Points of Order
Tuesday 4th July 2017
(7 years, 5 months ago)
Commons ChamberRead Full debate Telecommunications Infrastructure (Relief from Non-Domestic Rates) Act 2018 Read Hansard Text
Diana Johnson (Kingston upon Hull North) (Lab)
On a point of order, Mr Speaker. In his final speech in the House, the former right hon. Member for Leigh made the very compelling case that there was evidence for criminal acts having taken place during the contaminated blood scandal, which was of course the biggest treatment disaster in the history of the NHS. Given that the criminal acts that, allegedly, took place are set out on the front page of today’s Daily Mail, is it appropriate for the Secretary of State for Health to come to the House and say what action he intends to take? The former right hon. Member for Leigh asked the Secretary of State to indicate whether he was minded to set up a public inquiry into what happened, and said that if that did not take place, he would notify the police of the evidence he had in his possession. Mr Speaker, have you had any indication from the Secretary of State for Health about whether he intends to come to the House to make such a statement?
Mr Speaker
I am very grateful to the hon. Lady for her point of order. I have seen the Secretary of State for Health a couple of times today—recently, in the Chamber, and much earlier this morning, when I was returning from my health-giving swim and he was arriving at the House on his bicycle; as the hon. Lady would expect, we exchanged the courtesies of wishing each other good morning. The right hon. Gentleman did not give me any indication that he planned to make a statement on this matter on that occasion; nor has he since done so.
I have to admit that I was not familiar with the headline to which the hon. Lady referred, not least because the organ in question is not part of my daily reading matter. I am sure she will readily understand that it is not ordinarily a paper of any interest to me. However, I must admit that the headline is obviously a very important one relating to a very important story.
I am not aware of any plans by Ministers to make a statement, as I have said, but clearly the issue will not go away. I well remember the final intervention of the then right hon. Member for Leigh, and very powerful it was too. I rather suspect that the hon. Lady will return to this matter, especially if she judges it to be urgent, and she will know what opportunities are open to her to raise matters that she thinks are urgent.
Paul Blomfield (Sheffield Central) (Lab)
On a point of order, Mr Speaker. On 8 February, I asked the then Minister of State, Department for Exiting the European Union, the right hon. Member for Clwyd West (Mr Jones), about allegations that it was the jurisdiction of the European Court of Justice that had led the Government to issue a notice to withdraw from Euratom alongside the notice to withdraw from the EU. In response, the Minister told the House that that was not the case, and that
“it would not be possible for the UK to leave the EU and continue its current membership of Euratom.”—[Official Report, 8 February 2017; Vol. 621, c. 523.]
The former chief of staff to the Secretary of State has now contradicted that statement. He has said that it was in fact the role of the European Court of Justice that lay behind the Government’s decision. Mr Speaker, can you advise me how we can find out the truth of the matter: why are the Government leading us out of the important treaty on Euratom?
Mr Speaker
I do not think it is for me to seek to penetrate the inner recesses of ministerial minds to ascertain their precise motivation in the pursuit of policy. When the hon. Gentleman asks how he should take forward this matter, my short answer is by the tabling of questions, which will probably need to be very precise and focused if he is to elicit the information he seeks. That is my guidance because, although I have indulged him on this occasion—because I could not know precisely what he was going to ask until he had asked it—what he has asked does not constitute a point of order, although it is no doubt of enormous interest and relevance to him and many other Members.
I must advise the House that it is not the responsibility of the Chair to ensure consistency of statements from any Government, or indeed from persons previously connected with a Government. If that were one of the responsibilities of the Chair, a wholly disproportionate amount of his or her time would have to be devoted to keeping up with such matters. The hon. Gentleman has made his concern clear, and that concern has no doubt been heard by those on the Treasury Bench. If a Minister felt that he or she had been inaccurate in statements to the House, that Minister would have a responsibility to set the record straight.
Peter Dowd (Bootle) (Lab)
On a point of order, Mr Speaker. With your permission, I would like to raise the motion for the 2017-18 estimates on the Order Paper today. I have notified the Government of my intention to raise a point of order. The calling of a general election only two years into a fixed-term Parliament, the resultant hung Parliament, the delay in the elections of Chairs of Select Committees and the fact that no Opposition day debates have been scheduled with only days to go before recess have combined to create an unprecedented situation in terms of the scrutiny of Government finances.
Opposition Members are deeply concerned that the Government are asking Parliament to approve, on a motion tonight, the appropriation of £586 billion without debate, so avoiding what many of us believe to be the proper and correct parliamentary scrutiny of public finances. Such scrutiny is of particular interest to the thousands of public sector workers who are currently receiving mixed messages on pay from the Government. Presumably these estimates, which were published in April, still reflect the public sector pay cap, and this is also where the money for the Northern Ireland settlement will come from.
Mr Speaker, as custodian of the House and of its long tradition of transparent scrutiny of Government spending since the Bill of Rights in 1689—not you personally since 1689—will you advise me what course may be taken to ensure the appropriate consideration of the estimates?
Mr Speaker
I appreciate the hon. Gentleman’s recognition that I am not quite that old—that is, it has to be said, heartening. As for his passing reference to the election of Chairs of Select Committees, the House is due to treat of that matter today. It may well be that I will have something to say on that matter today. I share the concern of the hon. Gentleman, and indeed of Members on both sides of the House, that the Chairs of Select Committees should be elected sooner rather than later, and that the Committees should be constituted as quickly as possible, so that they can undertake their important task of scrutiny. Parliament and parliamentarians will always be served by such an approach.
I understand the hon. Gentleman’s concern that the House should be asked to authorise the expenditure of very large amounts of public money without an opportunity for debate, but I can assure him that there is nothing underhand or disorderly about this. It is in accordance with the Standing Orders and the House’s agreed estimates procedure. This is not one of those estimates days on which the House is invited to debate matters recommended by the Liaison Committee before agreeing to the estimates.
That said, it is always open to the House to reconsider its procedures. I am aware that the Procedure Committee recently published a report on estimates procedure—a report to which a Government response is awaited—so there may be an opportunity for the House to look at these matters before too long. I hope that is helpful both to the hon. Gentleman and indeed to the House.
Bill Presented
TELECOMMUNICATIONS INFRASTRUCTURE (RELIEF FROM NON-DOMESTIC RATES) BILL
Presentation and First Reading (Standing Order No. 57)
Secretary Sajid Javid, supported by the Prime Minister, Mr Chancellor of the Exchequer and Secretary Karen Bradley, presented a Bill to make provision enabling relief from non-domestic rates in England and Wales to be conferred in respect of hereditaments used for the purposes of facilitating the transmission of communications by any means involving the use of electrical or electromagnetic energy; and for connected purposes.
Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 3) with explanatory notes (Bill 3-EN).
Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill
Monday 10th July 2017
(7 years, 5 months ago)
Commons ChamberRead Full debate Telecommunications Infrastructure (Relief from Non-Domestic Rates) Act 2018 Read Hansard Text Read Debate Ministerial Extracts
The Minister for Digital (Matt Hancock)
I beg to move, That the Bill be now read a Second time.
Everyone in the House knows the importance of being connected, whether through traditional means or, increasingly, through digital connections. Whether the issue is the next generation of broadband technology, better mobile phone coverage or preparing for the next generation of 5G, the Bill is all about improved connectivity. Whether we are talking about fixed networks in the ground or the next generation of mobile and wireless connectivity, what people care about is how well connected they are—good download and upload speeds, reliability, latency, and how quickly they get reconnected when there is a problem. It is a problem that we can all identify with, Madam Deputy Speaker. May I say what a great pleasure it is to see you in the Chair for the first time from the Dispatch Box, Dame Rosie?
Our task is to prepare for a world of considerably greater demand for digital connectivity. Just as Moore’s law states that the cost of computing halves each year, Nielsen’s law has seen the doubling of data demands every two years. World-class connectivity is important for people to function in the modern world, whether at work or at play. It will continue to transform our public services and bring efficiencies there, too, and it is important for all sectors in our economy. The challenge is always to stay a step ahead of need. We need the digital infrastructure that can support that, providing ubiquitous coverage so that no one is left out, and sufficient capacity to ensure that data can flow at volume and with speed and reliability to meet the demands of modern life.
All these connections rely on Britain laying more fibre-optic cable. Whether fibre all the way to the premise—to each home and business—or the fibre that underpins the mobile network, all modern connectivity runs off fibre. Around five years ago, the nation took a strategic decision to roll out high-speed broadband based largely on a part-fibre, part-copper network. Superfast broadband delivered in that way is today available to 93% of UK homes and businesses. We rank first among the big European states for superfast connections, and we are on track to reach 95% by the end of this year.
In mentioning that, may I pay tribute to my right hon. Friend the Member for Wantage (Mr Vaizey)? He did so much—he never lets me forget how much—to deliver the first-rate, high-quality superfast broadband connectivity to homes and businesses around the country that now allows us to say that 93% of people have access to, but do not necessarily take up, superfast broadband.
Catherine West (Hornsey and Wood Green) (Lab)
I thank the right hon. Gentleman for being so quick to take an intervention. May I suggest that he is being a little Panglossian and positive in his approach? As constituency MPs, we receive quite a number of complaints, and yet the grin on his face suggests quite the opposite.
Matt Hancock
That was me talking about what we have done so far—just wait until I talk about what we need to do in the future. I strongly agree with the hon. Lady that we need to do much more, which is what the bulk of my speech is all about. Indeed, it is what the Bill is all about. If she holds the view she espouses, I look forward to her marching through the Division Lobby later in support.
Precisely on the point raised by the hon. Lady, of course 7% of premises do not yet have access to superfast connections, so we are introducing the new broadband universal service obligation so that, by 2020, everyone has access to a minimum level of service. That will provide a vital safety net and ensure that nobody is left behind as the country takes these strides towards better connectivity.
Yet even this is not enough. Demand marches on. People’s needs and expectations have risen further, and will continue to rise. Yes, we need to celebrate what we have done so far, but we must also deliver deeper connectivity, now and in the future, to support a competitive market and to ensure that we get this infrastructure in the ground. We must work now to deliver the next generation of technologies, 5G and fibre over the decades ahead. This Bill is part of a suite of actions we are taking to boost Britain’s fibre. We will break down barriers to better broadband for business and get quicker connectivity for consumers.
First, in the Digital Economy Act 2017 we reformed the electronic communications code, which regulates agreements between people who provide sites and the digital communication operators. That new code will make it easier for electronic communications infrastructure to be deployed, maintained and upgraded. We are currently finalising the regulations needed to support the new code, which we plan to commence later this year when the work has been completed.
Secondly, with the separation of Openreach from BT we will see a more competitive market, with an Openreach that serves all customers well, rather than just focusing on BT. That decision has been largely welcomed by BT’s competitors and is the result of intense negotiations between Ofcom and BT. It is the right outcome and will ensure that Openreach delivers not just for its customers but for the whole country.
Thirdly, we are supporting the fibre roll-out through a £400 million digital infrastructure investment fund to help competitors in the market to reach scale and to deliver. The fund will improve access to commercial finance for alternative developers for full fibre infrastructure, helping them to accelerate roll-out plans and compete with the larger players.
Sir Desmond Swayne (New Forest West) (Con)
Will that assist those areas, of which there seem to be a great number in my constituency, where one part of, say, a market town or a small village has had its box upgraded by BT but users who are a few yards further away from the box, requiring longer reaches of copper wire, cannot get a decent service?
Matt Hancock
It may well help, but the universal service obligation is the thing that will really help those people, because it means everybody will have a right to a high-speed broadband connection. Some of those connections will be delivered by the next-generation full fibre connectivity and some of them by the existing technology, but our whole package of measures to deliver better broadband and quicker connectivity will ensure that we reach those people who, frustratingly, can be just a few yards further away from a box—or, indeed, who see the fibre go down in the road in front of their premises—but who do not have a connection.
Rebecca Pow (Taunton Deane) (Con)
I welcome the Bill, which is essential for moving the country forward and making our businesses as strong as possible, but even in the centre of Taunton Deane and the county town of Taunton there are areas where people still cannot get fast broadband. Will the Minister tell them how quickly they might be able to take advantage of this new service?
Matt Hancock
The universal service obligation is in law to ensure that everybody can access the service by 2020, but that is an end date, a deadline. As I said earlier, we have now reached 93% of premises. Crucially, that is 93% of premises having access to broadband—they still have to take it up. In fact, everybody who takes up the service in a subsidised area puts more money into the pot so that we can give more people access to superfast broadband.
Just 42% of the country had superfast broadband in 2010, when my right hon. Friend the Member for Wantage took up the reins of delivering it, but now 93% have access to it. We are on track to get to 95% at the end of the year, and then 100% of premises will have access to high-speed broadband by 2020. As my hon. Friend the Member for Taunton Deane (Rebecca Pow) can see, we are rolling that out. Crucially, that is delivering today’s technology—it delivers the needs of an average household today—but we also need to make sure we are ahead of the curve on the next generation of technology.
The idea of the digital investment fund is that it supports the commercial finance of alternative developers so we get more players into the market, rather than just having BT and Virgin, the two big players. The Government’s investment will be at least matched on the same terms by private sector investments so we expect it to capitalise more private investment and bring more than £1 billion of investment overall into full-fibre broadband, getting the really high speeds that some people need and want now, but many, many more will need and want in the future as these demands increase.
Kit Malthouse (North West Hampshire) (Con)
I want to refer back to the Minister’s remarks on the universal service obligation, which of course he is right to hail as a revolution in provision. The USO will be subject to a cost cap, so I wonder whether he will tell us when our constituents are likely to know what that cap is going to be and therefore whether he will be burnishing his credentials as a hero of rural Britain or not.
Matt Hancock
I know when to take a compliment as a threat. The truth is that this all depends on the technology. It may cost an awful lot to dig a trench and get a piece of fibre all the way to some places a long way from the existing network. However, new technologies are coming on stream, especially fixed wireless technologies, where a signal is beamed from one place to another. As a last resort, there are satellite technologies, which are good but not as reliable, that mean everyone can get connected. The aim is to get decent broadband speeds to every premises that wants them, making sure that as much of that as is feasibly possible is covered by a fixed network, but using technologies to get to the hardest to reach.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
I am grateful to the Minister for confirming that 100% of properties will have access to this by 2020, but will he confirm what speeds they will have access to? At the moment, there is a range of 2 megabits per second for the universal service and 24 megabits per second and more for the superfast service. What range of speeds is he talking about when he refers to 100%?
Matt Hancock
We have said 10 megabits per second as a minimum, and that is Ofcom’s analysis of the needs of the average household today; this is about making sure there is a service everybody can use. As we ask people to pay their taxes, get their passports or do their rural payments service applications online, it is a perfectly reasonable request back to us in government that people should have a decent level of broadband. If people want the really tip-top level, they may have to pay more for it, and that is not unreasonable either. We are saying that there must be a decent level of high-speed broadband. At the moment, we have said 10 megabits per second as a minimum, but we have also said that that has to be reviewed in an upwards direction in due course.
Richard Benyon (Newbury) (Con)
I speak as someone whose constituency is one big roadworks, where a company called Gigaclear delivers fibre to premises, which is welcomed by people in even quite remote communities.
Will the Minister help us with concerns we might have about his discussions with the Valuation Office Agency, which, in my experience, seems not to understand the way the world is? At the click of a VOA bureaucrat’s mouse, the finances of a local unitary authority such as West Berkshire Council can be radically altered in terms of how networks are business rated.
Matt Hancock
I can tell my right hon. Friend two things. The first is that we are committed to a business rates review to look at these sorts of things for fibre currently in the ground; I am sure the Secretary of State for Communities and Local Government and the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Nuneaton (Mr Jones), who are here on the Bench, will have heard what he has said.
The second thing is that at the heart of this Bill is making sure that new fibre that goes into the ground will have no such rates at all for the next five years, which is why we are here legislating today; we are making sure that companies such as the one he mentioned can get on and deliver this fibre, digging it in the ground as efficiently and cheaply as is reasonably possible, and we reduce the tax on that.
The fourth reason why fibre is important is for implementing our 5G strategy, including exploring commercial options to improve mobile coverage on our roads and rail networks, because we want mobile phone coverage where people live, work and travel. We are working with Ofcom to make sure that UK regulations on spectrum and infrastructure are 5G ready. We are working across Government with the Department for Transport and the Department for Communities and Local Government to make sure that we get right the rules on putting the infrastructure in place. We are also supporting 5G pilots, the first of which we will roll out next year, making Britain a global leader in 5G. All 5G roll-out is supported by fibre—there cannot be a 5G mast without the fibre that connects it to the network.
Fifthly, our £200 million local full-fibre networks programme is about supporting local bodies to stimulate the market for fibre connectivity in their areas. Fibre cannot be delivered by some sort of entirely nationalised, top-down, taxpayer-funded system; it has to be done in collaboration with the private sector. The local full-fibre networks programme is being delivered in support of local bodies to encourage the market to provide more fibre connectivity. For example, public sector anchor tenancies will bring together public sector broadband demand in an area to create an anchor customer, thereby making sure that investors know there is enough revenue to reduce the risk of building a new network. Such networks will connect directly into public sector buildings such as schools and hospitals. At the same time, they will improve connectivity for those who work in our vital public services and bring fibre closer to more homes and businesses, allowing them to be connected, too. The first wave of projects will begin later in the year. This is a great example of the public and private sectors working together to improve connectivity for all.
Sixthly, our business broadband fibre connection vouchers are incredibly exciting for people like me who are frustrated at the poor quality of broadband being delivered to businesses. In the previous Parliament, we had a really effective voucher scheme for superfast broadband for businesses. The new vouchers will be trialled by the end of the year and will be for full-fibre connections for businesses. The scheme will be rolled out more widely in 2018 to help businesses to get the best fibre broadband, because we know that so many jobs and so much business growth depends on it.
The Bill takes a further step. Business rates are an important source of revenue for local services, but have long been cited as a barrier to investment by the telecoms sector. There has been consternation—as articulated by my right hon. Friend the Member for Newbury (Richard Benyon)—at how the rates have been calculated. There was a perception of a disparity or lack of fairness between the rates paid by some operators, such as BT and Virgin Media, and smaller alternative networks such as CityFibre and Gigaclear. The rating methodology is of course a matter for the independent VOA, which has been working on this issue with the sector, but it is complex work and we do not have a moment to waste.
We recognise the urgent need to go the extra mile, so in last year’s autumn statement my right hon. Friend the Chancellor announced a 100% rate relief for all new fibre networks for five years from April 2017, with any relief backdated to that date. We will fund and fuel a full-fibre future, and we have introduced this Bill early in the Parliament to bring forward the legislative changes required to make that happen. The Bill will introduce new rules into each provision for business rates to allow us to vary the rates bill for telecommunication infrastructure, which will be set so that no rates are paid on new fibre for five years from the April just gone.
Wendy Morton (Aldridge-Brownhills) (Con)
Does the Minister think the five-year period for business rates relief will be sufficient to incentivise the market players to get on and roll out fibre broadband? Will he try to ensure that as they do that we get coverage throughout the country and they do not just start in the easy-to-reach areas first?
Matt Hancock
First, there is no doubt that the five-year business rates holiday shows that we are reducing the cost of getting fibre into the ground. Secondly, it is time limited, so my message to alternative providers, as well as the big players, is to get on with it and make use of the relief while it is available. Thirdly, it gives us time for the business rates review and the VOA to look at the complexities over a reasonable period and come forward with a long-term, sustainable scheme. Sixthly—fourthly? I cannot remember which point I was up to, but I am sure that Hansard will make this bit sound really eloquent. I have completely lost my train of thought!
The final thing I was going to say is that the five-year business rates holiday will also give us the opportunity to decide, towards its end, whether five years has been long enough and whether we want to extend it. The fact that it is a five-year period demonstrates that providers should get on with it. I assure my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) that it will be no shorter than five years, and I am grateful for her intervention because it allowed me to get completely confused with my own points.
In total, our efforts are part of measures worth £1.1 billion to support the market-led roll-out of fibre broadband and ensure that we are at the front of the 5G queue. There is still a lot more work to be done, and we will consult shortly on the technical details of implementation. The relief will reduce the costs of deployment, thereby incentivising the market to deliver where it otherwise would not have. I hope that, in the spirit of cross-party collaboration, the Bill will get the support of Government and Opposition Members, as it will benefit people right across the United Kingdom. We want to see a country in which people are better connected and everyone can get online and reach their full potential, and to make sure that nobody is left behind. The Bill provides a step on that journey, and I commend it to the House.
Andrew Gwynne (Denton and Reddish) (Lab)
May I welcome you to the Chair, Madam Deputy Speaker? It is a pleasure to see you in your rightful place. I wish to take this opportunity to welcome my shadow Communities and Local Government team: my hon. Friends the Members for Oldham West and Royton (Jim McMahon) and for Makerfield (Yvonne Fovargue), and my hon. Friend the Member for Portsmouth South (Stephen Morgan), who has today agreed to act as my PPS.
The Opposition cautiously welcome the Government’s apparent commitment to provide financial relief for all new investment in full-fibre internet for five years. In the course of my speech, I shall set out why I say “cautiously”. Until the intervention from the hon. Member for Aldridge-Brownhills (Wendy Morton), the Minister had waxed lyrical for twenty minutes before coming to business rate relief, which is the subject of this very short Bill.
The Opposition welcome the opportunity finally to discuss a crucial piece of infrastructure policy—a policy that will have a huge impact on the potential investment opportunities for all our communities over the coming decades. It is rather ironic that we are talking about IT connections on a day when pretty much all the parliamentary internet connection is down. I have it on good assurance that the parliamentary information and communications technology officers are busily trying to reconnect MPs to the internet and their email accounts.
All Members will know that the policy in the Bill will affect every part of the country—north or south; England, Scotland, Wales and Northern Ireland; urban or rural—so we have to get this right. I am sure Members will feel that acutely today as we and our staff struggle with the collapse of internet connection across the Westminster estate which I just mentioned.
We were expecting a larger, more substantial Bill, not least considering the scope of investment and certainty needed not only for full-fibre infrastructure but on business rates more widely. However, it appears that the Government have been in permanent listening mode for quite some time now, which would explain their decision to acquiesce in the concerns of independent and large internet providers who at the end of last year faced an excessive fourfold increase in their rateable values.
The UK’s main providers and the Broadband Commission have estimated that UK 5G infrastructure will outstrip the economic benefits of fibre broadband, which most of the country currently uses, by 2026, when it will be outdated. By 2026, therefore, the UK will reach a tipping point where the direct economic benefits of new 5G optical fibre internet will beat the conventional fibre broadband. Various estimates point to a boost to the UK economy of between £5 billion to £7 billion just six years from roll-out, with 5G broadband delivering economic growth almost twice as quickly as conventional fibre broadband used today. Much as with our railways and road links, the quicker the connection, the faster businesses will grow, particularly in an age when online sales, social media and direct online contact with buyers and sellers are becoming the norm.
A study by O2 has revealed that national 5G infrastructure will also add an extra £3 billion a year through secondary supply chain impacts, boosting overall UK productivity by a total of £10 billion, which, as I have already said, makes good, sound economic sense. With improved connectivity comes greater economic growth, more jobs and improved links between business hubs and individuals alike. Although today’s Bill will be welcomed by larger providers in the sector as it will relieve some of the burden that they face from increased business rates—£60 million is on offer, which is a big giveaway to them—I worry that it will do not as much as it should for the independent providers, and it will not come close to mitigating the fourfold increase that all providers have faced. Perhaps the Minister can give us some assurances when he winds up the debate. Providers are not the only ones who need assurances; consumers do, too, and they need to know that those costs will not be passed on to them.
Additionally, I am slightly disappointed that this Bill contains only partial measures, instead of the more detailed and wide-ranging set of proposals that were outlined in the Local Government Finance Bill, of which these measures were originally a part. I mention that Bill, which had successfully passed through Committee, as it included proposals on local business rate retention for local authorities as well as the legislation for business rate relief for new full-fibre broadband, which we are now discussing today. However, those fuller measures seem to have disappeared since the general election.
Since that election, I have asked the Secretary of State on three separate occasions about the progress that has been made on delivering business rate retention for local authorities. Perhaps the Under-Secretary of State for Communities and Local Government, the hon. Member for Nuneaton (Mr Jones), has something to say on that. He can intervene on me now or respond in his closing remarks. I ask him again: what is happening to retention and why has business rate relief for new 5G connectivity now been separated into this smaller, separate Bill?
As I have said, I have written to the Secretary of State about this matter and I await his response, although I hope that, by this stage, the Department will do less listening and more acting on this issue of business rate retention. In the spirit of the cross-party co-operation that the Prime Minister is now asking for, and in respect of the exchange of ideas and genuine dialogue between the Opposition and the Government, I suggest that perhaps we can work together on a shared future for local government finance. The local government sector deserves more than a policy and a financial black hole with which it is currently faced with the exclusion of the Local Government Finance Bill from the Queen’s Speech. At the same time, the Government are still announcing their intention to remove the revenue support grant. Perhaps the Minister can clarify that when he closes the debate.
The Secretary of State and I visited the LGA conference last week—admittedly we received slightly different receptions. I am sure that he was reminded again and again by representatives from councils of all political colours of the financial certainty that local authorities desperately need—specifically at a time when they have already absorbed budgets cuts of 40%. However, like me, they have received no updates and no certainty. While we are talking about an element of the business rate in this Bill, perhaps we can remind the Secretary of State that local authorities need to have that clarity and certainty for future financial planning. They need some idea from this Government of where the wider business rate policy is going.
I will repeat what I said during my speech to the Local Government Association: “The Secretary of State told local government that they faced a looming crisis in confidence. He’s wrong. It is this Government who are facing a looming crisis in confidence.” The lack of clarity on business rates and the botched business rates revaluations have left thousands of businesses facing cliff-edge increases in their rates. In addition, the Government’s support package and promises to review the revaluation process go nowhere near far enough.
It is clear that business rates are this Department’s ticking time bomb, which threatens to destroy high streets and town centres across the country. Labour advocates introducing statutory annual revaluations to stop businesses facing periodic and unmanageable hikes, and guarantees a fair and transparent appeals process. We will reform business rates, scrap quarterly reporting and end the scourge of late payments, because it is Labour which is the party of business. [Interruption.] Members can heckle, but the facts speak clearly: this Government have let down business and they have let down local government.
Helen Whately (Faversham and Mid Kent) (Con)
Will the hon. Gentleman just remind us of the Labour party’s policy on corporation tax rates?
Andrew Gwynne
Absolutely. Labour would have increased corporation tax to pay for better public services, but our rates would still have been among the lowest in the G20. It is a question of priorities. We can put money where people want it—in a better NHS, in better local government and in better education—or we can have poorly funded public services and tax giveaways to those at the very top. For all its rhetoric about ending austerity, it seems quite clear that the Conservative party has not changed one iota. There was a further omission to this Bill—
Kit Malthouse
Does the hon. Gentleman recognise that the reductions in corporation tax in the past few years have resulted in a massive increase in the cash collected by the Treasury?
Andrew Gwynne
As I said in answer to the hon. Member for Faversham and Mid Kent (Helen Whately), it is a question of priorities. We can give tax cuts to big business, or we can invest in public services. The point is that we made a very clear choice—[Interruption.] We have differences of opinion on this. The hon. Gentleman feels that having the lowest corporation tax is a good thing, but I think that having a corporation tax that is among the lowest in the world with a better funded public—[Interruption.] It is not an anti-business rant. I am talking about being both pro-business and pro-public services. That is the choice, because our public services are on their knees. If this is the cross-party co-operation that the Prime Minister wants, I am afraid it will be a long time coming.
Several hon. Members rose—
Andrew Gwynne
I will not give way, because we are talking about infrastructure.
Andrew Gwynne
No, I have given way once to the hon. Lady, I will not do so again.
There is a further omission in this Bill—the exclusion of any real and meaningful legislative commitments on growing rural broadband. I am worried that there appears to be absolutely no mention in the body of the Bill or the explanatory notes of growing and expanding the UK’s superfast broadband in our rural areas, although the Minister touched on it and I think there is some consensus about its desirability.
Let me give a short anecdote. Last year, I was privileged to be in a delegation to Zambia for the Inter-Parliamentary Union Assembly. In the middle of Africa, in the middle of nowhere, on a visit to a health scheme near the Zambezi river, I received an almost-perfect 4G connection to my mobile phone. There are parts of my constituency where I do not get such a perfect 4G connection. We need to look at our internet connections, broadband connections and mobile telephone connections in this country so that we have the very best to support business, consumers and individuals.
As I am sure the Minister is aware, many families living in rural areas struggle to get anything close to fast broadband, let alone 5G, which is what we are discussing today. Many others struggle to get anything above 2 megabits per second, making most average use of day-to-day internet functions incredibly frustrating. The impact on rural businesses is steep, with the Select Committee on Environment, Food and Rural Affairs warning before the 2015 general election that rural communities are being overlooked for potential investment by businesses looking to expand and develop because certain regions have very poor digital connectivity. The then Chair of the Committee, the former Member for Thirsk and Malton, said:
“There is a risk in the current approach that improving service for those who already have it will leave even further behind those who have little or none.”
Rather than taking responsibility for this ever-growing chasm in our technology and identifying specific areas that desperately need investment, the Government have chosen to rely solely on the market to encourage improvements in any given area.
Matt Hancock
That is not the case. The Digital Economy Act 2017, which was the last Bill passed in the previous Parliament, gives us the power to require a universal service obligation so as to get high-speed broadband to everybody.
Andrew Gwynne
Well—[Interruption.] Exactly. As my hon. Friend the Member for Oldham West and Royton says, the Minister should share that with his Back Benchers. In all parts of the House, there is growing dissatisfaction with some rural broadband connectivity, its impact not just on consumers but on businesses, and the slow pace of improvement. It is clear that the Government ought perhaps to use their powers to ensure that those improvements happen, because it is a massive frustration for those communities and businesses—I see him nodding his head in agreement.
Andrew Gwynne
Will the hon. Lady to let me answer the Minister’s intervention before I take another?
I am grateful to hear that from the Minister, and we will hold the Government to account to ensure that that intervention takes place. As he knows, we are all here to ensure that improvements happen, and if he has given a commitment from the Dispatch Box that he will use his ministerial position to ensure that the market is not a free-for-all and that the Government will ensure those improvements in rural areas, for rural businesses and consumers, the Opposition will support him.
Helen Whately
I thank the hon. Gentleman for giving way to one of the Back Benchers he mentions. Yes, many of us are campaigning on behalf of our constituents for better broadband, but on behalf of many of my constituents I appreciate that 20% of properties have been connected to superfast broadband thanks to the Government’s intervention. I expect up to 100% to be connected thanks to further Government intervention through the universal service obligation, as the Minister mentioned earlier. I look forward to being very grateful to the Government for all the work they are doing for my constituents.
Andrew Gwynne
I am grateful to the hon. Lady for that intervention, because, of course, it was not just the Government who did that. I do not know whether she was a remainer or a leaver, but it would be remiss of the House, whatever our views on Brexit, not to acknowledge the involvement of the European Commission in funding some of the roll-out of this infrastructure and technology. It has come not just from the Government but from others, and we can see the European flag stickers on boxes, cabinets and infrastructure up and down the country.
Andrew Gwynne
I am afraid that I have upset the hon. Gentleman by mentioning the word “Europe”.
Kit Malthouse
The hon. Gentleman has to recognise that there is also a downside to EU involvement. I know that my right hon. Friend the Member for Wantage (Mr Vaizey) struggled for a long time with EU state aid rules and the roll-out of broadband and, certainly for small businesses, had to come up with a slightly Heath Robinson-esque scheme of vouchers to get around the rules. If anything, they hampered roll-out rather than assisting.
Andrew Gwynne
The hon. Gentleman is absolutely right. I am not saying that everything was perfect with that scheme, or with the European Community and European Union. I was merely pointing out in response to the intervention from the hon. Member for Faversham and Mid Kent (Helen Whately) that it would be remiss of us to suggest that all the funding came from central Government when it came from a variety of sources, including the European Commission, to which all those stickers are a testament.
As I have said and as the Minister has acknowledged, our rural areas need a long-term investment strategy, not just short-term subsidy, helpful though that is. I look forward to holding the Minister to account while he is in this post to ensure that he makes good on his word. The short-term subsidy will help, but we need to ensure that investment continues apace beyond the five-year deadline of this business rate relief and we need continually to update our internet connections with the latest technology.
The Opposition’s focus is to encourage investment in all communities by excluding new investment in plant and machinery from future business rates valuation, which will free up medium and large businesses to invest in any area of the country. The country needs fresh ideas to meet the emerging challenges of the new century, yet what we have seen today, in a stripped-down Bill, is the lack of a comprehensive and compelling legislative framework that supports all businesses and local authorities on business rates.
I desperately plead for the co-operation the Prime Minister has asked for. I hope that it is genuine and heartfelt, and that she looks for ideas from the Opposition, which we are more than happy to provide to the Government—ideas to improve our infrastructure in cities and in rural areas, to update our connectivity, not just physically but through the cloud and other technologies, and to use emerging technologies to benefit British business, which will be crucial if we are to keep a competitive advantage in the uncertain years ahead. As we remove ourselves from the EU and strike a new set of trade deals across the world, we must keep that competitive edge. I agree with the Minister that new and emerging technology and infrastructure is part of the mechanism to drive Britain’s economy in the face of the new challenges that lie ahead.
