Friday, September 08, 2006

The BBC License Fee Reclassified as a Tax?

One of the speakers has just raised the fact that the 'BBc License Fee has been reclassified as a tax, so why can't we access everything it does in an open way, seeing as we've already paid for it?'

Hmn. Here's what the House of Lords had to say about it:

The licence fee as a tax

22. Since our last report there has been a significant change in the position of the licence fee. In January 2006 the Office of National Statistics re-classified the licence fee as a tax. Previously, this payment had been classified in the National Accounts as a service charge. Explaining the change the Office of National Statistics (ONS) says "in line with the definition of a tax, the licence fee is a compulsory payment which is not paid solely for access to BBC services? A licence is required to receive ITV, Channel 4, Channel 5, satellite, cable". [6]

23. We are not convinced by this argument not least because it has been the case that a licence has been required to view any television channel in the UK for many decades. Nevertheless the decision means that from now on the licence fee will be recognised as a form of hypothecated taxation.

24. Reclassification of the licence fee as a tax also has the consequence that the BBC is reclassified from the public non-financial corporations sub-sector to the central government sector.[7] The status of the BBC is thus also affected by this decision and it becomes a central government body. This change also affects the Welsh broadcaster S4C.

25. When announcing its decision the ONS tried to offer some reassurance that "These classifications are solely for the purpose of producing National Accounts and the statistical products based on them. This has no implication for the independence of these broadcasters".

26. In spite of this we are concerned about the consequences of the ONS' decision. The reclassification of the BBC as a central government body could have serious implications for its independence. There are various subgroups of public body that come under the title central government body. The only existing one that the BBC could conceivable fall into is the category of a non-departmental public body.

27. The Cabinet Office guidance on non-departmental public bodies shows that the sponsoring department of such a body has significant powers over it. For example the sponsoring department has a role in designating who the body's accounting officer will be, in approving the form of the annual report and accounts, in determining audit arrangements, in reviews on the grading and loading of posts and in setting pay remits.[8] The reclassification of the licence fee as a tax, and of the BBC as a central government body, could therefore have significant implications for the BBC's independence. We urge the Department of Culture, Media and Sport first to spell out the implications of these changes and second to explain how the BBC's independence will be safeguarded in light of them.

28. The licence fee is now classified as a tax and we note that for the first time the Government have started to use it as such. They are using it to cover costs that should be covered by general taxation, in particular the costs of providing targeted help with digital switchover. As we will discuss in the next chapter, over 75s are currently given a free television licence funded from general taxation as part of the Government's social policy. By proposing to fund targeted help with digital switchover through the licence fee, the Government have introduced a type of "top-slicing" for the first time. This is a profound change to the constitutional position of the BBC. By doing this the Government can raise taxation without being seen to do so.

29. As long as the licence fee is being recognised as, and treated as, a tax then our argument that Parliament should have a chance to properly scrutinise it becomes even stronger.

So - firstly, a Government department has pointed out that the license fee doesn't just pay for a BBC service - it is a payment for access to all broadcasters. No change there.

It also means that 'The BBC ... becomes a central government body.'

Which has implications for the BBC's independence.

Mind you, the chap who pointed that out as a rallying call to getting access to BBC data, rather than a blow to journalistic independence, has just shown a C64 emulator running in flash. Which redeems him.

If you're interested, here is a report comissioned by ITV about the license fee, and here is the ONS document about the reclassification. Tags:

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