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Jeremy Corbyn Hopes to Splash £500bn on Infrastructure and Broadband

Thursday, August 4th, 2016 (2:33 pm) - Score 992
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The embattled leader of the UK Labour Party, Jeremy Corbyn MP, has promised to spend £500 billion on national infrastructure and use part of it to roll-out “high speed broadband” so that the United Kingdom can “stop languishing behind Bulgaria and Romania,” but only if he wins the leadership contest.

At this point it’s probably worth pointing out that both Bulgaria and Romania have adopted the EU’s Digital Agenda, which means they aim to have 100% coverage of 30Mbps+ NGA “superfast broadband” services (including 50% subscribed to 100Mbps+) by 2020. In terms of Next Generation Access (NGA) broadband coverage, both sat at around 71%+ in 2015 and that compares with 90.5% in the UK.

But the crucial caveat here is with the technology mix. In 2015 the EU calculated that the UK’s fixed line NGA coverage was predominantly delivered by a mix of cable DOCSIS (47%), FTTC/VDSL (79%) and only 1% on the most future proof FTTP/H.

By comparison Romania has 14% covered by VDSL, 58% via FTTP and 29% on Cable (67% are also covered by WiMAX wireless). Finally, Bulgaria delivers 0% VDSL, 28% FTTP, 61% Cable and 65% via WiMAX.

In other words, whether or not the UK is “behind” Bulgaria and Romania depends upon how Corbyn chooses to define “high speed broadband” and whether or not speed is more important than total service coverage. Not to mention other factors, such as affordability etc. As usual we’re not going to get that sort of detail in a set of political commitments.

Similarly the proposal to spend £500 billion on infrastructure is most welcome although, as you’d expect from any politician vying for office, there’s precious little detail on where this money would come from (our economy isn’t exactly in a good state right now) and how much of it would go towards broadband.

Jeremy Corbyn MP said:

“George Osborne cut government investment. The investment that provides a platform for people and businesses to thrive. The Tory government cut research spending by £1 billion in real terms. How on earth are we going to become a strong modern economy if we cut science funding? They cut subsidies in renewables, the energy of the future. Germany and the US are pouring money into this.

That’s why we have announced a National Investment Bank to help channel £500 billion of investment over the next decade … We will invest in the high speed broadband businesses need and stop languishing behind Bulgaria and Romania.”

Corbyn’s full list of 10 pledges has been outlined on his personal website, although he’s got quite a steep hill to climb before being in a position to actually implement them and the general election isn’t until 2020. Otherwise we’re going to steer well clear of the toxic party politics side of things because that could easily send our readers into a terminal coma, much as it would when talking about any other political party.

As a side note the Institute for Public Policy Research (IPPR) has also called on the Government to boost its public spending in order to protect against the Brexit downturn, with calls for this to focus upon digital and physical infrastructure (broadband, transport etc.). Rumours are already circling that the Government may well outline something along these lines in their annual Autumn Statement 2016, but we’ll have to wait a bit longer for that.

UPDATE 4:37pm

We should add that the £500bn commitment would be over a 10 year period and that Corbyn’s leadership rival, Owen Smith MP, has promised £200bn over five years.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he is also the founder of ISPreview since 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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12 Responses
  1. brianv

    A national investment bank would provide the capital, based on the concept of Public Credit; investing in infrastructure through issuance of municipal bonds.

    The public would clamber for it, in this climate, with interests rates now slumped to 0.25%; great place for your money, knowing you’re investing in a fibre broadband future, with yields secured on access fees. Corbyn and his economists have dubbed this ‘People’s Quantitative Easing’.

    Nothing new in that infrastructure investment model. It was used by Roosevelt, Lincoln, Washington and his first Treasury secretary Alexander Hamilton. Although the turd-mongers in the City of London, desperate to protect their lucrative private banking interests, claim that Public Credit is untried. Not true.

    Roosevelt used Public Credit via his Public Works Programme to invest in infrastructure of the day – roads, ports, railroads, schools and hospitals – so-called ‘internal improvements’, to boost the domestic economy, provide jobs, and ultimately, lift the US out of the Great Depression.

    150 years earlier Alexander Hamilton did the same – using Public Record to rescue the USA from the bankruptcies of war with England.

    Thumbs up to Corbyn if he can deliver universal fibre to the home, using People’s Quantitative Easing, Public Credit, and a National Infrastructure Investment Bank.

  2. FibreFred

    Sounds great, another amazing promise from an MP

    “but only if he wins the leadership contest.”

