THE BBC licence fee will go up by less than the rate of inflation over the next five years, it was reported.
The government is said to be hesitant about raising the fee amid skyrocketing household bills.
This year, the fee went up from £157.50 to £159 and talks are ongoing to determine how much it will cost in the future.
But ministers have rejected a demand by BBC bosses to increase the fee in line with inflation, as has happened in recent years, despite them warning it could lead to significant cuts in “quality” output.
"The BBC is a hugely important national institution,” a government source told The Times.
“But equally these are hard times. Nobody wants to punish the BBC but it’s got to be subject to the same efficiency savings as everyone else.”
The BBC takes £3.2 billion from the licence fee but some Tory MPs want to see it cut and point to the success of paid for streaming services such as Netflix.
According to one MP “it doesn’t play well in the red wall”, referring to seats won by the Conservatives in traditionally Labour seats.
“I don’t think they should be getting any extra when they pay Gary Lineker God knows how much,” they added.
Jonathan Gullis, the Tory MP for Stoke-on-Trent North, called for the fee to be scrapped altogether.
“With the rise of satellite and online streaming, the imposition of a compulsory tax is now rightly questioned,” he said.
But Greg Dyke, a former director-general of the BBC, called for an increase in line with inflation.
“It’s hard to see why it shouldn’t increase with inflation given the competition it now faces,” he said.
With the rise of satellite and online streaming, the imposition of a compulsory tax is now rightly questioned
“The BBC has had a good run in terms of quality drama, for example, but that costs a lot of money.
“A lot of the money goes on news. It needs to be properly funded.”
Minister are reported to favour a compromise “mixed” approach, with below-inflation rises over the next few years before increases in line with inflation towards the end of the five-year period.
At the beginning of this year, the government decided not to move ahead with plans to decriminalise non-payment of the TV licence fee.
The idea would, however, "remain under active consideration", it said.
Over-75s now have to pay to watch their favourite shows and the year-long grace period to get used to the rule change came to an end in August.
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