BT Broadband Provision: Local Businesses

Clive Efford Excerpts

Thursday 10th March 2016 Westminster Hall

[Clive Efford (Eltham) (Lab)]

It is a pleasure to serve under your chairmanship for the first time, Ms Ryan. I congratulate my hon. Friend the Member for Bishop Auckland (Helen Goodman) on securing yet another debate on broadband. I am sure that the Minister needs no notes to respond to these debates.

We heard from a number of Members about the problems in their constituencies. In an intervention, the right hon. Member for Ashford (Damian Green) read out a response that suggested BT was trying to distance itself from Openreach, which is incredible. The hon. Member for South Suffolk (James Cartlidge) said that his constituents had dug their own channel in an effort to expedite the situation themselves. That is taking things to an extraordinary degree, but it shows the lack of service, particularly for people in rural areas, although I stress that the problems are not just in rural areas.

The hon. Member for Bury St Edmunds (Jo Churchill) illustrated very eloquently the chaos suffered by one business in her constituency. When the line was reallocated, the business lost its BT broadband connection. When it came back, the speed was reduced and the gentleman was forced to travel 25 miles to another office. The impact of something like that on a small business is difficult to measure.

The hon. Member for Sittingbourne and Sheppey (Gordon Henderson) read out a catalogue of failures over a long timeline. It is difficult to understand how BT can be so incompetent and fail in its duties so frequently. The hon. Member for Brecon and Radnorshire (Chris Davies) highlighted the problems for rural people and called for a truly national roll-out. The hon. Member for Tiverton and Honiton (Neil Parish) said that by definition the hardest-to-reach areas are rural, and underlined that by discussing the ignominy of companies having to pay BT to get an explanation of BT’s failure so that they can get compensation. That is hard to stomach for small businesses.

The hon. Member for Filton and Bradley Stoke (Jack Lopresti) intervened to underline how arrogant and aloof BT is when it comes to the needs of people who are not receiving broadband, especially to businesses. That was also underlined by the hon. Member for Angus (Mike Weir), who discussed BT’s failure to carry out repairs. Because BT has a monopoly in his area, it does not respond readily to his constituents’ concerns.

The Federation of Small Businesses has referred to broadband as the fourth utility, as have many Members today. As broadband becomes ubiquitous and ever more vital for doing business, it becomes more important that businesses can access broadband. It is vital for all businesses, not just those in the digital economy. It is ludicrous that the Government have not been able to provide what has become the fourth utility for so many people.

The Government’s own broadband impact assessment states:

“It is now widely accepted that the availability and adoption of affordable broadband plays an important role in increasing productivity”,

and that access to faster broadband is worth £17 billion to the economy. It goes on to explain how better infrastructure increases productivity by

“supporting the development of new, more efficient, business models, enabling business process re-engineering to improve the efficiency and management of labour intensive jobs, and enabling increased international trade and collaborative innovation”.

Broadband also allows more people to work, or to work in different ways.

The failure to roll out broadband is increasing the problems for inner cities in the face of demands for public services and more infrastructure. A fully rolled out broadband infrastructure would mean that businesses could relocate, or more readily remain in rural areas to conduct their business. If, as the impact assessment shows, something is worth £17 billion to the economy, surely it is a false economy for the Government not to ensure that it is rolled out properly.

The European Commission set a target of universal broadband by 2013, yet we are still not there. When the Labour Government left office in 2010, they left behind a fully funded plan for basic broadband to be delivered to all within two years, and superfast broadband to 90% by 2017. The remaining 10% would have been covered by mobile broadband. We are falling further and further behind our competitors. Australia, a huge landmass, is aiming for 100 megabits per second for 93% of premises by 2021; South Korea will have 1 gigabit by 2017; and Ireland has recently increased its average broadband speed by 10%. Yet in the last quarter, the average speed in the UK has fallen by 3.7%.

