RISHI Sunak is reportedly set to block a 9 per cent licence fee rise as the UK Government warned the BBC it must be “realistic” about how much it can put up the price.

The annual fee is set to increase by £15 to £173.30 in April, which would be the biggest single increase for close to 40 years, The Telegraph reports.

The paper reports that ministers are thought to be reconsidering a deal struck with the corporation and will seek the BBC to accept a smaller rise.

Speaking to reporters in Dubai last week, the Prime Minister said: “Final decisions haven’t been made, obviously, but the BBC should be realistic about what it can expect people to pay at a time like this.”

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Boris Johnson agreed a deal with the corporation while prime minister which froze the licence fee for two years before rising in line with inflation for the four years after that.

The two-year freeze saw the BBC’s budget shrink as inflation ate into its income.

Speaking on Times Radio on Monday morning, Culture Secretary Lucy Frazer (below) said: “We’re in a position where people are struggling with the cost of living.

The National: Housing Minister Lucy Frazer

“And as a Government, we tried very hard to make sure that those costs are low. And the licence fee is due to rise, although we froze it for two years.

“But as it rises, the BBC needs to be realistic about how much it can rise by. We want to make sure we protect licence fee payers and make sure that it just rises at an amount that people can afford.”

Asked about a rise to more than £170, she said: “Well, obviously, that’s high. This is something that we’re looking at, at the moment. And we’ll be making a decision on this in due course.”

Sunak has also previously said it was “welcome” the BBC was making cuts, adding: “It’s really important that when things are difficult, everyone is doing what they can to ease the cost of living on families.”

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He said: “The BBC like any other organisation that serves the public should be looking to do that and cut its cloth appropriately, so I think that is very welcome.”

The BBC previously announced its nightly current affairs show Newsnight would be reduced to a 30-minute programme as part of the cost-cutting measures in its news output.

Newsnight will continue to air on weeknights as an “interview, debate and discussion show” but more than half of its 60 jobs will go.

As part of further changes, an extended hour-long edition of BBC News At One will relocate to Salford while BBC Breakfast, also broadcast from Salford, will be extended by an extra 15 minutes daily, the corporation said.

More focus will be put on digital storytelling and live coverage across the BBC News division, with a “reduction in the amount of television packaging”.

We told previously how the corporation was criticised for announcing the creation of a new royal editor role amid the package of cuts

The corporation expects the raft of changes to save £7.5 million.

A BBC spokesperson said: “The Government and BBC agreed a six-year licence fee settlement in January 2022, which froze the licence fee for two years with increases in line with inflation from 2024.

“As is usual practice the Government sets and confirms the cost of a licence each year and this remains unconfirmed for 2024/25.

“The BBC will continue to focus on what it does best: working to deliver world-class content and providing great value for all audiences.”