Broadband in Wales

Chris Davies Excerpts

Wednesday 6th July 2016 Westminster Hall

[Mr Mark Williams (Ceredigion) (LD)]

I beg to move,

That this House has considered broadband in Wales.

It is good to see the Minister here fresh from Colchester. He has had a busy day; he was in this Chamber first thing this morning. It is also good to see the shadow Minister, the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), in her place. We were looking forward to a contribution from the hon. Member for Newport West (Paul Flynn) in his elevated role as shadow Secretary of State, but it is genuinely good to see the hon. Lady here in his stead.

I am grateful for the opportunity to raise this matter in the House. Today is a very important day in this House, not least given the events in the main Chamber. It is also a very important day for Wales, with the football this evening. We have the best of Wales—and, I am sure, of Scotland—in this Chamber to debate this important issue.

As many hon. Members know, the issue of broadband and internet connectivity is a recurring problem. Not a week goes by without concerned constituents contacting us. It is not unique to my constituency. Despite genuine improvements—some would say vast improvements—and the Government’s genuine attempts to meet their targets, there is a feeling that we are falling behind in many rural communities and in Wales more widely.

I welcome the Government’s intention to introduce a broadband universal service obligation and their ambition to give people the legal right to a 10 megabits per second connection, no matter where they live, by the end of this Parliament. The Prime Minister said:

“Access to the Internet shouldn’t be a luxury; it should be a right—absolutely fundamental to life in 21st century Britain.”

I could not agree more, and I am glad that that was put into the tentative stages of legislation with the introduction of the Digital Economy Bill yesterday. I look forward to that principle being put into law, but targets have come and gone before, and the proof of the pudding will be in the proverbial eating.

I also welcome the Government’s recent target to connect 97% of premises by the end of 2019. The many communities that are currently underserved with bad or non-existent broadband connections are enthusiastically waiting to hear whether that target will be met, and whether they will benefit or will be among the 3% left out. My constituents are certainly hoping for good news. I will hear of the challenge in the contents of my inbox—or, more precisely, given the subject matter, in the representations I get from constituents who use more old-fashioned means of communicating their disquiet.

There is a feeling—I think this will be endorsed by other hon. Members—that the peripheral parts of the United Kingdom are often left out and forgotten. The principles of entitlement do not always seem to extend to all parts of the United Kingdom. That is the basis of many of our concerns. None the less, it is welcome that successive Governments have talked about the importance of connectivity and have recognised that it cannot simply be left to the market to decide where we have access. Although in urban areas it is possible to rely on commercial businesses to fill the demand for high-speed broadband, the internet has become a necessity for everyone, including individuals trying to fill out Government forms online and business people such as farmers trying to do their taxes and apply for funding, some of which is an existential need. I have previously cited the example of the farmer in southern Ceredigion who had no broadband at all. He was forced to send a paper tax return to Her Majesty’s Revenue and Customs, and got fined for doing so. We managed to get the fine back for him, but he was told that next year he should pop down to the local library to submit his return online. There are not many libraries left in rural Ceredigion, and those that there are do not have sufficiently safe, secure or reliable broadband connections. That is the reality for many of our constituents.

We need only look at the comments made by figures in the technology industry and note our own experiences as constituency MPs to see how hugely the internet has changed our lives and how far we have to go to ensure that everyone has adequate access. The chief executive of Cisco, Phil Smith, said of Wales:

“I’m very surprised that broadband hasn’t got to the level of penetration it should. To be honest, it’s like saying you don’t have a road now, or you don’t have water. Companies, countries and individuals can’t survive without broadband; it’s not some optional nice thing to have; this is the way business is done.”

In Wales, where our physical infrastructure is challenging, broadband is even more necessary. Its importance cannot be overstated. That view is shared by organisations as diverse as the Countryside Alliance, the Federation of Small Businesses, Ofcom, the National Union of Farmers and the Farmers’ Union of Wales.

There have been improvements and substantial investment to improve the number of individuals and businesses able to access fast broadband speeds. Millions have been spent on improving the low figure of 55% superfast broadband coverage in Wales in 2014. Although we have failed to meet the aim of 96% coverage, I welcome the increase to 87%. The availability of superfast in rural areas of Wales increased to 50% last year thanks to the Superfast Cymru programme; yet, as a Member with a rural seat, I cannot help but be concerned that rural areas are still losing out most. Improvements are a good thing, but many of the 11% of premises in Wales that cannot receive the proposed USO broadband speed of 10 megabits per second are in my area. How can we improve the situation to ensure that those areas are not left behind? Surely areas that not only have some of the lowest speeds but contain some of the highest percentages of those without a connection altogether need to be prioritised.

