BT Broadband Provision: Local Businesses

Helen Goodman Excerpts

Thursday 10th March 2016 Westminster Hall

[Helen Goodman (Bishop Auckland) (Lab)]

I beg to move,

That this House has considered BT broadband provision for local businesses.

It is a pleasure to see you in the Chair, Ms Ryan. The Minister and I have sparred on many occasions about the state of rural broadband. I have been away from this brief for 18 months, but now I am returning, as a constituency MP, because things have not improved as we had all hoped. I want to bring some stories from my constituency to public attention, because I cannot see how, apart from by doing that, we will exert any real pressure on BT, which I think is becoming more and more complacent.

The first big problem in my constituency was faced by an auctioneer called Addisons, which was located in Barnard Castle. Addisons had been there for decades and increasingly found that auctions needed to be conducted over the internet. It would get better prices if it could conduct auctions over the net, but the connection offered by BT was not fast enough for it to be able to do that, so the firm closed, with the loss of dozens of jobs.

Last autumn, William Smith, a firm that has been working in Barnard Castle since 1832, got in touch. In October 2014, it ordered a short haul data service, at a cost of £30,000 up front, with a subsequent monthly fee of £16,000. Let me explain in more detail the situation of this family-run company in my constituency. It had a place in the middle of town and then it wanted to operate a larger warehouse on the outskirts of Barnard Castle. To do that, it needed a new data link between the two sites. As I said, the firm went to BT in October 2014. It said to BT, “We’re building a new warehouse”—the warehouse cost £2 million—“and we need this data link so that we can use it. Without the data link, we can’t use the new warehouse and our staff can’t work effectively.”

Nine months later, nothing had happened, so the firm got in touch with its Member of Parliament and complained about that, reasonably enough. I thought, “Well, I used to be the shadow Minister. I know all the right people in BT; I know the public affairs people. I’m sure we’ll sort this one out in a trice.” I could not have been more wrong. We got in touch with the public affairs department. My staff were in almost weekly contact. We got in touch with the chairman of BT, Sir Michael Rake. Again, we made absolutely no progress.

I was very concerned because at one point we were not even getting responses from BT, so I asked the Minister to get in touch. The Minister got in touch, and the upshot of that is that the firm now has one of its links established, but it needs more links. The situation is rather complicated. It needs more capacity on the link, so we are still not there completely. The first section was completed on 29 February, 17 months after the firm paid its £30,000 up-front fee. That is not acceptable, and everyone knows that. However, that is not the only ongoing problem in my constituency. There is also a problem in Whorlton.

[Anne Marie Morris (Newton Abbot) (Con)]

The hon. Lady is making an absolutely first-class point. Does she agree that the nub of this is that no priority or even equality of treatment has been given to the business community? In my rural constituency, there are businesses that can get absolutely nothing. We need parity between businesses and others in order to get businesses properly supported in terms of technology, IT support and broadband; otherwise, productivity and the mission to increase productivity become, frankly, a dead duck.

[Helen Goodman]

The hon. Lady is absolutely right. I will detail my next case and then come on to the general issues that she raises, because I agree with her entirely.

In Whorlton, the Danshell Group has a care home for vulnerable people with learning disabilities. It paid an even higher fee, £100,000, for its links, because it is trying to help people to maintain contact with their families through Skype and it is using sophisticated technology in other ways to provide therapies for those people. It still does not have its connection.

When people are paying these very large sums of money and they get in touch with BT months before they want the connection, they should expect a decent level of service. One thing that struck me in the William Smith case was that every time we rang BT, there was a new problem: it had to go under the road; the fibre had to be blown; there needed to be a new duct here; there needed to be a new duct there. It became absolutely clear that at no point had the people in BT sat down and made a plan. They had not looked at what was needed and said, “Okay, if we’re going to achieve this by then, we need to do this on date A, this on date B and this on date C.” There was no plan. It was as if they were complete amateurs and had never done it before.

