BBC licence fee is ‘regressive tax’, broadcaster’s former chair says

The head of Britain’s media regulator and a former chair of the BBC, Michael Grade, has described the broadcaster’s licence fee a “regressive tax” that needs to be re-examined by the government.

Pointing out that both he, a well-paid executive, and a single mother living on a low income, pay the same £159 licence fee, the former ITV and Channel 4 boss said one of the big questions for the next BBC charter review was whether the broadcaster should be allowed to compete for advertising revenue against commercial stations.

In an interview with Financial Times, Grade said he believed that the BBC needed to be more “independent and transparent” in its approach to how complaints are handled, something he said Ofcom has “pushed quite hard” for.

The government is expected to overhaul the BBC’s complaints system as part of a review into how the corporation is funded. In recent weeks its reporting has been criticised by both sides of the Middle East conflict.

In 2022, the then culture secretary, Nadine Dorries, froze the BBC licence fee for two years and argued it should be abolished completely in 2027.

Since then, rightwing politicians and writers at news outlets such as the Daily Telegraph have tried to undermine the national broadcaster, which has been labelled by some on the right as the enemy of the Conservative party.

The government is interviewing a shortlist of about 10 candidates to replace Grade, who was picked as chair of Ofcom after Boris Johnson’s attempt to appoint the former editor of the Daily Mail, Paul Dacre, was overruled.

“The board does need to be much more publicly open about what they think about some of the stuff that becomes controversial. We hardly ever hear from the board and that leaves a vacuum,” Grade told the FT.

Ofcom has employed an additional 350 people to handle the extra workload from the recently passed Online Safety Act, which imposes rules for tech groups on harmful and illegal content.

Ofcom will have powers to require tech groups to use “accredited technology” to search encrypted services for illegal content, which has raised objections from the industry. Grade said Ofcom would set out how it would deal with encryption issues next year.

A BBC spokesperson said: “The BBC’s existing Charter runs until 2027 and securing the long-term future of the BBC is a priority. We are open minded about the future and it is right there is a discussion on if and whether the licence fee needs to evolve. We look forward to a healthy public debate about how the BBC is best equipped to continue to deliver for audiences in the UK and around the world.”