We will not divide the House tonight. We will look to strengthen the Bill in Committee and we will continue to challenge the Government on their wider local government finance policy until we get the answers and certainty that local government so desperately needs. Technology and infrastructure are vital to building Britain’s capacity to grow and develop in a changing world in which we look to new and emerging markets. It is incumbent on whichever party is in government in future to work constructively with others to ensure that Britain’s infrastructure is kept as up-to-date and as state-of-the-art as possible.
In that respect, we cautiously welcome the Bill. We will seek to strengthen it in Committee, but let us work together on some measures for future local government finance because, as the local government Minister knows, local government needs that certainty.
Mr Edward Vaizey (Wantage) (Con)
I am grateful for the chance to speak under your chairmanship for the second time, Madam Deputy Speaker. I refer hon. Members to my entries in the Register of Members’ Financial Interests.
It is a great pleasure to take part in this debate. I thought it might be narrowly-focused, but I have judged, from the interventions on the Minister, that this is clearly going to be yet another talk-fest about the quality of broadband in individual Members’ constituencies. That means I will have to stay for the whole debate to ensure that hon. Members are not too rude about me. I know that they are unswerving in their support of the Minister, but they always liked to have a go at me when I did his job.
It was quite good to hear the Opposition spokesman, the hon. Member for Denton and Reddish (Andrew Gwynne), as he spent very little time actually talking about broadband, which shows how well the job has been done. He finessed his speech to talk widely about the important issue of business rates, but only mentioned broadband briefly. I understand why and respect his reasons because, under the stewardship of the Minister, we have of course seen the most successful rural broadband programme ever devised anywhere in the world. There was meant to be a cheer there. [Hon. Members: “Hear, hear!”] I will give hon. Members their cue points as I go through my speech.
This incredibly successful programme has delivered superfast broadband to 4.5 million premises for a few hundred million pounds. Most of that money, if not all of it, will come back to the Government because the way in which the contracts were constructed means that the money starts to be paid back once take-up passes a certain threshold. I echo the words of my hon. Friend the Member for Faversham and Mid Kent (Helen Whately). She talked about the 20% of premises in her constituency that have superfast broadband. It is very important that we see our cup as half full. The Opposition Chief Whip spends his time thinking his cup is half full at the moment—[Interruption.] Oh, he is the Deputy Chief Whip; well, for me, he is really the Chief Whip. I digress. We hear from people who do not have broadband and are waiting for superfast broadband, and it is absolutely understandable that they are irritated. Those voices obviously grow louder as superfast broadband spreads, and as more people have access to this fantastic technology.
I got involved in the debate about business rates for broadband many years ago. In fact, when I was in opposition, I used to tease the then telecoms Minister, the right hon. Member for East Ham (Stephen Timms). I came up with an Opposition policy to reduce or eliminate business rates on telecoms infrastructure because every provider I went to told me that business rates were a big impediment to investment. I challenged the then Minister, asking him what on earth he was going to do about that, because the Valuation Office Agency was in charge of the business rates and it was the Minister’s job to take the agency by the scruff of the neck and sort the situation out. Of course, when I got into office, I realised that there was absolutely nothing I could do about it. The Valuation Office Agency is independent. It decides the level of business rates and it certainly sees off any Minister who tries to alter its independence or affect its judgment—quite right too.
The other row we had was about the fact that BT apparently gets a better deal on its business rates compared with some of the smaller providers. My understanding is that that is because of a long-standing court case brought by BT. BT also has much more infrastructure in the ground, so it is able to cut a wholesale deal with the Valuation Office Agency, but it is much more difficult for small providers that are getting under way. It is one of those unfortunate things. The point that I am trying to make, in my own rambling fashion, is that the impact of business rates on investment in broadband infrastructure is real. It is one of the factors that people take into account when they are trying to build infrastructure. The Bill is a very welcome measure to address that problem.
Madam Deputy Speaker, I do not know if you have actually read the Bill, but it is the most boring and technical Bill that I have ever read. There are only six clauses. I saw six officials sitting in the Box and wondered whether each had been given a clause, because the chance of making it to the end of drafting even one clause is almost impossible. I do not know whether any of my hon. Friends suffer from insomnia under the stress of doing this job. If so, I strongly recommend that they take the Bill home; they will be sound asleep by halfway through clause 1. However, I understand the thrust of the Bill, which aims to encourage new investment in broadband infrastructure by suspending the levying of business rates. That is the best way to do it, and the Government have calculated that something like £60 million of savings could be made.
I echo what the Minister said at the Dispatch Box. I hope that all new infrastructure providers—people have mentioned companies such as Gigaclear and CityFibre—will take advantage of this. The Bill is aimed squarely at them to remove a financial barrier to further investment. The Government are trying to move to the next phase of broadband roll-out. The key task of the previous Parliament was to get workable broadband with speeds of about 24 megabits to as many people as possible. That has pretty much been completed. I understand that, under the universal service obligation, people in the last 5% of premises might get lower, but still workable, speeds. We are starting to build the future-proofed infrastructure to deliver fast and reliable broadband at speeds of above 30 megabits. Those are the kinds of broadband speeds that we will be able to dial up as more people make use of the technology. We all know—this does not need to be rehearsed—how much technology and data are now used, and the kind of bandwidth needed for the average home with two teenagers and parents watching 4K content, let alone for somewhere with business needs.
Planning is a much bigger impediment than business rates. A lot of people forget that. They think it is easy to build this infrastructure, but it is not at all. One comes across far too many cases of councils not being co-ordinated. There are cases of broadband providers having to go to five different council departments to get permission for way leaves, to dig up the highway and all the other permissions they need to build this infrastructure. We really need to get to grips with this in some shape or fashion.
In the spirit of co-operation that the Prime Minister announced this morning, let me suggest that the Labour Front Benchers talk to the Mayor of London. There must be an opportunity for him to set up a broadband taskforce to get all the London boroughs to co-ordinate their planning. I have heard of councils—it does not really matter what political colour they are—not granting way leaves to providers who wanted to provide broadband for social housing in London. I have heard of councils that did not want the green boxes on their pavements because they did not like the design. I have come across councils that refused to let broadband providers go ahead with future work, because they did not clear up after their previous work. Now, I understand councils’ irritation, but they are still holding things back. It is an incredibly dull point, but there must be an opportunity to co-ordinate the planning functions of the London boroughs, as well as of councils across the country.
Michael Tomlinson
May I disagree vigorously with my right hon. Friend by saying that it is not a boring point? It is actually very important that these companies clear up after themselves, because it causes reputational damage when they try to deliver superfast broadband and leave a mess behind. That does cause concern to residents, and it has caused concern in my constituency. He may say that it is a bit of a dull point, but it is important for companies to get things right so that they can be encouraged to do more in future.
Mr Vaizey
I thank my hon. Friend for that point. In fact, although I welcome Virgin Media’s investment in cable in Didcot, the company has irritated quite a few of my constituents on the Ladygrove estate, so he is right that companies should clear up after themselves. I suppose I did not make myself entirely clear; my point was that, while councils should hold companies to account, their retribution should not be, “You can’t do any more work,” because they would be punishing constituents for companies’ past transgression.
Clearly, the Government want to encourage full fibre—fibre to the premises. It is true that we are falling behind some other countries. Spain, for example, is well advanced, but that is an historical advantage, because the infrastructure was put in 30 years ago, with extraordinary foresight. One also has to remember the topography of the built environment, because the more apartment blocks—as opposed to spread-out domestic homes—there are, the easier it is to deliver broadband quickly.
One should also not necessarily be seduced by statistics. Members might see, for example, that France is ahead of us in terms of fibre to the premises, but that fibre is in the same place as fibre to the cabinet, so very few people take it up, and a lot of people would say that it is wasted investment. The incremental approach taken in the UK so far—of getting universal coverage for superfast broadband and then moving on to fibre to the premises—is the right approach, because it keeps pace with customer demand. That is what has to happen.
The good news about fibre to the premises is that the cost of investment is coming down rapidly. TalkTalk has conducted trials in York, and what has happened is telling. The company has got the cost of connecting each home down to a few hundred pounds—£200, £300 or £400, I think. Also, people now talk about the impact on the community—about whether their house is in the green zone, which is where the fibre to the premises is, and people want to be there. Interestingly, customers do not actually care whether they can access 1 gigabit; what they get by having fibre to the premises is an absolutely 100% reliable service, whereas even those of us who have signed up to superfast broadband know that the service can drop out.
This is a very important and welcome Bill. I would simply ask the Minister when he sums up—I do not know whether it will be the Secretary of State or my right hon. Friend the Minister for Digital—to talk a little about whether the Government have considered how this relief impacts on mobile infrastructure. The roll-out of 4G in this country has been very successful, and we should not forget that it has all been done through private investment. When we rail against the mobile operators, we have to remember that they pay us—the taxpayers—by paying in to the Treasury coffers for spectrum, and they then build out their networks, effectively with their own capital. However, they come across the most bizarre planning issues all the time, and although the Minister talked about the electronic communications code, which will help to make mobile planning easier, we could perhaps hear about whether the Bill will apply to the fibre that goes from the masts back to the cabinets, or whether it could be amended so that mobile masts were free from whatever business rates these companies pay.
I would also like to hear how the Bill will encourage the roll-out of 5G, which will potentially transform everything. What we need are small cells dotted throughout the urban environment. The company Arqiva is already trialling a 5G network with its own spectrum. Again, we potentially need a rethink on planning to make it much easier for mobile companies to roll out these small cells. Given the dense coverage companies need, requiring them to get planning permission for these small cells will be a real hindrance to the fast roll-out of 5G.
As I made my remarks, I could tell that I had the full attention of the House. I noticed one or two yawns and a few slightly irritated looks as people thought, “When is this guy going to finish so that I can make my speech about our rotten broadband and get it in my brilliant local paper?” Well, the time is now, because I have finished.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
On behalf of my Plaid Cymru colleagues, may I congratulate you, Madam Deputy Speaker, on your election as a Deputy Speaker? We are looking forward to working with you and serving under your guidance for the duration of this Parliament.
I will keep my contribution short, because, to all intents and purposes from a Welsh perspective, this is an enabling Bill. We broadly welcome the provisions outlined in it, which provide powers for Welsh Ministers to award business rates relief to properties used to facilitate the transmission of broadband and mobile communications. This is at least one step in the right direction for my constituents, who have seen little digital dividend from the hundreds of millions of pounds spent on broadband and mobile signal to date.
I do, however, have some concerns about the UK Government’s strategy of incentivising only the most advanced technology. As I understand the Bill, the plan in England is to provide 100% business rate relief for technology that supports 5G and ultrafast broadband. As we heard in an earlier intervention, that has a budget of around £60 million, which equates to Barnett consequentials for Wales of around £3 million, and that will just go into the general Welsh Government pot. If I have one message for today’s debate, it is that it is vital that the Labour Welsh Government ring-fence that cash so that that money is not spent on pet projects.
Some 40% of my constituents are unable to access high-speed internet, and an even greater proportion are unable to get a 3G or 4G mobile phone signal in their homes. It is clear that we have a selective connectivity problem in Carmarthenshire. There is no doubt that that is holding back Carmarthenshire and the Welsh economy. We have no hope of making progress in developing our economy unless we can get to the bottom of the telecommunication infrastructure problems we face. If we were able to do so, I am confident that we would have a bright economic future in Carmarthenshire and in Wales, due to the incredible natural assets we have as a county and a country.
I am fortunate enough to have been born and raised in one of the most beautiful parts of the world, and I have no hesitation in saying that. We have a range of incredible leisure activities. One of the things that I think we will see in the modern workplace is that work and leisure time will become compressed, with people looking to set up their businesses where their leisure activities lie. Those who like horse riding, cycling, mountaineering, canoeing or surfing will find all those incredible leisure activities in abundance in Carmarthenshire, and I am confident that if we were able to deal with the basic telecommunication infrastructure problems we face, we would be able to put forward a very attractive economic package for investors and people looking to set up their businesses in our beautiful county.
While I urge the Welsh Government to use the powers and the Barnett consequentials awarded to them through the Bill to incentivise connectivity improvements in Wales, I call on Welsh Ministers to take an alternative approach to that put forward by the UK Government. It is vital that future investment, at a bare minimum, should enable rural Wales to reach a level playing field, before we start subsidising the most advanced technologies. The connectivity inequality in our nation needs to be eradicated, not entrenched, but I am afraid that we have seen the Government and providers concentrating investment over recent years on easy hits—on the large cities and the large towns in my country—while the more rural areas have been deliberately left behind.
The Welsh Government, via this Bill, must now use these powers and consequentials wisely. Rather than only incentivising the most advanced telecommunications technology, it is time that something drastic was done to incentivise the building of telecommunications infrastructure in rural areas such as the communities that I am very fortunate to serve in Carmarthenshire.
Simon Hoare (North Dorset) (Con)
I suppose I should apologise to the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Nuneaton (Mr Jones) because the last time I was called to speak in a debate with no time limit, the subject was the local government finance settlement in 2016; I think that his scars have only just about healed. I was starting to take it a bit personally: every time I got called to speak, a new time limit was suddenly imposed, usually shorter than that which had gone before. My neighbour, my hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson), has suggested that one is imposed pre-emptively on my getting up to speak, but I hope, Madam Deputy Speaker, that you will resist his cri de coeur.
I am not going to talk with the authority of my right hon. Friend the Member for Wantage (Mr Vaizey), because he speaks with great experience about these matters, but I want to make some points. First, I very much welcome this Bill, particularly the fact that it appears to be the result of a collaboration between three important Government Departments—the Department for Communities and Local Government, the Department for Digital, Culture, Media and Sport, and the Treasury. That sort of joined-up working of three Departments coming together to identify a problem and create a solution is to be welcomed, and it signposts a very-likely-successful governmental modus operandi for the five years of a Conservative Government that we have ahead of us.
I find myself almost reaching for the smelling salts and some form of remedial medication in agreeing with the Labour Front Bench spokesman, the hon. Member for Denton and Reddish (Andrew Gwynne), although I would probably approach this in a slightly different way. I welcome the proposals in the Bill to help speed up and underscore the importance of the delivery of broadband. In relation to local government, particularly in small shire districts that are always seeking to be more efficient, I hope—indeed, I know—that my hon. Friend the DCLG Minister will be taking the reduction in the funding stream of non-domestic rates to a local authority into consideration as he evolves the new funding settlement for our local councils, which do so much good work to deliver these services. I thought that the hon. Member for Denton and Reddish made that point well, and I am sure it will have been heard on both sides of the House. The delivery of broadband and the delivery of those local council services are important, very often, to exactly the same constituents who need both.
I hope that this Bill and the proposed financial incentive, if that is the correct word, will act as a spur to existing providers to deliver on the notspots that are very prevalent, particularly, though not exclusively, in our rural areas, where the economic case for delivery is either non-existent or marginal, or where, as a result of further economic investigation, it has fallen outwith the confines and constraints of the initial contract usually agreed between a county council—in the case of Dorset, as with so many—and British Telecom.
My right hon. Friend the Member for Wantage spoke with huge authority and experience, and I do not demur from anything that he said. My right hon. Friend the Minister for Digital talked about the evolving technologies that mean that this will not just be about wire, copper, fibre and so on, as fixed wireless and satellite are playing a part. This has been a long-running debate. I look to my hon. Friend the Member for Boston and Skegness (Matt Warman)—he does not look to me, but I look to him—who has done so much to promote the delivery of rural broadband: so much, in fact, that he has been rewarded by being made a PPS in the Department, which means that he can no longer speak on the subject. This is clearly the route to promotion: talk with authority and knowledge on a subject and then get zipped up and silenced for many years to come. Perhaps that is why I got moved from DEFRA to the Home Office—I do not know.
This subject has knocked around in public and political debate and in the media for a long time, so it is worth while, with your indulgence, Madam Deputy Speaker, pausing for a few moments to remind ourselves of the most enormous strides made in broadband provision for all our constituents and constituencies, urban and rural. Yesterday afternoon, I ordered something online—I am going to tease the House by not saying what the object was—to be delivered to my house tomorrow morning. The sketch writers, and indeed anybody else, may wish to run some sort of book on what it was. All I will say is that it is not something I would have guessed one could have ordered online even three or four years ago. My hon. Friend the Member for Witney (Robert Courts) is looking even more perplexed than usual. I was struck by the huge change that this technology has made, and this Bill helps to underpin its delivery.
From a rural point of view—and what could be more rural than North Dorset?—it is worth re-amplifying the benefits that are derived from fast and superfast broadband and that will be further helped by the contents of this Bill. It was a pleasure to follow the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), who was right to point out, as I do, the huge unlocking of tourism potential in the promotion of hotel rooms, rooms in pubs, visitor attractions and the like, and in interactive tourist information centres in areas where local authorities may have withdrawn from face-to-face, over-the-counter visitor services. It will be absolutely crucial for the farmer in my constituency who is trying to buy or sell stock or make their submission to the Rural Payments Agency to have fast, reliable broadband of a speed and a regularity of service that no longer drops off just as they reach that crucial moment of hitting “send” or loading up that large map.
The issue is also crucial for small and medium-sized businesses. I am thinking of two in my constituency, both of which happen to be based in a small market town called Sturminster Newton: one is Crowdcomms and the other is Harts. Crowdcomms provides online and interactive platforms for large international conferences. It has offices based in Seattle, Sydney, and Sturminster Newton—it is there because the town has 4G.
Harts of Sturminster is one of those wonderful shops, Madam Deputy Speaker, that I know you will cherish and love as I do. It is the sort of shop that you walk into and do not say, “Do you sell?”, but merely ask, “Where can I find?”, because it sells absolutely everything, from powdered egg, to blackout curtains, to knicker elastic and sock gaiters—it is all there. You require none of those things, Madam Deputy Speaker. [Interruption.] My right hon. Friend the Member for Wantage says that he now knows what I was ordering, but he would be wrong on all counts.
The shop makes its largest sales from its cookware department online. This is in a small market town that, until a few years ago, had as its main centre of industry the largest calf and livestock—particularly cattle—market in the whole of the south-west. Broadband is transforming local rural economies, creating good-quality, high-tech jobs. It also helps—we forget this at our peril—with the delivery of a whole raft of other things in rural social life, including for small villages that are geographically disconnected and not particularly well served by rural public transport.
We now have faster broadband service provision than has hitherto been the case, which helps with promoting charitable and fundraising events. I remember the frustration on my wife’s face as she tried to download posters for events she was organising for the St Gregory’s parents, teachers and friends association, but that has been transformed by the faster speed. Everybody in North Dorset now knows—as does everybody who reads the Official Report—that St Gregory’s summer sizzler event will take place in Marnhull this Friday. Everybody is invited. It is a huge fundraising event for our local school, the promotion of which is better enabled by broadband.
Mr Vaizey
I know more about my hon. Friend’s life now than I did five minutes ago. The entire House still wants him to reveal what he ordered online last week that he could not have ordered four years ago. That is a terrible omission from the tour of his domestic online arrangements.
Simon Hoare
I am going to tantalise the House still further by telling my right hon. Friend that it was inflatable and made of rubber. Before you rule me out of order, Madam Deputy Speaker, I will explain that it is a small, two-man dingy for my elder daughter and me to do a little bit of rowing and mackerel fishing during our summer holidays. Right hon. and hon. Friends may be pleased, disappointed, depressed or made despondent by that explanation.
Simon Hoare
My hon. Friend says that she is relieved that it was something so entirely innocent and innocuous.
Fast broadband, which allows us to watch telly and order online, will of course help address rural isolation, which is particularly significant in an area such as mine. FaceTime and other mechanisms will help keep families together by keeping those intergenerational conversations going when geography means that a weekly visit may not always be appropriate, feasible or affordable.
Towns such as Sturminster are not unique. Glastonbury, which I think is in the constituency of my hon. Friend the Member for Somerton and Frome (David Warburton), has lost all of it banks—[Interruption.] I am sorry: Glastonbury is in the constituency of my hon. Friend the Member for Wells (James Heappey).
Amanda Milling (Cannock Chase) (Con)
My hon. Friend mentions banks on the high street. Several branches in my constituency have shut and one of the arguments I hear is that people can use online banking, which is the very reason we need to ensure that we have excellent broadband facilities.
Simon Hoare
My hon. Friend makes my point far better than I could. She is absolutely right. The town of Sturminster has lost two banks in the past year and will lose its third bank at the end of this year. Private and business customers are told that internet banking is available. That is fine, so long as the speeds and the service are reliable enough to allow them to remember why they logged on and which financial transaction they wanted to undertake. That situation is not unique to my part of the world.
Wendy Morton
I did not use the word “relieved”; I said that I was reassured. Does my hon. Friend agree that rural areas such as Sturminster need a good broadband speed to enable people to access banking services that no longer exist on the high street? That will enable small businesses in particular, including those that are part of the gig economy, to operate in a business environment that does not leave them at a competitive disadvantage compared with those parts of the country that already have good broadband coverage.
Simon Hoare
My hon. Friend is absolutely right. Who among us has not visited an agricultural show or small business that cannot afford the necessary infrastructure for the interconnected pieces that allow people to pay by credit card or contactless? However, by plugging a whizzy device into an iPhone—my right hon. Friend the Minister for Digital and my right hon. Friend the Member for Wantage know all about this, but it baffles me—my credit card can be charged for whatever service I have purchased, thereby helping small and medium-sized businesses. That also helps particularly, though not exclusively, those people who make and sell things from home and do not have commercial premises from which to trade.
The Bill is helpful for all those reasons. It will also help the next generation. Television and other advertisements always focus on getting faster film, the latest cartoon, watching sport and so on, all of which is welcome and laudable. There is also, however, potential for huge learning opportunities for our young people through the delivery of education in a 21st-century setting. That will, I hope, boost and bolster our productivity, and it can all be assisted by superfast and reliable broadband.
Over the past seven years, the Government have made the most enormous strides. We have occasionally beaten up our Ministers and others, saying “I’ve got this village or that hamlet that isn’t covered.” As I said at the start of my speech, this issue is not reserved solely to the rural setting; it is also an issue on the edge of Tech City here in London and elsewhere. However, if we pause and look at the data, we will see that, notwithstanding some of the problems we have had, we are striding ahead of many of our European friends, who are also our economic and commercial competitors, in providing access to broadband. We should not always beat ourselves up. At a time when we are all being fed the negative and “the anti”, this is something about which the Government should be duly proud, as my right hon. Friend the Member for Wantage has said.
The Bill is a fundamental and very important next step. We hope and believe that it will assist better and faster delivery in our rural areas in North Dorset and across the county of Dorset. It has my full support. The Ministers promoting it have my admiration and encouragement, and I look forward to seeing it make speedy progress through this House.
Kit Malthouse (North West Hampshire) (Con)
It is a pleasure and an honour to follow my comrade and hon. Friend the Member for North Dorset (Simon Hoare).
On my first day in this House, I was told by an older Member that if I wanted to keep something secret I should make a speech about it in the House of Commons. And so it was that on 13 September last year I gave a speech on the subject of this Bill and called for 100% rate relief of new fibre networks. I even went so far as to draft an amendment to the Digital Economy Bill, not to give that rate relief but to require the valuation office to produce an annual report on the impact of the rating system on competition in the telecoms sector. Various players in the industry had presented me with the ridiculous conundrum that it was cheaper for them to rent fibre from BT than to pay the rates bill on putting in new fibre themselves. In their view, that entrenched the near monopoly of BT and gave it an enormous structural advantage, which was basically choking off competition.
I spoke on Second Reading of the Digital Economy Bill, drafted an amendment and had a fruitful conversation with my right hon. Friend the Minister for Digital, who is no longer in his place, who persuaded me that, given some of the other amendments I had tabled, I should leave my proposal to the Government to mull over for some months and that they would give it some serious thought. Imagine my pleasure and surprise, first when it appeared in last year’s autumn statement, and now, even more so, that it has appeared in this Bill. It will provide an enormous boost to competition in the sector. There is no doubt that the asymmetric deal on business rates between BT and new entrants is choking off new investment in large parts of the country. Smaller companies have very little incentive to compete directly with BT; they have to look for areas of the country that are currently unserved or un-commercial in order to try to make their networks pay. As a result, innovation is hard to come by.
BT has been helpful to me and my constituents, as I know it has been to several other Members, and I hope it will take the Bill in the spirit in which it is intended. Those of us who believe in a market economy think that competition is good. We think that it will be better not only for the consumer, but for BT, because it will drive the company to greater innovation, efficiency and, we hope, profit.
The Bill represents a welcome move towards seeing broadband and telecommunications as utilities. Over the past few months, steps have been taken in legislation towards that position. The building regulations have been changed to make the provision of broadband compulsory in new developments. Broadband will, I hope, be provided as a universal service over the next few years, and now non-domestic rates are being lifted on parts of the network. Broadband is increasingly being treated—as water, gas and electricity are—as a vital utility, which is what it is becoming. I am pleased about that development, and I hope that broadband will continue to be viewed increasingly as a utility.
In a constituency such as mine, broadband is incredibly important for a successful, vibrant countryside. If the countryside is to compete with its urban neighbours, it needs to be connected to the world. These days, that social and economic connection takes the form not of roads, dual carriageways or motorways, but of superfast broadband. My constituency, like that of my hon. Friend the Member for North Dorset (Simon Hoare), is peppered with enterprises that do most of their business online. Hon. Members will be pleased to know that on Saturday I attended the Amport fête and came across a brand new and very pleasing business called Test Valley Gin, a new brand of gin that is taking the market by storm. Kate Griffin, the inventor of this gin, is having some success. The 36 bottles she produces each week are selling like hot cakes, many of them online on a website called theginstall.co.uk.
Andrew Gwynne
My ears pricked up when the hon. Gentleman mentioned gin. Perhaps, in the interests of cross-party co-operation, he could share some around?
Kit Malthouse
I have to confess that I was so taken with the small sample that I tried—I was driving—that I bought a bottle. Perhaps I will bring one in. I did wonder whether the House of Commons authorities might start serving Test Valley Gin in the bars. It is an excellent drink, infused with a secret recipe of local herbs and spices, and I can recommend it.
Michael Tomlinson
I had the great pleasure of being in my hon. Friend’s constituency yesterday, although I beg his forgiveness for not seeking his permission. Hon. Members will be pleased to know that I went purely for a cricket match, and I did not think that I was obligated to seek his permission to play cricket in his wonderful constituency. He is making an important point. Broadband is increasingly important in all our constituencies, and I believe it is as important as road and rail. It is a part of our infrastructure that our constituents just cannot do without.
Kit Malthouse
My hon. Friend is absolutely right. He is very welcome to visit my constituency at any time. In fact, I am surprised that he has only been once recently, and he should come more often. My door is always open.
Ensuring that villages are connected to the world is becoming vital to maintaining rural life. Rural residents find it increasingly ridiculous that they can see broadcast-quality footage of Tim Peake in the international space station but they cannot go online and post complimentary comments on my Facebook page, as my constituents increasingly seem to do.
Simon Hoare
I suggest to my hon. Friend that his constituents might wish to do the former more often than the latter.
Kit Malthouse
I think that is rather churlish of my hon. Friend, given how complimentary I have been about him. I hope that one day I will reach the level of popularity and name recognition in my constituency that Commander Peake has reached in the world.
Small business is becoming increasingly important in rural areas. Some 25% of small businesses—nearly half a million—are located in rural areas, where they provide lots of employment and create wealth. The Bill points to a wider issue with which the House will have to grapple over the next few years—the hon. Member for Denton and Reddish (Andrew Gwynne) mentioned it—and that is the appropriateness of the business rate system. We are applying a tax first devised in 1572 to a 21st-century economy, much of which exists somewhere in the cloud. The Bill acknowledges at its core the disproportionate impact of business rates on competition in this sector. Those of us who have rural constituencies—indeed, anybody whose constituency contains a high street—understand the disproportionality of business rates for retail businesses, particularly now that more and more people buy things online, as my hon. Friend the Member for North Dorset said. If we are to keep our high streets vibrant, keep our businesses working and maintain the competitiveness of the rural economy against the huge businesses that these days operate from nowhere, I question whether taxing property—frankly, taxing investment and expansion—remains an appropriate way to gather the revenue that we need.
There will come a point, over the next couple of decades, when we have to consider shifting taxation on corporations away from property and profit, and towards turnover. If we taxed the turnover of the large multinationals —the Googles and the Amazons—we would collect more from them than we currently do, but in a fair way. Small shops on the high streets in North West Hampshire compete with corporations that transact in this country, dispatch goods from a second country and book the profits in a third country. We have to think about the asymmetric nature of the taxation of those organisations if we want to create a level playing field for competition.
I welcome the Bill. I welcome the move towards the designation of broadband as a utility and the recognition of the distortive effect of business rates on commerce. I hope that over the next five years or so, many companies will take advantage of the rate relief window. I suspect that at the end of that period it will be somehow extended, and I hope that any such extension will become permanent. I hope that businesses will take advantage of the window and come to North West Hampshire to plaster my entire constituency with broadband fibre, to the cabinet and to the premises, with my pleasure and approval.
Helen Whately (Faversham and Mid Kent) (Con)
Like several Members here, I have the pleasure of representing a beautiful and very rural constituency. In fact, 42% of my constituency is part of an area of outstanding natural beauty. It is a lovely constituency in which to walk, have picnics and spend time. It is fabulous for farming, but less good for connectivity.
Over the two-and-a-bit years for which I have been the Member of Parliament for Faversham and Mid Kent, I have received letters—and occasionally emails, if people have managed to get online—from constituents in many villages including Headcorn, Kingswood, Doddington, Eastling, Selling and Sheldwich. Those are all lovely villages, but they struggle with connectivity, and residents have had difficulty getting fast broadband.
In several of those villages, it can be difficult even to get a mobile phone signal. A couple of months ago, during the general election campaign, I was in Headcorn, and I thought I might tweet a picture from Headcorn station. Not only did I not have 4G on my mobile phone, but I did not have any mobile phone signal at all. I could not even make an old-fashioned mobile telephone call or send a text message. There are parts of my constituency, such as that patch of Headcorn, where unless people happen to be with the one operator serving it a little, it is impossible even to make a mobile phone call.
My constituency wants to have better broadband and better mobile phone connections, and that is why I welcome the commitment this Government have been and are making to connectivity across this country. As I mentioned in an intervention, thanks to the Government’s programme of rolling out high-speed broadband, 8,432 properties have now got a high-speed broadband connection that would not have had one without the programme. By September 2018, I am expecting about 2,000 more properties to be on high-speed broadband thanks to the programme. That amounts to 25% of the properties in my constituency being connected thanks to this Government’s work and commitment to high-speed broadband, and it will get Faversham and Mid Kent up to about 90% of properties being on high-speed broadband.
We are still some way off the 100% level that I would like, so I very much welcome the universal service obligation that is coming into force. I pay tribute to the work of my hon. Friend the Member for Boston and Skegness (Matt Warman) in campaigning very hard to put that into law. I also welcome the commitment made earlier by my right hon. Friend the Minister from the Dispatch Box that the financial cap will be high enough to make sure that 100% of properties in constituencies such as mine receive access to broadband of at least 10 megabits per second. That is not the high speed that we hope will be delivered by the Bill, but for those who have no or incredibly slow broadband at the moment, 10 megabits per second will make a great difference.
All of us who represent rural constituencies know the difference between the haves and the have-nots on broadband, but having high-speed broadband is genuinely life changing. It enables us to do things that we now consider everyday functions of life, and whether it is sending emails, booking tickets or flights online, choosing hotels or B&Bs, comparing offers on travel insurance or car insurance, or shopping for groceries, there is so much that those of us with high-speed broadband take for granted. However, in my constituency, some people still do not even have such access.
Mr Ranil Jayawardena (North East Hampshire) (Con)
Will my hon. Friend not add watching BBC Parliament so that all her constituents in Faversham and Mid Kent can see her excellent speech?
Helen Whately
I thank my hon. Friend very much, although I doubt whether even one of my constituents is watching my speech. I will not hold my breath while waiting for confirmation.
We know that children, including mine, often get set homework tasks requiring them to look up things on the internet. If a child lives in a rural village or at the end of a track and they cannot get online, they are disadvantaged. There is also the very basic thing of staying in touch with distant relatives, who often live all around the world. I remember when I was a child that the cost of making an international call was enormous. During my gap year as an 18-year-old, I made two phone calls to my parents in nine months, because it cost such a huge amount to phone home, but people can now make video calls basically for nothing so families around the world can stay in touch. As older people go online—many people in their 70s, 80s and 90s are very active internet users—I hope that the internet will be one way in which we can tackle the challenge of loneliness. For someone to make a FaceTime call to their grandma or grandpa is a great way for them to keep in touch, and that is often much easier if it is very difficult to go to see them.
There is also the question of the use of the internet for work, where it can make a huge difference for rural areas, as it does for the economy in general. It enables people to work from home—I have two caseworkers who do most of their work supporting me and my constituents from home, which enables them to juggle that work and their family commitments—and I know that a huge number of people in my constituency now run businesses from home, including many quite significant rural businesses. There is a fabulous business called Bombus around the corner from where I live just outside Faversham, which makes amazing products out of maps. If any hon. Members want interesting products based on maps of their constituencies, I recommend that they contact Bombus to get all sorts of books, paper goods and lampshades. On the other side of my constituency, near Maidstone, a business enabling people to compare utility prices has about 100 employees in a really rural spot. There is no way in which that business could exist without good broadband, so it is very important for the rural economy.
