Superfast Broadband Delivery: Somerset

Ian Liddell-Grainger Excerpts

Tuesday 13th November 2018 Westminster Hall

[James Heappey]

My hon. Friend is ensuring that the Minister gets the message loud and clear, because that is one of the key questions for today’s debate. The remedial plan presented by Gigaclear already runs beyond the date that the Government have said that all available money for the delivery of phase 2 will be spent. Clearly, if Gigaclear’s remedial plan is accepted, the Government will need to be willing to extend the period over which the money is spent from 2020 to 2022. I hope that the Minister will be able to give us some good news on that.

Given that only 40% to 60% of properties that were due to be connected by 2020 will now be connected by that time, we might also look at whether we should offer a voucher scheme to people who now find themselves in the 50% to 60% that will not be connected, so that they can take some sort of interim measure themselves. We did exactly that for those who were going to be in phase 2 or in the final 5% when the phase 1 delivery programme was rolled out; we offered voucher schemes of £500, so that people could take interim measures within their homes.

The second issue is the ongoing case for state aid, which we have spoken about a number of times. When the delay in the Gigaclear delivery was first announced, I was straight on local TV and radio, and speaking to my local newspapers, because I was very, very cross. My expectation was that my mailbag was about to explode and that I was going to be contacted by hundreds, if not thousands, of very angry people who were concerned that the broadband they had been waiting for for years and they thought was just weeks away was actually going to be years away again.

The reality is that I have had hardly anything, and that makes me wonder why. If I go back to my former employment, there is a very important part of the military planning process. When assessing the orders to be given in order to achieve a mission, we keep asking ourselves whether the situation has changed, in order to make sure that we are not problem-solving against a situation that no longer exists. I have come to realise in the last few weeks that the reason why so many of my constituents have not been in touch with me about the Gigaclear delay is that they have sorted themselves out.

They have gone to Openreach and put in place a community fibre partnership, or they have gone to companies such as TrueSpeed or Voneus that have cell-to-build business models. Those companies go out into communities and engage, they get 30% sign-up and then draw down the money from Aviva, which underwrites the delivery of the infrastructure, and they build the fibre into those communities. When the Gigaclear contract was delayed, there was complete silence from all those communities that were flashing red on the whiteboard in my office as those which most urgently needed broadband. The reason is that the market is already providing, and has already provided, for a number of them.

[Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)]

My hon. Friend is making a strong point and is representing his constituents extremely well. I am old enough to remember, because I was here before this started with CDS, that we were originally promised a level, as he quite rightly said, and it has not appeared. BT, slightly duplicitously, is getting in behind and setting up in villages that we were not expecting to come on. They were going to come on with Airband or Gigaclear, which is the point that my hon. Friend has made, and have actually come on behind. We should celebrate the fact that BT is still opening up in some areas—I hope the Minister takes that point—as it is a good fibre system. I accept that Gigaclear has problems and I understand that, but we must not just put BT to one side, because its infrastructure is what they all use.

[James Heappey]

My hon. Friend and neighbour is absolutely right: the market is delivering. Whatever the business model, and whether that is cell first and build second, I now have hundreds, perhaps even thousands, of TrueSpeed, Voneus and Openreach fibre-to-the-premise customers in my constituency—a situation that has been delivered through an open-market solution, within the area that the open market review had identified as requiring state aid.

A key question for the Government today is whether state aid is even legal in areas where the market has already provided. I am not sure that we should be using taxpayers’ money to subsidise the delivery of a competitor into an area where a commercial company has already set up. TrueSpeed is underwritten by Prudential. How absurd that we would be spending taxpayers’ money to subsidise the delivery of an infrastructure underwritten by one pension scheme while another, Aviva, has underwritten the money on a commercial basis without the need for taxpayers’ intervention. As the market has changed, we need to be very clear about whether we need to go back and look at the open market review again to understand where the market is now providing.

It is certainly the case that my constituency and those of my hon. Friends the Member for Weston-super-Mare (John Penrose) and for North East Somerset (Mr Rees-Mogg), of my right hon. Friend the Member for North Somerset (Dr Fox) and my hon. Friends the Members for Somerton and Frome (David Warburton) and for Bridgwater and West Somerset (Mr Liddell-Grainger) will benefit more quickly because TrueSpeed is working away from the transatlantic fibre link that lands at Weston-super-Mare. TrueSpeed has accessed that link to fibre and is fanning out from there. The delay in the Gigaclear contract is an opportunity for us to look again at whether the market has changed, and whether Gigaclear’s priorities need to be tweaked.

[James Heappey]

My hon. Friend is an excellent pacemaker—she runs slightly in front of me. I am coming to that point, but it is very helpful for the Minister to hear such things twice.

There is another part to the point about the change in the market and whether state aid is relevant. There is also the frustration that communities feel when they have got themselves motivated to bring in an alternative provider, such as TrueSpeed, Voneus or Openreach, and when they have fibre to the premise already, and yet their roads are now being closed and dug up with their tax money to deliver something that causes huge inconvenience to them while it is being put in, and which they have already got. A number of communities have written to me not to criticise the delay in the Gigaclear programme but to ask, “Why on earth are you still digging up our roads and blocking off our village when we have already got ourselves sorted and we have got it? Can we not have our tax money spent on improvements to our junction or a new road or something else?”

I know that is not how it works, but it certainly underlines the case for reassessing the priorities that Gigaclear has been set by Connecting Devon and Somerset, so that Gigaclear focuses on areas where we know the market will not be able to provide over the next 24 months, rather than focusing on areas, as is the case at the moment with its early areas, that are in direct competition, particularly with TrueSpeed. I am not sure that that is the most effective spending of Government money.

As my hon. Friend the Member for Taunton Deane (Rebecca Pow) pointed out, we have been given extra money by the Government to look at further broadband improvement in rural areas. There is a real opportunity to take the money that the Government have announced—I know that the Minister will be enthusiastic to remind us of the vast sums of money that the Government have made available to Devon and Somerset—and to add it to the £5 million-plus already available in gainshare from Openreach from phase 1 of the CDS roll-out, and the substantial additional money that is still to come as part of that gainshare, and look at where that combination of funds could be used as an intervention to deliver the final 5%.

We know now, by definition, what the final 5% is, because phase 2 delivers everything but the final 5%, so surely we can deliver that final 5% concurrently rather than waiting until we have connected the 95th percentile to get on with connecting the 96th through 100th percentiles. It seems to me that the money is already available. The gainshare is coming onstream very quickly. We have a real opportunity to get the whole thing cracked in a few years by taking advantage of what the market is now providing.

In some ways, we have an embarrassment of riches, because in some parts of Somerset we now have two entirely independent fibre-to-the-premise networks being dug in on very remote rural lanes, which is a slightly absurd situation. In small communities such as Badgworth, Biddisham and Lympsham, people will soon end up being able to choose which fibre-to-the-premise provider they want to use—not the internet service provider, but actually who is going to put the fibre to their front door. I am not sure that that is actually what taxpayers’ money should be being used for.

[Mr Liddell-Grainger]

I remind my hon. Friend that places such as Exmoor and the more remote parts of Somerset do not have that choice. Gigaclear’s cheapest package, for instance, is £35, with an activation fee of £120. Sometimes we have no choice. I know my hon. Friend is fully aware of that, because he covers the Mendips, but it is worth reiterating to the Minister that there is a cost differential here that people have to pay.