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TV licence will be revamped to include BBC iPlayer

Tuesday, July 7th 2015 by Ellen Branagh

A loophole that allows people to watch catch-up services on BBC iPlayer without a TV licence is to be closed, the government has announced.

The Department for Culture, Media and Sport (DCMS) said the government will bring forward legislation in the next year to “modernise the licence fee” to cover public service broadcast catch-up TV.

At the moment, a loophole means you do not need a TV licence to watch online catch-up services like BBC iPlayer, or to watch ‘over the top’ streaming services like Netflix or Amazon Prime.

But the DCMS announcement, made as part of a deal with the BBC that will see the broadcaster take on the cost of giving free TV licences to over-75s, means that loophole will be closed.

Fans of streaming and catch-up TV could now see themselves having to pay the £145.50 licence fee, though exact details of how a new system would work have not been released.

Earlier this year the House of Commons Culture, Media and Sport Committee suggested that the licence could be replaced by a new compulsory levy placed on every UK household.

The move is likely to recoup some of the £650m cost of the BBC funding TV licences for the over-75s.

DCMS said the broadcaster will start taking on the cost in 2018/19, building up to the BBC taking on the full costs from 2020/21.

Outlining an agreement between the government and the BBC, DCMS said the government also plans to reduce the broadband ringfence – the amount the BBC has to set aside for superfast broadband – to £80m in 2017/18, £20m in 2018/19, £10m in 2019/20 and nothing in 2020/21.

The licence fee will also increase in line with inflation, subject to a review of the BBC’s charter, which sets out the aims and purposes of the corporation and governance arrangements including its relationship with government.

'iPlayer loophole'

BBC director general Tony Hall said: “We have secured the right deal for the BBC in difficult economic circumstances for the country.

“This agreement secures the long term funding for a strong BBC over the next Charter period.

“It means a commitment to increase the licence fee in line with inflation, subject to Charter Review, the end of the iPlayer loophole and the end of the broadband ringfence.

“In the circumstances, the BBC has agreed take on the costs for free licence fees for over-75s, and after the next parliament, will take on the policy.”

Chancellor George Osborne said: “The BBC is a valued national institution that produces some of the finest television and radio in the world. But it is also a publicly-funded body, so it is right that it, like other parts of the public sector, should make savings.”

He said by taking on the cost of TV licences for the over-75s, the BBC would help ease pressure on taxpayers.

“The decisions the BBC and the government have reached together will also secure its long-term future, with a funding model that is sustainable and can adapt in an age where technology is rapidly changing,” added Mr Osborne.

Culture, media and sport secretary John Whittingdale, who has previously said the licence fee needs ‘tweaking’, added: “The BBC is a world-class broadcaster and a cultural institution producing some of the best television and radio in the world.

“However as a publicly-funded institution, it also needs to make savings and contribute to what we need to do to get our country’s finances in order.

“I welcome the BBC’s commitment in reaching this funding agreement, which is an important issue for its own future.”

The commitment to give a free TV licence to all households with an over-75 year old will be honoured throughout this parliament, DCMS said.

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