Broadband tax will see homes giving up internet, study claims

03/11/2009

Government plans to introduce a broadband tax will see as many as 100,000 homes in the UK abandoning their internet services, a new study has shown.

Comments from broadband provider Talk Talk followed the announcement by the government that it would add a 50p tax to phone bills to pay for the roll out of next generation broadband services in rural areas of the UK.

The introduction of the tax, which was first outlined in the Digital Britain proposals from June, has not been subject to a public consultation, the company explained.

Charles Dunstone, chief executive officer at Talk Talk, said: "This is an unjust and regressive tax on all phone customers which will subsidise mostly richer rural households that can afford high priced super fast broadband services.

"As well as being unfair we estimate that the increase in price will mean that over 100,000 mostly low income homes will be forced to give up their broadband lines."

Up to £40 is expected to be raised from each home and will total £1 billion.

Kevin Still, EuroDebt director, said: "Giving lower income households and those in financial difficulty access to the internet is important to allow them access to the cheapest tariffs on all sorts of essential expenditure items, including energy switching and insurance products, where the benefit of checking the market can be very financially beneficial.

"EuroDebt believes strongly that those with money problems should not be financially excluded and the rise in the number of UK residents with current accounts has been encouraging."

He added: "EuroDebt provides a prepaid current account that is available to all UK residents without the requirement of a credit check. Broadband now often comes bundled with other services and this tax could cause chaos if people try to 'unbundle' their services."

Tags; Housing Debt and Bills, Budgeting Advice,

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