Labour plans to nationalise parts of BT
Labour government would create a new public company called British Broadband
Labour plans to nationalise parts of BT and offer free internet access to every household and business in the UK, if it wins the December election.
Shadow chancellor John McDonnell said a Labour government would take control of the network and create a new public company called British Broadband. This would involve nationalising Openreach, parts of BT Technology, BT Enterprise and BT Consumer.
To fund the project, Labour would add an extra £15bn (€17.45bn, $19.3bn) of borrowing to the existing £5bn put aside for broadband. The “visionary" £20bn plan would "ensure that broadband reaches the whole of the country,'' McDonnell said.
The subsequent cost of maintaining the network is estimated at about £230m a year, which Labour said would be partly covered by raising the taxes charged to technology giants such as Amazon, Facebook and Google.
According to a report from Ofcom earlier this year, only seven per cent of the UK has access to high-speed broadband.
McDonnell said full-fibre services would first be given to rural communities with the worst broadband access, and then rolled out across the whole of the UK by 2030.
BT chief executive Philip Jansen told BBC News that the real cost of building a digital Britain could be as high as £100bn. He also warned about the impact of any changes on shareholders and the millions of investors, via pension schemes.
“Our shareholders ultimately own the company and they provide the investment that funds the infrastructure in this country,” he said.
Labour’s pledge to part-nationalise BT sent its share price down by nearly four per cent in early trading on Friday.
“Shareholders are nursing massive losses on their investments should they have bought in at £5 say two years ago,” said Jansen. “That’s market forces and the reason for that is they recognise we’re going to invest very, very heavily in a competitive market and there’s a lot of risk in that investment.”
“Any change like the current idea of nationalising part of BT or the infrastructure bill or giving it away for free takes away that competitive nature.”
The shadow chancellor said Labour had taken legal advice to ensure pension funds with investments in BT are not left out of pocket. They would also compensate shareholders by issuing government bonds.
In other election news, the Liberal Democrats unveiled details of their green policy programme, promising to spend £100bn over the next five years tackling climate change and protecting the environment. The pledge would be funded through £85bn of borrowing and £15bn through tax changes.
Lib Dem MP Sir Ed Davey - who was previously secretary of state for energy and climate change in the coalition government - said the programme would include a new £10bn renewable power fund to leverage an extra £100bn of private investment.
"This will fast-track deployment of clean energy, to make Britain not just the world leader in offshore wind, but also the global number one in tidal power too," he said. "And we will invest £15bn more to make every building in the country greener, with an emergency ten-year programme to save energy, end fuel poverty and cut heating bills."
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