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Neil Parish (Tiverton and Honiton) (Con)
It is a great pleasure to serve under your chairmanship, Sir Alan. I welcome the Minister for Culture and the Digital Economy to his place, and I thank Mr Speaker for allowing time for this vital debate.
This debate is about the management and delivery of broadband, which covers a multitude of sins that I hope we can examine today. Many right hon. and hon. Members have constituents who are not included in the existing broadband roll-out and businesses that are looking to relocate if they cannot get broadband. Therefore, this is a timely debate. I hope to use it to address some of our concerns about the national roll-out of broadband in the UK and the management of Broadband Delivery UK. I will make some civic remarks about the current broadband delivery programme in Devon and Somerset and the work of BT.
It has been more than 20 years since the UK Government published their first Command Paper that was available on the internet. Today, broadband is vital in accessing public services. Since July 2012, the Government have committed to becoming digital wherever possible. The Government Digital Service, which created the gov.uk website—the single point of entry to online services—has provided firm leadership in the digital age, and it even won the Design Museum’s “designs of the year” award in 2013. Putting public services online is not a cost-cutting exercise, but a vital part of streamlining Government services. It makes services easier for the public to use and more responsive to their needs. I commend the Government and the Minister on their work on leading the digital revolution.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I congratulate the hon. Gentleman on securing this urgent and important debate. Will he deal in his speech with who is responsible for the fact that some areas are below others in getting superfast broadband? Huddersfield and three other Yorkshire towns and cities, which are centres of this country’s manufacturing economy, are among the worst 10 areas, while the top 10 are mainly, although not all, in the south of England. Who does the hon. Gentleman think is holding back some areas of the country? Will he pinpoint the barriers today?
Neil Parish
I thank the hon. Gentleman for his intervention. Naturally, I do not know his area well. Broadband is delivered partly through the Government and partly through companies. There are schemes in place in areas such as Devon and Somerset to connect rural broadband and rural users, and naturally I have had more experience of that. Certainly, the Government’s programme aims to ensure that the cities he mentions are also provided with broadband, but I suspect that he will be given an answer by the Minister.
Mr Sheerman
The Government and previous Governments have done very well on this issue, so, unusually for me, I am not berating the Government. People keep saying that BT is responsible. Is BT holding things back or not?
Neil Parish
I am not going to get drawn into giving an exact answer to the hon. Gentleman. I shall come on to that issue later. BT is doing a good job in some areas, but it could do better in others; that is what we all want to see. However, we must recognise that, rightly or wrongly, BT is a major player in delivery, and delivering broadband to all our businesses and residents, wherever they are, is essential.
The Government have been ambitious in their plan to transform broadband in the UK, which has been co-ordinated by Broadband Delivery UK. The Government’s roll-out of superfast broadband has reached more than 1 million homes and businesses across the UK. The £1.7 billion nationwide roll-out is firmly on track to extend superfast broadband to 95% of UK homes and businesses by 2017. The rate at which fibre technology is being rolled out under the programme is rapidly accelerating, and up to 40,000 premises are gaining access every week. A key part of our long-term economic plan is to provide the digital tools that people and businesses need to thrive.
However—there is always a however—the move to online services is in serious danger of leaving thousands of people in digital darkness. The current target of 95% superfast broadband coverage by 2017 still leaves behind 5%. We must also ensure that we get to 95% by 2017. “The final 5%” is a misleading term, as it will not be evenly distributed across the country. Some communities—particularly those in rural areas—are disproportionately affected. More than 10% of the countryside is still without access to broadband in any form, and there are 12,000 premises with no digital footprint whatever.
As a member of the Select Committee on Environment, Food and Rural Affairs, I took part in the inquiry on rural broadband provision and digital-only services. As our report made clear, the difficult geographical nature of some communities must not be used as an excuse for a lack of broadband or poor broadband speeds. Those challenges should encourage investment and innovation in new types of technology.
Julian Sturdy (York Outer) (Con)
I join other Members in congratulating my hon. Friend on securing this important debate. He is right to praise what the Government have done so far, but he is also right to talk about the growing digital divide. It is important that we get superfast broadband to the final percentage of rural communities. Does he agree that, to get to those rural communities, we need to embrace new wireless technology? Ultimately, fibre to the cabinet will not deliver to those communities.
Neil Parish
My hon. Friend is exactly right. Our experience in Devon and Somerset is that new technologies have not been used quickly enough in the roll-out of broadband. BDUK is beginning to pick up and pilot some new technologies, but more should have been done more quickly. One of the purposes of this debate is to say to the Minister and to BDUK that we must deliver broadband faster and look at new technologies. A lot of the technologies are already out there. For example, smaller boxes can be put on to telegraph polls. I am not a technical man, but there are ways to deliver broadband more quickly. I imagine that the problems in Devon and Somerset are similar to those in Yorkshire, so we need to work on them.
Mr Richard Bacon (South Norfolk) (Con)
I am enjoying my hon. Friend’s speech. Does he agree that the point made by my hon. Friend the Member for York Outer (Julian Sturdy) is of the essence and that we will not get to 100% without using the technologies that he spoke about? Crucially, those facts were not only predictable and predicted, but were fully known five years ago in 2010, during the discussion about what kind of contract should be let. It was known at the time that the introduction of alternative players is a prerequisite for getting full coverage. Does my hon. Friend the Member for Tiverton and Honiton (Neil Parish) feel, as I do, rather let down by BT and, to some extent, the Government, given that they did not take account of those important facts five years ago when they contracted with BT?
Neil Parish
I thank my hon. Friend very much for his comments. He is right. What happened is that the contracts—certainly, the Devon and Somerset contract, which I know the most about—were far too secretive, so it was difficult for people to know exactly who was going to get broadband and who was not and for other companies to come in and provide it. We are doing better, and it is getting better—I am not here just to beat up BT—but we need firm and friendly criticism. We need to say, “Get on with it. You’ve got the contracts to deliver, so let’s have it done. If you are not going to be able to deliver it, let’s know about it, and if we can get in competition, all the better.”
Anne Marie Morris (Newton Abbot) (Con)
I thank my hon. Friend for giving way; he is being most generous. I wonder whether he shares my concern that, from my latest meeting with BT, I understand that the universal commitment to a minimum of 2 megabits per second now no longer applies and that some local authorities are trading off more fibre for not having to meet that commitment.
Neil Parish
My hon. Friend raises an interesting point. Through some fibre optic systems, it is not possible to deliver the minimum 2 megabits, and we should have known about that sooner and action should have been taken sooner. However, I do not want to be too negative this afternoon; that is not in our interest as hon. Members or that of our residents, wherever they are in the country. We have to say to BT, “You have got behind. Now move forward much more quickly.” I think that it will, but its feet need to be held firmly to the fire, so that it feels pain in order to deliver. It is no good saying to someone that 95% of the country has broadband if they live in an area in which 95% of people do not have it. In some areas, the figures are nearly as low as that. In my constituency, the figure is 22% at the moment, and that is over the whole constituency.
Richard Graham (Gloucester) (Con)
My hon. Friend is being very generous in giving way. Although the focus of this debate is primarily on rural broadband, does he agree that there is a specific issue with urban broadband black spots? BT and Openreach know where those black spots are, but they will not share them with constituency MPs. County councils often know, but will also not share them, and it would be useful if the Minister tackled that issue briefly later.
