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Government scraps broadband tax

fibre optic

By Hani Megerisi

Posted on 7 Apr 2010 at 10:42

The Government has scrapped its controversial 50p per month broadband tax, as it looks to push the Digital Economy Bill through parliament ahead of the General Election.

The 50p per month tax on all landlines was proposed by the Government last year in an attempt to bring "next generation broadband across 90% of the UK by 2017."

However the tax was met with fierce opposition from industry and the Conservatives, who promised to scrap it if they came to power in favour of private investment.

Whilst there is a political consensus that public funding may be required to roll out fibre on a near universal basis, there was never agreement on the levy itself

It now appears the Conservatives have won their battle, with the Government dropping the tax in an effort to garner consensus among the parties and rush the bill through ahead of the General Election.

The final vote on the bill is expected at around 10:30pm this evening.

A spokesman for BT told PC Pro the development was “no great surprise” due to the controversy around it. “Whilst there is a political consensus that public funding may be required to roll out fibre on a near universal basis, there was never agreement on the levy itself. The lack of certainty over that funding is frustrating.”

The horse trading surrounding the bill has been slammed by Labour MP Fiona Mactaggart who accused the Government of indulging a “front-bench conspiracy”.

“I have been to the Vote Office and I am not aware of what the clause says,” she said. “I speak as a parliamentarian, within hours of the Bill’s Committee stage, and I am unable to see that new version, so I do not know what is going to be proposed.”

It is believed the Government will reinstate the tax if Labour is re-elected in the 6 May General Election.

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User comments

I'll raise a glass of cider to that!

But if we let 'em back in then it's back on the books. I thought it was part of the Finance Bill i.e. the budget, not the Digital thing bill. The finance bill "has" to go through or the budget isn't enacted. Still, whoever gets in we get the "real" budget shortly afterwards, that one was just the usual pulling the wool over our eyes. Cynical? Me?
JH

By JohnHo1 on 7 Apr 2010

Funny...

....this was the one part of the Digi' Bill I could support, if, the monies raised went only towards fibering the country.

It would would have been a sweeter deal if it was promised to start from the outside working in ...but the world don't work that way!

In five or six years, expect middle England to collective cry as to where is their 10mb+ broadband?!? "It's in that 50p extra per month you didn't pay since 2010, sir/madam".

You will never get something for nothing, now never more so!

By fingerbob69 on 7 Apr 2010

Westcoast Broadband

Fingerbob69 is right, nothing in this world is free and no company is going to invest the estimated £34bn needed to connect the whole country to high speed broadband.

Taxing the people via the telephone line was right in principle.. however, it wouldn't of raised enough funds to offer a complete solution to everyone combined by the fact the government target was only 90%, so their would still be 10% unbable to connect, most likely in a rural setting meaning all of the hype would of meant nothing, not to mention, not everyone in the UK has a telephone so why only tax those people?

I recently spoke to Ian Livingstone, the CEO of BT, he has little over £1.6bn to invest in high speed networks but admitted all he would do is plough that in to urban fibre, leaving rural communities in the same state.. as a business, he rightly can do this. I also spoke to Jeremy Hunt of the Conservatives along with David Cameron and both admitted they havn't a clue on how they are going to roll out a solution other than he would be looking at urban fibre first, leaving yet more rural communities in the dark ages.. Their policy is empty, just banding around private investment as a solution.. allowing private firms to cherry pick the cheapest and most lucrative deals.

The only solution is a part private and part public funding proposal funded by higher council tax in 'not spot' settings, local and government investment and investment via some sort of digital tax from the whole country.

We supply rural broadband to councils all over the UK but the money we use comes from Europe, there is no current UK financial solution and doesn't look like their will be in the near future.

Westcoast Broadband

By westcoastbroadband on 8 Apr 2010

Thank goodness

Common sense and fairness has prevailed. While the idea of a small tax on landlines was appealing from a simplicity point of view it would have been grossly unfair. Very many elderly people rely on their landlines and are already struggling to pay their bills. They very often don't have mobile phones or broadband and have no interest in either so why should the investment for the next generation have been inflicted on their already stretched budgets? A more sensible tax would be on those who already have super fast broadband they presumably can afford it so another 50p or £1 a month wouldn't hurt. That should go to upgrade the network and until it does those of us stuck on 500kb or below should be paying reduced amounts.

By jaibee3 on 8 Apr 2010

I could live with the 50p levy

I wasn't bothered with the 50p tax.. as long as OAP's were exempt.
My worry is that rural area's may not benefit, unless they implement the fibre-to-the-cabinet option, bringing villages 'nearer' to the exchange.

Steve

By Techno610 on 8 Apr 2010

Fast Mobile Broadband is the solution

4G mobile networks are coming providing speeds of 100mb+ on your mobile network. It won't be long until all mobile networks in the UK will start providing it. If BT is for some reason unwilling to invest provide fibre to the rural areas then the likes of Vodafone and T-Mobile will be more than happy to invest money in 3G expansion and 4G adoption.

By samstep on 8 Apr 2010

fiber broadband

Mobile broadband wont work as the main connection.We all want and should have fiber to the house if this had not been stoped by maggi thatcher in her bid to sell BT cheep!! we would all have it. The tax is the best way to do it. If you want some thing then you have to pay. but it should not be that you live in an urban area you get it but if you live in a rural area you dont. I live in the south weast (weston super Mare) and we dont have cable. so not so rural but the south weast we are always leaft out as is devon and cornwall. we still pay the same as every one else for our broadband but its one of the slowest

By normad1 on 8 Apr 2010

More than 50p per month!

It was actually to be more than 50p per month; £0.50 + VAT at whatever rate applies after the coming rejection (sorry, election!) This fact is due to the way the telephone service providers would be charging the levy. Bear this in mind when casting your vote!

By BornOnTheCusp on 8 Apr 2010

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