Licence fee for TV to be pounds 101

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THE TV licence fee is to cost more than pounds 100 for the first time in its history, to help the BBC's attempts to recover the cost of its new digital services.

The Government announced yesterday that the licence would go up by 3.7 per cent from next year, but pledged to keep rises below inflation in 2000 and 2001.

Chris Smith, Secretary of State for Culture, Media and Sport, told MPs that the fee would rise to pounds 101 for colour and pounds 33.50 for black and white TVs from April.

Under a five-year funding deal inherited from the last government, the fee should rise by just under inflation every year, but the minister said that exceptional spending pressures on the BBC had to be taken into account.

Despite pressure from the BBC to put up the charge even more, the rise would be much smaller after next year, with the fee increasing by 1 per cent under inflation in 2000 and 2.5 per cent under inflation in 2001.

The rises will not affect a separate review into BBC funding ordered by Mr Smith in October. An independent panel, whose chairman is due to be announced soon, will oversee the review.

In a written parliamentary answer Mr Smith said that the licence fee rise was "designed to allow the BBC to plan its business properly" over the next few years.

Peter Ainsworth, the Tory culture spokesman, said that the licence could only be justified if the corporation stuck to its public-service remit and avoided competing with commercial channels for a mass audience.