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Chancellor Rebuffs MP’s Attempt to Reinstate B4RN’s EIS Tax Relief

Friday, March 8th, 2019 (9:28 am) - Score 1,441
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The former leader of the UK Liberal Democrat party and MP for South Lakes, Tim Farron, has accused the Chancellor (Philip Hammond) of “fobbing off local communities” by effectively imposing a “tax rise” on rural broadband ISP B4RN with its decision to withdraw their EIS tax relief.

At the start of this year ISPreview.co.uk revealed that the Government had decided B4RN, as well as other Community Benefit Society (CBS) based broadband operators, were seemingly no longer eligible to benefit from any tax breaks or other support afforded by the Enterprise Investment Scheme (here) because their approach was “fundamentally uncommercial” (i.e. not setup to make a profit, which is true).

Providers like B4RN typically build Gigabit capable “full fibre” (FTTH) broadband networks in some of the most challenging rural areas. In order to do this they rely on volunteers helping to build the network (usually in exchange for shares instead of cash) and landowners (e.g. farmers) agreeing to waive their right to payment under a wayleave (access) agreement.

However such providers make no secret of the fact that any money they make is then reinvested back into their network and used to further improve coverage or service quality. The loss of EIS support was thus a big blow to B4RN’s deployment strategy (i.e. it’ll now take them and others like them a lot longer to roll-out into new areas).

In response Tim challenged the Chancellor over this and Philip Hammond said he would be “happy to look at them” again and respond to the MP (here). At the end of last month Tim finally got a response, albeit one from HMRC saying they wouldn’t comment on a private company’s affairs. No mention of any review. Tim has now written to the Chancellor again.

Tim Farron said (Letter Extract):

“B4RN have worked absolute wonders to provide some of the fastest internet speeds in the country to some of our most rural communities, reaching parts of Cumbria and Lancashire that the Government and BT couldn’t or wouldn’t reach.

Therefore, to disincentivise people from investing in B4RN will clearly damage the delivery of high-speed connectivity in rural areas.

I am astonished that you could condone this decision which might overturn the capacity of B4RN to deliver your policy on rural broadband at minimal cost to the Government.

This policy, which would seem to have been made by HMRC on the hoof, MUST be reviewed and then reversed.”

One fear is that if operators of a similar size cannot access this kind of support then it may simply result in the Government needing to dole out even more public funding (vouchers etc.) in order to resolve a problem that, in some areas at least, the local community could have done by itself.

Meanwhile B4RN has moved on and recently launched a crowdfunding drive with the aim of raising £3m (minimum of £1m) to support its future plans (here). Clearly they aren’t expecting a change of heart from the Government and since the recent launch they’ve already raised over £100,000. But there’s still a long way to go over the next 54 days.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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28 Responses
  1. Avatar Pedant

    Liberal*

  2. Avatar Optimist

    If Tim Farron’s plea were to be heeded, other ISPs would say they could build new infrastructure in exchange for tax cuts as well. This would go down like a lead balloon at the Treasury as that would mean the ingenious schemes of vouchers etc. would no longer be needed, thus cutting out civil service jobs, and politicians would no longer get kudos by announcing these schemes close to eletion time when evey vote counts.

    So I say cut the taxes and the red tape, and let businesses, community groups etc. get on with installing broadband, and lots of other things as well. I think it was Ronald Reagan who said that the last thing any business owner wants is some official from the government saying he is here to help.

  3. Avatar CarlT

    Good of Tim to take time from his evangelical duties to do this.

  4. Avatar A_Builder

    Well at least on this issue I agree with Tim.

    Self help groups like B4RN do deserve tax breaks as they are contributing to the greater good for whole communities.

    I have great respect for people who work hard to get things done and are problem solvers.

    I don’t really agree that this then spills into what others Alt Nets want to do as it was already quite specific and value limited.

    All that needs to be done is to create a specific flavour of the scheme for community interest groups.

    There are times when Spreadsheet Phil is a wally, due to being too narrow in view, and this is one of them. As is only going to mean a bigger number on another spreadsheet to plug the gap caused by slowing B4RN and their ilk down. The cost of this would be peanuts and would keep a successful scheme rolling and spreading.

    I think we all realise that being Chancellor is a nightmares you are effectively trying to control Credit Addict spending but departments….but sometimes…..the long view…..???

    • Avatar Joe

      “All that needs to be done is to create a specific flavour of the scheme for community interest groups.”

