Government denies it plans to scrap 'broadband tax'

The Government has denied that it plans to scrap the 'broadband tax' on people’s landlines but conceeded that it may not be its decision ultimately

Speculation was rife earlier this week when Stephen Timms, recently appointed communications minister in charge of delivering the Digital Britain proposals, appeared to indicate this was a possibility.

However a representative for the Department for Business, Innovation & Skills (Bis) said the Government still planned to go ahead with the charge; and Mr Timms had only said it was technically possible for the legislation to be blocked if the Tories won the next election.

A blog on the official Digital Britain website backs this up.

In a statement to Computeractive the Department of Bis said: "The Government remains committed to the timetable for introducing the 50p levy on fixed lines in 2010, as set out in the Digital Britain report.

The idea for a £6 a year charge was first mooted in the Digital Britain report which came out in June. This report put forward a number of plans including universal access to today's broadband services of not less than 2Mbits/sec by 2012 and a Next Generation fund.

This fund would have helped pay for building the infrastructure for super-fast broadband services in areas not considered commercially viable by internet service providers. The planned levy on phone lines would have contributed around £1.5m to this.

However if the Tories do oppose the charge, Mr Timms conceded it would not make it through the first Finance Bill. “The levy is unlikely to make it through the short finance bill without Opposition support and that does not look likely… In that case, it would have to wait until after the election," he told The Guardian.

The Tories have said they are opposed to the charge and would scrap it.

However, the possibilty that the charge could be scrapped has alarmed the Country Land and Business Association (CLA). It warned if this happened, the move would harm rural communities.

Henry Aubrey-Fletcher, CLA president said: “The levy would be a small step in the right direction, but without it in the meantime, rural businesses would continue to be excluded from the prosperity urban areas take for granted.”

Mr Timms is now preparing legislation to go before the next session of Parliament to enact aspects of the Digital Britain strategy that requires new laws or regulations.