Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill

Baroness Pinnock Excerpts

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

[Baroness Pinnock (LD)]

My Lords, I draw Members’ attention to my entry in the register of interests as a councillor and a vice-president of the Local Government Association. I have to say that I agree with much that has been said by people who know much more about this subject than I do, the noble Earl, Lord Erroll, and the noble Baroness, Lady Harding.

I speak from my understanding of what is being proposed. As the Minister said, this is part of a package of inducements to the telecommunications industry to ensure wider accessibility of superfast broadband. However, that seems to raise the question of why telecoms companies are not obliged by law to ensure that there is full superfast broadband access. In a situation where public bodies such as the Government and local authorities are digital by design, households as well as business premises need access to broadband to access public services. That is my first query. I accept that steps have been taken in that direction, but when I think that other utilities such as water and electricity companies are required by law to ensure that there is access to their services, it seems to me that connectivity should be on an equal footing. I look forward to hearing how the Minister might respond to that comment.

The financial inducements in the Bill to put in full-fibre broadband will not be necessary in West Yorkshire, where European Union funding is currently enabling that to happen. What a shame, therefore, that we are on the route to leave the EU because it might have been able to fund it out of EU funds rather than out of public funding from the Government.

Much-improved connectivity is of course welcome, so the purpose of the Bill will clearly be welcome. As the noble Baroness, Lady Harding, has pointed out, though, all it does is provide full-fibre connectivity to the nearest roadside cabinet, and the further you are from that cabinet the worse your connectivity will become. That will put a limit on connectivity. I was interested to hear that there had been only 2% take-up of full fibre to the house. Have the Government considered inducements to the telecoms companies and providers of broadband to ensure that there is full-fibre connectivity to the premises rather than to the nearest roadside cabinet? That is how we will get access to superfast broadband across the country.

The other major question which the Bill raises, and to which I have seen no answer, is that, as well as broadband connectivity, we need improvements to mobile connectivity. For many families, mobile connectivity is far more important than broadband connectivity. Poorer families can often afford to access only mobile technology and do not use full broadband. That is true everywhere, but is particularly the case for improved mobile connectivity in rural parts of the country, where it may be the only way that many people can access public services—through their mobile phones.

To expand on that point for a minute, experts in this House may be able to throw some light on this, but I understand that 5G will be more advantageous than having superfast broadband to many people—not to businesses, I accept, but to many individuals and their families. Should there not be inducements to companies wanting to extend the reach of mobile connectivity, as we are doing here with broadband?

I think the Minister has answered the other point I wanted to make, but I was concerned about how local authorities will access reimbursement for the loss of business rates. It sounded as though it will be the responsibility of individual local authorities to claim reimbursement through the Valuation Office. If regulations have been laid, perhaps the Minister can expand on them when he responds.

Finally, I urge the Government and perhaps their Bill drafters to amend the Bill to include information about the meaning of the formulae that have been included, which make for interesting reading. For example, the Bill states:

“Where subsection (4F) below applies, the chargeable amount for a chargeable day shall be calculated in accordance with the formula—


            ”.


Nowhere in the Bill is there any indication what A, B, F or C is, and further on in the Bill, we have a “T” as well. I know that the Bill relies on amendment of previous legislation but, for the sake of transparency and the understanding of those who will be affected by the Bill, it would be enormously helpful if Bill drafters included notes about what the formulae mean.

With those remarks, I welcome the move to extend both the speed and reach of broadband through the Bill and hope it can be extended to mobile connectivity.

Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill

Baroness Pinnock Excerpts

Committee: 1st sitting (Hansard): House of Lords
Tuesday 24th October 2017 Grand Committee

Moved by

[Baroness Pinnock]

1: Clause 1, page 1, line 14, at end insert—
“(aa) the hereditament is wholly or mainly located within a local authority area where the average broadband speed is 10Mbps or less, and”

[Baroness Pinnock (LD)]

My Lords, I have wondered from the outset of the Bill’s proceedings why companies with billion-pound turnovers require business rate relief, as stated in the Explanatory Notes, of £60 million over a five-year period to provide an incentive for laying fibre to provide fast broadband. My amendment relates to concerns about the lack of focus for the expenditure of public funds. When, as is the case, resources are extremely limited, it is important that they are spent in the most effective way. In this instance, the focus should be on providing incentives where broadband speeds are already poor.