The FUW noted recently, after its Meirionnydd branch visited a farm in Machynlleth—for those who are not geographers, Machynlleth is a town settled between the three historic counties of Montgomeryshire, Ceredigion and Meirionnydd—that the highest proportion of those with no broadband access are farm businesses. For farmers who have attempted to diversify their businesses by letting self-catering cottages and converting buildings into offices for use by others, connectivity is critical, yet many are at a significant disadvantage. Those who have children at home—increasingly, more online homework is required—are struggling. As I said earlier, almost all of them have to keep up with changing agricultural rules and apply for services online. It can be costly, if not impossible. More and more services are going online, so digital inclusion is vital.

According to Ofcom, in June 2015, more than 67% of my constituents had slow internet connections of less than 10 megabits per second, and almost 20% had connections of less than 2 megabits per second. That situation was replicated in other rural constituencies throughout Wales. Carmarthen East and Dinefwr—it is good to see the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) here—Montgomeryshire, and Carmarthen West and South Pembrokeshire join Ceredigion in the top 10 constituencies with the slowest broadband connections anywhere in the United Kingdom.

The issue of inadequate broadband connections affects not simply an isolated house here or there—the stereotypical cottage in a valley with roses around the front door. Whole communities lack adequate, or even usable, internet connections. For years, these issues have been plaguing Llangrannog in my constituency, which is a significant tourist community; the sizeable community of Llanfair Clydogau near Lampeter; and Synod Inn, down our main road between Aberystwyth and Cardigan—the most significant road in our constituency. There has been little progress. In Llanfair Clydogau, I am specifically dealing with broadband casework on behalf of not just individuals who write with concerns, but an entire community.

At this point, I want to place on record my appreciation for BT’s parliamentary unit, who I think were in the Members’ Dining Room earlier today. I was not there, but Clova Fyfe and her team in particular have been assiduous in responding to the individual concerns of Members of Parliament, and I genuinely thank the unit for that.

[Chris Davies (Brecon and Radnorshire) (Con)]

Will the hon. Gentleman give way?

[Mr Williams]

That is very timely. The hon. Gentleman has just walked in, but I will give way.

[Chris Davies]

I thank the hon. Gentleman for bringing forward this debate on a topic that I have spoken about on many occasions in this place. I was at the BT meeting, as was my colleague the hon. Member for Ynys Môn (Albert Owen). The people from BT were very helpful, as always, but they leave many questions unanswered.

[Mr Williams]

There we are. Perhaps the hon. Gentleman will shed some light on some of those unanswered questions a little later. I thank him for that intervention.

Communication with individual constituents is sometimes less satisfactory. Too many of my constituents have had template responses from BT and Openreach saying that they have absolutely no plans for the foreseeable future to improve the state of the broadband connection. That seems to be the case for large parts of the county. Even in some of our larger communities, such as Lampeter, which is an important university town, connections are at best poor. For many of the small businesses that I have visited there, the No. 1 request is for something to be done to improve broadband speeds and provision. Options for businesses, although an improvement over those for some of my rural communities, are sometimes limited.

For struggling small businesses, the quality of the broadband connection can often be the difference between keeping afloat and going under. That seems like a dramatic statement, but our reliance on broadband and communication, and—this is where that rural point comes in again—the fragility of the rural economy and some of our rural businesses mean that it is very important that they get their marketing right and, for some, their internet booking systems right. I have in mind specifically some of our tourism businesses. For many growing businesses, the inability to invest in a fast and more reliable connection that is not extortionately priced can be a stumbling block. I am sure that the Minister will agree that the opportunities for our economy of getting broadband right are immeasurable. For the rural economy, that would mean a great deal more potential being realised.

[Mr Williams]

I must say that I have not been on a horse for some time, I do not think I have ever been on a surfboard and I have a mountain bike that has remained in my porch for some time, but I take the hon. Gentleman’s point. He is right: there is huge potential in the area of outdoor pursuits and tourism. We have to face the reality that connectivity, whether we get it through broadband or our mobile phones, is now an integral part of all that. We cannot separate the two.