We have got to this point very quickly. About 12 years ago I worked at AOL Time Warner launching digital products, such as the UK’s first video on-demand service for downloading films. Back then, just over 10 years ago, people had to plan ahead: if they wanted to watch a film, they had to start downloading it and then go away, perhaps to cook something for supper, and come back a couple of hours later when enough of it had downloaded to enable them to watch it, if they were lucky, although it may well have stopped downloading halfway through. We probably launched the product a little ahead of what the technology could do. Now, however, my children sit down in front of the television on a Sunday morning, when I am trying to catch up on some sleep, turn on the iPlayer and watch something immediately, with none of that delay. That change has turned watching television into a completely different experience.
I welcome the Government’s commitment to this area, but I very much ask them to press on with making sure that we get high-speed broadband to 100% of properties across constituencies such as mine. I also ask them to make sure that the new technologies enabled by the Bill such as 5G and full-fibre broadband—I will now turn to the Bill— benefit those not only in more urban areas of the country, but in rural areas. I would ask that as far as possible that should not be a simple sequential process, with the people of Headcorn being able, if they are lucky, to make a phone call and then getting 3G, 4G and eventually 5G sometime in the distant future. I am very keen for some leapfrogging so that those in more rural areas can catch up thanks to new forms of technology.
It is particularly important for the Bill to go ahead, with investment in these new technologies, in the challenging economic climate and the challenging economic times in which we live. I am very mindful of the ageing population in this country. We have talked a lot during the past couple of weeks about the cost of the public sector and the desire to increase the pay of people working in the public sector. We know that as a country we face a productivity challenge in that we are not nearly as productive as we need to be for people to have a good or a better standard of living, and we face global competition. I am pretty realistic in saying that—unfortunately, unlike the hon. Member for Denton and Reddish (Andrew Gwynne), who wishes to raise business rates and thinks, erroneously, that that will increase revenue to spend on public services—history tells us that, as we very well know, increasing business rates results in a fall in revenue.
Helen Whately
As the hon. Gentleman gave way to me, I will give way to him.
Andrew Gwynne
I merely wish to correct the record: at no stage have either I or the Labour party said that we want to increase business rates. We want a small increase in corporation tax, which would still result in our having one of the lowest rates of corporation tax in the world.
Helen Whately
I appreciate the hon. Gentleman’s putting the record straight, because I made an error in my notes. Instead of business rates, I meant to say corporation tax. We disagreed about this point earlier. My point about corporation tax stands. Unfortunately, raising corporation tax results in a reduction in revenue for the Government, as my hon. Friend the Member for North West Hampshire (Kit Malthouse) pointed out.
James Cartlidge (South Suffolk) (Con)
My hon. Friend is making an excellent speech. Was she as shocked as I was to hear the shadow Secretary of State refer to a “small” increase in corporation tax, because the rate Labour would move it to would be almost a 50% increase on the 17% rate that we will have?
Helen Whately
My hon. Friend is absolutely right. This point really is significant because as corporation tax rates come down below 20%, businesses behave differently. Businesses are more likely to locate in this country, to invest in their businesses in this country and to create jobs, which is what my constituents and, I am sure, the constituents of the hon. Member for Denton and Reddish want. That also generates the revenue that is paid in taxes to fund public services.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
On the subject of large increases, given that the hon. Lady would be outraged by a 50% increase, she must be absolutely distraught at the business rates revaluation, which has seen some business rates go up by 200%.
Helen Whately
In some respects, the hon. Gentleman and I may agree, although not on the specifics of his point. As other hon. Members have said, the business rates system does need a further look. For instance, I am unhappy with the way business rates tend to penalise high street shops in some of my smaller towns. The largest employer in my constituency is a brewer, and pubs have struggled with some of the increases in business rates. However, I recognise the efforts that the Chancellor made following lobbying by me and other Members of Parliament to help pubs with the changes to business rates. There is no question but that there is further work to be done on business rates, and that has been acknowledged by the Government.
Michael Tomlinson
May I take my hon. Friend back to corporation tax? She is absolutely right that the reduction in the rate has seen an increase in tax take. Surely the important thing is to look not at the tax rate, but at the tax take—how much tax is actually raised. The final point she made about jobs is crucial. We see record levels of employment across all our constituencies, which is to be welcomed. That has happened because businesses want to expand and take on more people.
Helen Whately
I thank my hon. Friend for that intervention. I will return to the content of the Bill in a moment, Madam Deputy Speaker, but I am spending a little time on corporation tax because the hon. Member for Denton and Reddish spent some time talking about it. It is important that Government Members make it clear that we are absolutely committed to raising revenue for public services. The last thing we want to see is tax changes that gain the right headlines but have the wrong effect on the bottom line from the Government’s point of view. We are absolutely committed to making sure that we can raise revenue for public services, about which we care very much, but we recognise that, to do so, we must have a tax environment that is supportive to businesses, because they are what provides the jobs and the economic growth.
On economic growth and people working harder to keep up their standard of living, as an economy, we need to be more productive and technology is the crucial enabler in that. That is exactly what the Bill will support. For instance, 5G as a technology is and will be a great enabler of the internet of things. Every second around the world, 127 devices are newly connected to the internet. That rate will surely increase, so the demand for connectivity and the ability to carry large volumes of data will only go up.
It is vital that we are at the forefront of that. In fact, 5G is forecast to boost economic value by $4 trillion to $11 trillion globally by 2020. That is a huge increase in economic value, so it is vital that we as a country take our share of that economic growth. In practice, it will mean developments that allow us to have smart household appliances, driverless cars and, one day, driverless lorries, which for my constituents, who are very unhappy about lorries being parked up in laybys a lot, will be an interesting prospect.
Amanda Milling
My hon. Friend and I both have residents and businesses that face the plight of HGV fly-parking. I know that she, too, is very passionate about this. Does she agree that, as technology advances, we should look at different ways of doing business?
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I am sure that the hon. Member for Faversham and Mid Kent (Helen Whately) will find an ingenious way of relating the intervention by the hon. Member for Cannock Chase (Amanda Milling) precisely to the Bill. I can see a way of doing it and I am sure she will succeed.
Helen Whately
I could see the frown on your face, Madam Deputy Speaker. It might seem like a stretch to go from talking about telecommunications to lorry fly-parking, but as 5G is an enabler of the internet of things and, potentially, of driverless cars and driverless lorries, it might mean that lorry drivers no longer have to take long breaks to sleep. The reason lorries are parked in the laybys of our roads is that the drivers are sleeping because they have to have a compulsory rest before they can keep driving, but we could have lorries without a driver, so the subjects genuinely connect.
To return to what I was planning to talk about, another important potential application of 5G is in healthcare, with wearable devices. For instance, people’s heart rate and blood pressure could be tracked. That is very much part of the future of healthcare and preventive healthcare to help us all to look after ourselves. As somebody who is very committed to the NHS and to making sure we have a sustainable NHS and a healthier population, I am keen that we enable such developments in healthcare.
Those are just a handful of examples of what we hope 5G will enable. We hope to be at the forefront of this technology by investing in it.
Michael Tomlinson
My hon. Friend is being very generous with her time, but before she moves away from 5G, I invite her to reflect on this point. It is important not to leave behind those communities that are yet to clock on to 3G and 4G. I am sure that, in her constituency, as in mine, there are areas where people simply cannot access 3G or 4G. Although 5G is to be welcomed, will she join me in calling on the Government to ensure that those areas are not left behind?
Helen Whately
I completely agree. As in his constituency, there are parts of my constituency that do not have 4G, 3G or even enough mobile signal to make a phone call. I am very keen for the Government to intervene to ensure that there is comprehensive mobile phone reception across rural areas. I also hope that we can have a catch-up for those areas, so that they can canter quickly through 3G and 4G and then go straight to 5G.
Vicky Ford (Chelmsford) (Con)
While we are on the subject of notspots and blackout areas, does my hon. Friend agree that there are priority areas such as along railway lines? Many of my constituents commute every day and it is so frustrating not even being able to get a phone signal on the railway line. The Bill will enable extra infrastructure, so that we have connected commuters, which is key in the 21st century.
Helen Whately
My hon. Friend has made an important point about the Bill’s focus on the infrastructure along routes such as rail lines and motorways, where it will be of particular benefit. My constituency, like hers, contains commuters who would like to be able to do more work on the train, and the Bill will make that possible.
Full-fibre broadband should bring an end to a problem about which I often hear from BT engineers: the challenge of the “last mile”, the old copper wires that are so dated, some of them more than 100 years old. Although that technology has served us very well for many years, it is probably time to move on, so that people can get proper high-speed broadband, especially those who live further away from the cabinet and the traditional infrastructure.
It is right for the Government to support the development of new infrastructure by providing incentives in the form of appropriate conditions for substantial private investment in that infrastructure, which will multiply by many times the investment that they are making with the use of taxpayer funds. The combination of the £400 million digital infrastructure fund and the £60 million business rates relief for which the Bill provides should be wearable for the Government, while also resulting in much more investment in the country’s digital infrastructure, which we badly need.
I want to ensure that we reach out to and communicate with younger voters. I say to them, “You may not be watching the Parliament channel on your internet connection, but take note of what is being said.” This is an example of the Government’s looking ahead to the sort of economy that we need for the future: looking towards investing in the infrastructure that we need, so that we will be able to compete globally, have a modern economy, have innovation and have the kind of jobs and the kind of economy that will give younger workers opportunities for decades to come, and give us the economic growth that we need in order to fund a high standard of living and the public services about which we care so much.
Matt Warman (Boston and Skegness) (Con)
Let me begin by thanking my hon. Friend the Member for North Dorset (Simon Hoare), although he is no longer in the Chamber—and, indeed, my hon. Friend the Member for Faversham and Mid Kent (Helen Whately)—for being so kind about the work that I have done on broadband. When my hon. Friend the Member for North Dorset said that I would not speak in the debate, I was going to leap to my feet like some sort of digital gazelle, but I thought I would keep the House waiting. We have heard several extensive speeches about the many benefits of Government investment in digital infrastructure, but my speech will be somewhat briefer.
My hon. Friend the Member for Faversham and Mid Kent said that some of her constituents were not able to do something as old-fashioned as making a mobile telephone call. Mobile telephone calls are, in our modern world, pretty old-fashioned, but we should not forget that not many years ago they were simply impossible in this place. Since then, we have not only been through the period of the invention of mobile phones; we have been through a period during which all our constituents railed against the installation of mobile phone masts. Now we have come full circle, and they rail against the absence of mobile phone masts. The digital revolution has thoroughly revolved.
I want to make some brief points about the Bill. It seems obvious to me that, although adopting this approach to encouraging digital infrastructure investment means that the Government are forgoing a certain amount of revenue from business rates, their fostering of digital innovation and infrastructure investment will ensure that the amount they get back through the broader benefits of economic growth is many times greater than the amount that the business rates themselves cost the state and the taxpayer. That strikes me as a definition of the way in which the Government should be using public money, pump-priming economic growth to allow the development of an economy that works in the digital way that, as we have heard, our children will expect, and that all modern businesses already expect.
I commend the Government for taking that approach. It is also commendable that, by giving the relief a five-year term—which my right hon. Friend the Minister hinted could even be extended—they are giving firms an incentive to invest in installing fibre now, even if they do not turn it on, so to speak, for a number of years. I hope that we will secure the economies of scale of broader investment while continuing to benefit from business rate relief on that investment. That can only be a good thing, and it also addresses some of the concerns raised by the industry before the introduction of the Bill.
We should bear in mind that the growth in demand for fibre will only increase. When I was a journalist writing about the launch of the iPlayer—the BBC cunningly launched it in Christmas Day, because it knew that demand would be rather more limited—the BBC did not think for one moment that it would itself be broadcasting in 4K come 2016-17. Still less did it think that we would, as a matter of course, live in households in which half a dozen people wanted to download the 4K streams that broadcasters now routinely provide.
It is no small irony that, by all accounts, when Bazalgette built the London sewers he offered quadruple the capacity that was required in Victorian London. Now we see that that quadruple capacity has been more than exhausted by a growing population, and we should take the same approach when it comes to investing in our digital infrastructure. To point out that a prominent Bazalgette is still involved in the life of our digital nation is not in any way to draw a comparison between sewage and the modern digital output with which he is concerned. The huge benefits provided by the man who brought us “Big Brother” and a host of other programmes are not to be described in that way in the slightest degree. All we can say is that this is clearly a family that has contributed a huge amount to the life of our nation, at every level of our infrastructure.
In this day and age, there is never an excuse for underestimating the amount of digital capacity that we will require. Although 4K may appear to be perfectly adequate for our purposes today, we will look back on it in a number of years and see that it is paltry in comparison with what we will be using on a routine basis, whether that involves virtual reality, driverless cars, or all the technologies that will eradicate the digital scourge of fly-parking mentioned by my hon. Friend the Member for Cannock Chase (Amanda Milling).
We should not only encourage the Government to proceed with the Bill as quickly as possible, but encourage any Government to ensure that this sort of rate relief applies to investment in digital infrastructure, whether mobile or fixed, thus ensuring—following the launch of the iPlayer not so very long ago—that the internet of things that is now coming upon us will be fully served. That will be thanks to the investment of Governments such as this.
Amanda Milling (Cannock Chase) (Con)
It is an honour to follow my hon. Friend the Member for Boston and Skegness (Matt Warman), who is a real expert in this field, as he has demonstrated tonight. I have to admit that I am a technology dinosaur; when it comes to communications, if I have a choice between email, text or telephone, I will choose an actual conversation every single time. It takes an awful lot less time to pick up the phone and have a conversation one to one than to compose lengthy emails that often can take hours to construct by virtue of the need to check the content and tone, or to correspond via text messages; at present I have about eight text messages building up, and I will no doubt forget to respond to all of them.
I welcome this Bill, which provides business rate relief for new fibre infrastructure. Its measures form part of a wider package that rightly encourages investment in our country’s digital infrastructure and that helps ensure that Britain remains a digital world leader. The Bill will help homes and businesses across the country have faster, more affordable and more reliable broadband connectivity.
We have heard this evening from many Members who represent constituencies very different from mine. Many of their areas are very rural, and we have heard from them about issues of the connectivity of mobile and broadband in rural areas. My constituency is not like that: I have mainly towns and one large village—Cannock, Hednesford, Rugeley and Norton Canes. There is limited rural space in my constituency; my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) is one of my near-neighbours, and I see her nodding, as she recognises what my constituency is like.
I also have a forest in my constituency. If someone is driving through the forest of Cannock Chase and I, as a passenger, am having a phone conversation, the chances are that the phone call will cut off; I must add that I am on wireless, not Bluetooth. This is an issue in the more rural parts of my constituency. The measures in the Bill that make broadband and mobile access much better will be welcomed by people and businesses across the country, including in my constituency.
Wendy Morton
Does my hon. Friend agree that although her constituency, like mine, is not predominantly rural, we can still find notspots—not just in forests and so forth, but in the more built-up areas?
Amanda Milling
My hon. Friend is right, and I will come on to some specific issues later in my speech.
My office is on Market Street in the heart of Hednesford, yet when I am there, more often than not I cannot make telephone calls because I do not have any mobile phone reception. When I am travelling between my office and my home as well, invariably the mobile phone reception falls.
Why is broadband and mobile access so important? As Members have said, it is key to family and our daily lives. We can keep in contact with our friends across the world through Facebook and social media. We have talked about the closure of high street bank branches across the country because people are increasingly doing their banking online, but they need excellent online access to be able to do that. I am not sure that any Members have mentioned being able to switch energy suppliers. We talk about people trying to get better rates for their gas and electricity, and that is often best done by looking at online portals. If people do not have good internet access, the range of deals they can get is restricted.
We have talked about watching television, too. Personally, I just switch the TV on; that goes back to my being a bit of a dinosaur. Many people, however, use iPlayer and on-demand services. My mother, for instance, has never used a computer, but a few years ago we got her iPlayer and she is absolutely reliant on it for communicating with people and watching television, but she has to have excellent broadband access to do that.
I want to raise some specific issues in terms of broadband access and the roll-out of full fibre connectivity. A number of my constituents live on a new housing development called Chasewater Grange, and they complain of painfully slow broadband speeds. It is a new Taylor Wimpey development on the edge of Norton Canes. There are about 130 houses. Despite being billed as a superb collection of high-quality homes, with a mix of house types to suite a range of tastes, including three and four-bedroom homes, all with easy access to local amenities—which I fully support; they are fantastic, and it is a fantastic development—the one thing the local residents do not enjoy is fast and reliable broadband access.
On building a new housing scheme, developers install gas, electricity and water as a matter of course, but we are now in a time when broadband is the fourth utility. The provision of superfast broadband should be treated in the same way as the other utilities. The problem is not unique to Chasewater Grange. I have done quite a lot of research on this issue over previous days, and I have been reading endless reports of residents of new developments up and down the country facing similar issues.
My hon. Friend the Member for North West Hampshire (Kit Malthouse) is not in his place at present, but he made the point that this problem has been recognised, and last year an agreement was reached between the Government, Openreach and the Home Builders Federation to ensure that superfast and ultrafast broadband connectivity would be either provided free or co-funded by Openreach to new developments. This has been extended to all developments with more than 30 homes, and connection will be free. We rightly place emphasis on building new homes; we often talk about the issue in the Chamber. So I am pleased that there is recognition that broadband connectivity is as important as the other utilities. Homebuyers expect this.
The issue is particularly important in my constituency, because thousands of new homes are being built all the time. When I drive around the constituency, I never cease to be amazed by the number of new developments. In the Pye Green valley and in Brereton, where I live, homes are being built all the time, and we must make sure they have access to both the main utilities and also broadband.
The moves made by Openreach and the Home Builders Federation are good news, but they are not going to resolve the issues faced by the residents of Chasewater Grange. I was very pleased to learn last week that that community has made some progress in securing funding from both Openreach and Taylor Wimpey to complete the work to install the fibre-based broadband. However, the residents of Chasewater Grange still face a funding shortfall, and they are communicating at present with Superfast Staffordshire. I hope they succeed in securing some assistance to be able to bridge the gap and ensure that this fibre broadband is connected.
I hope that as a result the residents of Chasewater Grange will soon be able to enjoy the benefits of fast and reliable broadband, and be able to do their banking online, and that the teenagers will be able to do their homework online—I am sure that we would all agree that it is important that they can complete their assignments. I also hope that those residents who want to work from home will be able to do so. The issues relating to broadband speeds are not confined to Chasewater Grange. I know of homes on Sweetbriar Way, for example, that have been waiting years for this connectivity. I also have a small number of rural properties in my constituency, and they are still waiting, too.
I want to turn to a more positive aspect of fast broadband access. The redevelopment of the Rugeley B power station site will present opportunities to tap into existing superfast broadband infrastructure. The power station sits right alongside the west coast main line, which has the superfast broadband network running up the line. Similarly, the canal network in the area has that infrastructure. The power station site benefits from the railway line and the canals; it also has national grid infrastructure. I have described it before in the House as a connectivity crossover, and we need to make the most of it. It presents an ideal opportunity to attract high-tech businesses and advanced manufacturing that can make the most of the infrastructure.
The power station site is huge, and there will also be some homes on it. I have talked about the need to bring broadband infrastructure to the door in new housing developments. The superfast broadband line is very close to this development, and we need to make the most of it—not only for today but for future generations. There is a real opportunity to ensure that the regeneration of this power station site attracts the businesses that will create highly skilled, highly paid jobs for those future generations. As I have said before—and will probably say again to the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Nuneaton (Mr Jones)—we need to have ambitious, bold and visionary plans for Rugeley.
There is another site in my constituency that has excellent digital infrastructure, and again, we need to make the most of it. It is the Cannock campus of the South Staffordshire College. It was very disappointing to hear recently that it is to shut owing to falling numbers, because it had received a multi-million pound investment a few years ago, part of which provided it with excellent digital infrastructure. We need to make the most of this site as we look at plans for its future. We need to tap into that digital infrastructure.
I am sure that many other Members want to speak in this important debate, but I want to come back to the Bill that we are discussing tonight. It is part of a wide range of reforms that the Government are undertaking to ensure that we have excellent digital infrastructure across our country. I welcome the Bill. I welcome the fact that it will enable my constituency and others to have faster, more reliable broadband and to enjoy all the benefits that the internet and emails offer us.
Wendy Morton (Aldridge-Brownhills) (Con)
As always, it is a pleasure to follow my constituency neighbour, my hon. Friend the Member for Cannock Chase (Amanda Milling). It is also a pleasure to take part in the debate. Before I get into the detail of my speech, I should like to thank the Minister for Digital, my right hon. Friend the Member for West Suffolk (Matt Hancock), who is no longer in his place, for giving me a comprehensive response to what I thought was a simple, straightforward intervention earlier. I asked him about the five-year limit and the deadline for the business rate relief, which was an important point. If the Bill can incentivise companies to really get behind investment in our digital infrastructure, that will be a good thing. It will have far-reaching benefits.
The Bill made me think of a couple of things. My hon. Friend the Member for Cannock Chase described herself as a “technology dinosaur”, but I would describe myself as a technophobe. The challenges with the internet connection that we have faced here in Parliament in recent weeks have been frustrating, to say the least. All I will say is that it is very handy to have a staff member on your team who is a good bit younger than you are. I have found that they know everything about the internet, and they have been a huge help to me.
I am also reminded of the time, probably 20 to 25 years ago, when we first started to see the internet appear—I use the word “appear” because that is how it felt—and we had our first internet connection. It was a big thing to have the internet at home. I seem to recall that there was no such thing as wireless internet. There was a wire that led from downstairs to upstairs, and we had to plug it in and unplug it. It was impossible for more than one person at a time to be on a computer. How things have changed!
I am also reminded of the first mobile phone that we had. I could not fit it into my quite large handbag. It was almost the size of a brick, and I used to walk around with it. It had an aerial and a handset with a curly cable attached. Again, how things have progressed! Who would have imagined that we would be here this evening talking about 5G—
Andrew Gwynne
Perhaps my nostalgia is greater than the hon. Lady’s, because I believe that my Nokia “brick” was far more reliable than my Apple iPhone has ever been.
Wendy Morton
I bow to the hon. Gentleman’s judgment on that one. Sadly, I did not have much chance to use the “brick”; I seem to my recall that my husband used it more than I did. However, I do have my own iPhone these days, so things have changed. Today, we can stream films into our homes and download music. I have something that I call the boogie box. I can have it in the kitchen or move it around the house, and it picks up the music from my iPhone. It is just amazing what we can do and how technology has changed our lives. It has also changed business and so many other things.
The Bill is relatively short, but it is very important. It gives effect to one of the commitments on digital communications that were made in last year’s autumn statement. It is also important because it aims to give targeted support to the roll-out of full-fibre broadband connections and 5G mobile communications. Often, when we talk about infrastructure in this place, we are talking about roads, railways or bridges. We are talking about very visible and tangible pieces of infrastructure. That infrastructure obviously matters to the local area, as well as regionally or nationally, but occasionally something that seems small can have a much more far-reaching impact.
This Bill is about a piece of infrastructure that is far less visible. We see the green broadband boxes as we drive round our constituencies, but we cannot see the full-fibre broadband. We will know it is there, however, because we will be able to access it. Although the technology is not visible, the Bill will enable full-fibre broadband to reach across England and Wales to the benefit of residents and businesses across the country and across my constituency.
Many hon. Members have given examples this evening of where broadband makes a difference in their constituencies—an individual household, a small retail business, a large manufacturer in a business park or someone working in the gig economy. Small and medium-sized businesses are the backbone of the local economy in my constituency. Whether in the shops of Aldridge village centre or in one of our many and varied business parks, businesses are creating jobs, driving the investment that is reducing unemployment, and developing skills for today and for the future. Such businesses may use the internet to sell their goods, to order components or materials, or to run their customer service. The internet is now an integral part of business.
Amanda Milling
Access to the internet is as important as electricity. If the lights go out and the power goes off, a manufacturing business will not be able to produce its goods. In the same way, if a business is reliant on the internet, it can grind to a halt without it.
Wendy Morton
My hon. Friend is absolutely right. Before entering this place, I worked in the optical industry, and our business relied on the internet day in, day out for processing orders and for sending stock back to Europe. The minute the internet went down we could do nothing at all, which shows how crucial connectivity is.
The Bill is vital, because under current broadband, superfast broadband and mobile coverage we still get some so-called notspots. We have rightly heard many contributions from hon. Members representing rural constituencies. My constituency does not fall into that category, but I agree with my hon. Friend the Member for Cannock Chase that rural constituencies are not the only ones that are affected. We have notspots in my constituency, and I even find that I have to move around in my own home from time to time to get a mobile connection. Were it not for the wi-fi connection, I would struggle on many a day. I hope that the days of having to lean out of the kitchen window or move to a certain spot in the living room to get some mobile signal will soon be a thing of the past.
We have heard a lot about businesses and individuals tonight, but this Bill is not just about them. I am thinking of my constituency’s many voluntary organisations and charities, many of which provide lifelines to local residents. They too rely on having a good internet connection. Through their webpages, they allow people to get information 24 hours a day. Through the internet, we are able to reach much further than we could in the past.
I want to follow up on something said by some other hon. Members about demographics and age. Access to the internet has the potential to cut across all parts of society. If an older person has good internet access, they can keep in touch with their family through Facebook or FaceTime—things that we did not have a few years ago. If someone has grandchildren living on the other side of the country, or even on the other side of town, and wants to connect with them on a more frequent basis much more cheaply than by using the telephone, that can be facilitated through a good internet connection.
When I go into a school, as all hon. Members do, and have a debate either with primary school children or, more often than not, older secondary school children, the very valid question, “What do the Government do for us as young people?” often comes up. Sitting here today has made me realise that this Bill is an example of something that the Government are doing that will help young people. The younger generation are probably more tech and phone-savvy than all of us here put together—I can certainly speak for myself on that.
Luke Graham (Ochil and South Perthshire) (Con)
My hon. Friend will agree that the age disparity between young and old can be bridged through the internet and through proper broadband and mobile connections, particularly in rural constituencies and especially those in Scotland. Although some powers have been devolved—unfortunately no SNP Members are here tonight to speak on such an important issue—I hope that my hon. Friend and the Minister will recognise the important role that Westminster can play in all the nations of the UK by giving funding and offering direction for broadband and mobile.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. This Bill is for England and Wales, not for Scotland. That is the problem, so we need to deal with England and Wales and not drift too far.
Wendy Morton
I am grateful to my hon. Friend the Member for Ochil and South Perthshire (Luke Graham) for making that valuable point. I am sure that I will be corrected if I am wrong, but although this Bill relates to England and Wales only, Barnett formula consequentials will apply, so my new hon. Friend from Scotland made a valid point.
The Bill is about looking to the future. It is about developing infrastructure, so that we can take our country forwards. As we seek to develop new relationships and partnerships in a post-Brexit world, the Bill will make connectivity around the world so much easier and better.
Turning briefly to business rates, the Bill will enable 100% business rates relief for new full-fibre infrastructure for a period of five years. I hope that that will provide an incentive and encourage the telecommunications industry to get on with the job of delivering what we in this House want to see. Together with the universal service obligation, I hope that rates relief will make a significant difference to our constituents. I hope that we will make a big contribution towards closing the digital divide that we have heard so much about and that we will get higher-quality, more reliable connectivity in households and businesses. That is what I want in my constituency and what other Members want for theirs. In closing, I am supporting a Government who are investing in our country, in our infrastructure and in the livelihoods and futures of not just today’s generation but tomorrow’s as well, so I will support the Bill this evening.
Mr Ranil Jayawardena (North East Hampshire) (Con)
It is a pleasure to follow my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton), who addressed the substance of this important Bill with her customary attention to detail and her personal reflections on the progress that the internet has made. The change it has made to all our lives has been enormously valuable.
I will address the core of the Bill first, before explaining why it is so important. It is excellent that the Bill will provide for 100% business rates relief for full fibre infrastructure for a five-year period from 1 April 2017, and it is important that that is backdated so that it truly supports telecommunications companies that invest in their fibre network. It is also important that the Government will cover the full costs of that relief. As a former councillor, I know the impact that Government reliefs can have on local government, and it is important to note that the Government have said here that, because of the measure’s importance, they will meet the full cost of the relief.
I am grateful to my hon. Friends the Members for Aldridge-Brownhills and for Ochil and South Perthshire (Luke Graham) for mentioning the impact on Scotland. The Bill, of course, has territorial extent to England and Wales, but the Barnett formula applies, so it is important that we recognise how it affects the whole United Kingdom.
As we have heard, constituencies vary across the UK, from tightly packed urban settings to sparser rural settings. Superfast broadband, based on part-fibre, part-copper technology as today, is now available to 93% of premises, which is good progress. My hon. Friend the Member for Aldridge-Brownhills spoke about the progress of the internet, and I recall having a dial-up modem that would beep away before connecting at perhaps 28 kilobits per second—FaceTime or Skype would have been inconceivable in those days. We have made huge progress, and 93% of premises being able to access the part-copper, part-fibre service is good news, but the proposed relief provides—the Minister will correct me if I am wrong—£60 million-worth of support to telecoms companies that invest in their fibre network by installing new fibre lines.
Virgin Media is now part of Liberty Global, which, to deviate slightly, shows the importance of having a competitive corporation tax regime. As has already been noted, a competitive corporation tax regime means a company such as Liberty has invested in Britain and bought Virgin Media, and is now taking it forward. I would have thought that the Bill will boost Virgin Media’s £3 billion “project lightning” network expansion, as well as plans by Openreach, a subsidiary of BT, to increase its investment in fibre optic. The Bill will also help smaller alternative players, which my hon. Friend the Member for North West Hampshire (Kit Malthouse) said were priced out of the market in the past due to the impact of business rates and other competitive and regulatory pressures.
I welcome the Government’s aim, through this and other measures, to provide superfast broadband speeds of 24 megabits per second, or more, for at least 95% of the United Kingdom, which is progress beyond what we have achieved to date, but we should go further. That is why I am pleased that the Digital Economy Act 2017 provides for every household to have a legal right to request a fast broadband connection.
Michael Tomlinson
I do not apologise for reinforcing the important point, in case Opposition Members say it has already been made, that 95% coverage still means that 5% of our constituents are left out, so will my hon. Friend join me in pressing the Government to ensure that the service is truly universal? Although we welcome the measures set out in the Bill, we are still speaking up for our constituents, the remaining 5%, who are waiting.
Mr Jayawardena
As ever, my hon. Friend makes an important and cogent point. He is right to champion the interests of all the United Kingdom, which is why the universal service obligation is so important. The obligation, I am sure the Minister will agree, is only the first step towards ensuring that Britain is the most competitive country and is the place where businesses based elsewhere in the world want to do business. As my hon. Friend the Member for Aldridge-Brownhills also noted, that is even more important in a post-Brexit world. We must ensure that we are absolutely match fit and ready to go in the next century, which is why it is important that every household has a legal right to request a fast broadband connection.
As has become customary in our Wednesday exchanges, I will reference points raised by my constituents. This is not a maiden speech, but Hazeley Lea, a lovely part of my constituency, gets less than half a megabit per second, which is totally unacceptable. Worse, residents say that they have too much downtime because the current connection—part-copper, part-fibre—is unreliable. It is not just homes, individuals and families but diversified rural businesses that are affected. One constituent says:
“Just yesterday, I saw a third visit this week by Openreach to my immediate neighbour. I took the opportunity to talk to the engineer on site who confirmed there was a major problem perhaps with old underground cabling to the area simply giving up. He also confirmed that none of the line managers are likely to take this further because of the costs to BT to supply new cabling.”
That demonstrates that what the Government are trying to do is right. Not only are they addressing the old underground cabling that is simply giving up—the cabling was introduced many, many years ago for technologies that are now old-fashioned, as my hon. Friend the Member for Faversham and Mid Kent (Helen Whately) said—but they are tackling the costs that apply to businesses through business rates and other regulatory matters. The costs, particularly business rates, have been prohibitive in helping businesses to invest.
I was on a British-American Parliamentary Group visit to Chattanooga, Tennessee, where the weather was almost as good as it has been here recently. Importantly, I found out that a £70 million grant had got local people—the Chattanooga area has a population of just over 500,000—not 24 megabits per second, which is the UK Government’s measure of success in this phase of superfast broadband, but 1 gigabit per second through providing fibre to the premises, not just fibre to the cabinet. That is what the Government are trying to do, and it is the way forward.
Coming back across the pond to Stratfield Saye, the seat of the Duke of Wellington, the exchange there is a problem because, at present, the broadband connection given to my constituents, and undoubtedly to the Duke of Wellington, comes from Mortimer across the county boundary in Berkshire, instead of from Bramley in my constituency and the county of Hampshire. Naturally, Bramley is much closer to Stratfield Saye than Mortimer will ever be. Indeed, the length of cabling required from the exchange to the home would be cut in half if the connection were provided from Bramley. That shows the lack of flexibility in the system. We need to ensure that there is the right technology in the right places to serve people in the 21st century, not the convenience of telecommunications operators from the 20th century.
