Closed Labour promises free broadband while Boris Johnson says opposition plans are ‘terrifying’ — as it happened

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Jeremy Corbyn’s opposition party proposes part-nationalisation of BT, prime minister says Brexit transition will not be extended beyond 2020 and Lib Dems promise to be ‘party of business’


Good morning

Welcome to today’s rolling election coverage from the FT.

We will have the latest breaking news, analysis and comment, including reaction to Labour’s vow to part-nationalise BT. All eyes on the BT share price when it opens in around 40 minutes.


Today’s papers

The election is on most of this morning’s UK front pages in one way or another.

The Times leads on Labour’s promise of free broadband, saying it would cost £12-25bn. The Telegraph says Nigel Farage has accused Downing Street of ‘dirty tricks.’

The Daily Mirror uses the example of a veteran left for 10 hours on a hospital trolley to cover NHS waiting times, while the Daily Mail has trawled through the Labour candidates standing for election to find negative comments about leader Jeremy Corbyn.


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.


Tories attack ‘ideologically driven’ nationalisation plans

The Conservatives have described Labour’s proposals to offer free broadband for all as “ridiculous” and “ideologically driven.”

Matt Warman, the Minister for Digital and Broadband, said he has spent months talking to broadband providers, users, experts & mobile network.

“Not one has ever suggested a single element of Labour’s ridiculous broadband proposals,” he said in a tweet.

“They would make roll-out slower – maybe connectivity feels better when it’s useless but ideologically driven.”

The Conservative’s press office has also tweeted its take, with this image of retro dial-up internet:


Emoticon BT shares fall at the open

BT shares fell nearly 4 per cent at the open, before settling to trade around 2.7 per cent lower.

The relatively limited reaction suggests the City is not pricing in a Labour majority government in December.

John Curtice, the polling guru and senior fellow with think-tank The UK in a Changing Europe, said yesterday that the two likely election outcomes are a Tory majority or hung parliament.

“The chances of Labour winning a majority (in the Commons) are frankly as close to zero as we can safely say,” he said.


BT chief says nationalisation plans would cost £100bn

The chief executive of BT has said the price tag on Labour’s plans to nationalise parts of the company could reach over £100bn in total.

Speaking on BBC’s Today Programme, Philip Jansen described Labour’s proposals as “very, very ambitious” and that they would not be “straightforward” to implement.

Mr Jansen said the plans would involve capital investment of £30-40bn, with another £5bn a year of revenue lost a year “if you’re giving it away for free”.

So you’re not short of £100bn.

He added that the company had a pension liability “which we see as a responsibility” of £60bn.


TalkTalk says plans to sell fibre business ‘paused’

Shares in broadband company TalkTalk have fallen nearly 1.5 per cent in early trading.

The group said this morning that Labour’s broadband plans have led a deal to sell its FibreNation business to “pause.”

“Our discussions are very advanced, and yes, the news overnight of course is making everybody in the sector pause and consider,” chief executive Tristia Harrison told Reuters.

“We were really close, really close, but I think something of this sort that is in the news, obviously everybody is pausing, considering, digesting and working out what it means.”


Labour hints state could take control of other broadband groups

Jim Pickard writes:

Labour’s shadow chancellor John McDonnell has been on the media rounds this morning.

He was asked whether he had been “fibbing” when he said in July that there would not be any more Labour nationalisations beyond those already set out.

“They were talking about whether I was going to nationalise all of BT, and that’s not what we’re doing,” he told the BBC Today programme.

The shadow chancellor hinted that the state could also take control of smaller broadband providers such as Virgin Media and Sky Broadband which could be damaged by the Openreach takeover.

“We’ll come to an agreement with them, either an agreement of access arrangements or working alongside us, or if necessary they can come within the ambit of British Broadband itself.”

“They’re only 10 per cent of the network, which is why we’re doing this. They’ve failed.”

Labour would raise money to run its nationalised broadband system through a system of “unitary taxation of multinationals”. Mr McDonnell said this would involve treating multinational companies as single entities and taxing UK-based multinationals on the share of their global profits that reflects their UK share of their global sales, employment and assets.


