Labour pledges cheap broadband tariff for low-income families

Labour pledges cheap broadband tariff for low-income families

In government, party says it would stop inflation-busting price rises and take action on mid-contract hikes

Labour will say broadband is an essential utility and that there must be an industry-wide social tariff for low-income families negotiated by Openreach and others.

A Labour government would enforce a cheap broadband tariff for low-income families as well as taking action on mid-contract price hikes, the shadow culture secretary will announce.

Labour will say broadband is an essential utility and that figures from the regulator Ofcom show almost a third of households (8 million) are having problems paying their broadband, phone and streaming bills. That is double the number a year ago.

In a policy launched on Thursday, Labour will say there must be an industry-wide social tariff for low-income families, negotiated by industry players such as Openreach, which runs the UK’s broadband network, with Ofcom and consumer groups.

The party will say that a failure to agree a tariff would mean a Labour government setting one and legislating to enforce it.

Universal credit claimants can already qualify for some heavily discounted broadband deals from some providers but the schemes are not well publicised or understood. There is no requirement for telecoms providers to offer social tariffs for broadband products.

Labour analysis suggests customers who are eligible for a social tariff could save an average of £250.32 a year.

The party has said it will also reverse changes that now allow wholesale broadband prices to rise with the rate of inflation, rather than costs, meaning that providers have had a £1.7bn windfall.

Wholesale prices for 2023 will be set this October, with inflation estimated to reach a peak of 13%. As a result, broadband bills could increase by a quarter.

The third aspect of the plan is to empower Ofcom to strengthen consumer protections, including on mid-contract price rises and early termination costs.

The offer is less generous than the 2019 manifesto pledge of universal free broadband. Though that pledge from the then Labour leader, Jeremy Corbyn, was widely ridiculed by the Conservatives, the recognition of internet access as a universal right grew during the Covid pandemic when home working and home schooling became necessary for millions of people.

Lucy Powell, the shadow secretary for digital, culture, media and sport, said broadband access was “a necessity not a luxury”, and that Labour’s plans would “ease the broadband bombshell facing families and firms” at a time when both were “already facing eye-watering energy bills, and mortgage and rent increases”.

She added: “Whilst the Conservatives crash our economy, Labour will ensure accessing and connecting to digital infrastructure powers growth across our economy to ensure people and places aren’t left behind.”

Broadband and mobile are the only utility sectors in which mid-contract price increases are allowed, unlike energy and gas – where suppliers cannot increase prices mid-contract unless there is a change in VAT rates.

There is also little to no promotion of existing tariffs. According to research from the consumer group Which? in May 2022, only one provider advertised its social tariff on social media and none of the providers asked customers whether they received any benefits when they were signing up for a new deal that was not a social tariff.