[Damian Green (Ashford) (Con)]

To illustrate the hon. Lady’s point, which is about not so much the inability as the unwillingness of BT to acknowledge that it is a joined-up operation, I want to read out an email sent to a constituent of mine in the last couple of weeks by someone in the executive level complaints team at BT. My constituent had complained, not unreasonably, that he could get only 1 megabit. The email reads:

“Our suppliers (Openreach) are in charge of this network and they would not consider any request from the public to move lines or modify serving exchanges, with the view to simply improving broadband speeds.”

I cannot but take that apart. Openreach is not a supplier to BT; Openreach is part of BT. It is dishonest of BT to pretend that somehow Openreach is a separate operation. Also, that allows it to say, “I’m sorry. Just because the public ask for higher broadband speeds, you can’t expect us to provide them.” That is completely unsatisfactory.

[Helen Goodman]

The right hon. Gentleman is absolutely right, and his constituency of Ashford is not even particularly rural; it is not as if the company has to travel dozens or hundreds of miles to make the connections in his constituency. It seems to me that it has a particular problem with the small business sector and it has a problem the minute someone is outside one of the large urban areas. Further to the point made by the hon. Member for Newton Abbot (Anne Marie Morris), it is obvious that the benefits of good internet access are greater in rural areas than in big urban areas, because, as anyone with a rural or semi-rural constituency knows, vast amounts of resource go into transport and moving stuff and people around.

[James Cartlidge (South Suffolk) (Con)]

I am sure that every hon. Member present is getting a feeling of déjà vu and agreeing with pretty much everything that the hon. Lady is saying. I have a similar case. Stoke by Nayland golf club in my constituency ended up doing a self-dig in March last year. It dug its own line, with the agreement of Openreach, after many months waiting for BT Openreach to come and put down a line. Recently, an engineer finally turned up, offering to put down a line. That company in my constituency had already dug into the ground itself. Does not that prove that there is a massive breakdown in communication between Openreach and whoever the actual supplier is?

[Helen Goodman]

The hon. Gentleman is absolutely right. Now, the Minister made a rather good speech yesterday in a similar debate, in which he said that BT was spending far too much time buying sporting rights and not enough dealing with the problems. He is right. BT needs to concentrate on the day job but it is not doing that. This infrastructure is vital to the country’s productivity.

[Jo Churchill (Bury St Edmunds) (Con)]

My constituency is located slightly above that of my hon. Friend the Member for South Suffolk (James Cartlidge), and we have problems across the constituency. To further reinforce what the hon. Lady is saying, some companies in my constituency have now produced their own lines, and doing that cost a company I spoke to this morning, which has had the problem since last May, £6,000. That company can afford it, but that might not necessarily be the case for my small businesses or when there are issues of safety, such as when my farmers are involved.

One local business—this trumped everything I have seen—had its line, let’s just say, “reallocated”. The business line was not identifiable enough so it was reallocated to a homeowner. It took BT five to six weeks to figure out where the business line had gone and that it had redirected it. The gentleman in question was passed back and forth between line and broadband engineers. After a month, his broadband was reinstated. However, his connection speed was reduced by half. For the past three months, he has been forced to drive 25 miles to another office in Ipswich where he can access broadband. He identified the lack of supply and poor customer service as the two main obstacles to resolving his case. I would love to say that that example is isolated but it is not, and it has a real impact. The Minister knows, because I have seen him on many occasions, that the problem really affects my rural constituency.

[Helen Goodman]

It certainly does. The issue affects the hon. Lady’s constituents and the whole country. Our productivity is not rising as it is in the other G7 countries, and it has not been for eight years. Proper investment in infrastructure is one of the ways that we can get our productivity up, from which we will all benefit. When it works, it is really great.

