Broadband (East Yorkshire and North Lincolnshire)

Lord Vaizey of Didcot Excerpts

Monday 10th September 2012 Commons Chamber

[Andrew Percy]

My hon. Friend is absolutely right. One of the communities on our boundary, South Ferriby, has sourced a wireless solution for the village from one of the providers I mentioned earlier. It has decided to get on and do it itself.

I want to turn to the North Lincolnshire delivery plan. It is good news that in our area BT has commercially fibred the Brigg exchange, while it has recently been announced that the Scunthorpe exchange, which my hon. Friend the Member for Scunthorpe and I share, will be upgraded. Across most of north Lincolnshire, however, the situation will remain unchanged. The broadband delivery plan bid is for £12 million, of which £2.62 million is being provided by Broadband Delivery UK and the rest match funded by the European regional development fund—which, of course, is just British taxpayers’ money by another means and with a big chunk taken out—and by the council and the private sector.

I want to make the case to the Minister on why we must be moved up the list of priorities. North Lincolnshire is a particularly high priority owing to the accessibility and relative compactness of northern Lincolnshire as a rural area. It is also very flat in large parts, which makes roll-out much simpler, and has good ground conditions, making cable laying inexpensive. I am more than happy for him to visit north Lincolnshire, if he wants, to see how easy it is to dig up our land.

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

With a shovel.

[Andrew Percy]

Yes, he can bring a shovel.

We have high levels of economic growth based on renewables and offshore wind. We have big investment coming that will be a real motivator to delivery as we move forward, and we have two giant enterprise zones, one on the south bank at Grimsby and the Able marine energy park, which will bring with it thousands of jobs. The delivery plan has been highly rated. Indeed, when people came up from the Cabinet Office in the past couple of weeks to look at how North Lincolnshire’s delivery plan was written, they were said to be very impressed. It is a high priority for BT and is sixth on Fujitsu’s priority list. Sadly, however, we are 23rd on the BDUK procurement list and have been given a slot in December. With the issues around state aid, however, there are concerns that there could be some slippage. Given the huge renewables agenda in our area and the high priority given by BT and Fujitsu, we deserve to be reconsidered. All areas will make that claim, of course, but there are specific reasons north Lincolnshire should be moved up the procurement list. I will be more than happy to provide the Minister with even more reasons, should he want them.

[Mr Vaizey]

Has my hon. Friend finished?

[Andrew Percy]

Not quite. I am going to talk about east Yorkshire now; it is a disadvantage of representing two counties. [Interruption.] With almost perfect timing, my hon. Friend the Member for Beverley and Holderness joins the debate just as I move on to east riding.

We have a specific issue in a large part of east Yorkshire. Kingston Communications, the telephone service provider in Hull and the surrounding area up to Beverley, is a separate company that was developed by the local council. There is no BT provision in that area. KC’s internet service, Karoo, has a mixed reputation, but it is delivering broadband speeds of 100 megabits in parts of Hull. KC is, however, excluded from the national procurement framework. Will the Minister take into account the unique nature of the area, given that it has that historical network which specifically excludes BT? KC cables are installed not only in the area from Hull to Beverley but across the whole of east Yorkshire, and they could be tapped into as part of the roll-out.

The delivery of the East Riding’s broadband plan will be particularly difficult, because it is the most rural unitary authority in England. It has particular geographical problems and a lot of small, remote communities.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

It is a great pleasure to respond to the debate, which began rather earlier than I had expected. I am glad that the eye-level cameras have not yet been installed in the Chamber, because if they had been, they would have captured graphic high-definition images of my sweating face as I returned post-haste to the Chamber to respond to this important debate.

It is good to be back in the Chamber of the House of Commons, but thanks to modern technology—partly brought about by the advent of modern communications —one is able to keep in touch with colleagues even when one is not in the Chamber. I must say that during the reshuffle madness that overtook us earlier in the week, when some of us were hoping to hold on to our jobs, I was grateful to Twitter for giving me an insight into the mental state of some of my colleagues.

I congratulate my hon. Friend the Member for Brigg and Goole (Andrew Percy) on initiating this important debate. Let me begin by saying that I think he is a great loss to the Front Bench. I know that it is only a matter of time before the Prime Minister sees sense and appoints him to the Front Bench, not least because I have read some of his tweets, which give an indication of the policies that will be introduced when he does join us. Lancashire is to be declared a rogue state; a new Department will be set up, the Department for Brigg and Goole—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I am sure that the Minister does not wish to test the Chair by referring to Lancashire at this stage. I am sure that he is desperate to get stuck into Yorkshire and Lincolnshire—and only the minor parts of both counties.

[Mr Vaizey]

Knowing your personal interest in the future of Lancashire, Mr Deputy Speaker, I thought it important for you to understand the policies that may be presented to the House in future, including, of course, the final policy—the change of name from Snickers to Marathon. But you are quite right: it is important for us to return to the subject of the debate.

