CBI Joins Calls for Boost to UK Digital Infrastructure Investment

The Confederation of British Industry, which speaks on behalf of 190,000 UK businesses, has today added its voice to the growing chorus of people calling on the Government to use next month’s Autumn Statement 2016 as a platform to boost investment in digital infrastructure (broadband etc.).

The new Chancellor, Philip Hammond MP, is due to issue his first Autumn Statement on 23rd November 2016 and there’s already been plenty of speculation about the possibility that this may include a fresh commitment to invest more money into improving national infrastructure, particularly broadband, energy and transport.

In keeping with that the CBI has today proposed an increase in average Public Sector Net Investment spending this Parliament to 2% of GDP (it is otherwise forecast to fall to 1.7%), which would effectively increase the average annual public investment by £6 billion.

The CBI suggests funnelling this into various transport / energy improvements, tax breaks and more R&D. The group also calls for digital infrastructure (broadband and mobile etc.) to be given a boost, not to mention tweaking business rates in order to exempt new plant and machinery investments (broadband infrastructure builders were recently hit by a huge rates hike), as well as bringing forward the RPI to CPI (inflation) switch.

Carolyn Fairbairn, CBI Director-General, said:

The Chancellor should capitalise on the UK’s core strengths, setting out a pro-enterprise agenda that instils confidence and kick starts investment. With huge variations in productivity between different parts of the country, the top priority must be to set out a programme that will get our regions firing on all cylinders and supports businesses to innovate, invest and create jobs in the years ahead.

With interest rates at rock bottom, now is the time for the UK to put serious effort into improving our creaking infrastructure. We would like to see £6 billion more spent each year on public investment: improving our transport and digital network, building more homes and extending regional funding. This can be achieved by increasing Public Sector Net Investment to 2% and delivering on previous infrastructure project commitments.”

At present we wouldn’t be surprised if the Prime Minister, Theresa May, gave her approval to an investment boost in order to offer some good news during an otherwise shaky post-Brexit climate. However it’s not yet clear if the Government would do this in the autumn or wait until next year’s Budget 2017 announcement.

Meanwhile the new Digital Minister, Matthew Hancock MP, has recently signalled his belief that “gigabit speeds” and pure fibre optic (FTTP/H) broadband connectivity are “the future“, while hinting at the prospect of specific help for alternative network (AltNet) providers (here).

In our view the most likely outcome of the forthcoming Autumn Statement is the possibility that we might finally get some solid details on last year’s proposed Broadband Investment Fund (details), which is designed to help AltNet ISPs secure funding for the construction of new “ultra-fast” (100Mbps+) broadband networks.

Apparently all of the CBI’s various proposals combined would carry a total cost of around £11.5 billion in 2017/18 (0.6% of GDP), falling to roughly £7 billion by 2020/21 (0.3% of GDP).