      Exactly – the present scheme wasn’t designed for ‘Barn’ and I support stripping it – but thats not an argument for not putting in a special scheme for projects just like ‘barn’.

      Something of the same issue occurs around Community benefit schemes. They aren’t charities (and often can’t afford to be charities!) so miss out on lots of help but don’t benefit from any other help which ends up in a net loss to the taxpayer from actually generally good activity.

  5. Avatar chris conder

    I doubt there is anything our politicians, even a chancellor can do about anything, this country is run by civil servants. Shame none live in Lancashire and could see the benefit B4RN EIS had, and a shame none of the current batch of civil servants know the basic rules of physics. They still think fibre comes down phone lines and don’t realise this country is free falling into becoming a third world digital nation. EIS could have helped many other groups start up to rectify the shortfall in internet connectivity and stimulate competition. Where altnets go, BT soon follow.

    • Avatar CarlT

      While you’re here, Chris, any idea why you guys came 12th in download speeds on the Think Broadband tests for February losing out on median and mean download to Virgin Media Vivid 150 and having the worst quality score of any fixed line ISP bar EE?

    • Avatar CarlT

      The civil service stuff is nonsense by the way. They do the donkey work of course but policy direction and specifics of laws are in politicians’ remit. The civil service produce the laws to implement the wishes of the politicians and from there implement them once they have been passed by Parliament.

    • Avatar A_Builder

      @CarlT

      I worked with the most senior civil servant responsible for policy in this area at around the time that the FTTC thing started.

      I had privileged access to talk to him privately off line. And we had some very interested conversations.

      His wife was very proud that they had ‘fibre’ broadband installed. Strange that his house was covered in one of the first waves…of rollout…..?

      I said to him “you know BT are not actually putting fibre to the home in” the response I got was a puzzled “I though they were…”

      So I can say confidently form having directly challenged the individual in question in private and looked into his eyes that he really did think that BT was putting fibre in.

      So the name change con job really did work at the heart of government and slowed the pressure on BT to reform itself.

      And I am afraid that Chris is right on this.

      I’d also say to CarlT that civil servants do very often have to put forward items of Departmental Policy very often to deal with the vacuum of ideas from the politicians. Departmental Policy is often the non controversial stuff that just has to happen in the background to keep the place running.

      There is an excellent series of quips that sums this up in Yes Minister. Sir Arnold (Cabinet Secretary) is talking to Sir Humphrey (Permanent Secretary) in his club.

      Humphrey says his minister ‘has more than one policy idea.’
      Arnold responds witheringly ‘can’t remember the last time we had a minister with more than one idea.’

      There is more than a grain of truth in this.

      Departments of State have to do more than one thing at a time!

    • Avatar alan

      “While you’re here, Chris, any idea why you guys came 12th in download speeds on the Think Broadband tests for February losing out on median and mean download to Virgin Media Vivid 150 and having the worst quality score of any fixed line ISP bar EE?”

      TO be fair to Chris for a moment the TBB “Quality Score” and how it is supposed to show, as they put it….
      “…a measure of the variance of the download speed during the course of the test, so those with low scores of 0.1 to 0.2 have very stable speeds, where as those scoring grades C and higher have wildly varying speeds”
      https://www.thinkbroadband.com/news/8338-uk-broadband-speed-test-results-for-february-2019

      Has to be a bit of a joke anyway. Vodafone who currently have issues (only the stupid will dispute this) which you have also commented on this site (and i agree they voda have issues) some how managed to score impressive ‘A’ scores on all their fixed line broadband products???

      That despite them having problems for months. The funniest thing is in the TBB news item about the voda issues…
      https://www.thinkbroadband.com/news/8335-vodafone-claims-line-card-issue-causing-video-streaming-and-download-problems

      They refer back to their speed testing results for January, not the February ones (IE the the link i gave and the results you mention for B4RN)…

      What happened in February did the problem go away for voda yet they just decided to report a non issue (according to their tests for February tests anyway). And just refer back to Jan results as it suits the news piece agenda???

      TBB tests…….. Take with a pinch of salt, comparing one product to another when one has thousand of tests and another may only have hundreds or less i doubt is the best way to measure *cough* let alone compare and give a “Quality Score” of any provider. In fact you could argue its stupid to some degree.

    • Avatar Andrew Ferguson

      In the article published on 1st March, we had not processed the February results looking at the single thread speeds. An article on that is due later in March, i.e. when time allows (a quick look suggests nothing has improved). So your concerns there that we are ignoring February are incorrect..

