Superfast Broadband

Lord Vaizey of Didcot Excerpts

Wednesday 24th June 2015 Westminster Hall

[The Minister for Culture and the Digital Economy (Mr Edward Vaizey)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I say that to all the Chairmen, but in your case I really mean it. You have your own experience of the broadband roll-out programme, because your Labour council refused to take part in the phase 1 programme; having seen how successful phase 1 has been, it has now, I gather, set up to take part in phase 2. That is down explicitly to the actions of the brilliant Conservative MPs in the area, who persuaded the Labour council to come on board the programme and connect 8,000 premises that otherwise would not have been connected.

I do not know whether to congratulate my hon. Friend the Member for Boston and Skegness (Matt Warman) on securing this debate, but I should thank him for bringing so many hon. Friends and colleagues here to support me this afternoon on a complex and difficult programme. I certainly thank him for the email he circulated earlier today:

“You may be interested to know that in my own county of Lincolnshire, BT’s rollout is ahead of schedule and well under budget.”

I think that that is true in many areas.

I shall give a brief history of time on behalf of my hon. Friends. Everyone knows that when we came into government, we found that the previous Labour Government did not have a plan to help get broadband out. They talked about a 2 megabit commitment for the end of 2012, but they had not put anything in place for that. My right hon. Friend the Member for South West Surrey (Mr Hunt), when he was Secretary of State for Culture, Media and Sport, rightly decided that we had to push further and go for superfast broadband from the get-go. He knew full well that, if we had rolled out 2 megabits, I might have been able to stand up in this Chamber and say that we had achieved that, but all hon. Members would be screaming for superfast broadband. He made the right decision.

We set it out that phase 1 would cover 90% of UK premises and on many occasions I had to appear in front of the right hon. Member for Barking (Margaret Hodge), the then Chair of the Public Accounts Committee, following various National Audit Office reports, and hear that we would not make that target. Indeed, I recall that some journalists in the sector thought that the target was too stretching and could not be achieved. However, lo and behold, by the end of 2015—or early-2016 at the latest—we will have reached it. In fact, we will shortly announce that we have exceeded 3 million premises, as the figures are increasing by 40,000 premises a week.

This is a complex engineering job that does not involve simply turning up at a doorstep and flicking a switch. An expensive cabinet, which needs power, needs to be put in and then it needs fibre run from it back to the exchange. All that requires highways, planning and power.

[Meg Hillier]

The Minister will also be aware that the Public Accounts Committee called for local government and BT to make further information available—including, critically, information about the speed of service. Is he content that his Government have done that?

[Mr Vaizey]

If someone goes to gosuperfast, a website provided by the Government, they can type in their postcode and find out whether they have access to BT Openreach, which gives access to Sky, TalkTalk and other over-the-top providers—or, indeed, access to Virgin Media. It is important to remember that this is an engineering project and some of the tasks achieved, such as getting fibre to the Scilly Isles, rank among the most complex engineering phases.

I will not go through every single speech—they were all brilliant, but there were a lot of them. Let me take two quick examples. The hon. Member for Ynys Môn (Albert Owen) talked about the need for rural areas to come first, but his area is a classic example for why the scheme matters. Precisely no premises in his constituency were due to get commercial superfast broadband from BT or any of the rivals that often say that they could do the job better because such investment is not economic. However, 93% of his constituents will get superfast broadband under the scheme, including those—[Interruption.] That is what is being delivered under the scheme. This is what we are up against: when superfast broadband is delivered to Opposition Members, they do not want to give us any credit.

My hon. Friend the Member for Tiverton and Honiton (Neil Parish) spoke with great passion and asked what I was doing to help him. This morning, I had another meeting with BDUK to discuss getting the contract signed for connecting Devon and Somerset and I have such meetings all the time to get local authorities together with BT. We have already provided £110 million for Devon and Somerset. We have passed 143,000 premises and we are due to pass 300,000.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I recognise the huge improvements that have been made and the manifesto commitment to roll out ultrafast broadband to premises as soon as possible. However, are we being ambitious enough? Australia will be delivering 100 megabit broadband to 93% of premises by 2021, Finland will deliver that by 2015 and South Korea will deliver 1 gigabit by 2017. According to a London School of Economics report, the Government’s investment—

[Mr Vaizey]

I have got my hon. Friend’s point; I am running out of time. We are being ambitious enough for him because we support him. That is why 100% of Torbay will get superfast broadband under our scheme—[Interruption.] Sorry, I got the wrong name—I heard the Chairman give the wrong name!

