Labour’s Free Broadband For All – Would It Have Worked?
What would have had to be done to achieve this?
On the run-up to the crucial election which took place on the 12th of December, Labour released their manifesto in which they pledged to provide free, full-fibre broadband to all homes and businesses within the UK. This proposal may sound marvellous when looked at face-on, however, it raised a number of questions to various key issues.
The key question here is, how do a Labour government intend on providing this free broadband service to all UK citizens? The party has said in order to achieve this pledge they will have to partially-nationalise BT. This would involve the government purchasing Openreach, the body of BT which is responsible for operating the majority of the UK’s broadband infrastructure. Labour have valued this nationalisation manoeuvre at £20bn, however, this figure has been lambasted by BT who claim it would cost five times more than this estimation.
Another controversial issue concerns where Labour are going to source this £20bn from. Labour said they plan to borrow £15bn on top of £5m already committed by the government. In relation to the operating costs of providing this free broadband, Labour have claimed a price of £230m a year, however this figure seems difficult to trust after BT’s annual report showcased annual operating costs of above £2bn. The funding of these operating costs would be supported by a new ‘tech tax’ which would target large multinationals such as Google and Facebook by straining their global profits.
The key criticism of this radical plan is that it would strangle the broadband market, leaving other service providers unable to compete with the governments free service. Additionally, there are worries that this scheme could crush the efficiency of the sector due to the absence of a profit motive and therefore lead to expenses spiralling out of control. The strongest critics of this plan include Prime Minister, Boris Johnson who derided it as a “crazed communist scheme”.
Despite its clear flaws, this policy does contain some very attractive aspects. The primary benefit that this pledge offers, is the opportunity for the UK to catchup with the rest of the world in terms of broadband accessibility, with currently only an abysmal 8% of UK homes having access to full-fibre broadband compared to countries such as Portugal with rates at a much more satisfactory 89%. This prospect of improving national broadband provision would ensure a digital divide across the nation is averted thus ensuring that the majority of UK citizens have crucial access to broadband which has become a fundamental component of modern life.
This debate concerning whether Labour’s broadband policy is feasible or justifiable has effectively been made redundant following the Conservative party’s landslide majority secured on Thursday. We can therefore be rather certain we will not see such a radical nationalisation policy under the pro-free market Conservative government which is set to be in power for the next four years. This issue may therefore have to be revisited at some point in the future if or should I say when a Labour government again assumes control.
By Oliver Watt