Rural Phone and Broadband Connectivity
Nick's Speech in the Backbench Business Debate
Nick Herbert (Arundel and South Downs) (Con)
First, I add my thanks to my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) for initiating this debate and the interest he has taken in the subject, which concerns a large number of us who represent rural constituencies and who believe that access to broadband is now essential, not a luxury. Despite its relative proximity to London, I had in my constituency two of the country’s four not spots. Even though the villages are just 50 miles from London, broadband was not available at all. The latest House of Commons figures suggest that only 52% of my constituency has superfast broadband access, making it one of the worst for broadband coverage. Many of my right hon. and hon. Friends who represent rural constituencies will be familiar with that situation.
Does my right hon. Friend agree with me that we must not forget the plight of farmers, who now have to apply online for their money from the EU? Between 10% and 15% of farmers do not have the capability to do so, which will have a serious impact on their livelihoods.
I strongly agree. That is a good example of why access to broadband is no longer a luxury but a necessity, particularly when people such as farmers are required to file information in that way.
Three and a half years ago, I held a summit in conjunction with West Sussex county council. The then Culture Secretary, my right hon. Friend the Member for South West Surrey (Mr Hunt), attended and we had a good meeting to discuss how to improve the situation. Following that, the Government announced their programme to extend broadband access across the country and West Sussex county council announced its Better Connected programme. With £6 million-worth of central Government support, which was matched by the county council, the programme will fulfil the Government’s ambition to ensure that 95% of the county has access to superfast broadband and the whole county has broadband coverage by 2017.
I welcome the Government’s support and commitment. I recognise what they have done to make improvements, but we have to look ahead and test whether what is being done will be sufficient to ensure access for those in rural areas who will not benefit from the programme. The Rural West Sussex Partnership, which is a branch of the local enterprise partnership, Coast to Capital, has suggested that in fact the coverage delivered by the programme will not be 95%, but could be 90% or even as little as 85%. Even if 95% coverage were to be achieved, there would still be the matter of the 5% of people who did not have access to superfast broadband. They are often the people who do not have access to mobile phone coverage, either, and are therefore effectively disconnected.
I know of the strong interest taken by my hon. Friend the Minister for Culture and the Digital Economy and my right hon. Friend the Secretary of State for Culture, Media and Sport, who met me recently to discuss these issues. I was grateful to him for the interest that he showed and for listening to the concerns that I set out. I have a few observations which I hope he will not mind my repeating to the House.
First, as other hon. Members have pointed out, there is a problematic lack of competition in the sector. That is one of the reasons why we are not seeing the necessary roll-out, an effective roll-out or sufficient customer service. There was a problem in the initial contracts which were awarded by BDUK because, although there were originally two bidders, one—Fujitsu—dropped out. We ended up, therefore, with one bidder for the contract, BT. So there is an effective monopoly and that is unsatisfactory. That is not the Government’s fault; it is simply the reality.
Chris Bryant: The right hon. Gentleman makes an important point. We need greater competition because that would deliver results faster for everybody. However, I query his last comment. With 44 small tenders, it was remarkably difficult for anybody to presume that they might gain more than one, other than BT. My worry is that the way the tender process was set up created the monopoly in the first place.
Nick Herbert: I am not sure whether that is the case, but we can look ahead at how we can inject more competition into the sector to ensure the competitive pressures needed to improve customer service. I would look again, as hon. Members have suggested, at BT’s relationship with Openreach and see whether there is a case for splitting them, injecting more competition there and potentially breaking up Openreach. We need more competition in this sector.
Secondly, we should not be fixated on the fibre-based solution, which will never be realistic in the hardest-to-reach rural areas. In those areas, wireless technology or access to 4G or faster mobile data signals will become the solution. I do not believe that satellite will be the solution. We therefore need to ensure that the kind of solutions being advanced in public-private partnership recognise that different solutions will be necessary in rural areas.
Mr Graham Stuart: Does my right hon. Friend, like me, welcome the £10 million fund that the Government have created to develop new technologies? Does he, like me, hope that the Government might be able to go further to make sure that small companies, such as those in my constituency, can be supported to develop the technology, show proof of concept and thus challenge BT and deliver for rural communities?