At the last Budget in 2016, the Chancellor emphasised the importance of fibre-to-property broadband to meet future needs, especially of businesses, where improving broadband speeds is probably the single, and simplest, change that will improve this country’s lagging productivity. A report in August of this year assessed that the UK was behind 30 other countries in accessibility to fast broadband. The Government’s current assessment is that 90% of properties have access to fast broadband; however, this figure includes properties that are 1 kilometre distant from the cabinet—not the Cabinet but the street cabinet—and consequently have barely a connection at all.

The Bill simply gives an incentive for broadband providers, both large and small, to lay fibre. The major companies have billion-pound turnovers, so the question has to be asked whether an incentive at the level provided for in the Bill will be significant. Obviously, it will make a difference for smaller providers but the Bill does not distinguish between large and small providers. The Bill makes no requirement for companies to focus on laying new fibre where broadband speeds are currently below the Government’s standard of 10 megabits per second, where the need is greatest.

Hence the amendment, which will limit the business rate relief to laying fibre where broadband speeds are already poor. I have deliberately not made the distinction between rural and urban, as some rural areas such as Cornwall have already benefited from EU investment in improved broadband access, while some urban areas have very poor broadband speeds. Even in London, some areas such as parts of Southwark suffer from having below 10 megabits per second.

I should like to explore further a concern that the largest provider of fibre, BT, has a business plan based on laying cable to the cabinet in the street and not to the premises. From there to the premises the link will be by copper, which in itself degenerates the speed. The further the premises are from the cabinet, the worse the broadband speed. At 300 metres distant, the broadband speed is not much improved from the old copper connections. As I said earlier, at 1 kilometre the connection is barely accessible. A further factor that results in broadband speeds reducing, even with fibre, is the number of properties connected to the cabinet. None of these issues is addressed in the Bill.

My final concern, which is admittedly outwith the Bill, is the cost to families and individuals of accessing broadband. Fibre cable can be laid to provide access but if the cost is prohibitive, some families will not be able to access the better-quality broadband. Since it is becoming, in my view, one of the utilities—like water, electricity and fuel provision—it is really important that we start thinking about how all families are able to afford broadband. I put this into the equation to ask the Government whether they will, at some point, be willing to address that increasingly significant concern. My amendment would encourage the Government to focus public funds on incentives that will make areas with poor connectivity see significant improvements. I beg to move.

[Lord Kennedy of Southwark (Lab)]

My Lords, I refer the Committee to my registered interests as a local councillor and a vice-president of the Local Government Association. I support Amendments 1, 5 and 11 in this group, tabled by the noble Baroness, Lady Pinnock. They highlight some real problems for communities—be they urban or rural—which suffer from poor connectivity, and there has been no real incentive to improve the situation for them by improving speeds. The amendments add the condition that, for the relief to apply, it has to be focused on areas within a local authority where the average broadband speed is 10 megabits per second or less. I think I am right when I say that about 93% of homes and businesses in the UK are able to receive superfast broadband, but it is the copper version. The Bill is generally welcomed.

The noble Baroness is right to focus her amendments on areas with poor connectivity. There is a good argument for this as reliefs provide an incentive to do something that a business might otherwise not want to or be keen to do. The view may be taken that it is not economically beneficial, or something else could be more beneficial. The noble Baroness raises the important issue of how to ensure that those parts of England and Wales, urban and rural, which suffer from poor connectivity can benefit from the relief provided to companies. Otherwise, such areas run the risk of falling further behind. We can all agree that the benefits that fibre can bring could be enormous for all parts of the UK.

Can the noble Lord, Lord Bourne, respond to the concern expressed by the noble Baroness, as we do not want to see parts of the country falling further behind? How can we ensure that this relief, welcome though it is, actually benefits those areas with the worst connectivity?

