LUCY FRAZER: Why I’ve capped the TV licence fee rise… There is no legitimate case for increasing it in the current climate

The past few years have been tough. The unprecedented horror and disruption of the Covid pandemic and the war in Ukraine have meant households have been buffeted by harsh economic headwinds caused by steep inflation and global energy challenges. While the economy has turned a corner, I know they are still feeling the pressure.

We are not complacent – we know inflation in some areas is proving more persistent. The Government has been clear that it will take action to support households across the country with rising costs. That has to include the BBC licence fee.

That is why in January 2022, we froze the licence fee for two years, an action that has saved people £17. That freeze will come to an end in April next year and the licence fee will rise by inflation. But I recognise bill rises are never welcome, and family budgets remain stretched, so yesterday I stepped in to limit the increase to the equivalent of under £1 a month.

The BBC matters deeply to this country. At its best it reflects our values, culture and identity. We saw with its coverage of the Coronation, its reporting on the conflict in Ukraine and the hosting of Eurovision, its incomparable capacity to inform, educate and entertain. It knows the pressures that households and businesses are under because it reports on them every day.

It will still have £3.8 billion to create its world-leading content and it knows that in the current climate there is no legitimate case – economic or otherwise – for a steep rise in the licence fee.

We are not complacent – we know inflation in some areas is proving more persistent. The Government has been clear that it will take action to support households across the country with rising costs. That has to include the BBC licence fee

The BBC matters deeply to this country. At its best it reflects our values, culture and identity

I recognise that a £10.50 increase will be felt by households. The number of licence fee payers is declining, with an increasingly competitive media landscape. We need to make sure that the cost of the BBC does not rise exponentially, nor that it is borne by a smaller number of licence fee payers.

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And it is our job to think beyond tomorrow. We know that if we want the BBC to succeed, we cannot freeze its income. But at the same time, we cannot ask households to pay more to support the BBC indefinitely.

The BBC understands – as we do – that the licence fee was established in a completely different era to the one we are in today. The entire media landscape has been reshaped by the advent of new technologies and streaming services. We cannot bury our heads in the sand. This is an issue that needs to be tackled head on.

We need to ask searching questions about the licence fee in the long term. Would other models help the BBC generate commercial revenue from its huge range of creative output? How can we best support the BBC while keeping costs down for households? To help us answer these questions, we are launching a review to look at a range of options for funding the corporation.

It will look at the evidence, speak to experts and analyse the options. It will conclude its work so it can inform the next BBC charter in 2027.

It will also specifically look at the issue of criminal prosecution of the licence fee – something I personally feel is morally indefensible in modern times – an issue that can only be changed at the charter review.

The BBC is a great national institution and we want to ensure it is fit for the present and whatever the future holds, while keeping costs down for the public.

We all want to see the BBC thrive and for it to live up to the public’s expectations when it comes to impartiality, accuracy and diversity of opinion. That can only happen with a sustainable funding model that is fit for the changing world digital age we are in today.

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