Some people in Bramley are nearer Chineham in the constituency of my right hon. Friend the Member for Basingstoke (Mrs Miller), but none the less they are connected by cables from Bramley. Those cables are actually steel, not copper, because apparently when the cables were installed by BT, then state-owned—I do not know whether the Labour party plans to renationalise BT, too—[Interruption.] The hon. Member for Oldham West and Royton (Jim McMahon) says it is a possibility, so perhaps he would like to clarify the matter at the Dispatch Box. The point I was making was that BT simply said, “It is all right, we don’t have to face any competition. We’ll just shove some steel cabling in there and it doesn’t matter what happens to local people.” Of course when we were talking about telephone and analogue technology, that was fine, but we are in this new digital age now and we need to make sure people have the right technology to their doorstep. That is why we must tackle this head-on.
I do not want to be totally critical of BT, as it has done a lot of good work in enabling a lot of cabinets and coming up with flexibility in the way those things are delivered. For example, in the parish of Ellisfield in my constituency BT came up with a match funding scheme that said, “If the community can raise some of the money, we will put in the other half.” That is a very innovative scheme for a community so rural that it made this commercially unviable to deliver. But therein lies the problem: no one should be penalised for accessing what is now a utility, as my hon. Friend the Member for Cannock Chase (Amanda Milling) rightly said—people should be able to expect this. Charging people £558 per dwelling not only is on the cusp of what BT might ordinarily provide as a commercial arrangement, but it was penalising residents in rural areas for living where they do.
Michael Tomlinson
May I take my hon. Friend from Hampshire to Dorset and endorse what he is saying? He is advocating greater flexibility within BT and saying that although some good work is being done, more could and should be done. Does he agree that we need flexibility across the piece, not just in Hampshire and his beautiful constituency, so that where difficult rural issues arise, sensible solutions are found?
Mr Jayawardena
My hon. Friend makes an important further contribution to this debate and is right in what he says. Let me take him back to the further remarks from my neighbour, my hon. Friend the Member for North West Hampshire, who pointed out that Brexit provides an opportunity, because EU state aid legislation got in the way of allowing local communities to come up with solutions. When I was a local councillor, we introduced CITI—the communications improvement and technology infrastructure fund—which was a new way of providing match funding from the borough council, but it was then ruled out of order because it was deemed “state aid”. Not only had we, through careful management, kept council tax down and not increased it, by using the excellent initiatives from this Government on match funding and helping local councils keep council tax down, but the money that we had saved and that we wanted to put to good use for the residents of Basingstoke and Deane in north Hampshire could not be used because of state aid rules. So we must tackle these things and we must deliver those solutions for local people.
Robert Courts (Witney) (Con)
I am grateful to my hon. Friend for the important points he is making about the combination of local government and local IT companies. We have a similar situation in west Oxfordshire, where we have a number of excellent companies. Does he agree that through good local governance and providing freedom for local companies, with sensibly managed local finance, we can find the solution to the internet shortages—the notspots we have been talking about?
Mr Jayawardena
I thank my hon. Friend for that point. He is right: this is all part of the competitive nature that we need to try to ensure is supported. We need to provide local solutions to local problems. Mr Deputy Speaker, I am sure you are aware that Hampshire County Council has been working to go beyond 96% connectivity—[Interruption.] If you were not aware before, you are now. That could be met if we allowed local firms to meet that 4% shortfall. If we allowed local firms to bid for further funding from the state, unhindered by EU state aid rules—indeed, instead, further supported by these business rates initiatives—we would close that 4% gap without a shadow of a doubt.
Let me turn from BT, which has had a great benefit from the current business rate arrangements, to Virgin Media, which should benefit from this. I outlined that earlier, but it is important to talk a little more about it to outline the importance of the issue to a British company based in my constituency; it has its corporate headquarters in Hook. It has run a competition, through its own commercial judgment, to supercharge local communities. Although the company has not yet supercharged Hook, which is where it is based—I hope it is listening and will do so shortly—it has agreed to supercharge Hartley Wintney and Phoenix Green, just down the road. That means that those places will have ultrafast fibre to the premises very shortly, which is good news because residents there will get a head start on what the Government aspire for the whole of the country to receive. Those residents will receive fibre to the premises, which means they will be eligible to get the 1 gigabit per second telecommunications connectivity that is critical for the future.
Businesses will benefit as well—this is not confined to households. In Yateley in my constituency, Samsung has its European quality control centre. If we want those technical businesses to be based in constituencies such as mine, we need to ensure they have the connectivity to match. Samsung being the technical giant that it is, it needs that more than perhaps anyone else. It is therefore brilliant news to hear that these business rates initiatives will be introduced.
This is not just about the giants; it is also about the smaller businesses. Fleet, the biggest town in my constituency, has a business called CV-Library. It was set up in 2000, in the dotcom boom era. Although that was a very different internet era, that remains an internet business and it is very successful. It was set up by a young carpet fitter who was looking for work and it is now the UK’s third biggest jobs board. Of course it has thrived on the great number of new jobs created under the economic management of this Government, and it is one of the top 500 most visited websites in the UK. So we are talking about a well reputed website.
That small business has come a long way, with Resume-Library allowing it to operate in the United States, and it is now thriving as an international business. Again, as with Samsung, if we want such businesses to be based outside the main towns and cities—outside London and across the country, ensuring that we create an economy of the nations and regions, not just of London —we need connectivity that serves businesses such as CV-Library and allows them to thrive and to connect with the world, as CV-Library has done with Resume-Library and will, I am sure, do in future. Incidentally, it was the first jobs website to allow people to apply for jobs on a mobile phone. I shall come back to that important point in a moment.
One resident in Bramley told me that he found it
“incredible that we are surrounded by much better services and yet it appears that we are unable to access these.”
People such as that resident from Bramley are used to going on their mobile phone and connecting to 4G, yet in their house they cannot connect to a decent fixed-broadband service. He also said:
“I have been told by BT that it is not possible to switch exchanges”
from one to another
“as this is ‘too difficult’”.
In the mobile age, when people can go about their daily business while they walk to work, it is not acceptable for something to be simply too difficult for a monopoly provider. We must do better, and the Government are.
It is important that the 100% business rates relief is focused on encouraging the full-fibre initiative and getting that to the premises. Indeed, the digital infrastructure investment fund has also been designed as an incentive. Traditionally, it has been difficult to finance digital infrastructure investment in Britain because the industry has been relatively young. The lack of certainty about future demand has made investment difficult to secure. I hope that the digital infrastructure investment fund, along with business rates initiatives such as the one in the Bill, will ignite interest, so that private finance will invest in this important sector. Digital infrastructure is a critical part of our infrastructure, like roads and rail, so I hope that the private interest we really need will be drawn in. As my hon. Friend the Member for Witney (Robert Courts) mentioned, the drawing in of private finance will make the market more competitive and allow local solutions to rise up and meet local people’s needs.
Full-fibre networks are so much more resilient than the traditional copper-wire networks. I referred to my constituent in Hazeley Lea who told me that the copper cabling was failing. That is a problem not only for Hazeley Lea and North East Hampshire, but for the whole country, because the internet is delivered to most homes in Britain by underground copper cables. My hon. Friend the Member for Aldridge-Brownhills referred to the green cabinets that people see springing up, and from which bushes are cut away so that they can be enabled for fibre, but the final part of the service is still delivered by copper. The wires can be degraded by distance, as has been the case for my constituents in Stratfield Saye and Hazeley Lea; indeed, the constituents in Bramley who live near Chineham have the problem of the long distance from the exchange in Bramley.
Full-fibre networks seek to run the fibre connections straight to the doors of homes or businesses. I make one plea to the Government, because there is still no capability in planning legislation and the national planning policy framework for local councils to mandate fibre to the premises, which would solve the problem referred to by my hon. Friend the Member for Cannock Chase. They can request it, but the only requirement they can make is that there be a telephone connection to a home. I have been told that, if it is done at scale, particularly on larger developments, the cost difference is marginal, if existent at all. The Government could easily remove that difficulty for councils to mandate fibre, and it would be transformational in the new homes that the Government aspire to build throughout the whole United Kingdom.
Michael Tomlinson
My hon. Friend mentioned the fact that copper wires can be degraded by age and distance, but volume of traffic is also a problem. Does he agree that when, on a Saturday night, for example, a popular programme is on or more people want to be streaming or gaming, the whole system slows down and grinds to a halt? That is also part of the degradation process.
Mr Jayawardena
My hon. Friend is absolutely right that copper’s capacity is insufficient for today’s challenges. We must make sure that we deal with not only today’s challenges but tomorrow’s, so we must ensure that there is more fibre than we even need today. We do not want to end up, perhaps in five or 10 years—not a million miles away—with the fibre we install today not being good enough for the challenges of tomorrow.
In turning to the challenges of tomorrow, it is important to consider mobile communication, which is enabled by the fibre broadband that links the mobile masts. Fibre provides the connectivity, via the masts, to users who perhaps want to do their banking on their phones, as several Members have said. Deploying mobile infrastructure remains challenging at times, particularly in remote locations or among difficult topography. It is important for us to consider the viability of such initiatives as we move from 4G to 5G, and as we do so, perhaps we could find a remedy for those communities that have not even moved to 3G or 4G. We must ensure that those initiatives are viable, so that no one is left behind. Mobile telecommunications can be an excellent way of providing mobile broadband—fast broadband—to rural communities, instead of running fibre to those rural homes. It could be that part of the solution, part of dealing with the final 4%, is to ensure that fibre is run to mobile masts, which are then accessible to those rural communities.
Reducing operating costs is critical to ensure that the potential economic viability of these sites is considered properly. I am sure that the Government will consider that in the deliberation that they will doubtless have in the time ahead. Targeted business rates relief to enable fibre cabling to be rolled out to those hard-to-reach areas would be particularly helpful in notspots that have been badly served by telecoms to date and could be much better served by telecoms in future.
It is important to prioritise sites such as railways and motorways, as mentioned by my hon. Friends the Members for Faversham and Mid Kent (Helen Whately) and for Chelmsford (Vicky Ford). They demonstrated that to have connected commuters, which was the term used by my hon. Friend the Member for Chelmsford, we need fibre to be run alongside railways.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. [Interruption.] The hon. Gentleman will have to sit down for a second. We cannot both be on our feet. I have given a lot of leeway, but I do not want to get too involved in 4G, 5G, and telecommunications being passed down motorways and railways, as they have absolutely nothing to do with what we are discussing. I know that you have been asked to filibuster, but do not worry because we have so many more speakers to come and you might deprive them. Come on, Mr Jayawardena.
Mr Jayawardena
Mr Deputy Speaker, filibuster never. I am informing the nation.
Mr Deputy Speaker
Yes, but it has got to be on the subject that we are discussing. We will be talking about cricket next. Come on.
Mr Jacob Rees-Mogg (North East Somerset) (Con)
I am very grateful to my hon. Friend for giving way. Mr Deputy Speaker suggests that this is a filibuster. My hon. Friend has hardly cleared his throat.
Mr Jayawardena
Mr Deputy Speaker, you are very, very kind, but I shall be bringing my remarks to a close very shortly.
It is important to recognise that new fibre, which will be rolled out under business rates relief, allows for better mobile connectivity in those hard-to-reach areas.
Chris Elmore (Ogmore) (Lab)
The hon. Gentleman makes a very good point on the topic of infrastructure around railways and roads. Does he agree that airports are important and need infrastructure as well?
Mr Deputy Speaker
I have a good suggestion for the House: I think you should put in for an Adjournment debate on that very subject. With two Members, I am sure that you can do the subject justice.
Mr Jayawardena
Mr Deputy Speaker, as ever, you make an excellent suggestion. I will speak to the hon. Gentleman in due course.
As we allow fibre to be rolled out, using this relief, to areas that have not been accessible in the past, it is important to reflect on the way in which people are changing their behaviour. People are moving to mobile. We need to ensure that accessibility to the mobile network—the fibre network—is possible. That is why it is critical that we work with companies such as Network Rail to roll out fibre on its land as well as across other people’s land.
As my hon. Friend the Member for Aldridge-Brownhills said, all of this is in stark contrast to the way in which we used to work. It is important that people are helped along this journey. If we want to roll out more fibre, we need to ensure that there is proven demand for it, otherwise it is simply not commercially viable. We need to reduce the operating costs, which we are doing through business rates relief for the roll-out of new fibre. It is good to see the new digital training opportunities that have been created as part of the digital strategy. The new digital skills partnership is seeing Government, business, charities and voluntary organisations come together, which is really positive news. I should declare an interest, so I refer Members to the Register of Members’ Financial Interests. A plan by Lloyds Banking Group to give face-to-face digital skills training to 2.5 million people, charities and small businesses by 2020 is a good example of that partnership. Google has pledged to provide five hours of digital skills as part of its commitment, too. The idea has been adopted by business.
The strategy and these plans demonstrate that the Government take businesses and people seriously in rolling out fibre broadband across the country. This is part of the cuts to business rates that benefit all rate payers and will be worth almost £9 billion over the next five years, and it is part of the Government’s focus on ensuring that we create an economy that serves the whole country—all the nations and regions. It is about ensuring that the Government are committed to the long-term reform of this country.
Who would have thought that Alibaba and Amazon would be the big retailers of today, not the greengrocer on the high street? Who would have thought that we would have been speaking to people across the world on FaceTime instead of flying across the world to see them? Who would have thought that people would be able to watch this speech on their mobile phone rather than read it, dare I say, in Hansard? I am sure that many will.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I have a slight problem. I did not expect to have to bring in a time limit—[Interruption.] Seriously. I do not want to have to introduce a time limit, but we have the summing up in about an hour and there are still five speakers to come, so can we aim at around 12 minutes? If this continues, two speakers will drop off the end, and I certainly would not want that to happen when Members have been sitting here all day. I want to help Members.
Bim Afolami (Hitchin and Harpenden) (Con)
The words will ring in my ears: filibuster never, inform the nation always. That is a lesson for us all.
Mr Deputy Speaker
Order. I will give you an extra lesson—[Interruption.] You will have to take your seat for a second, though. You might be informing the nation, but it has to be on the subject we are discussing, otherwise you are out of order.
Bim Afolami
Of course, Mr Deputy Speaker. Thank you very much for that kind reminder.
This Bill matters. As my right hon. Friend the Member for Wantage (Mr Vaizey), the former Minister, mentioned, it is not necessarily the most thrilling Bill. It is relatively short, with six clauses; as a former lawyer, I can appreciate that brevity is often harder than writing something very long, so I admire the draftsmen’s ability in putting together something so succinct. The Bill should have strong support not just from the Government but from all parties, as has already been suggested by Opposition speakers.
My constituents in Hitchin and Harpenden, only 30 to 40 miles from central London, face patchy broadband coverage in many areas. I appreciate the point made by my right hon. Friend the Member for Wantage—it is often harder to get broadband in spread out villages and rural areas than in tower blocks and urban areas. It is physically harder; I appreciate that, but the village of Kimpton, slap-bang in the middle of my constituency, has pretty terrible broadband.
Let me give the House some statistics to back my point up. In Kimpton, no residence or business receives superfast broadband. We are in the bottom 7% in the country for average download speed and in the bottom 0.5% for connections of more than 30 megabits per second. There is still a job to do and, with due deference as a new Member of the House, I say to the Government that we still have a job to do connecting up rural areas in our country. We should not forget that.
Huw Merriman (Bexhill and Battle) (Con)
As my hon. Friend knows, my 92-year-old aunt lives in Kimpton, and he is speaking eloquently on her behalf. Does he agree that it is most important, particularly in rural areas, that older people living in the community should have access that keeps them engaged with their friends and family?
Bim Afolami
I agree. It is important for people to be connected to friends and family; the converse situation is one of loneliness in many respects. We live in a society that is increasingly atomised, so it is helpful to ensure that older members of society have full digital connectivity. That is another reason why the Bill is important.
At a recent meeting of a local business club in my constituency, a business owner whose business is situated in a rural area just north of Harpenden told me that it takes three days to back up her server, such is the slow download speed. Business rates relief for the installation of full-fibre broadband infrastructure will provide a huge incentive for operators to invest in the broadband network with the latest technology—a point made admirably by several of my hon. Friends, not least my hon. Friend the Member for North East Hampshire (Mr Jayawardena).
It is important to consider why, in the broader sense, it is important to have world-leading digital infrastructure. Why are we all here? I shall offer a few observations. We are effectively going through a new industrial revolution. Technology, powered largely by the internet, is driving a global future. This country needs to be at the heart of that, and rolling out full-fibre broadband is central to the challenge. The Bill will make it easier, enabling small businesses in rural areas such as mine to access the superfast broadband they need. As the Minister said, the Bill will break down barriers to business, which everybody wants—at least on our side of the House.
The Bill shows that the Government can, in limited ways and when the time is right, provide innovative solutions to help to solve some of the biggest problems choking up areas of the economy. We need strongly to support the free market and free enterprise with little Government intervention, unless necessary. The Bill and the Government’s actions are bold. We need to be bold enough to use the tools of government to allow the private sector to work more efficiently and incentivise it to provide better results for our constituents, who send us to this place on their behalf, after all.
Business rates relief is welcome, as many hon. Members have said, but I urge the Government to ensure that we do not lose sight of our manifesto commitment to a full review of business rates, and to produce a system that is more fit for purpose. In certain ways, the current system has shown itself to be capricious, cumbersome and, in some senses, frankly unfair.
When discussing a Bill on digital infrastructure, it is appropriate to point out the fundamental asymmetry and unfairness for bricks-and-mortar businesses paying the levy in comparison to the digital technology-based businesses with which they often compete on a day-to-day basis. We all know businesses on our high streets that have this problem. It is important for the House to recognise that many international taxation treaties inhibit the United Kingdom from taking unilateral action on the taxation of global technology businesses because their nature is, indeed, global rather than domestic. Everybody can appreciate the difficulties with that. I urge the Government to look for more international agreement on the issue so that we can start to address the balance of the business rates paid by physical, bricks-and-mortar businesses compared with those paid by their digital cousins and friends.
In staying true to the detail and narrow nature of the Bill, it is incumbent on me briefly to talk about 5G mobile broadband, following on from my hon. Friend the Member for North East Hampshire. Now, this may seem like a dull topic, but I assure Members that it is not—it can be very dull. The reason is that 5G, like 4G or 3G, is something we take for granted; it is just there. We do not think enough about where it comes from or the work that goes into it. However, 5G will be the enabler for so much technological development in this country.
O2 estimated in a report that 5G infrastructure will be just as pivotal as broadband to the wider economy over the next five to 10 years and will greatly boost British productivity, which all Members of this House should wish to see. The benefits are manifold, from telecare health apps, to smarter cities, to more seamless public services. Those are some of the many benefits that 5G mobile broadband can help to bring about, and I urge Members to support the Bill, which provides some of the digital plumbing that will enable us to bring tangible benefits to our constituents.
To take up a point raised by my hon. Friend the Member for North East Hampshire about 3G and 4G, it is important to note that some areas, especially rural areas, are still not on 3G or 4G—
Mr Deputy Speaker
No, it is not that. I am trying to be helpful. I am bothered about time. I would like us to discuss broadband infrastructure to houses, rather than 3G, 4G and 5G, which is mobile phones. If we were having a debate on mobile telecommunications, it would be brilliant, but we are not. I have allowed a bit of freedom, but I do not want the debate to concentrate on that issue. The hon. Member for North East Hampshire should know better than to lead you on into discussing something I have told him off for.
Michael Tomlinson
On a point of order, Mr Deputy Speaker. Forgive me, but this is my very first point of order, and I am sure you will indulge me as a relatively new Member of Parliament. However, in clause 1, there is reference to mobile phone telecommunication as well as—
Mr Deputy Speaker
Don’t worry—I can help you. I am very bothered about the length of time and the number of speakers I am trying to get in, so if we can concentrate on the bolts of what it is about, it will be much easier to get everybody in to speak. The last thing I want to do is not get you in to speak, seeing as you have sat here all day. So I think it is better if I can help the House move along in the area I think we need to discuss. To go back and talk about 3G over 4G is not relevant to today’s debate.
Mr Deputy Speaker
I will make the rulings. You can listen to my rulings, and we can have a discussion later if we need to, because I want to hear you speak in a little while.
Bim Afolami
Thank you very much, Mr Deputy Speaker.
In closing, I should say that the Bill is a significant step forward. It helps our country to lead the world in a new industrial revolution based on digital technology. It also shows that this Government, and indeed any Government using their powers effectively, can make truly positive impacts on people’s lives when acting in the right way—in this case, to enable superfast broadband to reach more people more quickly.
Robert Courts (Witney) (Con)
It is a great pleasure to follow the many distinguished speakers in this debate, who have made so many excellent points—particularly my hon. Friend the Member for Hitchin and Harpenden (Bim Afolami), who so eloquently laid out many of the issues that many of us face in our own constituencies.
I have a few brief points to make, but if I may I shall start with a little trip down memory lane. I have recently purchased a new iPhone. In doing so, I remembered the first iPhone I ever bought, which connected to a thing called EDGE—it did not have 3G. Of course, those days are long behind us, and with my new device, I can do a great many tasks I just could not have thought of in those days.
I say that because today is my baby son Henry’s first birthday, and I apologise to him in advance, if he ever watches this speech, that I am here, rather than speaking to him. But all is not lost, because, owing to the wonderful invention of mobile phones and the internet, I can take part in the happy day. I can, for example, see him and speak to him on Skype. For his part, he wonders why on earth his father’s voice is coming out of a small box my wife is holding in front of him.
I can also see photographs and videos of him opening presents. These presents were, of course, ordered from a well-known, very large internet company—and a gigantic number of them there are, too. His everyday necessities are ordered through the internet; there is no longer a requirement to go to the shop. Indeed, it is possible, although I do not have this system myself, to link up the house so that I could turn the lights up and down in his room if I wished. I could check on his welfare through a webcam that I could view on my mobile phone. The most extraordinary, and perhaps slightly disturbing, thing is that there is a teddy bear in his room—a company called CloudPets produces these—and, using an app on this iPhone, I can go online and record a message so that when he plays with the teddy bear and presses the button on it he can hear my voice. This is lovely, of course, on his first birthday.
However, the internet is not just something to amuse, and perhaps confuse or even slightly frighten, infants; it is of everyday importance for us all. As many hon. Members have rightly said, these days the internet needs to be seen, as it certainly is by the people of Witney and west Oxfordshire, as another essential utility. We all know that we are able to get about by road and by train, and that we are connected to water, electricity and, in some cases, gas. We expect those things now. Once, not so many years ago, the internet was seen as a bit of a luxury that people might want in order to go online and look at websites, but it was not something that they had to do. Now it very much is, because so many services take place online that it is increasingly hard to use them if we wish to telephone. Utility companies, for example, increasingly encourage us to go online, perhaps to pay a bill or change a tariff, rather than ring to speak to a person. It is therefore absolutely critical that everybody has immediate access to these services.
I would like, if I may, to clarify some of the terminology that we have discussed in the course of this debate. We all fall very quickly into the habit of referring to fast broadband, superfast broadband and ultrafast broadband —or full broadband, as it were. Superfast broadband—I appreciate that the House is aware of this, but it is worth dwelling on for a moment—uses fibre-optic cable to get to the cabinet but then, from cabinet to house, only copper. That is an old system that does not carry the data required these days due to attenuation—the breakdown of signal over distance and the physical effect of the current going through the copper. The signal slows down so that even if there is fibre-optic cable running to the cabinet, by the time it gets to the house the user does not necessarily receive anything like superfast coverage. That is why, although I entirely bow to the expertise of my right hon. Friend the Member for Wantage (Mr Vaizey) and thank him, on behalf of constituents, for all the work that he did, there is still a job to do, as I think we would all accept. Superfast broadband is being rolled out across the entire country, but still, in some places, 5% to 10% of people do not have it, never mind anything else. We increasingly need fibre-optic cable running to the property, which enables full-speed broadband all the way.
In my professional life before I was elected, I saw exactly why that is. I know that other hon. Members will feel exactly the same. As a barrister, I would be away at court; the papers are often sent through to barristers at the last minute. They would sometimes be very big bundles, and our clerks would wish to email them to us to save us having to go into chambers to pick them up before going home. If I had been in court in, say, London, and I wanted to go to chambers in Winchester or Oxford before I went home, I would wish to avoid that step. I would have to go to my home in Bladon, a village in Oxfordshire, to look at the email to see whether the papers had been sent to me, but there was not enough broadband speed to download them, so I would have to get into the car, drive into chambers, pick up the physical bundles, and then drive back. All the while, I was wasting time, wasting money, downgrading my productivity, and adding to the traffic and pollution on the roads, all of which was unnecessary. When people write to me, as they frequently do, to say that it is impossible for them to carry out their business, I entirely understand their point, because I have suffered that very same frustration.
West Oxfordshire is full of businesses that operate from home. Before this debate, I had a look through my emails to see how many villages had written to me. Over the course of the brief time I have been a Member of Parliament, I have been contacted by constituents from the Wortons, Spelsbury, Kencot, Lechlade, Bladon, Bampton, Bruern, Filkins, Stanton Harcourt, Chastleton, New Yatt, Sandford St Martin, Fawler, Minster Lovell, Taynton, Langford and Standlake. That is 17 or 18 places in all.
I shall concentrate on the example of Chastleton. A gentleman from the parish meeting wrote to me—I am sure you will be pleased to hear, Mr Deputy Speaker, that he made his point succinctly—to say that Chastleton is lucky to get a speed of 1.5 megabits per second and that that has implications. First, businesses simply cannot work from home or find it very difficult to do so. Secondly, as I have alluded to from my own experience, it affects traffic flow because people have to either collect items in person or go to their workplace in Oxford, thereby adding to congestion on the A40, which hon. Members will know is a subject that I mention frequently. Thirdly, on education, children who are required to do their homework online simply cannot do so in many cases.
If anything, my correspondent has missed out one of the real drawbacks of the absence of a proper broadband connection, which is its effect on elderly care. My hon. Friend the Member for Hitchin and Harpenden (Bim Afolami) has referred accurately to an atomised society. When we go away to work, in many cases we leave elderly relatives without immediate access to family. It is absolutely crucial that people are able to make contact with loved ones quickly and easily, and to access the necessary services, including online medical advice and transport-booking facilities.
I remember my father going abroad on business trips. He would telephone during the week and we would wait while the signal bounced off the satellite, went around the world and came back again. We are a long way from those days. When I went to work in New Zealand some years ago, I was able to have a video conference with my loved ones at home and it was set up very quickly. That is all well and good. Those powers exist, but only if people have an adequate internet signal, which is clearly necessary for businesses, the elderly, family and care.
I know that many hon. Members represent rural areas where this issue is the chief concern. However, the situation is much the same in cities. The speeds experienced by many householders in Westminster and Lambeth are not much better than those in the rural areas we represent, so let us not think that the issue affects only those of us who have lots of small villages in our area. It affects cities as well. In fact, a lady who lives on Buttercross Lane in my biggest town, Witney, wrote to me to make a point about developers, which has also been made by my hon. Friend the Member for Cannock Chase (Amanda Milling), who is no longer in her place. My correspondent was frustrated that the cabinet is very close but the developers are not required to connect the rest of the properties. That issue clearly causes immense and understandable frustration for my constituent and many others.
The digital economy has contributed about 7% of national output over the past year and has grown three times faster than other areas of the economy, so it is of enormous significance to the economy, particularly in areas such as mine, where so many people work from home, are self-employed and run small businesses. I declare an interest as the chairman of the all-party parliamentary group for small and micro businesses. The issue is very close to my heart.
There have been many bank closures in Carterton. As other hon. Members have said, we are told that that is because people are increasingly using those services online. That is all well and good, provided that they have the ability to do so. Although someone in Carterton might have a strong signal—not everybody does—that is not necessarily the case in the surrounding villages. They need one if they are to pay council tax or do internet shopping.
When I was younger, if I wanted a particular book I had to order it from the local bookshop. It might be sourced from the other side of the world and take months to arrive. Some of the romance of that has been lost, because we can now order almost anything we want and it will appear in a matter of days or, at most, weeks. That is one of the wonders of the internet age. The same is true of music. Music lovers may remember that once upon a time, if we wanted to listen to a hard-to-find song or album, it was sometimes possible to track it down, but it might have to be ordered from abroad. Now, the many well-known streaming services make it possible to listen to whatever we like immediately, as long as we have a good enough internet service.
Decent, high-speed, ultrafast broadband is absolutely crucial for day-to-day necessities and for business. My hon. Friend the Member for North Dorset (Simon Hoare), who is not in his place, has given us an inkling of what is required in rural economies. In years gone by, the biggest contributor, directly and indirectly, to the economy of Witney and west Oxfordshire was something called the Cotswold Lion. The Cotswold Lion is actually a sheep, and in the not-too-distant past—only 50 or so years ago—the blankets and gloves made from its fleece were the mainstay of Witney’s economy. Now, we are looking to unlock tourism. It is essential that those who provide accommodation in bed and breakfasts, and in the great many houses that are available on short lets, can get those properties online.
On Saturday I attended the Witney carnival. At many such events all over west Oxfordshire, people sell things such as art or food products at small stalls. All such businesses are made possible and successful by access to good, fast broadband. Without it, they simply will not work. I apologise for saying it again, as I have done on many occasions in this House, but broadband is not a luxury; it is absolutely essential in this day and age. I entirely agree with west Oxfordshire residents who write to me to point out that they have a slow connection and they ought to have a fast one. They are absolutely right. It is essential in their personal lives and their businesses.
Broadband is entirely necessary for all of industry, in business premises, in home businesses and in the tourism sector. As I have said, a great deal of work has been done. I thank the Government for the work that was done before I came into Parliament and for their continuing efforts to roll out fast broadband across my constituency and beyond, but we must complete the job. I applaud the introduction of a legal right to superfast broadband. Coverage in Witney is about 90%, but we need to work towards 100%. I welcome the package of measures that the Government are introducing, which include the universal service obligation and £400 million towards the digital infrastructure investment fund.
As I said in an intervention on my hon. Friend the Member for North East Hampshire (Mr Jayawardena), I particularly encourage private investment. I am grateful to BT for being proactive in my constituency and trying to connect as many people as possible. With sound money, good local governance, strong local councils and wise investment in flexible, agile and cost-effective local companies—there are several such companies in my constituency—we can provide this full solution.
I will briefly touch on the two clauses in the Bill that I consider to be most relevant. The first of them quite rightly puts business rates relief for broadband alongside the existing relief for small businesses, charitable organisations and rural businesses. Clause 6 promises that the effect will be more or less immediate, and I applaud that.
My final point—I do not want to test your patience, Mr Deputy Speaker—concerns 5G. I welcome the fact that broadband and mobile telephony will be combined over the coming years. As we seek to bridge the digital divide, we really must fix notspots. I applaud everything that the Government have done towards that, and I hope that the Bill will be given a Second Reading.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Before I call Mr Tomlinson, I want to help him by saying that he might want to take a few pages out of his speech. If hon. Members keep to 10 minutes each, they will all get a chance to speak.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
I am very grateful to you, Mr Deputy Speaker, for your guidance and for your earlier ruling, which has given me the opportunity to speak for 10 minutes, rather than the nine, eight or seven minutes I might otherwise have had.
Mr Deputy Speaker
Order. If it is helpful I can make the limit eight minutes to give someone else more time.
Michael Tomlinson
My meaning is the exact opposite. I am very grateful to you, Mr Deputy Speaker.
It is a great pleasure to follow my hon. Friend the Member for Witney (Robert Courts), for whom I feel great sympathy. I am sure that many of my hon. Friends as well as Opposition Members have been in a similar situation when trying to communicate with members of their family on birthdays, important anniversaries and the like. He and I, as well as my hon. Friend the Member for Hexham (Guy Opperman)—he has arrived in the Chamber at the appropriate moment to hear me say this—were members of the same chambers and therefore in exactly the same situation when trying to download papers attached to an email to make sure that they arrived in court on time.
I warmly welcome the Bill. As we have heard so many hon. Members say, the importance of broadband cannot be overstated. It is as important as road and rail, and is a vital part of our infrastructure. Although I am pleased with the progress the Government are making, I will dwell on one or two brief points about where improvements still need to be made.
I start with words of congratulation, because it is right to acknowledge where the Government are moving in the right direction, and to be able to stand up and say that 93% coverage for superfast broadband is indeed an achievement. I applaud the ambition to achieve 95% coverage by the end of 2017, and I was pleased to hear the Minister say that the Government are on target for that. However, it is frustrating for the 5% who are still left without it. That point has been repeated this evening, but I make no apologies for repeating it again. Many of us who have spoken represent constituents who are in exactly that position, and I know that a number of my constituents are not consoled by the fact that 95% of the rest of the population have access to superfast broadband while they do not.
I need not dwell on specific internet speeds; suffice it to say that the 1,000 megabits per second lauded in relation to the Bill is to be warmly welcomed, but that figure would be staggering to my many constituents who are struggling with 0.5 to 1 megabits per second and really cannot imagine a speed as vast as 1,000 megabits per second. However, I will, if I may, dwell on two or three brief constituency examples that constituents have raised with me. I must declare an interest in that, in the village of Lytchett Matravers, I am affected by many of the same issues.
The first example involves a constituent who wrote to me expressing great concern about broadband speeds of between 0.5 and 1 megabits per second. As has been said, we use the internet for more and more things these days, including education. My hon. Friend the Member for Faversham and Mid Kent (Helen Whately) mentioned researching points for educational purposes, but it goes further than that because many of our children are asked to do homework based on the internet and purely on the internet; in fact, they have to access the internet to download the homework to do that evening. One constituent wrote to me saying that they have to ration the amount of homework that their family can do, with the children taking it in turns to get on to the computer and complete their homework, because speeds of 0.5 to 1 megabits per second simply do not allow two children to do their homework at one and the same time. The additional point was made that updating software—with Microsoft, people do not get a wonderful DVD or disc to put into the computer these days; they actually have to download it from the internet—simply cannot be done if the speeds are not fast enough.