Nick Herbert: Indeed. Like my hon. Friend, I welcome the Government’s funding initiative in this area. I had intended to go on to say that. None of what I say is a criticism of the Government; they are merely suggestions as to how we can improve the situation further.
Thirdly, we need to ensure that the technologies adopted are future-proof. There is a danger that in seeking to meet the commitment to wholesale coverage by 2017 or superfast coverage for 95%, technologies are adopted that will not stand the test of time and will quickly be found to be insufficient.
Fourthly, I have a general observation to make about subsidy. Given that we all agree that access to broadband is an essential public service, there is a role for public subsidy in this area. That role should be to correct instances of market failure. We need to be careful to ensure that subsidy is not directed at companies or providers where the market would provide a service. With the current BDUK roll-out, there is a danger that public money is being used to close the gap in areas where it would have provided the service anyway, and the remaining 5% or 10% is not being covered. We must ensure that in future subsidy is directed to the hardest-to-reach areas and that the market is left to fill the gaps. That is a hard judgment to make, given that we are trying to ensure that the market operates properly.
In my constituency villages are being connected one by one. There is a tremendous improvement, which reflects the initiative of the Government and the country council. I welcome that, but I suspect that many of those villages would have been connected anyway to fibre. What is happening is that the rural areas are being left out. I remind the House that these rural areas comprise a great number of people and rural businesses who need to be connected. There is the danger of a growing digital divide, which might in turn become a further manifestation of something we need to avoid: a rural-urban divide. We see that in many other aspects of policy, and I think that we should strive to prevent it.
I mentioned that three and a half years ago I convened a summit to discuss how to improve the situation in West Sussex, and I believe that it bore fruit. I therefore suggest holding another similar event in West Sussex, not to criticise but to look forward and see how we can close the gap and ensure that we do not have a digital divide in rural West Sussex in future. I would be grateful if my right hon. Friend the Secretary of State considered attending the summit, partly because of the lessons I think there would be for other rural areas. The summit would have the active support of the South Downs National Park Authority, for instance, which is very interested in the issue. The Government have done a great deal to improve the situation. We must now ensure that we go further and close the digital divide.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
Let me begin by saying how grateful I am that the hon. Member for Rhondda (Chris Bryant) mentioned E. M. Forster, because my late father campaigned for a blue plaque for E. M. Forster, which can now be seen on the flats in Arlington Park mansions in Chiswick. That is an aside, but I always like to mention my old dad, my late father, who was in the other place. I usually get to mention him during steel debates, but I digress.
We have had an excellent debate with some 18 contributions, most from the Conservative Benches because only one Labour Back Bencher showed up to make a speech. That gives the lie to the Opposition spokesman’s protestations that Labour is interested in rural communities and interested in getting broadband to them.
We heard excellent speeches from my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), who called this important debate, and the hon. Member for Barrow and Furness (John Woodcock). We heard my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) talking about his area’s local enterprise partnership. We heard from the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) and from my right hon. Friend the Member for Arundel and South Downs (Nick Herbert), who made some important suggestions. We heard the hon. Member for South Down (Ms Ritchie), who contributed to the EFRA Committee report, which to a certain extent sits behind today’s debate.
We heard from my hon. Friend the Member for Skipton and Ripon (Julian Smith), who has pioneered broadband in North Yorkshire, and from my hon. Friend the Member for Newbury (Richard Benyon) who spoke about Vodafone. The hon. Member for Argyll and Bute (Mr Reid) came up with a new acronym—MBORC, which I shall investigate—while my hon. Friend the Member for Newton Abbot (Anne Marie Morris) quite rightly started by praising the Government.
We heard from my hon. Friend the Member for Hexham (Guy Opperman), the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith), my hon. Friend the Member for Beverley and Holderness (Mr Stuart) and from my hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw), whose contribution I always intensely enjoy. We then heard from my hon. Friends the Members for Salisbury (John Glen) and for Newark (Robert Jenrick)—it is the first time I have heard the latter speak, and what an excellent contribution it was.
We then heard from my right hon. Friend the Member for North East Bedfordshire (Alistair Burt) and, of course, from the hon. Member for Somerton and Frome (Mr Heath) who I always remember saying—although not in this debate—that the only way he can get a signal is by standing on his kitchen cabinet.
