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Neil Parish (Tiverton and Honiton) (Con)
Thank you, Mr Betts. It is a great pleasure to work under your chairmanship. Do I have to move the motion now?
Neil Parish
Thank you for passing the motion to me, Minister. Don’t worry, once I get going, it will be fine.
I beg to move,
That this House has considered delivery of rural broadband.
Next time, Mr Betts, I will make sure that I know the new procedure. It is a great pleasure to work under your chairmanship. It is a delight to have the Minister here this afternoon, and I shall put some questions to him at the end, which I am sure he will be more than able to answer. I thank hon. Members for turning up this afternoon. We are all concerned not only about rural broadband but about the delivery of broadband throughout the country, which is very significant.
The internet is increasingly important to everyday lives, whether for online shopping, for staying in touch with friends or for all our rural businesses, such as farming and tourism, which are keen to have broadband. Despite a public subsidy of about £1.7 billion, too many consumers, businesses and individuals cannot access broadband. Theoretically, until we had to change the system, farmers were expected to deliver payments online, and next year they will have to, but if they do not have superfast broadband or a good internet connection that will be impossible.
BT owns a lot, if not all, of the infrastructure and is the largest retail provider using it. Ofcom is considering whether to propose separating the infrastructure division, Openreach, from the rest of BT, which would create more competition and mean that BT no longer had a conflict of interest in delivering the high-quality broadband that everyone deserves. I do not know whether this afternoon the Minister will want to be drawn on the question of what should happen to BT. An independent Openreach would improve the quality of service and increase infrastructure investment.
There are two elements to the delivery of superfast broadband in most constituencies: the publicly funded programme—in my constituency, Connecting Devon and Somerset—and the commercially funded roll-out of superfast broadband in larger towns and cities. We must remember, however, that Government and council money is all taxpayers’ money, and we want to see value for it. In earlier debates in the House, we have been very concerned not only about the pace of broadband roll-out but about whether it is being rolled out with value for money for our taxpayers.
For the Devon and Somerset roll-out, the first delivery contract was let to BT and is believed to be on time; it has been suggested that it is also within budget. The target refers to 90% coverage of the area by 2016, but that is where the problem lies in many respects. If roll-out across a constituency or a country is in percentages, people automatically roll out to the areas that are easiest to get to and, all the time, we will have to put public money in to get to those hardest-to-reach areas. I have yet to be convinced that we are getting the necessary value for money from many of the contracts.
If we let one contract get to 90% of the population and another to 95%, and if it is the same company rolling out the broadband, what stops the company from not delivering what it should have done under the first contract but delivering it under the second contract and saying, “Of course it is all too hard to reach. We need more money to reach the hardest-to-reach areas”? One of our problems in Devon and Somerset is that there has not been enough competition in letting the contracts. A contract was let to BT, then a further one was to be let to it again. There has not been enough competition, so there are not enough people out there with wireless connections or different types of technology to keep BT moving. BT has been slow at bringing in the new technologies.
Many Members present have constituencies with a hilly topography and many farms, villages and hamlets are stretched out and a long way from the cabinets and the fibre cable. In the end, there will have to be a system not only of fibre cables but of wireless and other technologies to deliver broadband.
Andrew Bingham (High Peak) (Con)
I cannot stay for the whole debate because I have to go to the main Chamber, but given the very name of my constituency, the High Peak, I want to echo what my hon. Friend is saying. Broadband has very much become the fourth utility, and businesses and farmers need it. The terrain of the area that I represent makes broadband difficult to get, so we need to put some effort into that last 10%, because those people are as important as the first 10%.
Neil Parish
I could not agree more with my hon. Friend. There have to be other initiatives, or other existing systems. Can we use church towers or mobile phone masts, if there are any? Do we need more of those, or do we need to link the broadband or internet connection to other systems? Otherwise, we seem to be getting only to those areas that we can get to and not to the hardest-to-reach areas. I am not yet convinced, even with the latest contracts, that we are getting where we need to be.
Jake Berry (Rossendale and Darwen) (Con)
My hon. Friend is absolutely correct about reaching the hardest areas. A key driver for the final 10% is getting more competition into the market for broadband provision. Was he as concerned as I was to read in The Times this week that BT Openreach had been referred to Ofcom? The article claimed that it was to some extent fiddling figures to avoid having to proceed as quickly as possible with the installation of fibre-optic cables. That must be of concern to him and to rural residents in my constituency, in places such as Water, Lumb, Lower Darwen and Whitworth, who have been waiting a long time to be remembered as the final 10%.
Neil Parish
Yes. If we look at the contracts with BT in particular, there is money that is supposed to be delivered into the contract, but that always comes at the end. I do not know what the situation is in my hon. Friend’s area, but there is certainly little under the Devon and Somerset contract.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
My hon. Friend is altruistic, so he will not mind me commenting on other constituencies. He mentioned what the situation was in the constituency of my hon. Friend the Member for Rossendale and Darwen (Jake Berry), so I am sure he will welcome the fact that broadband will reach 98% there under our scheme, and High Peak 93%. That is good news—thousands of our constituents being connected, thanks to this superbly successful broadband programme.
Neil Parish
I thank the Minister for his intervention. It is all very well to talk about the great delivery of broadband in those areas, which is fascinating, but it does absolutely no good to many of my villages, which have only 25% of people connected. The more he keeps on about how much other areas have got broadband, the more it annoys those who have not got it. That is the problem with rolling out statistics.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
I am grateful to my hon. Friend for securing this debate. Although I welcome what the Minister has said about percentages for individual constituencies, the great concern for my constituents in Dorset will be that last 5% to 10%, as they are the hardest to reach and are clamouring the loudest to make sure the broadband is actually delivered.
Neil Parish
My hon. Friend raises an interesting point. Also, the last 5% is probably not 5% around the whole country but 50% of particular areas of very many of the constituencies of Members here today. Believe it or not, I have some sympathy for the Minister—
Neil Parish
Occasionally, on a good day. To be serious, the people who have broadband are very happy and we do not hear much from them; the issue is the people who do not. I repeat that the more we talk about all those who have it, the more it drives on those who do not.
Kevin Foster (Torbay) (Con)
I am sure my hon. Friend will recognise that those of us who represent coastal communities face a real barrier to the delivery of infrastructure, better known as the sea, which rules out some of the options he has talked about. I welcome the Minister’s announcement in a previous debate that Torbay would have 100% coverage, but sometimes in an urban area it is the site that most needs to be covered—a business park or a development park—that is left out, even though nearby housing has been covered.
Neil Parish
My hon. Friend raises a good point. That is part of the trouble and is hard to understand. When someone knows that people right next to them have a good connection but they themselves have not it seems a huge anomaly. BT has so much fibre-optic cable that where it is rolling out the contract it tries to deliver broadband with that cable, but sometimes it simply will not work. I do not think that BT is necessarily deploying the other technologies that we need as fast as it should be.
Tom Elliott (Fermanagh and South Tyrone) (UUP)
It is interesting to hear the hon. Gentleman say that the areas that are of most concern to him are the 5% who are not going to get broadband if the 95% target is hit. What about my constituency? Fermanagh and South Tyrone has coverage for only 55% of the population; are the other 45% not as much disadvantaged as the 5% in the areas with 95% coverage, or even more disadvantaged?
