UK Gov To Introduce 50p Broadband Tax In January 2010?

A new nationwide broadband tax to fund Britain's effort to roll out next generation broadband across the country is set to be introduced by the beginning of next year, before the general election.

The 50p monthly levy will be charged on fixed phone lines - which include fixed cable from Virgin Media as well - and could bring the monthly cost of the standard BT line rental up to £14.50.

Treasury Minister Stephen Timms, who is in charge of implementing Lord Carter's Digital Britain report, told an audience at a London event organised by the British Computer Society that the government wants to make high speed networks nationally available, claiming that it is vital for jobs and growth that Britain has a world-class digital infrastructure.

He added that the so-called next-generation fund would help achieving that and the current government is likely to "legislate for it this side of a general election" although the opposition parties are set to challenge this.

The shadow culture secretary, Jeremy Hunt, was unimpressed saying that "Slapping on a broadband tax is an old economy solution to a new economy problem."

More significantly, customers will be indiscriminately hit by the increase; this prompted Steve Weller of uSwitch to blast the decision, lamenting that " If the Government truly intends to tax home phone users to fund the universal roll-out of broadband, this is a classic case of robbing Peter to pay Paul."

Around £175 million a year is expected to be collected a year through the tax; the monnies will be used to spread next generation internet in regions which broadband companies consider as economically not viable.

Our Comments

Many, like Gordon Kelly of Trusted Reviews, have rightly criticised the project. A Conservative government is likely to scrap these plans and even if they are maintained the £1.25 billion it will collect over the next seven years is likely to be a fraction of what would be needed.

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