BT Broadband Provision: Local Businesses

Jo Churchill Excerpts

Thursday 10th March 2016 Westminster Hall

[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.

--- Later in debate ---

[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.

--- Later in debate ---

[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.

[Jo Churchill]

Before my hon. Friend is asked to come back to the topic of the debate, may I just draw a comparison? No matter who is to blame—whether it is BT, or any other company or persons—the people who suffer are our businesses, and that is the point that we want to address here today. The Government are doing good work. Suffolk County Council is hitting its targets; indeed, it got an extra payment for doing that. But the key word that my hon. Friend used was “communication”. I had a very robust conversation on Monday with BT’s directors—in fact, it was incredibly robust—and I pointed out that if they cannot communicate with their customers, their businesses and so on, they should not call BT a communications company.

[Neil Parish]

I thank my hon. Friend for that intervention, which brings me back on track. She is right about communication, and I will say a little more about that in a minute.

The point that my hon. Friend also rightly makes is that broadband is absolutely essential for our businesses. If we have a car, a piece of machinery or anything else that is not working, we can swap that car or that piece of machinery for another make that delivers what we want it to deliver. The problem that our constituents have is that there is no other “make” out there that can necessarily deliver broadband. Again, that is why BT needs more competition and why it has to step up to the plate.

Despite all my rhetoric I am not actually anti-BT, but I want BT to deliver. I know that the Minister is working very hard on this issue. I have urged him before to apply his iron fist to make sure that BT delivers, because it is not our money—it is our taxpayers’ money. It does not matter whether it comes from Government or councils; in the end, it comes from our individual taxpayers, who are often the very same people who are not getting connected to broadband. Therefore, they have paid for broadband but they are not getting it, so they have a double whammy.

We have made that point this afternoon and I know that the Minister must probably think, “Oh, yet another debate on broadband.” But once people are connected to broadband we will not have these debates, because people will not be concerned. While these debates continue, naturally he must respect that.

My final point is about some businesses in Dunkeswell and Luppitt, which are the sites of old aerodromes. They could not access broadband for three weeks, because the exchange went down. Exchanges can go down, but I will now explain the compensation that those businesses have been offered. Many businesses in my constituency have been affected by poor internet and broadband speeds; some of them have had no internet at all for a lengthy time, which is unthinkable from day to day. Companies such as Assinder Turnham Ltd, a property and construction consultancy, Lynch Motor Company Ltd, Dolly Diamond, and Flymoore Aircraft Engineering were all without internet for as long as three weeks. I completely understand that a catastrophic fault at a BT exchange can and will happen from time to time, but when it happens, what is done to compensate and help the businesses that are left on their knees?

I will take Flymoore Aircraft Engineering as an example. It is a local business in my constituency that deals with aircraft respraying and engineering. It lost broadband from 25 January for three weeks. Flymoore could not do its VAT returns, and so spoke to Her Majesty’s Revenue and Customs. Flymoore asked BT for evidence to provide to HMRC, but was told that it would cost £10 to get something called a work report. This company was without broadband for three weeks, but it ended up paying BT for the lack of service. It could not pay its staff or order parts or supplies for aircraft, and it did not receive new orders for work and so lost vast amounts of money. Flymoore could not access the European Aviation Safety Authority’s website, which has all the mandatory legal requirements for aircraft safety. Because of that, it could not finish ongoing jobs. It could not access repair information or manuals online. It needed those instructions to physically carry out the maintenance on the aircraft.

At the very least, we would expect substantial compensation for the serious loss of business. Flymoore had a financial buffer to deal with market uncertainty, but virtually all of that has been wiped out, and the business is struggling financially. BT did not initially offer compensation, but Flymoore has since managed to get £25 in compensation and three months’ free internet. What sort of company offers that level of compensation? If there was competition in the marketplace, BT would have to offer proper compensation.

I will not go into all the details of the other businesses affected, but interestingly they have all been offered different amounts of compensation and different lengths of free internet access. There seems to be nothing in place to compensate for the types of losses that the businesses have had. It is not only about delivering broadband in the hardest hit areas, but about ensuring that when the broadband connection is there, it is constant. If it breaks down for a long period, those businesses need adequate compensation. What they have been offered is pathetic.

BT needs to step up to the plate, deliver broadband and compensate people when they do not receive it. My hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) gave us a huge catalogue of issues with a company trying for more than a year to get broadband onsite. We want, and we have, a dynamic economy, but we will only improve it further by having good delivery of broadband across the whole country.

--- Later in debate ---

[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.”

--- Later in debate ---

[Mr Vaizey]

My right hon. Friend is moving me on to the next stage of infrastructure roll-out of broadband, but I agree, whether that is fibre to premises or new technology such as G.fast. I have talked about the need for a gigabit Britain and, as far as I am concerned, we are reaching the end of the superfast broadband roll-out programme and now we need to look ahead. We are not complacent: we need to go for a gigabit Britain.

To make things easier for people to build such networks, we will reform the electronic communications code, so that laying fibre across land becomes cheaper; we will reform planning so that mobile operators—as mentioned by one of my hon. Friends—may build bigger masts to get better signals; and we will work with Ofcom on a digital communications review, which will open up BT’s poles and ducts. I completely agree with those who say that it is important to follow up and to ensure that the practical implementation of the regulations actually happens. The Secretary of State for Business, Innovation and Skills also announced a review of business broadband, which is at the very heart of what colleagues have been talking about.

[Jo Churchill]

Will the Minister bring domestic and business sides together, where possible? As he knows, the Home Builders Federation rolled out its programme in my constituency, in Woolpit. Businesses in that village cannot get adequate supply, which is crazy.

[Mr Vaizey]

I agree with my hon. Friend. That should form part of our business broadband review—that we need to put in place proper procedures to ensure, in particular when business parks are being built or extended, that communications providers know that and therefore use the opportunity to put in place the new technology that everyone wants to see. The infrastructure programme, however, is going well.

I should also mention that, in the digital communications review, Ofcom has proposals for automatic compensation to householders and businesses where communications providers fall down in what they are providing. I am extremely keen to see that implemented as soon as possible. So we will make it easier to build infrastructure and to use Openreach’s network, and we will bring in provisions to ensure that when Openreach and other communications providers fall down with consumers, consumers get compensated.

Question put and agreed to.

Resolved,

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