Jeremy Corbyn has been forced to defend Labour plans for free broadband as businesses warned of “disaster” and Tories called the idea “crazy”.
The Labour leader unveiled the eyebrow-raising election pledge to make full-fibre broadband a “public service” by 2030, with part-nationalised “British broadband” provider.
The ambitious policy, set out ahead of the December 12 general election, has provoked an immediate market reaction, with shares in BT tumbling 4% and TalkTalk putting the sale of one of its businesses on hold.
Boris Johnson, meanwhile, called the plan a “crackpot scheme that would involve many, many tens of billions of taxpayers’ money” and tech firms claimed it would halt further investment.
But Corbyn said the commitment would help build a country “fit for the future” and save households £30 a month.
Speaking on the campaign trail in Lancaster: “The internet has become such a central part of our lives – what was once a luxury is now an essential utility.
“That’s why full-fibre broadband must be a public service, bringing communities together with equal access in an inclusive and connected society.”
The plan would involve nationalising BT Openreach, which operates the UK’s broadband infrastructure and the retail arm of the service, BT Consumer.
Pressed on what the news could mean for other broadband providers, Shadow Chancellor John McDonnell said the government would reach an agreement with rivals such as TalkTalk, Virgin Media and Sky.
It would mean, he told the BBC, offering them “either an agreement of access arrangements or working alongside us, or, yes, if necessary they can then come within the ambit of British Broadband itself”.
Pushed on whether this means Labour would also take these companies over, McDonnell said: “I think we can come to an agreement – they’re only 10% of the network and that’s why we’re doing this, because they’ve failed.”
How would Labour implement and pay for free broadband?
The initial one-off infrastructure investment would be paid for with £15bn from a new £250bn ‘green transformation fund’ and £5bn of government cash not yet spent on improving broadband.
The future running costs would come from taxing corporations such as Amazon, Facebook and Google.
The rollout would begin in rural and remote communities, and some inner-city areas, with the worst broadband access, followed by towns and smaller centres, then by areas currently well served by superfast or ultrafast broadband.
Labour says consumers will save households £30-a-month, but the Conservatives say the public could end up footing a higher tax bill in the long run.
The news has met with a strong reaction.
Tory former broadband minister Ed Vaizey described the Labour policy as “crazy”.
Speaking to the BBC, he said: “I think they’re sort of crazy really, I think they’re completely unnecessary and I think they’ll achieve precisely the opposite of what Labour intends.
“It will end up costing taxpayers a huge amount of money and I suspect it will delay the rollout of super fast broadband hugely.
“I think they will achieve completely the opposite effect.”
He added: “I think there’s a difference between government investing strategically where there is market failure, and I’ll acknowledge that in some areas there is market failure, and a wholesale nationalisation of the telecoms network.”
Replying to the question “can we have free broadband” on Twitter, prime minister Johnson wrote: “What we are going to deliver is gigabyte broadband for all and what we won’t be doing is some crackpot scheme that would involve many, many tens of billions of taxpayers’ money nationalising a British business.”
James Lusher, Virgin Media’s head of external communications, made his views on Labour’s policy clear by tweeting a gif of a raccoon stealing food from a cat bowl captioned with the words: “This mine now.”
Julian David, chief executive of tech trade association techUK, meanwhile, said: “These proposals would be a disaster for the telecoms sector and the customers that it serves.
“Renationalisation would immediately halt the investment being driven not just by BT but the growing number of new and innovative companies that compete with BT.
The news was welcomed by the Communication Workers’ Union said the policy was “incredibly exciting” and could “truly connect every person in the UK”.
Corbyn said “British broadband will be our treasured public institution for the 21st century”, while McDonnell added the plan was a “shovel-ready project” saying: “The network can be built in 10 years. We can train and provide the skilled engineers and workers needed to roll out the network, including through our exciting package on lifelong learning.
“We can implement this new tax on multinationals, to ask the tech giants like Google and Facebook to pay a bit more, for internet connectivity they benefit from, and so that we can all share in the benefits of living in a digital world.”