Digital Britain broadband tax could be scrapped

Timms is in charge of Digital Britain

There is growing speculation that the government is already preparing to abandon plans for a 50p per month “broadband tax” to help fund rollout of superfast networks across the UK – or at least to postpone the controversial plan until after the General Election next year.

Stephen Timms, the minister in charge of delivering the Digital Britain strategy that includes the levy on fixed telephone lines, has been quoted in several newspapers as implying that the charge will be put back.

"When you face a General Election you tend to have a short finance bill before the election and a longer one afterwards. It [the levy] is unlikely to make it through the short finance bill without Opposition support and that does not look likely … In that case, it would have to wait until after the election, " he told The Guardian.

And in The Sunday Times, Timms said: “If the question is, is the levy definitely going to be legislated for this side of the election, I can’t say for sure.”

The Tories are opposed to the levy and would scrap it if they win the election.

The £6 per year charge is meant to go towards helping companies fund the rollout of next-generation fibre-optic broadband capable of delivering speeds up to 100Mbit/s across the country. BT and Virgin Media are implementing fibre in areas where there is commercial viability for such a service, but one of the aims of the Digital Britain plan was to ensure superfast connectivity is available to the entire country.

If the levy is scrapped, there will be widespread calls from the telecoms industry for alternative ways of supporting the rollout.

Timms is preparing legislation to go before the next session of Parliament to enact aspects of the Digital Britain strategy that require new laws or regulations.

The blog on the official Digital Britain web site - which is written anonymously with no credited author - claims the plan for the 50p fee is still in place.

"There has been a bit of speculation about whether all this will happen in a General Election year, although arguably that could be said about any of the governing party’s intentions for the coming year. The DBR [Digital Britain report] said the fund would be established in 2010 and that remains the plan," it says.

The Country Land and Business Association (CLA) has been campaigning for more support for broadband rollout in rural areas. President Henry Aubrey-Fletcher said: “A 50p-a-month levy on fixed-line telephone accounts would contribute only around £1.5m towards the future of nationwide superfast broadband in this country. While this is welcome, it is no where near enough to secure future rural broadband provision even with additional private/public funding.

“If the proposed levy is scrapped, we are still left with the problem of where the much-needed investment would come from. The levy would be a small step in the right direction, but without it in the meantime, rural businesses would continue to be excluded from the prosperity urban areas take for granted.”