Let me also congratulate my hon. Friend the Member for Cleethorpes (Martin Vickers) on contributing so ably to the debate. He is a soothsayer. I read a tweet from him 131 days ago, in which he said “Louise Mensch is a great talent of our party. One day she will be leader.” I read a later tweet regretting her departure from the House of Commons.

[Martin Vickers]

I should point out to the Minister that I do not tweet, and that the account set up in my name is a spoof.

--- Later in debate ---

[Mr Deputy Speaker]

Order. I do not think that we should have any more mention of tweets. I think that we should return to the subject of broadband, and not worry about Members who have left the House and given notice that they no longer wish to be part of it. I call the Minister, and I hope that he will return to the subject in hand.

[Mr Vaizey]

It is very important for us to debate the provision of broadband services in the constituency of Brigg and Goole. My hon. Friend mentioned six issues on which he would like to hear from me about progress. The first was wireless provision. The second was whether the bid from his part of the world could be moved up the ladder. The third was the role of Kingston Communications in broadband delivery. The fourth was the question of what steps might be taken if a funding gap arises. The fifth was a request for a guarantee that broadband roll-out will be finished by 2015. The sixth was an update on 4G spectrum. In responding to those six points, I have an opportunity to update my hon. Friend and the House on the progress that has been made in achieving the Government’s objective of stimulating more private sector investment in locations where the commercial investment case is weak.

Let me make it clear that we do not underestimate the importance of superfast broadband in stimulating economic growth and in providing a core service for many businesses and consumers throughout the country. That is why one of the first steps we took on coming to office was to set aside some £530 million to support public intervention. It is important to stress the fact that that money has been provided to support the roll-out of superfast broadband where the market will not deliver.

The market will deliver to about two thirds of the country, mainly the urban areas. That will be done by BT and Virgin Media in competition with each other, and I am delighted to be able to say that both of those companies are investing many hundreds of millions of pounds in rolling out superfast broadband. Virgin Media has doubled the speeds it offers to consumers to about 100 megabits and BT has advanced the roll-out of its commercial broadband programme by a year.

Everybody knows, however, that some public support is needed to get broadband to some areas, particularly rural areas where the cost of laying fibre exceeds the potential market return. The £530 million sum I mentioned has been supplemented by a £150 million urban broadband fund, as well as a further £150 million for mobile infrastructure projects, and because of the way we have set out the programme, there will be additional money from local councils. There will be between £1 billion and £1.5 billion of public money going into broadband roll-out. That is a very significant amount of public expenditure in infrastructure.

The newspapers are full of talk about stimulation for growth and investment in “shovel-ready projects”. This is a shovel-ready project that will be going ahead in the next weeks and months and over the next two years. It will not only provide jobs, as many people will be employed to lay this fibre, but stimulate the economy by providing a broadband infrastructure.

I would like to acknowledge the significant contribution made by local authorities, which have stepped up to the challenge magnificently both in identifying local funds to match the Government contribution and in leading project procurement and implementation. North Lincolnshire and North East Lincolnshire councils have put together proposals for a joint project, and East Riding of Yorkshire council has developed plans for a project in east Yorkshire. Indeed, we have been able to approve all local broadband plans, with the exception of one, Sandwell, which I hope will be ready for approval in the very near future.

Broadband Delivery UK state aid broadband notification has taken longer to be approved by the European Commission than was anticipated. We had hoped it would be approved earlier in the year, but we believe we are now in the final stage of discussions with the Commission on the detail, and we hope it will be signed off shortly. Once we have that approval, the BDUK team in the Department for Culture, Media and Sport will be able to give state aid approval for all projects that are compatible with the notification, allowing for a much more rapid turnaround than if the Commission had to deal with each one separately. I recognise that there has been some impact on the project pipeline, but we will work as hard as we can to meet our 2015 deadline for having the best superfast broadband in Europe.

We have used this time to our advantage. We have prepared projects for procurement under the BDUK framework. The framework contract was agreed by DCMS with BT and Fujitsu at the end of June. It allows projects to undertake accelerated procurement with standard terms and conditions. Five projects are already in procurement using the framework, and we have agreed with the bidders that further projects will enter procurement at a rate of about one per week from October onwards. We expect procurement to be complete by next summer. I would like to recognise the willingness shown by the suppliers to accommodate our shared desire to increase the pace of procurement.

I want to say a few words about broadband in north Lincolnshire. There may be concerns about the pipeline of projects, and my hon. Friend mentioned his concern about where his project resides in the list. The situation is straightforward: projects are listed in line with the order in which local broadband plans were approved. Projects that were able to move more quickly at the early stage have therefore appeared earlier in the list. While there may be other ways of defining the list, our experience has been that the order in which the projects come forward does broadly match their readiness to go ahead. However, if projects are not ready when their procurement slot is reached, we will promote another project up the list. I do not want to encourage my hon. Friend therefore to sabotage other broadband projects, but it is important that he be aware that, in effect, the list reflects when projects are ready for procurement; but the list can change, and it is therefore important that he and the project team keep in touch with BDUK.

