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EXPLAINED: What France’s TV licence pays for and what might replace it?

As promised by President Emmanuel Macron during his presidential campaign, the TV licence in France is set to be abolished this year, as part of a bill to put money back into the pockets of French people. But could it be replaced by something else?

Televisions. Photo by Nabil Saleh on Unsplash
Televisions. Photo by Nabil Saleh on Unsplash

The “purchasing power” law containing the measure is to be presented to the Council of Ministers on Wednesday, July 6th. If it is adopted, it will save those households who pay for the redevance audiovisuelle in France €138 a year.

But what is the redevance audiovisuelle , and what does it pay for?

What is it?

The annual TV licence raises €3.7billion a year, which is ploughed into public broadcasting. 

Of the total amount raised annually, 65 percent is allocated to France Télévisions, 15.9 percent to Radio France, 7.5 percent to Arte, 7 percent to France Médias Monde, 2.4 percent to audiovisual archive agency INA and 2.1 percent to TV5 Monde, a Senate report has revealed.

It alone is not enough to cover all the recipients overheads – for example, the sum paid to Radio France accounts for 86.4 percent of its budget. The remainder is made up through advertising and other state subsidies.

Who pays?

The €138 annual TV licence bill is paid by every household in France equipped with a television set – or “similar device”, such as a video projector or computer capable of showing TV broadcasts.

People living in France’s overseas territories currently pay €88 a year.

In 2022, 27.61 million households are subject to it and 22.89 million actually pay it, according to a report by the Jean-Jaurès Foundation and economist Julia Cagé.

It has historically been paid as part of the taxe d’habitation bill, which is also in the process of being cancelled by the government, while older people and those on low incomes are already exempt from paying the annual fee.

Why is it being cancelled?

The key reason the government keeps talking about is purchasing power. 

 “This will give €138 to 27 million French people,” Gabriel Attal, Minister of Public Accounts, told France Inter. “What we’re removing, it is not a budget, it is a tax that many said was dated.”

Macron’s election pledge on the TV licence was hardly unique. Almost all the other candidates in the presidential campaign had pledged to axe the annual fee, which was paid as part of the taxe d’habitation bill – which has also been abolished for most households in France.

€3.7billion is a lot of money. Will anything replace it?

This the big question – and the parliamentary debate is expected to get heated. A number of plans have been put forward for covering the costs, including a means-tested contribution payable by households, or an additional tax on the price of digital products.

For the moment, the government favours the integration of the public media budget into government funding, which would require approval from Parliament. 

During his presidential campaign, Macron proposed to define, “a budget with multi-year visibility”, whose amount would be fixed for several years. Culture Minister Rima Abdul Malak told France Inter recently that this remained the new government’s preferred avenue.

Will this proposed method work?

Not everyone is convinced. A study published by the European Audiovisual Observatory in February 2022 concluded that “the independence and programming freedom of public broadcasting are closely linked to the need for broadcasters to be able to count on an adequate financing system”.

Unions and cultural experts are concerned about the possibility that independence would be eroded if financing was linked to the government of the time. Bruno Patino, the head of Arte France, said in a statement to AFP that he feared for his channel’s future if the funding model changed.

“The disadvantage of budgeting is that we are much less protected from the vagaries of politics, since the latter decides on the budget,” cultural economist – and critic of the plans – Françoise Benhamou told Le Monde

Opponents are also concerned that public broadcasting budgets would be too easily cut. “From the moment there is no more dedicated funding and we have to draw from the general state budget, we will end up being told that it all costs too much and that we have to cut expenses or  close a channel, or even, as we already hear sometimes, privatize,”Senator David Assouline told a demonstration organised by the public media unions. 

How is the licence fee paid elsewhere?

Italians pay their licence fees as part of their electricity bill. In Germany, the licence fee is collected by an agency that is run and operated by the channels themselves. 

