Darling confirms controversial telephone tax

9 December 2009

Households will be taxed 50p per month for having a fixed-line telephone to fund high-speed broadband, Alistair Darling confirmed in his pre-Budget report.

The new broadband tax, which will cost every household an additional £6 a year, was today given the green light by the chancellor.

Darling said the money raised by collecting this new levy - estimated to be around £170m a year - will help achieve the goal of delivering “super-fast” broadband services to 90% of the UK by the end of 2017.

The tax was first proposed in the Digital Britain report earlier this year. Speaking about the introduction of the tax at the time, minister for Digital Britain Stephen Timms said: “It is vital for jobs and growth that Britain has a world-class digital infrastructure. I am wholeheartedly committed to plans set out in the Digital Britain White Paper for a levy to ensure that over 90% of the country has access to next generation broadband by 2017.”

Communication experts, meanwhile, are concerned about the impact such a tax will have on consumers.

Steve Weller, marketing director at uSwitch.com, slammed the tax as “robbing Peter to pay Paul”.

“Vulnerable groups in the country, such as the elderly, rely heavily on their home phone but have absolutely no use for broadband,” he explains. “It’s outrageous that they will be forced to fund the creation of a Digital Britain that they will play no part in.”

Many households have already seen the price of their line rental increase, and research from broadbandchoices.co.uk recently revealed that half of consumers feel these costs are not good value for money.

Michael Phillips, product director at the comparison website, says: “This is just another body blow to customers who have already seen the majority of telecoms suppliers significantly raise line rental charges this year.”

The Conservative party has vowed to scrap the tax if they win the next general election.

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