Is Labour’s pledge of free broadband for every home realistic?

Jonjo Murtagh looks at the financial arguments of Corbyn’s pledge to get everyone connected with fast broadband speeds.

Free broadband to every home in the UK was one of Jeremy Corbyn’s headline-grabbing pledges in his bid to become Prime Minister.

The Labour party’s aim is to install ‘full-fibre’ broadband, which would allow for a faster connection, in to every home and business by 2030.

In a speech at the University of Lancaster Corbyn said that the plan would increase productivity in the UK and boost economic output.

“Making broadband free and available to all will open up opportunities for everybody. It will put us at the cutting edge of social and economic change. It opens up opportunities for work, creativity, entertainment and friendship.

“Fast and free broadband for all will fire up our economy, deliver a massive boost to productivity and bring half a million people back into the workforce.”

Only 8% of homes in Britain are currently eligible for full-fibre connection.

The idea has been received well by the public, most of whom will save large amounts of money if the scheme goes ahead.

Julie Marshall, from North Derbyshire, said that the plan was welcome news. “We’ve paid a lot of money for our standard broadband package for a while now, so obviously it’s great that we might be able to get it for free.

“It means that other people who maybe can’t afford to keep their broadband will be able to use it for their needs.”

Julie feels that the installation of ‘full-fibre’ broadband would help millions of people across the country. “I know it’s only the areas around London that seem to get full-fibre broadband, and I don’t think that’s fair.

“I sometimes work from home and my son uses the internet a lot too, and we’ve noticed that the service isn’t what it could be.

“We constantly have problems with our broadband and even though they’re usually fixed pretty quickly, the speed hasn’t really changed.”

Labour say that the scheme would be funded each year by a new tax on multinational companies such as Google and Facebook.

This proposal has been criticised by other politicians, who say that the companies will fight against the tax or downsize their operations in Britain.

Shadow Chancellor John McDonnell said that Labour are not concerned about backlash from the companies.

“I don’t think there will be any backlash, because this proposal’s time has come. If any of them decide to pull out, or challenge, the market will be filled by other companies,”  he said in a public statement.

The Labour party say it would cost £20bn to initially build the network, and the new tax scheme will cover the £230m required to keep it running each year.

To implement these changes, they must first succeed in nationalising Openreach, a subsidiary of BT that is responsible for fixing phone line connections and installing fibre-optic broadband.

This process would result in the creation of a state-owned organisation, titled British Broadband, that would be tasked with making Jeremy Corbyn’s idea a reality, and addressing the UK’s apparent internet problem.

The UK’s internet problem

  • Only 8% of homes and businesses have full-fibre broadband
  • 15th out of 19 countries for speeds over 300 Mbps (Megabits per second)
  • Only country with worse full-fibre speeds is Nigeria
  • Bottom three countries for the proportion of fibre in overall fixed broadband infrastructure

Philippa Burrell, from BT in Doncaster, said that customers were always looking to improve their service to get faster internet connections.

“People are often looking to upgrade, but they will be paying £8 more per month than what they would be with a standard service. Most people are paying just under £40 for their current broadband package, which comes with slightly slower speeds at around 75-76 megabits per second.

”BT customers currently have a few options regarding what package to choose from, depending on what their budget is and what speeds they are looking for.

“The fastest service that we offer is our Ultrafast fibre. This costs around £47 per month, and with that you get a new router, something called a Wi-Fi booster and much faster internet and download speeds.”

The ‘full-fibre’ broadband network that Labour hope to install should they be elected could offer homes and businesses speeds of over 1 gigabit per second (Gbps) –1,000 megabits.

The major political parties agree that the UK is behind other countries when it comes to broadband, and there should be efforts made to increase the speeds to 1 Gbps. However, Labour’s plan to nationalise broadband has come under heavy criticism from their main political opposition, Boris Johnson’s Conservative party.

They said Corbyn had dramatically understated the amount of money it would cost to install the network, quoting a number closer to £40 billion, rather than the £20 billion proposed in the Labour party manifesto.

They also say the annual costs would be closer to £650 million, rather than £230 million.

Nicky Morgan, Secretary of State for Digital, Culture, Media and Sport, felt that the plan was unrealistic, and typical of Corbyn’s pledges.

On the Conservative party website she said: “This fantasy plan to effectively nationalise broadband would cost hardworking taxpayers tens of billions. Corbyn is so desperate to distract from his Party’s divisions on Brexit and immigration that he will promise anything, regardless of the cost to taxpayers and whether it can actually be delivered.”

 

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