Channel 4 chairman says BBC should become Sky-style pay-TV service | Media | The Guardian
Lord Burns warns that replacing the licence fee with a household levy would be a ‘dangerous route’ for the corporation to take

The chairman of Channel 4 has warned that the idea of replacing the BBC licence fee with a household levy would be “dangerous”, saying that the corporation should become a Sky-style pay-TV subscription service.

Lord Burns
, who spent the best part of 18 years working at the Treasury, warned that funding the BBC with a household tax would put the corporation’s independence at risk.

“My view is a [household levy] is quite a dangerous route that would take the licence fee into the same territory as other taxes, which would build up quite a significant risk about the independence of the BBC,” he said, speaking to the House of Commons culture select committee on Tuesday.

“The great advantage they have had with the licence fee is with five- or 10-year settlements there has been an important degree of protection. To turn it into a tax will probably be good from the point of view of [eliminating] evasion and avoidance but that puts you in the hands of the Treasury.”

Burns said that his extensive experience at the Treasury had shown that it could be very risky to rely on funding from a form of taxation under the control of the government.

“[You] should be very cautious about putting the BBC’s finances into a position where it is just another item on the government’s books and where it could change on a year-by-year basis,” he said. “In my experience everything is up for play each year. Do we really want BBC income up for debate each year?”

Committee member Labour MP Paul Farrelly pointed out that the type of household levy being considered, which the BBC has itself backed, would somehow be collected and managed independently of government.

Burns, who was appointed in 2003 as independent adviser to then culture secretary Tessa Jowell ahead of the last BBC charter review, argued that “we are some way from a position where government will allow an independent body to set the licence fee”.

Burns said that he has long been a proponent of the BBC looking to move to a subscription model, similar to that of a pay-TV provider such as Sky, over an extended period of time.

“For my sins … my own view is that some kind of conditional access in the long term is the right way forward for the BBC,” he said. “The BBC is sufficiently popular and [people] enjoy its services that they will pay up. The BBC should be doing everything they can to be in charge of their own income. I regard it as a huge prize.”

Burns cited the example of Channel 4 which, under previous chief executive Andy Duncan, had pushed for public funds, citing a looming £100m annual “funding gap”, which he has tried to make self-sufficient.

“This is what I have spent the last six years doing at Channel 4,” he said. “Getting away from the notion that Channel 4 would need public support. In the longer term [the BBC should] be looking at how to maximise the amount of income not from government. In the long term you would replace the licence fee. If you didn’t pay [a subscription] you wouldn’t get it.

“I know this divides people. And it won’t happen quickly. But they need to find a way of transitioning. If I’m asked what the end game in this should be I am a supporter of a subscription [service] in the very long term and we should be looking at how to move toward it.”

Asked his view on the scale and scope of the BBC Burns said that it is “about right”.

“There aren’t any really significant activities they should discontinue,” he said. “I don’t see where I would be wanting to look for large scale reductions. I don’t begin from a position at all that says there are obvious areas they should cut back on.”

Labour MP Ian Lucas raised the issue of the BBC being forced to take on the £750m annual cost of providing free TV licences for over-75s.

Burns said that for the government to have taken on the burden in the first place was “very strange”.

“For the Treasury to get into this in the first place I don’t think it is the high point of policy-making I’ve seen in recent years,” he said, adding that the corporation will struggle to deal with the policy. “I find it an extraordinary position not that the BBC is going to have to make decisions on how to take this forward. This gets the BBC into something which with the best will in the world I doubt it is equipped to handle.”

He also backed the idea of a unitary board, and independent regulation by an “Ofbeeb”, ideas he said had been mooted 10 years ago when he was involved in charter renewal.

“The notion the BBC should have a proper board has taken 10 years and now everyone is agreeing with that,” he said. “I’m pleased to see that.”
Burns said that his view over the years had changed little but he could see more of the responsibility being handed to the board than he initially envisioned, and a “rather smaller role for Ofbeeb”.

Asked about proposals such as the BBC plan to fund 100 journalists to cover local news, Burns raised his wider concerns about how difficult the corporation can be to work in partnership with.

“It’s back to execution,” he said. “The BBC is not an easy partner. It doesn’t do much where it isn’t the leader. They always want to be the leader. It is a characteristic of the organisation. The closer you get to the BBC and more you try to negotiate, work, make arrangements with them it is a difficult organisation to deal with.”