Neil Parish
I entitled this debate in a broad fashion, so it is right for my hon. Friend to raise that point. The black spots are not just in rural areas, as the hon. Member for Huddersfield (Mr Sheerman) also mentioned. I have a series of questions that I want the Minister to answer at the end of the debate, but I hope that he is taking note of that point; I know that he is working very hard on it. If someone is in an area where they cannot get broadband, they are very frustrated, and when they have heard that packages have been put together to deliver it, that infuriates them even more. We need to be very aware of that.
Mr Sheerman
Before the hon. Gentleman moves off black spots, may I just have one more bite at that? I understand the black spots and the rural dimension, but as this lovely graph shows, nine out of 10 of the top-performing broadband innovations are in the south of England. It is the reverse in the north of England, where the worst-performing areas are. This is not just little black spots in the countryside; they are in major towns and cities. That is why we are so angry.
Neil Parish
I repeat that I am sure the Minister is aware of that, and I hope that he can answer the hon. Gentleman’s question. He is right to raise that issue. My constituency has many problems not only in the Blackdown hills and on parts of Exmoor, but on the edge of towns as well, so this is not just about rural broadband.
Anne Marie Morris
Does my hon. Friend share my further concern that many people in our very rural communities work from home and whether businesses are in the programme is very much in the lap of the gods? As I understand it, in some local authorities, business premises and industrial estates will be connected as part of the programme, and in others, they will not. If the economy and small businesses matter, surely that should not be an option.
Neil Parish
My hon. Friend raises an interesting point. Naturally, some areas may have the cables and cabinets, so it is much easier to deliver there. However, if there is a difficult spot to deliver broadband in, with lots of small businesses, we have to find a way to deliver it. This is not just about businesses, but about our residents. Broadband is very much part of our infrastructure, just as railways and roads are. We will be left behind if we are not connected, so that is the purpose of this debate. I thank her for that intervention.
During the inquiry, we heard from BT that it believes that the current target of 95% coverage by 2017 may slip. Given the resources and the free rein that it has been given, I hope that the Minister will impress upon BDUK the need to hold BT’s feet over the hot coals to get the job done. The target for superfast broadband has changed a number of times. The original date for completion was 2012. For our constituents to have confidence that their homes and businesses will get superfast broadband, it is important that the targets for broadband coverage are not changed again. If BT fails to achieve its targets, there should be a mechanism to hold it to account. That is very much what I want to see.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
For my hon. Friend’s benefit, I tell him that we have never changed our targets. We got rid of an unambitious target of 2 megabits at the end of 2012. We had an ambition, which I hope we will reach, of superfast broadband coverage of 90% by the end of 2015, and because of the huge success of this programme, we have added a further target to get to 95% by the end of 2017.
Neil Parish
I have huge confidence in the Minister, but as he can imagine, if someone is living in a constituency such as mine, where about 70% or 80% of people are not getting broadband, those figures do not mean an awful lot. Therefore, I urge him to ensure—I know that he will because he is such a wonderful Minister—that they will immediately get their broadband tomorrow. I am being slightly facetious, but let me reiterate that the purpose of this debate is not just to criticise, but to see whether we can do better. I am not criticising the Government, but when there is a contract from BDUK that has Government money, council money, business money and, in fairness, money from BT, let us make sure that it delivers on its promises.
Tessa Munt (Wells) (LD)
I briefly intervene to say that there is no such thing as Government money or council money; it is all taxpayers’ money and that is why those responsible have to be held to account.
Neil Parish
I stand corrected by the hon. Lady. It is indeed our money that is being spent and we expect this service to be delivered.
The National Farmers Union has warned that its members do not have the infrastructure connections to enable fast enough broadband to comply with online Government services, including complying with the new agriculture policy, because all the mapping now has to be done online. I can understand that because of the need to map all the hedgerows, but it is essential that we get broadband out to those businesses.
The Federation of Small Businesses conducted research in July 2014 that shows that 94% of small business owners consider a reliable internet connection as critical to the success of their businesses and that 14% of UK small firms view the lack of a reliable broadband connection as being their primary barrier to growth. That has been recognised by the Government, but this is again about delivery. As small firms become more reliant on a high-quality broadband connection to do business, that will become even more significant in future.
As the EFRA Committee’s report rightly noted,
“2 Megabits per second (Mbps) is already an outdated figure, and 10 Mbps is increasingly recommended as a suitable USC for standard provision.”
The Government must reassess whether the current universal service commitment is still valid and right.
I would like to get a little more parochial. The Connecting Devon and Somerset programme that covers my constituency is on track to deliver superfast broadband to 90% of premises across Devon and Somerset by the end of 2016, up from 64% overall when the programme began. The programme is supported by a £32 million investment from BDUK.
I am pleased that the Department for Culture, Media and Sport announced on 25 February 2014 an additional £22.75 million for rural broadband in Devon and Somerset from the Government’s—from the taxpayer, from us all —£250 million broadband fund. However, my constituency of Tiverton and Honiton is ranked as the 611th worst constituency for broadband out of 650 constituencies. Only 33% of premises have high-speed broadband. A large number of communities in my constituency, such as Upottery, Stockland and Rousdon are being left in digital darkness. Some business owners in parts of Dunkeswell have told me that they may be forced to relocate because of the lack of reliable broadband. I have been working with local campaigners, Graham Long in Upottery and Rebecca Pow in Churchinford and Otterford.
CDS has now published its procurement tender for the next stage of the roll-out, to extend superfast broadband coverage as far as possible in Devon and Somerset, with the aim of getting to 100% coverage by 2020. I welcome the progress made in connecting more premises in Devon and Somerset, but I am deeply disappointed that we are not farther along this road. Communities in my constituency should not have to wait until 2020 for broadband delivery. I do not buy the argument constantly put to me by BDUK that, “It’s all too difficult, Mr Parish.” It is not too difficult, because a contract was given and money has been provided to deliver in those difficult areas. The contract is there to provide exactly what we want—broadband in our rural communities. Greater focus is needed on helping hard-to-reach areas and exploring innovative technologies.
Neil Parish
I think that the argument has gone even as far as state aid rules and whether Brussels was involving itself in the letting of contracts and whether being able to extend the existing contract with BT and BDUK was the best way forward. Those types of argument have been used. I am not against BT or what BDUK is doing, but I do feel that not enough competition has been brought into the system to keep BT and BDUK up to the mark.
Mr David Heath (Somerton and Frome) (LD)
Does the hon. Gentleman agree that the issue in Devon and Somerset now is not so much the delivery of the original contract, which is carrying on at its own pace—we are impatient, but it is happening—but the large areas in our constituencies that will not be covered by that contract and that need to catch up with the rest of the counties? I think that that will not be done through big contracts. It will be done through small, individual contracts, with new technologies such as wi-fi, rather than this approach, which I think will fail many people in rural areas.
Neil Parish
I thank the hon. Gentleman for his intervention. He may well be right. One problem that we have with these large contracts—the situation is getting a little better—is that people do not actually know where the broadband will be delivered. If there is an alternative system—satellite, wireless or whatever—people do not necessarily know whether to put private funds into it, because they do not know whether BDUK will actually deliver it to their area. This is the frustrating part of what we are doing. We have all worked hard across the parties to get money. The MPs in Devon and Somerset all signed the letters to get the money and we delivered the money and have the contract, yet individual residents are not getting the broadband. Naturally, they do not like all these figures being bandied about for how much is being delivered if they do not have broadband themselves.
