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Last Updated: Wednesday, 12 October 2005, 07:18 GMT 08:18 UK
Fury over BBC's licence fee plans
BBC chairman Michael Grade (left) and director general Mark Thompson
The BBC's bosses have made a series of shake-ups to cut costs
The BBC's proposals to increase the licence fee with a 2.3% above-inflation rise have been attacked by critics.

Several front page headlines of Wednesday's papers are given over to criticism, from MPs, pressure groups and the newspapers themselves.

BBC director general Mark Thompson says the rise would fund the switch-over to digital TV and BBC on-demand services.

The corporation is to present its bid for the next licence fee settlement to a House of Commons select committee.


If the government accepts the BBC's proposal, the fee would rise by 3.14 per year until 2013, not including inflation. The current fee is 126.50.

This provoked headline figures of 180 in the Daily Mirror and 200 in the Daily Telegraph, with the Daily Express asking whether a service funded by the licence fee is still needed.

The Times talks about "greedy auntie" BBC, while other papers - The Sun and The Independent - report on the furious reaction by some MPs to the request.

Theresa May, shadow secretary for culture, media and sport said the BBC's proposals amounted to a "stealth tax" and said the corporation was making the increase "without making sufficient savings elsewhere".

The BBC says it needs an extra 5.5bn over the next seven years to pay for more original programmes, new digital and local services and increased costs.

Viewers' groups have also spoken out. Jocelyn Hay, chairwoman of the Voice of the Listener and Viewer group told The Times it was "totally wrong" for licence payers to "meet the additional cost of bringing a highly desirable social benefit of a kind which has traditionally been paid for out of general taxation".

Help the Aged spokesman said many elderly people would be unable to meet the increase.

Grab from BBC Interactive Media Player
Content quality 1.6bn
Eg - cutting repeats
Digital services 1.2bn
Eg - TV and radio on internet (above)
Digital infrastructure 0.7bn
Eg - high definition TV
Local relevance 0.6bn
Eg - regional TV and radio
Base costs 1.4bn
Eg - sports rights

The corporation says it can fund 3.9bn of the needed funds through cost-cutting measures and commercial profits. But the proposed licence fee increase would fund the remaining 1.6bn.

"We know that licence fee payers find the licence fee a burden in their household costs," Mr Thompson said.

"It is a bigger licence fee, but the BBC gives out of it bigger digital TV and digital radio services. It is a big step towards digital Britain."

The corporation's valuation kicks off negotiations that will eventually see the government set the new annual fee.

The current deal ends in April 2007 and the next will last for seven years. The licence fee currently generates 2.94bn a year for the corporation.

Digital switchover

Under the current deal, set in 2000, the licence fee goes up by 1.5% above inflation per year. It will increase to 128.50 next year, not allowing for inflation.

Culture Secretary Tessa Jowell has said the corporation will get some extra money to spearhead the UK's switch to digital TV by 2012.

Let's pay for what we watch - 30p per episode of EastEnders
James Rigby, Essex

The corporation aims to make its TV programmes available on the internet, to make its archive more accessible and invest more in local TV and radio services, with other moves planned.

Mr Thompson and BBC chairman Michael Grade have already made a series of shake-ups, including almost 3,800 job cuts and internal value-for-money drives.


But culture select committee member Nigel Evans MP said: "There are millions of people out there who don't get inflation-busting increases whatsoever."

"How have you got the nerve to come here and say you want to push up the licence fee to near 180 and expect those people to stump up the cash"

The BBC said research found 81% of the BBC audience believed the licence fee was good value for money and more than 40% would be prepared to pay twice the current licence fee or more.

The government is preparing to set out the BBC's role, function and structure in its next 10-year royal charter, which will run from 2007.

Mark Thompson defends the proposed licence fee increase


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