loveMONEY election manifesto: scrap the TV licence

The TV licence is a headache, and we think it's time for it to be scrapped. Here's how the BBC should really be funded.

The TV licence has long been a bugbear for many UK households, with critics complaining that it’s outdated, unfair and relies on bullying tactics to work.

Research from Strategy Analytics asked 1,023 people how they felt about the TV licence fee. A substantial 29% thought that it should be scrapped altogether.

loveMONEY readers are on the same wavelength: only 29% agree with the TV licence.

At loveMONEY we think that the licence fee has got to go. But are there any viable alternatives to fund the BBC?

Problems with the TV licence

Shockingly, 10% of court cases relate to TV licencing. Though evaders don't end up with a criminal record, they could be landed with a fine of up to £1,000.  

Most licence fee fines come in at £150-£200, but for those on low incomes who are most likely to be done for licence fee evasion, this is an unpayable charge. The problem is that they can't afford to pay the £145.50 TV licence fee, either. 

This means that otherwise law-abiding people are ending up in court because they watched a bit of TV without a licence. For other services like Sky or Netflix, your service is merely withdrawn if you can’t pay — much simpler than a trip to the courthouse.

Even The Magistrates’ Association has been calling to decriminalise TV licence evasion for almost 20 years.

It costs a ludicrous amount in admin as well, which could easily be saved by using a different funding model. Numbers from 2016 showed that £101 million out of £3.7 billion went towards “licence fee collection”. The Beeb even found itself in trouble earlier this year when Capita, who collects its licence fee payments, was found to be targeting vulnerable people with aggressive tactics. Employees were given bonuses of up to £15,000 a year if they 'caught' 28 people per week.

Could it get worse now that you need a licence for catch-up? Let's be honest, the method of checking whether or not you have a TV licence for watching iPlayer is pretty flimsy. 

Source: BBC

Making the move to subscription

The BBC argues that the licence fee is still ‘the most effective way’ to fund the corporation, while others have suggested crowdfunding, funding through general taxation and even a National Trust-esque charitable funding model.

But we think that a subscription-based model makes the most sense.

“Netflix shows us that it’s easy to do subscriptions – it’s cheaper and better,” says the Adam Smith Institute’s executive director, Sam Bowen.

“It’s perverse to expect people to pay for TV they don’t want to watch".

He argues that a change to subscriptions will make way for a 'slimmed down' BBC which can save on big expenses like bidding for sports broadcasting, unless it won’t be available anywhere else. 

How do we do it?

"Bring in private equity-type people who are good at valuing to see what is and isn’t valuable. Then sell off the profit-making arms of the BBC, like BBC 1. You could even work around a listener-owned model for Radio 5," Bowen says.

He suggests the subscription could cost £10-£15 a month and the transition could be done overnight.

The Thick of It producer Armando Lannucci argues that if an international subscription model works, a UK subscription model which costs less than the current TV licence cost is a viable funding option.

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More from the loveMONEY election manifesto:

Stamp Duty needs another makeover

Let's ditch the unfair Marriage Allowance

Make taxes more transparent: merge Income Tax and National Insurance