      On the joke that some are getting A scores, the quality/variance is based on the multiple download results which are generally performing well.

    • Avatar alan

      “On the joke that some are getting A scores, the quality/variance is based on the multiple download results which are generally performing well.”

      Its a pity this “variance” of multi download results is not shown in any visualisation or in any of the figures presented for ALL the ISPs. Be nice if in some way it could be.

    • Avatar Andrew Ferguson

      @Alan You said “Its a pity this “variance” of multi download results is not shown in any visualisation or in any of the figures presented for ALL the ISPs. Be nice if in some way it could be.”

      Which is patently incorrect.

      https://www.thinkbroadband.com/news/8338-uk-broadband-speed-test-results-for-february-2019 has the figure for each package/provider and other items covering it usually include this too.

      So no idea what you are talking about.

    • Avatar alan

      Maybe i do not understand from the data you present how you reach a conclusion on what letter a service scores for its quality score.

      From your link as an example we have
      “EE Fibre Plus FTTC 80/20 E (2.1)”

      But from all the speed figures (IE the bottom xx percent the mean, the mediam etc etc figures) you present it does not make sense why they score an E. There is no big gap difference in speeds, the speeds are good (in fact better than some that score an A ill give an example in a moment).

      Others that have scored an A rating but the figures presented are nowhere near as as good.

      Example…
      Right below the “EE Fibre Plus FTTC 80/20 E (2.1)” entry is…
      “Daisy Wholesale FTTC 80/20 A (0.3)”

      Yet the data/speeds for that Daisy entry are all worse (bar one) and all have a larger variance (difference between between the various speed data given) Yet some how they score an “A”

      That is what i mean by does not make sense or show how or why someone scores an A or a worse figure. The data as to why they score an A, B, or in this example an E just is not presented.

      Maybe it is just something that shows up on individual speed test which results in the A,B,C etc scores but there is nothing at all to explain it in the speed data you present.

    • Avatar Andrew Ferguson

      Top of quality column has a link to https://www.thinkbroadband.com/faq/broadband-speed-test#360

      At end of article we state “For those not familiar with the quality score, this is a measure of the variance of the download speed during the course of the test, so those with low scores of 0.1 to 0.2 have very stable speeds, where as those scoring grades C and higher have wildly varying speeds during the course of the test. EE also scores oddly and this is due to some quirk of their hardware or network configuration that means people see a a very slow ramp up to the connections maximum speed, in terms of how the public would see this is web pages being slow to start loading but after things will speed up. Another way to think of the quality score is that for day to day web browsing a grade A connection even if half the speed of another service with a Grade C connection will often feel faster to use.”

      Towards end of https://www.thinkbroadband.com/news/8345-streaming-peak-and-off-peak-broadband-performance-for-largest-uk-providers-in-january-2019 there is a set of EE specific results.

      A slow connection can have a grade A quality score if its variance is low enough and similarly for a fast connection.

      Your mistake seems to be assuming that faster connections are going to have a better quality. This is part of a move to try and steer focus away from every increasingly headline speeds.

    • Avatar alan

      “Top of quality column has a link to https://www.thinkbroadband.com/faq/broadband-speed-test#360

      At end of article we state “For those not familiar with the quality score, this is a measure of the variance of the download speed during the course of the test, so those with low scores of 0.1 to 0.2 have very stable speeds, where as those scoring grades C and higher have wildly varying speeds during the course of the test.”

      First let me clarify this is not a troll (as suspected elsewhere in these comments) it is real curiosity and interest in your testing, with that said. Yes i understand what you have stated there and understand what it is a measure of. What i do not understand is how that measure can be applied as a unilateral “quality score” of an ISP and its product/Service. Let me explain…

      At the bottom of the page you linked to it states…
      “Monitoring this score can be useful when trying to locate a wireless access point in the ideal position in a home as a if you can get a grade A score and your median (average) speed is high enough you should be able to download at very close to that average figure all the time. If you have a D,E,F grade score than the variations mean if you are streaming video there is an increased risk of buffering.”

      So If i as a user registered and run the speed test you ask for every month for you to collect this data and in month one i run the test on a machine which is wired and scores a grade A, then in month 2 i decide i want to say decorate the room the computer is in so i run my speed test in the month 2 wirelessly a couple of rooms away and it scores a B grade. Then in month 3 summer arrives and im living life at the bottom of the garden on the fringes of my wifi and i run your test and score a C, D or E how again is that a “QUALITY” score of my ISP or the product I subscribe to from my ISP???

