Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill

Baroness Harding of Winscombe Excerpts

2nd reading (Hansard): House of Lords
Monday 9th October 2017 Lords Chamber

[Baroness Harding of Winscombe (Con)]

My Lords, I begin by declaring my interests. I only recently, four months ago, stepped down as chief executive of TalkTalk, the internet service provider.

In my brief time in the House, I have heard many speeches lamenting poor broadband speeds, and it is quite cheering to speak today in a debate about a potential, although admittedly only partial, solution. Connectivity, as my noble friend said, is essential to modern life, and becoming more and more essential. Unfortunately, the copper wires that we all—98% of households—depend on for broadband today are not fit for propose. It is nothing short of a miracle that they deliver even poor broadband at all, because they were certainly never designed to when they were laid decades ago. Full fibre, on the other hand, is designed for that.

I draw the analogy with the electricity market. Imagine if we all had apps on our phone to check the power wattage into our homes and we started conversations of an evening by saying, “I’m terribly sorry, we live quite a long way from the electricity substation here, and therefore the lights don’t work all the time”. That is exactly what happens with copper-based broadband today, and it is not good enough for now, let alone for the world that we will be inhabiting in the next 10 or 20 years. I worked for a business that was starting to trial full fibre right the way to the home. Families using it do not say, “I have fantastic ultra-fast broadband”; they just say, “My broadband works; it does what it says on the tin”. That is why pushing to have full fibre, and fibre-optic cable laid right the way to everybody’s home or business premises, is so important. It is modern technology that will not just be fit for today—all you have to do is pump more power down it and it will be fit for a very long time ahead.

It is extremely good to support the Bill today, because although I am hugely hopeful about the role Britain can play in the digital revolution, and how we can emerge stronger and more competitive as a result of it, we do not do very well on full-fibre take-up today. As I have said, 98% of households use a copper-related product, so although availability is a bit more than that, there is a 2% take-up in the UK. That compares to 40% in Sweden, 26% in Portugal, 11% in France and an EU average of just under 9%. These are figures from the FTTH, the Fibre to the Home Council Europe, from this time last year. We are a long way behind today and I am pleased to support a Bill that will incentivise all providers to start investing more firmly in full fibre. The danger is that the large incumbents attempt to eke out a return from their legacy copper assets, while the new businesses are daunted by the sheer scale of the challenge ahead in investing in full fibre. So it is great to see the Government coming up with a proposal that will genuinely incentivise everybody to invest.

I will just make three brief comments on the Bill. First, it is very important that the scheme cannot be gamed. I am reliably informed by people in the industry that, according to the business case based on full rates relief, ripping out existing fibre and replacing it with a new one that would be eligible for rates relief would pay back in just a couple of years. It would be a real shame if an intent to do the right thing translated into a subsidy for the old networks we already have. I assume that this will be in secondary legislation, and it would be very good to hear from my noble friend how the Government intend to ensure that this cannot be gamed and will genuinely incentivise the building of new fibre to premises across the UK.

Secondly, this is a good Bill but it is only a relatively small contribution. I believe the Treasury estimate is £60 million over five years—would that all our broadband problems could be solved with £60 million over five years—so this is good but it is only a start. The Minister has set out quite an impressive list of other initiatives that the Government are putting towards nudging, cajoling and encouraging the industry to build out more fibre, and it is hugely important that we complete on all those actions. It is not the words that will drive this but the actions and there is a lot more to do, particularly making it easier for all providers to access existing poles and ducts; ensuring that the commitment to the universal service obligation is not an excuse to rely more on copper and less on investing in fibre; and ensuring, as the noble Earl, Lord Erroll, has just said, that Openreach separation is just that and genuinely drives the investment that the country needs.

I bow to the experts here, of which I am definitely not one, on the rating regime. While temporary short-term relief in a specific sector is good, I very much doubt that it is the long-term answer to enable businesses to understand how the rating regime works and invest in the things that the country needs for the long-term future. That all said, it is important that we do not let the perfect become the enemy of the good. This is a good Bill and I am pleased to support it.