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50p Tax on UK Phone Lines to Fund Next Gen Broadband to Become Law

Posted: 23rd Sep, 2009 By: MarkJ
Plans to impose £0.50p per month tax on all fixed UK phone lines (Next Generation Fund), which would be used to help fund deployment of next generation broadband services around the country, look to be back after the government confirmed it would soon be made law; crucially, before the next general election.

The Digital Britain report set a target of 2017 for 90% of UK homes and businesses to be within reach of next generation broadband lines by 2017 (here) and the fund was seen as crucial to this effort. However several concerns were raised, such as the added cost for low income families, the difficulty in gaining fair distribution of the money itself and the fact that the tax might not be enough to do the job.

The fund has also faced opposition from the Conservative party, which noted the tax's potentially unattractive nature to voters. However, rather than leave it until after the election and risk its new tax being scrapped, the government has instead managed to push it into this year’s finance bill.

Stephen Timms, the governments Treasury Minister, has been quoted in today's Guardian as saying: "My aim is that we should legislate for [THE TAX] this side of a general election." The move is curious because parliamentary convention typically requires that pre-election finance bills should be short and uncontroversial.

We remain undecided about where the balance between pro’s and con’s with this fund should reside, although how it is distributed must surely be the most crucial matter. Having a pot of cash is one thing but knowing precisely how to use it, without unfairly disadvantaging alternative technology, is going to be trouble.
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