In Sweden, Norway and Finland, licence fees have been replaced by a progressive tax. In Sweden, for example, a levy of one percent of taxable income, up to a limit of €126, is paid; in Finland, companies rather than households pay the tax; and in Norway, a scale by bracket has been defined.

In Spain and Netherlands, the budget for public media is integrated directly into that of the State.

What do French people think?

Unsurprisingly, they’re overwhelmingly in favour of scrapping the TV licence fee – a survey in 2019 found that 85 percent of French people liked the idea of abolishing it.

They’re less enamoured of the idea that the €3.7billion lost to public broadcasting should be covered by part of the government budget – and therefore paid by taxes. Only 20.9 percent were in favour of “a contribution levied each year on the state budget,” according to a June 2022 survey by the Jean-Jaurès Foundation. 

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MONEY

Reader Question: Why did my French electricity bill increase by more than 4%?

The French government has capped electricity prices rises at four percent - but as with many French rules, there are certain exceptions.

Reader Question: Why did my French electricity bill increase by more than 4%?

Question: I read in the media that electricity prices in France are capped at four percent, but I just got a letter from EDF telling me that my bill is going up by almost 20 percent – is this a mistake?

The French government’s bouclier tarifaire (tariff shield), froze gas prices at 2021 levels and capped electricity price hikes to four percent – it remain in place until at least the end of 2022.

However, there are some customers who will see increases to their bills of more than that – here’s why: 

The regulated tariff rate

The French government involvement in price-setting doesn’t just happen during periods of energy crisis, normally regulated tariff prices are updated twice a year: usually on February 1st and August 1st.

Typically, this value is calculated by the CRE (commission de régulation de l’énergie) and it is based on several different factors, which are explained on this government website. These tariffs proposed by the CRE are then subject to approval by the ministers in charge of energy and the economy.

READ MORE: EXPLAINED: Why are French energy prices capped?

These affect the state-owned Engie (formerly Gaz de France), the mostly state-owned EDF and some local distribution companies. Around 70 percent of people in France get their electricity from EDF but other suppliers do exist in the market.

These alternative suppliers, like Direct-Énergie, Total Spring or Antargaz, are free to charge more – but don’t usually charge much above the EDF rates for obvious commercial reasons.

Basic rate

The government-set limit in price rises refers only to the basic rate (option base) for electricity.

This plan represents over 80 percent of the 32 million households connected to the electricity grid in France. So, there is a good chance you might be subscribed to this without even realising it. 

If you are on the basic tariff rate, your bill will not increase by more than four percent this year.

Other tariff options

However, other options for electricity bills do exist, including off-peak rates, green deals and fixed energy prices for a certain period.

Typically people who sign up for these will have been paying less for their electricity in the preceding months than those on the base rate.

However, there are certain special deals that are not covered by the four percent cap, and some users will find that their deal period has come to an end, they are then shifted onto the base rate – which is likely to represent a price increase for them of more than four percent.

It’s little consolation when faced with rising bills, but you will likely have been paying significantly less than customers who have been in the base rate for the past few years.

READ MORE: French government to continue energy price freeze until at least 2023

Kilowatt price

Because most electricity price plans are bafflingly complicated, the easiest way to compare is to look at the price per kilowatt-hour.

Your electricity bill consists of a fixed part, the monthly subscription (abonnement) and the variable part, which depends on the quantity of electricity consumed (in euro per kilowatt-hour, kWh). The latter part is what is concerned by the tariff shield of four percent.

Here is an example of what that might look like:

The mid-August base rate price per kilowatt-hour is €0.1740/ kWh, so if you’re with EDF they cannot charge you more than this rate.

Other EDF plans charge significantly less than that – for example the Vert Electrique Weekend deal has been charging €0.1080/kWh on weekends and €0.1434/kWh on weekdays. 

Bill rises

With the tariff shield, the average resident customer on the base rate will see a €38 rise on their bill this year, while professional customers will see an average of €60 rise. 

Without the tariff shield, electricity prices per residential (non-business) customer would likely have increased an average of €330 a year, according to the CRE.

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