BBC licence fee frozen for next two years, Nadine Dorries announces

The license fee hasn't been scrapped but the BBC are still not in the clear, as ITV News' Sejal Karia reports

The television licence fee, which funds the BBC, is being frozen for the next two years, the culture secretary has announced.

Nadine Dorries said the annual payment, which normally changes on April 1 each year, will be kept at the current rate of £159 until April 2024.

It will then rise in line with inflation for the following four years. In that time the government will consider other ways to fund the BBC, with ministers wanting to reform the license fee.

Ms Dorries said the decision to freeze the licence fee was made because "we simply could not justify putting extra pressure on the wallets of hard working households".

She said the government was considering whether it was necessary for the UK to continue forcing people to pay a licence fee if they want to watch television.

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"It's time to begin asking those really serious questions about the long-term funding model of the BBC and whether a mandatory licence fee with criminal penalties for individual households is still appropriate," Ms Dorries said.

Labour suggested talk of scrapping the licence fee was a "distraction" from the crisis engulfing Boris Johnson's leadership and questioned whether it was a genuine attempt to help struggling families.

Boris Johnson and his top team have been consumed by the No10 party scandal in which several Covid rule-breaking parties hosted in Downing Street have been reported by the media.

ITV News Political Editor Robert Peston believes the news about the BBC's future, along with another announcement around the navy taking over patrolling the Channel for migrants, could be an attempt to distract those within his party and the general public from the crisis.

Ms Dorries' opposite number Lucy Powell asked why the government was pressing ahead with increases in National Insurance and refusing to lift VAT on household bills if it really wanted to help.

She said Ms Dorries statement in the Commonns was an attempt by the government to "throw up a distraction and finding someone else to blame for the prime minister's disintegrating leadership".

She asked: "What is it about the £13.57 a month that marks it out for such immediate and special attention to address the cost of living over the £1,200 increase in energy and household bills, or the £3,000-a-year tax increase that her government has imposed?

"Is the licence fee really at the heart of the cost-of-living crisis? Or is this really about their long-standing vendetta against the BBC? "

From next April families are typically expected to face a £1,200-a-year hit to their incomes as the energy price cap is raised and a 1.25% increase in National Insurance contributions (NICs) comes into effect, according to economic think tank the Resolution Foundation.

After Money Saving Expert founder Martin Lewis said families could be hit by a "seismic" rise in costs, ITV News created this page to show people where help might be available.

The licence fee is set by the government, which announced in 2016 that it would rise in line with inflation for five years from April 1, 2017.

The BBC has previously come under fire over the abolition of free TV licences for all over-75s, with a grace period on payment because of the Covid-19 pandemic having ended on July 31.

Only those who receive pension credit do not have to pay the annual sum.

BBC chairman Richard Sharp and director-general Tim Davie described licence fee freeze as "disappointing".

"A freeze in the first two years of this settlement means the BBC will now have to absorb inflation. That is disappointing - not just for licence fee payers, but also for the cultural industries who rely on the BBC for the important work they do across the UK.

"The BBC's income for UK services is already 30% lower in real terms than it was 10 years ago. We will set out the implications of the settlement later, before the end of the financial year, but it will necessitate tougher choices which will impact licence fee payers."

They added: "We actively look forward to the national debate on the next charter and, of course, all options should be considered. The BBC is owned by the public and their voice must always be the loudest when it comes to determining the BBC's future."