Current economic gloom and the war in Afghanistan make tax breaks unlikely, in the eyes of CMA Director General David Harrington: “Tax credit for suppliers and tax relief to consumers would be very welcome. However, the Treasury will decide on this and it will have to take the view that short-term pain is worth it for long-term gain, and I am not sure it will do so.”
Earlier this month, Harrington said it was up to the government to intervene in order to encourage the broadband market to grow. "The CMA has long urged the government to seize either the chicken or the egg in order to let demand grow. The free market cannot solve this one; it requires intervention."
Harrington suggested that this means either ensuring that Oftel is “more rigorous” in its policing of the competition in the market or that the Treasury implements tax incentives for both supplier and user.