TV licence fee to rise by pounds 6 to fund BBC's digital plans

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The Independent Online
Chris Smith, the Culture Secretary, will today confirm an inflation- busting increase in the BBC's annual licence fee next year.

Viewers will have to pay pounds 97.50 next year for a colour TV licence, an increase of pounds 6 - or 6.6 per cent - on this year. The announcement will support the Conservative government's five-year licence formula for the Corporation, unveiled last year.

Labour said at the time that the proposals were "surprising" and would be reviewed by the party if it came to power. The review is now complete, and the Conservative's proposals will be fully implemented.

The present fee of pounds 91.50 represented a pounds 2 rise on the previous year, in line with inflation. After next year, there will be one further above- inflation increase, before the fee rise dips below inflation for 2000 and 2001.

Next year's big jump will be used to fund the introduction of digital. It emerged yesterday that the BBC would need to use up to pounds 7m of licence- payers' money each year to pay for capacity, encryption and other services on digital satellite television.

The BBC has committed to transmitting its digital channels via as many technologies as possible so as to ensure its new services can be seen by all its licence-fee payers. ITV, by contrast, is not at the moment intending to broadcast its digital channels on satellite or cable.

A BBC spokesman said the expense of broadcasting on digital satellite should be compared to the cost of transmitting on the current analogue technology. That is thought to amount to more than pounds 20m annually.

The Corporation is using digital television to introduce such as News 24, the 24-hour news channel which is currently only seen by a minority of the population with access to cable television. Other offerings will include BBC Choice, featuring "companion" programmes designed to complement those running on BBC1 and 2; and BBC Learning.