Neil Parish
The hon. Gentleman stresses the point that people in a large area of his constituency are not getting the connection that they should be getting. That is the problem. We have done well in the areas we can get to reasonably easily, but given the amount of public money going in to deliver to the areas that are harder to get to, I feel coverage is not getting there fast enough and there is not enough concentration on that problem.
Scott Mann (North Cornwall) (Con)
I thank my right hon. Friend for giving way. Many businesses are looking to relocate to rural areas, which presents us with a big problem. Those businesses do not want to be confined to industrial estates; many looking to relocate to my constituency of North Cornwall are food based and want to have access to broadband on farms. What can be done about that?
Neil Parish
I thank my hon. Friend for that point. I also thank him for elevating me to the status of right honourable; however, I am only an hon. Member. To be serious, we talk a lot about infrastructure and about roads. It is right that the Government are doing a lot about our roads, and I fully support that.
Neil Parish
Yes, and broadband, but the issue is the speed with which we are getting the broadband out. There are individual areas with quite a lot of really good businesses that want to stay, but some are considering whether they will have to relocate if they do not get broadband quickly. That is the conundrum. I therefore echo what my hon. Friend the Member for North Cornwall (Scott Mann) has said.
David Simpson (Upper Bann) (DUP)
I congratulate the hon. Gentleman on obtaining this debate and on his elevation to the Chair of the Environment, Food and Rural Affairs Committee. He is very well placed to debate this subject and has been a champion for rural broadband. The hon. Member for Fermanagh and South Tyrone (Tom Elliott) indicated that his constituency has low coverage. We are talking about the last 5%. As has been said, the Government are encouraging innovation, and encouraging farmers to diversify, yet there is still not the broadband coverage that is needed. Surely as well as investing, we need to think outside the box. Whether we are using church towers or whatever, we need to be innovative in our thinking.
Neil Parish
One question I will be putting to the Minister is whether we will need to use some form of voucher system to enable the hardest-to-reach areas to do their own thing. In Devon and Somerset we often get BT starting on part of an area, which stymies work for the rest of it, and then nobody else wants to come in to finish the job. We have to get to grips with those sorts of issues. It is good to have the Minister here because we shall get such clarity when I ask him my questions.
Rebecca Pow (Taunton Deane) (Con)
I congratulate my hon. Friend on securing this debate. We are continuously talking about this subject and are edging the Minister forward; he realises how serious this is. In my constituency, the Blackdown hills, which border the constituency of my hon. Friend the Member for Tiverton and Honiton (Neil Parish), are a harder-to-reach area. Might it be possible to consider giving that area special designation, such as Dartmoor has, when the contract process for phase 2 of Connecting Devon and Somerset begins? It could then be considered for one of the new different methods, so that those hill people could be catered for. Will the Minister comment on that?
Neil Parish
I thank my hon. Friend and new constituency neighbour. It is great to have her in Parliament—she really speaks up for her area. We have treated Exmoor and Dartmoor as a special entity, and most of the area will have a wireless connection. I think that we should look at the same sort of treatment for the Blackdown hills. I know that the Minister is not keen on the benefits of not having signed the contract with BT earlier this summer, but one benefit of looking at a new contract for Devon and Somerset is that there is some competition out there. Other companies are prepared to come into the area and so may be prepared to come in to the Blackdown hills. The Devon and Somerset contract is probably one of the biggest in the country—
Neil Parish
I thank the Minister for that clarification. I think it is too big in some respects—[Laughter.] No, I do. It is too big, so it is unwieldy. Some of the other companies providing broadband are not of the same scale and size as BT, so because the contract is so large it is almost tailor-made for BT and no one else. If the Minister wants greater competition, I suggest that a smaller contract could be the way forward.
Alex Chalk (Cheltenham) (Con)
Does my hon. Friend agree that in the conversation about superfast broadband we should not lose sight of those people who do not have broadband—by that, I mean a connection at a speed of 2 megabits per second? Cheltenham is not wildly rural, yet there are people there who are on dial-up speeds. It is no good saying that 93% are on superfast broadband, as that could obscure the fact that lots of people really have no broadband at all, as is the case in my constituency. Funding has to be sent towards those people in e-poverty as a priority, to take them out of the digital dark age.
Neil Parish
If my wife was here, she would be reinforcing exactly what my hon. Friend is saying. Every time she gets on to our computer and it does not dial up properly or get any connection, she says, “What are you doing about it?” so hon. Members can see how I have been encouraged to hold this debate. He is right; what is driving everybody so crazy is that some people have superfast broadband, some people have some form of connection and some people have either a very slow connection or no connection at all. As we get towards 2 megabits, the argument then will be whether it is 24 megabits, 50 megabits, or 100 megabits. I am not the most technical man in the world, but I imagine that those are getting faster—but seriously, this is a problem and we somehow have to get everybody on to a reasonable speed and connection for broadband before we drive everything forward. Otherwise, people will be treated doubly badly as a result. That is what we are all worried about in our individual constituencies, and I am sure that the Minister is taking note of that.
Chris Davies (Brecon and Radnorshire) (Con)
I thank my hon. Friend for securing the debate. As a new Member of Parliament, I find that the question of broadband is one of the biggest in my inbox. My only problem is that in the village in which I live, I have a very slow speed, so I cannot get back to my constituents as quickly as I would like to.
I thank the Minister for coming to Brecon and Radnorshire during the election campaign. He had a look at broadband in the town of Brecon and I am delighted that Brecon now has a good speed. The problem is in Brecon and Radnorshire. The county is vast—the largest constituency in England and Wales—and it is very difficult to get to many parts. We need to think outside the box. In a part of my constituency called Elan valley, 27 homes are not even on mains electricity, so how we are going to get them to mains broadband, I really do not know. However, I would be grateful if the Minister looked into such matters. We have a long, long way to go in rural broadband, but please look into this issue. Like the rest of the Members here—and, I am sure, Members who are not here today—I find that business and social elements in my constituency are being stifled. Broadband has to be pushed further up the scale and the delivery of rural broadband has to be a top priority.
Neil Parish
I welcome my hon. Friend to Parliament, and I am sure that he will do a great job for Brecon and Radnorshire. My brother used to live in Lampeter, so I drove quite regularly through the Brecon Beacons. Brecon and Radnorshire must have some of the most hilly and mountainous country in the nation of Wales and in the United Kingdom. I therefore suspect we will have to use lots of different methods of getting broadband and internet connections to those areas—I expect the Minister at least to provide my hon. Friend’s constituents with generators where they do not have electricity. In very drawn out constituencies that are difficult to get to, we will need different technologies. I am sorry to labour the point so much, but I do not think that it has had enough focus, and it is what my hon. Friend will need more than anybody. I and many other hon. Members will need it as well, but my hon. Friend’s constituency will need it in particular.
Antoinette Sandbach (Eddisbury) (Con)
Is not one of the problems the fact that BT will not be open about which premises and cabinets will not be connected, particularly in relation to its commercial programme? It has been extremely difficult to get information from Connecting Cheshire because it says that it is prevented from releasing that information under a freedom of information request, because of BT. Many of the communities that are not connected, if they knew they would not be connected, would be willing to band together to try and find a solution if they could, and if there were some sort of voucher scheme.