It has also been brought to my attention that many commercial internet providers and individuals have concerns about the role that Openreach has played in providing the infrastructure and in some of the specifics of the national broadband scheme, such as how funding is spent. Some of us here have been concerned for some years about the conflict of interest in a commercial provider such as BT holding a near monopoly of the country’s physical broadband infrastructure. I certainly welcome Ofcom’s proposals, which it set out in its initial conclusions from its strategic review of digital communications, to open BT’s ducts and telegraph poles to its rivals and for Openreach to be reformed to ensure a better service for customers and businesses. That should help to improve competition and the development of new technologies—something that those of us in rural areas, and indeed urban areas, would very much welcome. That is positive news, but issues still need to be addressed and many are concerned that BT has a limited incentive to invest in a fibre network and ensure improved speeds for people in Wales, due to the huge revenue that it continues to make from the legacy copper Openreach network.

However, although there is little hope that broadband connections will be provided by commercial deployment in my constituency—the Minister made the point at a briefing that I attended two or three months ago that absolutely no premises in Ceredigion could be viewed as economic and covered in that way—there is rightly concern that some areas are being needlessly subsidised at the expense of those that really need subsidy. It will come as no surprise that my assertion is that my constituency, other parts of Wales and other rural areas are the communities that need that.

According to Virgin Media, the 90% rule that underpins the national broadband scheme defines an area as eligible for state funding where 90% or fewer households currently have access to superfast broadband. Virgin Media believes that that threshold is set too high. As an MP for a rural area in which that threshold is nowhere near reached, I think that that is probably correct. I believe strongly that where there is a genuine market failure, the Government need to intervene to help to ensure that everyone has access to something that I would argue is a necessity. What research have the Government done to ensure that areas where up to 90% of households receive superfast broadband are indeed unable to achieve the final 10% or more via commercial deployment rather than Government subsidy? I ask that because I recognise, as I think we all do, that the pot for ensuring adequate broadband for all is not unlimited and it is vital that it is used as effectively as possible. If there are areas with high levels of superfast broadband that can fill the gap through commercial deployment, so that the subsidy can instead be used for rural areas where provision cannot come in any other way, it is important that that happens.

I welcome the fact that much of the money from the UK Government is given to Cardiff Bay to spend as they feel necessary. I welcome a number of their schemes, which are focused on helping some of the hardest-to -reach areas. Access Broadband Cymru provides grants of between £400 and £800 to fund the installation of new fibre broadband connections for those who would not be covered by commercial roll-out or who have connections of less than 2 megabits per second and also funds satellite technology as an alternative in some areas. Although I am by no means uncritical of the Welsh Government for missing targets and failing to ensure that rural areas are prioritised, I would also say, as an MP representing a Welsh constituency, that the existence of this Assembly scheme has not always been very clear. If that is not clear to me as a Member of Parliament, it is certainly not clear to many of my constituents. The first time that I heard of that scheme was at the Minister’s briefing in Portcullis House a few months ago. That speaks volumes about communication. He talked at that meeting about the millions of pounds that have been made available to the Assembly Government. It was alarming that many of us had not heard of that scheme.

[Chris Davies]

That matter was brought up with BT today. The fact that there are so many schemes available really is one of Wales’s best-kept secrets. Perhaps the British Government could play a part in pushing the Welsh Government and working closely with them to ensure that where there are gaps, the public and our constituents know that those schemes are available. They are there to help people and they can improve broadband accessibility if people are told about them.

[Mr Williams]

I am grateful to the hon. Gentleman for raising that. That is very true: hot off his meeting with BT, he brings useful information to the Chamber. I suggest that the point about collaboration between the Department for Culture, Media and Sport and the Assembly Government in Wales is important—all the more so as we proceed with the Digital Economy Bill. I have not yet looked in great detail at the Bill, which was introduced yesterday, but I wanted to ask the Minister about the relationship in meeting targets between setting them in London and delivery on the ground in Cardiff, which is really important.

I will conclude now. Thank you, Mr McCabe, for the opportunity to raise this important issue. I will not lambast DCMS for inaction because that is simply not the case. Significant progress has been made and the Government’s intention—[Interruption.] I detect that the hon. Member for Ynys Môn (Albert Owen) may usefully put on his boxing gloves in a moment or two. Where I will voice my deep concern, as befits the Member of Parliament for Ceredigion, is about the fact that many of my constituents are not realising the entitlements they are promised.

The National Farmers Union has spoken clearly— it also produced an excellent report, “NFU Spotlight on Farm Broadband & Mobile Networks”, which I commend—and campaigned energetically for the rights not just of its farmers, but of the broader community. Those considerations need to be taken on board. Many constituents in rural areas across the country are feeling let down and they expect a response from the Assembly Government and from the UK Government as well.