    Arrrr right. Hmmmm

    • timeless

      he will win.. in fact he won the leadership election by landslide.. the problem is its MPs within his own party that are causing the issues.. not to prattle on but the other so called candidate Owen Smith has pretty much copied Corbyns policies word for word and is calling them his own. but l digress.

      my personal opinion on Corbyn is that he will deliver much more than the previous Labour or the Cons ever will, not saying he is perfect but compared to the rest of them he is very different, why else would rebel MPs, right wingers and the media spend so much time smearing him? lets face it he is ruffling their feathers and threatens the current status-quo.

    • FibreFred

      He may indeed win but if other mps don’t back him which they don’t and won’t labour won’t get in it will be another two general elections before labour will even get a look in. Leadership remains their issue

  3. fasman

    really — 26bn and who do think going to pay for that — spend. spend , spend 1!!!
    there is never going to be universal fibre to the home

    • timeless

      well if the money is taken away from Trident for example and put on something other than mutually assured destruction, getting out of all these wars we are now a part of in oil rich countries and actually takes the wealthy what they owe by closing all those loopholes that allow them to avoid paying billions there would be allot more money to pay for this.

      as for Labours overspending, its a myth created by the Conservatives, firstly what we need is more spending because in a good economy money needs to pass hands not stay with the privileged few and secondly and the most important part of the myth, take a look at the Conservatives borrowing, youll see they have borrowed more in the past 6 years than any Labour government over the past 100yrs combined..

      and l ask you, whos currently paying for the damage the Cons are currently doing.

    • TheManStan

      Very few governments show good economic policy but glib statements about borrowing in an effectively stagnant/recessive economy fail to impress.

      I’m sure you can explain the rising and peak borrowing at the end of the last Labour government?

      No other government has borrowed more in a single year.

    • brianv

      fasman writes:— “really — 26bn and who do think going to pay for that — spend. spend , spend 1!!!”

      Well, actually, it’s very simple. Corbyn proposes to print money to pay for it. That new money will pay the contractors and the suppliers to roll-out universal FTTP. Secured on the future access fees for the new Fibre network.

      Corbyn has dubbed that “People’s Quantitative Easing”. The creation of a National Bank for investing in public infrastructure. Directly injecting that newly printed money into the physical economy.

      You may say “ooh, well what about inflation? With all that newly-created money, surely inflation will soar?”

      Indeed, what about inflation? However,tThe Bank of England is actually running a Quantitative Easing programme already, and massively expanded it just last week.

      Quietly tucked away in the minutes of the last meeting of the Bank’s monetary policy committee – when the base rate was slashed to a 40 year low of 0.25% – was the following announcement:

      —- The BoE will print another £60bn of new money to buy government bonds; another £10bn to buy corporate bonds; and loan up to £100bn new money to the banks. Extending the existing QE programme to £435bn in total. —

      Read all about it at https://www.theguardian.com/business/2016/aug/04/bank-of-england-cuts-uk-interest-rates

      —-

      £435bn of newly printed “helicopter money”, eh?! Completely dwarfing the £26bn bill for rolling out FTTP to every home in the land.

      Furthermore, as with all monetary policy announcements, the devil is in the detail. We’d like to think the Bank of England is ultra-cautious in where it’s directing that new money into the economy, right? But nope, that new money is actually being given to utterly-bankrupt high street banks; already drowning in speculative instruments – crippled by unfulfillable financial derivatives.

      These are the “Too Big To Fail Banks”, who then exchange that new money with the Bank of England, for their toxic paper debts. Junk bonds and collateralised debt obligations (CDOs), their liar loan books, and their highly-defaulting mortgage-backed securities. All swapped for the Bank of England’s crisp new banknotes.

      So how does that new money targetted at the private banks actually help the physical economy? How does it help the man in the street? It doesn’t at all. It simply keeps those bankrupt commercial banks afloat for a little bit longer.

      And that, my friend, is the folly of the Bank of England’s Quantitative Easing Programme.

      Instead of injecting new money directly into the physical economy, as Corbyn proposes, to pay for projects like fibre to every premises, the BoE is giving that new money instead to the rotten-to-the-core banks of the City of London. With almost no caveats on how those banks may spend it.

      And that, my friend, explains why Britain is at the very bottom of the OECD league for availability of FTTP.

  4. fasman

    timeless — actually labour grew the public state by 1m let alone anything else !!!!! all with final salary pensions !!!!! – so you and me will be paying for that for ever and a day

  5. dragoneast

    While all the money is being spent how long do the investors wait for their return? Or do they collect it in the next world? Institutional investors would love to invest in infrastructure, if only government could make its mind up and stop chopping and changing. And there’s no sign of that, from Labour or anyone else. This “we can stop doing this and do that” is fine, unless it’s your job and livelihood that’s affected. Why is it always everyone else that have to adapt at our whim?

    • brianv

      “Institutional investors would love to invest in infrastructure” ??

      Really? Who says?

      When will BT’s parasitic shareholders be taking the lead in this?

  6. TheFacts

    Over a ten year period implies being re-elected.

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