--- Later in debate ---

[Baroness Pinnock]

My Lords, I thank the noble Lord, Lord Ashton, for his detailed response to the amendment, which I tabled to explore how the Government’s intentions could result in better focused expenditure of public money. I accept his criticism that using local authorities as a geographic unit is, to use the phrase he used earlier, a blunt instrument.

I was trying to say to the Government that if we are to spend public funds, which are in short supply, let us make really good use of them by connecting to higher speeds those parts of the country that currently have very poor broadband. I accept the very detailed response the noble Lord has given, but to be honest he has not responded to the question of focusing on improving accessibility, apart from saying we need fibre connections everywhere. We all agree with that, but let us incentivise companies to do it where it is needed. I would welcome the Government coming forward with an amendment that enables that to happen, with the vast support they have working these things out, but given the response I have had, at this moment I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

--- Later in debate ---

[Lord Kennedy of Southwark]

My Lords, Amendments 2, 3, 6, 7, 9, 10 and 12 are all in my name and form group two in our deliberations. This group seeks to address one of the principal concerns expressed by people and smaller companies in the industry: that the way the Bill is written does not provide enough protection from companies ripping out old fibre and laying new fibre solely to benefit from the relief, which would pay for itself in less than two years. I think that was one of the points the noble Baroness, Lady Harding of Winscombe, made at Second Reading after her discussion with colleagues and people in the industry. I am convinced that there is a real risk of this happening, which would be absolute madness and not what the relief was intended for. It would, in effect, become a subsidy for old networks. Can the Minister address this particular point: how will we ensure this does not happen?

My amendments seek to prevent this in three ways. They would put in the Bill the words,

“must include the condition that new fibre is part of the hereditament”.

They would add a subsection that would put in the Bill the meaning of “new fibre” and what would not be covered by this relief. They would go further to address the point that laying, affixing, flying or attaching should not be solely to gain relief. Amendment 9 makes the specific point that the relief should not be there just to “replicate existing” telecoms structures. The Bill is about providing business relief to encourage and to speed up additional fibre telecommunications infrastructure.

There may be other ways to do what I seek here, but the Bill as drafted has people in the industry concerned. They are unhappy with the protections that the Bill affords at present, or fails to afford. The purpose of these amendments is to raise the issue with the Minister, and to get a response and, I hope, a commitment from the Government that these issues will be looked at seriously. Further, would he be prepared to meet me and representatives of the industry between now and Report? That would be helpful, because it is a serious problem. Somehow the Government, either with these amendments or by regulation, have to address these points further. I beg to move.

[Baroness Pinnock]

My Lords, I support the amendments tabled by the noble Lord, Lord Kennedy, because he, like I did in previous amendments, seeks to focus the relief provided in the Bill on those places and areas that need it most. He is asking to put in safeguards to prevent some companies deliberately laying cable with no purpose and to ensure that what is done on rate relief achieves the outcome the Government seek, which is to provide more domestic premises and businesses with fast broadband connectivity. I look forward to the response from the Minister—I am not sure which one, perhaps it will be a double act. The questions that the noble Lord, Lord Kennedy, has raised are important and need an answer.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Northern Ireland Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, on this occasion I am genuinely grateful to the noble Lord, Lord Kennedy, for raising this matter. I am not always grateful to him for raising matters but I am today. I am grateful also to the noble Baroness, Lady Pinnock, for her comments. We have a shared interest here, in that I cannot believe that anybody wants to see gaming in the system.

Concerns about gaming in the proposed rate relief for new fibre were raised by a small number of operators in August, when we first shared with them our proposals for the draft regulations. As the noble Lord has said, my noble friend Lady Harding raised this issue at Second Reading. I think she went on to say that she was not by any means convinced that there would be gaming but she raised it as a concern, so we share an interest in ensuring that there is not gaming.

Other operators have told us that they do not believe there is scope for gaming and support the proposed scheme. Nevertheless, we take this matter seriously and have been investigating these claims. Overall, our initial view is that it is unlikely gaming will be used in this tax relief. As I have said, we continue to discuss this with the sector and we are still gathering evidence.

