BT taken by surprise by Labour’s plans for part-nationalisation
The big news this morning is that Labour is expanding its nationalisation plans to include chunks of BT – a move which has taken the company by surprise after being reassured by John McDonnell in the summer that it was “not on the list” for nationalisation.
The proposal extends the list of nationalisation targets in Labour’s sights, which already includes various utility industries, including water, the railways, Royal Mail and National Grid.
Jim Pickard and Nic Fildes report:
The party’s manifesto, which will be signed off on Saturday, will now include a promise to take control of Openreach as part of a broader £20bn attempt to give the UK free full-fibre broadband by 2030.
Mr Corbyn will announce on Friday that a Labour government would pay an undisclosed sum to take control of the network and insert it into a new public entity called British Broadband.
The process of delivering state of the art broadband to up to 18m premises would be paid for through £15bn of borrowing, the party said — on top of £5bn already committed by the government to upgrade broadband.
The subsequent cost of maintaining the network would then be funded through a new tax on multinational companies, including tech giants such as Google and Facebook, to raise the £230m a year needed to run the service.
BT’s chief executive Philip Jansen was in California this week in meetings with Google and Microsoft, some of the Silicon Valley companies that the Labour Party is planning to tax to pay for the investment in full fibre.
He told the Financial Times that “free broadband for all” was an “appealing” concept for consumers but that it would need to be thought through carefully.
On Friday morning Mr Jansen told the BBC Today programme that the nationalisation was likely to be at a “deep discount” to the current share price, which had already plunged in the last two years because of jitters about the company’s huge investment programme in broadband.