Photo: PA

The Labour Party has today set out ambitious plans to provide everyone in the UK with free full-fibre broadband by bringing parts of BT into state ownership and forming a new British Broadband public service entity.

The proposal, revealed by Labour leader Jeremy Corbyn and shadow chancellor John McDonnell, would see the government take control of Openreach, the arm of BT that operates much of the UK’s existing broadband network, as well as parts of BT Technology and its consumer and business and retail broadband arms.

A Labour government would use the nationalised businesses – which the party said would be purchased at a price set by parliament – to create a government-owned entity to provide improved internet access across the country. The entity would have two arms: British Digital Infrastructure, which will roll-out the public network, and the British Broadband Service, which will deliver free broadband.

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In addition to the cost of nationalising part of BT, Labour has said there would be a capital cost to roll out the full-fibre network of £15.3bn, in addition to the government’s existing spending, which would be paid for through the party’s planned Green Transformation Fund. However, BT has today said such a scheme could cost up to £100bn.

The party has also announced that it would introduce a new tax regime for multinational companies, which would “more than cover” the £230m annual maintenance costs of the broadband network.

'Create a connected society'

Corbyn said that the nationalisation scheme would help “bring communities together in an inclusive and connected society”.

Launching the policy in Lancaster, he 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. That’s why full-fibre broadband must be a public service, bringing communities together, with equal access, in an inclusive and connected society.”

According to Labour, only 8-10% of premises in the UK are connected to full-fibre broadband, compared to 97% in Japan and 98% in South Korea. A study by the Centre for Economics and Business Research found that a full-fibre network could boost productivity by £59bn by 2025 and bring half a million people back into the workforce.

John McDonnell said the proposal was “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,” he said.

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

According to Labour, free provision would save the average person £30.30 a month.

The party has also announced plans for a new charter of digital rights, which could include powers for individuals and collectives to challenge “algorithmic injustice”, where online algorithms cause disproportionate harms to particular groups, as well as data protection and preventing the use of digital infrastructure for surveillance.

Responding to the Labour plan for the Conservatives, digital secretary Nicky Morgan said that the scheme would cost taxpayers "tens of billions". The Conservatives highlighted that the party had not yet costed how much nationalisation of Openreach would cost.

Prime minister Boris Johnson described the proposal "a crackpot scheme" and insisted the Conservatives will deliver gigabit broadband for all.