With the next General Election not due until 2029, it'll fall to the current crop of MPs to agree on the BBC charter renewal before the deadline in late 2027. Given Prime Minister Keir Starmer has a stonking majority of 170 seats in the House of Commons, we're likely to see the Labour Party's position cemented for the next decade.
So, what does the newly-elected Government believe about the TV licence fee?
One thing we can already rule out from the new administration replacing the £169.50 TV licence fee with a Netflix-style subscription. The subscription model was mooted under the last Conservative Government.
Looking into the feasibility of these plans, last year then-BBC Chair Dame Elan Stephens warned that viewers would need to be charged £400 a year under a Netflix-style model to make up the same £3.74 billion annual income generated by the TV licence fee model.
That would equate to £33 per month, compared to the current rate of £14.12.
"When the cost of the licence fee is compared with the monthly cost of a subscription streaming service, it would probably be around £400 a year, and that’s a pretty accurate comparison," Dame Stephens said.
It's unclear exactly where this figure comes from, but it's most likely a result of adding a subscription fee to the myriad services provided by the BBC, including eight national television channels, 10 radio stations, digital apps like BBC News, BBC Sport, and BBC Weather, as well as podcasts and on-demand boxsets from BBC iPlayer and BBC Sounds, as well as educational content from BBC Bitesize, the Proms, and the BBC World Service.
For comparison, Netflix charges £10.99 per month alone for ad-free access to its films, documentaries, and TV shows. That's £131.88 annually for a much narrower range of content.
Prime Minister Keir Starmer talks to journalists onboard a plane to Washington DC to attend the 75th Nato summit. During the flight, Sir Keir discussed his views on the TV licence fee and its future under the Labour Government
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BBC Director General Tim Davie has publicly rejected calls for a subscription model as it would incentivise the BBC to only produce content for its most die-hard subscribers. Earlier this year, he said: "We should not create another commercial walled garden or a narrow BBC that provides a niche service for the most hardcore users.
"The very wonder of the BBC is that quality news sits next to genres, such as drama and sport, thus ensuring widespread usage."
Quizzed on whether a Netflix-style subscription could work by GB Newson a recent flight to Washington DC, Sir Keir Starmer responded: "We’ve committed in our manifesto to obviously the BBC and to the licensing scheme. It comes up, I think from memory, in 2027 so obviously there’s going to be some more thought between now and then, but we are committed to the BBC and we are committed to the licensing arrangements."
BBC Director-General Tim Davie talks to King Charles III and the Queen during a visit to the BBC World Service at BBC Broadcasting House, London, to mark its 90th year in 2022
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One of the ideas floated by Nadine Dorries, when she was serving as UK Culture Secretary in Boris Johnson’s Government was a so-called "Television Tax" linked to total household income or council tax bands. This would solve one of the biggest complaints about the TV licence fee — it's a regressive tax.
Regardless of whether you're earning £10,000 or £100,000 a year, you will pay the same £169.50 TV licence fee. Obviously that means contributing to the BBC's coffers is less taxing for those who earn the most.
Former Conservative Culture Secretary John Whittingdale famously said the regressive nature of the TV licence fee meant that it was "worse than a poll tax."
Likewise, Ms Dorries repeatedly criticised the unfair nature of the current BBC funding model during her time in Cabinet, something that chimes with statements from former BBC Chairman Richard Sharp.
Last summer, he said: "I would be in favour of a form of a mandatory payment – currently the licence fee.
"There is one issue, which is that it’s regressive, which may need to be addressed. You can look at models around the world – there’s a broadband tax, there’s household tax and there’s the licence fee. Change is disruptive from moving from one mechanism that works to another."
Sir Keir Starmer hasn't publicly addressed the idea of a Television Tax based on household income or council tax bands, but it's something that could soon reemerge as the Government looks to modernise the TV licence fee model as we head into the 2030s.
Lisa Nandy serves as Secretary of State for Culture, Media and Sport in Keir Starmer's Government, a brief held by Thangam Debbonaire until she lost her seat in the General Election. We have a rough idea of what the 44-year-old MP for Wigan believes about the TV licence fee as she outlined her views when she was running for the Labour leadership back in 2020 in an article for the website, LabourList.
Lisa Nandy suggested a new model where the BBC is "owned and directed by licence fee holders," changing the relationship between the public broadcaster and its audience. The annual £169.50 fee — an increase of £10.50 introduced earlier this year—wouldn't just pay for the upkeep of linear channels, live radio, and iPlayer, but would also make viewers stakeholders in the BBC.
Under the proposal, licence fee payers would have a say in major BBC decisions — addressing a common criticism that the annual fee is a one-way transaction, with limited accountability to those who fund it.