I understand that Connecting Devon and Somerset chose the route that it did because of the lack of bids and the concern over the state aid deadline, but I believe that more could have been done to open the market. At national level, there should have been more work to prevent one company from gaining such a monopoly on publically funded broadband roll-out as BT has achieved. Given the impact of flooding and sea damage on the west country’s transport infrastructure, the provision of high-quality rural broadband has never been more important to the resilience of the south-west and its communities and businesses.
I have a number of questions that I am sure the Minister will be keen to address. Does he believe that BT is providing value for money? I think that that is a very important question for the simple reason that I want to see everyone get broadband. I accept that some areas are very difficult to get to, but surely that is what these contracts are let for. We have to make absolutely sure that we are getting value for money.
Will the Government re-examine the universal service commitment of 2 megabits? What work is the Minister’s Department doing to ensure that survey information is made publically available and that BT is not hamstringing local authorities with spurious confidentiality agreements? What work are the Government doing to pilot new technology to reach the hardest-to-reach areas? Finally, will the Minister examine ways of making BT much more accountable?
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
I congratulate the hon. Member for Tiverton and Honiton (Neil Parish) on securing the debate. I want to give a different perspective on the issue of broadband coverage, coming as I do from one of the most concentrated urban areas in Scotland. At first sight, it might seem strange that someone from a constituency that has superfast broadband to a degree that colleagues would be envious of would complain about lack of coverage, but the fact is that even in my very urban constituency, many areas, covering thousands of homes and businesses, do not have superfast broadband at the moment and do not seem to have any prospect of getting it any time soon.
The projection is that, by 2017, 98% of people will have superfast broadband. That sounds very good and, if it happens, I will obviously be pleased about it, but many of my constituents who are currently affected are somewhat sceptical as to whether that figure will actually be reached and whether some of the current not spots in my constituency—they also exist in other urban areas—will have that level of provision.
We have the problems that I have described in urban areas such as mine because of a fundamental flaw in the arrangements for the roll-out of superfast broadband. It applies not just in my constituency, but in many other urban areas up and down the country. It is the basic problem that Government schemes and funding arrangements do not apply to areas where, it is believed, superfast broadband can be deployed commercially and therefore does not need to be subsidised. However, what then happens is that BT—it normally is BT—decides that it is commercially unviable to provide superfast broadband in certain areas, and nothing seems to change to make that move a little more quickly. It is Catch-22: these areas are commercially viable, so they do not get the subsidy—the financial arrangements—but we are told that it is commercially unviable for the market to provide in those areas.
I have lots of examples from my constituency. You will be relieved to hear that I will not go through them all today, Sir Alan, but they involve some incredibly densely populated areas. Quite often in new build developments of hundreds of flats, it is for some reason not regarded as commercially viable to provide superfast broadband. Of course, there are business locations in the area as well. We find instances in which the cabinets are there, but there is no indication of when superfast broadband will be provided. Even more frustratingly, we have a number of locations where the fibre-optic cable is in the street, running past particular houses, blocks of flats and blocks of offices, but there is no indication whether those properties will actually get superfast broadband, although someone down the street will obviously do so.
In Edinburgh city centre, the heavy concentration of commercial activity means that the residential properties are relatively dispersed, so again it has not been regarded as commercially viable to provide superfast broadband to those properties. There is something wrong when houses in the centre of some of our most concentrated urban areas still do not have a clear date for obtaining superfast broadband. I have raised the issue time and again with various levels of government—UK Government, Scottish Government and local government—and all I seem to get is an assurance that it will be all right eventually, but the problems persist. I have raised some concerns with the Minister in the past, but I urge him to look again at some of the cases in my constituency. I have had more cases over the past few weeks, and I am happy to provide him with the details.
I also want the Minister and his counterparts in the devolved Administrations to look at ways of ensuring that as many properties as possible in the areas in which contracts are rolled out have the opportunity to access superfast broadband. That should not be beyond the wit of Government, regulators or companies. If the contractual arrangements for roll-out are too far advanced in many parts of the country, as I suspect they may be, it should be the responsibility of Government to look at schemes to fill the gaps. We want to find some way of ensuring that not spots in urban areas, just as in rural areas, get superfast broadband. That is important not only because people enjoy having it, but because it is, in many cases, essential for business, essential for communication and essential in a world in which more and more of the transactions of everyday life—including contact with Government, both local and central—are carried out online. People who do not have access to superfast broadband will lose out, and that needs to be addressed in urban areas as well as in rural areas, which have different problems but which suffer from the issues that affect us all.
Tessa Munt (Wells) (LD)
I am afraid that I do not share the optimism of my colleague the hon. Member for Tiverton and Honiton (Neil Parish) about what will happen in Devon and Somerset. The Government’s own figures show that only 41% of residents and businesses in Somerset have access to superfast broadband. That goes nowhere near meeting the needs of local people or rural businesses in my constituency. Effective, reliable and affordable broadband is essential in the 21st century, and it is fairly shaming that we can in no way compare ourselves with places such as Korea, which seems to have magnificent broadband coverage. It is a bit of a shame to have to say that. [Interruption.] Did the Minister want to say something?
Tessa Munt
Okay. Effective, reliable and affordable broadband is essential to keep people connected and ensure that our rural economy prospers. I do not understand how providing superfast rural broadband appears to mean strengthening the broadband in towns, where we have some coverage already, while coverage peters out as we move into rural areas. Surely, the whole point of rural broadband should have been to start in areas where there is little or no coverage and work back towards the places that have at least some coverage. The whole thing seems to be back to front, as far as I am concerned.
The Minister is always very optimistic and loyal about this project, and I would be delighted to share his optimism, but I have no idea how the final 59%, let alone the final 5%, of people in Somerset will be anywhere near getting some sort of decent service by 2020. The idea of getting to 90% by 2015 and 95% by 2017 is an utter dream. I would also like the Minister to tell me what superfast broadband is. Every time I have asked BT the question, it has fluffed the answer. I want to know what people in my patch can expect by way of an upload speed and a download speed.
Mr Vaizey
I am now ready to intervene. May I briefly put on the record that as far as I am aware, 21,000 premises in the hon. Lady’s constituency will be covered under phase 1, which is getting to 90%? That is effectively the same amount as were covered commercially. The figure of 21,000 and the term superfast broadband are audited, so we do not say that those premises are reached unless they are getting speeds of 24 megabits a second.
Tessa Munt
I thank the Minister for that clarification. If he has information about where that will happen, that leads me to my next question. Every time I have asked where the not spots are, I have been given all kinds of maps showing different colours. Most of my constituency is under consideration, or somebody is looking at the plumbing, or whatever. It seems unlikely that anyone will be able to make any headway in those areas. If the Minister is that sure, however, I am delighted.
I would be very grateful to have that information from him so that people who have no coverage can make alternative arrangements. I have heard reports, from my part of the country and others, of parish councils attempting to find out what is going on, and arranging for their own parishes to go online through some alternative to BT. Just when they have been about to hit the button and go for it, BT has suddenly come back to them and said, “Actually, we are going to do your bit after all.” That is not very competitive. If BT is not going to be up front, it is not fair for it to come back to communities that are trying to make their own arrangements and say, “Don’t do that, because we are coming in anyway.” That is slightly anti-competitive practice, and it does not look good, even if it is the truth.