BDUK is working to progress projects to preparation at the earliest opportunity, and I understand that north Lincolnshire should be entering the BDUK assurance process in early November and will be able to launch its open market review in that month. That will be a significant milestone for the project.

My hon. Friend also mentioned his concern about funding gaps. Again, I do not want to give him or others who have spoken in the debate false hope, but obviously our door is always open to hear concerns and requests. However, we do need clear evidence of a gap in funding before considering a request for further funding. We certainly expect good evidence to be made available of any shortfall, and we will consider a good case if one is put forward. I stress to my hon. Friend, however, that there needs to be clear evidence of a funding gap.

My hon. Friend also mentioned the position of Kingston Communications. The use of suppliers not listed on the framework is a matter for the project teams. We have of course encouraged projects to use the framework because it saves time and procurement process costs. We expect all the remaining procurements to be undertaken using the framework. We recognise that other suppliers, such as Kingston Communications, may have an interest in this programme. However, it must be for the project team, working with BDUK, to decide whether the benefits of opening the procurement more widely would offset the benefits of effectively departing from the framework contract. That is an important point to make.

[Mr Graham Stuart]

Just to nail this absolutely, can the project team decide to do that? They do not have to go through the framework, so they could, if appropriate, work with a company such as Kingston Communications.

[Mr Vaizey]

It is possible for them to do that, but as I say, they have to work with BDUK to decide whether that is the right way forward. It is for BDUK to sign off a procurement process that goes outside the framework. The decision has to be in conjunction with BDUK; it cannot simply be unilateral. BDUK is willing to sit down and discuss with the project team whether that is the appropriate way forward, but I must stress that it has to be done with BDUK.

[Andrew Percy]

Perhaps the Minister can therefore give an assurance that his departmental officials will offer all possible support to East Riding council, should it wish to investigate that approach further.

[Mr Vaizey]

Of course they will. You have indulged me enormously with my rather frivolous opening remarks, Mr Deputy Speaker, but I hope you will not regard it as frivolous when I say that, although my team of officials working in BDUK is small, they are highly effective and have devoted themselves to this project. I have never found them lacking in their ability to engage with Members.

I have made it a rule as a Minister always to have a meeting with any hon. Member who wishes to engage with me on this project, and the officials at BDUK have been utterly tireless in working with both me and other hon. Members to provide assurances. The team will work with Members, but I stress that it is important to work in partnership with BDUK and to listen to its advice about whether departing from the framework is the right way to go.

I have dealt with moving up the ladder, with how Kingston Communications could be involved, with our attitude to any funding gap and with our desire to reach our goal by 2015 notwithstanding the slight delay in obtaining state aid approval. My hon. Friend mentioned wireless technology and asked whether it would be part and parcel of any solution. We have always taken a technology-neutral approach to the delivery of broadband and it would be up to whoever won the contract to provide broadband in his part of the world to decide on the best delivery methods. For example, that could be provided purely by fibre, with the potential for some wi-fi, although we have always said that satellite could play a small part in the mix, too. It is important to take a technology-neutral approach and for the appropriate mix of technologies to be used to deliver superfast broadband at a cost-effective price.

I should mention a couple of other points. First, we had an important announcement last Friday, which should interest my hon. Friends, about removing some of the planning obstacles to rolling out superfast broadband. That is relevant, as it ensures that the money set aside by the Government and my hon. Friends’ councils to deliver superfast broadband will go as far as possible.

Finally, I know that I have stretched your patience, Mr Deputy Speaker, but my hon. Friend the Member for Brigg and Goole mentioned 4G, which is also an important part of the broadband mix. People have complained that the 4G auction has been delayed and, of course, the 800 MHz spectrum at the heart of 4G has not yet been cleared because it was used for analogue television; we have not fully switched over to digital television and will not do so until the end of October. As I am sure my hon. Friend is aware—he mentioned the company in his speech—Everything Everywhere has applied to liberalise its 1,800 MHz spectrum for 4G and we are due to hold the auction for 4G spectrums 800 MHz and 2.6 GHz at the end of the year. We are on the verge of tipping over to introducing 4G services at the end of this year and throughout next year, which will have a transformative effect on the services available for mobile users.

As my hon. Friend said, more and more people are accessing the internet and, effectively, broadband services using mobile platforms. That is crucial to future growth in the UK economy and the Government will work very hard with mobile network operators to ensure that both the liberalisation of 1,800 MHz and the auction of 800 MHz and 2.6 GHz go as smoothly as possible, because at the heart of this question are the consumers and the businesses that will benefit from the introduction of 4G and of superfast broadband.

Question put and agreed to.