Broadband tax


Stephen Timms, the treasury minister in charge of implementing the Digital Britain plan, is pushing ahead with the broadband tax of 50 pence a month for everyone with a fixed line telephone. Utter lunacy.

Firstly it is bad form to pass a controversial finance bill so close to the general election, especially with the opposition coming out against the plans. Although this is not my greatest concern, it is suggestive of political motivations well apart from any concern for the public good. If this is all set up only for the next government just to rip out, this will be more government waste to add to the ever-increasing piles. That is if the next government has the gumption to actually cut the stealth tax.

They should. The tax is being instituted to raise money to encourage more people to have access to broadband. Economics 101: if you want people to do more of something, don’t tax it. Timms is working off the recommendations that came out of Lord Carter’s Digital Britain report. Despite its length – 238 pages – there is no plan on exactly how the £150m to £175m a year will be used to increase access to broadband. There are very real personal protestations and engineering difficulties that have not been properly investigated and given the growth of mobile broadband and dongles, many of the perceived problems are surmountable without government interference.

More tax for wasteful government policies is not exactly what is needed given the state of public finances. As Cameron rightly pointed out on Tuesday, even Thatcher failed to curb the growth of the state. However, his “more consensual" approach does not inspire hope in his ability to get a grip on it. In truth the only time politicians have been able to get us back in the black is when the economy has grown at a quicker rate than they are able to think up ways to tax and waste it. Sadly, as we are now all too aware, this growth is often on the back of government induced bubbles.