Neil Parish
I thank my hon. Friend for that intervention and welcome her to Parliament. She is right. I do not know whether Cheshire is the same, but Devon and Somerset signed a confidentiality clause with BT in the first contract, so that has made it doubly hard. The situation has got better and in Devon and Somerset, websites have been set up and people know roughly where they are going to be. The people at BT argue that is a commercial matter, and if they say they are going to be in a certain place at a certain time and they do not arrive, they leave themselves open to a legal challenge. However, it is still very frustrating for people. I am a little concerned that BT is inclined to move faster when it thinks somebody else might move into the area. It is just a feeling of mine, but I think it is probably shared quite a lot in this Chamber. Perhaps we can ask the Minister about that: does he actually like the confidentiality clauses in these contracts, and would it be better if we did not have them? It would be interesting to see what he has to say about that.
In 2010, Ofcom put regulation in place to allow competing broadband providers access to Openreach national infrastructure and access to passive networks, so that their own fibre to the cabinet or fibre to the home superfast networks could be deployed. That has been helpful for non-BT providers such as Sky and TalkTalk. The majority of superfast investment comes from BT and Virgin Media, and both are investing in upgrading their existing networks. We need, all the time, to keep as much open access as we can.
I turn to Britain’s digital future. The UK has one of the most competitive broadband markets in the world, with lower prices than most other European countries. Once people actually get access to the internet and broadband, they get a very good deal, but it is about making sure that we can get people connected in the first place. The UK has an ambitious digital plan, which will help the economy and result in world-class connectivity, so we are going in the right direction—I thought I ought to put something in this speech to make sure that the Minister felt that I have listened to what he has said. This will help to decrease business costs as well as reduce the cost of public services and help our long-term economic growth. Indeed, it might even help our long-term economic plan, might it not? However, the current market structure is letting Britain down.
There are over 500 different telecom companies, the majority of which depend on Openreach. It is worth remembering that when other sectors were privatised, such as the electricity sector or the rail network, they were prevented from simultaneously owning the infrastructure and being a retail provider. Ensuring that Openreach was independent of BT would help to extend internet coverage, which, in turn, would help to support small local businesses. In addition, that would help to cut back on the red tape and ensure that the process of installing broadband across the country is much more transparent.
I have emails in my inbox from businesses that feel like they are being let down by the Government not getting broadband to them fast enough. I know that the Minister is working hard on that, but it is what people are concerned about. Over 200 businesses have been in touch to say that they do not have the internet connectivity that they need to be able to run their business. Indeed, 75% of Federation of Small Businesses members say that the internet is vital to their businesses. One particular business said that as a result of the internet, its sales increased by 40%, and 46% of members would like faster internet provision. It is extremely important that businesses have good internet speed and access so that they can promote themselves online. It is essential for tourism, shopping and market research.
In rural areas, Broadband Delivery UK intends to roll out superfast broadband to 95% of the UK by 2017, with universal access to broadband speeds of up to 2 megabits. The final 5% is primarily made up of rural areas, which is mostly what we have been talking about today. Although that is only 5% nationally, it probably means that in many of our constituencies, up to 50% of our areas will not be covered. Rural areas also have slower superfast broadband coverage. There are also related technical issues, as rural areas tend to be further away from the cabinets. That means that companies and the Government should be looking at more efficient and cost-effective solutions, which we have largely covered this afternoon. We appreciate that the Department for Culture, Media and Sport has announced a £10 million fund to pilot technologies such as satellites to address the problem, but we would like to see more speed due to the negative effect on businesses and constituents. I want to labour this point for a third time. We have not concentrated enough effort and resources, and certainly BT has not, on the different technologies. We will not by 2020, 2021 or 2022 get to the hardest-to-reach areas if we are not using the better and newer technologies to get to them now, because all these things take time. That is what worries us. We are very pleased for all those who have the broadband connection, but we are very worried about our constituents and businesses that do not have it.
Finally, I come to my questions for the Minister. Can he extend competition to keep the pressure on BT to deliver on its contracts more quickly and effectively? Can he persuade BT to use extra technologies, especially in the harder-to-reach areas, to ensure that BT is delivering on its contracts as promised? Will he encourage other companies to bid for contracts to deliver superfast broadband, especially in difficult to reach areas, so that there is local competition in the marketplace? Can businesses and individuals be given vouchers that would go some way towards paying for broadband, which in many cases individuals have to fund privately, out of their own pockets, instead of through the huge taxpayer subsidy that BT is already receiving? Will the Minister keep up the pressure on BT to ensure that it keeps its promises, as already too many people in rural areas do not have broadband and that is only adding to the problems of rural isolation?
Mr Clive Betts (in the Chair)
Six hon. Members have applied to speak. I shall restrict the Front Benchers to nine minutes, rather than the usual 10, to allow everyone else five minutes to speak. It is a five-minute time limit, including any interventions, because obviously we are restricted.
Tom Elliott (Fermanagh and South Tyrone) (UUP)
It is quite an interesting debate here today—and we have almost had the debate already. I welcome the fact that the hon. Member for Tiverton and Honiton (Neil Parish) has secured this debate. The last time I spoke in this Chamber, he intervened. The debate was on fracking, and I recall that he was blaming Europe, or he was taking the blame for most decisions that had been taken in Europe. I am surprised that he has not also taken the blame for the decision on rural broadband.
As I said, I welcome the debate and I want to touch on a few aspects of the issue. One critical aspect is how targets will be met. It is okay to reach 95% in some areas. As with rural farm payments, it is often possible to reach the first 90% or 85% quite easily; it is getting to the last ones that is very difficult. However, in my constituency and others in Northern Ireland, we are not near that: 55% is the figure for Fermanagh and South Tyrone and the situation is similar in other areas. For West Tyrone, the figure is also 55%. Only four constituencies in Northern Ireland—the urban ones in Belfast—are meeting the 95% target. I am sure that other people in rural areas are in a similar position.
We need a much more in-depth look at who can get broadband when there is a fibre-optic cabinet in the area. I have found two examples recently. About a year ago, we found that the Department of Education was bringing fibre optic to a local village school, but no one else in the village or in the area—no business and no resident—could access that fibre-optic connection. We have now found that BT is bringing fibre optic to the village and putting it into a cabinet, but many people in the area still cannot obtain it from BT. I cannot understand the technology of that.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
This issue is regularly raised in Wales. We get notification that fibre optic is enabled in our area, but if we ring to sign up, it is not. How much can we rely on BT’s statistics? I ask my hon. Friend the Minister this question through my hon. Friend the Member for Fermanagh and South Tyrone (Tom Elliott). How robust are the statistics that tell us that these targets are being met if we are being told one thing but the physical reality on the ground is another?
Tom Elliott
Absolutely. I thank the hon. Gentleman for that intervention; what he says is right. I do not have an answer as to how reliable the figures are, but obviously the Minister may be able to give us more information on that. Clearly, if fibre optic is in the village, whether it is going to the school or to a cabinet through BT, the real question is why businesses and residents cannot access it. I just do not know. That has not been addressed.
