Jeremy Corbyn tells ITV News Labour's free broadband pledge 'is affordable' as BT questions costs

  • Video report by ITV News Political Correspondent Libby Wiener

Jeremy Corbyn has told ITV News Labour's new free broadband pledge "is affordable" after BT questioned the cost of the party's plan to re-nationalise parts of the company.

BT claimed the cost of the project to deliver free full-fibre internet across the UK by making broadband a public service could double from Labour's estimated £20billion.

When questioned about the cost of the scheme by ITV News Political Correspondent Libby Wiener after Mr Corbyn launched the policy at Lancaster University, the Labour leader insisted: "It is affordable, and it's got to be affordable because our country needs it."

BT share dropped nearly four per cent on opening and TalkTalk's sale of its broadband business has been put on hold after Labour announced their new policy on Friday.

Labour said it would nationalise OpenReach BT broadband and introduce a tax on big technology companies, to cover the £20 billion cost.

However BT's chief executive Philip Jansen said the plans were "very ambitious" and warned upgrading the network will cost £30 to £40 billion.

Here are some of the highlights from the Labour leader's speech to activists on Friday morning.

The announcement was described by ITV News Business Editor Joel Hills as "extraordinary", and could have huge ramifications on the telecoms sector as a whole.

He said that a "report by National Infrastructure Commission in 2018 put the cost of building a full-fibre network at £33.4 billion and said rollout would take 'at least a decade'".

ITV News Consumer Editor Chris Choi said of Labour's proposal: "Broadband is complained about almost as much as politicians - so a party that wants to run it is either crazy or visionary... depending on your outlook."

Labour denied reports it was planning to renationalise BT this summer and the new policy announcement has taken the company by surprise.

While BT said it was willing to work with whoever wins the general election, leading UK technology body TechUK said it would be a "disaster" for the industry and customers if the plans were implemented.

The Conservatives described Labour's plans a "fantasy", while the Liberal Democrats said the move would be "wasting billions of taxpayer funds".

The policy announcement has also put the sale of TalkTalk's full fibre broadband business, FibreNation, on hold, chief executive Tristia Harrison announced.

BT share prices plunged overnight ahead of Jeremy Corbyn's annoucement at 11am, before slowly recovering.

BT share prices dipped dramatically overnight amid news of Labour's pledge. Credit: Google
  • What is full-fibre broadband?

Full fibre broadband uses a fibre optic cable to connect from the local telephone exchange to your house without the use of any copper cable.

Currently, there are some internet connections which use copper lines, which deliver a slower connection.

Full fibre broadband could offer speeds of 1000Mbps - 20 times faster than the UK average.

It is estimated the UK has less than 10 per cent full fibre connection, which lags well behind Latvia, Lithuania and Spain, where roughly half of all homes have access to the fastest connections.

  • What are Labour's plans?

The party said the multibillion-pound plan will put an end to patchy and slow coverage, and will boost 5G connectivity across the country.

The rollout would begin with communities that have the worst broadband access, including rural and remote communities and some inner city-areas, followed by towns and smaller centres, then by areas currently well served by superfast or ultrafast broadband.

Labour said it will be paid for through the party’s Green Transformation fund and taxing corporations such as Amazon, Facebook and Google, adding it will save the average person £30.30 a month.

They said there would be a one-off capital cost to rollout the full-fibre network of £15.3 billion, in addition to the Government’s existing and not yet spent £5 billion commitment.

The party will also announce plans for a new Charter of Digital Rights, describing it as “the strongest protection of data and online rights ever enacted”.

Broadband modem. Credit: PA
  • What has Labour said about the plans?

In a speech on Friday, Mr Corbyn said: “A new public service delivering the fastest broadband free to everyone is at the heart of Labour’s plans to transform the future of our economy and society.

“The internet has become such a central part of our lives. It opens up opportunities for work, creativity, entertainment and friendship.

“What was once a luxury is now an essential utility.”

He will add: “That’s why full-fibre broadband must be a public service, bringing communities together, with equal access, in an inclusive and connected society.

Labour leader Jeremy Corbyn will make the broadband announcement on Friday. Credit: PA

“It’s time to make the very fastest full-fibre broadband free to everybody, in every home in every corner of our country.

“Making it free and available to all will open up opportunities for everybody, at the cutting edge of social and economic change.

“By creating British Broadband as a public service, we will lead the world in using public investment to transform our country, reduce people’s monthly bills, boost our economy and improve people’s quality of life.”

The party aims to deliver free full-fibre broadband to all individuals and businesses by 2030, with the plan being to integrate the broadband-relevant parts of BT into new public entity, British Broadband.

One of the goals is to deliver the service to at least 15-18 million premises within five years.

Also speaking on Friday, shadow chancellor John McDonnell will say: “This is public ownership for the future.

“A plan that will challenge rip-off ‘out-of-contract’ pricing – and that will literally eliminate bills for millions of people across the UK.

“Every part of this plan has been legally vetted, checked with experts and costed.”

Shadow chancellor John McDonnell said Labour's nationalisation proposals are "perfectly compatible" with EU Law.

Answering a question following his speech, Mr McDonnell said: "We've taken legal advice throughout and our approach with the legal advice we've had, which has been extensive - this is perfectly compatible."

Shadow chancellor John McDonnell will describe the plan as ‘public ownership for the future’ Credit: Jacob King/PA
  • What has the reaction to Labour's plans been?

BT chief executive Philip Jansen told Radio 4's Today programme that Labour's plans were "very, very ambitious".

He said the project could cost close towards £100bn - which dwarfs the £20bn figure Labour has touted.

Mr Jansen said: "All I'm really saying is these are very, very ambitious ideas, and the Conservative Party have their own ambitious idea for full-fibre for everybody by 2025.

"How we do it is not straightforward, it needs funding, it's very big numbers, so you know we're talking £30 to £40 billion per building, and if you're giving it away it's again a sort of eight-year timeframe, it's sort of another £30 to £40 billion. So you're not short of £100 billion."

But Julian David, CEO of tech trade association TechUK, 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."

A BT spokesman commented on the plans, saying: "It should be a top political priority to super-charge the roll-out of full fibre broadband and 5G right across the UK so we can build the digital economy of the future.

"Whatever the result of the election, we'd encourage the next government to work with all parts of the industry to achieve that. It's a national mission that's bigger than any one company."

The Conservatives claimed Labour's pledge was a "fantasy".

Nicky Morgan, Secretary of State for Digital, Culture, Media and Sport, said: "Jeremy Corbyn's fantasy plan to effectively nationalise broadband would cost hardworking taxpayers tens of billions.

"Corbyn is clearly so desperate to distract from his party's divisions on Brexit and immigration that he will promise anything, regardless of the cost to taxpayers and whether it can actually be delivered. What reckless idea will be next?"

Sam Gyimah, Liberal Democrat shadow secretary for business, energy and industrial strategy, said: "It might be a Christmas election, but this is getting silly. Another day, another unaffordable item on the wish list.

"Wasting billions of taxpayer funds to nationalise BT, won't solve the connectivity issues faced by so many of our rural communities."