Debate over future structure of BBC heats up

Shadow culture secretary Tim Yeo has called for a radical restructuring of the BBC as part of the next charter review in 2006, and slammed the licence fee as "a regressive television tax".

Mr Yeo, who set out his arguments for a shake-up of the national broadcaster in an article for the Financial Times, called for a three-pronged reform package to address the role of public broadcasting, to allow the BBC to more freely exploit its brand commercially, and to deliver more empowerment for the viewing audience.

The present licence-fee system – which raises £2.2 billion a year for the BBC – is, said Mr Yeo, “a compulsory and regressive television tax" which has become outmoded, moreso he claimed, in the last decade as technological advances in digital and satellite broadcasting provide greater choice and competition in the market.

All this has conspired to reduce the BBC's public service broadcasting role as it no longer needs to "remedy market failure" making it doubtful whether "entertainment within the public service broadcasting remit is justified", according to Mr Yeo.

The Conservative spokesman did not go as far as calling for the scrapping of the licence fee, instead opting to call for a reduction in the fee in return for the BBC placing programming on pay-per-view.

Mr Yeo concluded: "Broadcasters must stop treating the viewer as a passive creature, content to flop down in front of the screen and consume a diet that someone else has chosen."

However, in a timely speech to the Social Market Foundation conference, BBC Chairman Gavyn Davies defended the corporation against many of the points raised by Mr Yeo.

"Sometimes, the BBC is even now portrayed by its competitors as a lumbering giant which is becoming ever more dominant in the broadcasting and online markets. But actually the truth is very different. Far from being larger than ever before, the BBC is in fact, smaller than ever before – not because it has been failing audiences but because it faces far more competitors than ever in its history," he said.

"The consumer has reaped the benefits from competition between the BBC and the private sector."

On the argument for subscription programming, Mr Davies said that if the BBC was bundled into two distinct parts, it might "marginalize the public service channels thus losing mass audiences for national events".

Citing Sky One which, he said, contains only 6% of programmes originally made in the UK, Mr Davies added that the "fundamental economics of subscription television" means that home-produced programmes would be reduced.

(GMcG)