Yesterdays emergency budget by the new Government has finally confirmed that the “broadband tax” that Labour wanted to bring in has been scrapped.
Labours 50p per month broadband tax was to be charged to every phone line in the UK with the money raised used to help fund the roll out of fibre optic broadband across the UK.
The new Chancellor of the Exchequer, George Osborne said:
“I am happy to be able to abolish this new duty before it is even introduced.
Instead, we will support private broadband investment, including to rural areas, in part with funding from the digital switchover under-spend within the TV licence fee.“
The broadband tax would have cost those with a phone line around £6 per year, with those with more than one telephone lines having to pay for each line they have. Labour figured it would raise between £175m-£200m per year to help fund the roll out of Next Generation fibre broadband, however the Conservatives are going to use the extra money that has been left over from the digital switchover to help fund getting this fibre broadband out into rural areas where it is not financially feasible for companies such as BT to fund the deployment themselves.
It is estimated that there is around £300 million left in the digital switchover fund, with many not believing that this will be enough to make sure all rural ares get broadband.
There will be a slight rise potentially on broadband prices with VAT rising 2.5% up to 20% which is due to come into effect on 4th January 2011.