UK Budget 2010: 50p broadband tax gets the green light

Wed 24 Mar 2010 5 Comments

pound coinsChancellor Alistair Darling officially gave the controversial 50p broadband levy the go-ahead today in the 2010 Budget as he outlined plans roll-out an improved broadband network across the UK.

Darling confirmed details to provide the majority of UK homes (90 per cent) with access to super-fast broadband by 2017, funded by a £6 annual tax on landline phones. The tax for this Next Generation Fund (amounting to 50p per month plus VAT) will be charged on all lines available for use by an owner, regardless of whether they're making use of it or not.

The Labour government is confident provision of an improved broadband network across the country will create "hundreds of thousands" of new jobs and could lower the cost of public spending as more services go online. Speaking on the commitment the chancellor commented in his budget speech: "The UK has the potential to be a digital world leader. It needs high-speed broadband for rural areas as well as urban, it must not be limited to the well-off."

Confirmation of the 50p broadband levy has been a long time coming and in that time it's rallied up quite a lot of competition. In fact, if the Conservative party win the next election the proposals could be scrapped altogether. They've pledged to ditch the tax if they come into power, instead choosing to focus on providing a more specific 100Mb broadband for the majority by 2017. Rather than gathering funds from a broadband levy on phone lines they say they will be able to subsidise cabling in rural areas with funds from private investors, with any shortfalls being made up by the licence fee.

Earlier this week Prime Minister, Gordon Brown showed his commitment to improved high-speed web access in a pre-budget speech: "Faster broadband speeds will bring new, cheaper, more personalised and more effective public services to people," said Brown. "It will bring games and entertainment options with new levels of sophistication."

However, some industry experts, including the likes of Eclipse Internet's proposition manager, Paul Richens, believes it would be more beneficial to concentrate on providing basic broadband access for all, rather than focussing on speeding broadband for the "majority".

Chancellor Darling did not comment on when the broadband tax would come into force.

How do you feel about being charged £6 per year to fund broadband access across the UK? Let us know below.

To give you some background info on the pros and cons, Broadband Genie editor, Chris Marling discusses the 50p broadband tax in more detail in his blog.

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Comments

  • neutral

    by Jason Parker at 15:28 on 24 Mar 2010Report abuse

    It says in your article £6 per month? I though it was £6 per year?

  • happy

    by Jonathan Rapley at 17:41 on 24 Mar 2010Report abuse

    I'm still a teenager and am not the taxpayer, but if I was, I'd be willing to pay more than 50p to see the development of much faster internet speeds in the UK. I'm not asking for South Korean internet speeds, but a steady 20Mbps+ everywhere and the recycling of copper wires for fibre optical cables would be fantastic.

    In my household, we're using BT and get our service from the Twickenham telephone exchange. I never get over 3Mbps and usually only get 2Mbps which is very annoying, so when I become a taxpayer, I'll be more than happy to know that some of my income is going to benefit my leisure of gaming, watching online videos and not being struck by peak-time speeds.

  • unhappy

    by james at 22:27 on 24 Mar 2010Report abuse

    Horrible Idea, using taxes to help private firms to roll out fibre optic network. BT will charge masses for the service and it and it will all go back in their pocket. This will lead to less people having broadband not more.

  • unhappy

    by martin at 10:47 on 26 Mar 2010Report abuse

    I object strongly to this tax and will cancel my land-line with BT should it come into effect, but your article suggests i would still be liable to pay this tax. Cancelling my land-line will remove my access to dial-up and broadband, so i don't understand the government's logic as i do not have access to cable living in the countryside and mobile access is no suitable replacement on cost and performance grounds. Standing by my principles means i lose out.

  • happy

    by Dan at 16:57 on 1 Jul 2010Report abuse

    Great idea, waiting for the private sector will take forever, because none of them can afford the long term returns.
    If we do not get our 3rd world communications infrastructure up to date quick (and i am talking gigabit fiber nodes in EVERY village/suburb in the UK) then UK businesses are no longer going to be able to operate. within a decade simply because they cannot communicate with their customers properly.
    (You know that 32 gigabyte HD augmented reality proposal video/presentation you need to send to japan before the Swedes do? Or how about that hi-def video conference you cannot attend?)

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