The second example I was recently given by a constituent involves a rural business. Again, the constituent lives about 100 metres from a different network that is much faster and would allow the business to function properly. As it is, he is struggling on less than 1 megabit per second and has to go to his place of work to download his work. The speeds where he lives simply will not allow it. My hon. Friend the Member for North East Hampshire (Mr Jayawardena) mentioned an example in his constituency in which BT was flexible, but in this case BT has not been flexible enough and will not allow my constituent to change from one exchange to another, despite the distance of merely 50 metres or so.
I am conscious of the time, Mr Deputy Speaker, but I want to make one or two final points about postcodes, if I may. I know that the Minister is soon to jump up to the Dispatch Box, but I want him to take this point on board. Quite often the data are arranged by postcode and the percentages are calculated on that basis. However, some roads have the same postcode but different exchanges. I can think of one example in Dorset where it is claimed people have the potential to access superfast broadband on the basis of the postcode alone, but that is not the case because the one postcode has two separate exchanges.
I warmly welcome the measures in the Bill. It will not solve all the problems overnight. When my constituents look at the full-fibre speeds, with fibre to the door rather than just to the cabinet, of course they applaud them, but they want them and they want them soon. Thank you, Mr Deputy Speaker, for indulging me and for giving me a full 10 minutes, and I sit down in advance of reaching those 10 minutes.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
Thank you, Mr Deputy Speaker, for giving me the opportunity to speak for longer.
It is a pleasure to speak on this Bill tonight, because when I campaigned in the by-election back in December broadband was one of the major issues. Indeed, trying to deliver broadband throughout my constituency is part of the five-point plan on which many hon. Friends helped me campaign back in those winter months.
I agree with my hon. Friend the Member for Witney (Robert Courts) that broadband is essential. That is a relatively new thing. I am not that old, but when I look back to my childhood, I remember there being one BBC computer in a corner of the school that we went to use a class at a time. Only when I got to university did we really start to use the internet and have the ability to send emails. At that stage, we were sending emails only to other people within the university—in my case mostly to the man who is now my husband.
Now, we cannot conceive of how we could possibly live without the internet, whether we are young or old. As my hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) said, people need it to be able to do homework. The children of my constituents and my own children have been given homework on Sumdog and other maths applications that they are supposed to do online, but they simply cannot do it with broadband speeds of less than 2 megabits per second. That is affecting the educational opportunities of the children in our most rural constituencies.
Young people in general are having difficulties. When they turn on the television and turn on Sky broadband, for example, they are told they can watch downloads, TV on demand or downloaded films, but they cannot because those things are not available to people who live in many of the rural areas I represent, where download speeds of less than 2 megabits per second are very common.
It is perhaps for business people that the lack of broadband represents the greatest problem. It is a particular problem for small businesses and, in rural areas, for farmers, who have to complete their single farm payments online. Reloading and reloading and reloading that page becomes very wearisome. We are now being asked to complete tax returns online—in fact, we will be asked to do so four times a year. VAT returns are also done online. All this becomes more and more wearisome when we have to do it online and we simply cannot do it. When businesses want to advertise for new employees they do it online and when people apply for those jobs they do it online. All those things cannot be achieved because we do not have access to what is now, in effect, a utility. In many parts of my constituency, it is not possible for families to do their shopping online. They write to me complaining, “We live in the most rural area in the country, and we cannot order our shopping.”
This is, perhaps, of even greater concern to the elderly. Jo Cox founded the Commission on Loneliness to help people in our community, such as the elderly, who are cut off from society. That may be more prevalent in rural communities than it is in cities. The internet offers elderly people living in such communities the opportunity to be connected to their families through Skype and other methods of communication. It also offers opportunities for telemedicine. At a time when we face challenges in relation to social care and the elderly, telemedicine and the use of the internet to monitor the condition of and check on the wellbeing of an elderly person can enable us to improve our social care offering to people in rural communities, and communities everywhere; but if we do not have the necessary internet resources, we cannot do that.
I welcome the Government’s 93% superfast broadband coverage—we have made great strides in increasing the number of people who have access to this wonder—but for those who do not have access to it, the position has become increasingly frustrating. Some people living in Wellingore wrote to me saying, “We can see the cabinet, but we do not have access to it, because we are on a different exchange, and by the time the signal reaches us from that cabinet, it is so slow as to be virtually useless.” Those people are being supported through the community fibre partnership, and I hope that in time they will be able to benefit from good broadband. The situation is similar in Swaton. A constituent wrote to me saying that they were full of excitement at the sight of the superfast broadband sign with the little box in the corner. It is right outside their house, but they are not connected to it; they are connected to one down the road.
People in Sudbrook—here I must declare an interest, in that Sudbrook happens to be the nearest village to where I live—were originally told that they would have broadband by this September. Unfortunately, however, they have now been told that that will not necessarily happen because of the railway line, although the railway line is not new but has been there for a long time. Their broadband seems to have been indefinitely postponed. It beggars belief that in this day and age something as simple as a branch line should prevent the upgrade of a broadband network.
Overall, I think that the Bill, which will abolish business rates on fibre broadband for five years, will encourage the placement of new fibre lines, and I hope very much that that will happen in the rural components of my constituency. I hope that, in focusing this benefit, the Minister is minded to ensure that providing broadband for people in rural communities who are currently suffering from a lack of access to that vital utility is given a higher priority than increasing broadband speeds from very, very fast to even faster in our cities and town centres.
Huw Merriman (Bexhill and Battle) (Con)
It is a pleasure to be the last Back Bencher to be called in the debate, which has been incredibly interesting, although I think that, at times, the connection between the clauses in the Bill and the contents of speeches was well and truly lost. There was a suggestion that constituents of ours would have been able to watch the debate online. If that is the case, given certain parts of it, I find myself feeling sympathy for the 93% of the public who have such access. My hon. Friend the Member for North East Hampshire (Mr Jayawardena), who is no longer present, said that innovation would permit constituents to watch the entirety of his speech online. Conservative Members speculated on whether that same innovation would allow the battery in his phone to last quite as long. Perhaps there is still some way to go.
None the less, this has been an interesting debate, and I am delighted to be able to use the last few minutes to further it. Despite great work by my local authority, East Sussex County Council, and indeed by the Government, too many of my constituents do not have a connection to fast broadband. My constituents’ age profile is high, and in order to balance our local economy we must encourage more working-age people to come to live and work in East Sussex. It is not too far from London, but, from a commuting perspective, particularly given our travails with Southern rail, it is too far to be attractive to many such younger working-age people. My constituency is fortunate in that 75% of it is designated as an area of outstanding beauty, so in that sense it draws people to want to come there to set up their own businesses, but they will not do so without the connectivity of superfast broadband.
Richard Graham (Gloucester) (Con)
My hon. Friend describes a constituency that is different from mine, but in many ways we have similar issues. In Gloucester, we struggle with the black spots that often arise in urban environments. Most of the city is well-covered but there are certain black spots where people cannot access broadband that enables them to work from home. That is similar to the problem that he describes.
Huw Merriman
My hon. Friend is right: urban areas, as well as rural ones, will not continue to regenerate without this problem being fixed.
I welcome the introduction of the Bill and the granting of business rate relief as a result for a five-year period on fibre and 5G installations. That should act as the further incentive that we in my constituency need to provide a fix.
I also welcome the previous Bill’s introduction of the new universal service obligation, which, again, should give the last 7% faster broadband. As has been said, this type of connectivity infrastructure is, in the modern age, akin for our constituents to the delivery of a new road or railway in the past. It is vital for the entire economy that we do not leave these constituents behind.
As well as recognising the investment from the Government via this Bill, and previous funding initiatives, I commend Conservative-run East Sussex County Council and Labour-run Brighton and Hove Borough Council for working together to help businesses and properties across East Sussex to access faster broadband. Through their e-Sussex project, my county has allocated £34 million in funding for areas that are too expensive for the market to upgrade itself. Every exchange in East Sussex will be included, and the current project will cover an area of 660 square miles and over 66,500 premises. It will install over 400 new fibre telecoms cabinets and other structures and will lay over 1,000 km of fibre—the distance between Brighton and Berlin.
The first e-Sussex contract is achieving excellent results in bringing better, more reliable fibre broadband to many areas that would not otherwise benefit from upgraded services. However, there remain properties that are hard to reach—for example, where a property is too far from the upgraded cabinet to benefit from any speed uplift. “Hard to reach” generally means too expensive for the public purse to fund. East Sussex has therefore signed a second contract with BT for further investment, so that an additional 5,000 homes and businesses in East Sussex will be able to access high-speed fibre broadband.
There has been much talk today of political parties coming together over a common interest. Perhaps that local example is a positive illustration of the power of working together.
Richard Graham
Have my hon. Friend’s council and the council in Brighton introduced in their planning requirements an absolute requirement on all developers to provide superfast broadband? This is an area where many of our councils around the country could do more, and I would be interested to learn of his experience.
Huw Merriman
I do not believe those councils have, but my hon. Friend touches on another issue. I am referring to East Sussex County Council and Brighton and Hove Borough Council, but outside of Brighton but within East Sussex it is the district councils that would have the planning condition powers to which he refers. Therefore, I doubt that those councils have done so, but this is perhaps a good example. of where districts can work better together with their county cousins.
This might seem like great news for East Sussex, but I am afraid we are starting from a very low base in terms of where we are operating from. The recent report by the consumer organisation Which? found that Rother District Council’s geographical area, which covers the bulk of the 200 square miles of my constituency, is in the bottom 10 of all districts and boroughs in the entire British Isles for average broadband speeds. Rother joins the highlands, the Shetlands and the Orkney Isles in the bottom 10 performing areas. In contrast, the residents of Tamworth, which tops the list for speeds with an average of 30 megabits per second, are much more fortunate. The average speed for Rother is less than 10 megabits per second.
Bearing in mind that 10 megabits per second is deemed to be the minimum acceptable standard by Ofcom, I very much welcome the Minister’s commitment that 100% of my constituents will receive 10 megabits per second by 2020. The Which? report suggests that the increased performance for the Rother District Council area will be vital if the Government are to meet their 100% target. May I therefore put in a blatant invitation to the Minister to meet me to discuss what help could be offered to my constituents in Rother, in addition to the provisions in the Bill and the universal service obligation, to enable me to assist the Government in meeting their target?
In conclusion, I welcome the Bill as part of a package of proactive measures from this Government to deliver faster broadband. I should also mention—notwithstanding the fact that I just said, “in conclusion”—that I welcome the further reforms to the business rate mechanism. I do not wish to wander too far from the topic, but I can think of many examples of business rates having an impact on businesses in which services are being offered. We should not forget, for example, that Members of Parliament are subject to business rates, as I found out to my personal cost when I exceeded my IPSA budget for my staff office. I therefore absolutely welcome the point made by my hon. Friend the Member for North West Hampshire (Kit Malthouse) that business rates should be linked to turnover, rather than to premises. That would certainly help my constituency. As a further meander, Mr Speaker—
Mr Speaker
I am much enjoying the hon. Gentleman’s dilation. There is no prohibition on him dilating a little further if he is minded to do so. He clearly has an expectant audience.
Huw Merriman
You are very kind, Mr Speaker. That is helpful, although I think part of what you said was perhaps inaccurate.
The other point I wanted to mention was corporation tax. I hope Opposition Members will agree that my speech has been quite collaborative so far, but I take issue with some of them on this issue. Conservative Members have pointed out that corporation tax has been reduced, yet the overall yield—the amount that can be put into public services—has increased. For whatever reason, the Opposition want to increase corporation taxes, which would reduce the amount of money available for public services. That is of course illogical.
Huw Merriman
I will of course give way to a man who is anything but illogical.
Mr Rees-Mogg
I am very grateful to my hon. Friend for giving way. Has he not once again powerfully shown the benefits of the Laffer curve, which demonstrates that lower rates lead to more tax revenue?
Huw Merriman
I thank my hon. Friend for reminding me of the Laffer curve, a term I have not heard since I was doing A-levels at Aylesbury College, where I was studying economics. He is absolutely right.
That brings me to another point about the Opposition. As well as supporting the Bill, it is important to support its aims, which are to increase business, to increase turnover and to increase the amount of money that we can put into public services. I am reminded of a recent visit to Bexhill business park, where the Government are creating funds for a new road. In return, it is hoped that investment will be generated for new businesses to set up there. It is interesting that many businesses from across Europe are looking to set up their headquarters in that business park. At a time when business confidence is perhaps a little uncertain owing to our position with regard to the European Union, it is absolutely essential to ensure that we have the lowest possible corporation tax base, so that those businesses can have every incentive to invest in this country, not just for the short term but for the long term. I am sure that they will be absolutely delighted that this Government have been returned to deliver just that.
In conclusion to my conclusion, I very much welcome the steps that this Government have taken to incentivise further broadband roll-out. I hope that they will help my constituents in Rother, which is, as I have said, in the bottom 10 districts—[Interruption.] I repeated that in case Scottish National party Members did not hear it the first time. I very much look forward to supporting the Bill as it spends its many days in Committee.
Yvonne Fovargue (Makerfield) (Lab)
The Opposition welcome this Bill. It is vital that our homes and businesses have access to broadband and that broadband is faster, safer and more reliable than before, which is why we will be carefully scrutinising the Bill in Committee. As the Chancellor put it, this country was late to the 4G party, so we should do all we can to ensure that the UK is at the forefront of 5G communications and has full-fibre broadband to support it.
There was some doubt that this Bill would appear. The policy was originally announced in the Chancellor’s 2016 autumn statement and was due to be implemented as part of the Local Government Finance Bill, but it was then scuppered by the general election—like a lot of things. It was not mentioned in the Queen’s Speech, and there was some industry nervousness that it had been abandoned, but here we are in early July with a stand-alone Bill and I am glad that we are.
As we have heard, the Bill has a simple premise—at least I thought it was simple before I attended the start of this debate five hours ago. It will encourage firms to install new optical fibre by providing 100% business rates relief backdated to last April for a minimum period of five years. We understand that it will cost the Exchequer around £65 million by 2022. That is sure to be welcome news to the UK’s broadband companies, many of whom wrote to the Chancellor last February to complain that the current business rates regime is not fit for purpose and discourages inward investment in upgrades.
This legislation meets some of those concerns. The fact is that those business leaders were really talking about the whole business rates regime. This Bill deals with just one aspect when we actually need to be talking about the whole system, which many hon. Members from across the House have agreed with. There are many other changes to the system that could help to support businesses, and we outlined some of them in our manifesto, including switching from RPI to CPI indexation, exempting new investment in plant and machinery and ensuring that businesses have access to a proper appeals process. I appreciate that this is a stand-alone bill dealing with digital infrastructure, but I fear that it is no more than a sticking plaster for our moribund business rates system when we really need a total rethink.
This is a framework Bill, so it is short on detail. Conditions of eligibility will be outlined in future regulations, for example, which is why we need to scrutinise the Bill carefully. I do wonder which firms will benefit. The relief is expected to boost the big data providers through, for example, Virgin Media’s £3 billion “project lightning” and BT’s Openreach subsidiary, but it is unclear whether smaller firms will benefit initially. What impact does the Minister expect the reform to have on smaller providers? It would be a great shame if this Bill was merely for big business. Would it help smaller firms if the Bill’s provisions could be applied retrospectively to capture work on full-fibre networks that has already taken place?
Like many hon. Members, I am worried about how the Bill will benefit Britain’s rural communities, who have not done quite so well out of the broadband revolution so far. Many areas of the country, including urban areas, have been dogged by poor connectivity. I could not get broadband speeds for the past seven years in my area, but we were connected just last week because the housing company that built my house did not allow it to be cabled. However, many customers still do not get the advertised speeds that they are paying for. If they want a broadband upgrade, they pay for it, but they do not always receive what is advertised, so I commend the Which? report on broadband speeds. We pay our water rates, but if the utility company merely gave us a trickle out of the tap, we would be quick to complain. Many Members have said that broadband is the next utility, so why is that not included?
Businesses have suffered from not having the proper access to markets and customers that they should have. The public have suffered from being cut off from internet sites and entertainment sources, and their children are doubly penalised because so much modern education relies on online resources.
Discussion of digital exclusion has been sadly lacking in this debate. Services are increasingly going online. In fact, jobcentres have recently closed as people are encouraged to apply online for all their benefits and council services, yet many people do not have access. In my constituency in the borough of Wigan, 99% of people have access to fast broadband, but only 74% of them have the skills to use it. The cuts in the adult education budget are particularly penalising those people by preventing them from joining the digital economy that we all enjoy.
As I said at the outset, we support the Bill, which is an important step towards securing better broadband connectivity and access, but it is about more than just access. The Bill can work only if it is part of a broader picture that, on the one hand, fully incentivises business to invest in the future and, on the other, ensures that everyone, not just a select few, benefits from the reforms. More than just this Bill, that means education to ensure that everyone has the skills to take advantage of this great step forward.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
We have had an interesting and, at times, wide-ranging debate on this important Bill. It is good to see such interest from Government Back Benchers, but it is slightly disappointing not to hear one speech from an Opposition Back Bencher on such a critical issue across the country.
The improvement of connectivity in the digital age helps individuals in their workplaces and homes, and can transform public services and the economy. Improved connectivity will bring significant economic rewards, with research suggesting that increased broadband speeds alone could add £17 billion to UK output by 2024, which has been recognised by all Members who have spoken today. I thank the many colleagues who made such passionate contributions today, which show that we all recognise the importance of investing in our telecommunications infrastructure.
The Bill will ensure that we help to close the digital divide and get higher quality, more reliable and resilient connectivity to more households and businesses. The Bill makes the technical changes needed to introduce 100% business rates relief for five years for newly installed fibre infrastructure. The importance we place on that relief is shown by how quickly we have introduced the Bill in the Session.
The Chancellor announced at autumn statement 2016 that we would provide relief on new fibre with effect from 1 April 2017. It is therefore vital that we move quickly to reassure the sector that the relief will follow. Investment decisions have been made on the back of the Chancellor’s commitment, and it is right that we proceed with the Bill to give us the powers to deliver the promised relief.
The Bill introduces support that forms part of a wider £1 billion package of measures that the Government are putting in place to support investment in digital infrastructure, and it forms an important part of the Government’s digital strategy. As such, the Bill will help to maintain the UK’s current high ranking as an internet e-commerce economy, as well as providing significant coverage of quick, reliable broadband connections to homes across the country.
I want to mention some of the contributions made in this debate, starting with that of the hon. Member for Denton and Reddish (Andrew Gwynne). He welcomed the Bill and also made the economic case for it. I felt he acknowledged that this Government are investing in the technology of the future. He intimated that the measures in the Bill will favour larger providers, but let me reassure him that, on the contrary, the Bill actually helps the smaller providers and opens up competition. It puts those smaller providers on a more level playing field, and that view was reiterated in several contributions.
The hon. Gentleman mentioned business rate retention, and we are absolutely clear that we want local government to keep more of the taxes that it raises locally. That commitment was in our manifesto and we are looking to follow through on it.
Andrew Gwynne
This is an important point, which I have raised in points of order and through other mechanisms in the past week or so. Will the Minister clarify that it is still the Government’s intention to proceed with the measures that were in the Local Government Finance Bill relating to the local retention of business rates, on the same timetable set out, with the changes to the revenue support grant?
Mr Jones
As I said to the hon. Gentleman in my response to his comments, this Government are absolutely committed to allowing local government to keep more of the taxes it raises locally. That was in our manifesto. He made a very important point, not just then, but during his contribution, about local government wanting certainty, but he was using a little faux rage, given that during the time his party was in government, local government had no more than one year of certainty on how it would be funded. Local government currently has a four-year settlement and therefore greater certainty. That said, we are well aware that in the last year of that settlement we need to provide certainty to local government, and it is our intention to do just that.
The hon. Gentleman also mentioned more regular revaluations. I can—
Mr Jones
I am not going to give way; I am going to make some progress. On regular revaluations, I just want to tell the hon. Gentleman that we are committed to the aim of delivering more frequent revaluations. The hon. Member for Makerfield (Yvonne Fovargue) also made the important point about the detail of the measures in the Bill. As she knows, this is a framework and we are going to introduce further regulations to implement the Bill. I can assure her that those regulations will be put forward before the Committee stage, so that hon. Members can scrutinise them during the passage of the Bill.
Andrew Gwynne
On a point of order, Mr Speaker. I have stood at this Dispatch Box on a number of occasions in the past week or so to discuss this important issue; I have asked you how we can get a statement from the Secretary of State or his Ministers. The last time, the Secretary of State did say that we could raise this in a debate. I have asked the question and we have still not got answers. How do we get that certainty for local government?
Mr Speaker
The answer to the hon. Gentleman’s question is that if he does not at first succeed, he must try, try again. I am sure that is something his mother taught him when he was at school—when he was a young boy growing up. What I would say to him is, “Persist. Go to the Table Office. Think of the opportunities for different types of questions and, as we approach the summer recess, the relative urgency or emergency of what he seeks.”
Mr Jones
Thank you, Mr Speaker.
Let me move on to contributions made by other right hon. and hon. Members. My right hon. Friend the Member for Wantage (Mr Vaizey) showed his significant knowledge in this area. He welcomed the Bill and, given that significant knowledge, it was good to see him confirm that he thought the Bill would help to incentivise the smaller providers and increase competition in the sector, a point reiterated by my hon. Friend the Member for North West Hampshire (Kit Malthouse).
My right hon. Friend the Member for Wantage also mentioned the impact the Bill would have on our mobile infrastructure and 5G, as well as the need to look at the planning system to ensure that we have the mobile infrastructure we need. I am sure he will be aware that provisions were introduced last November as part of the Digital Economy Act 2017 to speed up the planning process for telecom infrastructure.
The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) welcomed the framework for England and Wales. As he acknowledged, the Bill’s framework will allow the devolved Government to take up—or not, as the case may be—the measures. He was right to point out that funding will be provided for Wales through Barnett consequentials.
My hon. Friend the Member for North Dorset (Simon Hoare) made an important point about the potential loss of income for local authorities during the Bill’s implementation. I can reassure him that if a network is on the local rating list, compensation for local government will be provided via a grant to cover the particular local authority’s share of the cost of providing the business rate relief.
My hon. Friend the Member for North West Hampshire welcomed the Bill, which I understand fulfils a wish he had during the passage of the 2017 Act. He seemed extremely pleased that the Government have taken up the suggestion to provide this business rate relief.
My hon. Friend the Member for Faversham and Mid Kent (Helen Whately) discussed the Bill’s importance in the context of social inclusion and the tackling of loneliness. She referred to rural small businesses that would benefit from the delivery of fibre broadband to their communities.
My hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) recognised that the five-year rate relief period would provide a significant incentive to fibre broadband. Like my hon. Friend the Member for Bexhill and Battle (Huw Merriman), she made the perceptive comment that this type of fibre broadband is becoming as important a part of the nation’s infrastructure as our road and rail network.
My hon. Friend the Member for Boston and Skegness (Matt Warman) made an important contribution. He has campaigned tirelessly on this issue and talked about the benefit for the Government, with our investment being returned many times over because of the increased economic activity that will be created.
My hon. Friend the Member for Cannock Chase (Amanda Milling) talked about the importance of having fibre connectivity on new housing estates, citing Chasewater Grange. She also mentioned the opportunity that the fibre roll-out could provide to new industrial developments, and did not forgo the opportunity to mention the Rugeley B power station site, which is extremely important to her and her constituents.
My hon. Friend the Member for North East Hampshire welcomed the Bill and mentioned how, in rural areas such as his, its provisions could well assist with tech jobs that hitherto may not have been deliverable in rural areas.
Ms Nusrat Ghani (Wealden) (Con)
The Minister mentions rural areas; could he reference my constituency, Wealden? Broadband is imperative there, not only for the farmers who need to log their files and the teachers who need to do their Ofsted reports, but for the many business throughout the constituency’s three towns, Uckfield, Crowborough and Hailsham. We need connectivity in rural areas, and I hope the Minister can comment on that.
Mr Marcus Jones
I concur with my hon. Friend. My hon. Friend the Member for Sleaford and North Hykeham (Dr Johnson) made the same comments in regard to how these types of measures will help those in her constituency engaged in the agricultural industry and farming.
In conclusion, this Bill will help businesses and households with their broadband and support the economy. It is only one of several measures—[Interruption.]
Mr Speaker
Order. I am sure that the Minister is very flattered. The House cannot wait to hear more of the oratory.
Mr Marcus Jones
Thank you, Mr Speaker.
This is one of several measures that we are taking on both broadband and business rates and I commend it to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Telecommunications Infrastructure (Relief from Non-domestic Rates) Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill:
Committal
(1) The Bill shall be committed to a Committee of the whole House.
(2) Proceedings in Committee of the whole House shall be taken in the following order: Clauses 1 to 4; the Schedule; Clauses 5 and 6; new Clauses; new Schedules; remaining proceedings on the Bill.
Proceedings in Committee of the whole House, on Consideration and up to and including Third Reading
(3) Proceedings in Committee of the whole House, any proceedings on Consideration and any proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
(4) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(5) Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee of the whole House, to any proceedings on Consideration or to other proceedings up to and including Third Reading.
Other proceedings
(6) Any other proceedings on the Bill may be programmed.—(Rebecca Harris.)
Question agreed to.
Telecommunications Infrastructure (Relief from Non-domestic Rates) Bill (Money)
Queen’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Rebecca Harris.)
Question agreed to.
Mr Speaker
Order. If, inexplicably, some Members do not wish to hear the debate on the future of the King George Hospital in Ilford, I hope that they will leave the Chamber quickly and quietly, so that we can hear the oration from the constituency Member of Parliament, and his neighbour, to whom the matter is of great importance.
Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill
Tuesday 5th September 2017
(7 years, 3 months ago)
Commons ChamberRead Full debate Telecommunications Infrastructure (Relief from Non-Domestic Rates) Act 2018 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the Whole House Amendments as at 5 September 2017 - (5 Sep 2017)
The Second Deputy Chairman of Ways and Means (Dame Rosie Winterton)
With this it will be convenient to discuss the following:
Clauses 2 to 4 stand part.
That the schedule be the schedule to the Bill.
Clauses 5 and 6 stand part.
New clause 1—Report on operation of the relief—
“(1) The Secretary of State shall, by 30 September 2018, lay a report before Parliament containing an assessment of the operation of the relief in the 2017-18 financial year.
(2) The report shall include an account of—
(a) the impact upon the level of local authority income raised through non-domestic rating,
(b) the level of investment likely to have been stimulated by the proposed relief, and the scope for extending the relief to other forms of investment,
(c) whether the duration of the relief is appropriate,
(d) the views of those subject to charge of non-domestic rates on the relief, and
(e) the efficacy of the existing mechanism for distribution of relief.”
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
The Government are committed to supporting full-fibre telecommunication infrastructure and the roll-out of 5G. This will deliver a step change in the speed, service quality and reliability of broadband and mobile services. Independent research suggests that increased broadband speed alone could add £17 billion to UK output by 2024, so this is a vital measure for the whole economy. The Bill will provide the powers we need to implement an important part of that strategy.
At the 2016 autumn statement, the Government announced 100% rate relief for new full-fibre infrastructure in England. The clauses in the Bill will allow us to deliver that relief with retrospective effect to 1 April 2017. We have already published draft regulations that illustrate how we will use these powers to implement the relief. The draft regulations have been prepared in consultation with telecoms experts in the Government, Ofcom and telecoms providers. Business rates and telecoms are technical fields so there is considerable scope for complexity where they meet. However, I am glad to say that through our work with the sector, we believe that we have found a clear approach to allow the valuation officer to identify, capture and quantify new fibre.
Mr Edward Vaizey (Wantage) (Con)
I refer the Committee to my entry in the Register of Members’ Financial Interests. Is my hon. Friend aware of some concerns in the telecoms sector that the tax relief could be gamed? People could switch off lit fibre and light dark fibre in order to take advantage of the tax relief. Some have suggested that a better way of implementing may be simply to limit the quantum of business rates paid by telecoms companies. Will my hon. Friend comment on those concerns, which I have heard from a number of providers?
Mr Jones
I understand the concerns raised by my right hon. Friend, and I have great respect for his considerable knowledge of the matter. I reassure him and the various bodies that hold concerns that the relief is not a measure to support the relighting of fibre that has been turned off. Indeed, it is to support the laying of new fibre in the ground. This technical matter is laid out in the draft regulations and explained in the accompanying consultation document published by my Department last week. Consultation will ensure that the proposal reaches the right audience in the telecoms sector. With business rates experts, we will ensure that the relief will work as planned. The consultation will also allow us to move quickly to implement the relief once the Bill has passed and ensure that support is available for new fibre.
Kit Malthouse (North West Hampshire) (Con)
Even if this were a relief that applied to currently dark fibre that is lit, or to fibre that was lit, is unlit and is then lit again, if the premise of the scheme holds true, this is an investment. The idea is that this is meant to spur more economic activity. Therefore, more tax will be gained from corporation tax, pay-as-you-earn and other forms of business rates because people will have premises that become available for use and that are then much more commercial. Rents will rise, values will rise and all the rest of it. The Government do not need to be too chary about where the relief goes, because if the relief is seen as an investment, not just some kind of freebie for the industry, it will benefit everyone, including the Government.
Mr Jones
My hon. Friend is right that this is an investment in the infrastructure of the country. Indeed, it is a relief that is time-limited for five years. After that five-year period, that fibre will attract its own income into the business rates pool, whether on the local list or on the central list.
Mr Vaizey
I hope the Minister will forgive me for interrupting his eloquent speech, but I was spurred into action by my hon. Friend the Member for North West Hampshire (Kit Malthouse), who is a newly elected member of the Treasury Committee—I congratulate him—and who displays the forensic skill we will see in many hearings in months to come. It behoves me to clarify that it is possible under the current regulations for a telecoms provider simply to lay new fibre in existing ducts, turn it on and take advantage of the tax relief, even though there is already fibre in those ducts. That would be seen as gaming the system—taking advantage of the tax reliefs without building the new infrastructure my hon. Friend the Member for North West Hampshire has campaigned for so vigorously. That is simply the warning light that I put up, and it may be that my hon. Friend will drive future Treasury Committee hearings towards that subject.
Mr Jones
By definition, full fibre is fibre that goes all the way from an exchange to the particular business or residential property that it individually serves. Therefore, by definition, even if an existing set of ducting was used, the new fibre would be an expansion of the network, because it would serve a different property from the current fibre. I therefore hope that my right hon. Friend is reassured.
Sir Oliver Heald (North East Hertfordshire) (Con)
As my hon. Friend will know, there are homes and businesses in the rural parts of North East Hertfordshire that are more than 1,000 metres from the nearest cabinet, so providing fibre straight to the door is the best solution. Will the proposed change mean that more work can be done on that more quickly?
Mr Jones
My right hon. and learned Friend hits the nail on the head. The whole design of this legislation and this tax relief is intended to encourage providers—not just the large ones, but the smaller ones, which these proposals are very good for—to bring that new, direct fibre cable to homes and businesses.
Mr Jones
I will just make some progress first, if I may.
The Bill contains six clauses. Clauses 1 to 3 provide the powers for the relief, and clauses 4 to 6 cover consequential and financial matters. Business rates are payable on three classes of properties: first, occupied properties shown on the local rating lists held by local authorities; secondly, unoccupied properties shown on local rating lists; and, thirdly, properties on the central list, which is held by my Department.
The main business rates legislation in the Local Government Finance Act 1988 contains separate provisions for charging rates on those three classes. Clauses 1 to 3 provide powers to allow relief in those three classes. Clause 1 allows for relief for occupied hereditaments shown on local ratings lists. Clause 2 allows for relief for unoccupied hereditaments shown on local ratings lists. Clause 3 allows for relief for hereditaments on the central list.
Clauses 1 to 3 have similar structures and serve the same purpose. First, the powers in the clauses will allow the Secretary of State to set conditions as to when the relief will apply. This is not a wide-ranging power covering all properties. The power can be used only for telecommunication hereditaments. Through these powers we will target the relief on operators of telecoms networks who deploy new fibre on their networks. That will incentivise and reward those operators who invest in the fibre network.
Edward Argar (Charnwood) (Con)
In that context, could the Minister clarify something for me? The Bill says the relief will apply to hereditaments used “wholly or mainly” for the purpose of telecommunications. Is a standardised definition of “mainly” extant in legislation, or could he enlarge on what it would be defined as?
Mr Jones
I think it would be best for me to reassure my hon. Friend that the sole purpose of this legislation is to cover telecommunication hereditaments. As he has heard, the aim is for the Government to provide a targeted, five-year rate relief to incentivise the laying of new fibre cable, which will hopefully serve and support his constituents in Leicestershire.
Julian Knight (Solihull) (Con)
I thank the Minister for giving way—he is being most generous in allowing interventions. In 2015 and last year, Solihull enjoyed a higher growth rate than China, but it is still one of the poorest areas for broadband provision, particularly business provision. The Minister can imagine what more could be achieved if we had better broadband, so the Bill is very welcome, as is the £60 million in targeted tax relief. Does he agree that the relief will not only boost Solihull’s economy but key in to the midlands engine, which is absolutely at the heart of UK growth and productivity?
