While the government is still deciding on whether to decriminalise non-payment of the television licence fee, following a public consultation earlier this year, the very future of the TV licence fee hangs in the balance. Although safe until the next BBC Charter Review in 2027, when the way the BBC is governed and funded is decided, government ministers are reported as saying they are “open minded” about how to fund the BBC from then onwards.
This January while she was culture secretary, Nicky Morgan, now Baroness Nicky Morgan (considered by some as a strong candidate for the vacant post of BBC Chair) suggested the licence fee was an increasingly outdated way of funding the BBC, and it was time to look at new ways of subsidising public service broadcasting (PSB). Interesting to note that in mid-October it was announced that the new BBC Chair salary would be increased by £60,000 to attract ‘credible’ candidates for the “3-4 days per week” role. The salary was cut to £100,000 when Sir David Clementi was appointed in 2016.
Ever since the arrival of digital technology with more viewers going on line and using other platforms, the TV licence fee has faced more criticism. There are 25,752,560 television licences in the UK, according to the most recent figures – a slight drop on the previous year, despite the population continuing to increase. As a flat rate fee applied uniformly (with exceptions for the over 75s receiving Pension Credit which is now paid for by the BBC), it’s a regressive payment, taking a larger percentage of income from low-income earners than from high-income earners, which has been criticised by some on the grounds as fairness.
So what are the alternatives? There are some basic principles to be established. Attempts to move to a commercial or subscription model should be resisted, the later resulting in a considerable loss of income from present levels. Whatever system is introduced it must be independent of government and commercial pressures, with the central focus being the promotion of public service principles.
From 1 January 2013, Finland scrapped its TV licence fee and introduced a public service broadcasting tax – also called YLE tax – to fund the Finnish Broadcasting Company and other European countries are shifting away from licence fees and towards funding public broadcasters through general taxation. The same year Germany replaced its licence fee with a household levy charged at a flat rate per household with exemptions for certain low-income groups (e.g. welfare claimants and students); businesses also pay the levy.
A more recent example is Sweden (a country I know reasonable well), when in November 2018 parliament (the Riksdag) decided that the radio and television licence fee, paid by all households that had a television, would be replaced by an individual public service fee. The fee would be collected via the tax system and administered in a closed (or ring fenced) system so that funds are kept separate from other funds in the government budget. The fee is paid by everyone aged 18 and over who has a taxable earned income. The maximum payment is 1,350 SEK/year per person (around £120). Depending on your income the fee can be lower and in some cases it can be zero.
It’s collected by Skatteverket (the Swedish Tax Agency) and based on individual income tax returns. The Swedish Tax Agency pays the money to a special public service account administered by Kammarkollegiet (the Legal, Financial and Administrative Services Agency). Through this agency the money is administered in a ring fenced system separate from the rest of the central government budget. The money in the account may only be used to finance public service broadcasting activities.
There are five public service TV channels: SVT1, SVT2, SVT24, Barnkanalen (Children ́s channel) and Kunskapskanalen (The Knowledge channel) – there is no advertising on these channels). Together with these public service channels there are also regionally broadcasted programmes and Swedish Radio channels are also included in the service fee.
The system was introduced on 1 January 2019 and along with the new fee, other changes were introduced which aimed at strengthening the independence of public service broadcasting. Just how successful these changes turn out remain to be seen. One reason for the change was that paying the licence fee was unpopular. It was based on whether a household had a TV or not. A survey conducted by the SOM Institute in 2018 found that 16% of Swedish respondents stated that the license fee was very much worth the money, whereas 22% of individuals did not think that public broadcasting was worth the money at all. Particularly young people were not convinced by this concept – more than half of 16 to 29-year-olds stated the licence fee to be not worth the money. In comparison, the share of 65 to 85-year-olds was 34%.
There were also a number of high profile cases of evasion and some 14 years ago there was a public outcry when it was disclosed that three minister in the Moderate (centre-right) government had not paid their license fee.
