Free broadband ‘would cost thousands of jobs’ and leave 181,000 employees ‘out in the cold,’ says telecoms sector
- Former BT chairman says ‘whole chunks’ of telecoms industry would go under
- Labour will nationalise BT’s infrastructure arm Openreach as part of their plans
- TalkTalk have delayed the sale of FibreNation, their full-fibre broadband arm
Tens of thousands of jobs are at risk from Labour’s radical plans to nationalise parts of BT and give away free broadband.
A joint open letter published by telecoms industry bodies warned that Labour’s plans ‘fundamentally jeopardise’ the futures of Britain’s 600 other internet service providers, such as Virgin Media and TalkTalk.
‘These businesses appear to have no role to play in Labour’s nationalised broadband service, with the sector’s 181,000 employees left out in the cold,’ the letter said.
Should the Labour Party win the general election, they have said they will nationalise BT’s Openreach division, as well as parts of BT Technology, BT Enterprise, and BT Consumer
Labour failed to flesh out its plans over what would happen to rival broadband operators, making it impossible to predict exactly how many jobs are under threat. However, industry sources said it would likely lead to tens of thousands of job cuts unless those businesses were also taken under State control.
The letter was signed by the heads of the Internet Services Providers’ Association (ISPA), the Independent Networks Cooperative Association, TechUK, and the Broadband Stakeholder Group.
It came as former BT chairman Sir Mike Rake attacked Jeremy Corbyn’s ‘free broadband for all’ plans and claimed they would cause ‘whole chunks’ of the industry to go out of business. Rake, who headed the telecoms giant between 2007 and 2017, told the MoS that the plans would also delay the rollout of super-fast internet to rural homes.
He claimed this would cause devastating damage to vital foreign investment in British infrastructure. Labour’s plans to nationalise BT Openreach – which builds and maintains the network of cables in the ground – and other parts of BT’s business sent shockwaves through the City last week.
They were was announced just months after Shadow Chancellor John McDonnell denied plans to take BT into public ownership.
Rake, a City grandee who previously chaired the CBI, said the plans were ‘not the answer’ to sluggish broadband speeds. He also hit out at Labour’s claim it would cost £230million a year to maintain the network, claiming it would actually cost billions.
Should the Labour Party win the general election, they say they will nationalise BT’s Openreach division, as well as parts of BT Technology, BT Enterprise, and BT Consumer
‘You can make a much better argument about nationalising the railways than you can of this,’ he said. ‘It’s too complex. It’s the wrong answer.
‘The private sector is on course to deliver [superfast internet across the country] with a bit of government help. [Nationalising BT] is not only going to be hugely expensive and distracting, but risks taking much longer to do.’
Andrew Glover, chairman of ISPA, said: ‘Our members range from small regional internet service providers with a handful of staff to household names with thousands of employees and it is extremely worrying that Labour has given no consideration to how their plans would affect them.’
Edwin Morgan, director of policy at the Institute of Directors, said: ‘Labour’s sweeping proposals may send tremors through the industry and those working within it. The prospect of having their business model upturned could have a chilling effect on investment in other companies in the sector, and potentially on recruitment plans.’
Simon Clifton, chief technology officer at satellite internet firm Bigblu Broadband, said even though more roles could be created at an enlarged BT, the risk to jobs at rivals was ‘a big issue’.
TalkTalk’s planned sale of its FibreNation full-fibre broadband business to CityFibre has been put on hold since Labour’s announcement. One source pointed out that Shadow Business Secretary Rebecca Long-Bailey had previously hailed a decision by TalkTalk to move its HQ last year to Salford, where she is MP, but those jobs were now at risk.
Rake said: ‘You’re disrupting a whole load of businesses across the country which aren’t going to exist any more. Some will but whole chunks won’t.’
Labour said it wants to get rival operators on board with its plan and would encourage them to continue selling their products. It added that all affected staff would be transferred to the new organisation, dubbed British Broadband.