Peter Brooke, the Secretary of State for National Heritage, disclosed in a Commons' reply that the fee would rise in line with inflation until the BBC's royal charter expires in 1996.
The new fees of pounds 84.50 for a colour licence and pounds 28 - up from pounds 27.50 - for a black and white set, will come into effect from 1 April. John Birt, director-general of the BBC, welcomed the announcement. 'It means the fruits of our hard- won savings can go into improving programmes, and particularly to reducing the rate of repeats on television,' he said.
'Welcome, too, is the recognition of the BBC's success in recent years in becoming a more efficient organisation.'
Mr Brooke said Touche Ross, the accountants invited by the Government to study the BBC's efficiency, had reported favourably. 'The consultants concluded that the BBC had done well to manage its financial position during a time of considerable change.'
About pounds 1.5bn a year revenue is generated by the fee.
Mr Brooke congratulated the BBC on its efficiency savings and for its efforts to generate new revenue. He said the decision to link the licence fee to changes in the retail price index over the next three years 'will enable the BBC to channel savings into programmes and . . . largely eliminate its annual borrowing'.
Robin Corbett, Labour's broadcasting spokesman, said: 'Against the high and rising cost of satellite services, the BBC licence still represents extremely good value for money.
'I hope the BBC will use this period to ensure its programme making capacity, and the jobs on which that depends, is maintained.'
BBC financing beyond 1996 has yet to be decided.Reuse content