Plans for a £6 phone tax to pay for high speed internet access have been slammed by MPs.
The influential Commons business committee, including MPs Julie Kirkbride (Con Bromsgrove) and Peter Luff (Con Mid Worcestershire), attacked Government proposals to impose a new 50p-a-month charge on telephone lines.
They said the new tax would hit elderly people with low incomes - who might not even use the internet.
The cash will be used to pay for high speed internet connections which are five times faster than current services.
But the cross-party Business Committee warned that it would be a “regressive” tax, because everybody would pay the same regardless of whether they could afford it.
And the MPs warned that the people who were most likely to struggle to pay the tax, including the elderly and people on the lowest incomes, were also the people least likely to benefit from it.
They warned: “We believe that a 50 pence levy placed on fixed telecommunication lines is an ill-directed charge. It will place a disproportionate cost on a majority who will not, or are unable to, reap the benefits of that charge.
“The levy is a regressive tax under which a minority of users will receive enhancements to their services paid for by a majority who appear unlikely to access these services. The Government must look again at this proposal.”
Ministers are planning to create internet services with speeds of more than 40mbs - at least five times faster than the maximum speed of 8mbs offered by most internet services today.
It would allow households to download music almost instantly and watch films with cinema-quality video and audio on demand.
However, households in remote areas, possibly including rural areas of the Midlands, are likely to miss out. Only 90 per cent of the country will be able to use the new services, which will not be available until 2017.
In a report to be published today (Tuesday) following an inquiry, the Committee said there was little demand for new high speed services because services were already fast enough for most internet users.
And the MPs said Government should concentrate instead on helping people with no internet access at all.
They praised a separate plan, also drawn up by the Government, to ensure every home in the country had access to internet services at speeds of at least 2mbs by 2012.
Mr Luff, the committee’s chairman, said the Government should cut taxes on internet firms to allow them to develop their own services, instead of taxing telephone customers to subsidise the services.
He said: “We believe that the Government should consider a reduction, or even a temporary removal, of business rates on fibre optic cable. This would be a more effective use of limited public sector funds than direct financial intervention.”