The coalition Government designed a fragmented and monopolistic superfast broadband roll-out that handed £1.7 billion of taxpayers’ money to one company to roll out broadband: BT. Four years later, many homes are still waiting. Incredibly, the Government have missed their targets on several occasions. In a Westminster Hall debate yesterday, the Minister raised several of his own frustrations with the service. We have debated broadband on 45 occasions in the past five years. The Minister has answered questions on the subject at every Culture, Media and Sport questions I can recall—a total of 63 times in the past five years. There has been a constant barrage of attacks from Members on both sides of the House about the quality of the service.

The Minister said in yesterday’s debate: “Openreach must do better.”

[Mr Vaizey]

Yes, it must.

[Clive Efford]

He continued:

“As the Minister responsible, I find it particularly frustrating that I have to step in to sort out these problems.”

[Mr Vaizey]

I do.

[Clive Efford]

Well, there must be an enormous number of problems because quite a few have been mentioned today that he has not got around to. He went on:

“Why has Openreach not put in place a hit squad to deal with some of the more prominent complaints that come from MPs?”—

[Mr Vaizey]

Yes, absolutely.

[Joan Ryan (in the Chair)]

Order. Minister, will you address these points in a few moments when the hon. Gentleman sits down?

[Clive Efford]

Thank you, Ms Ryan. Why is that hit squad not in place?

[Jo Churchill]

Will the hon. Gentleman give way?

[Clive Efford]

I shall just finish my point. The Minister has been in post for nearly six years. Why, when he is answering a debate that he has responded to on 45 previous occasions, is he still asking why Openreach has not put in place a hit squad to deal with MPs’ complaints? Perhaps the hon. Member for Bury St Edmunds is going to tell us.

[Jo Churchill]

No, I am not going to tell the hon. Gentleman. I put that and another question to BT on Monday, and it replied that it now no longer uses agency workers to do the difficult work; it now uses its own people to do the work that needs programming, which should sort out the fact that it cannot programme that work to sort it out for the customers. It strikes me that a company of its size, which consistently fails and, by its own admission to me, has the wrong people doing the wrong job at the wrong time, needs some assistance in the rear end department.

[Clive Efford]

Again, the hon. Lady very eloquently illustrates one of the problems that we have with Openreach.

The Minister gave his own example:

“I dealt with a factory that had been built to be ready to open specifically on the basis of when Openreach was going to connect it, but Openreach was already a year behind schedule. That cost that factory many tens of thousands of pounds. It continues to baffle me why it cannot get its act together and sort out these prominent problems.”

It is beginning to baffle us why he cannot sort out these problems with Openreach.

“I had to intervene on new builds. When a housing development is being put together, one would have thought it was the most obvious thing in the world that the people buying the houses are likely to be relatively young and likely to have children, and therefore likely to want, in this day and age, fast broadband connections. However, it took me a year to 18 months to bang together the heads of BT and the house builders to get an agreement.”

[Mr Vaizey]

I will explain in a minute.

--- Later in debate ---

[Clive Efford]

I sincerely hope you will. If it takes the Minister 18 months, imagine what it is like for constituency MPs.

The Minister was obviously in full flow, because he threw in one or two other items:

“I, for one, would love them to get rid of this landline rental charge that they put on our bills. They put on their adverts a nice, big, juicy low price for broadband, and then an asterisk and a line saying, ‘By the way, you’ll have to pay £25 a month for landline rental.’”

Is that a statement of policy, or just the Minister throwing something into the air?

[Mr Vaizey]

Ms Ryan, you quite rightly admonished me for trying to respond to the Opposition spokesman from a sedentary position, but it is frustrating. Yesterday, I joked that, because of the lack of an Opposition policy, I would give an Opposition speech, but I did not expect the Opposition spokesman literally to read it out word for word the next day. Can we perhaps hear what the Opposition propose?

[Clive Efford]

The hon. Gentleman is the Minister. If he wants to dodge the arguments by posing as an Opposition Member, fine, but that is to run up the white flag and admit defeat.