The Department for Environment, Food and Rural Affairs and various other parts of Government, such as the Rural Payments Agency, have moved to digital. However, according to the figures that we have been given by the Country Land and Business Association, more than 10% of the countryside is without access to any broadband, and 12% has no digital footprint whatsoever. The trouble is that our suppliers expect farm businesses to be fully interactive online. Even though the basic infrastructure is not in place and Government-funded schemes are not delivering to remote and difficult-to-connect communities, they still have to use the various basic internet systems. Farmers find it difficult to innovate and to use new farming technology and software, which has to be downloaded from the internet. They also find it difficult to comply with other Government regulations by, for example, submitting VAT returns, getting vehicles taxed and processing animal tagging.
In my constituency, accessing the internet is also vital for jobseeker’s allowance claimants. Those who are looking for work, for whatever reason, have to show that they have applied for every possible job opportunity online. If they do not have internet access, it is absolutely impossible to meet the criteria, and their benefits may be stopped. Some of my constituents have to travel some distance to use the internet. They have to go to Bridgwater or to Wells, and there is little public transport. For people who are challenged financially and have little money because they have no job, but who are trying to find themselves work, it is incredibly difficult to compete and get the jobs that they need and want.
Mr Heath
Is not much of the problem caused by the hugely deceptive nature of percentages? We talk about a large percentage being covered without realising that in Somerset and the surrounding area, that means the fleshpots of Taunton and Exeter, and probably places such as Tiverton and Honiton. That relatively small percentage of people covers a large area of my constituency and that of my hon. Friend, and they are the people who do not get broadband and do not get mobile phone coverage worth having. In fact, they do not get anything, and it is time that they were properly served.
Tessa Munt
I tend to agree. Rather than looking at percentages, we should look at people. Back in the 1980s—I can remember all of this—we had British Rail trying to move trains from A to B and forgetting that its job was to move passengers from A to B. Exactly the same lack of focus on people has led us to where we are with broadband.
When my children were in senior school, they found the internet essential because they had to access their homework online. When they were at college, they had to send all their submissions online to their tutors, and they have to do exactly the same thing now that they are at university. It is difficult for someone who has no broadband and who lives some distance from the library, if they cannot drive or do not have a car and there are no buses. How the hell is anybody meant to be able to do these things?
I have a wonderful constituent who is 94 years old, who moved into Cheddar and found herself waiting weeks and weeks for some sort of connection. She used Skype, Twitter and Facebook to keep in contact with members of her family, who were all over the world. We must remember that in order to keep older members of the community living in their own homes, it is absolutely essential they can access services such as having their heavy shopping brought in from the supermarket by ordering online. They can still pop out to the shops every day and do the small items of shopping. Using the internet in such a way will help to keep them in their own homes.
Many of the businesses in my area are tourism-based, and if they do not have a reliable online connection and cannot use broadband at the right speed, they do not have a competitive edge. It is also difficult to buy, sell and communicate if the connection drops out all the time. Without a decent broadband connection, life is so much harder.
I wrote to the Competition and Markets Authority asking it to look into BT’s apparent refusal to join an open bidding process to increase high-speed fibre broadband access in Somerset. There is slight confusion over this, but it looks as though BT has held back information that might have enabled other organisations to join the bidding process. By saying that that information is commercially sensitive, it has prevented anybody from being involved in tendering for the phase 2 superfast extension programme.
Mr Bacon
I have no doubt the hon. Lady is right that BT has engaged in anti-competitive behaviour, and broadband is now a regular source of complaint among residents and businesses in my surgeries in Norfolk. However, is the situation not even worse? BT inflated its budgets for the BDUK rural broadband programme, thereby obtaining more state aid than it was entitled to. At the same time, it invested less in the programme than it communicated to the Government.
Tessa Munt
The hon. Gentleman has taken the words right out of my mouth. I hope the Minister will be in a position to address our concerns.
Sir Alan Meale (in the Chair)
Order. Minister, quite a few Members want to speak, and the debate should not be turned into a question and answer session between you and one Back Bencher or another. It is much more important that we have as full a debate as we can. In the generous amount of time that remains, you will get an opportunity to reply to all the questions put by Members on both sides of the Chamber.
Tessa Munt
I am pleased that the Minister is so keen, but I take your point, Sir Alan.
My next point relates to the consequences of using the closed tender option in the Connecting Devon and Somerset bid. It is likely that all the confidentiality clauses required by BT, which shrouded the phase 1 programme, will carry straight over into phase 2. There can, therefore, be no demonstration of value for money to the public. BT will not invest in the programme to take coverage above 95%. Its focus must be on shareholder value, so there is no incentive for it to do that. People will not know whether they will get faster broadband under phase 2 until BT sees fit to tell them. Businesses and individuals cannot plan their futures on that basis.
Another aspect is the number of constituents who contact me about the allied organisation, BT Openreach, and I have spoken to the Minister before about my dismay at its pretty appalling service. In my village, lines went into an office and shop connection, but giving the broadband connection some life seems to require a bloke coming 20 miles across Somerset to flick a switch. When he fails to turn up, and businesses are not online, as they need to be, that makes things difficult, because there is no way for people to contact someone who can tell them what is happening.
We have been talking about digital darkness, and I will finish on a slightly lighter note—actually, it is not a lighter note, but something that filled me with horror. Last week, I asked the Prime Minister what he was going to do about the 41% coverage in Somerset. He told me:
“All local councils now have searchable websites”—[Official Report, 25 February 2015; Vol. 593, c. 318.]
He said people can therefore see when they can expect to get broadband in their area by going online, which is brilliant—if they are online.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Sir Alan. I warmly congratulate the hon. Member for Tiverton and Honiton (Neil Parish) on securing the debate.
I have been very focused on this issue in the last five years, first as a member of the Public Accounts Committee, which has looked in detail at the rural broadband programme and made a number of criticisms of it. I have also been to a series of debates—in fact, so many that I have seen more of the Minister this last fortnight than I have of my husband. That is not a joke, sadly, much as I like the Minister.
In my constituency, I have constant complaints from businesses and residents about connection times, speeds, unreliability of service and, of course, cost. I represent one of the most urban areas of the UK. We are a powerhouse for the future of the tech economy. We have frequent visits from the occupants of Nos. 10 and 11 Downing street. The Prime Minister has dubbed my area tech city. There is, therefore, great Government pride in the area, but we have pretty poor broadband. When I complain, I am told, “It’s okay: two thirds of businesses in Shoreditch have a connection.” However, that means that a third of businesses in this critical area do not.
The House of Lords Digital Skills Committee has now joined the cacophony on this issue. Given that the Committee is in the other place, it is worth putting on record its very first recommendation, which is about hard infrastructure:
“We are concerned about the pace of universal internet coverage and the delivery of superfast broadband. In particular, we find it unacceptable that, despite Government efforts, there are still urban areas experiencing internet ‘not-spots’, which is hampering universal coverage and the UK’s international competitiveness.”
It goes on to say, and I agree, that broadband should be seen as a utility—something that is necessary, just as water and electricity are.
