Oral Answers to Questions

Debate between Kevin Hollinrake and Jesse Norman

Tuesday 13th September 2016 Commons Chamber

[Jesse Norman]

Actually, there is remarkably little sign that confidence in the sector is dropping. There is a recognition that those changes had to be made and the sector has responded remarkably resiliently. We must not forget that it has also been spreading expertise in solar internationally, which is another reason for thinking this is a real long-term success story.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I welcome the new ministerial team to their new roles. Kingspan, a significant employer in my constituency, has contacted me regarding concerns about the revaluation of business rates for cellphone rooftop solar. The result is a sixfold to eightfold increase in rates. Will my hon. Friend agree to meet me and representatives from the company to see how these effects can be mitigated?

Fourth Industrial Revolution

Debate between Kevin Hollinrake and Jesse Norman

Thursday 8th September 2016 Commons Chamber

[Kevin Hollinrake (Thirsk and Malton) (Con)]

It is always a pleasure to speak with you in the Chair, Madam Deputy Speaker.

I congratulate my hon. Friend the Member for Havant (Mr Mak) on securing this very important debate and on his motion, which notes the importance of small and medium-sized businesses, the huge contribution they make and their expertise. The motion also calls on the Government to

“continue introducing and supporting policies that keep the UK at the forefront of this revolution”.

I wish to add to that, as I think we will need policies that support small businesses and let them take advantage of these opportunities in the future.

I welcome the opportunities that this industrial revolution will bring, but I have niggling concerns. I will always be a champion in this Chamber for small business, having set up my own business in 1992 and then several technology businesses later on, with varying degrees of success. Business is a huge opportunity for this nation and for individuals, and it can transform the lives of people right across this land, whatever their background. There is also an opportunity for the consumer here, of course, as this technology revolution in particular is transforming the way in which consumers shop and travel, and how they can socialise. We need to look at how some of these channels will be dominated by huge businesses and at the potential opportunities—or even the lack of opportunities, which I am most concerned about—within their supply chains for small business.

Let me touch briefly on the pipes that we need. My hon. Friend the Member for Wells (James Heappey) talked about ensuring that the country has the right infrastructure, and this is about mobile phone communication—not just 4G but 5G—and our broadband. We do not want a sticking-plaster approach, because we need to get fibre not just to cabinets, but right through to premises. Only 2% of premises in the UK have a fibre-to-the-premises connection, which is the futureproof solution that we need. In Spain, the figure is 60%. I have welcomed the Government’s £1.7 billion investment in this area in the past, particularly for rural areas, as it has made life much easier for many of my constituents and businesses. Nevertheless, I fear that we will hit the same bottlenecks in five and 10 years’ time unless we step up our investment.

[Jesse Norman]

Did my hon. Friend note the brilliant report on broadband that the Culture, Media and Sport Committee published in July, which highlighted the underinvestment by BT in the national broadband network that independent experts estimate to be in the region of hundreds of millions of pounds a year? That is directly attributable to the way in which BT’s investment policy is carried out, and it is to the detriment of shareholders.

[Kevin Hollinrake]

My hon. Friend hits on one of my favourite topics: the culture of corporate obfuscation that we get from BT and its willingness to underinvest to maximise profitability. We absolutely need to get BT to up its game. I agree with Ofcom, which says that one solution is to open up the ducts and poles to other operators. Perhaps in future, when there are bidding rounds for Government investment, local authorities or the delivery authorities should themselves be held responsible for ensuring that third-party operators—smaller operators—get access to those ducts and poles in the local areas for which money has been committed.

The Government are supporting small businesses and innovations in many ways. As the Minister mentioned, there has been a 38% increase in investment in Innovate UK since 2010. Research and development tax credits have a hugely beneficial effect on companies that want to invest in new technologies. The enterprise investment scheme has unlocked investor capital for new start-up businesses and made such businesses possible on the back of these tax concessions. I support the retention and perhaps expansion of the concessions to make sure that we get new businesses to take advantage of these opportunities.

The failure rate for high-tech businesses is very high, but investors will countenance that because the rewards are also very high. Investors know that it is almost a winner-takes-all bet. They know that if they get it right, they can land themselves with an Amazon, a Google, an Uber, an Apple, or even a Rightmove or a Zoopla. In many sectors, there is either no competition or competition from just one other body, which puts those businesses in a hugely advantageous position.

In some areas of technology, business inevitably wins, and the other thing that will inevitably win is the machine. I spent my summer holidays reading a very interesting book by Matt Richtel called “A Deadly Wandering”, which talks about the ability of machines to multi-task. Richtel talks about the cocktail party effect. He describes a person in a conversation at a cocktail party. He says that it is not possible for them to listen to another conversation if they are truly engaged in their own conversation, as they can only do one thing at a time. Apparently, they can recognise their name being mentioned, but that is about it. Computers, on the other hand, can do millions of things at the same time, and they can do them better. A new computer called AlphaGo was built to try to beat the world champion of the game Go. That is not just a game of logic, but a game of intuition, yet the computer beat the world champion Lee Sedol five times in a row. The computer hones its own skills. So machines will win and big business will win.

The biggest worry I have about some of the businesses that will win in the future is their ability to dominate the entire supply chain. Uber is a good example. When it first came along, we saw it as just something that connected people who wanted a taxi with people who were taxi drivers. Uber has been clear that in the future it wants to be the taxi driver as well. In fact, it does not want any taxi drivers; it will have autonomous vehicles, and will no doubt link up with huge car manufacturers. Toyota, Nissan and other companies are looking at this. Uber will be end to end, taking away small business opportunities from taxi drivers, delivery drivers and HGV drivers.