The Minister said:

“I hope that the Advertising Standards Authority will crack down on how providers advertise their speeds. At the moment, if only 10% of customers are receiving the advertised speed, in the eyes of the ASA that is supposed to be okay. I totally accept that the ASA does a good job—it is a great example of self-regulation—but it really needs to go further on that. In my humble opinion, at least 75% of people should be getting the speeds that the broadband providers are advertising.”—[Official Report, 9 March 2016; Vol. 607, c. 139-140WH.]

Is that another policy statement? He is the Minister, so he really should not put such things into speeches if he does not intend to deliver them.

The Minister derided the previous Labour Government’s commitment to provide 2 megabits per second by 2012, but the Government are not delivering that minimum standard. Superfast broadband is 24 megabits per second, but the Government have moved the goalposts several times on it. It was 90% by the end of 2015; then it was 90% by the end of 2016; then it was 95% by the end of 2016; and now it is 95% by the end of 2017. When the Select Committee on Environment, Food and Rural Affairs was conducting an investigation into rural broadband, BT told it:

“it is there or thereabouts. It may end up being in 2018”.

The Committee pointed out in its 2015 report on rural broadband that it is by no means certain that the Government will even meet the phase 2 target. BT let the cat out of the bag: the Government are really behind the times.

Let me finish by asking the Minister a few questions. Two weeks ago, we cautiously welcomed Ofcom’s strategic review of digital communications—a plan for sorting out the mess created by six years of failed policy—as a step in the right direction. It mainly proposed two things: allowing rivals to access BT’s ducts and poles to increase competition, and addressing the issues relating to service standards. Ofcom will introduce automatic compensation for customers and businesses when things go wrong. It is good news that broadband, landline and mobile customers will automatically receive refunds for any loss or reduction in service, which hon. Members have spoken about today. Openreach will be subject to tougher minimum requirements to repair those faults and install new lines more quickly. As hon. Members indicated, that is very welcome indeed.

What will the Minister do if those proposals are not met? How will he ensure that those targets are achieved? For example, Openreach might decide to fix easier and quicker faults at the expense of some of the ones that have been described today. Ofcom will introduce performance tables on quality of service to identify the best and worst operators on a range of performance measures so customers can shop around in confidence. Will the Minister tell us how he intends to ensure that that is achieved? How long does he think it will take for the market to become more competitive? What will he do if it does not work? Are all the measures still subject to further consultation and debate? Ofcom will need the Government’s political cover to make that happen, but the Secretary of State’s mind is currently elsewhere. Will the Minister assure us that addressing the issues that hon. Members raised this afternoon is a priority for him and his Department?

--- Later in debate ---

[Mr Vaizey]

Well, I have, but perhaps I live in a different world.

Having said that, I find it frustrating that I am sometimes doing the job of the chief executive or directors of Openreach. I find it frustrating that I have to broker a deal between Openreach and house builders to provide what should be provided in any common sense view—when building a brand-new housing development, surely that is the time to lay brand-new technology that people will expect over the next 20 years. I find it frustrating that I have to deal with a legion of complaints that are the result, frankly, of bad management and bad customer service. I sometimes feel that someone in Openreach loathes me so much that they sent out a memo saying, “Please give me the address of every single MP’s office, so we can make sure that every time they try to get a phone line, it will take three months.” At least four MPs have complained about that to me.

[Clive Efford]

Given that the Government have provided so much money to BT Openreach, will the Minister accept that the proper checks and balances were not put in place to ensure that it delivered on its contractual obligations?

[Mr Vaizey]

No, I will not accept that, because the hon. Gentleman is missing the point I made earlier about the distinction to be made. The physical roll-out of infrastructure is going well, and more than 4 million homes that would not otherwise have got superfast broadband now have it. That job has been done extremely well. What frustrates me is the poor customer service, which I hear about again and again from my colleagues. That is why we have had two debates in two days. I am really trying to get the message to Openreach to sort that out.