A report by Digital Business First says that 10 million UK premises—homes and businesses—are unable to access superfast broadband. As the hon. Member for Somerton and Frome (Mr Heath) rightly highlighted, there are lies, damned lies and statistics. A few percentages here and there do not reveal the real trouble and pain that many businesses and residents face.
Let me give just a couple of examples. A resident in the Victoria park area, on the edge of Hackney, near Tower Hamlets, worked from home. However, his broadband service was so poor that he moved out of Hackney to get better coverage. I will not go into the numbers of businesses that have had problems, but I echo the comments of the hon. Member for Wells (Tessa Munt) about the poor quality of service. It takes a long time to get an Openreach engineer to visit. The Perseverance Works on Hackney road is a consortium—a co-operative, in effect—of businesses, and it took ages to get an engineer to visit it. When an engineer does visit, they do a survey, but it does not seem to belong to the customer, even though they paid for it. It is really difficult to find out exactly what is happening—the lack of transparency about the service is poor, and it really needs to be improved.
The Public Accounts Committee is now seeing the next phase of rural broadband being rolled out. Some real alternatives are being proposed. Finally, to pick up the point from the hon. Member for South Norfolk (Mr Bacon), alternative technologies are being promoted, albeit very late in the day, and only, of course, after the bulk provision has been cherry-picked. The cost envelope for the more difficult-to-reach areas is that much higher, which makes it much harder to deliver services.
I said I represent Shoreditch, which is an international hub of tech progress, but we are falling behind. Shoreditch is, frankly, a national embarrassment, when we consider the place it occupies in the world. It is second only to silicon valley in terms of the investment going into tech businesses, but broadband speeds, and upload speeds in particular, are very poor.
Tech City News does a weekly video round-up, which I recommend to the Minister, as it discusses cutting edge digital technology around the world and in Shoreditch. I have mentioned it before, but it is worth emphasising that the former editor, who has just moved on, says that it would be filmed and taken to his house to be uploaded, because the speeds around Old Street roundabout were too slow, and it took too long. If that is not a national embarrassment I do not know what is. I am always embarrassed to repeat that story in Parliament, as I do not want to dump on my area, but it is time the Government took that seriously. Perhaps the next time the Prime Minister and Chancellor visit, they will be able to celebrate success, rather than tripping over failures. In South Korea the aim is a national 5G wireless network. We need to look for the same. We should aim for more one-gigabit cities. There is some progress, and some companies are keen on achieving it.
I have some questions for the Minister and would welcome answers in writing if he cannot answer now. As part of the approach to improving access to and roll-out of superfast, the Government have put out an advertising programme, which—paraphrasing only slightly—says, “Superfast broadband: it’s coming—would you like it?” I would like to know the cost of the advertising programme, given that the Government have made great play of cutting back on advertising. How are they measuring success? What discussions has the Minister had with the Department for Communities and Local Government on planning rules to make it easier for other technologies to get into urban and rural areas and deliver superfast speeds, where the cable and fibre optics will not deliver?
More one-gigabit cities should be an aspiration of both the Government and the Opposition, so that things do not fall apart upon a change of Government. I hope we can be united in our aspiration. We need more collaborations such as that in York between the far-sighted Labour city council and TalkTalk, which wants to roll out superfast in its own way. It is important to give local authorities power over such contracts. More could be done to strengthen the arm of councils that want to follow that lead.
We need more competition in the market. That involves planning issues. Changes are needed to planning law to require landlords to provide what I would describe in simple terms as reasonable access for the installation of technology, particularly on high buildings. That would allow satellite and mobile superfast, for example, to fill the gaps. That might be more challenging in rural areas, and there might be other planning issues to do with rights of way across land, particularly agricultural land. Certainly in urban areas, however, it would be a fairly simple solution. All that it would require would be joined-up Government action and real will, not just on the part of the Minister, who, as the hon. Member for Wells said, always comes to our debates very optimistic about the programme, but on the part of his colleagues in other Departments. They also need to take the matter seriously. Will the Minister outline what conversations he has with Ministers in other Departments? Can he reassure us that they take the issue at least half-seriously? Are they, as I hope, stepping up to the mark to make sure our constituents no longer have to suffer the ignominy of the supposed superfast broadband programme, which is not delivering?
Mr Iain Wright (Hartlepool) (Lab)
It is a pleasure to serve again under your chairmanship, Mr Meale. I congratulate the hon. Member for Tiverton and Honiton (Neil Parish) on securing the debate. The roll-out of superfast broadband has been a priority of his since his election to the House in 2010, and it is to his credit that he has been pushing it on behalf of his constituents, and businesses in his area—and talking about the national issue as well.
The debate has been excellent and is very important. We have heard that broadband roll-out is an issue that affects not only Devon and Somerset, and rural areas, but urban areas, too. We have heard about problems in Edinburgh, Hackney and Huddersfield. However, I want to mention the most important place of all—Hartlepool. I live in the town of Hartlepool, and not in an outlying village. Given that Hartlepool is the centre of the universe, it strikes me as odd that it takes me 10 minutes to download something from iTunes. The idea of watching the new series of “House of Cards” on Netflix is a pipe dream that I could not possibly think about. BT has said it is because my neighbours and I are too far away from the cabinet—therefore it is not acceptable for us to have superfast broadband. That cannot be right for constituents and households in an urban area. However, things can be even worse than that: this morning I was speaking to my hon. Friend the Member for Stretford and Urmston (Kate Green) about this debate, and she said that businesses in Trafford Park, the largest industrial estate in Europe, are still waiting for superfast broadband. Someone from one of the businesses there told her that they were paying 10 times the price, for a fifth of the average speed.
That cannot be the right approach, because broadband is essential for the future competitiveness of the country. We are in the midst of a third industrial revolution based on digital technology. The digital revolution is already transforming the way commerce is transacted, social interaction conducted, and public services provided to citizens. It will continue to do that—indeed, its impact on society and the economy will accelerate. It will affect skills, employment and other things. It is not sufficient for firms to say, “We will have an add-on digital strategy.” Digitisation and technology will be intrinsic to everything that the economy, Government and society do. If we in this country are to enjoy rising living standards and improved productivity, and to maintain and enhance competitiveness in the global economy, we must have the ambition of being the leading digital nation, both in skills and in hard infrastructure, which is crucial.
In many respects the UK is well placed to achieve that. We are presently ranked ninth among the leading global digital economies by the World Economic Forum’s global competitiveness index. We have a culture of innovation and invention, and we have a digitally savvy population, in many respects, but we must go further, and we could do more. It seems to me that in 2015 the country is at a tipping point with respect to what we need to do to enhance our competitiveness in the digital world. The countries that rank higher than the UK are Switzerland, Singapore, the US, Finland, Germany, Japan, Hong Kong and the Netherlands. All of those are our competitors.
In a telling speech, the hon. Member for Wells (Tessa Munt) mentioned South Korea. As my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) mentioned, too, it announced last year that it would deliver a national 5G wireless network offering speeds of 1 gigabit per second by 2020. It is striking that the nations I mentioned have all invested in digital skills as a priority, but have also prioritised digital infrastructure, with a particular emphasis on driving universal access and usage. We have heard time and again that digital businesses can locate anywhere in the world, and that they will often go where connectivity is amenable; but we have also heard that 10 million UK premises are unable to access superfast broadband.
