General election 2019: Labour pledges free broadband for all
15 November 2019
Labour has promised to give every home and business in the UK free full-fibre broadband by 2030, if it wins the general election. The party would nationalise part of BT to deliver the policy and introduce a tax on tech giants to help pay for it. Shadow chancellor John McDonnell told the BBC the "visionary" PS20bn plan would "ensure that broadband reaches the whole of the country". But Prime Minister Boris Johnson said it was "a crackpot scheme". The plan includes nationalising parts of BT - namely its digital network arm Openreach - to create a UK-wide network owned by the government. Mr McDonnell said the roll-out would begin with communities that have the worst broadband access, followed by towns and smaller centres, and then by areas that are currently well served. A Labour government would compensate shareholders by issuing government bonds. The shadow chancellor said Labour had taken legal advice, including ensuring pension funds with investments in BT are not left out of pocket. As with other planned Labour nationalisations, he said MPs would set the value of the company at the time of it being taken into public ownership. Mr McDonnell told the BBC's Laura Kuenssberg that Labour would add an extra PS15bn to the government's existing PS5bn broadband strategy, with the money to come from the party's proposed Green Transformation Fund. Having already announced plans to nationalise water, rail and now broadband, Mr McDonnell said this latest plan was "the limit of our ambitions". A new entity, British Broadband, would run the network, with maintenance - estimated to cost PS230m a year - to be covered by the new tax on companies such as Apple and Google. "We think they should pay their way and other countries are following suit," said Mr McDonnell. Labour has not yet completed the final details of how the internet giant tax would work, saying it would be based "percentage wise'' on global profits and UK sales, raising potentially as much as PS6bn. Mr McDonnell said that if other broadband providers did not want to give access to British Broadband, then they would also be taken into public ownership. Labour has costed its policy from a report produced by Frontier Economics in 2018, which was originally produced for the Department of Digital, Culture Media and Sport. Broadband packages in the UK cost households an average of around PS30 a month, according to comparison site Cable - which people would no longer have to pay under Labour's scheme. The party claims it would "literally eliminate bills for millions of people across the UK". According to a report from regulator Ofcom earlier this year, only 7% of the UK has access to full-fibre broadband. The government hit its target to bring superfast broadband to 95% of homes by December 2017 - at a cost of PS1.7bn - but the internet speeds are significantly lower than those of full-fibre. BT chief executive Philip Jansen told BBC Radio 4's Today programme Labour had under-estimated the price of its pledge. But he said he was happy to work with whoever wins the election to help build a digital Britain, although the process for implementing Labour's plan would not be "straightforward". He added that the impact of any changes on BT pensioners, employees, shareholders - and the millions of investors via pension schemes - needed to be carefully thought through. The company has disputed the cost of rolling out fibre broadband to every home and business, saying it would cost closer to PS40bn than PS20bn. The BBC's business editor, Simon Jack, said Labour's proposal had caught BT "off-guard", as Mr McDonnell had said in July that he had no plans to nationalise the telecoms giant. Following Labour's announcement, BT's share price initially fell by 3% before recovering slightly. Julian David, chief executive of TechUK, which represents many UK tech firms, said: "These proposals would be a disaster for the telecoms sector and the customers that it serves. The Tories say the full cost of Labour's plan would be PS83bn over 10 years, rather than the PS20bn claimed by Labour, arguing they had greatly underestimated the cost of re-nationalising parts of BT, broadband roll-out and salary costs. Mr Johnson said Labour's plan would cost the taxpayer "many tens of billions" and that the Conservatives would deliver "gigabit broadband for all". He has previously promised PS5bn to bring full-fibre to every home by 2025. But Mr McDonnell said the Conservatives' funding plan for improving broadband was "nowhere near enough". The Lib Dems called Labour's announcement "another unaffordable item on the wish list". The SNP called Labour's plans a "pie-in-the-sky" promise and said the Scottish government was putting PS600m in to broadband. All sides are agreed: The UK has fallen behind competitors in rolling out a fibre network - the gold standard where a fibre optic cable arrives directly into your home - and way behind countries such as Spain, Portugal and Norway. When he was running for the Tory leadership Boris Johnson described the broadband strategy of Theresa May's government as "laughably unambitious" and promised PS5bn to hit what the broadband industry thinks is an extremely ambitious target. Now, Labour has come back with a plan that may be more realistic in timescale but is far more expensive in terms of state spending. What is not clear is what happens to the wider broadband market - from Virgin Media and Sky to the raft of fibre broadband firms that have sprung up in recent years. Labour is indicating that the companies "may want to come on board" with its scheme - but it is hard to believe that after years of complaining about BT stifling competition they will be enthusiastic about competing with a state-owned monopoly. The question for consumers may be who they should trust - broadband suppliers with patchy records on customer service or the state. By BBC journalist Phil Mercer Super fast, reliable and affordable - that was the broadband promise made to every Australian, who have been assured access to a new system by 2020. The National Broadband Network (NBN) is described as "one of the largest and most complex infrastructure initiatives undertaken in Australia." More than 6 million premises are already connected, but the quality of service is a lottery. Some customers to the state-owned company are delighted, while others complain the network is sluggish. There's a good reason for the disparity and it's down to the way that broadband is delivered.  Some methods are much quicker than others. In 2009, the former Labor government in Australia pledged an NBN with efficient optical fibre cables direct to most homes and businesses. The current centre-right administration opted for a cheaper option that would be finished sooner, and chose instead a mix of technologies including optical fibre, copper wires, Hybrid Fibre Coaxial (HFC), fixed wireless and satellite.
