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Licence Revenue

Volume 526: debated on Wednesday 14 April 1954

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asked the Assistant Postmaster-General what he estimates would be the revenue available for television from the sale of 4,300,000 £5 broadcasting licences; and what is the revenue expenditure of the British Broadcasting Corporation on its present television programme.

The gross revenue would, of course, be £21·5 million, but as I told the hon. Member on 7th April, the net revenue allocated to the B.B.C. has always been based on an examination of their forward programme, including both capital and revenue expenditure, after which the Government has decided what licence fees are necessary to meet the Corporation's reasonable needs and to cover Post Office costs and a contribution to the Exchequer.This is the basis upon which the estimate of a £5 licence given in December last by my noble Friend and myself was made. It was assumed that the B.B.C. would provide a second television programme in 1955-56 (that is, at the same time as we expect the new Authority to start), for the same number of hours a day as we expect from the Authority. It was further assumed that the second B.B.C. programme would cost as much in revenue expenditure (i.e. £3·5 million), and one-third in capital expenditure (i.e. £0·5 million), as the first programme for 1953-54.To this total of £4 million was added the B.B.C.S own forecast of expenditure in 1955–56 for their first television programme (i.e. £5·4 million revenue and £2·9 million capital), as well as a sum of £2·5 million to cover income tax. The grand total of £14·8 million was then divided by 4·3 million, the estimated number of licences in 1955–56, and to the resultant figure of £3 9s. per licence was added £1 for sound and 10s. to cover Post Office costs and Exchequer contribution. No allowance was made for any subsidy to television from sound.