BT will be part-nationalised and every household will be offered free full-fibre broadband if Labour wins the election, the party has said.
Leader Jeremy Corbyn announced the plan on Friday, saying once the scheme is up and running Labour would tax tech giants such as Amazon, Facebook and Google to pay for it.
In a speech in Lancaster, Mr Corbyn described the new free public service – dubbed British Broadband – as “central to Labour’s plans to transform our country and economy”.
He said the plan will end bad internet coverage and save households £30 a month on average.
The policy was described as a “disaster” for telecoms by the chief executive of techUK, and called “fantastical” by the prime minister.
“What we are going to deliver is gigabyte broadband for all and what we won’t be doing is some crackpot scheme that would involve many, many tens of billions of taxpayers’ money nationalising a British business,” Boris Johnson said, answering questions from the public on BBC 5 Live.
Labour put the cost at £20bn. The head of BT suggested the estimated cost was closer to £100bn,
Shares in BT dropped nearly 4% in early morning trading before Mr Corbyn officially launched the plan.
On the campaign trail today:
- John McDonnell and Jeremy Corbyn confirmed their broadband pledge in a speech
- The Conservatives will travel through the North West to launch their towns policies
- Ed Davey will propose the Lib Dem climate plan
- Boris Johnson has taken questions from the public in a radio phone-in.
Labour says broadband will first be rolled out in communities with the poorest access in the UK, such as rural areas, before being expanded across the country to all households and businesses by 2030.
There are more than 27 million households in the UK, according to the Office for National Statistics.
Mr Corbyn said the “massive upgrade in the UK’s internet infrastructure” will save the average person £30.30 a month, with funding also to come from the party’s Green Transformation Fund.
Shadow chancellor John McDonnell told Sky News: “We can’t afford not to do this, we are falling behind our competitors. South Korea did this, they have covered nearly 97% of their country.
“We are falling behind. Japan has done this, Stockholm is doing this.
“This is the way to do it, and if we don’t we will fail to compete.”
Ahead of his speech, Mr Corbyn tweeted: “Only 8-10% of premises in the UK are connected to full-fibre broadband.
“It’s 97% in Japan. Eight in 10 of us experienced internet problems in the last year. So we’ll make the very fastest full-fibre broadband free to everybody, in every home in our country. That’s real change.”
Sky News’ political correspondent Jon Craig said it was a “big moment” and a “huge and controversial pledge”, adding that it was “going further than Labour have done before on renationalisation”.
Digital, Culture, Media and Sport Secretary Nicky Morgan, who is standing down at the election, said: “Corbyn is clearly 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. What reckless idea will be next?”
Mr McDonnell insisted the plan was feasible, saying it had been fully costed.
He told Sky News parliament would cost Openreach with government bonds swapped for shares, as in previous instances of nationalisation.
Mr McDonnell also argued the costing came from an independent report which was commissioned by the government, and promised “it will be a good deal”, adding “there will be no job losses, more likely job increases”.
He said: “Every part of this plan has been legally vetted, checked with experts, and costed.”
Sky News’ technology correspondent Rowland Manthorpe said the policy would likely prove popular with voters, but suggested other broadband providers could feel “hugely threatened”.
He said: “Every poll and focus group I’ve seen would suggest this policy is going to be extremely popular. Not just the free broadband but the tech company tax – people are really angry about that issue.
“Buying BT is the easy bit. The hard part will be working out how this affects all the other firms, which could be hugely threatened by a state provider.”
Labour had already said it wants to nationalise gas, electricity and the railways – the latter of which has the backing of the majority of the public, according to a Sky poll.
Julian David, chief executive of techUK and a member of the government’s digital economy council, said the plans would be a “disaster” for the telecoms industry, adding that it would shift costs of investment being borne by the private sector onto the taxpayer.
He added: “Renationalisation would immediately halt the investment being driven not just by BT but the growing number of new and innovative companies that compete with BT. Full Fibre and 5G are the underpinning technologies of our future digital economy and society.
“These proposals would be a huge set back for the UK’s digital economy which is a huge driver for growth.”
Philip Jansen, BT chief executive, told the BBC: “These are very, very ambitious ideas and the Conservative Party have their own ambitious idea for full fibre for everyone by 2025 and how we do it is not straight forward.
“It needs funding, it is very big numbers, so we are talking £30-40bn and if you are giving it away over an eight-year time frame it is a another £30-40bn. You are not short of £100bn.”
A BT spokesman said: “It should be a top political priority to super-charge the roll-out of full fibre broadband and 5G right across the UK so we can build the digital economy of the future. Whatever the result of the election, we’d encourage the next government to work with all parts of the industry to achieve that.
“It’s a national mission that’s bigger than any one company.”
A spokesman for Virgin Media said: “Private investment is essential to delivering improved broadband infrastructure.
“Government policy has a role to play and can help to accelerate broadband deployment in a way that minimises the level of public subsidy needed and provides the UK and consumers with incredible connectivity within a competitive market.”
Mr Johnson is also talking about infrastructure out on the campaign trail, promising investment that he says will keep the high street open for business.
Under his plan, pubs, shops, cinemas and music venues will all qualify for cuts in business rates, and the Tories say they will also reverse some of the rail cuts of the 1960s.
Places which will be candidates for a £500m fund include Ashington, Seaton Delaval and Blyth in Northumberland and Skelmersdale, Thornton-Cleveleys and Fleetwood in Lancashire.
He also wants to extend the cycling infrastructure he introduced in the capital when he was mayor of London to the rest of the country.
Mr Johnson said: “For too long, too many towns and villages across Britain have been overlooked and left behind. We will invest in these communities and help people put the heart back into the places they call home.
“We will be able to save our high streets, keep pubs and post offices open and reconnect places to the rail network half a century after they were cut off.”
The Liberal Democrats also announced a campaign commitment of their own on Friday, pledging that an extra £100bn will be pumped into combating climate change if the party gets into power.
Party finance spokesman and former cabinet minister Sir Ed Davey will use a speech in Leeds on Friday to make the announcement and will also launch an attack on the financial plans of both Labour and the Tories.
“The Conservatives have made our economy weak – much weaker than people realise,” he will say.
“Too many people can’t live a secure, happy and fulfilling life. And too many businesses face crippling uncertainty over their future. Yet so far, the economy debate in this election has been a debate between fantasies.
“Fantasies born of nostalgia for a British Imperial past. Competing with fantasies from a failed 1970s ideology.”
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