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Ms Dorries told MPs that the licence fee will remain fixed until April 2024 when it will then rise in line with inflation for the following four years, up to the end of the current Royal Charter on December 31, 2027.
She said the broadcaster had been pushing for rises in line with inflation every year which would have seen the fee increase to more than £180 by 2027.
But she said the ‘global cost of living is rising’ and the Government does not believe it would be justified to hit families in the pocket in the next two years.
Meanwhile, Ms Dorries said ‘it is also time to look further into the future’ as she announced a review into the way the BBC is funded.
She said: ‘It is time to begin asking those really serious questions about the long term funding model of the BBC and whether a mandatory licence fee with criminal penalties for individual households is still appropriate.’
The Culture Secretary has previously signalled that she is in favour of scrapping the licence fee after 2027.
The announcement came after a former BBC chairman warned the £159 licence fee was ‘too much money’ as he suggested BBC2 and BBC4 could be abolished to cut costs.
Lord Grade, who was also CEO of Channel 4 and chair of ITV, said the sum ‘may not be a lot for Gary Lineker’ but it is for ordinary Britons, as he called the annual, universal levy ‘a regressive tax’.
BBC bosses have pledged to ‘continue to make a strong case to the Government for investing’ in the corporation.
In a message sent to staff today, director-general Tim Davie and chairman Richard Sharp said they ‘welcomed’ debate and ‘look forward to engaging in a discussion about public service broadcasting in the UK and how best to fund it’.
Culture Secretary Nadine Dorries today confirmed the BBC licence fee will be frozen at £159 for the next two years as she also announced a review into the long-term future of the annual levy
Director-general Tim Davie (pictured) and chairman Richard Sharp said in a message to staff that they ‘welcomed’ debate and ‘look forward to engaging in a discussion about public service broadcasting in the UK and how best to fund it’
The licence fee currently earns the corporation £3.2 billion a year. Ms Dorries is freezing the levy for two years
Delivering a statement on the BBC’s funding settlement in the House of Commons this afternoon, Ms Dorries said the broadcaster is a ‘great institution’ and it has a ‘unique place in our cultural heritage’.
‘However, in reaching the settlement I had to be realistic about the economic situation facing households up and down the country,’ she said.
‘The global cost of living is rising and this Government is committed to supporting families as much as possible during these difficult times.
‘Given that climate we had to think very carefully about imposing a potential increase on the TV licence, particularly given that any increase would expose families to the potential threat of bailiffs knocking on their door or criminal prosecution.’
She added: ‘In the end, we simply could not justify putting extra pressure on the wallets of hard-working households.’
Ms Dorries said the licence fee will be frozen for the next two years before then rising in line with inflation for the following four years.
She said: ‘The BBC wanted the fee to rise to over £180 by the end of this settlement. Instead it will remain fixed at £159 until April 2024.’
Ms Dorries said a review will now be launched to examine the future of the licence fee funding model.
She said: ‘As any serious commentator will tell you the broadcasting landscape has changed beyond all recognition over the past decade.
‘We are living in a world of streaming giants, of on demand and on pay per view and smart TVs. Technology is changing everything.’
Ms Dorries told the Commons that ‘as the tech has changed, so have audience habits, particularly amongst younger viewers’.
‘So it is time to begin asking those really serious questions about the long term funding model of the BBC and whether a mandatory licence fee with criminal penalties for individual households is still appropriate,’ she added.
Ms Dorries had signalled yesterday that the BBC licence fee will be scrapped after 2027 – if the Conservative Party is still in power.
She had tweeted on Sunday morning: ‘This licence fee announcement will be the last. The days of the elderly being threatened with prison sentences and bailiffs knocking on doors, are over.
‘Time now to discuss and debate new ways of funding, supporting and selling great British content.’
The Government’s decision to freeze the licence fee is reportedly part of Boris Johnson’s policy blitz dubbed ‘Operation Red Meat’, which aims to rebuild support among Tory MPs and voters after the Partygate row.
Officials have calculated that due to inflation currently running at 5.1 per cent the Corporation will now have to find savings of more than £2billion over the next six years.
