Tories pour cold water on Davie’s idea to charge wealthy more for BBC licence fee

The Conservatives have made clear that wealthier Britons will not be made to pay a higher BBC licence fee after Tim Davie, the corporation’s director general, floated the idea.

Mr Davie said the corporation was also looking at licence fee non-payment and whether criminalisation is the best option to enforce compliance.

“There is no doubt that the market has changed hugely since the licence fee was introduced, and I think it is right to ask fundamental questions about its longevity,” the director-general told the Royal Television Society.

“Given the changes in technology and audience behaviour, we will proactively research how we reform the licence fee post-2028, looking at its definition, whether it can and should be made more progressive, and ensuring that its enforcement is fair and proportionate. The licence fee needs reform, in my view.”

But a Tory source responded: “Charging better off households more for receiving the same service as audience shares and trust fall is not something a Conservative government could countenance.”

The licence fee currently stands at £159. Asked whether linking it to income would require means-testing, Mr Davie said that was not necessarily the case and “there could be a number of ways of making it progressive”.

The Government is ultimately responsible for setting the level of the licence fee. It will be in place until 2027-28 and the end of the current BBC charter. On April 1 it will rise by £10.50 to £169.50, the first increase since 2021.

Currently, every household pays the same, although there are some concessions including free licences for over-75s on Pension Credit.

Mr Davie’s speech comes after the Government announced in December that it would be reviewing the future of the licence fee and exploring alternative options.

Lucy Frazer, the Culture Secretary, said the Government would seek to reform the “increasingly anachronistic” funding model.

Mr Davie said that expecting the current licence fee arrangement to continue into the next decade was no longer an option, adding: “I do think the idea of just sitting where we’re at is the wrong one.”

He described the licence fee as “precious” and did not discuss alternatives, saying the BBC must remain a universal service.

The BBC will launch a public consultation on the issue next year. Mr Davie said: “Our most important relationship will be with the public, who own us and pay for us. 

“We will aim to reach and get feedback from up to one million members of the public, beginning next year, so their views are at the heart of the debate about the future BBC.”

In his speech, Mr Davie said that the corporation would also look at ways of boosting commercial income, forging more partnerships in the style of its deal with Disney over Doctor Who and finding new ways of monetising its archive.

The BBC is also introducing adverts on some of its podcasts, but Mr Davie assured viewers that there would be no commercial advertising on its television channels, saying: “Kellogg’s will not be advertising on BBC One.”

He added that any changes would continue “a journey of reform that goes back to when the BBC was first funded by a royalty on wireless-receiving sets”.

A report by the House of Lords communications and digital committee, published in 2022, said that the BBC faced “stagnation and decline” unless it explored alternatives to the licence fee.

The report suggested a household levy, in which every home pays towards the corporation regardless of whether they use it or not, but at a lower cost than the current £159; or a part-subscription model, which could make news provision free but place drama and entertainment behind a paywall.

Lord Grade, the head of Ofcom, recently criticised the regressive nature of the licence fee, saying it was unfair that someone like him should pay the same as a single mother living with her children in a rented room.

Greg Dyke, the former BBC director-general, has also backed a progressive licence fee, saying that the wealthy should pay more but those on benefits should get free licences.

“There are a lot of people like me who can easily afford to pay,” he said.

In addition to the funding mechanism, the corporation will also look at the scope of what the fee covers. At the moment, a licence fee is required for consumption of any live television and use of iPlayer.