Another issue in the EFRA Committee report that I noticed was not addressed is how farmers in particular, and people in rural areas in general, cannot now access business opportunities. Some of this is just about the simple registration of births of animals. Doing that online is actually very efficient. Someone may make a mistake on a form, and farmers quite often do—I am a farmer myself, so I hold my hand up—but it is very difficult to make one on the electronic form that is submitted, because it will be rejected. In fact, it is almost impossible to make a mistake on the application form that people put in. Many farmers are disadvantaged because they cannot do that online. In Northern Ireland, we can apply for the single farm payment process online, but many farmers in Northern Ireland cannot do that, simply because they do not have broadband availability. Even the dial-ups in Northern Ireland are quite slow—much slower, I am sure, than the broadband or dial-up connection used by the wife of the hon. Member for Tiverton and Honiton.
We want answers to those questions. I noted that the Minister had referred to two areas, saying that there was 98% and 93% availability of high-speed broadband. The hon. Member for Mid Dorset and North Poole (Michael Tomlinson) referred to Dorset, saying that the last 5% is key. It is the last 45% in Fermanagh and South Tyrone. It is the last 45% in West Tyrone, and I am sure that the hon. Member for Upper Bann (David Simpson) will make the case about his constituency, where I am sure the figure is equally low, so I think—
Kevin Hollinrake (Thirsk and Malton) (Con)
Thank you, Mr Betts, for giving me the opportunity to speak in the debate. I congratulate my hon. Friend the Member for Tiverton and Honiton (Neil Parish) on securing it. One of our roles as parliamentarians must be to create a level playing field, so that businesses can compete wherever they are situated. I give credit to the Government and to the Minister, because we have seen huge improvements. I am referring to the £1.7 billion of investment, the target of 95% of people getting superfast broadband by 2017 and the fact that we are one of the leading nations in the European Union for broadband access.
However, the issue is not just what we are spending, but where. The key question is whether we have a level playing field. Some 5% do not get good access; they have poor or absent broadband and mobile phone coverage. There is the issue of rural areas gaining access to schemes such as the £3,000 broadband connection voucher scheme, which was aimed only at cities.
As we have heard, broadband is now an essential service. The Institute of Directors names it as its No. 1 priority for businesses. Rural Action Yorkshire says that it is now a “necessity” and that poor mobile coverage and slow broadband make it nearly impossible to run a business. Many businesses in my constituency are struggling to compete. Businesses used to compete just locally, but now businesses compete nationally and internationally. I recently visited a Michelin-starred restaurant in my constituency that is competing against other Michelin-starred restaurants in other parts of the country. If people are sat waiting to be able to book a client in online and the screen will not change, they are losing business. Other companies selling goods online are competing against businesses internationally.
We want to attract great businesses such as architects and graphic designers, but they cannot operate in rural areas with slow broadband, which means that they will relocate out of our areas. They will move to urban areas or places where they will get faster broadband. It is not a level playing field, and that is contributing to a depopulation of young people and businesses, which hampers job creation and investment.
A report by the National Farmers Union recently stated that 40% of farmers are without access to broadband and 90% have no reliable service. Despite that, we expect them to fill in forms, use the common agricultural policy information service, complete VAT returns and manage vehicle tax and animal passports online. North Yorkshire County Council recently announced that its third-stage investment in broadband would still mean that some isolated areas would not get access to high-speed broadband, so those businesses have no prospect of a solution in the foreseeable future.
The position is similar for mobile phone coverage. Yes, there have been improvements, and we are delighted to hear of the £5 billion investment in new masts in our major networks around the UK. On the ground, however, we see little apparent improvement in access to mobile phone coverage.
How do we help rural businesses on to that level playing field? There are solutions, of course. Point-to-point wireless is an effective solution. Fixed-line to wireless and back to fixed-line is another. I am grateful to the Minister for agreeing to meet in October one of my providers, Moorsweb, which provides those excellent solutions in my area. Its business model is contingent on finding long-term customers in its area, but as soon as it achieves market penetration, BT or Openreach can come into the area and take those customers back. As a result, Moorsweb has no long-term customer base, which is a disincentive to it to invest. It is a good, not-for-profit organisation that is keen to deliver a service to local people, but when it invests, there is no long-term return. We need to make sure that such providers have security of commercial opportunity.
Effectively, we have a market failure. The bundling of BT with Openreach almost disincentivises the company from rolling out superfast broadband to industrial estates, where it already has leased lines—
Mr Clive Betts (in the Chair)
Order. I am sorry to cut the hon. Gentleman off, but we have to move on to the next contribution.
Cat Smith (Lancaster and Fleetwood) (Lab)
Over the summer, I had the privilege of speaking to a great many of my constituents about broadband access in north Lancashire. It has been clear since my election in May that many of my constituents, from both the farming community and the wider rural community, find poor broadband to be one of the biggest barriers to maintaining family connections—because they cannot Skype, for example—accessing things such as BBC iPlayer, and carrying out their the day-to-day business. As farmers increasingly diversify, poor broadband access cuts them off from many business opportunities. I will not cover ground that other speakers have covered on those issues, but I encounter very similar problems in north Lancashire.
Instead, I will tell a positive story about a community-led group in my constituency called Broadband for the Rural North, which has come together and, in true Lancashire spirit, decided to dig the trenches and lay the cables required to deliver broadband to rural communities. On 12 August this year, I joined Allen and Bruce, volunteers for B4RN, in laying cable and connecting the properties and premises just outside Dolphinholme in my constituency. That was fibre to the premises, delivering hyperfast—not just superfast—broadband, which is capable of 1,000 megabits per second. That is about 100 times faster than the superfast option delivered by BT.
That is an innovative and exciting project. What frustrates me, however, is that with the support of Lancashire County Council, after B4RN has connected up a village and achieved 80% or 90% take-up of its fibre to the premises, Openreach comes in and fits cabinets in the centre of the village, which offer a poorer service so people are not switching. My concern is that a few miles down the road, other villages have access to neither of those services, and it strikes me that it is not the most efficient use of Openreach’s resources for it to supply services to villages that have already found alternative ways of accessing high broadband speeds.
I end by noting my congratulations to Barry Forde and Christine Conder of B4RN, who were recently awarded MBEs in the Queen’s birthday honours.
Antoinette Sandbach (Eddisbury) (Con)
I am grateful to my hon. Friend the Member for Tiverton and Honiton (Neil Parish) for securing the debate. Although Eddisbury is in Cheshire and would not appear to have the engineering problems described by my hon. Friend the Member for Brecon and Radnorshire (Chris Davies), it has poor broadband coverage—in fact, coverage in my constituency is only 70%. Like the hon. Gentleman, I find that that is the issue about which I get the largest amount of correspondence from constituents. They are particularly concerned about the lack of information from Connecting Cheshire about when they will be connected.
There are considerable delays to the project—we understand that some of the delivery will be delayed until 2017—so although it should be a phase 1 roll-out, it will actually happen in the phase 2 timeframe. Another enormous frustration is that we will get three cabinets, say, in a village such as Little Budworth, but the fourth cabinet there will not be connected. That has a massive impact on the value of people’s homes. It also has an impact, for example, on their children’s ability to do their homework.
