Wednesday, 29 May 2013

Bush Free WiFi at a cost

Lamppost WiFi: coming to the Bush
Shepherd's Bush is set to receive public WiFi in a deal hailed by the Council as free to the taxpayer, but is that really the case?

Back on May 15th our Council announced a deal with communications company Arqiva, which will see local lampposts fitted with network technology. Users will be able to access a whole 30 minutes free WiFi, after which they will need to pay up if they want any more, unless they want to surf the Council's own website, which will continue to be free.

In return, of course, Arqiva gets a vast infrastructure network which it can then rent out, at profit, to mobile phone and internet companies as they seek to provide 4G and other online services to consumers. H&F Council will receive what it described as "a share" of that profit.

Sounding a bit one sided? Well, there's more.

The Financial Times has revealed that Arqiva pays no corporation tax, despite making sales of £1 billion per year. It has done this, for the last four years, in part by borrowing money from its shareholders and agreeing to pay them back at a 13 per cent rate of interest. Those loans can then be used to offset tax. All perfectly legal, of course, but with politicians accusing Google of being "evil" for exploiting its own tax loopholes eyebrows have been raised at local authorities like ours being so keen to do business with other tax avoiders.

In light of this Councillor Greg Smith's own comment on the deal is curious. He said:
"This is a fantastic deal for taxpayers and the council. We know that many of our residents still do not have online access, so this deal will open up a new digital world to them".
Fantastic deal? And the "new digital world" will be open for, er, thirty minutes.

Speaking in respose to the Financial Times expose Simon Hughes, Deputy Leader of the Liberal Democrats said:
"Central and local government must stop giving contracts to companies which do not pay their proper share of taxes"
While Arqiva boss John Cresswell had this to say in his defence:
"Arqiva has invested heavily in the UK’s infrastructure, including £630m in the digital switch-over. In recognition of this considerable investment in the UK’s communications infrastructure, the government has agreed a tax exemption for Arqiva from 2009".
You be the judge. 

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