Think-tank calls on coalition to scrap the BBC licence fee

THE licence fee that funds the BBC should be scrapped and replaced with a voluntary subscription, a think-tank will say today.

In a report entitled “Global Player or Subsidy Junkie?”, the Adam Smith Institute will argue that the BBC’s reliance on the licence fee has led to stagnation.

David Graham, a former BBC producer and the report’s author, argues the BBC is spending too much time fighting regulatory scrutiny instead of selling its content internationally.

If it were to charge a voluntary subscription, Graham says, it could take on the big US studios and provide substantial tax revenues for the exchequer.

“Continuing with the current funding model means justified hostility from the rest of the industry, contraction and decline for the BBC,” Graham is expected to say.

Tom Clougherty, executive director of the Adam Smith Institute, will add: “Most of the reforms on the agenda at the moment – like scaling back the BBC or sharing licence fee revenues with other broadcasters – risk stifling the potential of the British media.”

An aide to Jeremy Hunt, the culture secretary, said the government supported the licence fee, but warned it could be cut or frozen in line with the coalition’s austerity drive.