There are two strands to the problem. The first is quickly identifying those who will definitely be in the 5% or 1% who will not get broadband under phase 2 so that alternative solutions can be offered. A very good rural broadband support scheme was started in 2011; perhaps that should be looked at again, particularly for premises further than three kilometres from the cabinets. Even if fibre comes to a cabinet in a village, someone who lives three kilometres away cannot get superfast broadband speeds, so we need to deal with such premises. I believe that BT is already aware of the problem, but it will not tell the occupants of those properties that they will not get broadband under the scheme.
I know that the Minister is genuine in his commitment to rolling out broadband across the UK and making this country one of the most competitive in the world. As many hon. Members have described, the rural community has a high proportion of small businesses. Farmers are trying to diversify and set up other businesses, and to add value to their product so that they can export it. A lot of small businesses in my constituency make yoghurt and cheese, and they want to export and get their product out there in the market. The way to do that is on the web; not being able to access the internet prevents them from doing it. Not only that, but the cattle tracing system relies on movements of cattle being reported largely online, partly because if a farmer’s reporting card goes missing in the post, they will get heavily penalised.
Minister, we request clarity about which cabinets will not be covered. We ask the Government to consider a voucher scheme that will allow communities to band together and get in the innovative solutions that the hon. Member for Lancaster and Fleetwood (Cat Smith) described in her constituency from Broadband for the Rural North. There are solutions out there, but BT seems to be hiding behind its commercial roll-out programme to discourage such competition and prevent communities from being reached.
I find that, on the whole, the rural community are resilient, inventive and resourceful, and they are willing to work around problems. What they do not like is to be told that they will get this in 2015, and then to be told that it will happen in 2017, and finally to be told that they will not get it at all. I have no doubt that that frustration is driving the correspondence in my email inbox and those of many other hon. Members.
My second point is about the minimum service provision of 2.2 megabits per second. People are paying for their broadband service, but they are not getting those 2.2 megabits per second. I would like a clear statement, or something to which I can point providers, so that I can say, “The Minister has made it clear that you are required to provide 2.2 megabits per second as the minimum service obligation.” If we cannot get BT —Openreach, more specifically—to up its game, we should introduce a universal service obligation for it to provide that service across the UK.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
I thank the hon. Member for Tiverton and Honiton (Neil Parish) for this opportunity to debate the roll-out of rural broadband. This matter arose in oral questions this morning, when there were a number of discussions about it. I apologise if other Members have previously had an opportunity to debate this subject, but as a new Member this is my chance to put on the record the experience of my constituents in the county of Gwynedd in relation to connectivity.
I appreciate that we have been talking about 2.2 megabits but, compared with the UK average speed of 23.4 megabits, Gwynedd experiences average download speeds of 14.6 megabits per second. Superfast broadband coverage in that county is 53%, compared with 75% across the UK as a whole. Looking at other aspects of connectivity, 17% of Gwynedd has 3G coverage, whereas, at 84% coverage, 3G is effectively the norm for the rest of the country. We have approximately no 4G coverage in the county.
I welcome the fact that the UK Government, along with the Welsh Government and the European Union, have been funding the Superfast Cymru scheme that is being carried out by BT. It is anticipated that that scheme, along with other Welsh Government projects in this area, will achieve 96% coverage by 2016. None the less, it is disappointing that the Welsh Government and BT have so far refused to disclose which parts of Wales are likely to comprise the remaining 4%—those areas, of course, are most likely to be rural.
It should be appreciated that people living in rural areas find that the slow progress of superfast broadband roll-out is aggravated by all-round poor connectivity, given how the unreliable mobile data signal varies from provider to provider. We have talked about Brecon and Radnorshire, but please bear in mind that Dwyfor Meirionnydd includes Eryri—Snowdonia—and Yr Wyddfa, the mountain. We have the most mountainous area in England and Wales, and that topography has a direct impact on rolling out this technology.
Simon Hart
The Welsh Government also have Access Broadband Wales, so if people cannot get on to the BT scheme, there is £1,000 per household to connect via wireless or satellite, provided the household can demonstrate that it meets one or two basic criteria. That is a practical solution. For once, the UK Government can learn from the Welsh Government.
Liz Saville Roberts
Upgrading digital infrastructure in rural areas is crucial to ensuring that the rural economy is not further disadvantaged. We have a duty to ensure competitiveness. The current situation evidently puts rural businesses at a disadvantage and may make potential employers think twice about investing in such areas.
Rural businesses cannot afford to rely on passing trade in the same way as businesses located in great conurbations such as London and Cardiff. There is therefore a greater pattern of reliance on online customers. In my discussions with businesses in my area, I have heard that that is particularly true for tourism and accommodation. Such businesses’ shop window, and their crucial initial interaction with customers, is dependent upon slick interactivity, and some of these businesses, by their very nature, are located in areas that are the most difficult to reach.
What will the UK Government do to ensure that the remaining 4% of homes and businesses that fall outside the Superfast Cymru scheme are provided with a dependable high-speed broadband connection? As I mentioned, it would be useful to know where those areas are, although I anticipate that they will be in rural areas. On the wider question of connectivity, does the Minister agree that network providers should be obliged to provide roaming across Wales, and the UK as a whole, to ensure that rural communities have a reliable data connection at all times?
James Heappey (Wells) (Con)
I congratulate my hon. Friend the Member for Tiverton and Honiton (Neil Parish) on securing this debate and introducing it in his inimitable style. He is surely emerging as a champion for agriculture and rural communities across the country. It would be churlish not to start by applauding the success of the phase 1 roll-out. It got off to a slow start in my county of Somerset, but in the past few months a satisfying number of villages have been connected each month. However, there are three key issues connected to phase 1.
First, there is a lack of awareness that cabinets have gone live, which means that the uptake in many places has been disappointingly low. Does the Minister have some ideas, or even some resources, to assist in the promotion of cabinets that have gone live so that there can be better uptake?
Secondly, it is not only farms and isolated hamlets that are at the end of long lines. In many linear villages in Somerset where the cabinet is in the middle, homes that are very much in the village suffer from being on the end of a long line. Indeed, the same is true of homes within the larger towns in my constituency, particularly Wells, where properties are connected directly to the exchange. It is hugely frustrating for people who live in a concentration of premises that have been connected and that have superfast broadband when, because they are connected directly to the exchange or because they are on the end of a long line, they do not have the connection that their neighbours have. We should prioritise such people when identifying who we address in phase 2 or phase 3.
Finally, there is a group of people for whom I feel very deeply: the people who live within the areas that were grabbed by BT for commercial roll-out but who BT has not yet got round to delivering. Those people live in villages just on the edge of a town. When BT’s eyes were bigger than its stomach, it said, “We’ll take that.” Villages all around them have since been helped by the state aid programme, but they are still waiting. Will the Minister consider imposing a time limit on BT for the commercial upgrade of cabinets? If BT fails to do so within that time, it should be made to forfeit so that the village can benefit from the state aid programme that is unwinding around it.
Looking at what comes next, I have a parochial plea. The Minister is well aware of the collapse of the phase 2 negotiations between Connecting Devon and Somerset and BT. There is no doubt that that has caused concern locally. Despite my earlier welcome for the acceleration of the process over the past couple of months, we should not ignore the danger that, with the phase 2 contracts not having been signed, there is a real likelihood that the progress in Devon and Somerset will plateau, which would be hugely frustrating for homeowners and businesses alike. Will the Minister consider imposing a deadline on Devon County Council and Somerset County Council for the negotiation of the phase 2 contracts?