For all the much-vaunted notion of London as a tech hub and Shoreditch as tech city, as my hon. Friend the Member for Hackney South and Shoreditch said in her excellent and knowledgeable contribution, there are connectivity problems in a place that is often seen as the national centre of the digital economy. The city’s average broadband speed ranked 26th out of 33 European capitals. London has an average speed of 25.44 megabits per second, whereas Bucharest, at No. 1 in Europe, has speeds of 80.14 megabits per second. As we have heard in the debate, and as I have mentioned, the UK suffers from internet not spots, in which businesses cannot connect and therefore cannot compete and grow.
The country suffers far too much from patchy coverage. I think my hon. Friend the Member for Hackney South and Shoreditch has already mentioned last month’s excellent report of the Digital Skills Committee in the other place, but it is worth referring again to such an excellent report and recommendation. It made it clear that the pace of universal internet coverage and the delivery of superfast broadband should be a matter of concern; universal coverage and the UK’s international competitiveness are being hampered. Yet as the National Audit Office set out, the Government’s rural broadband project will be delivered 22 months late. Only nine local projects will, it is estimated, meet the programme’s target of supplying 90% of premises with superfast broadband by May 2015. The Government now say that the date could be December 2017, but BT has stated that the programme may
“end up being in 2018”.
Why has that been allowed to happen?
That question was also asked by the hon. Member for South Norfolk (Mr Bacon) who, like my hon. Friend the Member for Hackney South and Shoreditch, is an excellent member of the Public Accounts Committee. Why have the Government structured the policy and the institutional architecture in that particular way? What did the Government do to ensure that the targets were achieved? Why was action not taken sooner to ensure that delivery times were met?
On phase 2 of the rural broadband roll-out, why did the Government not prepare a comprehensive and separate business case, based on the findings of phase 1? The Minister will be aware of the NAO’s progress update on the delivery of the programme, which was published some five weeks ago. Is he concerned about the NAO’s comments that phase 2, currently at the procurement stage, will face limited competition, given that BT is the only participant in the BDUK procurement framework?
We have heard time and again about BT’s role in the process. The Minister will be aware of the remarks by the Chair of the Public Accounts Committee following the publication of the Committee’s report on the roll-out of the rural broadband programme:
“The Government has failed to deliver meaningful competition in the procurement of its £1.2 billion rural broadband programme, leaving BT effectively in a monopoly…BT’s monopoly position should have been a red flag for the Department. But we see the lack of transparency on costs and BT’s insistence on non-disclosure agreements as symptomatic of BT’s exploiting its monopoly position to the detriment of the taxpayer, local authorities and those seeking to access high speed broadband in rural areas.”
On that basis, and given the comments made by hon. Members this afternoon, does the Minister really think that we have a healthy, competitive market that promotes good competition and encourages new entrants, who will drive down costs, drive up quality and access, and improve our country’s competitiveness?
Given the structure of BDUK, and given the structure of the process introduced by the Government, why were options other than that monopoly position not considered? Is the Minister concerned that the Government’s handling of the process means that a single private company will be able to reinforce its already strong position in the market, to the detriment of new competition? What will he do to ensure that the excellent local initiatives that we have heard about—the City of York council and TalkTalk initiative being a particularly good example—are encouraged as much as possible? We need local, innovative solutions that address specific local circumstances.
I am interested in the important question of who owns national infrastructure assets. What happens to the £1.7 billion public sector investment, in terms of BT’s assets and infrastructure? Is the Minister content that, in this case, vast amounts of taxpayers’ money has been used to improve a company’s balance sheet? We have heard about the importance of transparency. What is he doing to improve the transparency of data, access and cost base? I fully respect “commercial in confidence” agreements, but why are non-disclosure requirements allowed? How do they promote competition? What will he do to change that?
I have specific points about individual funds established by the Government. How much of the £20 million rural community broadband fund has been spent, and what has it achieved? Similarly, what proportion of the super-connected cities programme has been allocated, and what take-up has resulted from that programme?
This has been an important debate, because connectivity for our businesses and homes will be crucial in the 21st century economy, which will be led by a digital revolution. We should see broadband as a national utility, just as electricity, water and transport were in previous decades. Does the Minister need to think in a wider and more co-ordinated way across Whitehall to ensure that happens? Do planning and access to land also need to be altered to ensure that we can highlight and prioritise this important function of future competitiveness? Other countries are speeding ahead with connectivity, at the cost of our own competitiveness, prosperity and social inclusion.
Time and again, we have heard questions from hon. Members about value for money, accessibility, connectivity, availability and the services that businesses and constituents have received. I hope that the Minister will take on board the serious questions that have been asked today, and I hope he will be able to address them in the time remaining.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
It is a pleasure to serve under your chairmanship, Sir Alan. I apologise for my Tigger-like behaviour when I kept intervening earlier in the debate. As you rightly predicted, I now have plenty of time to set out the Government’s stall in response to the excellent contributions that we have heard.
I thank my hon. Friend the Member for Tiverton and Honiton (Neil Parish) for securing this important debate and for making his points in such a fair and balanced manner. I also thank the hon. Member for Wells (Tessa Munt) for her usual forthright remarks. I thank the hon. Member for Edinburgh North and Leith (Mark Lazarowicz) for his long contribution, and I thank the hon. Member for Hackney South and Shoreditch (Meg Hillier) for spreading the rumour about us, which will no doubt spread like wildfire thanks to the availability of 4G in and around Westminster. I am grateful for the interventions by the hon. Member for Somerton and Frome (Mr Heath), to whom I am paying homage with my extensive facial hair. Of course, I am always grateful for the response by the spokesman for the official Opposition, the hon. Member for Hartlepool (Mr Wright), a man for whom I have the utmost admiration, even if I do not always agree with him.
To utter that terrible phrase that tends to kibosh Tory Ministers, I will begin by going back to basics. I will set out in some detail exactly what the Government set out to achieve, and I will try to do that in as non-partisan a fashion as possible, despite the fact that this may be our last broadband debate before Dissolution. We came into government with the previous Government having set a target of 2 megabits of universal broadband by 2012, which was perhaps a perfectly respectable target at the time. The then Secretary of State for Culture, Media and Sport, my right hon. Friend the Member for South West Surrey (Mr Hunt), looked at that target and said that it was not ambitious enough and that 2 megabits was not the kind of speed that people would expect to receive as the programme rolls out, and it is fair to say that his prediction was absolutely right. Indeed, one or two of the rural lobbying groups, possibly including the Country Land and Business Association, are now effectively asking for a universal commitment of 10 megabits. Most people now regard 7 or 8 megabits as the kind of broadband speed they need to do what one might call the basics, even though some people argue that 1 or 2 megabits is what people need to use the iPlayer.
We had to find money for the programme and get state aid approval before letting the contract. We found £530 million from the TV licence fee, some of which was originally set aside for the digital television switchover, on which there was an underspend. We knew the core figure, and we decided that it should be match funded by local authorities, obviously not just to increase the available pot of money but to give local authorities ownership of the programmes. That was a conscious decision, and some people might say that it was a wrong decision, but I think it has proved to be right that local authorities will own and co-fund the contracts and will be partners in delivering in local areas.
We can dip into other pots of money. European money, for example, has been important in certain areas, and let us not forget the contribution of the company that eventually won the contracts—BT. This morning I looked at figures showing that some £410 million is being spent on delivering rural broadband in Scotland, with £120 million of that coming from BT. BT is not simply an open mouth into which taxpayers’ gold is being poured; BT is making its own contribution.
