The £2 broadband tax echoes Canada's 30¢ tax to save music

"Boy, hurting that new industry to save this dying one; that definitely won't backfire!" - Nobody, ever.

Remember when Canada introduced a compulsory levy on blank CDs to save the recorded music market, and how that totally made everything OK? Oh, you don't? 

Canada is one of a few countries which enacted what's known as a "private copying levy". Any "blank audio recording media", such as cassettes, CD-Rs, or MiniDiscs, is subject to a tax – of $0.29 per unit for CD-Rs, and $0.24 per unit for cassettes.

In a way, it's very similar to David Leigh's proposal to save journalism. Charge a levy on the new technology which is eating the old, and save the "valuable" incumbent at the expense of the upstart new entrant. In fact, it's better than Leigh's proposal; most audio recording media does have music on it, whereas very little internet bandwidth is used for news (if we were being fair about where the money goes, most of that £2 would subsidise porn – which is also suffering under the yoke of the internet).

So how did the levy do? It saved the Canadian recording industry, right? Not so much:

Source

The money taken from downloads is actually on the up in Canada, as with everywhere else; and eventually, the industry will recalibrate around this new funding source. But to pretend that state funding – particularly state funding based on a tax of an unrelated resource – can save the industry is sadly wishful thinking.

Newspapers pile up on the street floor. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Getty
Show Hide image

The 5 things the Tories aren't telling you about their manifesto

Turns out the NHS is something you really have to pay for after all. 

When Theresa May launched the Conservative 2017 manifesto, she borrowed the most popular policies from across the political spectrum. Some anti-immigrant rhetoric? Some strong action on rip-off energy firms? The message is clear - you can have it all if you vote Tory.

But can you? The respected thinktank the Institute for Fiscal Studies has now been through the manifesto with a fine tooth comb, and it turns out there are some things the Tory manifesto just doesn't mention...

1. How budgeting works

They say: "a balanced budget by the middle of the next decade"

What they don't say: The Conservatives don't talk very much about new taxes or spending commitments in the manifesto. But the IFS argues that balancing the budget "would likely require more spending cuts or tax rises even beyond the end of the next parliament."

2. How this isn't the end of austerity

They say: "We will always be guided by what matters to the ordinary, working families of this nation."

What they don't say: The manifesto does not backtrack on existing planned cuts to working-age welfare benefits. According to the IFS, these cuts will "reduce the incomes of the lowest income working age households significantly – and by more than the cuts seen since 2010".

3. Why some policies don't make a difference

They say: "The Triple Lock has worked: it is now time to set pensions on an even course."

What they don't say: The argument behind scrapping the "triple lock" on pensions is that it provides an unneccessarily generous subsidy to pensioners (including superbly wealthy ones) at the expense of the taxpayer.

However, the IFS found that the Conservatives' proposed solution - a "double lock" which rises with earnings or inflation - will cost the taxpayer just as much over the coming Parliament. After all, Brexit has caused a drop in the value of sterling, which is now causing price inflation...

4. That healthcare can't be done cheap

They say: "The next Conservative government will give the NHS the resources it needs."

What they don't say: The £8bn more promised for the NHS over the next five years is a continuation of underinvestment in the NHS. The IFS says: "Conservative plans for NHS spending look very tight indeed and may well be undeliverable."

5. Cutting immigration costs us

They say: "We will therefore establish an immigration policy that allows us to reduce and control the number of people who come to Britain from the European Union, while still allowing us to attract the skilled workers our economy needs." 

What they don't say: The Office for Budget Responsibility has already calculated that lower immigration as a result of the Brexit vote could reduce tax revenues by £6bn a year in four years' time. The IFS calculates that getting net immigration down to the tens of thousands, as the Tories pledge, could double that loss.

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

0800 7318496