Posted: 09th Dec, 2009 By: MarkJ
The UK Labour governments chancellor, Alistair Darling, has used his pre-budget report today to green light the controversial £0.50p (+vat) per month tax -
Next Generation Fund - on all fixed phone lines to help develop future superfast broadband networks. Darling hopes the levy, which should raise around £175m per year, will help next gen broadband services reach 90% of the UK by the end of 2017.
Alistair Darling said:
"Mr Speaker, we are modernising the UK's digital infrastructure and, in the process, creating thousands more skilled jobs. We have provided funding to help extend the opportunities of the broadband network to more remote communities.
We now want to go further, so we can provide the next generation of super-fast broadband to 90 per cent of the population by the end of 2017. This will be funded through a duty of 50 pence a month on landlines which will be included in the Finance Bill."
Concerns have been raised about the government’s intention to keep the tax going, even if its 2017 target is met (i.e. like road tax, which doesn't all get spent on roads). There are also fears about the difficulty in gaining fair distribution of the money, the way they want to add VAT on top of the tax, how the government might define a fixed phone line in the first place and the fact that the tax might not even be enough.