However, if it will help the Committee, I will explain in a little detail why concerns as to gaming have arisen, why we believe such gaming is unlikely, in practice, and how I propose to deal with the matter between now and Report. What is being seen as the potential risk of gaming comes from the line we propose to draw in regulations as to when the relief should apply. New fibre installed after 1 April 2017 will receive the relief. However, some operators will choose instead to use existing fibre optic cable which was installed prior to 1 April 2017 but has not yet been activated. This is known as dark fibre. The objective of the measure in the Bill is to support investment in new fibre broadband infrastructure. Therefore, previous investment in existing fibre, including dark fibre, is not considered to be new fibre, has not been incentivised by this measure and will be outside the relief.

We have heard concerns that the proposed different treatment in the relief scheme of new fibre, which gets the relief, and dark fibre, which does not, could lead to some gaming in the system. It has been suggested that telecom operators may replace or duplicate existing dark fibre with new fibre merely to secure the rate relief. It has also been suggested that some operators may install new fibre in existing locations to gain a competitive advantage over existing operators in that location, merely because of the rate relief.

To understand this better we are investigating the costs and operational implications of installing new fibre into existing infrastructure, such as ducts. By comparing these costs to the potential saving on business rates from the new fibre relief we can identify where, in principle, the scope for gaming exists. To help us with that work we have held discussions with telecom companies regarding this matter and are now considering evidence provided by one operator, Gamma Telecom, which I mentioned at Second Reading. The consultation on the draft regulations runs until 21 November, and during this time we would like to hear views from other operators regarding the risk of gaming. This work is at an early stage and noble Lords will understand that some of the data we are using in this study is commercially confidential.

Our initial findings are that in the vast majority of cases—perhaps covering more than 99% of the telecom network—it will not be financially viable for operators to install new fibre merely to gain the relief. In those cases, the cost of purchasing the fibre and the labour costs associated with opening existing ducts—putting the fibre through those ducts and then connecting the fibre—exceeds the saving from business rates. In those situations it will be cheaper to use existing dark fibre, so gaming would not occur. Our focus, therefore, is on smaller networks where the business rates paid in respect of each kilometre of network are higher than for larger networks. The potential for making a saving in business rates is therefore also higher.

We are looking closely at the circumstances in which new fibre may be installed in existing smaller networks and exploring more of the costs associated with accessing existing ducts. These circumstances account for a very small fraction of the telecoms network—probably less than 1%. That said, I cannot see why 1% should be ignored and if there is evidence of the possibility of gaming, I would want to ensure that we act. But even if there are circumstances where, in principle, the rates saving exceeds the costs, it does not necessarily follow that, in practice, gaming is viable. For example, it may not be possible to add new fibre to ducts which are already in use, while switching from one fibre to another may cause interruption or disruption to the customer, which may be especially unacceptable for business customers and unattractive to the operator. But, as I have said, we agree with the noble Lord and the noble Baroness that we do not want a tax system that is open to gaming in the way that has been suggested. If from our work with the sector we conclude that gaming is likely, I assure the noble Lord and the noble Baroness that we would consider how to amend the draft regulations to prevent it.

The amendments we are considering would move the definition of new fibre into the Bill. This would in fact significantly limit our ability to tackle any gaming. The approach in the Bill of defining in regulations the meaning of new fibre gives us the scope to first identify the circumstances in which gaming might arise before we devise the solution. It allows us to ensure that any solution is practical and to respond quickly to any future circumstances where gaming might arise.

Moving on to the practical points put by the noble Lord and echoed by the noble Baroness about meeting the sector, as I have indicated, I intend to meet Gamma between now and Report, which will probably be towards the end of November. I will certainly keep the House—including the noble Lord and the noble Baroness—informed about how the discussions are going. I would be happy to include them in the thrust of what is happening, and expect to act on any concerns about gaming which indicate that this issue needs addressing. As I say, we are as keen as they are to tackle any potential gaming. I hope with that assurance and the guarantee that I will keep the noble Lord and the noble Baroness involved with what is happening, that the noble Lord will feel able to withdraw his amendment.

--- Later in debate ---

[Baroness Pinnock]

My Lords, obviously I support Amendments 4, 8 and 13 in the name of the noble Lord, Lord Kennedy, which draw attention to the issues that he has just spoken about. Amendment 15 in my name asks for an impact study after 12 months to see how effective the provision is. In this instance, there have been difficulties that I have struggled with, as with the earlier amendment proposing a local authority boundary for an assessment of an average 10 megabits per second.

