Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill

Huw Merriman Excerpts

2nd reading: House of Commons
Monday 10th July 2017 Commons Chamber

[Bim Afolami]

Of course, Mr Deputy Speaker. Thank you very much for that kind reminder.

This Bill matters. As my right hon. Friend the Member for Wantage (Mr Vaizey), the former Minister, mentioned, it is not necessarily the most thrilling Bill. It is relatively short, with six clauses; as a former lawyer, I can appreciate that brevity is often harder than writing something very long, so I admire the draftsmen’s ability in putting together something so succinct. The Bill should have strong support not just from the Government but from all parties, as has already been suggested by Opposition speakers.

My constituents in Hitchin and Harpenden, only 30 to 40 miles from central London, face patchy broadband coverage in many areas. I appreciate the point made by my right hon. Friend the Member for Wantage—it is often harder to get broadband in spread out villages and rural areas than in tower blocks and urban areas. It is physically harder; I appreciate that, but the village of Kimpton, slap-bang in the middle of my constituency, has pretty terrible broadband.

Let me give the House some statistics to back my point up. In Kimpton, no residence or business receives superfast broadband. We are in the bottom 7% in the country for average download speed and in the bottom 0.5% for connections of more than 30 megabits per second. There is still a job to do and, with due deference as a new Member of the House, I say to the Government that we still have a job to do connecting up rural areas in our country. We should not forget that.

[Huw Merriman (Bexhill and Battle) (Con)]

As my hon. Friend knows, my 92-year-old aunt lives in Kimpton, and he is speaking eloquently on her behalf. Does he agree that it is most important, particularly in rural areas, that older people living in the community should have access that keeps them engaged with their friends and family?

[Bim Afolami]

I agree. It is important for people to be connected to friends and family; the converse situation is one of loneliness in many respects. We live in a society that is increasingly atomised, so it is helpful to ensure that older members of society have full digital connectivity. That is another reason why the Bill is important.

At a recent meeting of a local business club in my constituency, a business owner whose business is situated in a rural area just north of Harpenden told me that it takes three days to back up her server, such is the slow download speed. Business rates relief for the installation of full-fibre broadband infrastructure will provide a huge incentive for operators to invest in the broadband network with the latest technology—a point made admirably by several of my hon. Friends, not least my hon. Friend the Member for North East Hampshire (Mr Jayawardena).

It is important to consider why, in the broader sense, it is important to have world-leading digital infrastructure. Why are we all here? I shall offer a few observations. We are effectively going through a new industrial revolution. Technology, powered largely by the internet, is driving a global future. This country needs to be at the heart of that, and rolling out full-fibre broadband is central to the challenge. The Bill will make it easier, enabling small businesses in rural areas such as mine to access the superfast broadband they need. As the Minister said, the Bill will break down barriers to business, which everybody wants—at least on our side of the House.

The Bill shows that the Government can, in limited ways and when the time is right, provide innovative solutions to help to solve some of the biggest problems choking up areas of the economy. We need strongly to support the free market and free enterprise with little Government intervention, unless necessary. The Bill and the Government’s actions are bold. We need to be bold enough to use the tools of government to allow the private sector to work more efficiently and incentivise it to provide better results for our constituents, who send us to this place on their behalf, after all.

Business rates relief is welcome, as many hon. Members have said, but I urge the Government to ensure that we do not lose sight of our manifesto commitment to a full review of business rates, and to produce a system that is more fit for purpose. In certain ways, the current system has shown itself to be capricious, cumbersome and, in some senses, frankly unfair.

When discussing a Bill on digital infrastructure, it is appropriate to point out the fundamental asymmetry and unfairness for bricks-and-mortar businesses paying the levy in comparison to the digital technology-based businesses with which they often compete on a day-to-day basis. We all know businesses on our high streets that have this problem. It is important for the House to recognise that many international taxation treaties inhibit the United Kingdom from taking unilateral action on the taxation of global technology businesses because their nature is, indeed, global rather than domestic. Everybody can appreciate the difficulties with that. I urge the Government to look for more international agreement on the issue so that we can start to address the balance of the business rates paid by physical, bricks-and-mortar businesses compared with those paid by their digital cousins and friends.

In staying true to the detail and narrow nature of the Bill, it is incumbent on me briefly to talk about 5G mobile broadband, following on from my hon. Friend the Member for North East Hampshire. Now, this may seem like a dull topic, but I assure Members that it is not—it can be very dull. The reason is that 5G, like 4G or 3G, is something we take for granted; it is just there. We do not think enough about where it comes from or the work that goes into it. However, 5G will be the enabler for so much technological development in this country.

