What’s in a name? Quite a lot, actually

Some of us love it. Others make a point to avoid it. And there are those who don’t particularly mind it one way or the other. Whichever camp you fall into, there’s no denying that television is accessed by and influences billions (oh yes, billions). Small wonder, then, that the business of funding television is a serious one.

Some networks obtain their funding through private viewer subscriptions (such as Sky, the network which tends to inspire like Marmite). Others are funded through advertising (such as ITV, where the programmes are interrupted by adverts every few minutes, or, depending on the relative quality, the adverts are interrupted by the programmes). The BBC, on the other hand, is funded a little differently as everybody knows. The majority of its income is generated through public subscription, better known as the TV licence fee. For now.

For now?

Well, there’s been talk. Yes, talk – of the licence fee being… replaced. But if you were hoping we were going to say that it might be scrapped altogether, meaning that you wouldn’t have to pay for watching live TV, sorry to disappoint.

And when you have recovered from that disappointment, you might start wondering what will take its place. Some are calling it a ‘universal levy’, others a ‘household levy’.

What’s the difference?

Quite a bit, actually. First off, while the TV licence is only paid by those who watch live TV, the new levy would be paid by everyone. Also, under this household levy system, it may be that not everyone would pay the same amount. At the moment, while there are some who are exempt from paying the TV licence fee, such as all-student households, for almost everyone else it’s a flat-rate. It’s been suggested that the new levy should be means-tested. The TV licence is a flat-rate fee, and so makes up a larger proportion of lower-income households’ outgoings compared to those of higher-income households. Making the levy means-tested, it’s argued, would go some way to addressing this issue. All this means that the levy would effectively be more like another bill to pay when that dreaded time comes around and our bank accounts take a bit (OK, maybe more than a bit) of a hit.

So why, exactly?

Several reasons. For starters, it would increase the BBC’s income considerably. This is partly because more households would be required to pay it, and also because the levy would be easier to enforce. It’s estimated that, last year, the cost of collecting the licence fee and chasing those trying to evade it was £100m. In fact, in 2013 around 10% of magistrates’ cases related to prosecuting those who had tried to evade paying the TV licence fee. That, together with the fact that the BBC is facing budget cuts of around £700m, means it’s not so surprising that the BBC is backing the introduction of this levy.

It’s also been argued that this levy system would be fairer, mainly because by making it something that all households have to pay, that not-so-little loophole of catch-up TV, which currently isn’t covered by the TV licence, would be closed. After all, why shouldn’t those who only watch catch-up TV contribute to the cost of making those programmes and maintaining those services? And the same argument’s been made for those who don’t watch live or catch-up TV, but who listen to BBC radio.

And it’s for these very reasons that the Culture, Media and Sport Select Committee, chaired by the (now) Culture Secretary John Whittingdale, backed the levy in a report published in February this year.

But the proposed levy is by no means perfect. If it’s to be means-tested, how that would be determined and what the cut-off point would be, not to mention who would do the testing, would need to be set out. And then there’s the cost of all that.  So, as we said, much remains to be ironed out.

And when can we expect this?

It’s not clear exactly when the levy will be introduced. And as for whether it’ll be introduced at all, that’s not set in stone either. John Whittingdale has made it clear that it’s unlikely a decision on this will be made before next year.

Hopefully that’s simplified the what, why and how of the proposed levy for you. We here at Simplify the Law rather enjoy simplifying things, so it’s win-win all round.

More on simplifying

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