Culture Secretary Lucy Frazer said a £15 increase in the BBC license fee would be “large”, amid reports Rishi Sunak wants to prevent a 9% increase in the annual fee.

Ms Frazer was asked on Times Radio about the Prime Minister’s suggestion that the BBC needs to be “realistic” about how people can pay.

The company is seeking £500m in savings as inflation is high and the price of a TV license that covers most of its funding is frozen for two years.

Ms Frazer told Times Radio: “It means we are in a situation where people are struggling with the cost of living. And as a government we have tried very hard to ensure that these costs are low. And the broadcasting fee is set to increase, even though we have frozen it for two years.

“But if it goes up, the BBC needs to be realistic about how much it can go up. We want to make sure we protect broadcast license fee payers and ensure they only rise to an amount that people can afford.”

Asked about a rise above £170, she replied: “Of course that’s a lot. That’s something we’re thinking about at the moment. And we will make a decision on that in due course.”

For the past two years the license fee has been frozen at the price of £159, but it was previously agreed that it would rise in line with inflation from April 2024.

Ms Frazer’s comments follow the Prime Minister’s statement at the weekend that the BBC should try to “set appropriate standards” as the country continues to struggle with rising costs of living.

It is really important that in difficult times everyone does what they can to reduce the cost of living for families

Mr Sunak said “no final decisions have been made” about the future of the license fee but the broadcaster should be “realistic” about what people should pay at this stage.

Asked how sustainable he believes the license fee is, Mr Sunak told reporters: “Firstly, I think it’s welcome that the BBC is seeking savings and efficiencies in the way it operates.”

“It is really important that in difficult times everyone does what they can to reduce the cost of living for families.

“I certainly did that last year and made a number of decisions that weren’t easy.

“But that has helped bring down inflation, thereby reducing the burden and cost of living.”

Speaking during his trip to Dubai for the Cop28 climate summit, he added: “The BBC, like any other organization that serves the public, should try to do this and behave accordingly, so I think that’s very welcome.”

“I think for the future you look at the BBC – final decisions obviously haven’t been made yet – but the BBC should be realistic about what they can expect from people at a time like this. I think that’s the right approach.”

The BBC announced that its evening program Newsnight would be reduced to a 30-minute program as part of cost-cutting measures.

The BBC Two show will continue to air on weekdays as an “interview, debate and discussion programme”, but more than half of Newsnight’s 60 jobs will be axed.

As part of other changes, an extended hour-long edition of BBC News At One will move to Salford, while BBC Breakfast, also broadcast from Salford, will be extended by an additional 15 minutes each day, the company said.

There will be a greater focus on digital storytelling and live reporting across the BBC News department, with a “reduction in the amount of television packaging”.

The company believes the numerous changes will save £7.5 million.

A BBC spokesman said: “The government and the BBC agreed a six-year license fee agreement in January 2022, which froze the license fee for two years and provided for an increase in line with inflation from 2024.”

“As usual, the Government sets and confirms the cost of a license each year and this remains unconfirmed for 2024/25.

“The BBC will continue to focus on what it does best: working to deliver first-class content and delivering great value to all viewers.”

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