This is taken from The Guardian:

End secret deal on TV licence fee, say peers
by Owen Gibson, media correspondent
Friday March 3, 2006

An influential Lords committee has accused the government of treating the television licence fee as a stealth tax and called for the decision on the level of the charge to be debated in parliament, rather than decided in secret.

The Lords select committee on the BBC charter review chaired by Lord Fowler said in its report that the government could undermine support for the licence fee by charging the BBC with expenses that should be met by central government.

In the second part of its report published today on the BBC's future the peers said the clandestine horse-trading that characterises the runup to the renewal of the BBC's royal charter should be replaced by proper parliamentary scrutiny.

The committee argued that by asking the BBC to bear the costs of subsidising the switch from analogue to digital transmission, due to start in 2008 and be completed by 2012, the government risked pushing the licence fee ever higher and undermining public support.

"There is an overwhelming case for licence fee increases to be properly scrutinised by parliament with the assistance of the National Audit Office. There is no justification for the present position which is in effect a deal between the government and the BBC," said Lord Fowler.

While supportive of the licence fee in principle, the committee warned that by continuing to grant above inflation increases the government risked jeopardising wider public support.

The BBC has asked for an increase of 2.3% above inflation, which would take the licence fee to more than £180 by 2014. But it was criticised by the committee for not accurately costing the licence fee bid it put to government.

The BBC has estimated that it will cost £200m to pay for the switch to digital transmission and a further £300m if a charge for broadcasting over the airwaves is introduced. The committee said it was most worried by the government's decision to charge the BBC with subsidising the switch to digital for the old and vulnerable which has not yet been costed.

Appearing before the committee, the BBC chairman, Michael Grade, said the corporation was content to help subsidise switchover on condition that "it is not so onerous that it brings into question, or increases resistance to, the licence fee".

Elsewhere in the report, published ahead of the government's white paper on the future of the BBC due in the next fortnight, it said that recent moves by the European commission to break BSkyB's dominance of rights to Premiership football did not go far enough. It also strongly encouraged the corporation to make a "genuinely competitive bid" for the rights to England's home Test matches when the cricket rights next come up for auction in 2009.