BBC Licence Fee to Rise by 3% Over Next Two Years

18 January 2007

LONDON: Culture media and sport secretary Tessa Jowell is expected to tell the UK parliament today (Thursday) that the government will raise the TV licence fee by three per cent over each of the next two years - slowing thereafter. The decision is likely to cause dismay within the state-owned BBC which had hoped for considerably more.

Nonetheless, the deal secures the BBC's future over the next six years. The annual fee, currently £131.50 ($259; €200) will rise to a maximum of £151 by 2012.

An increase in the fee, which is levied on every TV-owning household in the UK regardless of whether or not it chooses to watch BBC programmes, is insufficient warn the broadcasting unions which fear "heavy job losses".

BBC management - including its recently defected chairman Michael Grade - had argued that the corporation needed an additional £5.9 billion over the next five years to fund such projects as a massive new centre in Salford, Lancashire, and the provision of free digital-TV boxes for elderly and infirm citizens.

Prior to the leaked announcement, BBC director-general Mark Thompson wrote in an email to staff that the corporation would face "some very difficult choices" if forced to accept a below-inflation increase. In December UK inflation rose to 3%, its highest in several years.

Data sourced from BBC Online: additional content by WARC staff