Former Tory minister Vaizey predicts ‘crazy’ Labour plans will backfire

Ed Vaizey, the former Conservative communications minister, has been on the airwaves this morning, writing off Labour’s plans as “crazy” and destined to achieve the opposite of their aims.

Mr Vaizey — who was one of the 21 MPs kicked out of the Conservative party for attempting to stop a no-deal Brexit — said Labour’s proposals to renationalise BT would “end up costing taxpayers a huge amount of money” and could “delay the roll out of super-fast broadband hugely”.

He told BBC Radio 4′s Today programme:

I think [the proposals] are sort of crazy really. I think they’re completely unnecessary and I think they’ll achieve precisely the opposite of what Labour intends.

Giving broadband away for free, he added, would be an “extra bit of craziness”.

He said the government should only intervene in the market “to provide a subsidy for rural areas”.

The market will deliver in urban areas.

Mr Vaizey was readmitted to the Conservative party this month but decided to retire from politics to focus on his creative interests.


Johnson insists Brexit transition will not be extended beyond 2020

Laura Hughes reports:

Boris Johnson told the BBC this morning that he can “absolutely guarantee’” there will be no extension to the transition period beyond its projected end date of December 2020.

The prime minister added “we’ll have bags of time” to get a new EU-UK trade deal by the end of next year.

The UK has until July 1 2020 to decide to request an extension to the transition period. Questioned on whether he will guarantee not to change or extend the deadline, he said: “If we get a working majority, and all we need is nine more seats, then we can absolutely guarantee it.

He added: “Listen to what Phil Hogan, the commissioner, is saying. There’s no reason why we can’t get cracking long before July. We’re going to come out of the EU in January.”

On developing the free-trade partnership, we’ll have bags of time to do it and, don’t forget, the great advantage is that we already are in a state of perfect alignment when it comes to our tariffs, our quotas, our industrial regulatory standards.

So, the deal that we’re doing with the EU is unlike any other deal that they have ever done.


Broadband providers slip on Labour plans

The Labour party’s plans to nationalise parts of BT have rippled through the stock market this morning in London, although the measured moves suggest investors do not expect the policy to be implemented anytime soon.

• Shares in BT have largely recovered. The group’s stock briefly fell nearly 4 per cent at the open, but was recently trading less than 1 per cent lower.

• Shares in rival provider TalkTalk fell 2 per cent, while Vodafone was just under 1 per cent lower. John McDonnell, the shadow chancellor, hinted that the state could take control of smaller broadband providers, which could be damaged by the Openreach takeover.

In the wider markets, the FTSE 100 rose alongside other major European bourses and risk assets, on positive headlines from the US-China trade conflict.

Sterling edged 0.1 per cent lower to trade at $1.2871.


BT now higher on the day

If you ever want proof that the market thinks there is no chance of a Labour majority government after this election, look at BT’s share price this morning.

After falling in the first 90 minutes of trading, shares in the utility were recently trading slightly higher on the day, despite the opposition party’s pledge to break up the company and nationalise BT’s Openreach network.

BT’s share price has collapsed from £5 to below £2 in recent years triggered by an accounting scandal at its Italian business and growing concerns over its cash balances.

Nick Delfas, an analyst with Redburn, said implementing the policy could be difficult. “Nationalisation and state aid of this sort are illegal under EU law, and the majority of the party wants to remain in the EU.”

Analysts at Jefferies said:

In a nationalisation scenario, we understand that BT’s most effective legal recourse might be to defend shareholder value, not attempt to block government policy. The UK has bilateral investment treaties with countries in which overseas BT shareholders are located, and these are intended to protect against asset expropriation. UK-based shareholders might expect to receive equal treatment.

Update: BT has announced it has retained the rights to broadcast Champions League football in the UK, in a boost to its TV sports business.


Boris Johnson: Labour’s BT scheme is ‘crackpot’

The prime minister is taking questions from BBC Radio listeners.

Asked if he would introduce free broadband, Boris Johnson told the BBC he would not pledge “some crackpot scheme that would involve many, many billions of taxpayers’ money nationalising a British business”.


What do the bond markets make of Labour’s spending plans?

