Digital Economy Bill

Lord Baker of Dorking Excerpts

2nd reading (Hansard): House of Lords
Tuesday 13th December 2016 Lords Chamber

[Lord Baker of Dorking (Con)]

My Lords, I welcome the Bill, which shows the Government’s continuing significant interest in the digital economy. So it should, because it is estimated that about 11.5 million people are employed in one way or another in digital activity in the UK. That number is likely to increase.

We are certainly in the beginning stages of the digital revolution, the fourth industrial revolution. I take the view that this industrial revolution, unlike the others, will destroy more jobs than it creates. This is unhistorical. As a Technology Minister in the Thatcher Government I made endless speeches saying, “Accept technology. It’s going to create more jobs than the Industrial Revolution, the car revolution and the computer revolution”. The digital revolution will not do that, because the agents of this revolution are much more widespread. They are artificial intelligence; big data; driverless cars, lorries and taxis; the internet of things; the growth of vast businesses in a matter of five or 10 years, such as Twitter, Facebook and Uber; virtual reality; cybersecurity; and hacking. These will all have huge effects on jobs.

I am not alone in thinking this. This is not an eccentric, lone view. The Davos meeting in January this year produced a devastating report, forecasting huge job losses right across the world in various countries, in two groups in particular: unskilled workers and middle management. For example, in America there are 3 million truck drivers and 8 million people in stopovers and sandwich bars. If the Mercedes lorries that are now being experimented with are driverless, most of those will go, so a lot of unskilled workers will go. Warehousing has already gone. The only time a human hand is likely to touch an Amazon order is when it knocks on your door and says it has a delivery for you. That will soon disappear because it is experimenting with drones for delivery in certain urban areas. A continuing massive amount of change is going on. There are also two reports from McKinsey that echo this. Only last week the Governor of the Bank of England, Mr Carney, expressed the views of his chief economist, Mr Haldane, who said that automation in Britain is likely to cost 15 million jobs.

If these forecasts are in any way remotely true, what are we going to have to do about it? I believe the answer lies in education. There is a bit of education in this Bill for, I gather, 30, 40 and 50 year-olds who cannot really cope with computing or smartphones. That is excellent and I am not criticising it—it is a bit like shutting the gate, but never mind. The Ministers in the DCMS should talk to the Ministers in the Department for Education, because that is where it has to be. The example I give your Lordships is GCSE computing, which is a very good exam, but this last year only 60,000 people took it. Some 300,000 people took a foreign language. Mastering a computer language is more important than getting the smatterings of a foreign language. I would make GCSE computing a compulsory subject for all students aged 16 and foreign languages optional subjects. The Department for Education would die a death before it did that, but it ought to do it. It would be responding to a need: if we start with GCSE computing, we will eventually produce computer scientists.

It is important to train youngsters at 16 to give them skills which will get them a job in the digital economy. That is what university technical colleges do. Our youngsters at 18 will have worked on projects—that does not happen in an ordinary school. Our youngsters will have worked in teams—that does not happen in an ordinary school. Our youngsters will have dealt with problem-solving—that does not happen in an ordinary school. Our youngsters will have been making and designing things with their hands—that does not happen in an ordinary school. Our youngsters will leave with a range of skills—personal and social skills, practical skills—which enable them to get a job in this digital world. If you leave at 18 with just academic subjects, it will not be enough; you are going to be one of those middle managers who are not there any more following the hollowing-out of middle management. So it has to start there.

I welcome the universal service obligation. It takes me back to the debates that we had in 1981, because I was the Minister who had to privatise BT and we had exactly the same problems with the universal service obligation then relating to traditional telephony. Even so, the Government have targeted only 95% of the UK by the end of next year. That other 5% will almost certainly be in remote rural areas, which can be reached only by mobile telephony. 3G is now almost old-fashioned; 4G is happening. I hope that the Government will invest very much more in masts for 5G, because that is how you are going to reach the lonely cottage at the end of the valley. As the right reverend Prelate said, we are now seeing masts on churches. Selling one’s church for this pornographic display is appalling, but it happens. Our village has a steeple, so it is not much good, but if a village has a tower and you can get a mast on it, you will get very good broadband.

The Government have pledged to provide broadband of 10 megabits to 95% of the country by the end of next year. Ten megabits per second is not very much actually. If you are in a household where two or three people might want to use the internet, it just will not work, and it is hopeless for small businesses. I think that Matthew Hancock said in the House of Commons that it was only a minimum, but it should be increased as soon as possible to at least 15 or 20 megabits. As the Minister mentioned, some areas can get to 24 megabits already.

Ofcom is given considerably greater powers in this Bill, which again takes me back to 1981, when we were privatising BT and had to set up the first regulator, which was called Oftel—I remember appointing the first director to it. The job of Oftel in those days, as to some extent it is of Ofcom today, was to ensure that BT did not cheat, because it owns most of the ducts in the country and must provide open, fair competition. I think that Oftel did that well; I think that Ofcom has done it well, too. There is a proposal that BT Openreach should be broken away from the rest of BT. I do not think that that would be very helpful. BT Openreach is the main instrument of extending broadband around the country. The controls on competition now in place mean that there is fair treatment for the other service providers that want to use those ducts. In our own place in the country, we decided to change one line where the broadband was very bad from BT to EE. It works very well, but it uses the same BT ducts. I am not sure quite why it works so well—my wife tells me that it is a better router—but we have experience of some switching, which is what the Government want to ensure. I hope that the Government will not accept the proposal from Ofcom to sell off BT Openreach from BT. It can work properly, more effectively and better in the nation’s interest by staying as it is.