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The government has officially dropped the controversial landline levy, designed by the previous administration to fund universal high-speed broadband.

Chancellor George Osborne announced in his emergency Budget yesterday that the 50p-a-month landline levy, which was set to affect the majority of UK consumers, will not now come into effect.

He said the majority of investment for an enhanced national broadband network would come from the private sector, rather than the taxpayer, although some public money would be made available to help fund rural service provision.

"I am happy to be able to abolish this new duty before it is even introduced," Ms Osborne stated.

"Instead, we will support private broadband investment, including to rural areas, in part with funding from the digital switchover under-spend within the TV licence fee."

While the Liberal Democrats supported Labour's plans for a broadband tax, the proposal was highly criticised by the Conservatives while in opposition.

The Chancellor has now followed through with the Tories' pledge to scrap the levy, made prior to the general election.

Back in April, the tax was dropped from Labour's final finance bill during the parliamentary wash-up period – a concession on Gordon Brown's part in an attempt to gain the necessary MP support for the equally divisive digital economy bill.

This piece of legislation – which serves to combat illegal file sharing – did make it on to the statute books, but after much discussion and debate, the broadband tax has been consigned to the dustbin.

Whether many of the other Digital Britain report provisions survive into the new political age remains to be seen.

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