I agree with all hon. Members representing rural areas who have spoken today—the hon. Members for Hackney South and Shoreditch and for Edinburgh North and Leith represent urban constituencies—and recognise that leaving broadband delivery to the marketplace is not enough. It does not make commercial sense for a private company to invest many millions of pounds upfront when it is unlikely to get a return on its investment because, frankly, there simply are not enough people in rural areas to take up broadband services. A subsidy was needed. We made it clear from the outset that, with that money and this scheme, we thought that superfast broadband speeds could reach 90% of the population. Again, with the benefit of hindsight, people might criticise us and ask, “Why didn’t you go for 100% from the very beginning?” However, we went for 90%. In effect, we thought that was achievable and realistic; it was a promise that we could keep. The programme has gone well.
Roger Williams (Brecon and Radnorshire) (LD)
I pay tribute to the Minister for his commitment to the project and the investment of £57 million in the Welsh roll-out. However, there were always people who were not to be connected to rural broadband and in Wales that was set out under postcodes. In the rural areas, postcodes cover communities that are spread widely and some people have not been able to get broadband even when it was said that it was available. A £1,000 grant has been offered—in England I think it is called the voucher scheme—for those who cannot get broadband, but people in postcodes that were told they would get rural broadband now cannot apply for the £1,000 to get access through satellite or some other technology. Does the Minister see how that is frustrating for constituents of mine and, indeed, many other people?
Mr Vaizey
I understand the hon. Gentleman’s frustration. As he knows, I was recently in his constituency, sitting in a digger, trying to do my bit to deliver superfast broadband to his constituents. From looking at the figures and as I understand it, no commercial coverage of any kind was planned for Brecon and Radnorshire, but under this scheme some 26,000 people should get superfast broadband by the end of 2016 who otherwise would not have done. However, I will come to the issue of people who feel as though they are in one category and cannot self-help, as it were, or apply to other schemes.
Neil Parish
One of my questions—the Minister may get on to this in a minute—is not whether BT is providing the money as well as the taxpayer, but whether we are getting value for money out of the contracts.
Mr Vaizey
I can give my hon. Friend an unequivocal answer—yes. Our latest audit found that the scheme cost is, I think, £92 million below what we expected. With clawback provisions—if more people take up broadband than expected and, therefore, more revenue comes in—we find that we can go further. In Cornwall, for example, a scheme started under the previous Government had a target of 80% coverage, but with the same money we will now reach 95%.
The hon. Member for Hartlepool quoted the National Audit Office report from, I think, 18 months ago, which was when I had to tour the studios with the right hon. Member for Barking (Margaret Hodge) to contest her conclusions. That report got wall-to-wall media coverage, but last month’s NAO report, which gave the scheme a clean bill of health and said that we had made a lot of progress, got absolutely no coverage at all. In fact, I wrote down a quote from the right hon. Lady. She said that there
“does seem to have been some progress, which we…welcome”.
Coming from her, that is a massive vote of confidence.
Tessa Munt
Will the Minister answer a simple question for me? He has already talked about return on investment. If people have contracted with a company to receive broadband at a certain speed but they then suffer slow speeds, poor connections and constant drop-out, they receive no return on their investment. How can they get their bills adjusted to reflect what they receive, because there is a definite variance between what they contracted for and what they get?
Mr Vaizey
That is an interesting point. If I wanted to dodge the hon. Lady’s question, I would say that that was a contractual matter between BT and its customer, or indeed any other provider and its customer, but it is an important point that I shall take seriously. We have already tackled relatively straightforward issues, such as stopping companies from advertising their speeds as the fastest speed that could be possibly received. We have asked them to advertise only the average speed that people are likely to receive. However, I want to look at whether we can have different levels of contracts for people who clearly receive slower speeds.
Tessa Munt
I thank the Minister very much indeed. Will he do that in the next few weeks, while he has still got the power?
Mr Vaizey
I know that the hon. Lady has nothing but admiration for my abilities. That is certainly something that I want to look at and, given that I said that in an open debate, she can be assured that we will look at and discuss that with BT and others.
Let me go back to basics—it is good to see one of the leading members of the Public Accounts Committee, my hon. Friend the Member for South Norfolk (Mr Bacon), returning to his seat, as I have already prayed in aid the National Audit Office. No doubt, he will seek to correct that position.
Sarah Newton (Truro and Falmouth) (Con)
While the Minister is going back to basics, I want to applaud him and the efforts in Cornwall on superfast broadband. He rightly points to some good results. However, I would really like him to address the point, which he mentioned, of the people who will not get fibre. What will we do to ensure that they have access to alternative technologies? Where those technologies are satellite, which—as the hon. Member for Brecon and Radnorshire (Roger Williams) rightly pointed out—are much more expensive than BT packages, what will we do to enable them to have equality of access and ensure that they are not priced out?
Mr Vaizey
I understand the point that my hon. Friend makes. Time is pressing, but I will answer her question now. We were clear about 90% coverage. People can question whether that target was ambitious enough, but when the programme was going well enough, we found more money—the Treasury gave us an additional £250 million—to go to 95%.
I stress that that was not us moving or revising the target. We said, “Phase 1 is going well. We think we can go further. Here is £250 million and we think we can go to 95%, again by 2017.” To answer the question from the hon. Member for Hartlepool, yes, some of those contracts extend beyond 2017. I used to be a lawyer. Thankfully, I am no longer, but, if he has ever met a lawyer, he will know that if they could write into a contract a completion date in 2117, they would do so to give themselves enough wiggle room. However, the end of the contract does not signify when the project is likely to end.
Of course we want to get to 100%, and all the advice we received said that getting to that last 5% could cost £2 billion. Those were, to put it bluntly, back of a fag packet calculations—they were by sophisticated people and on sophisticated fag packets, but that is what they were—so the previous Secretary of State, my Friend the right hon. Member for Basingstoke (Maria Miller), who deserves a lot of credit for the work she did across a range of issues, found £10 million from the Treasury for some pilot schemes, which are now well under way. Some of them are delivering superfast broadband and we are auditing them at the moment.
My hon. Friend the Member for Truro and Falmouth (Sarah Newton) is quite right that satellite is quickly emerging as one of the key solutions for the last 5%. We now want to do an analysis of what that is likely to cost, go to the Treasury with an evaluation, and think how best that can be delivered. That will probably involve some of the smaller providers. That is the plan and hopefully by 2018-19 we can be close to 100% superfast broadband access.
My hon. Friend the Member for Tiverton and Honiton said that he wants the pace to be picked up. We have passed the 2 million homes mark under the programme and we are adding 40,000 homes a week—50,000 a week in some instances. However, this is an engineering project and it cannot be delivered overnight.