Labour’s latest nationalisation proposals add to the party’s wider plans to ramp up borrowing to invest in the economy.

This slated borrowing surge has caused some consternation among economists over potential waste and chancellor Sajid Javid has claimed there would be “an economic crisis within months”.

But bond investors have been largely unfazed, write the FT’s Chris Giles and Tommy Stubbington.

The calm in UK government bond markets since Labour last week set out its pre-election plans to borrow to invest — notably in infrastructure — suggests few think the party’s proposals would be difficult to finance given historically low interest rates, even if many think they are not a good idea.

In the view of economists, Labour’s plan — announced on Thursday — to borrow to invest in nationalising part of BT and paying for free broadband connections would be possible to finance but they worry about whether it is a good use of resources.

The Treasury does not believe spending public money to connect rural locations to a full-fibre network would deliver high returns for the UK economy.

Read Chris and Tommy’s full analysis of Jeremy Corbyn’s spending plans here.


Johnson insists he has nothing to hide over Russia report

Laura Hughes writes:

Boris Johnson was asked this morning during a phone-in with the BBC if the reason a report into Russian interference in the UK democratic process is being withheld from publication is because he has “something to hide”.

Mr Johnson said this was “absolutely not” the case and that he saw “absolutely no reason to change the normal procedures for publishing ISC [Intelligence Services Committee] reports just because there’s an election”.

The ISC sent the report to Boris Johnson on October 17. It is normally up to No 10 to decide when such reports are put into the public domain because of their sensitivity for national security.

On the suggestion of Russian interference in UK politics, Mr Johnson said:

There’s no evidence of that and you’ve got to be very careful … You simply can’t cast aspersions on everybody who comes from a certain country, just because of their nationality.


Can Labour’s broadband policy cut through?

Labour will be hoping its eye-catching pledge to offer free broadband for all is the first major policy announcement of the election to catch the public’s attention. The promise has been trending on Twitter this morning and led the national news.

Labour will welcome this focus on domestic policies, particularly given that polling released earlier this week showed that so far almost nothing about this election has cut through the noise.

Asked which specific incidents, events or stories they have noticed in the first few days of the election, 42 per cent of people responded “none.” The next highest answer was the 5 per cent who had noted Jacob Rees-Mogg’s insensitive comments about the Grenfell fire.


Brexit party peerage claims are ‘nonsense’, says prime minister

Laura Hughes reports:

Nigel Farage claimed last night that allies of Boris Johnson offered eight peerages to Brexit party supporters, in a desperate last-minute attempt to persuade the Eurosceptic group not to field parliamentary candidates at the election in key Labour-held seats.

The Brexit party leader said Britain was becoming “like Venezuela” and that figures “deep inside Downing Street” had launched an extraordinary bid to persuade his group to stand down its candidates to avoid splitting the Leave vote.

Speaking on Friday morning, Mr Johnson denied his team had offered the peerages to Brexit party supporters. “No, nein,” Johnson said on BBC Radio 5. “What is this nonsense?”

Asked if officials had made calls to Brexit Party candidates, he said:

That would be a big thing for me to investigate — I’m sure conversations take place between politicians of all parties. But certainly nobody has been offered a peerage, I can tell you that.


EU to extend temporary market access to UK clearing houses

Away from the immediate drama of the election, Brexit preparations are continuing on both sides of the Channel, the FT’s Philip Stafford reports.

Brussels is planning to extend temporary market access to UK clearing houses as it steps up preparations to prevent financial turmoil should Britain crash out of the EU.

A temporary permit that allows EU investors to use UK-based clearing houses in the event of a no-deal Brexit is due to expire at the end of March next year. That has led to fresh fears among banks, fund managers and lawyers there could be extreme upheaval if the UK has not finalised its long-term relationship with the bloc by its expiry.

Valdis Dombrovskis, the EU commission vice-president responsible for financial services policy, told an event in London on Friday that central clearing was “a clear systemic risk in case of a no-deal Brexit”.

Regrettably, the risk to financial stability has not yet been fully removed, because industry has not so far fully prepared for a no-deal Brexit. Therefore, I intend to propose to renew this time-limited equivalence decision beyond that date, to prepare for any eventuality.