In Amendment 15, I have used “rural” as an accepted definition of areas which, on the whole, have poor broadband connectivity. If this was accepted by the Government, obviously it could be extended to all parts of the country. I am focusing again on the need for the Bill to use public funds effectively, by targeting their impact where they can make the most significant difference. Subsection (2)(c) of my proposed new clause refers to mobile phone connectivity. This relates to the fact that until we get 5G coverage, which I believe will be in 2020—it could be a year or two later—connectivity will depend on fibre-optic cables going as far as the mobile phone masts. This will have a big impact on those many families who cannot afford broadband but rely on mobile phones for their connectivity everywhere. They rely on them for accessing public services, which are now digital by default. If they can, they also make job applications via their phones, rather than having broadband to the house. That is why I raise these issues today.

The fundamental part of the amendment is to have a pause or period in which the Government assess the impact of this rate relief and ask: is it doing what we hope it will do? Can we improve the quality of mobile phone coverage by ensuring that some of the fibre-optic cable that is laid goes to mobile phone masts, in preparation for 5G coverage?

[Lord Ashton of Hyde]

My Lords, I am grateful to noble Lords for laying out their amendments clearly. As the noble Lord, Lord Kennedy, said, these amendments are very much linked to the last group on which I answered—the first group today.

Amendment 4, which was moved by the noble Lord, Lord Kennedy, seeks to ensure that there is a requirement for recipients of the relief to,

“give due consideration … to rural and hard to reach areas”.

In a similar vein, the noble Baroness, Lady Pinnock, proposes an amendment to require a report on the impact of these measures on rural connectivity. Although I might support the spirit of these apparently reasonable amendments, I do not believe that they are necessary. I share the concerns of many noble Lords that rural and remote areas should not be left behind in the drive to improve and extend high-quality broadband connectivity. I declare an interest: I live in a rural area and am absolutely aware of the problems to which noble Lords have alluded.

The relief provided for in the Bill is available across England and Wales. No area is excluded or exempted, and we have engaged with the Welsh Government to support the application of the measure in Wales. Providers deploying fibre connectivity in the countryside will receive the same rates relief as those deploying in the hearts of our great cities. That is important because the problems of slow speeds are the same, regardless of where the household is located. When we talk about social deprivation, for example, it is still a problem in an inner city as well as a rural area.

Providers are free to deliver connectivity wherever the market allows. However, to ensure that people living and working in rural and remote areas can and do have access to the broadband speeds that they need, the Government have delivered a series of measures, which I mentioned in my previous answer—but I shall remind noble Lords of them just briefly. There is the superfast rollout programme, which is worth about £1.7 billion of public money. We are currently consulting on the broadband universal service obligation, which will apply across the United Kingdom, with at least 10 megabits per second. Then there is the local full fibre networks programme, worth £200 million, and the rural development programme for England at £30 million for broadband. Those measures have been a great success, with 45% of households with superfast in 2010 rising to 95% by the end of this year.

It is clear that the relief will be alongside a package of measures put in place by the Government to help spread to those living and working in rural and remote areas the benefits of economic growth and access to services that better broadband connectivity will bring. Together, they will also lay the foundations needed for the next generation of mobile technology, known as 5G, to which the noble Baroness, Lady Pinnock, referred.

The noble Baroness’s proposed new clause in Amendment 15 would require a report on the impact of the measure on rural connectivity. I support the outcome—that is, an understanding of the impact of Government’s action in this area—but my concern is that requiring a report on the impact on rural connectivity may have an adverse effect. Telecoms networks take time to plan and build, and investors rely on certainty. A report on the relief after 12 months is premature, given the time taken to deploy networks. My noble friend Lord Bourne will cover reporting arrangements in greater detail later, but my concern is that if the Government are required to report so soon, it could create uncertainty over whether the relief will continue, and lead to unintended consequences.

