BBC licence fee expected to top £200 amid row over ‘YouTube tax’

The BBC licence fee will exceed £200 a year within the next five years, new figures suggest, as millions stop paying for it.

The analysis by the spending watchdog, the Office of Budget Responsibility (OBR), suggests 2.7 million people will switch off from paying the licence fee by 2031/32, forcing it to rise from £180 to £202.

It comes after The Independent revealed that the government is looking at plans to force up to 4 million households to start paying it again by extending it to streaming services in a so-called “YouTube tax”.

The proposal as part of the Charter renewal, is set to be outlined in a government white paper before Christmas.

It would mean people will need to pay the licence fee if they want to use streaming services such as Youtube, Netflix, Amazon Prime, Apple TV and Disney+. Currently it does not cover those services.

The expected drop of 2.7 million licence fee payers represents a significant downgrade from the OBR’s previous assumptions in March, when it predicted that 21 million people would still be paying it by 2031.

It fits a pattern of the BBC losing around 500,000 fee payers a year as people continue to switch off over continued controversies on coverage, impartiality and high salaries for some of its star presenters.

Both the Tories and Reform have come out in opposition to the proposed YouTube tax and have suggested the BBC should instead look to adopting a subscription model.

Currently people are expected to pay the licence fee to use BBC iPlayer and live TV on any platform. However, many people use streaming services, especially YouTube to get around the licence fee.

New BBC director general Matt Brittin is overseeing a major cost-cutting drive to save £500m over the next two years.

The cuts are expected to result in around 2,000 job losses, while the broadcaster has also begun cutting programmes and has announced the closure of the BBC Three channel, Radio 4 plus and BBC Scotland.

A BBC spokesperson said: “We have consistently argued that the current funding model is outdated and needs reform.

“We will continue to engage with government to secure a new charter that provides sustainable, sufficient and universal funding so the BBC can deliver for audiences for generations to come.”

A government spokesperson said: “The BBC must be funded by a model that is sustainable and fair to all those that are paying it.

“Through Charter Review, we are looking at a range of options, including how the BBC can operate more efficiently, generate more commercial revenue, and how the licence fee could be reformed.”