In the process of working out what is in phase 2, we should identify what is left. My final plea to the Minister is, when we know what is left because it has not been included in phase 2, let us be bold and get on with connecting them concurrently. There is no reason to wait to connect the final 5% sequentially after the completion of phase 2. We know what is left, so let us do it at the same time.
The Minister is right to shout about the success of this programme. It is a huge state aid project and a real investment by this Government in our country’s future, but the frustration grows in rural areas every time we are lapped by those in the cities. The reality is that, every time the cities get something more—dial-up, broadband, superfast, ultrafast, 3G, 4G and 5G—we are left even further behind. Every time we are lapped, the frustration grows, the productivity gap widens, the competitiveness advantage becomes more stark and the sense of isolation becomes more acute. We must not rest on our laurels. We must accelerate into the final 5% to make absolutely sure that no community in Somerset, or anywhere else in the country, is left behind.
Dr Paul Monaghan (Caithness, Sutherland and Easter Ross) (SNP)
I congratulate the hon. Member for Tiverton and Honiton (Neil Parish) on securing this debate and on his election as Chair of the Select Committee on Environment, Food and Rural Affairs. I was interested in his comments, I agree with many of them and I share the social and business concerns that he has highlighted.
As the Member for the UK’s northernmost mainland constituency, I have seen some progress in the delivery of broadband in rural areas. There is still much to do, and I think that we all share the view that the internet, and broadband in particular, has the potential to change our lives, especially in rural areas, where shrinking distances can have life-changing impacts.
A huge amount of business in the modern world relies on the internet, for research, advertising, selling and communicating. By letting people work remotely or run small businesses from their home, broadband is clearly good for local economies. For all those reasons, we in the Scottish National party believe that there should be a universal service obligation for broadband, and we are working towards that objective. The Scottish Government, through their Digital Scotland superfast broadband programme, are working to deliver 95% superfast broadband coverage in Scotland by the end of 2017. The initiative has already delivered £400 million in investment to extend fibre broadband access to areas where commercial organisations simply would not otherwise go.
The programme consists of two regional projects, one covering the highlands and islands and the other covering the rest of Scotland. Both those contracts were awarded to BT in 2013. The Digital Scotland roll-out has covered more than 394,000 premises since it started and is more than halfway to its target of making the technology available to 750,000 homes and workplaces by the end of the contract period.
Just two weeks ago, the new Scotland rural development programme broadband grant scheme opened for applications from community-led broadband organisations such as GigaPlus Argyll, a ground-breaking scheme in which numerous hard-to-reach communities have come together to procure superfast broadband services from commercial providers. We support such initiatives, and to date the SNP Government have made more than £16.5 million available for similar community broadband projects, in addition to the £400 million Digital Scotland superfast broadband programme and the larger £13.4 billion Scottish rural development programme for 2014 and 2020.
The Scottish National party has a strong track record of supporting Scotland’s rural and remote communities. We will continue to identify further opportunities to boost Scotland’s rural economies. I would like to see the UK Government support those efforts and implement complementary actions to ensure that rural communities benefit fully from the roll-out of broadband and 4G technologies in addition to mobile connectivity in its broadest sense. I am aware that the UK Government have committed to ensuring that 95% of households can access superfast broadband at a rate of 24 megabits per second by 2017. I applaud that commitment, just as I applaud the Scottish Government’s enhanced strategic approach.
However, the time has come for the UK Government to be creative and innovative in their thinking, and to prepare now for the future, particularly the future of our remote and rural areas. The UK Government must begin to consider issuing licences and providing the necessary financial incentives and support to encourage providers with the technological capacity to deliver broadband to rural communities that might never receive broadband services through conventional routes, in order to allow those communities to exercise their civic rights fully and participate fully in our society.
The UK Government must consider the supply opportunities for the 5% of households that are unlikely to have broadband before 2017. It is now time to consider high-quality service, measured in terms of speed, volume and latency, and to commit to ensuring that 100% of households have the opportunity to access broadband at a minimum of, for example, 20 megabits per second with a latency of not more than 30 milliseconds. I urge the UK Government to deliver on the Scottish Government’s call for a universal service obligation for broadband and to recognise that this crucial technology must now be considered a basic utility, one essential for those in remote and rural areas if they are to exercise their civic rights.
It seems clear that broadband will not reach all communities in the immediate future, and that there is consensus in this Chamber on the fact that the UK Government must now intervene to secure the necessary investment in our rural communities. I support the questions raised by the hon. Member for Tiverton and Honiton, and I look forward to hearing the Minister’s response and what he will do to take forward the objective of establishing a universal service obligation for broadband.
Susan Elan Jones (Clwyd South) (Lab)
I will try to make my contribution short, because the Minister appears to have a little list—in fact, it appears to be a large list. It probably has the names of all our constituencies on it and how things are improving, so I will allow him a little more time to engage in dialogue with Members about that.
We have had a good debate, introduced by the hon. Member for Tiverton and Honiton (Neil Parish). A lot of thoughtful speeches have been made. I was interested to hear the hon. Gentleman speak about the importance of value for money and how we deal with broadband in the hardest-to-reach areas. There has been a great deal of discussion about businesses and their receipt of broadband, or in many cases about how they cannot receive it properly. Furthermore, if we consider business development and rural regeneration, we see that there is an untapped source of private regeneration involving home workers living in rural areas, perhaps travelling sometimes to a company in the city. For that group, too, it is vital for there to be good access to broadband in rural areas.
I will not be able to mention all the speeches made by hon. Members, but I would like to draw attention to a couple of them, including the speech made by my hon. Friend the Member for Lancaster and Fleetwood (Cat Smith). She made the important point that farms today must often diversify their business, and good broadband is vital for that. She also spoke about Broadband for the Rural North, which seems to be doing a valiant job.
My Welsh colleague and neighbour the hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) spoke about Superfast Cymru, which I think we all agree is a good programme that will deliver real improvements. The hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) referred to Access Broadband Cymru. Although Conservative Members do not always praise what is happening in Wales, there is widespread agreement that that is an excellent initiative that deserves serious consideration.
This always happens at the summer recess: we come back and discuss the Government’s failure to deliver rural broadband. The Minister makes another speech; he often comes with a little list. We wonder whether the Prime Minister could not get mobile coverage on Polzeath beach during the summer, or whether it was difficult for him to chillax in his holiday cottage, but whatever it was, the view is always that something must be done, and the Minister is always dispatched here to tell us that he is the person to do it.
However, the facts are fairly simple. We all know, especially those of us from rural communities, that far too many parts of the country do not have any broadband coverage whatever. Some areas cannot get the most basic broadband at 2 Mbps, which is not even fast enough to watch iPlayer, and the roll-out of that basic broadband is three or four years late. Some people are still unconnected now, in 2015. The Minister says that the Government will provide basic broadband in 2015, while the Department for Culture, Media and Sport website says that it will be 2016. It would be interesting to hear which year we are talking about.
