After 75 years of the BBC licence fee, is it still fit for purpose?

On 1 June 1946 a television licence fee was introduced in the UK. We debate its relevance today.

A BBC cameraman explains the technicalities of the television camera to Russian-born US composer Irving Berlin in 1946 (Photo By George Konig/Keystone Features/Getty Images)

Roger Mosey is the Master of Selwyn College, Cambridge, and was formerly editorial director and the director of London 2012 at the BBC.

The idea of having to buy a licence to watch television may seem like a relic. But the principle behind the funding of the BBC is simple: if we all pay for something then we have a stake in an organisation which is designed to serve the public. And in a time when our society is fracturing, and media moving from the universal to the personal, there is still a common good in preserving a space where the British people can talk to each other.

It is easy to get carried away by the great drama on Netflix or the array of sport on Sky, or to think that it’s fine now that we can communicate with people of like minds via social media. But there is still demonstrably a hunger for moments we all share: almost 13 million people, 56 per cent of the viewing audience, watched BBC One on a Sunday night at 9pm for the finale of Line of Duty. A total of 27 million people witnessed Boris Johnson announce the first national lockdown in March 2020, with 18 million of those on the BBC. We’re about to enjoy Euro 2021 on the BBC and ITV – a welcome major event on the terrestrial channels – and it’s the BBC that will win the lion’s share of viewing for the final. These are live audience figures that the pay channels and streaming services can only dream of.

Critics say the licence fee is a mandatory tax, whether you like the BBC or not. True; and the corporation is sometimes an infuriating organisation. But it’s a tax that funds British content – drama, comedy and entertainment – and supports the creative industries. Even if you don’t consume much of it yourself, the country is better for the investment in actors and musicians and writers and technical staff. There is also no sign of the international digital media giants developing a quality news service for the UK, or providing the local and regional programming that is so popular. Many of us use Twitter or Facebook as a supplement to the mainstream media; but it would be grim if they were the only shows in town.

The licence fee is also more susceptible to the public’s wishes than its opponents allow. I can promise you that BBC managers spend a lot of time worrying about the erosion of consent for the payment. That is a good preoccupation, because it keeps them on their toes – and they need to try to provide something for everyone in the UK. It’s a strong deterrent to the BBC taking sides in the culture wars, as some of its employees seem to want. Only if you respect and understand and provide a platform for everyone – from a Brexit supporter in Belfast to an urban sophisticate in Clapham – can you maintain public funding.

It may well be that the form of payment needs to change – from a TV licence to a household tax as in Germany, or even by general taxation which would have the advantage of being progressive. But if we lost the publicly-funded BBC altogether, this country would be a poorer place.

Philip Booth is director of the Vinson Centre for the Public Understanding of Economics and Entrepreneurship, University of Buckingham, and author of “New Vision: Transforming the BBC into a subscriber-owned mutual”, for the Institute of Economic Affairs.

When the television licence was introduced, we lived in a world of limited spectrum and just one television channel. The charging of a fee to all those who owned television sets to fund a channel operating at arms-length from the government could be justified. After all, you needed a television to watch the channel, and the television set could not be used for anything else.

We now know that, on both sides of the Atlantic, this world of limited spectrum was artificially created. It arose as a result of a mixture of campaigning by the military and the intelligence services and as a result of highly conservative vested interests in broadcasting and politics. The former wanted to keep the spectrum for themselves and the latter effectively wanted to control what we watched.

Today we have different vested interests preventing reform of the broadcasting industry – especially the BBC.

The concept of public service broadcasting, as something that must be protected by the state and delivered by a state-backed provider, is an anachronism. Broadcasting today is similar to publishing in the late 19th century. The variety of genres and means of paying for content is enormous. The cost of entry is low. Local community special interest broadcasting is also a reality as small-scale production and broadcasting is so cheap.

The case for a particular broadcaster, owned by the state, to be funded almost entirely by a levy on people who own a television set or stream other live channels via another device even if they do not watch the output of that broadcaster has become untenable. Indeed, if we continue with this approach, the BBC’s funding will melt away as people access content in other ways. Amongst young people, the BBC will become of marginal importance.

One response is to privatise the BBC on a fully shareholder-owned basis. That way the BBC would be able to leverage its substantial reputation to become a major player in the evolving content delivery market. But there is another option which I favour. The BBC should become a mutual owned by its subscribers. People should be free to subscribe (or not) and the subscribers would become the owners. The broadcaster would still be free to develop joint ventures with a range of commercial and charitable organisations in the pursuit of its mission. However, it would be formally accountable to its owner-viewers. Accountability would come in two ways. The BBC would have to provide high quality services to keep its revenue streams. And, ultimately, the owner-viewers would be responsible for its governance and would elect its board. A whole range of premium services could be developed to boost its revenue.

The BBC has a better reputation abroad than at home. A subscription model would also allow the broadcaster to generate a rich vein of revenue streams from the 90 per cent of the English-speaking world that does not live in the UK. The BBC would become free, dynamic and accountable to the people rather than being accountable to the government. Indeed, this approach might be the only alternative to the dangerous policy of direct taxpayer funding that could ensure the BBC’s survival.

[See also: The BBC and the battle for truth]