On subsection (2)(c) of the noble Baroness’s proposed new clause, on mobile coverage, I note that the main benefit of the measure to mobile will be in aiding the deployment of 5G. It will take longer than 12 months for the next generation of mobile technology to appear; we do not quite know what it is yet.

Of course, we will monitor the effectiveness of the scheme in providing new fibre, which will include rural areas, but we need to allow the sector appropriate time to build networks in all areas. Ofcom reports on infrastructure deployment every year, and we should see the impact of all the Government’s measures in this field in due course. In view of those explanations, I hope that the noble Lord will withdraw his amendment.

--- Later in debate ---

[Lord Kennedy of Southwark]

My Lords, I will be brief, as we have rehearsed some of the points made earlier. Amendment 14 in my name and that of the noble Baroness, Lady Pinnock, puts a requirement on the Secretary of State to lay a report before both Houses of Parliament. A similar amendment was tabled in the other place to get the Government to make an assessment of the operation of the relief proposed under this Bill. The amendments list, in paragraphs (a) to (e) in subsection (2) of the proposed new clause, the areas that the report should cover. I hope that the Minister can address the concerns raised by the amendment. It seeks to ensure, among other things, that the issues we have been discussing today and in previous debates do not arise. It would be a major disappointment if we failed to address these concerns and also failed to take any measures to keep ourselves informed about the effect of the relief and how it is working.

I like to base my decisions on evidence. As I said, I was at a meeting today on a completely different matter, where, after many years down the line, we have not got a mechanism to change things. I hope we can get a positive response. I do not accept that having a report to Parliament, whether next year or in 24 months’ time, in itself creates great problems for business in terms of uncertainty. We are in very uncertain times on a whole range of issues, and I am sure businesses would be much happier with other things. I am sure the point can be made for the moment, but I do not accept the inference made. I beg to move.

[Baroness Pinnock]

As I have put my name to this amendment, clearly I support it. The specific parts of this amendment that I would like the Government to consider are paragraphs (a) and (e) of subsection (2). The first is the impact of the relief upon the level of local authority income raised and the second is, importantly, the mechanism for the distribution of the relief, whether it is going to be a speedy one and how carefully it can be calculated. I can see quite a lot of room for dispute about the cabling, such as which part of local authority boundaries it crosses and so on. What we would like is an assurance that there will be an appeal mechanism for local authorities if the distribution of the relief is not what they anticipate. The reporting would enable that to happen.

Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill

Baroness Pinnock Excerpts

Report stage (Hansard): House of Lords
Tuesday 28th November 2017 Lords Chamber

Moved by

[Baroness Pinnock]

1: Clause 1, page 2, line 36, at end insert —
“(c) require that a certain proportion of the relief granted to providers under this Act must apply to hereditaments in deprived or isolated areas of England and Wales.”

[Baroness Pinnock (LD)]

My Lords, I now bring us from space back down to earth with the telecoms Bill. I draw the House’s attention to my interest as a councillor in Kirklees and as a vice-president of the Local Government Association.

As I said at earlier stages of the Bill, this is a constructive way of providing an incentive to IT providers to lay more fibre, with the intention of enabling more properties—both households and businesses—to access superfast broadband. My concern throughout the passage of the Bill has been that a scarce resource—public money—is being used indiscriminately. Any company that lays fibre, be it a billion-pound company or a smaller provider, can benefit. Any fibre that is laid will qualify, regardless of the wider public interest.

The benefit of fibre to the cabinet in the street is dependent on the distance from that cabinet to the property. At 300 metres away, the benefit will be negligible—although the Government’s current, but unjustifiable, measure is 1 kilometre. Broadband speeds are also dependent on the connectivity from the cabinet to the property; a copper connection further degenerates the broadband speed available. By the way, I am pleased to see that action is being taken elsewhere to ensure that adverts for broadband speeds will show realistic speeds attainable in properties, particularly households.

The concerns I just described are the reasons for the amendment. Its purpose is to make sure that the Government make the most effective possible use of scarce public resources. I listened most carefully to the Minister’s response in Committee to the practical difficulties in my amendment. It would now add this to the list of potential regulations under proposed new subsection (10) of Section 44 of the Local Government Finance Act 1988. It would require that at least some part of the resources is allocated to improve connectivity in areas of deprivation and isolation. I beg to move.

