The threat of being caught and fined is enforced with heavy-handed intimidation. Its unbelievable that they're allowed to operate in such a way in a democratic society.
From wikipedia:
'In September 2008, [snip] and during December 2008, it was reported by the press that the chairman of the all-party Commons Culture, Media and Sport committee had accused TV Licensing of behaving "like the Gestapo", employing "tactics that are outrageous", saying: "The tactics used by TV Licensing in their letters are intimidatory and cause genuine distress. Their records are not always correct, but they write letters that assume members of the public are criminals"[17].
Meanwhile, in 2004, the Institute for Public Policy Research criticised the TV licence fee for its regressive impact, pointing out that it represents a much higher proportion of income for low-income households, that evaders are most likely to be single parents, lone tenants, pensioners and the economically inactive, and that the difficulties they have in paying the licence fee are compounded by the penalties enforced for non-payment[4].
'TV Licensing enforces the BBC's statutory obligation to ensure that every address where a television licence is required is correctly licensed,[42] but its agents have no special rights and, like any other member of the public, rely on an implied right of access to reach the front door.[10][53] The occupants of a visited property may deny an agent entry to the premises[55] without cause and are under no obligation to answer any questions or enter into any conversation. If an agent has evidence that television is being watched or recorded illegally but is denied entry by the occupants so that (s)he cannot verify the suspicion without trespassing, then TV Licensing may apply to a magistrate for a search warrant, but the use of such warrants is rare.[44] The BBC states that a search warrant would never be applied for solely on the basis of non-cooperation with TV Licensing[56][53] and that in the event of being denied access to unlicensed property will use detection equipment rather than a search warrant.[55]
The law allows a fine of up to £1,000 be imposed on those successfully prosecuted. This figure is frequently publicised by TV Licensing to maximise deterrence. In reality, magistrates rarely impose the maximum fines allowed to them by law. During the year 2005-6, the average fine including costs was approximately £153[57] (slightly more than the cost of a licence). However, in addition to the fine the guilty party will be obliged to purchase a licence at the usual cost and will be encumbered with a criminal record.[58]
TV Licensing is managed as a sales operation[48] and its officers are motivated by commission payments. In 2005, a TV Licensing officer was found guilty of false accounting and perverting the course of justice after he deliberately forged the confessions of four people to obtain commission payments.[59]'
I would be less disinclined to pay if the TV licensing comission operated transparently and the BBC were honest about exactly where and how the money is spent, but this is not the case.