Government ministers are distancing themselves from recommendations
for a pounds 24 top-up fee for digital subscribers in order to finance
the BBC’s digital channels, and looking at allowing the BBC to run
advertising as an alternative method of new funding.
Officials at Downing Street and the Treasury are keen to revive the
long-running debate over advertising on the BBC - a proposal considered
and rejected when Margaret Thatcher was in power, but one which Labour
has always opposed. One idea would be to allow the BBC to run
advertising just on its digital channels.
Advisers believe the introduction of advertising on some channels would
be politically more acceptable than the other alternative to the digital
levy proposed by the Davies Committee - a smaller rise in the pounds
101-a-year licence fee.
But the Cabinet is split over the issue and both Chris Smith, the
culture secretary, and Janet Anderson, the broadcasting minister, oppose
the idea of advertising on the BBC. They share the view of the
corporation’s bosses that ads could jeopardise its public service
A Government source said: ’If we do not opt for a digital fee, we will
have to consider the other options, including advertising, sponsorship
Although ministers were initially keen on the Davies plan, they are
nervous about the hostile reaction, particularly from commercial
Stephen Byers, the trade and industry secretary, has backed their claim
that a top-up fee could reduce the take-up of digital.
Government ministers are worried that it would be unfair to raise the
licence fee for all viewers - including those who do not opt for digital
channels. Smith has called in the consultants, Pannell Kerr Forster, to
report on the BBC’s finances by the end of next month. He will announce
his decision on the Davies plan in January.