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Ashton of Hyde) (Con)]

My Lords, the noble Baroness, Lady Pinnock, raised connectivity in remote areas. I thank her for her remarks. It is an issue that we explored at Second Reading and in Grand Committee, and one that I absolutely agreed is of utmost importance, as I do now.

The amendment seeks to ensure that deprived or isolated areas receive “a certain proportion” of the relief. However, it is not clear what exactly that would entail as the term “a certain proportion” is not defined. By its very nature, all areas would get “a certain proportion” of the relief depending on how much and where fibre is deployed and lit from 1 April 2017. If the noble Baroness intends for “deprived or isolated areas”—again, those are not defined—to receive a higher proportion of the relief than others, the amendment would not have that effect.

The Government cannot therefore agree to the amendment as it is technically deficient and does not fully engage with how the telecoms networks are deployed and the approach taken to upgrade our networks with more fibre. I do not want to dwell on the technical deficiencies because even if they were resolved the amendment would still not be in keeping with the Bill’s very simple aim—to promote fibre connectivity wherever it takes place.

As my right honourable friend the Minister for Digital said in the other place, we need to think of the fibre network like a growing tree—he is a romantic soul. We already have a strong trunk, which links our great cities and connects Britain to the world, but we must now grow the boughs and branches. We must grow out this fibre not just in the trunk or the boughs, but in a multitude of branches that serve people’s houses, businesses, and all the public services of the land. The point is, we need to support fibre everywhere and if the relief is not available to support the growth of those branches then they may not grow at all, such is the difficult balance of the business case for more fibre. Therefore, if we seek to ensure that particular areas benefit more than others it is possible we will undermine that business case and deprived or isolated areas may not benefit at all. I do not believe this was the noble Baroness’s intention.

We do agree that it is vital to see improved connectivity in remote and indeed rural areas. People need at least acceptable broadband at home and at work; it is essential for modern life. That is why the Government have consulted on the design of a broadband universal service obligation, which would provide a digital safety net by giving everyone, no matter where they live, the legal right to request a connection to broadband speeds of at least 10 megabits per second. But we are not satisfied with just acceptable levels of access: we want to ensure that businesses and households throughout the country have access to faster broadband—superfast and better. By the end of this year, 19 out of 20 premises will have access to superfast broadband. We are taking steps to ensure that the figure rises even further in the next two years so that 97% of households and businesses have superfast access.

Some £30 million of the £200 million funding under the England Rural Development Programme has been made available through Defra. This is targeted at supporting rural businesses and growth, for broadband services in these areas at speeds of 30 megabits per second or faster where this is not currently available or planned, and to ensure that all areas can and do have the broadband speeds they will need for the future.

The Government are delivering a series of measures to support the rollout of fibre broadband in addition to the measure we are debating today. We launched the £190 million challenge fund as part of the Autumn Budget for local bodies to bid into as part of the local full fibre networks programme. As it was being developed during this year, we received a great deal of interest in that programme from local bodies in all parts of the UK, not least in rural and remote areas. The projects delivered under this programme will, we expect, encourage further commercial development of future-proofed fibre networks right across the country. This follows our announcement last year of more than £1 billion to support digital infrastructure.

Also part of that substantial sum is the digital infrastructure investment fund. That involves £400 million of government financing now being administered by fund managers and will attract significant private investment which will be available for alternative providers to use for fibre networks. This work will have impacts right across the country and enable operators to make the commercial case for wider deployment. In summary, therefore, the Government acknowledge that all areas of the country need decent broadband. That includes urban and rural areas which do not have it. I have outlined the measures the Government are taking to achieve this, but the Bill has one simple aim: to incentivise new fibre optic cable wherever it is laid, because we need it everywhere. I therefore hope that the noble Baroness will feel able to withdraw her amendment.

[Baroness Pinnock]

My Lords, I notice that the Minister, in his detailed response, made the assertion that we would have what he described as “decent broadband” throughout the country. I have to say that I query the definition of “decent broadband” that is provided by the Government. A speed of 10 megabits per second is not really acceptable in the current way that business and households operate. The Government’s measure of “decent broadband” being within one kilometre of where the fibre is laid to the street cabinet certainly does not provide broadband speeds at the property, given that 300 metres away it has degenerated to such an extent that the improvement is negligible.

