Jowell dampens BBC expectations as licence fee talks begin

LONDON – The BBC has been warned by culture secretary Tessa Jowell not to expect the full extent of the increase in the licence fee it has asked for.

Jowell attempted to dampen expectations as her department started talks with the BBC, which proposed in October that the licence fee should be raised by 2.3 percentage points above inflation over the next 10 years.

"I certainly expect the figure to come in lower than the BBC's proposition," she said.

The government will listen to other broadcasters' views on the licence fee at a seminar in May, and Jowell hinted that the BBC's impact on the cost of hiring talent would be looked at.

"I think it's important that we expose the BBC's calculations and assumptions to other broadcasters. One of the questions I think we need to interrogate is the extent to which the costs of other broadcasters are led by the costs of the BBC," she said.

"For instance, if the BBC came in at a lower level for talent or creativity or innovation then to what extent would this in time also have the effect of reducing the costs facing other broadcasters -- to what extent does the BBC make the market?"

The licence fee currently costs viewers £126.50 a year and gives the corporation £2.94bn a year to spend. The BBC's proposal is likely to take it above £200 by 2016.

The setback to BBC hopes comes after it was revealed earlier this week that BBC star presenters are taking home large salaries, with the likes of Terry Wogan, the BBC Radio 2 breakfast show host, earning £800,000, 'Newsnight' and 'University Challenge' presenter Jeremy Paxman taking £1.1m.

It was also revealed yesterday that the BBC wants to pay £12.5m over three years to keep Jonathan Ross at the corporation, making him its highest-paid TV and radio presenter.

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