The Government are considering a minimum requirement or universal service obligation; I know that that has been raised in various speeches in this debate, including by the hon. Member for Eddisbury (Antoinette Sandbach). However, I believe that the universal service obligation that the Minister has discussed is only 5 Mbps, not the 10 Mbps that Ofcom says we need as minimum. Why has he not listened to Ofcom? Perhaps he has, and can clarify or even correct me.
The level up from basic broadband is superfast. The Government’s target is 24 megabits per second, but even that target is a long way short of what Ofcom and the EU call superfast, namely 30 megabits per second. Why do the Government promote that dodgy definition? They promised the
“best superfast network in Europe”,
but their broadband scorecard does not even measure its speed. At the same time, research shows that our rivals are speeding ahead. One study even showed that Ukraine’s capital has faster broadband than ours. Why is Kiev faster than London? The Government missed their superfast roll-out deadline of May 2015 and shifted it back by two and a half years to December 2017.
The Minister is writing furiously; I hope that he will correct me and bring the deadline forward a bit. Even the 2017 deadline is only a hope, as senior BT executives and almost half of councils have warned that it could be 2018 before the roll-out to 95% of the country is finished. Is the Minister really going to get up and say that BT Openreach has been doing a brilliant job or will he get things sorted?
The Government designed the tender process for superfast roll-out so that it was virtually impossible for any company other than BT to win. The hon. Member for Eddisbury and the hon. Member for Wells (James Heappey) also raised points in connection with that. What was the result? Funnily enough, BT Openreach won 44 out of 44 contracts, and its monopoly on the existing copper network was reinforced. BT Openreach delivers the Government’s delayed roll-out.
Although it is nominally at arm’s length from BT, Ofcom says that it still has an “incentive to discriminate” in favour of the rest of BT Group. Ofcom is now considering whether the situation provides an unfair advantage to BT and whether BT Openreach should be split off in the interests of transparency and fair competition. The Opposition believe that the situation is now so bad that Ofcom’s review should work on the presumption that BT Openreach should be split from the rest of BT unless the review produces conclusive evidence to the contrary. Surely the Government, apparently wishing to champion free enterprise—at least some of the time—should consider that view.
Beyond the existing roll-out, at least there is a plan for getting superfast broadband to 95% of the population, even if it is two and a half years late. The Government do not seem to have any plan whatever for how to get superfast broadband to the final 5% of the population, let alone how to pay for it. It is not 5% of the population, however, because as the hon. Member for Tiverton and Honiton made clear, we are talking about 50% in certain areas. The hon. Member for Fermanagh and South Tyrone (Tom Elliott) spoke of similar proportions in Northern Ireland. The Government have pilots looking at different ways to get to that 5%. When will those pilots definitely report? Will the Minister confirm the story in the Financial Times that he is considering an industry levy of £500 million?
The Government have missed target after target on basic and superfast broadband, and yet despite their record of failure, they are setting themselves another goal to miss. [Interruption.] The Minister smiles; he is going to correct me. The Government have set their sights on an ambition that ultrafast broadband should be available to nearly all UK premises. They plan to review progress against that ambition annually, starting in April 2016. Will the Minister commit today that the review will be conducted independently and then published for proper scrutiny? Will the Government be able to deliver on all their goals? At the Edinburgh TV festival, the Secretary of State for Culture, Media and Sport got the definition of “superfast” and “ultrafast” wrong. He said that it was “up to” not “at least” 24 and 100 megabits per second. That does not fill us with confidence.
What does the Government’s performance mean for rural communities up and down the land? Many of us fear that broadband is too slow and too late for many people and that the Government are creating a digital divide. We all rely on the internet. Broadband has become as much a public utility as electricity and water. People in rural communities expect decent, high-speed, reliable broadband. We all shop online, pay our vehicle duty and council tax digitally and check deliveries on the go on our mobiles and tablets.
We want high-speed, reliable broadband for social media, for catch-up TV and iPlayer. The NHS orders drugs, shares patient records and sends x-rays and test results online. Farmers are supposed to register and receive their common agricultural payments online. Builders and plumbers rely on internet searches for new clients and many of the burgeoning new industries, such as video games, are entirely dependent on the fastest possible broadband. Rural communities need broadband to diversify economically. Reliable superfast internet and mobile connections are essential for farmers who want to diversify their business, as my hon. Friend the Member for Lancaster and Fleetwood said, and for the geographically isolated. It is not an added extra any more; it is essential for every aspect of our lives and the economy. That is why we hope that the Government will get a grip and deliver decent rural broadband, so that the Minister might have a glimmer of good news for us for once.
Mr Clive Betts (in the Chair)
May I ask the Minister to finish at two minutes to the hour to allow Mr Parish two minutes to wind up?
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
It is a great pleasure to serve under your chairmanship, Mr Betts. I hope that you will signal the time to me, because I get so passionate and carried away about the subject. In fact, in the previous debate, I was meant to finish two minutes early, but I forgot because I had so much to say—not just a glimmer of good news, but a bucketful.
In the same way as we had a debate at the end of the previous parliamentary session, we meet early in the new parliamentary session to celebrate the world’s most successful state-sponsored broadband programme. Our cousins in Australia look at the UK and at their own broadband programme, which has not yet started and has already doubled in cost. Our cousins in America look at their rural broadband connection programme, which is much more expensive than ours and delivers to far fewer homes. Our European cousins in the big four member states look at us and see the UK powering ahead. They are celebrating our unequivocal success story. As I look at the thousands of homes being connected in the constituencies represented here today by my hon. Friends and hon. Members, I can say only that I am delighted to be the steward of this highly successful programme.
I thank my hon. Friend the Member for Tiverton and Honiton (Neil Parish) for calling the debate, because it allows me to once again rehearse some of the landmarks. Most of the debates begin with hon. Friends and hon. Members saying how important broadband is for rural communities. I get that point, which is why we started the programme in 2010. We understood that rural communities needed broadband and we also understood that it would not be delivered commercially. In Brecon and Radnorshire, not a single home in that constituency would get broadband under a commercial roll-out scheme. It is entirely subsidised by our rural broadband scheme because companies do not go where they cannot get a return on their investment. We are all agreed on that.
I notice a change of tone in the debate. Because we are now focusing on the last 5%, there is a quiet acknowledgement that the main job is done; we will get to 95% and now we need a solution for the last 5%. I understand that the role of the Opposition is to pick holes, particularly when they have no policy of their own. The hon. Member for Clwyd South (Susan Elan Jones) has to tread carefully; her party is in power in Wales. She lives in a world in which superfast broadband roll-out in Wales is going absolutely fantastically well and it is a disaster just in England, so we can discount pretty much everything she has said.
Let me remind hon. Members what the Government have said from the outset. In 2010 we said that we had a certain amount of money and would get to 90% of the homes in the UK by the end of 2015. I am still confident that we will do that. We have never changed that target. People think that we moved the goal posts; we have not. The programme was going so well that the Chancellor gave us more money, so we said that we would get to 90% by 2015 and use the extra money to get to 95% by 2017. So we have always said 90% and 95%. And I am no fool: I know that that means that we were not going to get to the last 5%. However, I also said as we approached our targets that we would look at how we get to the last 5%, and all my hon. Friends know—they have seen the curve—the enormous expense of getting to the most hard to reach premises.
