Cancel planned rise in BBC licence fee, says Cameron

The Conservative leader said a two per cent rise in the £139.50 annual fee should be cancelled. It is due to rise by £3 in April raising an extra £68 million for the BBC, which has a budget of £3.4 billion.

He said the BBC and all taxpayer-funded institutions had to show they could "live within their means" by cutting waste.

Mr Cameron's comments were laced with symbolism all designed to have a wider meaning, by preparing the public for spending cuts under the Tories to reduce the deficit in the public finances.

"Whoever wins the next general election, the next government of this country will need to make a really clean break with the past and set about fixing our economy," he told a news conference. "I am absolutely determined to do that.

"I don't want to win the next election on some sort of false prospectus that doesn't recognise how difficult things will be.

"I want to use the time between now and then to take people with us for the difficult decisions that will have to be taken."

The BBC appeared to be a totemic first step towards making the public services leaner. The corporation was granted a six-year deal in January 2007 by Tessa Jowell for three per cent rises in the first two years and then two per cent.

That would raise the cost to £151.50 in 2012, giving the BBC deeper pockets to compete against commercial broadcasters. But Mr Cameron said "the world has changed" since the deal was struck and the credit crunch required a rethink. Moreover, commercial rivals were suffering a slump in advertising revenues, which made it unfair to make the BBC better off.

The Tories said the BBC could easily find savings. They said 50 managers were paid a total of £14.3million last year, while £13.8million was spent on taxis, £2,797,032 on corporate affairs and £350,000 on bottled water.

Mr Cameron said belt-tightening was crucial to his "route map to recovery" and pledged a series of speeches spelling out details.

He is increasingly bold about promising to wield an axe on spending. Last year Mr Cameron abandoned his previous position of backing Labour's spending increase plans and last week he apologised to being part of a "consensus" that failed to stop the recession. He also hinted that spending cuts and tax rises could both be needed to rebalance the books.