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Chancellor George 18% BBC fee cut to lowest level of BBC TV since B&W 1978

Yes, it's back to when most homes had black and white televisions and there was only two TV channels on air because cutting the BBC income by 18% is what is going to be done tomorrow.

George Osbourne is going to show everyone just what a majority with 36.9% of the votes means for the British electorate.  Huzzah!   Photograph: Flikr
George Osbourne is going to show everyone just what a majority with 36.9% of the votes means for the British electorate. Huzzah! Photograph: Flikr
published on UK Free TV

7th of the 7th at 7am

I'm going to be in hospital on this budget day, having the tendons in my leg have the fragments of bone taken from them and somehow joined back together.    So I am going to miss the fun of the emergency budget, so let me get some data in now.

Updated - we have the details

We know now that the BBC will get £250m less in 2018/19, £450m in 2019/2020 and £750m in 2020/21 onwards. The change to allow iPlayer to count as needing Licence fee will come in a few years' time. From 2016 the fee will be index linked. So, here's a graph showing - adjusted for inflation - the total Licence Fee income (drops 18%) and the per paying home average licence fee, even though fixed at RPI otherwise.

Drop from 2007 (£173.82 adjusted) to £118 in 2020 represents total cuts of 32% in real terms.

The long-term view

Here's my ever-popular TV Licence 1946-2017 graph, with a new line. 

We need to factor in a new value: that is the provision of the discount for homes with someone over 75.     The 2014 Licence Fee income [1] is £3,726m from the 25.6m homes with a TV[3] and that pay £145.50.  

According to the House of Commons Library [1]

"The estimated cost of providing free television licences to all households including a pensioner would be nearly £700 million a year, while the cost of free television licences for all pensioner-only households would be approximately £490 million a year." 

The change to making the other licence fee payers support this means cutting the BBC UK Licence Fee income from £3,726m a year to £3,026m year, and 18% cut.

This mean, in terms of income that the average home licence fee is now £118, not £145.50.    I've draw the £118 line on the graph: not that you will be paying £118 – homes will either pay nothing of £145.50.

This level of income - £118 at today's prices - was last seen back in 1978 when 60.63% of homes paid £25 (£134.32 today prices) for a colour licence and the rest £10 (£53.73) for a black and white one. Just before the Winter Of Discontent, in fact.


So why not do this with free bus passes too?

According the government figures, the on concessionary travel costs about £1,400m a year, about twice the value of the free TV Licences for homes with someone 75 or over.  

Does this mean that we should also see bus fares rise by 34p to pay for the free travel by those with concessionary passes?   Would that be fair? 

The 34p add on would be splitting[5] the 4.2 billion non- concessionary bus journeys by the £1.4bn cost. 

And, the government keeps its manifesto pledge.


Or how about doing the same with the Winter Fuel payment?

If the BBC viewers are to pay for the free licences, then electricy and gas company's customers should fork out for the Winter Fuel allowance too.  That is about £2,100m a year.  

The official figures say we in total spend £14,659m on gas and £15,295m on electricity, totalling about £30bn.   

So, just adding a 7% levy to the gas and electrify bills will cover the 2.1bn needed.     That's much more equitable that just taxpayers forking out, isn't it?

And, the government keeps its manifesto pledge.


[1] BBC Full Financial Statements 2013/14

[2] House of Commons Library, Concessionary television licences: pensioners Standard Note: SN/HA/ 4955 Last updated: 25 June 2010

[3] Television ownership in private domestic households 1956-2014 (millions) - BARB

[4] Official TV Licensing website - How much does a TV Licence cost?

[5] Concessionary travel (BUS08) - Statistical data sets - GOV.UK

[6] How much do pensioners' benefits cost? - Full Fact

[7] Table 2.6.1 Total household expenditure on energy

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Monday, 6 July 2015

6:37 PM

I totally agree - its basically the Government using the BBC as a piggie bank, and simply would not accepted by any other organisation. The idea thats its any kind of deal (in return for getting rid of the Iplayer loophole) is nonsense - its a shakedown. At least they no longer have to pay for rural broadband, and there is a rise in line with CPI (although others have pointed out that using CPI saves the government money).

