Sunak set to block 9pc BBC licence fee increase

A BBC source told the Telegraph: “We get that there are cost of living challenges, but some of our competitors have put up costs by over 30 per cent. The BBC isn’t expect- ing anything like that, but we would argue that we are important and we offer excellent value for money, and every penny in investment in the BBC is good for the wider economy.”

“The BBC isn’t expecting anything like that, but we would argue that we are important to the UK and we offer excellent value for money, and every penny in investment in the UK is good for the wider economy.”

The developments follow recent tensions between the Government and the BBC over the corporation’s coverage of the Oct 7 Hamas attack on Israel. Cabinet ministers voiced frustration that the BBC would not call Hamas a terror group, despite it being proscribed as such.

BBC executives argued that doing so would risk its impartiality and noted the fact that Hamas is described as a terror group by others is often mentioned early in reports.

The licence fee was paid by 24.3 million people, according to the BBC’s most recent annual report, released in July. That was down 500,000 on the previous year, a sign of the challenge of a shifting media landscape as streaming channels become more popular.

In the past, the fee has often increased in line with inflation – due to happen for each of the next four years. The figure is usually calculated by using the consumer prices index measure to work out average inflation in the year to September.

That works out at around nine per cent, given the scale of recent inflation, and would take the annual licence fee cost to £173.30 from April. Not since 1985, when the fee was raised by a quarter, has an increase of that scale been adopted.