BT Group PLC‘s Openreach will be nationalised if the Labour Party wins the general election, according to documents leaked to journalists by the party ahead of a policy announcement on Friday.
Openreach is the infrastructure arm of the FTSE 100 telecoms group, running most of the UK’s current broadband network via its ownership of phone lines, internet cables and associated equipment, with other networks like TalkTalk and Sky having access to use telegraph poles and ducts to lay their own high-speed broadband fibre-optic lines for residential and business customers.
BT, a former state monopoly that was denationalised under Margaret Thatcher in 1984, is currently in the middle of a huge project to roll out super-fast fibre internet lines throughout the country.
The Labour Party’s plan would be to nationalise this network to create a UK-wide network owned by the government called British Broadband, with one arm to roll-out the public network and another to deliver free broadband.
This will be formed by bringing parts of BT into public ownership along with Openreach, namely parts of BT Technology that oversee the backhaul network and the BT Enterprise and BT Consumer delivery arms.
It was suggested that the cost of renationalising Openreach would cost £15bn, paid for by swapping bonds for shares, “as occurs with other public ownership processes”.
Labour said it does not intend to bring EE, Plusnet, BT Global Services, BT TV and other such “non-broadband-relevant parts of BT” into public ownership.
Shadow Chancellor John McDonnell will say, according to the prepared statement issued on Thursday night, that the plans represented “public ownership for the future” and that “every part of this plan has been legally vetted, checked with experts, and costed”.
The roll-out of a full-fibre network would an extra £15bn to the government’s existing £5bn broadband strategy, he told the BBC, as a “one-off capital cost”, with the cost of maintaining full-fibre “more than covered” by a tweak to corporation tax.
These are Labour’s costings
– £15.3bn captial cost to roll out network (plus govt £5bn commitment)
– Cost of renationalising BT Openreach (c£15bn?)
– £230m/yr maintenance costs paid for by multinational tax pic.twitter.com/qlkAC9rjUL
— Beth Rigby (@BethRigby) November 14, 2019
Crikey. Another huge “retail” offer to voters from Labour. Free broadband, funded in part by new taxes on Google, Amazon and Facebook. And delivered by a part of BT to be nationalised. Labour is blitzing giveaways, and creating enormous noise that drowns out the Brexit debate. pic.twitter.com/ndwX4tMg5S
— Robert Peston (@Peston) November 14, 2019