The interesting part is the power balance between Whittingdale, Osborne, the media and Tory MP's.
Whittingdale's shadow pointed out that Whittingdale had totally ruled out any change to the BBC having to pay for the over 75's as social policy. And yet it will, and he had to announce it. So Whittingdale, zealot in so many ways, was not ruthless enough for Osborne, and has been sidelined.

What does Osborne get out of it? Firstly, he gets to kill the BBC. Thats long been a dream of many on the free market right, simply because its ideologically attractive (shrink the sate small enough to drown it). It makes Osborne look a leader in taking on 'them', and burnishes the idea of him being the sort of person who will shrink the state, which will be attractive in the upcoming Tory leadership contest. And he doesn't have to put a bill through parliament, etc. He just has to make them run out of money.

Next, it of course pleases Rubert Murdoch, to which the Tories are very grateful after their slightly unexpected win. The idea that the BBC website and regional/local news threatens either the national or local press in any way is total nonsense of course, but when interviewed, he was careful to mention the main Tory papers. These are papers to which the Tories are grateful, and of course whose support Osborne will need in his bid to be leader of the Tories.

And of course he gets to use the BBC as a slush fund, continuing to give money to pensioners (which votre more than anyone else, and the only section of the population to majority vote for the Tories), thus saving him lots of money to help pay down the deficeit, which is still stubbonly high, despite his chancellorship.

Its a win win win for him. Although he's pretty much been anointed the next Tory leader, he is still going to have to run. And he will be up agains Gove, Tersea may, and of course Boris Johnson. And Johnson tends to be liked a lot more than Osborne.

Can this be stopped? It looks like a done deal, becuase the BBC has already agreed, and since the fee is collected on behalf of the BBC by government, I suspect its perfectly legal and almost impossible to stop (the Tories have decided they are going to give away Housing Association property, which they dont even own, so I dont have much hope), unless there is a really strong reaction. And I'm not holding my breath. The Sun this morning had the usual line (hardly surprising), and there are fair number of useful idiots around who will support it. It was depressing to hear on Broadcasting House a possible Labour Peer talking nonsense about this, whereas Lynn Falls-Wood got it instantly, and argued it well.

And this is just the begining - wait until negotiations for Charter Renewal start. Its going to get very nasty, which at least will mean we will get to see just how nasty, self serving and stupid people can be.

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MikeB's 2,579 posts GB flag

8:15 PM

MikeB: I think, in addition to the points you have raised, that I feel particularly put out by the omission of the simple "we're going to cut the BBC by 20%" from the Conservative Manifesto or campaign. Somehow a party that claims that it fiscally responsible (they did make a big thing of that, didn't they) managed to omit "cutting £1,400,000,000 from the BBC budget before the next election" from the plans they asked the public to sign up for. So much for British fair play, eh?

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Briantist's 38,915 posts US flag

10:02 PM

Briantist: Fair play? This is politics, and saying what you really think might not get you elected. So you come out with a bland statement, and hope nobody notices.

A quick google brings up a whole load of broken manifesto promises from 2010.
The 2010 manifesto said:'We will introduce measures to protect wildlife and promote green spaces and wildlife corridors in order to halt the loss of habitats and restore biodiversity.' (remember greenest government ever?). Strangely forgot to add that they would try to sell off the Forestry Commission about 5 seconds after getting into Downing Street, and after then trying (and almost succeeding) in bribing The Woodland Trust and The National Trust ito back the sale, public opinion and the efforts of people like 38 Degrees killed it. If they had been less in a rush, they might have got away with it. And dont even start on no topdown NHS reorginisation...

If they had written 'we really hate the BBC, and want to cut massive chunks from its budget', then that might have attracted attention. So you simply say your going to keep the licence fee frozen (which is bad enough), and bide your time. However, I think only the most naive observer would fail to see what happened during the last Charter Renewal and the attacks from both government figures and their friends in the media.

I'm a huge fan of Molly Ivins, and her dictum about politicans and their track records holds true. If a politican has been horrible to poor people before, then its unlikely that they will stop doing so, no matter what they might say in front of the cameras. And even being relected by the narrowest of margins is unlikely to make them tread more carefully - in fact its generally the opposite.

