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| BBC licence fee 'to rise by 3%' | BBC licence fee 'to rise by 3%' |
| (10 minutes later) | |
| Culture Secretary Tessa Jowell is expected to announce the TV licence fee will rise by 3% over each of the next two years, the BBC has learned. | Culture Secretary Tessa Jowell is expected to announce the TV licence fee will rise by 3% over each of the next two years, the BBC has learned. |
| The deal, to be outlined in full in the Commons, will see the current fee of £131.50 rise to a maximum £151 by 2012. | The deal, to be outlined in full in the Commons, will see the current fee of £131.50 rise to a maximum £151 by 2012. |
| Borrowing limits will also be tighter than requested. The BBC had wanted an above-inflation hike in the licence to boost programmes and digital services. | Borrowing limits will also be tighter than requested. The BBC had wanted an above-inflation hike in the licence to boost programmes and digital services. |
| Unions have warned that such a deal would lead to "heavy job losses". | Unions have warned that such a deal would lead to "heavy job losses". |
| The corporation had argued it needed an extra £5.5bn over the next seven years to pay for more original programmes, new digital and local services and increased costs. | The corporation had argued it needed an extra £5.5bn over the next seven years to pay for more original programmes, new digital and local services and increased costs. |
| It also said the money was needed to provide free digital set top boxes for the elderly and infirm, and meet the £400m cost of relocating 1,500 posts from London to Salford. | |
| The BBC's business editor, Robert Peston, said the corporation wanted to be able to borrow up to £400m - double what it is currently allowed to do. | The BBC's business editor, Robert Peston, said the corporation wanted to be able to borrow up to £400m - double what it is currently allowed to do. |
| But the borrowing limit will be increased to between £220m and £230m. | But the borrowing limit will be increased to between £220m and £230m. |
| 'Difficult choices' | 'Difficult choices' |
| After the first two 3% rises the increases will slow before reaching the maximum agreed 2012 figure. | After the first two 3% rises the increases will slow before reaching the maximum agreed 2012 figure. |
| In an earlier e-mail to staff, BBC Director-General Mark Thompson said the corporation would face "some very difficult choices" if forced to accept a below-inflation increase. | In an earlier e-mail to staff, BBC Director-General Mark Thompson said the corporation would face "some very difficult choices" if forced to accept a below-inflation increase. |
| HAVE YOUR SAY We pay enough for the BBC as it stands right now with the current fee Carl Thomson, Stoke on Trent Send us your comments Unions have also warned that such a deal would seriously hit programmes. | HAVE YOUR SAY We pay enough for the BBC as it stands right now with the current fee Carl Thomson, Stoke on Trent Send us your comments Unions have also warned that such a deal would seriously hit programmes. |
| John Whittingdale, Conservative MP and chairman of the Culture, Media and Sport committee, told the BBC he thought the deal was a fair one. | John Whittingdale, Conservative MP and chairman of the Culture, Media and Sport committee, told the BBC he thought the deal was a fair one. |
| He said: "I think you do need to bear in mind that even though the BBC is not going to get a licence fee increase the size that it asked for, the amount of money the BBC gets is determined not just by the level of the licence fee, but also by the number of people paying it. | He said: "I think you do need to bear in mind that even though the BBC is not going to get a licence fee increase the size that it asked for, the amount of money the BBC gets is determined not just by the level of the licence fee, but also by the number of people paying it. |
| "And the number of households has been rising steadily and is likely to go on doing so. So in actual fact, I think the settlement will continue to deliver a real terms increase in the amount of money available to the BBC." | "And the number of households has been rising steadily and is likely to go on doing so. So in actual fact, I think the settlement will continue to deliver a real terms increase in the amount of money available to the BBC." |
| Digital change | Digital change |
| The government has already announced that a £600m portion of the settlement will be "ring-fenced" to help pay for the digital switchover. | The government has already announced that a £600m portion of the settlement will be "ring-fenced" to help pay for the digital switchover. |
| The deal will also ensure the £400m move of some departments to Salford goes ahead. | The deal will also ensure the £400m move of some departments to Salford goes ahead. |
| Ms Jowell is expected to follow her announcement by giving a keynote speech to the Oxford Media Convention. | Ms Jowell is expected to follow her announcement by giving a keynote speech to the Oxford Media Convention. |
| Ms Jowell is said to have argued the BBC's case over tense negotiations during the past 24 hours, but the Treasury described the bid as "far too much". | Ms Jowell is said to have argued the BBC's case over tense negotiations during the past 24 hours, but the Treasury described the bid as "far too much". |
| "At one stage, she threatened to postpone Thursday's planned parliamentary announcement of a new licence fee settlement," our correspondent said. | "At one stage, she threatened to postpone Thursday's planned parliamentary announcement of a new licence fee settlement," our correspondent said. |