As I See It: Terry Murden
Labour may be lagging in the opinion polls, but it is not for the want of bold ideas and an appeal to the British sense of fair play. Its latest plan to re-nationalise part of BT, providing free broadband for all, will be the limit of its public ownership programme, but it may also be its biggest test.
Is such a massive undertaking affordable and, fundamentally, is it necessary?
The UK is ranked only 34th in the world broadband league tables, and stories of “not spots” support the case for a step-change in investment.
While there is a case for ending the rail franchising system – considered a step too far even for the ideology’s biggest champion, Mrs Thatcher – the re-nationalisation of BT is a formidable proposition. Not only has the £20bn estimated cost been challenged by BT boss Philip Jansen, there is also a precedent for failure.
Labour wants to give fast fibre broadband away for free, rather than use revenue to pay off debts raised to buy the asset.
Instead it would tax the internet titans such as Google and Amazon. This, however, would not raise anywhere near enough, on current estimates raising little more than £300m a year.
A Labour government would compensate shareholders by issuing government bonds. The shadow chancellor John McDonnell said Labour had taken legal advice, including ensuring pension funds with investments in BT are not left out of pocket.
Australia tried to create a National Broadband Network, a forerunner of the proposed British Broadband. It has been branded one of the biggest infrastructure failures in its history.
The Canberra plan in 2006 was to roll out full fibre to 93% of all premises. This proved to be far too ambitious, and it was scaled back. One telecoms analyst said: “It’s hard, expensive and fraught with difficulty. Australia’s NBN is years late, massively over budget and offering speeds and technology a fraction of the original political intention.”
Labour’s hierarchy will not be deterred. Its economic policy is being steered by Mr McDonnell, a former deputy to Red Ken Livingstone at the Greater London Council. Mr McDonnell and party leader Jeremy Corbyn are champions of the people who have an innate distaste for the wealthy and believe the capitalist structure is fundamentally corrupt.
There are those who share that view, but more are suspicious of the alternative: a country laden with debt, higher taxes, and unloved by overseas investors who would put their capital to better use in other countries.
Those with long memories will also need no reminding of Britain’s history of badly-performing nationalised industries. Labour cannot be faulted for promising a fairer, better world, but its belief in state control of industry is outdated and misguided.
The party’s starting point is mistrust in business. This is unhealthy and de-stabilising. Its plan for BT has already depressed its share price and raised questions about the future of 600 telecoms businesses and their employees.
More preferable is a partnership between government and business, seeking ways in which one can help the other. If industries need change, there needs to be better regulation, more appropriate taxation and incentives.
Sadly, Labour is choosing to tackle the current shortcomings in the economy by resorting to failed policies of the past.