O2 estimated in a report that 5G infrastructure will be just as pivotal as broadband to the wider economy over the next five to 10 years and will greatly boost British productivity, which all Members of this House should wish to see. The benefits are manifold, from telecare health apps, to smarter cities, to more seamless public services. Those are some of the many benefits that 5G mobile broadband can help to bring about, and I urge Members to support the Bill, which provides some of the digital plumbing that will enable us to bring tangible benefits to our constituents.

To take up a point raised by my hon. Friend the Member for North East Hampshire about 3G and 4G, it is important to note that some areas, especially rural areas, are still not on 3G or 4G—

--- Later in debate ---

[Huw Merriman (Bexhill and Battle) (Con)]

It is a pleasure to be the last Back Bencher to be called in the debate, which has been incredibly interesting, although I think that, at times, the connection between the clauses in the Bill and the contents of speeches was well and truly lost. There was a suggestion that constituents of ours would have been able to watch the debate online. If that is the case, given certain parts of it, I find myself feeling sympathy for the 93% of the public who have such access. My hon. Friend the Member for North East Hampshire (Mr Jayawardena), who is no longer present, said that innovation would permit constituents to watch the entirety of his speech online. Conservative Members speculated on whether that same innovation would allow the battery in his phone to last quite as long. Perhaps there is still some way to go.

None the less, this has been an interesting debate, and I am delighted to be able to use the last few minutes to further it. Despite great work by my local authority, East Sussex County Council, and indeed by the Government, too many of my constituents do not have a connection to fast broadband. My constituents’ age profile is high, and in order to balance our local economy we must encourage more working-age people to come to live and work in East Sussex. It is not too far from London, but, from a commuting perspective, particularly given our travails with Southern rail, it is too far to be attractive to many such younger working-age people. My constituency is fortunate in that 75% of it is designated as an area of outstanding beauty, so in that sense it draws people to want to come there to set up their own businesses, but they will not do so without the connectivity of superfast broadband.

[Richard Graham (Gloucester) (Con)]

My hon. Friend describes a constituency that is different from mine, but in many ways we have similar issues. In Gloucester, we struggle with the black spots that often arise in urban environments. Most of the city is well-covered but there are certain black spots where people cannot access broadband that enables them to work from home. That is similar to the problem that he describes.

[Huw Merriman]

My hon. Friend is right: urban areas, as well as rural ones, will not continue to regenerate without this problem being fixed.

I welcome the introduction of the Bill and the granting of business rate relief as a result for a five-year period on fibre and 5G installations. That should act as the further incentive that we in my constituency need to provide a fix.

I also welcome the previous Bill’s introduction of the new universal service obligation, which, again, should give the last 7% faster broadband. As has been said, this type of connectivity infrastructure is, in the modern age, akin for our constituents to the delivery of a new road or railway in the past. It is vital for the entire economy that we do not leave these constituents behind.

As well as recognising the investment from the Government via this Bill, and previous funding initiatives, I commend Conservative-run East Sussex County Council and Labour-run Brighton and Hove Borough Council for working together to help businesses and properties across East Sussex to access faster broadband. Through their e-Sussex project, my county has allocated £34 million in funding for areas that are too expensive for the market to upgrade itself. Every exchange in East Sussex will be included, and the current project will cover an area of 660 square miles and over 66,500 premises. It will install over 400 new fibre telecoms cabinets and other structures and will lay over 1,000 km of fibre—the distance between Brighton and Berlin.

The first e-Sussex contract is achieving excellent results in bringing better, more reliable fibre broadband to many areas that would not otherwise benefit from upgraded services. However, there remain properties that are hard to reach—for example, where a property is too far from the upgraded cabinet to benefit from any speed uplift. “Hard to reach” generally means too expensive for the public purse to fund. East Sussex has therefore signed a second contract with BT for further investment, so that an additional 5,000 homes and businesses in East Sussex will be able to access high-speed fibre broadband.

There has been much talk today of political parties coming together over a common interest. Perhaps that local example is a positive illustration of the power of working together.

[Richard Graham]

Have my hon. Friend’s council and the council in Brighton introduced in their planning requirements an absolute requirement on all developers to provide superfast broadband? This is an area where many of our councils around the country could do more, and I would be interested to learn of his experience.

