Tuesday, July 7, 2020
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The BBC licence fee still has to go

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PLENTY of prominent figures have suggested the coronavirus crisis has proved the necessity of a licence-fee-funded public broadcaster. The apparent threat to the licence fee at the start of the year has, supposedly, abated. Downing Street, they say, will no longer have any interest in fighting a licence fee war. Earlier this month, Matthew D’Ancona wrote to this effect, quoting a series of BBC sources. 

But the case for abolishing the licence fee remains overwhelming. That countries without a BBC equivalent have news services, or that the Prime Minister could address the nation without everyone paying a TV tax, does not appear to have been considered. If anything, the huge growth in digital entertainment during the crisis has shown just how strong the media market is and how outdated a tax to fund one particular organisation is.

The crux of the case against the licence fee is unchanged by coronavirus: why should nigh on every household have to pay £13 per month for content they may never watch? How can it be right that everyone who watches television has to pay a tax to the BBC, but gets no say over what is shown? The licence-fee model protects the Beeb from competitive pressure. It lets dear Auntie avoid the scrutiny of consumer power by guaranteeing their funding. If the licence fee is such brilliant value, why the terror at the public choosing whether to pay for it?

The BBC are worried by this argument. In their response to the government’s consultation on decriminalising non-payment of the licence fee, they suggested that in the future the fee could be charged on utility bills, rather than separately. Sources in D’Ancona’s article go further and suggest the era of the flat fee is about to end. The latest whisper is that the compulsion could be maintained, but the charge varied by means-testing. But what unites licence-fee advocates is the insistence that the only acceptable funding arrangement for the BBC is a compulsory charge. The idea of the Beeb funding itself through subscriptions or advertising is rejected out of hand. 

The sources in D’Ancona’s recent article reveal a great deal more, though apparently at times by mistake. While a media organisation identifying its key target as being to ‘evangelise . . . its unique role in nurturing the connective tissue, creativity and public ethos of the society it served’ is bizarre, a source noting that an advantage of this pseudo-philosophy means fewer management consultants coming in to provide strategic advice provides useful insight into how the BBC manage to spend £3.7billion of licence-fee income each year. Such tales emerge frequently, and it is striking that any BBC interest in fiscal restraint emerges only at points of crisis.   

There are many more charges that can be brought against the licence-fee model, ranging from the scale of presenter pay to the unwieldy size of the organisation. But the injustice of a governmental organisation owning a huge chunk of a major industry stands out. Privatisation was one of the great successes of the late 20th century and there is no other industry, bar healthcare, where the largest player (accounting for nearly a third of television viewership and over half of radio listeners) is state-owned. In any other mass consumer or entertainment industry, we would not stand for a quango protected from competitive pressure leading the market. 

D’Ancona’s write-up highlights how BBC insiders see the proliferation of private content as a challenge that must be met with higher spending. A ‘production source’ boasts of the BBC’s news and political reach versus Netflix or Amazon, as if huge political teams are beyond the wit of private providers. What this actually demonstrates is that the BBC can build excessively large teams thanks to near-limitless coffers and that market forces push the private sector into prioritising consumer demand.  

News media is one of the worst industries for the government to have a major stake in, given the divergence of public opinion. Perceived bias would hardly be an issue were the Beeb not tax-funded. The option to switch off and send your funding elsewhere is a powerful tool for consumers, meaning Fox News and MSNBC can exist in the same balanced media market. But it will always be nearly impossible to achieve that balance within one organisation.

It would be disappointing if the coronavirus crisis were to influence the government’s stance on the licence fee. That the biggest news source in the country is more watched during a calamity is hardly a strong reason to ignore the overwhelming case for axing the tax. This site often decries parts of the modern television landscape, but at least you can hit privately owned providers in the pocket. BBC controllers are never going to alter their output when they have a guaranteed funding stream. That’s why they are so desperate to keep the charges compulsory, whether as a broadband tax or a means-tested fee. To improve the media landscape, Britain needs to scrap the TV tax.

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Sam Packer
Sam Packer
Sam Packer is media campaign manager at the TaxPayers' Alliance.

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