Current Affairs

Issue

A complete two-year freeze on license fees of British Broadcast Corporation (BBC) has been announced by the British government.

 

Background

The licensing fee of BBC makes up about three-quarters of its income. The move is likely to have implications on financial and editorial stability of the broadcaster.

 

Details

• At present, the license fee will remain fixed until April 2024 and could be completely abolished by 2027.

• The government says that the move was undertaken as a cost-cutting measure for its citizens reeling under the fallout of the Coronavirus pandemic.

• However, political observers say that it is a part of the government’s efforts to bolster support for Prime Minister Boris Johnson.

 

License fee

• National television broadcaster BBC is funded through a system known as television licensing fee. It is a sort of a tax that needs to be paid by every household.

• Households playing live programmes need to pay a fixed amount to the government. Non-payment is a criminal offence and can result in jail time.

• The current fee is fixed at £159 for a colour TV license and £53 for a black-and-white TV licence. There are discounts for elderly and differently-abled.

• The amount collected as license fee is transferred to consolidated fund of the state and later disbursed to beneficiaries, including the BBC, via the parliament.

• Every April, the price is revised to account for inflation. There was an exception made in 2010 when fee was frozen for six years.

 

Importance for BBC

• The license fee accounts for about 75% of BBC’s revenues. The rest is covered through commercial deals and grants.

• Lack of funding will prevent the broadcaster to produce valuable content which could affect its ability to compete with other entertainment sources.

 

Criticism of the license fee

• Families are forced to pay even if they do not watch BBC or its content. The uniform rates are burden on UK’s poorer families.

• The programmes of BBC do not represent cultural minorities and are mostly London-centric. This has invited criticism from other regions such as Wales.

 

Other funding options

• Bundling BBC services into subscription packages, similar to Netflix.

• Taxing internet and television providers instead of families.

• Opening up BBC for advertisements.