A Swedish friend (living in Sundsvall at the time) tells me more in a short anecdote from 2003. “The company I worked for, Metso Paper, was involved in a regional project that still is ongoing, to promote young people to focus on their education generally and in natural sciences specifically. Few youngsters in the mid-Sweden region continued on to university education. Anyway, we arranged annually a meeting with teachers adding people from industry and local administrations. I headed a group that formed the meeting programmes.
That year we had invited a well-known science journalist, Maria Borelius as one of the speakers. Based on several public appearances she had given a positive impression. She also had a very impressive speech at the meeting. However, just before the meeting we were chatting a little. It turned out that she had a very definite opinion about journalists and journalism education; ‘journalist are all leftists and the education is very left-wing’ she exclaimed.
Three years later in 2006, she became Minister of Trade in the Moderate led Government. It then turned out that she was one of the three ministers that had not paid the TV-license fee and that she also had used ‘undeclared workers’ for domestic services. After eight days as a minister she was forced to step down.”
The new system also featured other changes were introduced which aimed at strengthening the independence of public service broadcasting. Just how successful these changes turn out remain to be seen. One big advantage is that via the tax system everybody who pays tax has to pay and it’s fairer and provides in theory a more reliable income for PSB. On the other hand there are those who say that PSB is just the voice of the government and this is said to be easier to claim as the parliament decides on the allocation of funding to the broadcasters. To counter this, the Government appointed an inquiry on constitutional reform to analyse whether the public service companies’ independence is sufficiently guaranteed through the current regulations or whether their independence can and should be further strengthened through amendments to the constitution.
This is important as one commentator has serious concerns about the powers the parliament (and therefore politicians) has to change the rate of the tax and the damage this could do to Public Service Broadcasting and democracy. In a paper ‘The trench war over public service is at a worrying stage’ dated 21 August 2020, Jan Scherman, former business manager for Aftonbladet TV (a non PSB TV channel linked to the newspaper Aftonbladet) and currently a media commentator wrote that: “This means that the Riksdag (parliament) is also not formally prevented by the new regulation from changing the decision on the allocation of funds during a permit period (in this case 7 years).
In ordinary Swedish – yes, the Riksdag can lower the tax! And there is no limit to when, how often and how much. Especially now that there will be no constitutional provision that protects public service as an activity. It is possible to dismantle the program companies beyond recognition and further against extinction, o.”
The debate continues and PSB in Sweden is by no means secure with the conservative right-wing parties generally critical of it and wanting much of it privatised, echoes of the debate here in the UK about the future of the publicly owned Channel 4.
Meanwhile it’s worth remembering that in November 2004 Dominic Cummings, now Boris Johnson’s most powerful adviser, wrote an article for the Business, a now defunct newspaper, calling for a “campaign to end the licence fee and break the BBC’s stranglehold”. The call for the “end of the BBC in its current form” came from his think tank the New Frontiers Foundation of which Cummings was director. The Foundation also called for the creation of a Fox News equivalent that would not be constrained by impartiality rules!
At least one of his objectives is in sight with the news that GB News (which is backed by amongst others the US broadcast giant Discovery) will be launched early next year. It promises US-style TV news programming built around ‘strong presenters’, like the political journalist Andrew Neil, recently appointed as chair.
As the Press Gazette pointed out on 5 October: “The channel will be a first for the UK, eschewing rolling news for appointment-to-view programmes. It takes its inspiration from the likes of Fox News and MSNBC in the US, but will have to fit within Ofcom’s stricter guidelines on impartiality that govern UK broadcasters.”
It will also be an interesting test for Ofcom and the impartiality guidelines which states that: ‘News, in whatever form, must be reported with due accuracy and presented with due impartiality’.
Also music to Cummings ears will be the news that Rupert Murdoch is making a comeback into UK ‘TV’with News UK, which owns the Times and Sun newspapers. He has employed CBS News and Fox executive David Rhodes to lead the new TV channel, which is launching next year. It’s reported that the channel will be centred on three to five hours of prime time programming and will be primarily focused on online streaming, though the company may also explore a traditional linear TV format.
The challenges are clear and hard political struggles lay ahead to defend PSB in the UK which the BBC can’t possibily win on its own!