A Labour government would compensate shareholders by issuing government bonds. The shadow chancellor said Labour had taken legal advice, including ensuring pension funds with investments in BT are not left out of pocket. As with other planned Labour nationalisations, he said MPs would set the value of the company at the time of it being taken into public ownership. Mr McDonnell told the BBC's Laura Kuenssberg that Labour would add an extra PS15bn to the government's existing PS5bn broadband strategy, with the money to come from the party's proposed Green Transformation Fund. Having already announced plans to nationalise water, rail and now broadband, Mr McDonnell said this latest plan was "the limit of our ambitions". A new entity, British Broadband, would run the network, with maintenance - estimated to cost PS230m a year - to be covered by the new tax on companies such as Apple and Google. "We think they should pay their way and other countries are following suit," said Mr McDonnell. Labour has not yet completed the final details of how the internet giant tax would work, saying it would be based "percentage wise'' on global profits and UK sales, raising potentially as much as PS6bn. Mr McDonnell said that if other broadband providers did not want to give access to British Broadband, then they would also be taken into public ownership. Labour has costed its policy from a report produced by Frontier Economics in 2018, which was originally produced for the Department of Digital, Culture Media and Sport. Broadband packages in the UK cost households an average of around PS30 a month, according to comparison site Cable - which people would no longer have to pay under Labour's scheme. The party claims it would "literally eliminate bills for millions of people across the UK". According to a report from regulator Ofcom earlier this year, only 7% of the UK has access to full-fibre broadband. The government hit its target to bring superfast broadband to 95% of homes by December 2017 - at a cost of PS1.7bn - but the internet speeds are significantly lower than those of full-fibre.
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What is Labour proposing?
BT chief executive Philip Jansen told BBC Radio 4's Today programme Labour had under-estimated the price of its pledge. But he said he was happy to work with whoever wins the election to help build a digital Britain, although the process for implementing Labour's plan would not be "straightforward". He added that the impact of any changes on BT pensioners, employees, shareholders - and the millions of investors via pension schemes - needed to be carefully thought through. The company has disputed the cost of rolling out fibre broadband to every home and business, saying it would cost closer to PS40bn than PS20bn. The BBC's business editor, Simon Jack, said Labour's proposal had caught BT "off-guard", as Mr McDonnell had said in July that he had no plans to nationalise the telecoms giant. Following Labour's announcement, BT's share price initially fell by 3% before recovering slightly. Julian David, chief executive of TechUK, which represents many UK tech firms, said: "These proposals would be a disaster for the telecoms sector and the customers that it serves.
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How has the industry reacted?
The Tories say the full cost of Labour's plan would be PS83bn over 10 years, rather than the PS20bn claimed by Labour, arguing they had greatly underestimated the cost of re-nationalising parts of BT, broadband roll-out and salary costs. Mr Johnson said Labour's plan would cost the taxpayer "many tens of billions" and that the Conservatives would deliver "gigabit broadband for all". He has previously promised PS5bn to bring full-fibre to every home by 2025. But Mr McDonnell said the Conservatives' funding plan for improving broadband was "nowhere near enough". The Lib Dems called Labour's announcement "another unaffordable item on the wish list". The SNP called Labour's plans a "pie-in-the-sky" promise and said the Scottish government was putting PS600m in to broadband.
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... And the other political parties?
All sides are agreed: The UK has fallen behind competitors in rolling out a fibre network - the gold standard where a fibre optic cable arrives directly into your home - and way behind countries such as Spain, Portugal and Norway. When he was running for the Tory leadership Boris Johnson described the broadband strategy of Theresa May's government as "laughably unambitious" and promised PS5bn to hit what the broadband industry thinks is an extremely ambitious target. Now, Labour has come back with a plan that may be more realistic in timescale but is far more expensive in terms of state spending. What is not clear is what happens to the wider broadband market - from Virgin Media and Sky to the raft of fibre broadband firms that have sprung up in recent years. Labour is indicating that the companies "may want to come on board" with its scheme - but it is hard to believe that after years of complaining about BT stifling competition they will be enthusiastic about competing with a state-owned monopoly. The question for consumers may be who they should trust - broadband suppliers with patchy records on customer service or the state.
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Could it work?