What concerns me, and I have pressed it throughout the passage of the Bill, is that all public bodies—understandably, and supported by me—are moving to digital by design. For instance, if you are unemployed and in receipt of employment and support allowance you are required to make job applications online. If you are not in a facility with good broadband speeds, that is really difficult.

[Lord Ashton of Hyde]

Let me make one thing clear: the universal service obligation, which we have said will come in 2020, will be at 10 megabits per second which although I know is not acceptable to a lot of people, will allow things such as job applications to be done: you can even download and watch a film at 10 megabits per second. The universal service obligation, which is a safety net, will be available to everyone.

--- Later in debate ---

[Baroness Pinnock]

I thank the Minister for his intervention but if he has ever tried to watch a film at 10 megabits per second he will discover that you get gaps while you are watching it because the download speed is variable.

I am concerned about people who live in isolated areas and those in more deprived communities who will not be able to afford full fibre to their household and the consequent monthly payments. I have been making this case throughout the passage of the Bill, because we need to consider broadband access as an essential utility and at the moment I do not think that the Government are seeing it in that light. Nevertheless, I understand the technical arguments that have been made and I accept the Minister’s statement that the Government appreciate the importance of all households having access to broadband Therefore, I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill

Baroness Pinnock Excerpts

3rd reading (Hansard): House of Lords
Wednesday 6th December 2017 Lords Chamber

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I am very grateful to the noble Lord, Lord Bourne of Aberystwyth. I draw the House’s attention to my interests as a local councillor in Lewisham and vice-president of the Local Government Association. As he said, we had a very fruitful meeting after I tabled my amendment at Report. I was very happy to withdraw that, and I am very pleased with what the Minister has brought back today. As he says, it has enabled the Government to put the dates in the Bill. If they want at some future point to extend the scheme, they can, without the need for primary legislation. It is a very sensible move.

[Baroness Pinnock (LD)]

My Lords, I draw the House’s attention to my register of interests as a councillor in Kirklees and as another vice-president of the Local Government Association. As we discussed on Report, we agree with and support the amendments proposed by the noble Lord, Lord Bourne, and initiated by the noble Lord, Lord Kennedy. We thank the Minister for his very helpful meetings on the Bill. I have certainly explored a number of issues, although I have not got very far, and I do not intend to let them go. There is a growing need to think about the accessibility and affordability of broadband and mobile networks for people less well off than the majority, when they are going to rely on them for access to public services and other important aspects of their lives. That issue will not go away, and I hope Ministers will take that point away and think about it.

As for the amendments, we will obviously support them.

[Lord Bourne of Aberystwyth]

My Lords, I shall respond to the typically generous comments from the noble Lord, Lord Kennedy, and the noble Baroness, Lady Pinnock, regarding the Bill in general. I also want to put on record a couple of other issues. First, I undertook that we would look at gaming, and after discussing the issue with Ofcom and Gamma Telecom—I have shared this with the opposition parties—they have concluded that there is no risk of gaming in relation to fibre, but we shall keep a watching brief on that issue. I also take note of what the noble Baroness said about rural issues and deprived and isolated areas that are difficult to get to. Again, we would want to take account of and pay special attention to that.

At Second Reading we benefited from hearing about the concerns about business rates of the noble Earl, Lord Erroll, and my noble friend Lady Harding. I am very grateful to the noble Lord, Lord Kennedy, and the noble Baroness, Lady Pinnock, for their constructive approach to the Bill. I am also grateful to my noble friend and co-pilot Lord Ashton for the support and expert knowledge he has provided throughout the Bill’s passage. I also extend thanks to the Bill team: Jonathan Denning, Nick Cooper, Pete McDougall, Stewart Kemsley, Thomas Adams and the ever-smiling Homaira Abdullah.

This Bill will help to close the digital divide and to get higher-quality, more reliable connectivity to households and businesses across the country, benefiting every sector of the economy. I beg to move.