IT industry says government's broadband plans do not go far enough

Broadband is vital to innovative industries

The technology industry has given a lukewarm response to the government's broadband announcements in the Budget, expressing concern that more state intervention is needed if universal high-speed access is to be achieved.

Chancellor Alistair Darling announced yesterday that he would double the main capital allowance rate to 40 per cent for this year to support £10bn of investment in the UK's broadband network.

But industry body the Broadband Stakeholder Group (BSG) is concerned that the budget announcements do not yet provide grounds for confidence that such services will be made available beyond urban areas.

"The key is to find the intervention sweet spot, just enough but not too much," said the BSG's chief executive Antony Walker.

"The announcement on capital allowances may help to bring forward investment but does not address the challenge of extending availability beyond urban areas. "

The BSG says there is a growing body of evidence to suggest that the long-term benefit to the UK economy of a measured and carefully targeted intervention has the potential to significantly exceed the cost to government.

The BSG says that the broadband network is vital for enabling creative and high-tech industries, highlighted by Darling as key to bringing the UK out of the recession, to do their job.

John Higgins, director general of Intellect, agreed that more could be done.

"Next-generation broadband, the crucial new infrastructure demand of the 21st century so far, is given some necessary help but it is nowhere near sufficient, " he said.