      Surely thats a quality score of my equipment and how i ran your test, and nothing to do with the ISP is it not? The “QUALITY” of my ISP would (under normal instances of them having no issues) NOT have changed.

      Im also a bit confused about this bit…
      “You are reporting a quality measure for providers, how do I find out the value for my test?
      Our broadband tester if you delve into the detail that the Analysis button provides will compare your speed test to others in your part of the UK and also how you compare to others using the same type of connection technology.”

      How do you rate Virgin media to others as just one example and give them a quality score? Pardon my ignorance but there is no other ISP that uses DOCSIS as the “connection technology” is there?

      If by “connection technology” you actually mean “connection methodology” (which would be wired or wireless in most cases) then i still do not understand how you can compare when one persons test which may wired another be over 2.4ghz and another which may be over 5ghz. Thats 3 different connection types. I believe at one stage people could select wifi as the connection type but can they select what frequency wifi? Also what would of happened if people said a test was over wifi when it was not?

      Also “others in your part of the UK” I assume this is based on postcode entered which in itself brings up issues, the least being 1) How far or near to the postcode entered do you compare results 2) How do you compare if nobody else in my local has tested 3) Does this also not mean part of the test is dependant on people entering the right postcode?

      Other issue i potentially see is those ISPs which have a very high or very low amount of customers/test are advantaged or disadvantaged when it comes to the quality matrix. Example If you are measuring a small ISP and say you have 1000 tests per month for that ISP but the majority of those are done over poor wifi then surely that affects what grade or “quality” you rate that ISP as. The quality of the ISP may be GRADE A, the Quality in the way people are testing though is another matter.

      Even worse the time of day a majority of tests are done could affect things for better or worse for the ISP. If you have a one ISP with majority of tests at off peak and another with majority of tests at peak time then surely that also factors into this “quality” score.

      Im sorry but while i seem to understand perfectly what this is supposed to show to me it seems in MANY (NOT ALL i grant you that) the “quality” of a test is down to how people run it in many instances and nothing to do with the ISP and you rating them.

      Thus again i do not understand how you can possibly give a “quality score” to an ISPs product and service when OUTSIDE factors which are not down to the can and no doubt does impact the results.

      If you would like to discuss this further in email or other correspondance i would be happy to. None of this is supposed to be a dig, rudeness or troll at you or TBB (as was though below in this thread). I personally appreciate the testing you do and the wealth of independent testing and opinion your site brings. It is sheer interest and in part utter confusion on how you are rating something when the result may be down to something else entirely.

  6. Avatar Mike

    Hammond is a douche bag remainer, I expected no less from him.

    • Avatar CarlT

      Given Farron, as a Liberal Democrat, holds stronger views still on that topic I don’t see a connection there.

      Moreover such divisive rhetoric has no business on an ISPR story like this one. Let’s keep it on topic and if not something worth laughing with rather than just laughable?

  7. Avatar chris conder

    CarlT, I have no idea what sort of server thinkbroadband, sponsored by bt and virgin use. I know when tested to ookla app with ethernet most of our customers with decent pcs get well over 900mbps symmetrical, and with modern phones get 6oombps on wifi. Lots of us have old phones though, so that brings the speedtests down. Each of our customers get the full gig, but can’t really measure it. Not that it matters, they all know all their gadgets will work all the time, not buffering at peak times or struggling when more than a few are connected. We see many on ‘superfast’ broadband getting less than 10meg and when they turn that off and test from ours they shoot up to 90meg on old gadgets and 400 – 970 meg depending on their own kit. It is a joy to see. We don’t bother with thinkbroadband much for testing as the ookla app is more consistent if you pick a decent server. Yes minister.

    • Avatar TheFacts

      @cc – are you aware we have lost someone who helped get the UK where it is today with broadband?

    • Avatar Andrew Ferguson

      Just want to go on the record and state that the thinkbroadband speed test service is NOT sponsored by BT or Virgin Media.

    • Avatar alan

      [Admin note: Comment removed – if you have an issue with TBB then take it up with them privately and don’t troll these comments].

  8. Avatar FibreBubble

    Although B4RN’s connection quality score was poor in Thinkbroadband’s latest data, the month before was dreadful. So they are trending upwards.

    If there was tax relief or quality data on Fibre to Forum things might be different.

  9. Avatar chris conder

    @Thefacts yes I had heard a rumour. Had very long chats with Bill, but we agreed to disagree in the end! he was a lovely chap.

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