There is a quarry in my constituency that has a very good website and, because of its website, it is able to sell stone to Spain because the Spanish people who are building the cathedral in Barcelona—the Sagrada Família—saw that the stone was the right colour. That is fantastic. When it works, it is brilliant, but it is not working often enough. The OECD and the International Monetary Fund say it; everybody says it. I really feel that the issue should take priority over some things, such as HS2, into which public money is about to be poured. If we could get the IT right, we might not need all the investment in transport, which is proving to be so controversial across the country.

[Mike Weir (Angus) (SNP)]

I understand what the hon. Lady is saying but I am a bit reluctant to pour yet more public money into BT, which is not up to the job of doing this, frankly. The Government, the Scottish Government and many others have poured money into these schemes. It is high time that a multinational company such as BT, which operates a private monopoly, steps up to the plate and invests some funds in this.

[Helen Goodman]

The hon. Gentleman is right. BT is extremely profitable. The industry is, of course, regulated by Ofcom but there must be a question mark about whether it is using its resources as effectively as possible. It is clear that the rural areas are particularly disadvantaged.

[Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)]

The hon. Lady is making a fantastic speech. Like all other hon. Members who have contributed, I think we are all in the same boat. In my rural constituency, rural business parks and centres that are looking to expand and already have connections are finding it incredibly difficult just to connect an extra building. Does the hon. Lady agree that it is completely unacceptable that they have to wait months—sometimes going into years—for a simple extension to their existing line?

[Helen Goodman]

Yes, the hon. Gentleman is absolutely right and, in a way, that is rather similar to the William Smith example I gave. These are not one-off examples. The Countryside Alliance has pointed out that

“8% of premises in the UK (2.4 million) are connected to lines that are unable to receive broadband speeds above the proposed Universal Service Obligation of 10Mbit/s. Many of these are in rural areas, where about 48% of premises…are unable to receive speeds above 10Mbit/s.”

That is 1.5 million people in the countryside who are unable to receive those speeds.

We all know that the Minister is a very nice man. [Hon. Members: “Hear, hear.”] He has helped many of us—faute de mieux—with our particular cases. I agree with what he said yesterday. I think he is right, but I am not wholly sympathetic because he is being forced to intervene as if he were a Minister in a Soviet, centrally-planned economy, on a case-by-case basis. That is because the policy framework set up by this Government, in which I think he had some hand, has not worked properly, and that goes back to the point made by the hon. Member for Angus (Mike Weir).

The Government made the areas for the contracts for the roll-out of broadband too small to be economic for any operators apart from BT to bid for them. That is why BT won all the contracts, maintains a monopoly, faces no competition, feels under no pressure and serves our constituents so badly. Everybody will probably welcome Ofcom’s proposals for changes to the governance of Openreach, particularly better standards of service to small businesses, and compensation when those standards are not met.

As well as keeping the pressure up on BT, which I want the Minister to do, we need him to talk to his colleagues in other Departments because the Government’s policy of digital by default is not serving rural communities very well. I had yet another complacent response from Treasury Ministers, saying that 98% of small and medium-sized enterprises submit their tax online. I bet that is only because they are not doing it at home because they go along to an accountant in a small town some way away and pay that person to do the submission online.

We have the same problem with the Rural Payments Agency. Once again, the Public Accounts Committee has had to look into the problem. I see that the Chair of the Select Committee on Environment, Food and Rural Affairs is in Westminster Hall this afternoon. He knows that the treatment of farmers by the Rural Payments Agency—expecting them to monitor their cattle movements and supply all the information online—is hopeless. I ask the Minister to go back to his colleagues to get some change of attitude from them.

[Jo Churchill]

I have been calling broadband access our fourth utility since I joined this place so I was interested last week when my right hon. Friend the Minister for Small Business, Industry and Enterprise also called it the fourth utility. As the hon. Member for Bishop Auckland (Helen Goodman) has said, it is interesting that although one Department is pushing for 100% coverage and a fourth utility, perhaps the joined-up thinking across Departments is not there.

[Helen Goodman]

The hon. Lady has put it beautifully.

