Chill, luvvies. The ‘unsustainable’ BBC Telly Tax stays – for now

Analysis The appointment of backbench Tory heavyweight John Whittingdale MP to head the Ministry of Fun will throw the BBC’s senior management into a state of high anxiety, and have the Beeb's opponents grabbing their crotches in excitement.

The minister is responsible for the government’s policy on the BBC. Many Tories view the Corporation’s news output on issues such as the economy, Europe and immigration as hostile to their own policies, which have just won a smashing democratic endorsement.

Much quoted now is Whittingdale’s view that the TV licence fee is “worse than the Poll Tax”. He argued in 2014 that the TV licence was more regressive (and therefore unfair) than the ill-fated, flat-rate local authority tax.

However, Whittingdale doesn’t appear to favour an abolition of the Telly Tax, if you look closely.

When compared with the Poll Tax, the TV Licence doesn’t actually emerge too well. The old “Community Charge” (preserved here in its gory infamy) exempted students, while a complicated series of rebates relieved many more from paying the full tax.

With the BBC licence fee, there is no means-tested element whatsoever; it doesn’t matter how poor you are, you pay £145.50 and go to prison if you don’t pay it*, Whittingdale pointed out.

Meanwhile, almost everyone who paid the Poll Tax used a council service in some way: it’s hard for a resident to avoid sanitation or street lighting. Avoiding the BBC is now habitual for many.

Some 20 per cent of people never view or listen to anything the BBC does - a figure the BBC itself disputes, claiming its own internal research shows 97 per cent of people "consume" BBC output across radio, "online", TV and "digital" - while 50 per cent of C2DEs never watch BBC One, according to the BBC Trust’s (the corporation's operationally independent governing body) most recent survey (available here, PDF), which includes survey results for 2013/14.

One of the few bits of good news for the BBC is that the population is getting older, and oldies watch more TV.

Yet unless they’re a pensioner over 75, they must pay the same as a wealthy middle class devourer of The Archers, Stephen Fry and Strictly.

So if you define “fairness” as a) paying proportionate to your income, and b) paying for what you use, then on both counts, the TV Licence is less “fair” than the Poll Tax.

Telly Tax Tweaks

In fact, Whittingdale’s Culture, Media and Sport Select Committee pointedly shunned abolition as the conclusion of its inquiry into the future of the BBC last year.

"There currently appears to be no better alternative for funding the BBC in the near term other than a hypothecated tax or the licence fee," Whittingdale’s inquiry concluded.

It also castigated the BBC for caving in to the government and rushing into a back room settlement. This compromised the independence of the Corporation and it should have held out for a better deal, the DCMS committee said.

What Whittingdale did say was the the £145.50 was archaic and “unsustainable” in the long-run because viewing habits have changed. There’s much more choice, and much of that is paid for voluntarily. With more people “pulling” down services by choice, and fewer having it pushed at them, then payment for the BBC should reflect demand, Whittingdale said. A voluntary element should be brought in.

Here the BBC could be punished for its refusal to formulate a Plan B - and pin all its hopes on continuity: of a (presumably Labour) government carrying through the TV Licence more or less intact. It now has to navigate a much more uncertain world. By doing so, the BBC could emerge with a much less lucrative settlement.

Whittingdale's DCMS committee looked at various funding mechanisms and found pros and cons with each. Advertising is rarely mentioned - there isn’t enough advertising money to go round, opponents of this say, and it would destroy today’s commercial operators. At worst, you’d have a BBC running advertising with very little competition.

Nor is adding BBC funding to income tax very popular, even though it addresses one half of the “fairness test” quite satisfactorily.

The committee looked at both conditional access and the overlapping idea of making much (or all) of the BBC’s TV output subscription based. And it found conditional access much more likeable. We ran a short history of conditional access here.

Essentially, payment would unlock BBC TV services for a household, either by bundling it with a cable or satellite subscription, or via a decoder card in the FreeView box. Either way, if you didn’t pay, you wouldn’t get the full range of BBC services.

One of the proponents of a subscription service, David Elstein, points out that if most people were “opted-in” by Virgin or Sky as they signed up, very few would take the trouble to opt-out. Some would, but not enough to seriously hurt the corporation, and subscription gains would easily offset these.

The strongest case for conditional access and subscriptions is that when the cost is compared with Pay TV services, the BBC looks good value. The £12.25/month is certainly more than a £7/month Netflix subscription - but look how far it goes. Many households today have multiple subscriptions, of which the BBC is one of the cheaper ones.

Whittingdale’s committee called for more research into attitudes into paying the licence fee, and said the Charter Review should investigate models such as Finland’s earmarked-tax model (the licence fee was scrapped, so the Telly tax now reflects income) and Germany’s per-household blanket fee.

It also recommended that most of the Telly Tax should go to the BBC, with only a “small” portion being “top-sliced” to fund other worthy broadcasting that the market doesn’t provide well (or at all): local and regional journalism and children’s TV.

Either way, the Trust is widely expected to go. Whittingdale’s committee said it was “too close” to the BBC. It's an unusual position for an MP to be in: suddenly being able to put into effect his own parliamentary committee's recommendations. ®

Bootnote

After publication a BBC press office flunkey rang El Reg and tried to persuade us that non-payment of the Telly Tax won't result in a prison sentence. Vulture Central's backroom gremlins are more than happy to quote from section 363 of the Communications Act 2003:

363 License required for use of television receiver.

1. A television receiver must not be installed or used unless the installation and use of the receiver is authorised by a licence under this Part.
2. A person who installs or uses a television receiver in contravention of subsection (1) is guilty of an offence.

3. A person with a television receiver in his possession or under his control who—

   1. intends to install or use it in contravention of subsection (1), or
   2. knows, or has reasonable grounds for believing, that another person intends to install or use it in contravention of that subsection,

   is guilty of an offence.

4. A person guilty of an offence under this section shall be liable, on summary conviction, to a fine not exceeding level 3 on the standard scale.

Naturally, if you can't pay the £145.50 Telly Tax, there's little chance you'll be able to pay the £1,000 fine - and non-payment of a court fine results in jail time. 107 people were jailed between 2011 and 2013 for non-payment of the Telly Tax, while in 1993 a staggering 845 people received prison sentences for daring to watch TV at home.