Businesses Tell UK Gov to Soften Brexit Blow with Broadband Investment

The British Chambers of Commerce (BCC), which represents thousands of businesses of all sizes and sectors, has told the Government that it should make use of low UK interest rates to help soften the impact from Brexit by investing in broadband, housing and reform of business rates.

The new Chancellor of the Exchequer, Philip Hammond, is due to make his first Autumn Statement 2016 to Parliament on 23rd November 2016. Recently there’s been a lot of talk about the possibility that this may include a fresh commitment to invest even more money into improving the national broadband infrastructure, which is something the BCC are keen to see.

Adam Marshall, BCC Director General, said:

“The Autumn Statement gives the Government a great chance to set the tone for its relationship with British business, by pulling out all the stops to support investment, infrastructure improvements, and business confidence.

The Chancellor made the right move when he signalled his willingness to use historically-low interest rates to invest prudently to support growth, and he has a golden opportunity now to use this fiscal flexibility to ‘crowd in’ business investment.

Plans to lower business costs and support investment would help firms take risks and seize opportunities in spite of the ongoing uncertainty surrounding the Brexit process. Westminster must do everything in its gift to improve the business environment, and firms will repay that backing with investment, hiring, training and export growth.”

So far there has been no concrete information on this front, although it’s very plausible that the Government may elect to flesh out their Broadband Investment Fund (details). The fund, which was proposed at the end of 2015 (here), is designed to help alternative network (AltNet) ISPs to secure investment for building new “ultra-fast” (100Mbps+) broadband networks (i.e. the language suggests that this is not designed for the incumbents of BT and KCOM).

The BIF is also “intended to complement other government programmes rather than duplicating or competing with them” (i.e. the UK Guarantee Scheme and Broadband Delivery UK) and it would be supported by a mix of both public and private investors (managed by the private sector on a commercial basis).

Pushing something like the BIF would also make sense given the current approach and timing of Ofcom’s Strategic Review, which is seeking to make it easier for rival operators to harness Openreach’s national network of cable ducts and poles. However for now nobody knows how much the BIF might be worth or if any restrictions will apply.

Elsewhere the calls for a reform of business rates, which is something that we hear every single year, may fall on deaf ears now that the Valuation Office Agency (VOA) has just introduced a massive and very counter-productive hike (here). Give with one hand, take back with the other.