Mr Jones
My hon. Friend is a keen advocate and supporter of the businesses of Solihull. My understanding is that, by the end of the current roll-out period, 91% of properties will have been reached by superfast broadband. However, the Bill will incentivise providers to roll out more direct fibre services to all parts of the country. Hopefully, businesses and individuals in Solihull will also benefit from the provisions in the Bill.
Through these powers, we will target the relief on operators of telecoms networks who deploy—I have reiterated this point a number of times for the sake of clarity—new fibre on their networks. The proposals will incentivise and reward operators who invest in the fibre network.
These concepts have not been defined before for business rates. The powers in the clauses will therefore allow us to develop definitions with experts in the telecoms and business rates sectors. By taking this approach, we can ensure that we accurately capture in the relief only those parts of the telecoms network that comprise new fibre, which has been a significant concern of right hon. and hon. Members.
Richard Graham (Gloucester) (Con)
The Minister knows that I am as keen as he is to make sure that all the blackspots in our urban constituencies are broadband-enabled as soon as possible. For some time, my concern has been that if new developments do not get fibre connections, there will be a continuing gap, and that every time Ministers stand up and say they will get 95% or 100% coverage, there will be new places without coverage. I am pleased that the Minister’s colleague, the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Salisbury (John Glen), wrote to me saying that Openreach will “provide FTTP”—fibre to the premises—
“to all new developments with more than 30 plots for free.”
That is great news, and it means that Ministers do not have to consider the option I was recommending of enabling local councils to make it mandatory for new developments to have fibre connections. However, will the Minister say something about developments with under 30 houses, because part of the regeneration of all cities is getting small plots redeveloped with housing, and that may involve developments of fewer than 30 homes?
Mr Jones
I thank my hon. Friend for that comment. He is absolutely right that it is extremely important that new housing developments serve well the people who purchase the properties in relation to superfast broadband. He is right that it is a requirement for developments of under 30 dwellings to have a broadband connection and for developments of over 30 properties to have a superfast broadband connection. In bringing forward those requirements, which started this January, the Government had to make a very challenging decision in getting the balance right between making sure that people are properly served with the latest technology and that we build the homes required to deal with the housing shortage in our country.
Mr Vaizey
I am very grateful to hear my hon. Friend talk about these issues. In my constituency, the developer Linden Homes built a housing development with houses selling for hundreds of thousands of pounds, and for the mere price of £6,000 to deliver broadband, refused to stump up that money. It is this kind of behaviour by developers that brings them into disrepute. I congratulate the Government on making great progress, because no new home should be built without superfast broadband.
Mr Jones
My right hon. Friend is quite right. Developers who are not necessarily compelled to provide superfast broadband should think to themselves how the installation of superfast broadband could become a selling point for the property. The provision of superfast broadband is becoming more and more important, particularly as more and more people work from home.
Kit Malthouse
I acknowledge that the Government made huge progress in changing the building regulations so that this becomes mandatory for developments of over 30 houses. However, does it not strike the Minister as peculiar, in this century, that building regulations require the provision of electricity, water and drainage to every house, no matter the size of the development, but not, now, this vital piece of infrastructure that is becoming mandatory for modern living?
Mr Jones
Even in developments of under 30, developers are required to provide a broadband connection for the people who are going to be occupying those properties. It is the developments of over 30 that require fibre broadband to be connected. While my hon. Friend does not seem happy with the premise on which that is based, the rationale behind it is based on the viability of new developments. Quite often, the smaller developments are more difficult for developers to find viable. Therefore, rather than prevent those developments from taking place by overburdening developers with regulations, a balance was struck.
Amanda Milling (Cannock Chase) (Con)
Since speaking on Second Reading about connectivity to new homes, another case arrived in my inbox last week. I cannot go through it in an intervention, but needless to say it involves BT Openreach and the developer, with lots of emails to and from the constituent. I am sure that I will be writing to my right hon. Friend the Minister for Digital about it over the next few weeks.
Mr Jones
I am sure that my right hon. Friend the Minister will be very happy to talk to my hon. Friend about this issue.
As I have said, through our work with the sector and the Valuation Office Agency, we believe that we have found a clear way to capture the concept of new fibre. We have set this out in our draft regulations and the consultation document that we published last week. However, this is a technical and fast-moving sector, so we will keep the operation of the relief under review to ensure that it is working as planned and that the regulations keep pace with the continuing technical advances and changes in the industry. Accordingly, it will remain important that we have the powers available to amend the operation of the relief scheme over time. The powers in the clauses will also allow the Secretary of State to determine the level of relief to be awarded. As I have said, the Government intend to allow telecoms operators 100% relief, but only for new fibre. That new fibre will of course form part of existing telecom networks with existing ratings assessments.
Through the operation of this scheme, we intend to ensure that the relief is awarded only in respect of new fibre and not existing fibre. To achieve this, the powers in the clauses will allow us to set, by a formula contained in regulations, the correct level of relief for each property, reflecting the amount of their network that qualifies for the relief. This will be based on a certificate of the amount of rateable value that it appears to the valuation officer is attributable to the new fibre. The consultation document we published last week explains how, when taken together, the formula in the Bill and the formula in the draft regulations will deliver the correct relief for a property.
As I have said, these provisions are mirrored in the first three clauses of the Bill. Sometimes the letters in the formula differ, but that is merely to conform to existing lettering in the sections into which the formula will be introduced. Hon. Members will have noticed that clause 1 includes a table referring to different subsections. In theory, there will be instances where a property could be eligible for the new fibre relief but also for another such as charitable relief, although we believe this to be extremely unlikely. However, for completeness, the table in clause 1 makes it clear which relief should apply. No such conflict can arise for unoccupied properties or properties on the central list, so the table appears only in clause 1. The rules we have adopted here are consistent with the existing hierarchy of reliefs in the business rates system. Charity relief will apply above all others, and then reliefs such as small business rate relief. The relief for new fibre will apply only where no other relief applies.
Clause 4 gives effect to the schedule to the Bill. As I have described, the Bill makes a number of amendments to different sections of the Local Government Finance Act 1988. Most of the amendments in the schedule are to that Act, and are necessary merely to ensure that those provisions continue to make sense and operate as intended. We are also in the schedule making consequential changes to the Business Rate Supplements Act 2009. Ratepayers entitled to mandatory reliefs in the main business rates system are also entitled to the same relief against the business rate supplement currently applied to larger properties in London. The Bill ensures that that continues to apply for the new fibre relief through these consequential amendments.
Clause 4 also includes the normal power to make regulations for other consequential provisions. We intend to use these powers to make consequential changes to the regulations that govern the transitional relief scheme. This will ensure that the relief is also available for those ratepayers who are either receiving transitional relief or whose reductions from the revaluation are being capped to fund the transitional relief.
Clause 5 provides the normal authority from Parliament that is necessary when making provisions that create a charge on public funds.
Clause 6 provides that the Bill applies to England and Wales. Business rates policy is devolved, so it will be for the Welsh Government to consider whether to introduce a similar relief. The Welsh Assembly Government have asked for the powers in this Bill to apply to Wales, although it will of course be a matter for Welsh Ministers to exercise those powers in relation to Wales. In Scotland and Northern Ireland, business rates legislation is made in their own Parliaments, so again it will be a matter for them whether to proceed with this measure. However, under the Barnett formula, Wales, Scotland and Northern Ireland will receive their share of the funding of the relief. As we have discussed, the relief for new fibre will apply from 1 April 2017, so clause 6 also provides that the amendments and powers in the Bill can take effect retrospectively for the financial year commencing 1 April 2017.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
We have just had a run-through of what the Bill contains, and by and large we welcome it. It is one of the remnants of the Local Government Finance Bill, which fell when the general election was called, and which contained things that industry and local government leaders wanted to see introduced. This could well be the first of several proposals, and I would welcome a conversation about that.
Mr Marcus Jones
Before I talk about the new clause, I would like to make a few observations about the hon. Gentleman’s opening comments. He mentioned the Local Government Finance Bill, which eventually fell when the general election was called. I spent many happy hours with him in that Bill’s Committee, where we debated the merits of allowing local areas to keep more of the taxes they raise locally. I reassure him that, as per our manifesto in the last general election, we are still absolutely committed to allowing local areas to keep more of the taxes that they raise locally. I expect that we will work over the coming months with the local government sector to discuss how we can take that aim forward.
On the point that the hon. Gentleman made about operators gaming the system by, for example, purporting to lay new fibre cable but simply relighting existing fibre cable that is already in the ground, I reiterate that the relief is all about the physical laying of new fibre in the ground. We believe that the definitions in the regulations provide a clear way of capturing what constitutes new fibre, so we consider that we will not be providing business rate relief when new fibre is not being installed and people are merely relighting existing fibre that is already in the ground.
I am grateful to the Opposition for tabling the new clause and giving us the opportunity to discuss at greater length the operation of the relief. Although, as I will explain, we cannot agree to the new clause, I hope that I can provide some detail and assurances on the operation of the relief. It is important to recognise that investment in fibre is a long-term commitment. To support and incentivise that commitment, the relief for new fibre will apply for a five-year period between 1 April 2017 and 31 March 2022. That was the commitment given by the Chancellor in the autumn statement of 2016, and that commitment will be met through the Bill and the draft regulations that we published last week. This is part of a wider package of measures worth £1.1 billion that we announced at the autumn statement to support the market development of digital networks underpinned by full fibre, to ensure that we have the world-class digital infrastructure that we need. This includes £200 million to support local bodies in the roll-out of full fibre networks in their area, and in July 2017 we launched a £400 million investment fund providing finance for network providers to match their fibre investments. Alongside the legislative changes we brought forward in the Digital Economy Act 2017, such as changes to the system that governs access to land and the powers for universal broadband, we are therefore creating the right environment for investment. This measure is a crucial part of that: it is crucial that we provide the necessary support and the environment to allow this investment to happen, and that is what the Bill will do.
Although I am not unsympathetic to the hon. Gentleman’s new clause, I do not think it would support the overall measure to require the Government, as the new clause would do, to review the operation of the relief only one year into the five-year period. This would create significant uncertainty in the sector about the future of the relief, especially as the new clause specifically questions whether a five-year scheme is appropriate. That could in itself damage the success of the scheme and jeopardise the returns we expect for both businesses and households.
As I have said, we cannot agree to the new clause. However, the Government do of course keep all taxes and reliefs under review, and that will include the tax relief for new fibre. We will continue to track the operation of the scheme, and where we believe it can be improved, we will take action. The Bill will allow us to do that. It will also allow the Chancellor in the lead-up to the conclusion of the scheme in 2022 to consider its success and whether it should be reviewed or repeated for future years.
The Bill allows for future relief schemes within the boundaries of telecommunication infrastructure, and for different levels of relief and different technologies within those boundaries, but, as with all taxes, that is a matter for the Chancellor of the Exchequer as part of the Budget process. However, I can give some details of where we will meet some of the aspects of the new clause from existing legislation and practice.
Under the existing local government finance system, local authorities are required to submit to my Department non-domestic rating returns containing information about the business rates income and relief in their area. These are provided before the start of the year as estimates, and after the end of the year as final out-turns. This information is published in full on my Department’s website. I can assure the House that these returns will be amended to include separate information about the level of new fibre relief, so this information will be available for each local authority in England. We expect the first returns to include this information to be the out-turn data for 2017-18, which are expected to be published in the autumn of 2018.
At earlier stages in the progress of the Bill, I gave the House the assurance that we will compensate local government for the cost of its share of the relief. We restated that commitment in the consultation document that we published last week, and I give the same assurance again today. The relief that will be awarded on the central rating list held by my Department is not included in the published return provided by local government, but I can confirm that we will also publish the value of the new fibre relief in respect of the central rating list.
I also assure the House that we take very seriously the challenge of developing a suitable mechanism to deliver relief to new fibre, and that we are listening to the views of the sector. We have been working with Ofcom, the valuation office and the sector to ensure we have the correct mechanism. Last week, we published a consultation document, as I have said, and draft regulations illustrating how this will work. We will have further dialogue with those stakeholders, collect views as part of the consultation and publish a summary of responses to that exercise. In view of the assurances I have given, I hope that the hon. Gentleman will not press his new clause.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clauses 2 to 4 ordered to stand part of the Bill.
Schedule agreed to.
Clauses 5 to 6 ordered to stand part of the Bill.
The Deputy Speaker resumed the Chair.
Bill reported, without amendment.
Madam Deputy Speaker (Mrs Eleanor Laing)
As indicated on the Order Paper, Mr Speaker has certified that clauses 1, 2 and 5 relate exclusively to England and Wales, and are within devolved legislative competence. As the Bill has not been amended in Committee, there is no change to that certification.
Under Standing Order No. 83M, a consent motion is required for the Bill to proceed. I shall now suspend the House for about two minutes while the Government table the appropriate consent motion, copies of which will be available shortly in the Vote Office and will be distributed by Doorkeepers.
Madam Deputy Speaker
The appropriate consent motion has been tabled. Does a Minister intend to move the consent motion?
Stuart Andrew (Pudsey) (Con)
indicated assent.
The House forthwith resolved itself into the Legislative Grand Committee (England and Wales) (Standing Order No. 83M).
[Mrs Eleanor Laing in the Chair]
The First Deputy Chairman of Ways and Means (Mrs Eleanor Laing)
I remind hon. Members that, if there is a Division, only Members representing constituencies in England and Wales may vote on the consent motion for England and Wales.
Motion made, and Question proposed,
That the Committee consents to the following certified clauses of the Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill:
Clauses certified under Standing Order No. 83J as relating exclusively to England and Wales and being within devolved legislative competence
Clauses 1, 2 and 5 of the Bill (Bill 3).—(Mr Marcus Jones.)
The First Deputy Chairman
I am pausing, lest anyone wishes to intervene at this moment.
The First Deputy Chairman
The hon. Gentleman must not tell the Chair to come on. I am anticipating some great speeches. I have stopped anticipating such great speeches.
Question put and agreed to.
The occupant of the Chair left the Chair to report the decision of the Committee (Standing Order No. 83M(6)).
The Deputy Speaker resumed the Chair; decision reported.
Third Reading
The Minister for Digital (Matt Hancock)
I beg to move, That the Bill be now read the Third time.
The Bill is part of a wide-ranging strategy to deliver world-class connectivity for our country. That, in turn, is part of our work and commitment to build a country that works for everyone and is fit for a modern age. Whether it is basic broadband over copper, world-class connectivity over fibre or continuous coverage through the air, it is part of what we could call a full-spectrum strategy.
The Bill provides vital support for the vision of full-fibre connectivity. Growing the fibre network beneath our streets and along our roads and railways is like growing a tree. The trunk links our great cities and connects Britain to the world, and we are growing the great boughs and branches to power ever wider mobile signal and reach every community. We are increasingly growing out fibre not just in the trunk or the boughs but in the multitude of small branches and twigs. It is increasingly going to people’s houses and to each business, and to all the public services of the land. The fibre network needs nourishment—it is as yet a sapling, and as increasing demands are put on it, it will be under greater strain, so we must ensure that it is strong enough to deliver.
I thank all right hon. and hon. Members who have contributed to the Bill, including those who gave it full support on Second Reading and highlighted the contribution that it would make to furthering our ambitions to deliver world-class digital infrastructure. They were absolutely right to make that point. I am grateful to the Clerks of the House, the Bill team in the Department for Communities and Local Government and my brilliant team in the Department for Digital, Culture, Media and Sport. I am also grateful to our partners in the telecoms industry, with whom we have worked on getting the Bill right. I look forward to their responses to the technical implementation consultation published last week. I would very much like to thank the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Nuneaton (Mr Jones), for steering the Bill through the House. The debates in Committee were fruitful, with the degree of support for the Bill being evident and strong.
The Bill will provide 100% business rates relief for five years for new fibre installed after April 2017. To get the details right, we will of course listen carefully to the responses to the consultation on the regulations—it is not on the policy or who the relief should apply to but on making sure that the technical details operate effectively. Especially given the Bill’s smooth passage through the House, we hope that it will be in force very soon to incentivise the deployment of more fibre and support our efforts to get world-class digital infrastructure.
To build on that, we want to create an attractive environment for the private sector to provide fibre. We are already seeing significant investment by operators across the country, including the new and growing altnets such as CityFibre, Gigaclear and Hyperoptic as well as Openreach and Virgin Media. That is supported by the Independent Networks Cooperative Association and others. I commend all of them for their work in the national interest. Business rates relief for new fibre will reduce the costs of deployment for those operators and incentivise the market to deliver where it otherwise may not have done. It is all part of ensuring that we can deliver the infrastructure that this country needs.
As I said, that is part of a broader plan. In July, we announced a £400 million investment fund to provide finance for network providers by matching their fibre investments. Over the summer we announced details of our universal service obligation so that every household will get decent broadband by 2020, and we recently announced further details of £200 million of support for getting full fibre to local bodies, schools, hospitals and other public services to help them to deliver their services more effectively and ensure that the branches of fibre are rolled out more broadly. We continue to extend superfast broadband coverage over the copper network. Over 93% of UK premises have been covered to date and we are on target to reach 95% by the end of the year. Mobile coverage is on track to reach 90% of the landmass by the end of the year and we want to see 95% coverage in future.
The Bill is proof of our commitment to connectivity and our determination to deliver digital infrastructure that the country deserves. It has wide support, it has been considered in detail and it will help us to build a modern Britain. I commend it to the House.
Jim McMahon
I share the vote of thanks to the range of people who have assisted the Bill. A great deal of work went on in the background to ensure the support of Members and the passage of the Bill. I would like to thank the Public Bill Office for the support it gave to the Opposition during the Committee stage, which was a great help.
The Opposition welcome this infrastructure, which aims to improve our connectivity. We know that improved connectivity is important for economic growth, more jobs and improved links between business hubs and individuals alike. One slight regret, which is a major regret for the people affected, is that nothing in the Bill addresses the divide between urban areas and our rural communities. With 95% of people connected, it is a bitter pill for the 5% who live in areas that are not connected. People in those areas do not want warm words about the amounts of money being given away, but a plan in place to say when high-speed will reach them. Self-employment is on the rise, so access to decent IT in rural communities is essential. It is not in the Bill, but I urge the Government to give more detail on what they are going to do to encourage that roll-out, either in terms of allocation or through the soft relationship they are developing with providers.
The Labour party is committed to focusing on improvements to connectivity and infrastructure in rural communities, many of which feel they have been taken for granted by the Government. They have suffered chronic underinvestment for far too long. We know there are different demands, different drivers and different pressures on our communities, but the decisions we make today should not be just about catching up with infrastructure developed five or 10 years ago; it ought to be about preparing the country for the next 10, 20 or 30 years ahead and for the next century. Many communities do not feel that they are a part of such consideration.
The Prime Minister previously called for co-operation across political parties. Over the summer, I reflected on 18 months of being an MP, after previously being a councillor and council leader for 13 years. To make a council and a place work, people need a common vision of what an area can be and they need to know what part they can play in taking it forward. I do not see that taking place nationally. It seems as though party politics is far more important than the people we all, collectively, represent. Getting one up on the Opposition or the Member sat across the Benches seems to be worth more than delivering investment on the ground for the very diverse communities we represent.
I should say that that is not my personal style at all. I am always more than happy to work across political parties if it means, ultimately, that we have better government for all the communities we represent. That is an offer. I do not intend to do the Government’s job for them—I am not a taxi for hire in that sense—but I am keen to ensure that the voice of industry, local government and our many diverse communities really feature in policy as it comes through.
There is one area that we need to address. This is not party political, although I do have a view about what the Local Government Finance Bill included and did not include in terms of some of the safety nets and safeguards required. Our local councils cannot continue with their current funding settlement. We know that demand for adult social care is outstripping the money that they have, we know that they are stripping away frontline services just to keep their heads above water, and we know that that is just not sustainable. People are being expected to pay more and more council tax for what they perceive to be fewer and fewer of the services on which they rely, and which they consider to be vital and the foundation of their communities. Surely, if we believe in a decent country in which people can get on and public service is the foundation stone, we must not stand by and watch those people fall over.
This is, in effect, a plea. We have seen the presentation of one element of the Local Government Finance Bill; let us now see the presentation of a scheduled series of Bills that will really address chronic underfunding and the short-term nature of local government finance.
Robert Courts (Witney) (Con)
It is a great pleasure to speak in a debate that is, as we all know, enormously important. I spoke in detail about the effect of poor broadband in my constituency on Second Reading, but I now want to make two brief points about events which occurred during the recess and which illustrate precisely what I have spoken about in the House on so many occasions.
Kernahan Service is a garage on one of the major industrial estates in Witney. It is an excellent local family-run company which has serviced vehicles throughout west Oxfordshire for many years. When I visited the garage, the people there wanted not just to explain to me how the business worked, but to demonstrate to me the difficulty caused by the poor broadband that was available to them. Nowadays, as we know, when vans and other vehicles go into a garage, they are plugged into a computer which then connects to a server, and that provides the diagnostic information. I have seen for myself the waiting and the waiting and the waiting in that garage: I have seen those people waiting to find out from the Ford servers what the difficulties are with a particular vehicle. Moreover, I have witnessed with my own eyes the managing director waiting and waiting and waiting for the results of a simple Google search for information. That makes very clear the problems experienced by businesses throughout west Oxfordshire, although it is not a particularly rural problem; it is being experienced in Witney and on one of the most important industrial estates there.
Then there is the domestic side. Isabelle Jackson, a 15-year-old constituent who lives in Kiddington, a small village just outside Woodstock, wrote asking me to raise this issue, and I now gladly do so. I am grateful to her for writing, because she has drawn attention to problems that are experienced by many young people.
Isabelle will take her GCSEs in the current academic year, and is required to do her homework online. She is required to do research and to use sites such as BBC Bitesize and MyMaths, which, as I am sure those with children of the relevant age will know, are very important. The broadband in her village runs at 0.9 megabits per second, so it is simply impossible for her to do her homework. It cannot be right that, simply because Isabelle and many like her live in rural areas, they are being disadvantaged in the course of their education, but that is exactly what we are seeing.
It is for those reasons—the effect on business and the effect on the domestic instruction of young people in particular—that I wholeheartedly welcome the Bill and the incentives that it gives operators to provide the investment that will ensure that we have high-speed internet in rural and, indeed, urban areas throughout west Oxfordshire.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill
Wednesday 6th September 2017
(7 years, 3 months ago)
Lords ChamberRead Full debate Telecommunications Infrastructure (Relief from Non-Domestic Rates) Act 2018 Read Hansard Text Amendment Paper: Committee of the Whole House Amendments as at 5 September 2017 - (5 Sep 2017)
Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill
Monday 9th October 2017
(7 years, 2 months ago)
Lords ChamberRead Full debate Telecommunications Infrastructure (Relief from Non-Domestic Rates) Act 2018 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the Whole House Amendments as at 5 September 2017 - (5 Sep 2017)
The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, I am very pleased to be able to assist my noble friend Lord Bourne in moving the Second Reading of this short but vital Bill.
In our modern world, businesses and individuals depend on being connected, and the ways in which this happens are becoming more and more diverse. We are fast moving beyond mere mobile phones to increasingly digital communications, and in the future this will include ultrafast broadband technology and 5G—the next generation of mobile connectivity. Fibre is crucial to both of these. The Bill will support that progression for both fixed and mobile or wireless networks by delivering a vital part of the Government’s package on fibre investment. The Bill will provide the framework to implement the Chancellor’s promise in the Autumn Statement 2016 to allow 100% business rate relief for new fibre up to 2022.
Many noble Lords have raised the problems of slow internet or poor mobile phone services. These matters are important to people. They affect the enjoyment of their lives and the success of their businesses. By delivering world-class connectivity we can transform our public services, bringing efficiencies to business and improving the lives of individuals. Central to this challenge is providing the digital infrastructure that can support these demands. All these connections rely on more fibre-optic cable. Fibre is the gold standard, and we are committed to delivering it, but we have heard concerns from operators that business rates acts as a barrier to that investment.
The commitment given at the Autumn Statement in 2016 will mean that new fibre investment made after April 2017 will not be subject to business rates until 2022. Telecom operators will continue to pay rates on their existing network, alongside all other ratepayers who pay business rates on their business properties, but by providing a temporary relief for new fibre we will give this sector the boost it needs to meet demand. The sector has been calling for this and telling us it will make a difference in the delivery of new fibre. We have made great progress in the last few years to improve connectivity across the UK. Superfast broadband is already available to 93% of homes and businesses; we are on track to reach 95% by the end of the year. We want to go further and providing rate relief on new fibre will help achieve this goal.
We will have the opportunity to discuss the Bill in more detail in Committee but I will briefly outline what it does. This short Bill contains six clauses and, essentially, gives us the powers we need to deliver the relief through regulations. The first three clauses contain the powers for those regulations covering occupied and unoccupied properties on local rating lists, and those on the central rating list held by the Secretary of State. The remaining three clauses deal with consequential and financial matters, allowing the relief to be backdated to 1 April 2017.
In order to calculate how much relief should be awarded on telecom networks, the regulations made under these powers will require the valuation officer to issue a certificate of the rateable value attributable to the new fibre. This will then be used by the local authority to calculate the amount of relief which should be awarded, ensuring that we will give relief only on the new fibre and not on any existing networks. We have already published draft regulations, in August, explaining how this will work and started discussions with the sector on its implementation. Consultation on the draft regulations will run for 12 weeks. The Valuation Office Agency will also hold discussions with the sector on how the relief will operate in practice. So I hope noble Lords will appreciate that we have already explained how the powers will work, thereby ensuring that the scheme operates smoothly.
More widely, the Bill is just one of several measures we are taking to boost Britain’s connectivity, including our ambition for more fibre. Over the summer we announced more details of the universal service obligation, so that every household will be able to get acceptable broadband by 2020. This will provide a vital safety net to ensure that no one is left behind. In the Digital Economy Act we reformed the Electronic Communications Code, which regulates agreements between site providers and communications operators, to make it easier to deploy, maintain and upgrade electronic communications infrastructure. We are also forming a dedicated team to look at how government can remove barriers to deployment, which will work with other departments and industry.
We will see a more competitive market as a result of the agreement between BT and Ofcom to separate out Openreach. A legally separate Openreach will serve not just all its customers but the whole of the United Kingdom. We are supporting fibre rollout through a £400 million Digital Infrastructure Investment Fund. This will help accelerate the rollout of fibre by providing better access to commercial finance for alternative developers of full-fibre infrastructure. In turn, that will help smaller operators compete with larger players. The Government’s investment will be at least matched, on the same terms, by private sector investors. As a result, we expect to see private sector investment into full-fibre broadband reach around £1 billion overall. We are also investing £200 million in our local full-fibre programme, supporting local bodies to stimulate new fibre development.
In total, our efforts are worth £1.1 billion to support the sector, and once this Bill receives Royal Assent the Department for Communities and Local Government and the Valuation Office Agency will move quickly to implement the rate relief for new fibre retrospectively to 1 April 2017. We want to see a country where people are better connected, where everyone can get online and reach their full potential and where no one is left behind. This Bill provides a step on that journey. I beg to move.
The Earl of Erroll (CB)
My Lords, I want to say a few words on this Bill. It is extremely welcome as the rateable value of fibre connections has long been a problem in the rollout of new systems and new local solutions. BT has for some time used it to block other providers with alternative solutions. It has been quite a problem. Several companies have gone bust over it, and there is litigation on it in the EU at the moment. One problem is that when a new company tries to put in a new solution and has to light some fibre, it is rated very highly, as if it suddenly had as many connections as that fibre could take, not the 10 or 20 subscribers the company may have to start off. Every time BT connects something new to fibre or puts new fibre down, it reduces its rate bill because of the deal that was done when it was set up by statute. Nothing has been done about this. It is inherently unfair and anticompetitive, and something needs to be done about it.
The sad thing about the Bill is that we are talking about new fibre only. What about making the old stuff competitive too, so that we can have alternative solutions? There should be an opportunity to look at that, but I suspect that good lobbying behind the scenes has made sure it will not happen.
The language of the Bill is so obscure that I find it quite difficult. The Explanatory Notes told me something about it. I am not sure whether it applies to newly laid fibre only or to dark fibre that has not been used and is about to be lit. I hope it applies to both because if fibre is already in the ground but has not been used, what is the point of forcing people to lay a new fibre cable to get it working? I cannot see why the Bill cannot be extended to make it more economic for people to attach to existing fibre to provide new local solutions where necessary. There is fibre there, but for one reason or another it is not economic for BT to do the last bit of the connection. I do not get the argument for it having to be totally new fibre.
The trouble is that BT is a publicly owned company not a UK plc asset. We have no control over BT. It has lots of problems to face. It inherited an enormous pension deficit. I have huge sympathy for its commercial problems operating in a global market. However, that does not mean that the British taxpayer, the British broadband user and people who are trying to get businesses going or to reduce the cost of government by getting broadband into areas that do not have it, such as parts of London, communities on the edges of cities and towns and certain rural areas, although some rural areas are better than others—we should not snap at little bits of the problem. We should take a bigger view. What annoys me is that if we put the amount of money we are putting into smart meters into rolling out broadband, we would have no problems and we could have smart meters everywhere. There is a lack of logical thinking at the beginning, but I am almost diverging.
I cannot work out how much power is in the hands of the Valuation Office Agency. It worries me that it tends to favour the incumbent as opposed to new development, quite aggressively in some circumstances, and, despite appeals, is not interested in increasing the rollout of broadband. It is more interested in sticking to what it sees as its rules and rating stuff like a Victorian water pipe.
I have had quite a few briefings on these issues over the years, and they give rise to concern. I hope things are going to change. This is a move in the right direction. I am still worried that Openreach is a wholly owned subsidiary of BT. When you look at how investments run and how things work up the corporate pipeline, you can influence things an amazing amount, even though you are not meant to, by where you put your investment, how you repatriate the profits, jiggle the money around et cetera. The separation may not be as great as we think.
The important thing is to get universal fast broadband out there everywhere, even in areas that do not have people living in them, because when the internet of things comes along, it will not work unless we have broadband everywhere. We need to worry about this to a greater extent than people think. It is not just a matter of cabling up every house, but that will be a start, so let us get there as quickly as possible and reduce the rates bill and the blocks to getting it out there, most of which are commercial.
Baroness Harding of Winscombe (Con)
My Lords, I begin by declaring my interests. I only recently, four months ago, stepped down as chief executive of TalkTalk, the internet service provider.
In my brief time in the House, I have heard many speeches lamenting poor broadband speeds, and it is quite cheering to speak today in a debate about a potential, although admittedly only partial, solution. Connectivity, as my noble friend said, is essential to modern life, and becoming more and more essential. Unfortunately, the copper wires that we all—98% of households—depend on for broadband today are not fit for propose. It is nothing short of a miracle that they deliver even poor broadband at all, because they were certainly never designed to when they were laid decades ago. Full fibre, on the other hand, is designed for that.
I draw the analogy with the electricity market. Imagine if we all had apps on our phone to check the power wattage into our homes and we started conversations of an evening by saying, “I’m terribly sorry, we live quite a long way from the electricity substation here, and therefore the lights don’t work all the time”. That is exactly what happens with copper-based broadband today, and it is not good enough for now, let alone for the world that we will be inhabiting in the next 10 or 20 years. I worked for a business that was starting to trial full fibre right the way to the home. Families using it do not say, “I have fantastic ultra-fast broadband”; they just say, “My broadband works; it does what it says on the tin”. That is why pushing to have full fibre, and fibre-optic cable laid right the way to everybody’s home or business premises, is so important. It is modern technology that will not just be fit for today—all you have to do is pump more power down it and it will be fit for a very long time ahead.
It is extremely good to support the Bill today, because although I am hugely hopeful about the role Britain can play in the digital revolution, and how we can emerge stronger and more competitive as a result of it, we do not do very well on full-fibre take-up today. As I have said, 98% of households use a copper-related product, so although availability is a bit more than that, there is a 2% take-up in the UK. That compares to 40% in Sweden, 26% in Portugal, 11% in France and an EU average of just under 9%. These are figures from the FTTH, the Fibre to the Home Council Europe, from this time last year. We are a long way behind today and I am pleased to support a Bill that will incentivise all providers to start investing more firmly in full fibre. The danger is that the large incumbents attempt to eke out a return from their legacy copper assets, while the new businesses are daunted by the sheer scale of the challenge ahead in investing in full fibre. So it is great to see the Government coming up with a proposal that will genuinely incentivise everybody to invest.
I will just make three brief comments on the Bill. First, it is very important that the scheme cannot be gamed. I am reliably informed by people in the industry that, according to the business case based on full rates relief, ripping out existing fibre and replacing it with a new one that would be eligible for rates relief would pay back in just a couple of years. It would be a real shame if an intent to do the right thing translated into a subsidy for the old networks we already have. I assume that this will be in secondary legislation, and it would be very good to hear from my noble friend how the Government intend to ensure that this cannot be gamed and will genuinely incentivise the building of new fibre to premises across the UK.
Secondly, this is a good Bill but it is only a relatively small contribution. I believe the Treasury estimate is £60 million over five years—would that all our broadband problems could be solved with £60 million over five years—so this is good but it is only a start. The Minister has set out quite an impressive list of other initiatives that the Government are putting towards nudging, cajoling and encouraging the industry to build out more fibre, and it is hugely important that we complete on all those actions. It is not the words that will drive this but the actions and there is a lot more to do, particularly making it easier for all providers to access existing poles and ducts; ensuring that the commitment to the universal service obligation is not an excuse to rely more on copper and less on investing in fibre; and ensuring, as the noble Earl, Lord Erroll, has just said, that Openreach separation is just that and genuinely drives the investment that the country needs.
