Asylum seekers could join people receiving unemployment and disability benefits as well as students who would qualify for free TV licences under a government shake-up of the BBC.
The radical proposals unveiled by Culture Secretary Lisa Nandy, as she set out her vision for the funding of the BBC from 2028, could see millions of people qualify for free licences while wealthier households potentially pay more.
The Government was considering “further targeted interventions to support household budgets”, the policy paper said.
It said ministers will look at following elements of the German template, where concessions are given to those “who receive social benefits and to some students”.
Under the German TV tax, called Rundfunkbeitrag, households pay €18.36 (£16) per month to support public service broadcasting, regardless of whether they watch ARD, ZDF or listen to Deutschlandradio, the country’s equivalent channels to the BBC.
The system offers numerous concessions with exemptions for people receiving unemployment benefits and students who get state funding.
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Those with disabilities may pay a reduced fee or nothing at all, along with senior citizens and people living in nursing homes.
Asylum seekers are also included in the categories of those who do not pay the charge.
But former BBC Director-General Greg Dyke said he feared giving free licences to millions of people claiming benefits as well as students would leave the BBC with a drastically reduced income.
“It’s important that the BBC is properly funded,” he told The i Paper. “You have to do it in a way that the BBC doesn’t lose money or gets at least as much money as it gets now. Other people would probably have to pay more to cover the concessions.
“The licence fee is an unfair tax because it’s a universal flat rate charge and fewer people are paying it, so you have to do something.”
He added: “My solution to the licence fee is to pay it out of government funds. But it can’t be the government of the day that decides the level. There needs to be a cross-party parliamentary committee or an independent body to set the fee.”
Benefits change could lead to £1bn BBC blackhole
Those aged 74 or over and receiving pension credit through either themselves or a partner are currently entitled to a free TV licence. Individuals who are blind, living in care homes or watching only black and white televisions are also eligible for discounts.
It remains unclear which benefits would be linked to free or discounted TV licences under the Government’s proposals. But if, for example, the seven million people claiming universal credit were to receive free licences – currently £174.50 – it could amount to a blackhole of around £1bn for the BBC. However, this assumes that all universal credit claimants are current licence fee holders.
“A free TV licence [for those receiving universal credit in addition to pension credit] would reduce cost-of-living pressures on almost three in 10 UK households,” said Deven Ghelani, founder of Policy in Practice.
“More importantly, it would limit often aggressive enforcement practices on people who may be struggling to put food on their table.”
The UK government is highly unlikely to exempt all those who get free licences under the German system, though, as it is not proposing to replace the licence fee with a household tax in the same way.
German-style licence fee
Ministers have ruled out funding the BBC from general taxation, saying they feared it would make the corporation subject to political pressures.
Peter Bazalgette, the leading TV executive and former chairman of ITV, said there were merits in the German example.
“Broadly I like the German system of having businesses and organisations paying the licence fee as well as private households. It seems to me that, say, £175 a year, is a small ask of them to invest in the value of trusted news (in a mad internet world), local culture and the talent for the Creative Industries.”
He echoed concerns that giving free TV to all those on benefits and students would leave the BBC with a shortfall.
Bazalgette told The i Paper: “There’s some logic to it but too many concessions in the licence fee system will reduce the quantum possibly rather too much.”
A BBC insider said the corporation could see benefits in offering students free licences.
“Young people are the hardest for the BBC to reach. If they get into the habit of watching the BBC at university, then they are more likely to be converted into licence-fee payers when they leave college. And the BBC will have their sign-up details.”
But free TV licences for asylum seekers would be a controversial move, particularly at a time when the Government is trying to clamp down on the number of people coming to Britain.
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Although making every household pay a charge, regardless of whether they watch the BBC, has been ruled out by ministers, some campaigners believe it is worth reconsidering.
Colin Browne is chair of the Voice of the Listener and Viewer (VLV) charity, said: “There is general agreement that if the licence fee is to continue as the main method of funding the BBC going forward, it needs to be made more progressive. The challenge will be to do this in a way that doesn’t reduce overall revenues for the BBC.”
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