I suspct the Wykemist Fallacy is still clouding many peoples judgement - they cant really want to kill the BBC and all that it does , just because of ideology and the wishes of their backers? Yes, they do. They have signalled it long enough…val, and they have five years to do so. The only thing the BBC can do is be prepared to fight very hard next year, and mobilise its allies. Of course they have a whole newsroom capable of digging up all sorts of dirt and Osbourne sounds like an interesting target....

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MikeB's 2,579 posts GB flag
Tuesday, 7 July 2015
Charles Stuart

4:04 PM

I really don't think the government's plans are unreasonable. What everyone seems to have conveniently forgotten is that the iPlayer loophole will be closed before the BBC has to start funding the over 75s. This should bring in a significant amount of additional revenue. My attempt at a calculation suggests between £150,000,000 and £200,000,000 per annum. OK, you might term that "recovery of lost revenue" but it's still something. The BBC is massively bureaucratic and I'm sure that many savings could be made by cutting support staff without too much effect on the front line. When the government has pledged to make significant cuts in spending, I do not think it's unreasonable for some of those cuts to affect the BBC.

The BBC does seem to have become oversized and complacent over the years. The licence fee is a "least bad" funding system that does give a different aspect to British broadcasting compared to that of many other countries. I do think that BBC radio has far too many stations and that they should look at closing some or selling them off as commercial enterprises. Maybe the government should allow the BBC to enter into joint ventures where minority interest, specialist and high risk programming is provided by the BBC to radio stations that have a commercial core. Although I'm too young to remember it, I can't help thinking that maybe BBC radio was at its best when it was the Home, Light and Third Programmes. Perhaps it should return to that model, plus local stations and perhaps 5 Live.

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Charles Stuart's 159 posts GB flag

8:03 PM

Charles Stuart: Unfortunately its a totally unreasonable 'deal', as Lord Patten and others have pointed out BBC will have to make cuts due to 'quick and dirty deal', says Lord Patten | Media | The Guardian

However, its a truely dreadful deal even in terms of basic accountacy. OK, so the Iplayer loophole is closed (it could have been closed at any time, but why would a government give up a bargaining chip?). According to the BBC figures (which Brianist has referred to), the loophole costs the BBC 150m a year in lost revenue. Frankly, its unlikely that figure could be recovered, even with the loophole closed, especially since it seems unclear if it only applies to the Iplayer, or all of the terrestial ondemand channels. For the sake of arguement, lets say they get all of that revenue back.

However. the BBC will almost certainly lose 200m (their figures again) from the decriminalisation of licence fee evasion. Yes, they will be able to pursue people in exactly the same way as before, but its will be a civil matter, and there will be added costs. And of course every person who refuses to pay will be a martyr to the cause, and will be treated as such by the Sun, Daily Mail, etc. Again, for the sake of argument, lets assume they are being too gloomy, and that they lose only half that amount. In theory, being very optimistic, the BBC might be 250m better off. And they are now released from paying for rural broadband, which was costing 12.5m a month (last figure I could find was from 2012).
And they do finally get an increase in the licence fee, but this will be phased in, and it will be calculated using CPI, which is worth less than RPI (a trick the government has used with benifit payments, etc).

On the other hand, they also now have to pay the full cost of the World Service/BBC Monitoring since last year (both of which are possibly of far more value to UK PLC than they are to the average licence fee payer), and now have to pay for S4C and give monies to the failing local TV ventures. That was estimated at an extra 340m a year.

The cost of the over 75's licence fee's seems to vary with the article you read, but anything from around 500m to 700m a year is the current amount, and of course this will rise. In the words of Admiral Ackbar 'Its a trap!'. The BBC gets perhaps 250m a year extra (and thats pretty optimistic), plus a rise in the licence fee for a while (but CPI, not RPI), and stops paying perhaps 150m a year for rural broadband, but has to pay at least 500m a year extra per year for thr over 75's. At very best, they break even, but as the costs of free licence's gets larger, and the amount they get in falls, they are much worse off.

