REVEALED: Inside Lisa Nandy's 'new tax' as 'BBC licence fee faces being scrapped by 2027' under Labour

As part of a review into how the BBC is funded, which will begin this year, Nandy is said to be looking at alternative models, including replacing the current BBC licence fee with funding through general taxation.

How would this work?

This would mean that instead of households paying a specific fee for watching live TV or using iPlayer, the BBC's funding would come from taxes collected by the Government.

This could include income tax, national insurance, or other existing taxes, which means every taxpayer would contribute to the BBC's budget indirectly through their tax payments.

This approach would eliminate the need for individual prosecutions related to non-payment of the licence fee, as it would be part of the general tax revenue.

The current system involves prosecuting individuals for not paying the TV licence fee, which can lead to criminal charges.

Last year, ministers considered decriminalising the non-payment of the TV licence fee after official data indicated that 1,000 individuals were facing legal action every week.

Under general taxation, this would be unnecessary because everyone would contribute via their taxes, regardless of their consumption of BBC services.

This would remove the legal enforcement aspect associated with the licence fee, as non-payment of taxes is already handled through a different legal framework.

The move to scrap the fee appears to reflect broader public opinion. Last year, the BBC published its financial results which revealed it had suffered from an £80million drop in licence fee revenues.

Approximately half a million households opted out of watching live television or the BBC’s iPlayer streaming service, dropping to 23.9 million households still paying the fee.

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Nandy has emphasised the need for a "sustainable public funding model" that is fair to taxpayers, but Government sources have indicated that funding the BBC through general taxation might not be a "realistic possibility".

The Government source said: “Funding the BBC through general taxation is not a realistic possibility, and is not being seriously considered.”

The chief concern is that if the BBC's funding were to come directly from Government tax revenue, it would become more susceptible to political influence, thereby compromising its editorial independence.

The BBC's current funding model via the licence fee is seen by some as a buffer against such interference.

One member of the public made this point on X, saying: "As usual, Labour's suggestion of funding from direct taxation leads to the worst of all possible worlds where the government directly control the BBC's funding, and therefore their impartiality and the public have no way of withholding their payment."

A spokesman for the BBC has said: “The public cares about the BBC and later this year, we will launch our biggest ever public engagement exercise so audiences can help drive and shape what they want from a universal and independent BBC in the future.

“We look forward to engaging with government on the next Charter.”