Licence fee tops £130 for 2006

The licence fee will rise above £130 for the first time this year, culture secretary Tessa Jowell has announced.

The year-on-year increase of 4.2% - RPI plus 1.5% - is the final increase under the BBC's current, five-year funding deal. From April 1, a colour licence will cost £131.50 and a black and white licence £44.

"The television licence fee settlement announced by the Government in February 2000 provides for changes in the licence fee of RPI plus 1.5 per cent for each year from 2000-2001 to 2006-20078," said Jowell.

"This settlement is designed to enable the BBC to provide a strong and distinctive schedule of high quality programmes and remain at the forefront of broadcasting technology. The settlement includes a requirement for the Corporation to raise over £1 billion through efficiency savings and increased income over the period."

The government is currently considering the BBC's proposals for a new funding deal - in effect from April 1 next year - of RPI plus 2.3% a year.