And it gets better. The BBC will ultimately have responsiblity for deciding how the over 75 licence fee is handled. In other words, they have to decide if there is means testing, etc. I imagine that any tightening of the critera will be seen as an attack on the elderly, and the papers will portray the BBC as heartless, etc. They will have no choice but to bear the burden, and thus sink beneath the huge cost of what is a government benefit, but just not paid by government. 'Its a trap!' Or perhaps one of those insect parasites which lies within its host, and then burrows its way out, devouring the poor creature as it does so.

'The BBC is massively bureaucratic and I'm sure that many savings could be made by cutting support staff without too much effect on the front line'. Tony Hall has cut management costs, and PWC gave the BBC a very good report on its cost control. I'm sure there is some more to be found, but simply waving hands in the air and saying they can cut away is wishful thinking. At some point you hit bone.

Does the BBC have too many radio stations? Thats a personal view, perhaps bound up in ideology, etc. However, the BBC is different from commercial stations. It plays a vastly large selection than the commercial ones (Radio 6 in particular) and tends to trend new bands…ent.

If you listen to most commercial radio, you quickly discover that most are pretty bland, with a relatively limited playlist (I swear Smooth FM's playlist is about 30 records), and of course they tend to be owned by large media groups, because thats how you get economies of scale and profitablity. This happens in the US as well. There some great indie stations, but for the most part its corporate radio. I'd recommend KRCW and KEXP in Seattle, which are actually both non corporate publically owned or donation based stations!

The idea that a corporate media chain is going to coproduce a programme with the BBC for a limited audience is simply unrealistic. 'Risky' tends to mean 'unprofitable'. Besides, whats in it for the commercial sector? Where are they going to play it?

If you are too young to remember the Home, Light and Third Programmes, how do you know it was at its best?

One thing we now do know (although we suspected it before) - Tony Hall is an awful negotiator. Mark Thompson threated to resign, as did the BBC Trust, if the over 75 licence fee was pushed on them last time. Hall didn't even put the deal to the Trust or tell anyone else about it. If he had, then the government might have backed down, or at least got a much better deal. At least we know he's an idiot at this stuff, so we shouldn't rely on him.

Its going to be awful, so lets start organising now.

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MikeB's 2,579 posts GB flag
Richard E

11:30 PM

Subscription is the way forward for the BBC .Most of their disgraceful cheer leading ( which is Illegal under Ofcom rules) for a Labour /SNP government in the General Election ,was the final straw for Conservatives . If I want to read lefty Guardian propaganda ,I would buy the Guardian , but the BBC is NOT impartial , just read their journalists tweets . All are Left wing ,& people who vote for other parties , should not have to pay for this . Their views do not represent people who don`t read the Guardian .

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Richard E's 42 posts GB flag
Wednesday, 8 July 2015
Charles Stuart

11:30 AM

I wouldn't go as far as Richard E in saying that all BBC journalists are left-wing but I do think that a disproportionately large number are. I think that the BBC does often give an appearance of being left-of-centre, though I actually think that it usually just about achieves political neutrality. In my opinion, it is a seriously flawed organization that needs some reconstruction.

While I can't remember the pre-'67 radio set-up, I can quite clearly remember the early '70s. It seems to me that every time BBC radio expands it gets a little worse. I really don't like BBC radio now, except for the midnight news programme on Radio 4 and programmes on the World Service. However, I still see BBC radio as better than most commercial radio. In my opinion, the only truly good commercial station is Planet Rock, though I tend to listen to Sam FM because it usually doesn't have DJs.

I think that the summary of my view is that the BBC needs to shrink. I don't know anyone who wishes to pay more for the licence and I think most people would be quite happy with BBC1, BBC2, News Channel, the five analogue national radio stations (also in good quality on DAB), local radio and World Service. I can see a case for BBC6 Music but don't think it's essential and though I like BBC4 (TV), I think that it could be absorbed by BBC2. I would get rid of children's TV channels and go beck to children's TV on BBC1 and BBC2 at the times it used to occupy. The BBC could then raise extra money by selling spare capacity on its multiplex, though I don't suppose that would be a huge income.

The licence as a source of funding cannot last forever. With zillions of channels, there's an increasing number of people who never watch or listen to BBC services. I think that eventually we'll have to have some kind of compulsory public service broadcasting levy that everybody pays, regardless of whether or not they ever watch TV or listen to the radio. I don't support the idea of the BBC being funded by subscription.