The permit will allow EU investors to access UK-based clearing houses, which form a core part of the plumbing of the financial system. The access rights would apply for all classes of cleared derivatives. The overwhelming majority of euro-denominated swaps are cleared in London.


Corbyn: Broadband an ‘essential utility’

Jeremy Corbyn is laying out the details of his party’s broadband nationalisation plan in a speech in Lancaster.

He said that the internet has become such a “central part of our lives” that “what was once a luxury is now an essential utility.”

Mr Corbyn said that once the programme is up and running, his government would tax large corporations to pay for the service.

“I hope they are listening to this. We are going to tax you fairly. That includes Facebook and Google.”


CBI: Labour’s nationalisation proposal ‘not the way to do it’

The UK’s largest employers’ group has weighed in on this morning’s news, arguing Labour’s plan to take control of BT’s Openreach network will impede the rollout of super-fast broadband, writes Valentina Romei, FT economics reporter.

“Fast reliable broadband is an absolute priority for people and firms and does need improving,” said Matthew Fell, chief UK policy director at the Confederation of British Industry.

But Labour’s plan is not the way to do it. The roll out of full fibre broadband across the country is underway, and all renationalisation will achieve is to slow down a process that needs speeding up.


FT Analysis: Lex on BT and Labour

The FT’s Lex column has delivered its verdict on Labour’s broadband plans. It says the nationalisation threat raises pressure over the tardy rollout of full-fibre broadband.

Labour is not tipped to win the election. But its pledge increases already hefty pressure on BT to atone for its tardy rollout of full-fibre broadband under football-loving former CEO Gavin Patterson, who was more interested in bidding for sports rights. BT shares, like those of utilities, are becoming too politicised for ordinary investors to bother with.

Read the full Lex column here.


Flying bricks, bucket heads and binfaces line up for votes

Count Binface, Lord Bucket Head, Elmo and and an interplanetary time lord have £500 to spare. They are among the 11 candidates standing against Boris Johnson in his Uxbridge and South Ruislip constituency where he has a majority of about 5,000.

Nice to see the Brits still enjoy a bit of silliness.

Count Binface, an independent, has stood in general elections as Lord Buckethead – wearing a bucket – against three prime ministers: Margaret Thatcher, John Major and Theresa May. He changed his name for this year’s vote over a copyright dispute.

Lord Bucket Head on the Uxbridge ballot paper is from the Monster Raving Loony party, which was set up the year Jeremy Corbyn became an MP, and has a number of candidates standing on December 12, including Baron Von Thunderclap in Mid Sussex. Its leader is Howling Laud Hope.

The Incredible Flying Brick, whose policies have included abolishing gravity, from the Loony party will share the ballot paper — and probably lose his deposit — with the opposition leader Mr Corbyn in north Islington. Mr Corbyn has been an MP in the predominantly remain constituency since 1983 and pulled in 73 per cent of the vote in 2017.

In its call for election candidates, the Loony party says on its website that it expects you “if you can” to be a candidate in your own constituency. Howling Laud is on hand to help: “Give him your name, plus ‘Loony Name’ if you have one, (if not he will sort you).” The deadline for candidates was yesterday at 4pm.

Candidates in a UK election must pay a £500 deposit upfront, which they get back if they have garnered more than 5 per cent of the votes cast.

Jo Humphreys will replace Liz Evenden-Kenyon, who withdrew from the race on Tuesday, as the Liberal Democrat candidate in Uxbridge.

The Democratic dashboard gives full details of the candidates and constituencies for the election.


Election survival tips

Tim Harford, our undercover economist, offers some tips on how to keep your cool before an election:

How to survive an election cycle with your sanity intact


Lib Dems hit out at ‘fiscal incontinence’ of other parties

The Liberal Democrats will proclaim to be the UK’s “party of business” and “fiscal responsibility” today in a broadside lambasting the election spending plans set out by its two main political rivals, writes Laura Hughes.

Ed Davey, the Lib Dem Treasury spokesman, will pledge to replace the UK’s £30bn business rates system with a land value tax as well as spend £100bn tackling the effects of climate change.

