TV Licence replacement: is going to be French, Finnish or German?

John Whittingdale Photograph: The Guardian

Brian Butterworth published on UK Free TV 15th May 2015 at 13:39

Given that the chair of that Select Committee is now the Minister, I thought it might be instructive to look at the two alterative systems for funding the BBC within that report (click here to download).

The report looked into three other systems, one from Finland, the French one and the other from Germany.

Finnish system

Since 2013, the TV licence in Finland has been replaced by everyone 18 and over.   This YLE tax is set at rate of 0.68% of income.  It does have two protections: if the contribution is below £38, no charge is made (income of less than £5600); and the maximum personal contribution is £103.

In effect the unemployed and students don't have to pay.    Those without a TV set on middle incomes have found themselves having a new tax to pay. 

"Given that the system was only introduced in 2013, it is probably too early to judge its success."

The problem with such a system in the UK is that the current PAYE system isn't really up to it, and a large number of people make other arrangements because they are self-employed, have more than one job or have investment income.     

German system: Rundfunkbeitrag

Again, since 2013, the old system based on the number of "broadcasting receiving devices" was changed to a universal flat fee per household, regardless of television usage.  Some unemployed and student households are exempt. 

Given that the old evasion level was higher than thought, the new levy is lower than the old licence fee whist maintaining income. 

Given that it would be a reasonably trivial matter to change the basis of the UK TV Licence to "all households", this would not address the perceived issue of such a tax not being progressive (in the sense that the more you earn, the more you pay).

The Select Committee said: "The German model of a broadcasting levy on all households is our preferred alternative to the TV licence.  We recommend that the independent panel and Charter Review process should investigate the advantages and disadvantages of a household broadcasting levy as an alternative to the licence fee and on how the broadcasting levy could be made more affordable for low income groups in the UK. We also believe that the new Finnish system, of a hypothecated tax specifically for broadcasting, based on an individual’s income, although still its infancy, would still be worth consideration during Charter Review".

France

"In France, the television licence is collected with the French equivalent of their council tax (taxe d’habitation). One advantage of collecting a licence fee with another tax or through a utility bill is that the collection costs can be shared with another body and reduced. If the licence fee were collected through the Council Tax or with a utility bill, nonpayment could be pursued through the civil courts."

The issue of making a public service broadcaster tax "progressive" could be addresses by using the council tax banding to make the fee higher in households with larger properties.   The system already has scope for discounts for single households. 

Also, the committee notes that

"While the licence fee annual collection cost appears extremely high, BSkyB told us that £100 million was nothing compared to what the BBC would need to spend on marketing in order to retain subscribers."