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

Before the Minister completes his comments, I should say that there has been a lot of talk about roll-out but not so much about take-up. Will he refer to the fact that, in parts of Wales, take-up of this fantastic scheme is still in the low-20s? Everyone seems to think that that is someone else’s problem, so will he clear that up?

[Mr Vaizey]

I will. Take-up is extremely important and the good thing is that take-up brings money back into the scheme. For example, the money set aside to get superfast broadband to Cornwall was due to get coverage to 80%, but because of high take-up we have reached 95%.

My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake)—I got his constituency spectacularly wrong; I hope he will forgive me—mentioned other jurisdictions. He will be pleased to know that the previous Australian Government lost the election because their broadband plan was so poor. If he believes that those Australian plans will happen, he will have to think again. They are busily trying to revise their programme because it was far too expensive and due to deliver far too late.

All my hon. Friends will have the note from the Library that puts us first in almost every category in the big five in the EU. Analysis published today by Enders Analysis again puts us top on access to speeds of 30 megabits. We are beating the Germans, the French, the Italians and the Spanish on that as well as on average internet connection speed. Because that scheme has been so successful, we have gone on to phase 2, which is 95% coverage. That is also why we have signed almost every single contract apart from Devon and Somerset, which I hope we will sign on Friday. We can then get on to start planning how we will get to 95%.

[Mr Richard Bacon (South Norfolk) (Con)]

The Minister said that the cabinets are expensive. The European Commission’s report by Oxera, which evaluates the UK scheme, has a chart on page 4.5 that should say how expensive the cabinets are, but unfortunately that page is blank—it has been edited out. I happen to have got hold of that chart and it looks like cabinets are a lot cheaper than BT said. In particular, when Olivia Garfield, the former head of BT Openreach, said in “Strike Up Broadband” on 13 December 2013 that cabinets cost £100,000, she was, to use a technical term, talking crap, was she not?

--- Later in debate ---

[Mr Vaizey]

I do not know whether that is a technical term. I do know, however, that in my hon. Friend’s constituency some 33,000 premises will be delivered superfast broadband thanks to the plan. He will also know that the National Audit Office and the Public Accounts Committee have validated the scheme for value for money. No contractor pays BT until the work is done and BT presents invoices, and the scheme is audited regularly.

Phase 2 is going ahead. Phase 3 is about no one being left behind, which is the theme of the debate. The key point about that last 5% is that we do not know how much it will cost. Back of an envelope costings can run into billions, but we need a proper figure. That is why we have launched the pilots, some of which are already delivering broadband connections to people all over the country. Better still, they give us an idea of the kinds of technology we can use to get to that 5%. That will include suppliers other than BT and other technologies that BT and others are using, such as wireless and satellite.

Hon. Members have talked about businesses. We do not want to leave businesses behind. That is why we have launched our successful business voucher superfast broadband scheme. This morning, we announced that that scheme has delivered vouchers to 25,000 small businesses in cities up and down the country. Better still, there is now more competition in the market. Virgin Media announced £3 billion of investment because of the success of our scheme. TalkTalk announced a 1 gigabit offer in York and it will roll that out to other cities. BT has invested £3 billion of its own money and let us not forget that we have the fastest 4G roll-out and take-up anywhere in the world.

[James Cartlidge (South Suffolk) (Con)]

Will the Minister clarify the timing of phase 3 for the final 5%?

[Mr Vaizey]

We hope to set out our proposals on phase 3 later this year. We are working on a series of proposals that we will look at in some detail and hopefully we will present those and take them forward. However, this is obviously a complex issue. Let us not forget that we are talking about the most difficult and expensive-to-reach premises. However, we do want to reach them; that is why we will carry out the scheme.

This is an unequivocal success story. I look forward to coming together again with all my hon. Friends and other hon. Members when we announce that we have reached the 3 million milestone. That may be in the summer recess, so I will invite them all to join me at a suitable seaside resort to make that announcement and release some balloons. Otherwise, they may want to put out press releases in their constituencies that tell their constituents how hugely successful the scheme is.

However, I do not want to be flippant or facetious. We have not forgotten those who need broadband. The tone of the debate was absolutely right. We are at a critical point where the engineering scheme we are rolling out is meeting the almost universal demand from our constituents for broadband. As a constituency MP, I know that those who get broadband under the scheme do not always say “thank you”—

Motion lapsed (Standing Order No. 10(6)).