In the time available I cannot answer all the questions put to me, but I hope that in the course of my response ome of the issues will be covered. If they are not, I will write to each and every hon. Member who has made a contribution to this debate.
Let me begin with the contribution of the hon. Member for Rhondda. We heard 10 or 15 minutes from him, but just as we searched the Benches behind him for any speakers, we searched for a policy in his speech—but policy could we find there none. Is it Labour’s intention, for example, to designate internet provision as a utility? Is it Labour’s intention to bring broadband to business parks? Is it Labour’s intention simply to provide broadband only where people say they want it, so that for the first two or three years of a Labour Government we would see a marketing campaign before any broadband was rolled out?
What are the Opposition’s positions on our policies? The hon. Gentleman lambasted us for not proceeding with the changes to the electronic communications code in the Infrastructure Bill, yet while it was still in the Bill, he was writing to the Secretary of State saying that Labour could not support it. The Opposition Front-Bench team has complained about the superfast broadband advertising campaign, yet now the hon. Gentleman claims that he wished we had advertised more.
I am afraid that the hon. Gentleman got his facts wrong when he said that we had moved the target. We had a target to get superfast broadband to 90% of the country by the end of 2015, and we have every chance of meeting that target. [Interruption.] I repeat that we have every chance of meeting that target. Then we set a new target of 95%—namely, getting to a further 5% of the country by 2016-17. That is not moving the target. The hon. Gentleman also said that we had ruled out wireless technology at the beginning; our approach has always been to be technology-neutral.
This broadband roll-out campaign is an unequivocal success. We shall very shortly announce that we have passed the 2 millionth premise as a result of the roll-out campaign. That means 2 million households—millions of people—now getting superfast broadband where the market would not deliver. Labour’s alternative policy was to give those people 2 megabits and then forget about it. Incidentally, Labour had no way of paying for it, as it had no policy to show how it would pay for this provision of 2 megabits. In fact, 97% of the country already benefits from coverage of 2 megabits, but we know—and all my hon. Friends know from their constituents—that that is no longer deemed to be enough. Most people now expect 7 or 8 megabits.
Some of my hon. Friends talked about future-proofing. In 2010, we thought that aiming for 24-megabit superfast broadband would be the right policy, but technology changes all the time. Members will have noted BT’s announcement last Friday that it expects to be able to achieve speeds of up to 500 megabits over a copper line, thanks to new technology that it is trying out.
In the past, we have been criticised by the National Audit Office for some aspects of our campaign. I have been robust in defending our programme against the NAO’s critique, and I am pleased to say that last week it praised the roll-out of superfast broadband. It made it clear that we were close to meeting our targets, and were providing value for money. For that I thank the men and women who work for BT, including the engineers who work tirelessly to produce superfast broadband. Over the Christmas period, I visited some of them in teventon, which is in my constituency. More often than not, they exceed their targets and their reach. I also thank Chris Townsend and all my officials who run Broadband Delivery UK, as well as Bill Murphy, who had overall responsibility for the BT programme.
I think that this is a programme of which we can be very proud. It is being delivered by a great British company, BT, and I was not going to come to the House and run that company down. Let us look at the facts. Superfast broadband is now available to nearly 80% of premises, whereas fewer than 50% had it when we came to office. The United Kingdom has a higher superfast coverage than any of the other EU5 countries. Our average broadband speed has quadrupled over the last four years. We have the highest take-up of superfast broadband in the EU5 and the lowest priced broadband in the EU5 and the United States, and we have the largest number of broadband users in the EU5.
I understand the frustrations expressed by my hon. Friends, because those statistics point to the fact that we live in a digitally savvy nation, and British consumers want to use the internet. For example, they spend the highest amount per capita on e-commerce shopping. They are rightly demanding the provision of higher speeds and better service as soon as possible, but we are moving as fast as we can, and, as I have said, we are exceeding our targets and are well on track. As for value for money, the independent assessment review conducted for BDUK showed that, in the case of a range of cabinets, BT’s costs were 90% lower than those of a normally efficient operator, while the NAO reported that the average costs of a broad range of projects were currently proving to be about 25% lower than the estimated costs of bids for those projects.
