General election 2019: Labour pledges free broadband for all

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Media captionLabour’s John McDonnell pledged “free broadband for the country” if the party gets elected

Labour has promised to give every home and business in the UK free full-fibre broadband by 2030, if it wins the general election.

The party would nationalise part of BT and introduce a tax on tech giants to cover the £20bn cost.

Shadow chancellor John McDonnell told the BBC: “It’s visionary I accept that, but other countries are having these visions and we’re not.”

Boris Johnson has promised £5bn to bring full-fibre to every home by 2025.

But Mr McDonnell said the Conservatives’ funding plan was “nowhere near enough”, and would leave the UK falling further behind other countries who already have fibre more widely available.

Broadband packages in the UK cost households an average of around £30, according to a report by broadband comparison site Cable – which people would no longer have to pay under Labour’s scheme.

According to a report from regulator Ofcom earlier this year, only 7% of the UK has access to full-fibre broadband – known as “fibre to the home” or FTTH.

The government hit its target to bring superfast broadband to 95% of homes by December 2017 – at a cost of £1.7bn – but the internet speeds are significantly lower than those of full-fibre.

Mr McDonnell told the BBC’s Laura Kuenssberg broadband was always a hot topic with the voters he met.

“Everywhere I go they’re saying [they have] either not got broadband at the speeds they need, holding our economy back, or it’s actually impeding on people’s social engagement,” he said.

“We’ll put the extra £15bn in [and] we’ll ensure that broadband reaches the whole the country.”

‘British Broadband’

The plan includes nationalising parts of BT – namely its digital network arm Openreach – to create a UK-wide network owned by the government.

A Labour government would compensate shareholders by issuing government bonds. Mr McDonnell gave an absolute guarantee that no pensioner would lose out as a result of the nationalisation.

He said Labour had taken legal advice about the move, including ensuring pension funds with investments in BT are not left out of pocket.

As with other planned Labour nationalisations, he said MPs would set the value of the company at the time of it being taken into public ownership.

Having already announced plans to nationalise water, rail and now broadband, Mr McDonnell said this latest plan was “the limit of our ambitions”.

A new entity called British Broadband would then run the network, with maintenance – estimated to cost £230m a year – to be covered by the new tax on companies such as Apple and Google.

“We think they should pay their way and other countries are following suit,” said Mr McDonnell.

Labour has not yet completed the final details of how the internet giant tax would work saying it would be based ‘percentage wise” on the global profits and UK sales, raising potentially as much as £6bn.

Mr McDonnell said that if other broadband providers did not want to give access to the new entity, British Broadband, then they would also be taken into public ownership.

The shadow chancellor claimed such a scheme would also have positive effects on the environment, due to a reduction in commuting and enabling people to move out of cities to rural areas.

“Making sure [fibre broadband] free to people [means] they can participate in the way that they haven’t in the past both economically and socially,” he added.

“We’re putting the money in and therefore we should own the benefit as well.”

Broadband is now a major political issue, but on one thing all sides are agreed: the UK has fallen behind competitors in rolling out a fibre network – the gold standard where a fibre optic cable arrives directly into your home – and way behind countries such as Spain, Portugal and Norway.

When he was running for the Tory leadership Boris Johnson described the broadband strategy of Theresa May’s government as “laughably unambitious”, and promised £5bn to hit what the broadband industry thinks is an extremely ambitious target.

Now, Labour has come back with a plan that may be more realistic in time scale but is far more expensive in terms of state spending.

What is not clear is what happens to the wider broadband market – from Virgin Media and Sky to the raft of fibre broadband firms that have sprung up in recent years.

Labour is indicating that the companies “may want to come on board” with its scheme – but it is hard to believe that after years of complaining about BT stifling competition, they will be enthusiastic about competing with a state-owned monopoly.

The question for consumers may be who they should trust – broadband suppliers with patchy records on customer service or the state.

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