The Minister may be able to help us with this final, slightly more topical, point: the funding we have received from the European Union. Following the referendum decision to leave the European Union, I hope the Minister can tell us what impact it will have on Government schemes to provide broadband to rural parts of Wales. Since £90 million of the funding for the Superfast Cymru contract came from the European regional development fund, there is concern that areas such as mine in Wales will suffer unless funding is found from elsewhere. Has he considered that? Has he looked into that? Will he confirm that Wales will not lose out? Because the need is very much there.

--- Later in debate ---

[Albert Owen]

I think I had a false sense of security there. But seriously, that money was targeted and redistributed by the European Union to the areas of greatest need, and we in Wales, particularly rural Wales, were some of the main beneficiaries of that money. It was identified at Brussels level that that funding was needed in certain areas that met the criteria set out, and it helped the scheme to be rolled out as effectively in Wales as anywhere in the United Kingdom. That is down to the partnership between, and moneys from, different levels of government.

Some 73% of properties in Wales have been covered by the roll-out of a 30 megabits per second superfast broadband initiative, and 76% of Anglesey has been covered by the scheme. The average speeds are in excess of those in some other parts of Wales, so there is a good news story there. However, as with all good news stories, there are people who are not benefiting. The date for 95% roll-out has slipped from July 2016 to 2017. To be fair, there have been negotiations under the contract between the Government and BT Openreach, leading to the Access Broadband Cymru scheme providing grants of up to £800, which have helped individuals get fibre to their hard-to-reach homes directly. That is good news, but we need to see that happening more quickly.

As the hon. Member for Ceredigion said, many of the areas in the last 5% are rural areas that rely on tourism. They are beautiful areas, and people want to locate there. I will give an example—I am sure the Minister will be interested in this. I travelled on a train a couple of years ago, and a businessman who lived in Rhoscolyn on Anglesey told me that he worked in three places: in Canary Wharf, here in London; in Hawaii; and in Rhoscolyn. If he had a choice and the broadband speed was there, he would stay in Rhoscolyn to do his work. Unfortunately, he has to go to Hawaii and suffer out there or come here to London to work. There is a serious point there: in many cases people want to locate their business in the area in which they live, which helps the local economy. We need to have a level playing field when it comes to digital technology.

[Chris Davies]

It is interesting to hear that the hon. Gentleman is a great fan of the link between the Welsh Government, the British Government and the European Union, because the two of us were at the meeting earlier with BT at which it clearly stated that rural Wales is behind in dishing out and receiving broadband. It was told by Europe that there needed to be a lot of chimney pots to allow it to tick the boxes and “draw the money down” from Europe—that was its phrase. It is because of our connection with Europe that rural Wales is behind. I hope the Minister will now ensure that we go forward quickly and catch up from the mistakes made in the last few years.

[Albert Owen]

The hon. Gentleman and I were on different sides of the debate—I was a strong remainer and he was not—and I think he has misunderstood what BT said. It said that the Welsh Government wanted greater coverage in the contract, and that was the reason for the slow-up. Coverage was needed, so BT needed to get to as many properties as possible in urban areas. That was why the rural areas were left behind. Even with his anti-European ways, he is stretching it a little bit to blame the EU on this occasion. I am quite happy to lay blame, and on this occasion it lay with the contract between BT and the Welsh Government.

BT would have liked to roll the scheme out across the whole country. It advertised it by telling many people in rural areas of Wales that broadband would be rolled out to them by 2015 and 2016, but for a commercial reason that has not happened. They have been left at the back of the queue, and I do not think that is fair, because rural areas are already suffering in many ways. I keep saying, because it is true, that the areas where there are poor broadband services and speeds are those where there is poor mobile signal as well. In London, if someone cannot get broadband or is without it for a few days or weeks, they can rely on 4G. In many rural areas in Wales that is not possible. We want to get BT linked up with EE, and I know the Minister has been involved in that. There is the possibility of homes getting a TV, landline and mobile phone package, and such packages will improve in the future.

The issue I most want to raise with the Minister is the new Digital Economy Bill. I very much welcome it, as I did when I spoke in the Queen’s Speech debate. In many arguments with me, the Minister used to say that a slow-speed universal obligation was a ridiculous idea and would not be needed, and that the Government were going for top-speed. All of a sudden that is now the Prime Minister’s flagship policy, and to secure his legacy in history we are at last going to have a universal service obligation. Because he is a professional, the Minister has gone from arguing with me to taking full credit for that—he says that it was his idea all along. He was listening to us in those debates, arguing with us and then going away and putting pressure on the Prime Minister to ensure that we got a universal service obligation.