BBC is accused of levying 'poll tax on television'

The corporation put its plans for an annual increase of 2.3 per cent to the House of Commons Culture, Media and Sport Select Committee, saying it needed the money to pay for the digital switchover. But MPs were joined by pensioners' groups in their criticism of the proposed fee for the next seven-year settlement.

Nigel Evans, a Conservative MP, described the licence fee as a "poll tax on television" and said: "There are millions of people who don't get inflation-busting income increases. How have you got the nerve to say that you want to put the licence fee up from £120 to nearly £180 and expect those people to stump up the cash?"

Help The Aged warned that many elderly people would be unable to pay for licences. Anna Pearson, the charity's policy and incomes officer, said: "Many under-75s are already struggling to make ends meet in the face of increased household costs such as council tax and rising utility bills. A near-20 per cent increase in the licence fee will be yet another burden."

The BBC's director general, Mark Thompson, and its chairman, Michael Grade, defended the figure at the select committee, although Mr Thompson admitted that the licence fee was already a "burden".

At present the licence fee costs £126.50, rising each year by 1.5 per cent above the retail price index (RPI). The BBC has calculated that it will need an extra £5.5bn between 2007 and 2013 to meet the cost of the digital switchover, improve its programming and become less London-centred. Targets include introducing high-definition television, launching new local television services and cutting repeats in peak time.

The BBC has pledged to meet 70 per cent of the extra costs by self-help measures, including cutting 7,000 jobs and increasing commercial revenue. For the remainder, it is relying on the Government to award a licence-fee increase which would see households paying nearly £180 a year by 2013.

Mr Thompson said that a Mori survey commissioned by the BBC showed that most viewers would be prepared to pay an extra 10 per cent to improve programming, while 42 per cent would be prepared to pay twice the current fee.

Paul McLaughlin, broadcasting officer of the National Union of Journalists, said that, although the union is currently fighting to prevent "damaging cuts" to the workforce, it supported a "strongly funded BBC".