If you dont have one and they catch you, you go to jail. Simple as that
http://www.tvlicensing.co.uk/Its around $200 a year if you have a colour tv or slightly less if you just have black & white, but if a person is blind, they only have to pay half

Most of the money is used to fund the BBC. Even if you dont watch the BBC, you still have to pay. Even if you watch tv only on the internet, you still have to pay. The BBC doesnt run commercials, so instead of raking in advertising revenue, us suckers have to stump up the money.
I dont watch television from one year's end to the next, but I still have to pay. When you buy a tv, the store you buys it from gives your name and address to the license people, and they check to make sure you have a license. If you dont, you get threatening letters. Then, if you dont pay up and they catch you watching tv, you're screwed.
They have detector vans. If they know someone doesnt have a license, they park outside and they can detect whether there's a tv signal being received in the house/apartment. If there is, goodbye freedom and hello iron bars.