Nevertheless, we have been working on that. Two Secretaries of State ago—under my right hon. Friend the Member for Basingstoke (Mrs Miller)—we set out very clearly a £10 million fund to pilot new technologies to get to the last 5%, because we did not want to go to the Treasury, give them a back-of-the-envelope costing and say, “Give us 2 billion and I think we could probably get to the last 5%.” We wanted to see whether we could drive down the cost and we wanted a good idea of what the cost would be. The good news is that we have a range of different providers already delivering to homes that count in the last 5%—in terms of competition, that is good news—and we are now actively working on a solution for the last 5%.
In the eight minutes I have left, let me address some of the points that have been raised. I completely accept the point that has been made about clarity. It is important to remember that this project is a partnership with local authorities. Every local authority that is managing one of these schemes should publish on a map where superfast broadband is going. I say to any hon. Member who has an example of a local authority that is not doing that to let me know please, and I will personally ring the chief executive of that council to ask why that is the case.
It is the case that sometimes the target is relatively flexible, because when someone is on the ground actually delivering broadband it is important for us to remember that they are part of an engineering project. Delivering broadband is not about flicking a switch; trenches have to be dug, cabinets have to be put in and power has to be put in. Sometimes, providers allow an element of wiggle room, but people should be able to get clarity.
As far as competition is concerned, the process was competitive; the 44 contracts were let as part of a competitive process. However, let us not forget that European state aid rules require open access for anyone who builds a network using state aid money. That is why Virgin did not compete with BT for these contracts. But there will be competition for the last 5%, because we are showing that smaller providers can come in for these smaller contracts. Nevertheless, we wanted to get to as many homes as quickly as possible.
My hon. Friend the Member for Tiverton and Honiton asked about new technology. BT is already introducing new technology, G.fast, which uses existing infrastructure to get speeds of up to 300 megabits a second, as well as fibre to the remote node. As I said earlier, one of the reasons that we have these pilots is to test new technology for the last 5%.
My hon. Friends have asked about vouchers, which brings me to the solutions for the last 5%. We are looking at a whole range of solutions. Funnily enough, some of the last 5% is in cities and we are looking for a bespoke solution for that; there might be a voucher solution, or a fund that companies can bill into. And yes, it is no secret that a universal service obligation is under consideration. We hope to announce our proposals towards the end of the year, to coincide with the spending review. However, it is our intention to get to 100%, in effect, by the end of this Parliament.
My hon. Friend also asked us to keep BT’s feet to the fire. We keep BT’s feet to the fire; we meet with BT regularly. As he will know, any Member of this House who comes to me with concerns about roll-out in their constituency will have a meeting with me, and BT will be asked to respond to those concerns.
I was asked whether we could rely on BT’s statistics. In the middle of August, I was very pleased to be able to say that we had passed the landmark of 3 million homes, and by the end of 2017 we should have about reached about 5 million homes. The 3 million figure is an audited statistic of premises that are capable of receiving speeds of at least 24 megabits a second. Roughly speaking, probably by the end of this month we will have reached 3.5 million homes, but we will not announce that as an official figure because it will not have been audited. We only announce figures that have been properly audited.
My hon. Friend the Member for Wells (James Heappey) talked about making people aware of superfast broadband. It is important to make people aware of it, because the more people who take it up the more money we get back. In fact, under the terms of the contract BT has paid back £129 million early; by the way, it did so earlier than it had to under the terms of the contract. That means that with the same money we might reach 96% of the country rather than 95%. We had a superfast broadband campaign towards the end of last year. Of course, we were mocked for spending money on that campaign, but it drove up take-up and pulled back money to allow us to go further.
I also take the point made by my hon. Friend the Member for Tiverton and Honiton about a time limit for BT where it has said that it will roll out broadband commercially in an area and is effectively putting a block on a competitor that might wish to go into that area. I will take that point away with me and ensure that we can make progress.
I am an unequivocal fan of this programme, because—obviously—I am responsible for it but also because I am the only one who seems able to talk about its benefits. I always like to hear speeches that refer to how well we have done and that simply request improvements, because that is the approach I take. We are doing well; we have hit all our targets; we are technically under budget; and this project is probably the most impactful and most successful Government infrastructure project of the last five years.
I will not take lessons from the Opposition. We had to write off £50 million of investment in South Yorkshire from a contract negotiated by the last Labour Government to deliver superfast broadband. They had a pathetic target of 2 megabits a second by the end of 2012. Members can imagine what kind of debate we would be having today if I was standing before you now and saying, “Well, we reached our 2 megabits target in 2012. What on earth are you complaining about?”
As for the absurd suggestion that London has worse broadband than Ukraine, that is for the birds. It is the finding of a bogus survey put forward by a rival of BT, and my hon. Friends must remember that everyone in this debate always has an angle; this marketplace is a highly competitive one and we will always hear from other people saying that they can do a better job. My hon. Friends should also remember that we lead the big five; that this country has the highest rate of e-commerce, so some people must be able to get online to buy goods; that two thirds of the people in the country have smartphones; that we have the fastest roll-out of 4G anywhere in the world and we will reach 98% of premises with 4G by the end of 2017; and that the Government have also negotiated a landmark deal with the mobile companies to get to 90% geographical coverage, because we do not forget rural areas or the roads that our rural constituents have to drive on. So I look forward to a weekly debate on broadband, so as to continue to celebrate this fantastically successfully programme.
Mr Clive Betts (in the Chair)
I call Neil Parish to wind up, on behalf of himself and, no doubt, Mrs Parish. [Laughter.]
Neil Parish
Thank you very much, Mr Betts, for calling me to speak again and if my wife is listening I am sure that she will hear immediately.
I thank the Minister for his straightforward replies and the work that he is doing. He can judge by the number of Members who are here today and by the number of interventions that were made that there is still much concern about this issue. Naturally, because he is a good Minister, he will put forward a very good line that everything is working well, and we accept that much of it is working well. However, many of us in Westminster Hall today represent areas in which there is much more to do. What pleased me about the Minister’s answers is that they showed he is listening to us and working hard on those areas.
The Minister made the point that there are now competitors to BT out there that can deliver to people in the last 5%, and that BT itself is now rolling out these different technologies that can get us to the last 5%. What has been frustrating for so many of us is that we have felt that BT was just not moving fast enough.
I am reassured by the Minister that he is working to get to the last 5%, that there is greater competition and that broadband will be delivered. However, I also assure him that I and many Members in Westminster Hall today will be back here again regularly, just to make sure that he and the Government are delivering on their target. That is because in the end—we have made this point many times before—our constituents are not worried whether it is BT or another company that delivers their broadband; they do not care who delivers it. But they want broadband and if they are living next door to a house that has it when they do not, that is hugely frustrating.
Of course, the one political point that we all know, whichever party we represent, is that those who have broadband are not necessarily the ones rushing to come in and tell us they have it; it is those who have not got broadband who come to us. We must make sure that we work hard for those people, and I think the Minister has received that message loud and clear.
I look forward to greater competition and to the Minister keeping the pressure on BT. He should look at universal coverage. Much can be done to ensure that BT delivers broadband better than it does at the moment, but I thank the Minister very much for his response.