Viewers could soon be charged for watching content on BBC iPlayer, as chancellor George Osborne announced cuts in government funding.
Osborne plans to make the broadcaster meet the cost of providing free TV licences for over-75s at a cost of around £650 million a year.
Osborne warned on the Andrew Marr Show this weekend that the BBC should make a “contribution” towards reducing the deficit.
The £650 million it would cost to the BBC to fund the free licences is roughly a fifth of the BBC’s £3.7 billion income from the fee. The treasury currently funds the free TV licences for over-75s.
Osborne wants to form an agreement with the BBC that allows it to charge for digital services, which could raise at least £150 million. This would involve changing the law so that people who watch TV via iPlayer and other online catch-up services would have to have a TV licence. Currently the licence fee does not cover these digital services.
The free TV licence for over-75s was introduced in 2001 by Gordon Brown. By 2013, it covered 77,000 homes, at a cost to the Department for Work and Pensions of £608 million, a figure that will rise as the UK population ages.
“The BBC is also a publicly funded institution and so it does need to make savings and contribute to what we need to do as a country to get our house in order,” said Osborne on the Andrew Marr Show.
The Conservative government pledged to cut the welfare budget by £12 billion a year, and details of this cost-cutting will be outlined in the Budget announcement on Wednesday, 8 July.
The BBC may also lose millions each year if not paying for a TV licence ceases to a criminal offence. Without the threat of legal action, the broadcaster fears, many people may stop paying the TV licence fee, priced at £145.50 annually.