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

On behalf of the Chair of the Environment, Food and Rural Affairs Committee and as a member of that Committee, which interviewed the chief executive of the Rural Payments Agency yesterday, I hasten to add that although broadband is difficult for our farmers, it is not the only reason why the Rural Payments Agency is not delivering at the moment. I just want that on the record because I would hate the chief executive purely to blame broadband for the delay.

[Helen Goodman]

The hon. Gentleman is absolutely right. I have 1,000 sheep farmers in my constituency and I know that to be true.

I want proper service for the small businesses in my constituency, particularly at the Teesdale end, which has been ill-served up to now. There are general lessons to be learned for BT, for Openreach and for the Government, and I hope we can make some progress on those general lessons.

--- Later in debate ---

[Neil Parish]

That really emphasises my point that competition is necessary.

I am also very disappointed that Openreach has not been detached from BT. BT has so much by having Openreach—it has so much of the cables, the infrastructure, the fibre optics and really everything across the country for delivery of broadband. So, BT holds all the aces. Is it truly giving other companies the opportunity to gain access to its infrastructure? I suspect not. It also has all sorts of fantastic lawyers and wonderful people around the place who make it very difficult for other companies to intervene, and that is the problem.

As the Minister knows, the second contract for delivering broadband across Devon and Somerset was not awarded because it was not value for money. Therefore, we are now going out again with a further contract. I hope there is a real competition for that. Although it is perhaps easier in some respects to deliver broadband across the whole of Devon and Somerset in one contract, if the contract is so big BT will probably be the only company to bid for it again. However, if we have smaller contracts, other companies can come in and deliver broadband across places such as the Blackdown hills and in villages such as Upottery and Ruishton—all those villages across the Blackdown hills and on to Exmoor, which are difficult to reach. So I have still got many more people to be connected.

The point has been made by my hon. Friend the Member for Brecon and Radnorshire and others that broadband is the fourth utility and we really need it for all our rural businesses, including our farms. All of us in Westminster Hall today who represent constituencies with areas of rurality are amazed—are we not?—when we go around our constituencies and discover the types of businesses that are there. It is not just the farms. There might be businesses manufacturing or designing wings for Airbus, or other such things, where they would be least expected. However, the only way that those businesses can prosper is by ensuring that broadband is there and connected. Broadband is key.

I now turn to what happened recently in an area of my constituency at Dunkeswell and Luppitt—

[Helen Goodman]

Before the hon. Gentleman gives a specific example, could he enlighten us on the so-called “childish turf war” between the Government Digital Service, the Rural Payments Agency and the Department for Environment, Food and Rural Affairs, which meant the payments to farmers were down from 90% to under 40% at the end of December 2015? He might be able to tell us a little about that.

[Neil Parish]

I hope I will not be ruled out of order, because that is going a little off the topic of the debate. However, I can enlighten the hon. Lady. We had the head of the RPA in Parliament yesterday, and obviously what happened—to put it in layman’s terms—is that DEFRA created a system that was not entirely compatible with what the RPA was doing. We tried to drill down yesterday on the issue: at what stage did the head of the RPA realise that, and at what stage did he intervene? Was there a breakdown in communication? Was there a clash of personalities? Yes, there was; there is no doubt about that. The trouble is that whatever Department or whatever system was to blame it is the farmers who pay the price, because they are still waiting for that payment.

In fairness to the RPA, it has speeded up its operation. However, what we are mindful of is that we do not want this situation to carry on as things did in 2004, when the payments were bad for 2005, 2006 and 2007, and it took 10 years and more to put matters right. We want to make sure that within one year the situation is absolutely right. There are people farming on the commons, and other farmers. Why should they have to wait so long for their payment when the problems are down to others?

As I say, we had the head of the RPA in yesterday and he was trying to say, “Well, it’s this Department, or that Department or the other Department.” However, as the hon. Member for Bishop Auckland says, if the farmers are not getting their payment, they are not interested in which Government Department is failing. We must deliver.