Labour has pledged to more than double the amount it would borrow for capital spending, setting it up for a battle with the Conservatives, who have outlined new fiscal rules to allow a wave of infrastructure investment. 

Sir Ed will say the Lib Dems support proposals set out by the Resolution Foundation, a think-tank, for governments to target a structural surplus in current spending equal to 1 per cent of national income over the length of a five-year parliament.

Liberal Democrats accept that rule — and our spending plans meet it, with current account surpluses in every year of our five-year costings. In other words, fiscal responsibility. Unlike the others, with their fiscal incontinence.

Read Laura’s full piece here


The UK’s broadband problem

The Labour pledge to bring free full-fibre broadband to every home in Britain would transform the state of the utility in Britain.

The FT’s Valentina Romei has been looking at how the UK compares with other developed countries for access to full-fibre broadband. As the below chart shows, the UK scores very poorly, with less than 2 per cent of those with fixed broadband having fibre access, far behind countries such as South Korea, Japan and Sweden.


Boris Johnson: Labour’s programme ‘terrifying’

The Conservatives have unveiled their campaign battle bus, with the prime minister using the opportunity to escalate his attacks on the Labour party.

Speaking in Oldham West & Royton – which has a Labour majority of over 17,000 – Boris Johnson said Labour’s programme is “absolutely terrifying.”

“I think their programme is truly scary, disastrous for this country.”

Earlier, Labour’s shadow secretary of state for business Rebecca Long-Bailey laughed off claims her party’s policy on part-nationalising BT amounted to “broadband communism”.

She told the BBC:

“When I see other industrial nations harnessing this technology and supporting their businesses, and the UK not being in a position to do that, that upsets me.”


Sketching plots, pacts and potential outcomes

Miranda Green and Robert Shrimsley show how Leave and Remain alliances are shaping the election:


Labour shows scale of its ambitions with free broadband pledge

Labour’s pledge of free superfast broadband for all may be the first policy proposal with a chance of cutting through, says Robert Shrimsley.

The appeal of this announcement is clear and there are few obvious negatives for Labour. It does, though, raise the question of why the broadband service should be free.

Labour’s broadband proposal shows the scale of its ambitions


Man jailed for threatening letter to MP

A man who sent a threatening letter to pro-EU former Conservative MP Anna Soubry has been jailed for 12 months.

Alden Bryce Barlow was also given a 10-year restraining order preventing him from contacting Ms Soubry or going near her constituency address, the Crown Prosecution said in a statement.

The conviction comes amid concerns over the safety of politicians in the country’s polarised political climate. Several MPs have told parliament they fear for their own security.

In the letter to Ms Soubry, Barlow referenced the murder of Labour MP Jo Cox and called Ms Soubry “treacherous.”

Prosecutors said they hoped the sentence would act as a deterrent to anyone contemplating threatening politicians.

“This letter contained a sickening and ominous threat to Ms Soubry, with an explicit reference to the murder of Jo Cox MP in 2016,” said Gerry Wareham, chief crown prosecutor.

Ms Soubry has been verbally abused during live broadcast interviews and was one of 115 MPs to have expressed “serious concern” over the safety of MPs around parliament earlier this year.

She left the Conservative party in February to help found The Independent Group of centrist MPs, which later rechristened itself as Change UK. She is standing again in her constituency of Broxtowe in next month’s general election.

Police traced Barlow by matching his finger prints on the back of the letter and CCTV footage from the post office counter in Doncaster where he posted the letter.


Markets round-up: BT trims losses while pound steadies

For our final markets round-up of the week, BT peeled back any earlier declines and was recently trading down about 1 per cent in London. The telecoms group had opened 4 per cent lower on Friday after the opposition Labour party revealed plans to re-nationalise parts of the former monopoly.

The relatively limited reaction suggests that investors are not pricing in a Labour majority government in December. The news this morning took the company by surprise after being reassured by John McDonnell in the summer that it was “not on the list” for nationalisation.

Sterling rose 0.2 per cent against the dollar to trade at $1.2904. Against the euro, the pound was trading at 85.66p. Europe’s composite Stoxx 600 rose 0.2 per cent in early Friday trading while the benchmark FTSE 100 fell 0.2 per cent.