I bow to the experts here, of which I am definitely not one, on the rating regime. While temporary short-term relief in a specific sector is good, I very much doubt that it is the long-term answer to enable businesses to understand how the rating regime works and invest in the things that the country needs for the long-term future. That all said, it is important that we do not let the perfect become the enemy of the good. This is a good Bill and I am pleased to support it.
Baroness Pinnock (LD)
My Lords, I draw Members’ attention to my entry in the register of interests as a councillor and a vice-president of the Local Government Association. I have to say that I agree with much that has been said by people who know much more about this subject than I do, the noble Earl, Lord Erroll, and the noble Baroness, Lady Harding.
I speak from my understanding of what is being proposed. As the Minister said, this is part of a package of inducements to the telecommunications industry to ensure wider accessibility of superfast broadband. However, that seems to raise the question of why telecoms companies are not obliged by law to ensure that there is full superfast broadband access. In a situation where public bodies such as the Government and local authorities are digital by design, households as well as business premises need access to broadband to access public services. That is my first query. I accept that steps have been taken in that direction, but when I think that other utilities such as water and electricity companies are required by law to ensure that there is access to their services, it seems to me that connectivity should be on an equal footing. I look forward to hearing how the Minister might respond to that comment.
The financial inducements in the Bill to put in full-fibre broadband will not be necessary in West Yorkshire, where European Union funding is currently enabling that to happen. What a shame, therefore, that we are on the route to leave the EU because it might have been able to fund it out of EU funds rather than out of public funding from the Government.
Much-improved connectivity is of course welcome, so the purpose of the Bill will clearly be welcome. As the noble Baroness, Lady Harding, has pointed out, though, all it does is provide full-fibre connectivity to the nearest roadside cabinet, and the further you are from that cabinet the worse your connectivity will become. That will put a limit on connectivity. I was interested to hear that there had been only 2% take-up of full fibre to the house. Have the Government considered inducements to the telecoms companies and providers of broadband to ensure that there is full-fibre connectivity to the premises rather than to the nearest roadside cabinet? That is how we will get access to superfast broadband across the country.
The other major question which the Bill raises, and to which I have seen no answer, is that, as well as broadband connectivity, we need improvements to mobile connectivity. For many families, mobile connectivity is far more important than broadband connectivity. Poorer families can often afford to access only mobile technology and do not use full broadband. That is true everywhere, but is particularly the case for improved mobile connectivity in rural parts of the country, where it may be the only way that many people can access public services—through their mobile phones.
To expand on that point for a minute, experts in this House may be able to throw some light on this, but I understand that 5G will be more advantageous than having superfast broadband to many people—not to businesses, I accept, but to many individuals and their families. Should there not be inducements to companies wanting to extend the reach of mobile connectivity, as we are doing here with broadband?
I think the Minister has answered the other point I wanted to make, but I was concerned about how local authorities will access reimbursement for the loss of business rates. It sounded as though it will be the responsibility of individual local authorities to claim reimbursement through the Valuation Office. If regulations have been laid, perhaps the Minister can expand on them when he responds.
Finally, I urge the Government and perhaps their Bill drafters to amend the Bill to include information about the meaning of the formulae that have been included, which make for interesting reading. For example, the Bill states:
“Where subsection (4F) below applies, the chargeable amount for a chargeable day shall be calculated in accordance with the formula—
”.
Nowhere in the Bill is there any indication what A, B, F or C is, and further on in the Bill, we have a “T” as well. I know that the Bill relies on amendment of previous legislation but, for the sake of transparency and the understanding of those who will be affected by the Bill, it would be enormously helpful if Bill drafters included notes about what the formulae mean.
With those remarks, I welcome the move to extend both the speed and reach of broadband through the Bill and hope it can be extended to mobile connectivity.
Lord Kennedy of Southwark (Lab)
My Lords, I refer the House to my entry in the register of interests as a councillor in the London Borough of Lewisham and a vice-president of the Local Government Association.
On behalf of the Opposition, I welcome the Bill as far as it goes. It is a positive step in boosting investment in fibre broadband infrastructure and the development of 5G. The Bill will encourage new fibre rollout, and that will boost connectivity for both residential and business users. That will have knock-on effects for improved economic growth. It has been estimated that 5G infrastructure will outstrip the economic benefits of fibre broadband by 2026, when that technology will have become outdated. It is important to ensure that we have the right infrastructure and connectivity speeds to deliver improved economic growth, boost businesses and create the new jobs of the future that we will all need.
There have been suggestions that the boost to economic growth with the new 5G network will be worth billions of pounds to the UK economy, so it is imperative that we place ourselves at the top in delivering the speed and connectivity for business and residential users, so that we have the tools to compete with anyone in the world. However, we were expecting a much larger Bill, dealing with a wider variety of local government finance issues, and it is disappointing that the Government have decided to come forward with only this one small part. Lack of parliamentary time really is not a good enough excuse for this and, if that is what the noble Lord, Lord Bourne of Aberystwyth, is going to tell the House shortly, it would be useful if he could update us on when we can expect the wider issues to come back to Parliament that were contained in the Local Government Finance Bill lost due to the Prime Minister calling the general election.
Local authorities need certainty and stability in these very challenging times, as does business. The lack of clarity on business rates, the shambles of the business rate revaluations and the hastily pulled together packages go nowhere near enough, while our high streets are in crisis. It is no way for the Government to behave. We have been exceedingly quiet in respect of legislation since the general election; we have just come back from another break, and we are away again next month—the lack of parliamentary time argument is difficult to accept. There may be a lack of will on behalf of the Government or, dare I suggest it, something of a crisis in the Government at the moment.
In subsections (4) and (5) of Clause 4, the Government appear to be taking Henry VIII powers. I have not seen a report from the Delegated Powers Committee, but I have seen the note issued by the department. It would be helpful if the Minister could reassure the House as to the limited nature of these powers, because Clause 4(4)(b) appears to contain a very wide power indeed.
The omission from the Bill of anything meaningful in respect of improving the rural broadband offering is most disappointing. Many noble Lords on all sides of the House speak up for rural areas and the threat to both their viability and sustainability across a wide variety of issues. I can recall debates about housing provision for working families, rural bus services, train services, shops, pubs and many other issues. Delivering proper broadband services, let alone anything close to 5G, is vital to ensure that our rural areas prosper. Without firm action from the Government on this matter, we risk leaving numbers of our fellow citizens further behind, which is not acceptable for them or the communities in which they live, which seek to remain sustainable. I shall table an amendment on that issue for debate in Committee.
Another issue that I want to explore further in Committee is the definition of “new fibre”, which the noble Earl, Lord Erroll, referred to in his remarks. The regulations propose that this is to be fibre that was,
“not laid, flown, affixed or attached before 1st April 2017”,
with those operators which light dark fibre already in the ground not eligible for relief. I want to explore the potential that that has for distortion and the risk to companies that have already invested in fibre networks, which may be at a competitive disadvantage to another company that comes along and lays new fibre that is exactly the same as the fibre already in the ground but not yet lit. The noble Baroness, Lady Harding of Winscombe, made reference to that issue, which we need to discuss much further in Committee.
In Committee in the other place, my honourable friend Mr Jim McMahon tabled an amendment to require the Secretary of State to provide an assessment to Parliament on how the business rates relief system was working. I would, again, like to bring that back for consideration by your Lordships.
In conclusion, we give a cautious welcome to the Bill as it stands, although there is disappointment that some of the wider issues that I have outlined have not been brought forward. I have a couple of issues that I intend to raise as amendments to this Bill in Committee, and I have posed a couple of questions to which I hope the Minister can respond.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Northern Ireland Office (Lord Bourne of Aberystwyth) (Con)
My Lords, I thank my noble friend Lord Ashton for introducing this Second Reading debate and all noble Lords who have participated in it. I am grateful for their contributions and for the welcome—so far as it went. This was, predictably, a wholehearted welcome but with regret for some things which the legislation did not contain. I can understand that, and I will deal with it shortly.
I will focus first on what the Bill does contain. The noble Lord, Lord Kennedy, is absolutely right: it is an important facet of the legislation that it helps the residential sector as well as business and provides assistance for the 5G mobile connectivity element, as referred to by the noble Baroness. The objective of this measure is to support and reward companies which invest in the telecoms network. As such, it is important to appreciate that this is actually buying something. This dates from April 2017 so we therefore do not propose to compensate any fibre which was already in the ground in February 2017. This is for new fibre put down for a five-year, fixed-term period. This brings me to the gaming aspect: I too was keen to know whether this was likely to be gamed. On consultation and inquiry it looks unlikely but we are watching this like hawks. If noble Lords think there is some means by which it could be gamed I invite them to let us know because we are, obviously, seeking to make sure it is not. I am pretty convinced that it could not be, because the financial incentive would be zero.
As we have heard in the debate, this is a technical area in respect of both telecommunications networks and how they are treated in business rates. We will, no doubt, return to the detail in Committee, but I reassure the House that we intend to develop the proposals for this measure in collaboration with the sector and only after consultation. The draft regulations are out for consultation at the moment and that will go on until 21 November. There is still an opportunity for everybody to participate in that and I encourage experts and politicians—do not take that the wrong way—to do so, particularly those who understand it in detail and politicians who represent those who do. My noble friend Lady Harding clearly understands this area very well, as does the noble Earl, Lord Erroll. I am very grateful for their participation and for giving the House the benefit of their expertise.
Broadband speeds and connectivity impact on the everyday lives not just of businesses but of households. Investment in new fibre will make a real change to people’s lives and is part of a package worth over £1 billion to the sector, as my noble friend Lord Ashton outlined. Providing rate relief for new fibre will give a welcome boost to investment. My noble friend Lady Harding asked about access to BT lines. They are consulting on that at the moment and we regard it as important. In terms of the rates relief offered, there will be a level playing field for participants in the system. No fear or favour is given to any provider: they are all treated in the same way.
It is important and fair to all ratepayers that telecoms operators pay business rates in the normal way, outside this five-year period where there is relief. We will not therefore seek to provide relief in relation to dark fibre, which would clearly be wrong. However, we have heard concerns about business rates deterring investment in new fibre, and providing this temporary relief from business rates just for new fibre investment would send a clear message to operators. If you invest in new fibre after 1 April 2017 you will not pay rates on it until 2022. For that new investment, you can remove business rates from the spreadsheet. As my noble friend Lady Harding indicated, that is important for getting investment going in this area where we lag behind. This legislation has some important provisions.
The noble Lord, Lord Kennedy, raised the issue of the Henry VIII clause. As he will know, consistent with my approach to legislation I am very keen to bear down on this, so I have looked at it to make sure that it is as confined as it can be. I well remember the noble and learned Lord, Lord Judge, participating in our proceedings and rightly being tough on Henry VIII clauses. This has not yet gone to the Delegated Powers and Regulatory Reform Committee but it will do so. As I say, we seek to confine it as much as is sensibly possible and, of course, it will be subject to affirmative resolution. I hope that both those points reassure the noble Lord.
Such is the technical and fast-moving nature of the sector that I do not think it would be prudent to try to put on the face of the Bill the detailed arrangements of the scheme. These will be done in the detailed regulation through consultation and discussion. I know that noble Lords will understand that. However, we want to ensure that the House is fully aware of how we intend to operate this measure. As I have said, we have published draft regulations and are continuing discussions with the sector, and the Committee stage will give us the opportunity to consider these matters in more depth.
The noble Lord, Lord Kennedy, sought, somewhat mischievously, as is his wont, to try to open this issue of rate relief on a much broader front all over the place. I have indicated previously that we remain very much wedded to the retention of business rates. I have also indicated that we will want to look at the broader issue of the high street versus the internet in the context of the G8—I think I am right in saying that—in which we participate, and take a lead on that. I think that is due next spring, so I can give the noble Lord that reassurance.
As I said, draft regulations will come forward. I reassure those who have a close connection with local government—the noble Baroness, Lady Pinnock, raised this issue—that local authorities will not be financially disadvantaged as a result of the relief. We will, through grant payments, compensate local authorities for the loss of the rates income that they suffer through the rates retention scheme as a result of this relief. This is a commitment that I am happy to restate and it is also given in the consultation document.
I thank all Members who have participated for the support that they have shown, at least in terms of the central core of this legislation. The commitment to provide rate relief on new fibre was given by the Chancellor in the Autumn Statement 2016. To maximise the benefit of this policy, telecoms operators need to be confident that the relief will be applied retrospectively to April 2017. I confirm that that will be the case. That is why we have brought forward the Bill as quickly as we have, with the support of the Opposition Benches, certainly in the other place and here too, to send a clear signal to the sector that this relief is on its way. With that, I commend this legislation to the House.
Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill
Tuesday 24th October 2017
(7 years, 1 month ago)
Grand CommitteeRead Full debate Telecommunications Infrastructure (Relief from Non-Domestic Rates) Act 2018 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 65-I Marshalled list for Grand Committee - (20 Oct 2017)
The Deputy Chairman of Committees (Baroness Stedman-Scott) (Con)
My Lords, if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells ring and resume after 10 minutes.
Clause 1: Relief from local non-domestic rates: occupied hereditaments
Amendment 1
Baroness Pinnock
“(aa) the hereditament is wholly or mainly located within a local authority area where the average broadband speed is 10Mbps or less, and”
Baroness Pinnock (LD)
My Lords, I have wondered from the outset of the Bill’s proceedings why companies with billion-pound turnovers require business rate relief, as stated in the Explanatory Notes, of £60 million over a five-year period to provide an incentive for laying fibre to provide fast broadband. My amendment relates to concerns about the lack of focus for the expenditure of public funds. When, as is the case, resources are extremely limited, it is important that they are spent in the most effective way. In this instance, the focus should be on providing incentives where broadband speeds are already poor.
At the last Budget in 2016, the Chancellor emphasised the importance of fibre-to-property broadband to meet future needs, especially of businesses, where improving broadband speeds is probably the single, and simplest, change that will improve this country’s lagging productivity. A report in August of this year assessed that the UK was behind 30 other countries in accessibility to fast broadband. The Government’s current assessment is that 90% of properties have access to fast broadband; however, this figure includes properties that are 1 kilometre distant from the cabinet—not the Cabinet but the street cabinet—and consequently have barely a connection at all.
The Bill simply gives an incentive for broadband providers, both large and small, to lay fibre. The major companies have billion-pound turnovers, so the question has to be asked whether an incentive at the level provided for in the Bill will be significant. Obviously, it will make a difference for smaller providers but the Bill does not distinguish between large and small providers. The Bill makes no requirement for companies to focus on laying new fibre where broadband speeds are currently below the Government’s standard of 10 megabits per second, where the need is greatest.
Hence the amendment, which will limit the business rate relief to laying fibre where broadband speeds are already poor. I have deliberately not made the distinction between rural and urban, as some rural areas such as Cornwall have already benefited from EU investment in improved broadband access, while some urban areas have very poor broadband speeds. Even in London, some areas such as parts of Southwark suffer from having below 10 megabits per second.
I should like to explore further a concern that the largest provider of fibre, BT, has a business plan based on laying cable to the cabinet in the street and not to the premises. From there to the premises the link will be by copper, which in itself degenerates the speed. The further the premises are from the cabinet, the worse the broadband speed. At 300 metres distant, the broadband speed is not much improved from the old copper connections. As I said earlier, at 1 kilometre the connection is barely accessible. A further factor that results in broadband speeds reducing, even with fibre, is the number of properties connected to the cabinet. None of these issues is addressed in the Bill.
My final concern, which is admittedly outwith the Bill, is the cost to families and individuals of accessing broadband. Fibre cable can be laid to provide access but if the cost is prohibitive, some families will not be able to access the better-quality broadband. Since it is becoming, in my view, one of the utilities—like water, electricity and fuel provision—it is really important that we start thinking about how all families are able to afford broadband. I put this into the equation to ask the Government whether they will, at some point, be willing to address that increasingly significant concern. My amendment would encourage the Government to focus public funds on incentives that will make areas with poor connectivity see significant improvements. I beg to move.
Lord Kennedy of Southwark (Lab)
My Lords, I refer the Committee to my registered interests as a local councillor and a vice-president of the Local Government Association. I support Amendments 1, 5 and 11 in this group, tabled by the noble Baroness, Lady Pinnock. They highlight some real problems for communities—be they urban or rural—which suffer from poor connectivity, and there has been no real incentive to improve the situation for them by improving speeds. The amendments add the condition that, for the relief to apply, it has to be focused on areas within a local authority where the average broadband speed is 10 megabits per second or less. I think I am right when I say that about 93% of homes and businesses in the UK are able to receive superfast broadband, but it is the copper version. The Bill is generally welcomed.
The noble Baroness is right to focus her amendments on areas with poor connectivity. There is a good argument for this as reliefs provide an incentive to do something that a business might otherwise not want to or be keen to do. The view may be taken that it is not economically beneficial, or something else could be more beneficial. The noble Baroness raises the important issue of how to ensure that those parts of England and Wales, urban and rural, which suffer from poor connectivity can benefit from the relief provided to companies. Otherwise, such areas run the risk of falling further behind. We can all agree that the benefits that fibre can bring could be enormous for all parts of the UK.
Can the noble Lord, Lord Bourne, respond to the concern expressed by the noble Baroness, as we do not want to see parts of the country falling further behind? How can we ensure that this relief, welcome though it is, actually benefits those areas with the worst connectivity?
The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, my noble friend Lord Bourne has left this one to me. I thank the noble Baroness and the noble Lord for their contributions. I realise the point that some of these issues raise. I will make some general comments on the points made by the noble Baroness, Lady Pinnock, and then come to the substance of the amendment.
The noble Baroness referred to billion-dollar companies—I presume she meant BT. The relief applies to all companies, large or small, because fibre-optic cable is the way of the future. We regard laying fibre-optic cable as a good thing, regardless of where it is and who lays it, so we leave it up to the market. This Bill is a fairly blunt instrument—merely an enabling measure; it was announced by the Chancellor and it is merely to allow the relief to take place. On the very understandable issue of where it should be directed, we have carried out a number of measures to effect that. We understand the issue about rural and hard-to-reach areas—and, indeed, some of the areas in our cities that do not have adequate broadband. The specific amendments do not necessarily address the broad thrust of some of the remarks made by noble Lords, and I will explain why we do not think the amendments are particularly helpful. They would mean that the reliefs provided for in the Bill on new fibre applied only to those areas that currently receive an average speed of less than 10 megabits per second. They would undermine a fundamental part of what we seek to achieve through the Bill. We want to ensure that businesses and households throughout the country, including rural areas and cities, have access to faster broadband. In fact, by the end of this year, 19 out of 20 premises will have access to superfast broadband.
The universal service obligation will provide a digital safety net by giving everyone in the country the legal right to request a connection to broadband speeds of at least 10 megabits per second by 2020. As noble Lords will know, we are also considering a voluntary proposal from BT in that respect. I stress that the 10 megabits per second is a safety net; we want as many people as possible to have access to superfast broadband or better, which is why we have set a target of 95% superfast coverage by the end of 2017, which will continue to be extended beyond that to at least 97% of premises.
We have delivered a series of measures to ensure that all areas can and do have access to the broadband speeds that they need. For example, Defra has just made available £30 million of funding under the rural development programme for England, targeted at supporting rural businesses and growth for broadband services in those areas with speeds of 30 megabits per second or faster where that is not currently available or planned. In the 2016 Autumn Statement, the Government announced more than £1 billion to support digital infrastructure, targeted at supporting the rollout of full fibre connections for future 5G communications. The first wave of projects for our local full fibre networks programme has been launched, and includes a mixture of urban and rural areas. We are soon to launch a challenge fund for local bodies to bid for access to £200 million, with all parts of the UK free to participate, and we anticipate a significant number of applications from predominantly rural areas. We think that those projects will encourage further commercial interventions to build and extend fibre networks.
We support better broadband in all areas, but we believe that the amendment would limit the rate relief to only those local authority areas with an average of less than 10 megabits per second, which would damage the rollout of faster broadband across the UK. First, it would mean that much of the new fibre to be installed to the premises—FTTP—would be excluded from the relief. To deliver a network that is fit for the future, we need more fibre everywhere, including in areas that currently get more than 10 megabits. This amendment could deter significant investment and have the perverse result that less full fibre—the gold standard of broadband technology—was actually deployed.
Secondly, the amendment would exclude from the rate relief new fibre in those villages and rural areas that do not currently have high-speed broadband but happen to fall within a local authority area which does on average have high speed broadband. It would mean excluding from the relief whole areas where support is needed and where the measures provided for in the Bill would make a difference. At the moment, less than 3% of premises across the UK receives under 10 megabits per second, so the amendment potentially excludes up to 97% of premises from the relief.
Therefore, I hope that the Committee will recognise that the amendments should not be included in the Bill. However, we agree that improving broadband in those areas with less than 10 megabits is a priority, which is why we have put in place the universal service obligation. The new fibre rate relief as proposed through the Bill will support that objective. I hope that, with this in mind, the noble Baroness will withdraw her amendment.
Baroness Pinnock
My Lords, I thank the noble Lord, Lord Ashton, for his detailed response to the amendment, which I tabled to explore how the Government’s intentions could result in better focused expenditure of public money. I accept his criticism that using local authorities as a geographic unit is, to use the phrase he used earlier, a blunt instrument.
I was trying to say to the Government that if we are to spend public funds, which are in short supply, let us make really good use of them by connecting to higher speeds those parts of the country that currently have very poor broadband. I accept the very detailed response the noble Lord has given, but to be honest he has not responded to the question of focusing on improving accessibility, apart from saying we need fibre connections everywhere. We all agree with that, but let us incentivise companies to do it where it is needed. I would welcome the Government coming forward with an amendment that enables that to happen, with the vast support they have working these things out, but given the response I have had, at this moment I beg leave to withdraw the amendment.
Lord Kennedy of Southwark
“(4FA) Conditions prescribed by the appropriate national authority by regulations under subsection (4F)(b) must include the condition that new fibre is part of the hereditament under subsection (4F)(a).”
Lord Kennedy of Southwark
My Lords, Amendments 2, 3, 6, 7, 9, 10 and 12 are all in my name and form group two in our deliberations. This group seeks to address one of the principal concerns expressed by people and smaller companies in the industry: that the way the Bill is written does not provide enough protection from companies ripping out old fibre and laying new fibre solely to benefit from the relief, which would pay for itself in less than two years. I think that was one of the points the noble Baroness, Lady Harding of Winscombe, made at Second Reading after her discussion with colleagues and people in the industry. I am convinced that there is a real risk of this happening, which would be absolute madness and not what the relief was intended for. It would, in effect, become a subsidy for old networks. Can the Minister address this particular point: how will we ensure this does not happen?
My amendments seek to prevent this in three ways. They would put in the Bill the words,
“must include the condition that new fibre is part of the hereditament”.
They would add a subsection that would put in the Bill the meaning of “new fibre” and what would not be covered by this relief. They would go further to address the point that laying, affixing, flying or attaching should not be solely to gain relief. Amendment 9 makes the specific point that the relief should not be there just to “replicate existing” telecoms structures. The Bill is about providing business relief to encourage and to speed up additional fibre telecommunications infrastructure.
There may be other ways to do what I seek here, but the Bill as drafted has people in the industry concerned. They are unhappy with the protections that the Bill affords at present, or fails to afford. The purpose of these amendments is to raise the issue with the Minister, and to get a response and, I hope, a commitment from the Government that these issues will be looked at seriously. Further, would he be prepared to meet me and representatives of the industry between now and Report? That would be helpful, because it is a serious problem. Somehow the Government, either with these amendments or by regulation, have to address these points further. I beg to move.
Baroness Pinnock
My Lords, I support the amendments tabled by the noble Lord, Lord Kennedy, because he, like I did in previous amendments, seeks to focus the relief provided in the Bill on those places and areas that need it most. He is asking to put in safeguards to prevent some companies deliberately laying cable with no purpose and to ensure that what is done on rate relief achieves the outcome the Government seek, which is to provide more domestic premises and businesses with fast broadband connectivity. I look forward to the response from the Minister—I am not sure which one, perhaps it will be a double act. The questions that the noble Lord, Lord Kennedy, has raised are important and need an answer.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Northern Ireland Office (Lord Bourne of Aberystwyth) (Con)
My Lords, on this occasion I am genuinely grateful to the noble Lord, Lord Kennedy, for raising this matter. I am not always grateful to him for raising matters but I am today. I am grateful also to the noble Baroness, Lady Pinnock, for her comments. We have a shared interest here, in that I cannot believe that anybody wants to see gaming in the system.
Concerns about gaming in the proposed rate relief for new fibre were raised by a small number of operators in August, when we first shared with them our proposals for the draft regulations. As the noble Lord has said, my noble friend Lady Harding raised this issue at Second Reading. I think she went on to say that she was not by any means convinced that there would be gaming but she raised it as a concern, so we share an interest in ensuring that there is not gaming.
Other operators have told us that they do not believe there is scope for gaming and support the proposed scheme. Nevertheless, we take this matter seriously and have been investigating these claims. Overall, our initial view is that it is unlikely gaming will be used in this tax relief. As I have said, we continue to discuss this with the sector and we are still gathering evidence.
However, if it will help the Committee, I will explain in a little detail why concerns as to gaming have arisen, why we believe such gaming is unlikely, in practice, and how I propose to deal with the matter between now and Report. What is being seen as the potential risk of gaming comes from the line we propose to draw in regulations as to when the relief should apply. New fibre installed after 1 April 2017 will receive the relief. However, some operators will choose instead to use existing fibre optic cable which was installed prior to 1 April 2017 but has not yet been activated. This is known as dark fibre. The objective of the measure in the Bill is to support investment in new fibre broadband infrastructure. Therefore, previous investment in existing fibre, including dark fibre, is not considered to be new fibre, has not been incentivised by this measure and will be outside the relief.
We have heard concerns that the proposed different treatment in the relief scheme of new fibre, which gets the relief, and dark fibre, which does not, could lead to some gaming in the system. It has been suggested that telecom operators may replace or duplicate existing dark fibre with new fibre merely to secure the rate relief. It has also been suggested that some operators may install new fibre in existing locations to gain a competitive advantage over existing operators in that location, merely because of the rate relief.
To understand this better we are investigating the costs and operational implications of installing new fibre into existing infrastructure, such as ducts. By comparing these costs to the potential saving on business rates from the new fibre relief we can identify where, in principle, the scope for gaming exists. To help us with that work we have held discussions with telecom companies regarding this matter and are now considering evidence provided by one operator, Gamma Telecom, which I mentioned at Second Reading. The consultation on the draft regulations runs until 21 November, and during this time we would like to hear views from other operators regarding the risk of gaming. This work is at an early stage and noble Lords will understand that some of the data we are using in this study is commercially confidential.
Our initial findings are that in the vast majority of cases—perhaps covering more than 99% of the telecom network—it will not be financially viable for operators to install new fibre merely to gain the relief. In those cases, the cost of purchasing the fibre and the labour costs associated with opening existing ducts—putting the fibre through those ducts and then connecting the fibre—exceeds the saving from business rates. In those situations it will be cheaper to use existing dark fibre, so gaming would not occur. Our focus, therefore, is on smaller networks where the business rates paid in respect of each kilometre of network are higher than for larger networks. The potential for making a saving in business rates is therefore also higher.
We are looking closely at the circumstances in which new fibre may be installed in existing smaller networks and exploring more of the costs associated with accessing existing ducts. These circumstances account for a very small fraction of the telecoms network—probably less than 1%. That said, I cannot see why 1% should be ignored and if there is evidence of the possibility of gaming, I would want to ensure that we act. But even if there are circumstances where, in principle, the rates saving exceeds the costs, it does not necessarily follow that, in practice, gaming is viable. For example, it may not be possible to add new fibre to ducts which are already in use, while switching from one fibre to another may cause interruption or disruption to the customer, which may be especially unacceptable for business customers and unattractive to the operator. But, as I have said, we agree with the noble Lord and the noble Baroness that we do not want a tax system that is open to gaming in the way that has been suggested. If from our work with the sector we conclude that gaming is likely, I assure the noble Lord and the noble Baroness that we would consider how to amend the draft regulations to prevent it.
The amendments we are considering would move the definition of new fibre into the Bill. This would in fact significantly limit our ability to tackle any gaming. The approach in the Bill of defining in regulations the meaning of new fibre gives us the scope to first identify the circumstances in which gaming might arise before we devise the solution. It allows us to ensure that any solution is practical and to respond quickly to any future circumstances where gaming might arise.
Moving on to the practical points put by the noble Lord and echoed by the noble Baroness about meeting the sector, as I have indicated, I intend to meet Gamma between now and Report, which will probably be towards the end of November. I will certainly keep the House—including the noble Lord and the noble Baroness—informed about how the discussions are going. I would be happy to include them in the thrust of what is happening, and expect to act on any concerns about gaming which indicate that this issue needs addressing. As I say, we are as keen as they are to tackle any potential gaming. I hope with that assurance and the guarantee that I will keep the noble Lord and the noble Baroness involved with what is happening, that the noble Lord will feel able to withdraw his amendment.
Lord Kennedy of Southwark
My Lords, I thank the Minister for that helpful response. I am happy to withdraw my amendment at this stage. I am delighted that the Minister is meeting representative of the industry, particularly Gamma. That is very good.
I hope the Minister is right on all these things and that there is no issue with gaming at all. My only concern is that we should pass the legislation in a way that eliminates it. We are often told by the Government that parliamentary time is precious. It would be a shame to get the Bill through and then find, in a year’s time, that there was a problem after all and people are doing the things which we do not think they will now. I like the idea of putting something in regulations as a good way forward. They can be amended a bit more easily. I was at a meeting this morning on a completely different subject: a very good initiative that the Government had come forward with many years ago, when I first joined the House, but now there are some concerns about how it is operating. To get that initiative changed, we have to go back and get the law changed. That is not always easy. I thank the Minister for his response and look forward to further discussions. I beg leave to withdraw the amendment.
Lord Kennedy of Southwark
“(4FC) Providers of telecommunications benefiting from the relief under subsections (4E) and (4F) must give due consideration to providing high quality telecommunications services to rural and hard to reach areas.”
Lord Kennedy of Southwark
Amendments 4, 8 and 13 in my name and Amendment 15 in the name of the noble Baroness, Lady Pinnock, concern how we help rural areas and communities benefit from improved connectivity with fibre, to address the concerns that rural and other hard-to-reach areas have.
Amendments 4, 8 and 13 are in effect the same amendment placed in three different parts of the Bill. They would place a requirement on those companies benefiting from the business rates relief to give due consideration to providing high-quality telecoms services to such areas. These are very reasonable amendments—I always table reasonable amendments in your Lordships’ House—and they would place a duty only to give due consideration. There is nothing onerous or anything that would put the viability of a business at risk, but they propose that connectivity must be given proper consideration and significance.
If a particular area is benefiting from an upgrade to fibre, the company doing the work should give proper weight to the proposition that, as a beneficiary of the rates relief, it should also look at whether the work in the village down the road could be done at the same time—the risk being that if it is not done then, it will never be done at all. The community would then be as disadvantaged, as it was previously.
I fully support the amendment in the name of the noble Baroness, Lady Pinnock. It asks that a report be laid before Parliament 12 months after the Act comes into force, to look at various issues, which I am sure she will refer to in her contribution. I beg to move.
Baroness Pinnock
My Lords, obviously I support Amendments 4, 8 and 13 in the name of the noble Lord, Lord Kennedy, which draw attention to the issues that he has just spoken about. Amendment 15 in my name asks for an impact study after 12 months to see how effective the provision is. In this instance, there have been difficulties that I have struggled with, as with the earlier amendment proposing a local authority boundary for an assessment of an average 10 megabits per second.
In Amendment 15, I have used “rural” as an accepted definition of areas which, on the whole, have poor broadband connectivity. If this was accepted by the Government, obviously it could be extended to all parts of the country. I am focusing again on the need for the Bill to use public funds effectively, by targeting their impact where they can make the most significant difference. Subsection (2)(c) of my proposed new clause refers to mobile phone connectivity. This relates to the fact that until we get 5G coverage, which I believe will be in 2020—it could be a year or two later—connectivity will depend on fibre-optic cables going as far as the mobile phone masts. This will have a big impact on those many families who cannot afford broadband but rely on mobile phones for their connectivity everywhere. They rely on them for accessing public services, which are now digital by default. If they can, they also make job applications via their phones, rather than having broadband to the house. That is why I raise these issues today.
The fundamental part of the amendment is to have a pause or period in which the Government assess the impact of this rate relief and ask: is it doing what we hope it will do? Can we improve the quality of mobile phone coverage by ensuring that some of the fibre-optic cable that is laid goes to mobile phone masts, in preparation for 5G coverage?
Lord Ashton of Hyde
My Lords, I am grateful to noble Lords for laying out their amendments clearly. As the noble Lord, Lord Kennedy, said, these amendments are very much linked to the last group on which I answered—the first group today.
Amendment 4, which was moved by the noble Lord, Lord Kennedy, seeks to ensure that there is a requirement for recipients of the relief to,
“give due consideration … to rural and hard to reach areas”.
