Anthony Barnett on Our Kingdom lambasted the BBC’s coverage of the David Davis campaign. I have spent nearly six years trying to persuade the BBC to acknowledge, let alone make amends for, the worst breach of impartiality in its history (a documentary on the Mau Mau rebellion purporting to be objective but actually presenting a lone scholar’s highly tendentious – and subsequently widely discredited – opinions).

In truth, these concerns regularly arise, and for the most part the BBC is aware of its obligations, especially under the new governance structure, which was responsible for a recent report by John Bridcut on the whole question of alleged liberal bias in the BBC. For me, funding is a much more important long term issue.

There are those who would die in a ditch to defend on principle the present licence fee – what former BBC DG Greg Dyke regularly calls an unfair poll tax. I would have much less of a problem with the licence fee if it were equitably levied: on those who can afford to pay tax, in proportion to their taxable income. A BBC charge of 0.75% of taxable income, collected with each individual’s tax payments, would leave the BBC with roughly its present income, but excuse those too poor to pay tax.

In the past, there have been concerns about editorial independence were the BBC to be funded directly out of tax receipts. However, the BBC’s World Service is already funded that way, as is 15% of its domestic service cost (the proportion paid by the Treasury on behalf of the over-75s), without any issues of supposed interference in editorial content. S4C and Gaelic Broadcasting are also directly funded, and similarly untouched by fears about independence.

Sunder sidesteps the more radical potential way of funding the BBC – voluntary subscription – by suggesting it would be too expensive to introduce. This is almost certainly untrue. The cost of collection and evasion of the licence fee is over £300m a year, excluding the hidden expense of the vast number of court cases the BBC initiates each year.

The last published estimate showed that 400,000 people were threatened with prosecution each year, and 150,000 actually prosecuted.

There is a social cost to this process, as well as a financial cost. A large proportion of those prosecuted are single parents on low incomes, for whom the licence fee is a considerable burden. To add to this burden the court-imposed fines is effectively to criminalise poverty. Almost no-one now goes to jail for failing to pay the evasion fine, but the victims of the system are often dragged back to court soon after a conviction, having fallen behind again and now finding themselves on the enforcers’ radar.

The reason that voluntary subscription has not been pursued in the past is not cost, but technology. However, the switchover to digital television means that by 2012 every functioning TV in the country will have the means of decoding scrambled TV signals – the technology that underpins pay-TV in all delivery systems. It seems quixotic to maintain the fleets of detector vans, armies of snoopers and mountains of paperwork associated with a physical licence when anyone failing to pay the licence fee in the digital age could simply be cut off from receiving the BBC’s signals.

And there’s the rub. Advertiser-funded free-to-air channels would still be available to non-payers, and the BBC could suffer a loss of viewers. However, surely even the BBC would prefer to have viewers who have chosen to pay for its services rather than those who have been coerced.

As it happens, there is an abundance of evidence that very few people would choose to do without the BBC, at a given price. Moreover, a series of studies has shown that a large proportion of the population would willingly pay more for the BBC than the current level of the licence fee, strongly suggesting that if the BBC introduced a series of channel packages, from, say, just BBC One through to the full array of current channels plus HD options and perhaps a sports channel, take-up of one or other of these choices would be nearly universal, and BBC income would rise, rather than fall, especially as each TV set would need its own smart card, allowing the cost of the cheapest package for a single TV to be as low as £5 per month.

The paradox of the present situation is that people too poor or too unwilling to pay for the BBC are forced to subsidise those who value it well above the level of the licence fee, mostly because that level is a much lower proportion of their net income than it is for the poorest. A tax-based licence fee removes that inequity, but a layered consumer proposition which is entirely voluntary gives the BBC a much stronger connection with its viewers and listeners, real accountability for the first time, and the opportunity to continue developing new services that will appeal to subscribers.

The BBC has in the past run a layered fee system: at one time, there were separate charges for radio and television, and when BBC2 was launched it effectively entailed a supplementary licence fee, as it was the only channel available in colour, and a colour licence cost more.

When the BBC first introduced its digital services, the BBC supported the recommendation of the report from a committee chaired by Gavyn Davies that a supplemental licence fee be charged for those services, as it was only fair that those who used them should pay for them. It was Tony Blair, under pressure from BSkyB and ITV Digital, who over-ruled this proposal.

Objections to subscription
One objection that has been raised to subscription is that it might induce the BBC to thin out its public service content as opposed to entertainment, so as to maintain the highest level of subscribers. There are three answers to this point.

First, there is a well-established public demand for high quality products: without it, publications like The Economist and the Financial Times could not exist, along with a huge array of other magazines.

Secondly, the research that has been done shows that the present balance of BBC output would deliver enough subscribers to maintain the present quality of service: and as the BBC is non-profit-making and publicly owned, there should be no pressure to dilute in order to maximize revenue.

The third answer is perhaps the most fundamental: if the BBC feels that it would be wrong to impose on voluntary subscribers content that had only limited appeal, then it is entirely open to Parliament to re-invent public service broadcast funding, along the lines of one of the options floated by Ofcom in its recent Public Service Broadcasting report (published on April 10th): a funding agency, dedicated to such content, and charged with ensuring plurality and quality of supply across the old and new media.

This would be a much more logical and elegant way of embedding public service content in our media in the future than, say, top-slicing the licence fee.

Conservative approach
Sunder asked what the Conservatives think about all this – presumably assuming that I might know something, because a think tank I chair produced a report on the future of the BBC (Beyond The Charter (pdf file)) that was commissioned by John Whittingdale when he was the shadow minister responsible for broadcasting.

In fact, the Conservatives largely ignored that 2004 report, and the latest publication from their Research Department (Plurality in the New Media Age‘ – pdf file) shows no interest in any change in funding arrangements.

As Anthony Jay’s paper shows, there is little to be learned from right-of-centre thinking on these issues currently.

After all, why keep even a reduced licence fee to pay for the most populist of the BBC’s TV channels, when 90% of what it transmits could be readily funded by the market-place? And what Radio 4 most needs is an effective competitor, not an enshrining of its unique status.

So we have a radical option for funding the BBC in the future, which would allow it much greater freedom and flexibility whilst introducing real accountability and transparency for the first time: and this would fit well with Ofcom’s current thinking in trying to envisage a public service content system in the future that would be plural and wide-ranging. We could also move to a fair, though still “single-package”, version of the licence fee, which would also eliminate all the current costs of collection and court cases.

Or we could stick with the social misery, inflexibility, lack of accountability and absence of transparency of the current regressive and unfair system. Time for the “liberal-left” to take off its blinkers and understand that dancing round the licence fee totem pole is no substitute for thinking clearly about what is best for the BBC and its audiences.

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Extracts from this article were first posted as comments in reply to Sunder Katwala’s article