Lisa Nandy, Labour MP for Wigan, is Secretary of State for Culture, Media and Sport and will be leading the review of the BBC charter when it comes up for renewal in 2027
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According to the article by Ms Nandy, a new model where the BBC is "owned and directed by licence fee holders" would be an improvement and ensure the broadcaster is accountable to its funders — the public who pay the licence fee — and not just to the Government of the day.
"To maintain the BBC as an institution, it must be accountable to those who fund it – the British people. Instead of tokenistic consultation with the people who pay for it, and backroom negotiations with the government, the BBC should move to a model of being owned and directed by licence fee holders – who can help decide the trade-offs that the BBC must make to secure its future," wrote Lisa Nandy in the four-year-old LabourList article. "This will mean a new structure for the BBC board that focuses on genuine public representation and participation – and greater commitments to transparency.
"This will support greater independence from the government, and protection from the Trump-like assault on free and open media that this government wants to pursue.
"It is time for all of us to be more forceful in supporting a free and open media. Because if we don’t fight for it, we will lose it and we will all be damaged as a result."
Now the Wigan MP is in a position to implement such radical changes, it'll be interesting to see whether her views have changed in the intervening years. It's worth noting that such dramatic reform would face challenges.
BBC bosses would need to find a way to juggle the requests and opinions of 24.4 million licence fee payers, maintain its editorial independence, make strategic decisions about the long-term health of the business, and meet all of its output requirements as a public broadcaster. That's a lot of paperwork and dozens of new processes and checks would doubtlessly need to be put in place to make it happen.
British viewing habits have shifted dramatically since the last BBC charter was agreed in 2017, with millions now choosing to watch programmes, films, news bulletins, and documentaries on-demand via an internet connection. With so much content streamed via an internet connection, many have suggested looking to broadband as a solution for a future-proofed funding model for the 2027-2037 charter.
Under the timeline agreed by the previous Government, led by Rishi Sunak, traditional aerial broadcasts across the UK will only be guaranteed until 2034. As it stands, broadcasters will be able to dismantle and switch off costly terrestrial television broadband in favour of more affordable streaming online.
But campaigners have warned about the dangers of moving to all-broadband model for the TV licence fee. Aside from the BBC licence fee, there’s no cost when tuning into linear TV channels using an aerial. Likewise, if you have a satellite dish, Freesat lets you watch dozens of free-to-air channels at no cost.
That’s not the case when the primary delivery method for live television is broadband. Ofcom figures show that roughly one in ten households — that’s 2.4 million across the UK ― find it difficult to afford their current broadband subscription.
There's also an issue around access, since Ofcom figures show that 31% of Britons aged 65 and over don’t currently use the internet at home. If the TV licence fee moves to a model that assumes everyone is connected to a high-speed broadband connection and can afford monthly internet bills as well as the TV licence fee, it could see millions ditch the world-renowned UK public broadcasters.
David Coulson, of consultancy firm EY that published a report into the dangers of moving away from aerial broadcasts in the 2030s, said: "Despite widespread broadband coverage, universal access for all viewers should not be taken for granted. It is crucial those least likely to have high speed broadband in 2040 continue to have access to television, particularly vulnerable groups such as the elderly, disabled individuals, low-income households, and rural communities."
The most recent update from the UK Government on its ongoing push to improve broadband connections across the UK before 20205, the chart shows an increase in connections to high-speed gigabit-capable internet — but campaigners say that uptake is another major barrier DEPARTMENT FOR SCIENCE, INNOVATION AND TECHNOLOGY According to data from Sky shared with GB News, 90% of its new customers now opt for broadband-powered kit over traditional satellite dishes, something that's led it to reduce staff numbers. And Everyone TV — the organisation behind Freeview and Freesat backed by the UK's biggest broadcasters, including the BBC, ITV, Channel 4 and Channel 5 — launched a new free-to-air platform in the UK earlier this year, known as Freely. Unlike Freeview and Freesat, this all-new proposition streams linear channels and on-demand boxsets over a wired or wireless internet connection.
This is similar to solutions like Sky Glass, Sky Stream, Virgin Media Stream, and the rebooted EE TV launched last year. Relying on a broadband connection means you'll be able to position your television anywhere in your house with a decent Wi-Fi signal — not where the aerial comes into the wall.
With so many Britons turning to broadband broadcasts, Lisa Nandy and Sir Keir Starmer will need to decide whether they want to slap a new levy on millions of Britons' internet bills to solve the BBC funding issue. Equally, they could choose one of the other proposals outlined above — or something completely different. The Germans, for example, impose a “rundfunkbeitrag” broadcast tax levied on every household and business.
Either way, as the BBC begins its second century in operation, the new Government has some tough decisions to make in the next two years before the charter renewal is due.
