How Labour's free broadband would work for consumers – from more access to a long-lasting tax bill
A tax on tech giants has been pencilled in to pay for the upgrade – but it might not go far enough
LANCASTER, ENGLAND – NOVEMBER 15: Shadow Chancellor John McDonnell and Labour leader Jeremy Corbyn address the audience at the University of Lancaster on November 15, 2019 in Lancaster, England. Labour leader Jeremy Corbyn has announced a major new digital infrastructure policy including free broadband for all. (Photo by Anthony Devlin/Getty Images)
By Jane Merrick
Policy Editor
November 15, 2019 3:42 pm(Updated July 10, 2020 11:12 am)
Boris Johnson has described Labour's free nationwide broadband pledge as a "crazed Communist scheme", but to the millions of people without access to fast internet and phone connections, who face the daily frustration of trying to get online, does political ideology really matter?
For the fifth largest economy in the world, the UK lags behind many countries in provision of full-fibre broadband – the fastest available allowing download speeds of up to 1 gigabit per second. Just 8 per cent of homes and businesses have access to full-fibre connections, compared to 89 per cent in Portugal and 71 per cent in Spain.
But many consumers and businesses can't even access superfast broadband, the next-slowest level down from full-fibre, classed as providing downloads of at least 30 megabits per second. Superfast broadband coverage is technically now at 94 per cent of UK homes and businesses, but connections often vary.
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Patchy access
What's more, this 94 per cent figure does not tell the whole story: because of cost and lack of reliability, only 45 per cent of homes actually subscribe to superfast broadband, according to the latest Ofcom report on the state of the industry in the UK. The cost of broadband to consumers is substantial: on average, £30 a month.
Some 2 per cent of premises cannot access a decent fixed broadband service with download speeds of at least 10 megabits per second, which, compared to full-fibre is already pretty slow. This figure is getting smaller all the time, but progress has been slow.
Ofcom says that 23 per cent of homes and businesses do not have good indoor 4G coverage from all major phone operators. Some 9 per cent of UK landmass, mainly rural areas, has no good 4G coverage from any operator at all, while only 66 per cent has coverage from all four mobile network operators.
Against this patchy backdrop, Labour's offer of a "British Broadband", with BT's digital network provider Openreach nationalised, will be appealing to consumers.
The policy would bring to every home the fastest broadband available, full-fibre, and it will be provided for free, something which would be transformative for those who currently don't sign up to superfast broadband on cost grounds. The timescale is long: the pledge would see full-fibre in every home and business by 2030 – but this is, Labour would argue, a realistic commitment.
How much it would cost – and who might pay
But while the state ownership aspect may not be off-putting to everyone on ideological grounds – let's not forget many of Labour's renationalisation policies were relatively popular at the 2017 election – there will be concerns about cost to taxpayers.
Labour says it will pay for "free" broadband by taxing major tech companies like Google and Apple, but has not provided detailed proposals of how that tax would work. It is estimated to recoup about £6bn for the government. Yet would the revenue from this tech tax be enough to cover the huge cost of British Broadband, which industry experts said on Friday could be at least £20bn?
The government currently pays for the maintenance and provision of motorways and the rail network, and the cost of that is borne by consumers. This nationalised digital infrastructure could affect taxpayers in the same way, even after the tech tax has been accounted for.
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