I want to talk about competition. We had an open competition: we put in place a state aid approved framework contract and anyone could have bid for the contracts. At the beginning, a consortium led by Fujitsu did indeed bid against BT. However, there are constraints when bidding for such contracts. To take Connecting Devon and Somerset, for example, the aim is to try to connect 360,000 homes, but there are not many players in that space, much as I would wish there to be. If a company takes money from the taxpayer—I think it was the hon. Member for Somerton and Frome who asked who owned the assets—there will be open access, so the TalkTalks of this world will provide their retail services on such networks, built partly by the taxpayer and partly by BT. That is open access. That is why, for example, a player such as Virgin Media, which some might think has the scale to compete against BT, did not want to play in this space, because it does not want to run an open-access network. I again give credit to the last Government for the structural separation of Openreach from BT. Openreach is an open platform to which others are allowed access, at prices that are regulated by Ofcom—
Mr Heath
Can I bring the Minister back to his “fag packet”, because one of his problems is that he has raised expectations? In Somerset, we may be a bit rough and ready; we are certainly very rural. However, we do not have big mountains, we are only under water part of the year and it was entirely predictable that the rotten old copper cables that ran three and a half miles from my house to an outhouse in Upton Noble were not going to be sufficient, so I do not understand why that was not factored in originally. Why was the contract not let on the basis of delivering fibre to those communities, rather than on the basis of some notional figure, which has failed to be met?
Mr Vaizey
I really fail to understand the point that the hon. Gentleman is trying to make, and I will not invite him to make it again or we could be here all night. In his constituency, 26,000 homes will get coverage under phase 1 of the programme, and nearly 2,500 more homes will get it under phase 2, so we are talking about 28,500 homes in his constituency that will get coverage.
The programme is run by the local authority. To make a blunt point, we are seeking bang for our taxpayer buck. To pluck a figure from the air, if it will cost £50,000 to connect a village of 20 people and one of 200 people, which group will be chosen? That is potentially a political decision as well. One might take a view that connecting those 20 people is better, in the sense that they are at the end of the queue, so let us bring them forward. However, that is something that we also left to local authorities, because we wanted them to partner this programme. It was not for us in the centre of Whitehall to decide between village A and village B.
Tessa Munt
Can the Minister comment on what appears to be utterly anti-competitive behaviour? I have written down in my notes some fairly serious allegations, and this story has been covered in both the Western Morning News and the Western Daily Press. It is claimed that BT said it would withdraw from the tender process for the contract for Connecting Devon and Somerset if CDS did not use the Broadband Delivery UK framework and run a closed tender process in which BT was the only bidder.
Mr Vaizey
I will happily look at evidence the hon. Lady has of any anti-competitive practices by BT. I will try to unpack what she is alleging. First, BT is free to bid or not to bid for these contracts. We should remember that when we are busily kicking BT, which we do in all these debates; for a quiet life, BT might not bid for any of these contracts.
Tessa Munt
As I understand it, in the national parks, parts of Exmoor and Dartmoor have been parcelled off, so that the contracts for those areas can be tendered competitively. Ironically the suppliers there have to confirm that they are not participating in any “anti-competitive activities” and they have to sign a “certificate of non-collusion”—
Mr Vaizey
I get the point. I am running out of time, so let me simply say that BT is free to bid or not to bid, and it is free to say to a contracting authority that it wants to use the framework contract to save time and make life more efficient, and that if the authority is going to use a different contract it will not bid. That is entirely up to BT and I do not think that is anti-competitive behaviour.
Obviously, we have a debate—a constant to-ing and fro-ing—with BT, because we audit its figures and invoices. Again, it is worth making the point that BT invests this money up front; it does not receive any money from the Government or the taxpayer until it has done the work. It is not handed a cheque to meander kindly down the road and do the work when it feels like it, and if there is some good football on the telly on Wednesday night, it will not do the work. It does the work and then it gets paid.
As I say, we audit those figures and they show value for money. BT is a national provider, and therefore it was in a very good position to win those contracts. However, there is competition throughout the country.
Mr Bacon
Interestingly, the Minister said earlier that Fujitsu bid against BT. No, it did not. It bid to be inside the contract, even though it had told the previous Secretary of State, my right hon. Friend the Member for Basingstoke (Maria Miller), that if it got inside the contract it would not bid for any work. She got down on her hands and knees and begged it to be inside the framework contract, because otherwise there would be only one successful bidder inside the framework contract. That is what happened, even though the Department knew that if Fujitsu entered the framework contract, it would not be bidding for any work.
Mr Vaizey
That is not my understanding, but I will happily write to my hon. Friend and explain what I think happened. However, I still fail to see the point that he is trying to make. The point I have just made is that these were quasi-national contracts—big contracts, to cover 360,000 homes—and very few players were willing to participate in that competition. Nevertheless, it was a competition—
Sir Alan Meale (in the Chair)
Order. The Minister is not giving way to the hon. Gentleman.
Mr Vaizey
As I was saying, you want this to be a debate, Sir Alan, and not a question and answer session.
There are competitors. Virgin Media, for example, has just announced £3 billion worth of private investment to reach 4 million homes in cities. I think the hon. Member for Hartlepool mentioned York, where TalkTalk, with Sky and CityFibre, is planning to build a network, but that will not be delivered overnight. Again, those involved must get investment to do that.
I will say this again and again and again—I make no apology for working for what BT is doing. We can argue about its customer service, and I am not BT’s representative. As a constituency MP, of course I deal with my constituents’ tales of woeful customer service from BT—I do not know how many millions of customers a week, or a month, BT deals with regarding faults on the telephone line, or whatever. I do not seek to be an apologist for BT’s poor customer service when it comes across my desk.
I will, however, stand up for BT as a great British company, which has worked tirelessly on this project and for which it seems to have received an endless supply of grief. BT has provided value for money; it has delivered what we have asked it to deliver; and it is working at pace. I was delighted to meet some BT engineers during the Christmas period while they were installing a cabinet in my constituency.
I am also pretty fed up with people doing down Britain in terms of our comparison with the rest of the world. The hon. Member for Wells talks about South Korea. Well, South Korea is a very different country to the UK. It is densely populated, with a lot of tower blocks that can be connected pretty easily. Nevertheless, its average speed is about 21 megabits, whereas our average speed—[Interruption.] Please stop heckling. As I was saying, South Korea’s average speed is 21 megabits and ours is 18 megabits.
Also, of course, when people talk about the speeds in other countries, they never talk about what that speed costs; they never talk about the equivalent of hundreds of pounds that people would have to spend every month to get these 1 gigabit speeds. And they also never talk about take-up. The fact is that some of this superfast broadband in South Korea, which people are so pleased to talk about, is used by very few South Koreans, because South Koreans do not want it as it is too fast and too expensive.
That brings me neatly to London, where the very misleading survey that was used in the Evening Standard does not come close to showing how competitive London is. The survey cited a company that said, “Oh, we couldn’t get any broadband. It’s terrible. We’re in the centre of London.” In fact, that company actually has superfast broadband running past its door, but it does not want to pay the price for it. However, thanks to the publicity that has been generated, I gather that it has been offered free superfast broadband by a local business provider.
When we launched our voucher schemes—more than 10,000 businesses now have these vouchers—we had around 500 suppliers on our books. There is no shortage of business broadband in London or in many other cities, but there is a shortage of businesses willing to pay the price for it. That is why we have asked Ofcom to review the price of leased lines and the business market. We want to see those prices coming down, and indeed BT’s prices have come down.
I have taken rather too many interventions and perhaps not put my points as forcefully as possible. However, I will say that I am proud of this programme; I am delighted that 2 million premises have received superfast broadband as a result of the programme; I am delighted that 40,000 premises will get superfast broadband this week, and that another 40,000 premises will get it next week; I am delighted that the programme is being delivered by a great British company; and I am delighted that that company is delivering massive value for money to the great British taxpayer.