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Charles Stuart's 159 posts GB flag

7:32 PM

Richard E: Its not often that you read something thats sounds like a parody of a letter in the Daily mail, but you managed it. I'll address the idea that the BBC is a hotbed of socialism in a moment, but the idea of subscription is simplyeconomically hopeless, as Brianist has pointed out again and again.In fact he pointed this very fact about 16 months ago, on this page: BBC plc, 2017. The new CEO decides between ITV and HBO | UK Free TV
In fact exactly the same exchange took place, where your wrote
' The BBC is anti democratic in, its constant left wing news bias, its just a mouth piece of the Labour Party , Guardian views of the news .A bloody disgrace '
Your 'evidence' for left wing bias at the BBC was
'they are all lefties , a relative of mine works for Chan 4 news , he gives me all the goss , about the BBC , & the politics of most of the reporters , also check there twitter feeds, it gives the whole game away , if you think what I say is BS .'
I pointed out at the time that this was pretty much the ur anecdote, and meant nothing (besides, what does someone who works for C4 know about the politics of people who work at the BBC?).
Charles Stuart: You reply above is not much different to the one you gave in March 2014, but is even more packed with 'I think', 'my view' and 'in my opinion'. Your entitled to your opinion, but not your own facts. We will leave aside the fact that both the current and previous Chairs of the BBC are Tories, that the chief political correspondent was a prominant Tory while at university, that the political editor went to Eton and was a near contemporary of Cameron, and spent a decade on The Times, and that at least one news presenter is married to Camerons press sect.
I cited several bits of research refuting the idea that the BBC was particularly left-wing. I aslo pointed out the idea that people reading the Guardian rather than the Daily Mail did not mean the BBC was part of a left wing conspiracy. In fact I read the other day that this particular bit of 'research' consisted of looking at how much the BBC spent on various papers. Of course once you realise that the Guardian's cover price is a bit higher than the DM or the Sun, you can see that their case starts to crumble. I suspect the DM failed to mention how much the Telegraph or Times cost the BBC as well.
You may feel that BBC radio used to be 'better'. Of course that is totally subjective and relies on memory.
Do people wish to pay more for the licence fee? In many cases, Yes, judging by the published research. True, a lot of people do not, but in a recent phone-in on radio 4, I was struck by just how popular the BBC was, and that the value of the licence fee in relation to what we get was recognised, and people were willing to pay more.
' I think most people would be quite happy with BBC1, BBC2, News Channel, the five analogue national radio stations (also in good quality on DAB), local radio and World Service'. Have you asked them? You might be happy with a reduced service, but what about the rest of us?
'With zillions of channels, there's an increasing number of people who never watch or listen to BBC services', Actually 97 percent of licence fee payers use BBC services on a weekly basis, so it seems that we are happy with the range of services they currently provide. Downloading is still only about 5-7 percent of total viewing, and the (fortunate) move to have all catchup services subject to having a licence will make it slightly less likely that people will 'cut the cord' whilst still using these services.
I suspect your list of what the BBC could be shrunk to is pretty much 'what I like and use'. If your a parent like me, then having kids programmes on for two hours a day on BBC1 sounds like a terrible idea, and I suspect the bulk of parents would agree. What I would like is a coherent idea from people as to how the BBC could be 'shrunk', considering that we now have more broadcasting technologies than ever before. If they can come up with something that pleases everyone, I would be amazed.

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MikeB's 2,579 posts GB flag
Thursday, 9 July 2015
Charles Stuart

12:40 PM

MikeB, I emphasize that what I say is my opinion built mainly on anecdotal evidence because I see this site as providing for that type of discussion. However, with regard to children's TV, I offer this newspaper evidence: Ban under-threes from watching television, says study | Society | The Guardian . And while it only deals with the under threes, I do feel that too much TV can't be good for older children either. I think that Richard E has every right to express his feelings without being pushed to provide evidence. In a way, the more people who say something, the more evidence there is, at least about people's views on the subject. I accept, that it will remain anecdotal until such time as one of the polling companies does some market research on the subject. I set out to have a conversation on this site, not an academic discussion.

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Charles Stuart's 159 posts GB flag
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