So what are the issues? I have dealt with the issue of whether we have moved the target, so let me now deal with the issue of competition. Time and again, people ask me why there is not more competition, but what sort of competition do they want? If we had organised a national bid—if we had asked a company to tender to provide broadband on a national basis rather than for 44 areas—what would have happened if BT had won? We would have had a national provider. Do people think that we should have done it according to regions? Who is to say that BT would not have won those contracts? The 44 areas were small, and were open to smaller providers should they have wished to bid. The fact is that BT won the contracts because it provided value for money. That has shown us how tough it is to build the necessary infrastructure, for this is an engineering project that requires infrastructure build-up.
I will give the Labour party some credit: it did provide an element of competition. It had a digital region in south Yorkshire which went to a provider other than BT, and that went bust. We have had to pick up the pieces, and have had to write off £50 million worth of taxpayers’ money. That is the kind of competition that Labour provided. Nearly 95% of Cornwall, where BT won the contract under the last Government, now has superfast broadband speeds. It is one of the best-connected regions in Europe, and Cornish companies are saying that they have better broadband than when they go to Silicon Valley.
The other issue is customer service. That involves maps, which pose another dilemma. On the one hand my hon. Friends say, “We want maps to show exactly here people are going,” but then the maps are published and BT or the local authority get on the ground and they say, “Actually, this is not as viable as we thought and we’re going to move somewhere else.” That leads to disappointment. There is a balance to be struck, but as far as I am aware now almost all regions are providing maps of up to seven-digit postcodes.
Contrary to impressions, I am not the spokesman for Openreach and I share, as a constituency MP, the frustrations that arise with customer service. I cannot inform the House what proportion of bad customer service and good customer service there is, but we all know that constituents who get good service from Openreach are not going to e-mail us while those who get terrible service will, quite rightly, e-mail us and expect us to sort that out. I hold my hand up and say that I have had my fair share of people complaining about Openreach customer service.
I also share the frustration about new housing developments, and as a result we have got the telecoms providers around the table with the major housing developers and we have put in place a system whereby new housing developments are flagged up to telecoms providers.
Finally, the biggest point Members mentioned is of course the last 5%. Again, I absolutely understand the frustration of my hon. Friends, and all I would say is, “Meet me halfway.” We have never as a Government pretended we were doing anything other than what we were doing. We said, “We have the money to get to 90% and we hope to do that by the end of 2015.” The Chancellor saw how well the programme was going so he gave us more money. We then had the money to go to 95% and we will get there by the end of 2017. Then, to give great credit to the former Secretary of State, my right hon. Friend the Member for Basingstoke (Maria Miller), we said, “We want to get to the last 5%, but the back-of-the-envelope cost is huge—literally in the billions of pounds—so let’s do some research before we go back to the Treasury to say what it is likely to cost.” That is why we set up the £10 million pilot projects: we wanted to get on the ground and see what new technologies could deliver superfast broadband speeds to that last 5%. We do not want to leave the last 5% behind; by definition they are the most difficult and most expensive to reach, but we will get there.
Mobile is another huge issue. We have the fastest roll-out of 4G coverage in the world and the fastest take-up, and I hope my hon. Friends will recognise the superb legally binding agreement to extend that, which the Secretary of State negotiated with the mobile operators. By the end of 2015 we will have reached 98% of premises with 4G from the main operators, but this groundbreaking deal will see the geographic coverage over the two years after that—2016 and 2017—spread to 90% of the country, and it is not going to cost the taxpayer a penny. We have already pioneered it with the mobile infrastructure projects because we have prepared—[Interruption.] The hon. Member for Rhondda is misunderstanding annual licence fees. We have pioneered that with our mobile infrastructure projects because, again, we recognised that rural communities want mobile coverage, and we now have 100 sites ready to go.
It has been difficult, however, and my hon. Friends mentioned the difficulties we face with landlords, who see this as an excuse. In fact I was being told only today bout a mast in the highlands that is damaged but which the company cannot get repaired because the landlords used its damage as an excuse to try to negotiate a higher rent. These are the kinds of issues mobile providers face up and down the country.
Finally, I commend the digital infrastructure document that we published today. We have been working in the last year to look at all the infrastructure networks the Government have a stake in, including the Network Rail signalling network, the emergency services network and JANET—the joint academic network for universities. We want to bring them together, to get that synergy that we have long called for.
I rest my case there, Mr Deputy Speaker.
You can read the Hansard of the full debate here.