Lord Grade told BBC Radio 4’s Today programme: ‘£159 a year may not be a lot of money for Gary Lineker but it’s a heck of a lot for many people in this country when there is inflation, an energy crisis and so on. It’s too much money.
‘The BBC in the entirety of its history has always asked for more money at every licence fee settlement.
‘It has done well cutting its costs over the last few years, but what it’s never done is given up any turf. Why do we need BBC2 and BBC4? I don’t understand it. The BBC is a bit like the monarchy, it is designed to survive and grow.’
Lord Grade said Ms Dorries had ‘fired the starting pistol’ on the debate about what could replace the licence fee.
He continued: ‘I would rule out funding the BBC by advertising because that would impoverish Channel 4 and Channel 5 etc. Subscription is a possibility but what would you do about radio? There is nowhere in the world where that works apart from very specialised services.
‘You could have grants in aid. Someone came up with an idea that you could tax the big streaming monoliths and so on… there are many ideas.
‘Time will run out very quickly and if there is going to be a transition from the licence fee we need to have that debate now.
Ms Dorries tweeted yesterday morning that ‘this licence fee announcement will be the last’
Lord Grade, who was also CEO of Channel 4 and chair of ITV, said the licence fee ‘may not be a lot for Gary Lineker’ but it was for ordinary Britons
‘What do we want from the BBC, how much should we spend on it and how do we pay for it? There are a huge number of options and I think that’s what the Secretary of State was trying to start.’
Ms Dorries’ announcement comes after a series of rows between the BBC and ministers over the Corporation’s alleged Left-wing bias.
Senior Government figures were last week incensed by its coverage of Mr Johnson’s apology to MPs over the Downing Street party row, complaining it ‘feels like the BBC isn’t going to stop until he’s gone’.
The licence fee currently earns the corporation £3.2billion a year.
BBC executives, who had called for the cost to increase in line with inflation as in previous years, told ministers it is unfair to conflate perceptions of bias with funding arrangements.
They argued that freezing the licence fee will damage the BBC’s ability to produce hit programmes such as Line of Duty and David Attenborough’s nature series.
Last year, BBC Chairman Richard Sharp said the cost of some of the Corporation’s biggest shows has doubled, while drama costs alone have risen by around 35 per cent.
The Government thinks that an inflation-linked rise is indefensible at a time when households are facing an intense cost of living squeeze due to energy price rises and tax hikes.
An ally of Ms Dorries, the MP for Mid Bedfordshire and a best-selling novelist who has appeared on ITV’s I’m A Celebrity…, told The Mail on Sunday: ‘There will be a lot of anguished noises about how it will hit popular programmes, but they can learn to cut waste like any other business.
‘This will be the last BBC licence fee negotiation ever. Work will start next week on a mid-term review to replace the Charter with a new funding formula.
‘It’s over for the BBC as they know it.’
In their internal message to staff today, Mr Davie and Mr Sharp reminded BBC employees the licence fee is ‘fixed’ until the end of 2027 but said what happens after that ‘is a matter for public discussion and debate’.
The Government’s proposed changes to the broadcaster’s funding arrangements are part of Boris Johnson’s policy blitz dubbed ‘Operation Red Meat’, which aims to rebuild support among Tory MPs and voters after the Partygate row
They continued: ‘At the moment the discussions about the future level of the licence fee for the rest of this Charter period are still ongoing, although we do expect them to conclude very soon.
‘We will continue to make a strong case to the Government for investing in the BBC.
‘There are very good reasons for investing in what the BBC can do for the British public, the UK creative industries, and the place of the UK in the world.
‘This is the case that we’ll continue to make to the Government right until the last moment.’
However, the pair said ‘it is for the Government to set the licence fee at the level that they believe is appropriate’.
They added: ‘As soon as we have more information we will let you know. In the meantime, thank you for your continued hard work, commitment and creativity.’
Ms Dorries has previously described the BBC as a ‘Left-wing’, ‘hypocritical’ and ‘patronising’ organisation which has too many ‘dull, boring, male and ageing wig-wearing men’ on presenting duties.
Source: Daily Mail