In a similar vein, the noble Baroness, Lady Pinnock, proposes an amendment to require a report on the impact of these measures on rural connectivity. Although I might support the spirit of these apparently reasonable amendments, I do not believe that they are necessary. I share the concerns of many noble Lords that rural and remote areas should not be left behind in the drive to improve and extend high-quality broadband connectivity. I declare an interest: I live in a rural area and am absolutely aware of the problems to which noble Lords have alluded.
The relief provided for in the Bill is available across England and Wales. No area is excluded or exempted, and we have engaged with the Welsh Government to support the application of the measure in Wales. Providers deploying fibre connectivity in the countryside will receive the same rates relief as those deploying in the hearts of our great cities. That is important because the problems of slow speeds are the same, regardless of where the household is located. When we talk about social deprivation, for example, it is still a problem in an inner city as well as a rural area.
Providers are free to deliver connectivity wherever the market allows. However, to ensure that people living and working in rural and remote areas can and do have access to the broadband speeds that they need, the Government have delivered a series of measures, which I mentioned in my previous answer—but I shall remind noble Lords of them just briefly. There is the superfast rollout programme, which is worth about £1.7 billion of public money. We are currently consulting on the broadband universal service obligation, which will apply across the United Kingdom, with at least 10 megabits per second. Then there is the local full fibre networks programme, worth £200 million, and the rural development programme for England at £30 million for broadband. Those measures have been a great success, with 45% of households with superfast in 2010 rising to 95% by the end of this year.
It is clear that the relief will be alongside a package of measures put in place by the Government to help spread to those living and working in rural and remote areas the benefits of economic growth and access to services that better broadband connectivity will bring. Together, they will also lay the foundations needed for the next generation of mobile technology, known as 5G, to which the noble Baroness, Lady Pinnock, referred.
The noble Baroness’s proposed new clause in Amendment 15 would require a report on the impact of the measure on rural connectivity. I support the outcome—that is, an understanding of the impact of Government’s action in this area—but my concern is that requiring a report on the impact on rural connectivity may have an adverse effect. Telecoms networks take time to plan and build, and investors rely on certainty. A report on the relief after 12 months is premature, given the time taken to deploy networks. My noble friend Lord Bourne will cover reporting arrangements in greater detail later, but my concern is that if the Government are required to report so soon, it could create uncertainty over whether the relief will continue, and lead to unintended consequences.
On subsection (2)(c) of the noble Baroness’s proposed new clause, on mobile coverage, I note that the main benefit of the measure to mobile will be in aiding the deployment of 5G. It will take longer than 12 months for the next generation of mobile technology to appear; we do not quite know what it is yet.
Of course, we will monitor the effectiveness of the scheme in providing new fibre, which will include rural areas, but we need to allow the sector appropriate time to build networks in all areas. Ofcom reports on infrastructure deployment every year, and we should see the impact of all the Government’s measures in this field in due course. In view of those explanations, I hope that the noble Lord will withdraw his amendment.
Lord Kennedy of Southwark
The Minister made the point, with regard to the amendment of the noble Baroness, Lady Pinnock, that 12 months may be too soon. After what period of time does he think a report would be useful? Would it be 12 months, 24 months or 36 months?
Lord Ashton of Hyde
Ofcom reports every year, so I do not think it would matter whether it is 12 months or 24. My point was specifically on mobile coverage for which the 12 months would not be appropriate, because 5G has not really been invented yet, so there certainly will not be any visible signs on mobile coverage. Essentially, we are saying that we want fibre-optic cable to be laid over all areas of the country to improve future mobile reception and also fibre to the premises, which is what the future gold standard is. We need it everywhere, not just in rural areas. While we accept that rural and hard-to-reach areas have a problem, I have laid down a series of other measures to deal with those areas specifically.
Lord Kennedy of Southwark
I thank the Minister for that response and for his response to my other question. I am happy at this stage to withdraw my amendment.
Lord Kennedy of Southwark
“Assessment of rate relief: reporting
(1) The Secretary of State must, within the period of 12 months beginning with the day on which this Act has effect, lay a report before both Houses of Parliament containing an assessment of the operation of the relief provided under this Act in the 2017-18 financial year.(2) The report must include an account of—(a) the impact of the relief upon the level of local authority income raised through non-domestic rating;(b) the level of investment likely to have been stimulated by the relief, and the scope for extending the relief to other forms of investment;(c) whether the duration of the relief is appropriate;(d) the views of those subject to the charges of non-domestic rates on the relief; and(e) the efficacy of the mechanism for the distribution of the relief.”
Lord Kennedy of Southwark
My Lords, I will be brief, as we have rehearsed some of the points made earlier. Amendment 14 in my name and that of the noble Baroness, Lady Pinnock, puts a requirement on the Secretary of State to lay a report before both Houses of Parliament. A similar amendment was tabled in the other place to get the Government to make an assessment of the operation of the relief proposed under this Bill. The amendments list, in paragraphs (a) to (e) in subsection (2) of the proposed new clause, the areas that the report should cover. I hope that the Minister can address the concerns raised by the amendment. It seeks to ensure, among other things, that the issues we have been discussing today and in previous debates do not arise. It would be a major disappointment if we failed to address these concerns and also failed to take any measures to keep ourselves informed about the effect of the relief and how it is working.
I like to base my decisions on evidence. As I said, I was at a meeting today on a completely different matter, where, after many years down the line, we have not got a mechanism to change things. I hope we can get a positive response. I do not accept that having a report to Parliament, whether next year or in 24 months’ time, in itself creates great problems for business in terms of uncertainty. We are in very uncertain times on a whole range of issues, and I am sure businesses would be much happier with other things. I am sure the point can be made for the moment, but I do not accept the inference made. I beg to move.
Baroness Pinnock
As I have put my name to this amendment, clearly I support it. The specific parts of this amendment that I would like the Government to consider are paragraphs (a) and (e) of subsection (2). The first is the impact of the relief upon the level of local authority income raised and the second is, importantly, the mechanism for the distribution of the relief, whether it is going to be a speedy one and how carefully it can be calculated. I can see quite a lot of room for dispute about the cabling, such as which part of local authority boundaries it crosses and so on. What we would like is an assurance that there will be an appeal mechanism for local authorities if the distribution of the relief is not what they anticipate. The reporting would enable that to happen.
Lord Bourne of Aberystwyth
My Lords, I thank the noble Lord and the noble Baroness for their contributions on this amendment dealing with the possibility of a review. I welcome the opportunity to return to this proposed new clause, which, as the noble Lord rightly says, was discussed in Committee in the other place.
We have said throughout the passage of the Bill that we intend to work with the sector and the Valuation Office Agency to ensure the smooth implementation of this relief. I happily restate that. We have published draft regulations for consultation; they are up for consultation until 21 November. I hope that noble Lords will see from the debate that we have just had in relation to gaming that my department and the Government as a whole are looking very closely at the detailed operation of the scheme. We all share the objective of wishing to see this scheme implemented effectively and quickly from the outset. This in turn will lead to new fibre growth and improved broadband. That is the aim, which I know that noble Lords share.
However, I fear that the proposed new clause would not achieve that aim and, if included in the Bill, could threaten the success of this scheme. I note what the noble Lord says about business uncertainty elsewhere, but that hardly means that a bit more uncertainty is a good thing or something that we should not be concerned about. Sending a clear signal to investors in the telecoms sector is critical to the success of this measure, which is why we have moved quickly to bring forward the Bill and why we are consulting early on the draft regulations. Investors need to see a clear intention on the part of the Government to deliver relief from 1 April 2017 for five years up to 2022.
One suggestion is about the length of the relief being provided. Any suggestion that it might not last the full five years is not desirable. Those sorts of signals can make the difference to decision-makers in telecoms companies in deciding whether to proceed with an investment. Businesses thrive on certainty. Decisions in telecoms companies are being made now on the basis of the promise made by the Chancellor that new fibre will have relief until 2022.
I understand the objective of the amendment, but it would create uncertainty in the sector and damage the prospects for success of the measure. By providing for, in effect, a review of the rate relief after only one year, we will sow the seeds of doubt in the sector. The sector may fear that the Government might cancel or otherwise negate the relief after a year—especially when, as the amendment clearly states, the review should consider the duration of the relief. We could expect telecoms companies to react in only one way to the prospect of such a review: they will be less likely to invest, which would damage the rollout of broadband. Therefore, I am afraid that the Government cannot accept the amendment.
We will, of course, continue to monitor the effective operation of the scheme to ensure that it is indeed providing relief on new fibre. We will work with the sector and the Valuation Office Agency to do that. The powers in the Act will allow us to adjust the scheme where necessary such as to reflect changing and new technologies. Any suggestion that the relief might last less than five years is something that we cannot subscribe to.
The amendment would also require the Government to assess the impact of the relief on local government. In fact, that is information which we already plan to collect and publish. I can give that undertaking. Each year, the department publishes non-domestic rating returns containing the information about the business rates income and relief in each local authority area, which this seems to ask for. I can ensure access to that; we can provide the link so that that information is readily available. Those returns are based on information provided to us by local government, and they can be found in full on our website. As I say, I am very happy to provide guidance on how that can be accessed. Those returns will in future include information about the level of new fibre relief. We expect the first returns to include this information to be the outturns for 2017-18, published in autumn next year. I am happy to provide that information and, indeed, to meet the noble Lord and the noble Baroness, with officials, to explain how a lot of the information that has been requested is already available.
Throughout the passage of the Bill through this House and the other place, we have been clear that we would compensate local government for the cost of its share of the relief, and I give that assurance again today. In view of these assurances, I hope the noble Lord will feel able to withdraw his amendment, with the undertaking that I am happy to meet him and the noble Baroness to go through this, perhaps to explain how at least some of this information is available at the moment.
Lord Kennedy of Southwark
I thank the Minister for his helpful response. I am happy to withdraw my amendment. I think that brings us to the end.
Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill
Tuesday 28th November 2017
(7 years ago)
Lords ChamberRead Full debate Telecommunications Infrastructure (Relief from Non-Domestic Rates) Act 2018 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 65-R-I Marshalled list for Report (PDF, 60KB) - (24 Nov 2017)
Lord Bourne of Aberystwyth
That the Report be now received.
Clause 1: Relief from local non-domestic rates: occupied hereditaments
Amendment 1
Baroness Pinnock
“(c) require that a certain proportion of the relief granted to providers under this Act must apply to hereditaments in deprived or isolated areas of England and Wales.”
Baroness Pinnock (LD)
My Lords, I now bring us from space back down to earth with the telecoms Bill. I draw the House’s attention to my interest as a councillor in Kirklees and as a vice-president of the Local Government Association.
As I said at earlier stages of the Bill, this is a constructive way of providing an incentive to IT providers to lay more fibre, with the intention of enabling more properties—both households and businesses—to access superfast broadband. My concern throughout the passage of the Bill has been that a scarce resource—public money—is being used indiscriminately. Any company that lays fibre, be it a billion-pound company or a smaller provider, can benefit. Any fibre that is laid will qualify, regardless of the wider public interest.
The benefit of fibre to the cabinet in the street is dependent on the distance from that cabinet to the property. At 300 metres away, the benefit will be negligible—although the Government’s current, but unjustifiable, measure is 1 kilometre. Broadband speeds are also dependent on the connectivity from the cabinet to the property; a copper connection further degenerates the broadband speed available. By the way, I am pleased to see that action is being taken elsewhere to ensure that adverts for broadband speeds will show realistic speeds attainable in properties, particularly households.
The concerns I just described are the reasons for the amendment. Its purpose is to make sure that the Government make the most effective possible use of scarce public resources. I listened most carefully to the Minister’s response in Committee to the practical difficulties in my amendment. It would now add this to the list of potential regulations under proposed new subsection (10) of Section 44 of the Local Government Finance Act 1988. It would require that at least some part of the resources is allocated to improve connectivity in areas of deprivation and isolation. I beg to move.
The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, the noble Baroness, Lady Pinnock, raised connectivity in remote areas. I thank her for her remarks. It is an issue that we explored at Second Reading and in Grand Committee, and one that I absolutely agreed is of utmost importance, as I do now.
The amendment seeks to ensure that deprived or isolated areas receive “a certain proportion” of the relief. However, it is not clear what exactly that would entail as the term “a certain proportion” is not defined. By its very nature, all areas would get “a certain proportion” of the relief depending on how much and where fibre is deployed and lit from 1 April 2017. If the noble Baroness intends for “deprived or isolated areas”—again, those are not defined—to receive a higher proportion of the relief than others, the amendment would not have that effect.
The Government cannot therefore agree to the amendment as it is technically deficient and does not fully engage with how the telecoms networks are deployed and the approach taken to upgrade our networks with more fibre. I do not want to dwell on the technical deficiencies because even if they were resolved the amendment would still not be in keeping with the Bill’s very simple aim—to promote fibre connectivity wherever it takes place.
As my right honourable friend the Minister for Digital said in the other place, we need to think of the fibre network like a growing tree—he is a romantic soul. We already have a strong trunk, which links our great cities and connects Britain to the world, but we must now grow the boughs and branches. We must grow out this fibre not just in the trunk or the boughs, but in a multitude of branches that serve people’s houses, businesses, and all the public services of the land. The point is, we need to support fibre everywhere and if the relief is not available to support the growth of those branches then they may not grow at all, such is the difficult balance of the business case for more fibre. Therefore, if we seek to ensure that particular areas benefit more than others it is possible we will undermine that business case and deprived or isolated areas may not benefit at all. I do not believe this was the noble Baroness’s intention.
We do agree that it is vital to see improved connectivity in remote and indeed rural areas. People need at least acceptable broadband at home and at work; it is essential for modern life. That is why the Government have consulted on the design of a broadband universal service obligation, which would provide a digital safety net by giving everyone, no matter where they live, the legal right to request a connection to broadband speeds of at least 10 megabits per second. But we are not satisfied with just acceptable levels of access: we want to ensure that businesses and households throughout the country have access to faster broadband—superfast and better. By the end of this year, 19 out of 20 premises will have access to superfast broadband. We are taking steps to ensure that the figure rises even further in the next two years so that 97% of households and businesses have superfast access.
Some £30 million of the £200 million funding under the England Rural Development Programme has been made available through Defra. This is targeted at supporting rural businesses and growth, for broadband services in these areas at speeds of 30 megabits per second or faster where this is not currently available or planned, and to ensure that all areas can and do have the broadband speeds they will need for the future.
The Government are delivering a series of measures to support the rollout of fibre broadband in addition to the measure we are debating today. We launched the £190 million challenge fund as part of the Autumn Budget for local bodies to bid into as part of the local full fibre networks programme. As it was being developed during this year, we received a great deal of interest in that programme from local bodies in all parts of the UK, not least in rural and remote areas. The projects delivered under this programme will, we expect, encourage further commercial development of future-proofed fibre networks right across the country. This follows our announcement last year of more than £1 billion to support digital infrastructure.
Also part of that substantial sum is the digital infrastructure investment fund. That involves £400 million of government financing now being administered by fund managers and will attract significant private investment which will be available for alternative providers to use for fibre networks. This work will have impacts right across the country and enable operators to make the commercial case for wider deployment. In summary, therefore, the Government acknowledge that all areas of the country need decent broadband. That includes urban and rural areas which do not have it. I have outlined the measures the Government are taking to achieve this, but the Bill has one simple aim: to incentivise new fibre optic cable wherever it is laid, because we need it everywhere. I therefore hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Pinnock
My Lords, I notice that the Minister, in his detailed response, made the assertion that we would have what he described as “decent broadband” throughout the country. I have to say that I query the definition of “decent broadband” that is provided by the Government. A speed of 10 megabits per second is not really acceptable in the current way that business and households operate. The Government’s measure of “decent broadband” being within one kilometre of where the fibre is laid to the street cabinet certainly does not provide broadband speeds at the property, given that 300 metres away it has degenerated to such an extent that the improvement is negligible.
What concerns me, and I have pressed it throughout the passage of the Bill, is that all public bodies—understandably, and supported by me—are moving to digital by design. For instance, if you are unemployed and in receipt of employment and support allowance you are required to make job applications online. If you are not in a facility with good broadband speeds, that is really difficult.
Lord Ashton of Hyde
Let me make one thing clear: the universal service obligation, which we have said will come in 2020, will be at 10 megabits per second which although I know is not acceptable to a lot of people, will allow things such as job applications to be done: you can even download and watch a film at 10 megabits per second. The universal service obligation, which is a safety net, will be available to everyone.
Baroness Pinnock
I thank the Minister for his intervention but if he has ever tried to watch a film at 10 megabits per second he will discover that you get gaps while you are watching it because the download speed is variable.
I am concerned about people who live in isolated areas and those in more deprived communities who will not be able to afford full fibre to their household and the consequent monthly payments. I have been making this case throughout the passage of the Bill, because we need to consider broadband access as an essential utility and at the moment I do not think that the Government are seeing it in that light. Nevertheless, I understand the technical arguments that have been made and I accept the Minister’s statement that the Government appreciate the importance of all households having access to broadband Therefore, I beg leave to withdraw the amendment.
Lord Kennedy of Southwark
“Time period for the availability of the relief under this Act
(1) Subject to the provisions under section 6(2), the amendments made by this Act will have effect for the period of five financial years after 1 April 2017.(2) The appropriate national authority may by regulations made by statutory instrument extend the time period for which the relief is to be made available.(3) A statutory instrument containing regulations made by the Secretary of State under subsection (2) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.(4) A statutory instrument containing regulations made by the Welsh Ministers under subsection (2) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the National Assembly for Wales.(5) For the purposes of this section, “appropriate national authority” is(a) in relation to England, the Secretary of State;(b) in relation to Wales, the Welsh Ministers.”
Lord Kennedy of Southwark (Lab Co-op)
My Lords, first, I draw the attention of the House to my registered interests: namely, as a councillor in the London Borough of Lewisham and a vice-president of the Local Government Association.
As we have heard, the Bill is not controversial. It seeks to help with the boosting of the switchover to fibre from our old copper broadband network. This is important as we need to increase the take-up of fibre at a faster pace, and it is recognised that an exemption from business rates could prove an incentive to speed up the process and get more of our outdated network on to a fibre network in a shorter period of time.
Amendment 4 in my name adds a new clause which puts into the Bill the time from which the relief from business rates will operate; namely, five years from 1 April 2017. I considered the issues at Second Reading and in Committee and my amendment seeks to give an additional power to the Secretary of State in England and to Welsh Ministers in Wales: that is, the ability to seek approval to extend the period for which the business rate relief is available to those companies that are installing new fibre beyond the initial period of five years.
The extension would have to be approved by both Houses of Parliament using the affirmative procedure. There will be parliamentary oversight of the process as it enables the Government to have the power to extend the scheme without the need for primary legislation. I think it is proportionate in the circumstances. It is a simple measure and will be an effective way of continuing the scheme if it has been deemed successful in helping roll out the network faster. Of course, if it has not been successful, the scheme will be ended and the option will not be taken up. I beg to move.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, I am grateful to the noble Lord, Lord Kennedy, for moving this amendment. As noble Lords will know, the matter of whether the five years of the rate relief scheme should appear in the Bill was also raised by the Delegated Powers and Regulatory Reform Committee.
As currently drafted, the Bill would allow the relief to apply indefinitely. The draft regulations that we published for consultation would provide that the relief is limited to five years from 1 April 2017—so the five-year period of the scheme appears in secondary legislation rather than in the Bill. We have taken this approach to retain the ability to repeat the scheme for later years without the need to return for more primary legislation. This will allow us to consider the success of the scheme in a timely manner as 2022 approaches.
Nevertheless, the noble Lord, Lord Kennedy, has made a very strong argument for why the five years should appear in the Bill. We have been clear that the purpose of the Bill is to implement the Chancellor’s commitment to offer five years of relief, and we now accept that such a fundamental aspect of the policy should appear in the Bill. But I am grateful that the noble Lord also recognises the value of retaining the ability to extend or repeat the relief scheme without another Bill. Therefore, we also agree that we should take a power to change the period of the relief and that this power should be subject to the affirmative resolution procedure, as the noble Lord set out.
As I have discussed with the noble Lord—and I appreciate the opportunity to do so—we intend to move our own amendment at Third Reading, achieving the noble Lord’s aim but ironing out one or two drafting defects just to ensure that we can make these changes. We will table the amendment tomorrow. Once more I thank the noble Lord for his constructive and helpful approach. I hope that, with these assurances, he will feel able to withdraw the amendment.
Lord Kennedy of Southwark
I thank the noble Lord, Lord Bourne, very much. As he said, we had a very useful meeting a few days ago. I am very pleased that the Government have accepted the main thrust of what I am suggesting to the House. I am happy to withdraw the amendment at this stage and look forward to seeing the Minister’s amendment when he tables it tomorrow.
Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill
Wednesday 6th December 2017
(7 years ago)
Lords ChamberRead Full debate Telecommunications Infrastructure (Relief from Non-Domestic Rates) Act 2018 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 65-TR-I Marshalled list for Third Reading (PDF, 65KB) - (5 Dec 2017)
“(aa) the day concerned falls before 1 April 2022,”
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, this amendment will place in the Bill the five-year duration for the rate relief scheme for new fibre. The scheme will apply retrospectively from 1 April 2017 to 31 March 2022. The need to have the five years on the face of the Bill was discussed at Report. I am most grateful to the noble Lord, Lord Kennedy, for raising this matter and agreeing to withdraw his amendment at that stage so that we could bring forward these changes.
The amendments will also allow for the period of the rate relief scheme to be extended by regulation using the affirmative resolution procedure. This will ensure that, if the Chancellor wants to repeat or extend the rate relief scheme, that can happen quickly without the need for another Bill but still with the approval of Parliament. I trust that noble Lords will agree that the amendment meets the commitment I gave on Report. I beg to move.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, I am very grateful to the noble Lord, Lord Bourne of Aberystwyth. I draw the House’s attention to my interests as a local councillor in Lewisham and vice-president of the Local Government Association. As he said, we had a very fruitful meeting after I tabled my amendment at Report. I was very happy to withdraw that, and I am very pleased with what the Minister has brought back today. As he says, it has enabled the Government to put the dates in the Bill. If they want at some future point to extend the scheme, they can, without the need for primary legislation. It is a very sensible move.
Baroness Pinnock (LD)
My Lords, I draw the House’s attention to my register of interests as a councillor in Kirklees and as another vice-president of the Local Government Association. As we discussed on Report, we agree with and support the amendments proposed by the noble Lord, Lord Bourne, and initiated by the noble Lord, Lord Kennedy. We thank the Minister for his very helpful meetings on the Bill. I have certainly explored a number of issues, although I have not got very far, and I do not intend to let them go. There is a growing need to think about the accessibility and affordability of broadband and mobile networks for people less well off than the majority, when they are going to rely on them for access to public services and other important aspects of their lives. That issue will not go away, and I hope Ministers will take that point away and think about it.
As for the amendments, we will obviously support them.
Lord Bourne of Aberystwyth
My Lords, I shall respond to the typically generous comments from the noble Lord, Lord Kennedy, and the noble Baroness, Lady Pinnock, regarding the Bill in general. I also want to put on record a couple of other issues. First, I undertook that we would look at gaming, and after discussing the issue with Ofcom and Gamma Telecom—I have shared this with the opposition parties—they have concluded that there is no risk of gaming in relation to fibre, but we shall keep a watching brief on that issue. I also take note of what the noble Baroness said about rural issues and deprived and isolated areas that are difficult to get to. Again, we would want to take account of and pay special attention to that.
At Second Reading we benefited from hearing about the concerns about business rates of the noble Earl, Lord Erroll, and my noble friend Lady Harding. I am very grateful to the noble Lord, Lord Kennedy, and the noble Baroness, Lady Pinnock, for their constructive approach to the Bill. I am also grateful to my noble friend and co-pilot Lord Ashton for the support and expert knowledge he has provided throughout the Bill’s passage. I also extend thanks to the Bill team: Jonathan Denning, Nick Cooper, Pete McDougall, Stewart Kemsley, Thomas Adams and the ever-smiling Homaira Abdullah.
This Bill will help to close the digital divide and to get higher-quality, more reliable connectivity to households and businesses across the country, benefiting every sector of the economy. I beg to move.
“(4FA) The appropriate national authority may by regulations amend paragraph (aa) of subsection (4F) above so as to substitute a later date for the date for the time being specified in that paragraph.”
“(aa) the chargeable day falls before 1 April 2022,”
“(4EA) The appropriate national authority may by regulations amend paragraph (aa) of subsection (4C) so as to substitute a later date for the date for the time being specified in that paragraph.”
“(ba) the chargeable day falls before 1 April 2022,”
“(4A) The appropriate national authority may by regulations amend paragraph (ba) of subsection (1) so as to substitute a later date for the date for the time being specified in that paragraph.”
“6A_ In section 143 (orders and regulations)—(a) in subsection (3), for “(3A)” substitute “(3ZA)”;(b) after subsection (3) insert—“(3ZA) The power to make regulations under section 43(4FA), 45(4EA) or 54ZA(4A) is exercisable by statutory instrument, and a statutory instrument containing any such regulations (whether alone or with other provision) may not be made—(a) in the case of regulations relating to England, unless a draft of the instrument has been laid before and approved by resolution of each House of Parliament;(b) in the case of regulations relating to Wales, unless a draft of the instrument has been laid before and approved by resolution of the National Assembly for Wales.””
Lord Kennedy of Southwark
My Lords, briefly, I want again to thank the noble Lord for handling this Bill in his usual courteous manner. It has broad support across the House and I have been very happy to work with the noble Lord and his colleagues on it. I also thank his Bill team—all the names that he mentioned. I have met a number of his officials and they have been helpful and courteous at all times.
Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill
Tuesday 23rd January 2018
(6 years, 10 months ago)
Commons ChamberRead Full debate Telecommunications Infrastructure (Relief from Non-Domestic Rates) Act 2018 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 65-TR-I Marshalled list for Third Reading (PDF, 65KB) - (5 Dec 2017)
Madam Deputy Speaker (Mrs Eleanor Laing)
I must draw the House’s attention to the fact that financial privilege is engaged by Lords amendments 1 to 13. If any Lords amendment is agreed to, Mr Speaker will cause the customary entry waiving Commons financial privilege to be entered in the Journal.
I also remind the House that certain of the motions relating to the Lords amendments will be certified as relating exclusively to England and Wales, as set out on the selection list. If the House divides on any certified motion, a double majority will be required for the motion to be passed.
Clause 1
Relief from local non-domestic rates: occupied hereditaments
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
I beg to move, That this House agrees with Lords amendment 1.
Rishi Sunak
It is an honour to begin my first Bill as a Minister. The Government have been and remain relentless in our pursuit of seeing every home in Britain provided with a decent broadband connection. My right hon. Friend the Member for Wantage (Mr Vaizey) is not in his place, which is a first for a broadband debate in this Chamber in recent times, but thanks to the good work he started, by the end of last year around 95% of premises had superfast broadband.
Under the universal service obligation introduced by this Government, every home in Britain will gain access to a high-speed connection within the next three years. That goal is indispensable to creating a cohesive, modern and economically vibrant Britain, and this Bill is another important step in ensuring we achieve just that.
At the autumn statement in 2016 the Chancellor announced a rate relief scheme for new telecom fibre. The relief will apply for five years, retrospectively from 1 April 2017, and it forms part of a wider package of support for digital infrastructure worth £1.1 billion.
The Bill provides us with the powers needed to introduce the relief scheme, and the relief itself will be introduced by technical regulations. In September 2017 we published detailed draft regulations for consultation. My Department is now considering responses to that consultation and is holding further discussions with stakeholders on the details. I am pleased to report to the House that the responses have been very positive, and I can therefore confirm that we will be ready to introduce the relief scheme shortly after the Bill receives Royal Assent.
As hon. Members will recall, the Bill received wide- spread support when it was considered by the House last year, and that support continued through the debates in the Lords. The Lords amendments make a helpful improvement by ensuring the five-year relief period appears in the Bill, as Opposition parties called for and as welcomed by my ministerial colleague Lord Bourne of Aberystwyth. The amendments will give telecom operators the added assurance that the relief scheme will operate for five years.
The amendments will still allow us to extend the period of the rate relief beyond five years, if we wish, through secondary legislation. Stakeholders wished to see that ability retained in the Bill, and it means that if the Chancellor wants to repeat or extend the relief scheme, we can do so quickly without a further Bill but still with the approval of Parliament. As a tax measure, it will of course be for the Chancellor to decide in the future if such a repetition or extension is desirable.
I commend the amendments to the House.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
I congratulate the new Minister on his promotion. I look forward to working with him on matters of common interest such as local government finance, which is a niche subject that does not always attract wide attention, but it is important, and it is important that we see reform. I made that offer to his predecessor, and most of the issues are not partisan at all. They are technocratic but essential, and if there is room for us to work together, we should seek to do so.
I am pleased to see the Bill return having been amended in the Lords, and I am pleased that the Government have received the amendments in the way they have. As we have seen in our debates, this is not necessarily a subject that gets Members excited or that results in mass attendance, but the people who do attend understand how important it is. This financial relief is intended to ensure that as many parts of England and Wales as possible benefit from high-speed fibre broadband. A financial incentive is an important mechanism for achieving some of that.
We were very probing in Committee and, unsurprisingly, we will be looking to see how the Bill works in practice. In particular, can we ensure that this is not just a tax relief for the big providers and that it gets to the smaller providers, too? Can we ensure it has a net effect on the extension of fibre broadband, or will it basically provide a subsidy for installations that would have happened regardless? Have we been able to reach a position where the providers themselves are satisfied that the Bill goes some way towards balancing the revaluation that they met with a degree of concern? I read recently in the Financial Times that BT and Virgin had hinted at the possibility of considering legal action against the revaluation, and I am interested to know the outcome.
Fundamentally, the Bill does two things. First, it rescues an element of the Finance Bill that fell when the election was called. The Bill contained many important reforms that were not contentious or party political but would have allowed local government finance to catch up with the changing times. I encourage the Minister to look at other provisions in the Bill to see what else could be brought forward to benefit local government.
Secondly, the measure proves that the Government can look at financial incentives for business growth, but business rates, of course, cover a wide range of business activity. It has been a long-standing criticism that we have not yet managed to address the impact of the treatment of plant and machinery, for instance, on business investment in new technologies and in new plant and machinery in those premises.
That has also been a concern on our high streets. When banks and building societies close, they are often the only provider of a cash machine in town. When a local convenience store agrees to take on the cash machine, it generally finds itself in a worse position at the end, despite providing a community service, because the turnover at the cashpoint will count towards its rateable value.
I raise those two points because I think there is a demand in industry and the community to ensure that business rates add value to our communities, rather than detract from them. As we embark on Brexit, we need to ensure that our country is in the most robust position possible to attract investment and ensure that we have strong infrastructure.
Finally, I pay tribute to Members in the other place, particularly Lord Kennedy, who spent a great deal of time on the issue and was involved in amendment 2. Let us see whether it makes a difference on the ground, because we pass legislation here not for the sake of it, but to make a material difference to public policy and the community. I will be waiting with interest to see whether this has a net effect on infrastructure investment.
Rishi Sunak
I thank the hon. Member for Oldham West and Royton (Jim McMahon) for his kind words of welcome. He has a long and distinguished track record in local government, and I very much look forward to working with him in the constructive manner he outlined. He made a couple of points that I would like to address briefly. The first point was about who is eligible for the relief. As he knows, it is available for any company deploying new fibre. One of the expectations and hopes for the relief is that it will bring more alternative and smaller providers into the market. We will be watching that closely, as I know he will, because we would all welcome a broader diversity of suppliers.
The hon. Gentleman made a good point about the relief being gamed, and ensuring that it is targeted specifically at new fibre deployments. That was raised in the Commons stages by my right hon. Friend the Member for Wantage (Mr Vaizey), and indeed in the other place by Baroness Harding of Winscombe. I am pleased to tell the hon. Gentleman that, following those exchanges, my Department worked extensively with Gamma Telecom and Ofcom to conduct a detailed study of the potential for the relief to be gamed. The results of that analysis clearly support the conclusion that, based on the evidence available to date, neither the Government nor Ofcom expect the rate relief for new fibre to give rise to gaming in the system. Without going into the details, simply the cost of deploying new fibre, withdrawing dark fibre, opening up the ducts and then reconnecting everything would in almost all cases be more expensive that the saving from business rates.
The hon. Gentleman mentioned other measures in the Local Government Finance Bill and the importance of ensuring that we have a business rates system that supports economic growth. I wholeheartedly agree with him and am keen to use the opportunity for the business rates reset, the revaluation and the fair funding formula to ensure that our financial system does indeed support local authorities in their aspirations to grow their local economies.
I put on record my thanks to Members in the other place and, of course, the officials who brought me up to speed on the legislation incredibly quickly. I also thank my predecessor in this role, my hon. Friend the Member for Nuneaton (Mr Jones), who did so much to get the Bill to the point at which we are in a position to approve it. As I have said, demands on broadband are doubling every couple of years. It is vital that we stay ahead of that need and move quickly to implement the relief scheme that has been promised. I am delighted that we are making good progress on the draft regulations, which will be implemented swiftly. I am grateful to Members in this House and in the other place for the swift progress we have made. This is only one small part of the Government’s strategy, but it is an important one called for by all stakeholders.
Lords amendment 1 agreed to, with Commons financial privilege waived.
Lords amendments 2 to 13 agreed to, with Commons financial privilege waived.
Royal Assent
Thursday 8th February 2018
(6 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 29 January 2018 - (29 Jan 2018)