[Huw Merriman]

I do not believe those councils have, but my hon. Friend touches on another issue. I am referring to East Sussex County Council and Brighton and Hove Borough Council, but outside of Brighton but within East Sussex it is the district councils that would have the planning condition powers to which he refers. Therefore, I doubt that those councils have done so, but this is perhaps a good example. of where districts can work better together with their county cousins.

This might seem like great news for East Sussex, but I am afraid we are starting from a very low base in terms of where we are operating from. The recent report by the consumer organisation Which? found that Rother District Council’s geographical area, which covers the bulk of the 200 square miles of my constituency, is in the bottom 10 of all districts and boroughs in the entire British Isles for average broadband speeds. Rother joins the highlands, the Shetlands and the Orkney Isles in the bottom 10 performing areas. In contrast, the residents of Tamworth, which tops the list for speeds with an average of 30 megabits per second, are much more fortunate. The average speed for Rother is less than 10 megabits per second.

Bearing in mind that 10 megabits per second is deemed to be the minimum acceptable standard by Ofcom, I very much welcome the Minister’s commitment that 100% of my constituents will receive 10 megabits per second by 2020. The Which? report suggests that the increased performance for the Rother District Council area will be vital if the Government are to meet their 100% target. May I therefore put in a blatant invitation to the Minister to meet me to discuss what help could be offered to my constituents in Rother, in addition to the provisions in the Bill and the universal service obligation, to enable me to assist the Government in meeting their target?

In conclusion, I welcome the Bill as part of a package of proactive measures from this Government to deliver faster broadband. I should also mention—notwithstanding the fact that I just said, “in conclusion”—that I welcome the further reforms to the business rate mechanism. I do not wish to wander too far from the topic, but I can think of many examples of business rates having an impact on businesses in which services are being offered. We should not forget, for example, that Members of Parliament are subject to business rates, as I found out to my personal cost when I exceeded my IPSA budget for my staff office. I therefore absolutely welcome the point made by my hon. Friend the Member for North West Hampshire (Kit Malthouse) that business rates should be linked to turnover, rather than to premises. That would certainly help my constituency. As a further meander, Mr Speaker—

[Mr Speaker]

I am much enjoying the hon. Gentleman’s dilation. There is no prohibition on him dilating a little further if he is minded to do so. He clearly has an expectant audience.

[Huw Merriman]

You are very kind, Mr Speaker. That is helpful, although I think part of what you said was perhaps inaccurate.

The other point I wanted to mention was corporation tax. I hope Opposition Members will agree that my speech has been quite collaborative so far, but I take issue with some of them on this issue. Conservative Members have pointed out that corporation tax has been reduced, yet the overall yield—the amount that can be put into public services—has increased. For whatever reason, the Opposition want to increase corporation taxes, which would reduce the amount of money available for public services. That is of course illogical.

[Mr Rees-Mogg]

Will my hon. Friend give way?

[Huw Merriman]

I will of course give way to a man who is anything but illogical.

[Mr Rees-Mogg]

I am very grateful to my hon. Friend for giving way. Has he not once again powerfully shown the benefits of the Laffer curve, which demonstrates that lower rates lead to more tax revenue?

[Huw Merriman]

I thank my hon. Friend for reminding me of the Laffer curve, a term I have not heard since I was doing A-levels at Aylesbury College, where I was studying economics. He is absolutely right.

That brings me to another point about the Opposition. As well as supporting the Bill, it is important to support its aims, which are to increase business, to increase turnover and to increase the amount of money that we can put into public services. I am reminded of a recent visit to Bexhill business park, where the Government are creating funds for a new road. In return, it is hoped that investment will be generated for new businesses to set up there. It is interesting that many businesses from across Europe are looking to set up their headquarters in that business park. At a time when business confidence is perhaps a little uncertain owing to our position with regard to the European Union, it is absolutely essential to ensure that we have the lowest possible corporation tax base, so that those businesses can have every incentive to invest in this country, not just for the short term but for the long term. I am sure that they will be absolutely delighted that this Government have been returned to deliver just that.

In conclusion to my conclusion, I very much welcome the steps that this Government have taken to incentivise further broadband roll-out. I hope that they will help my constituents in Rother, which is, as I have said, in the bottom 10 districts—[Interruption.] I repeated that in case Scottish National party Members did not hear it the first time. I very much look forward to supporting the Bill as it spends its many days in Committee.