Rural Broadband

Lord Vaizey of Didcot Excerpts

Thursday 10th September 2015 Westminster Hall

[Neil Parish]

Yes. If we look at the contracts with BT in particular, there is money that is supposed to be delivered into the contract, but that always comes at the end. I do not know what the situation is in my hon. Friend’s area, but there is certainly little under the Devon and Somerset contract.

[The Minister for Culture and the Digital Economy (Mr Edward Vaizey)]

My hon. Friend is altruistic, so he will not mind me commenting on other constituencies. He mentioned what the situation was in the constituency of my hon. Friend the Member for Rossendale and Darwen (Jake Berry), so I am sure he will welcome the fact that broadband will reach 98% there under our scheme, and High Peak 93%. That is good news—thousands of our constituents being connected, thanks to this superbly successful broadband programme.

[Neil Parish]

I thank the Minister for his intervention. It is all very well to talk about the great delivery of broadband in those areas, which is fascinating, but it does absolutely no good to many of my villages, which have only 25% of people connected. The more he keeps on about how much other areas have got broadband, the more it annoys those who have not got it. That is the problem with rolling out statistics.

[Neil Parish]

My hon. Friend raises an interesting point. Also, the last 5% is probably not 5% around the whole country but 50% of particular areas of very many of the constituencies of Members here today. Believe it or not, I have some sympathy for the Minister—

[Mr Vaizey]

No!

[Neil Parish]

Occasionally, on a good day. To be serious, the people who have broadband are very happy and we do not hear much from them; the issue is the people who do not. I repeat that the more we talk about all those who have it, the more it drives on those who do not.

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[Neil Parish]

I thank my hon. Friend for that point. I also thank him for elevating me to the status of right honourable; however, I am only an hon. Member. To be serious, we talk a lot about infrastructure and about roads. It is right that the Government are doing a lot about our roads, and I fully support that.

[Mr Vaizey]

And broadband!

[Neil Parish]

Yes, and broadband, but the issue is the speed with which we are getting the broadband out. There are individual areas with quite a lot of really good businesses that want to stay, but some are considering whether they will have to relocate if they do not get broadband quickly. That is the conundrum. I therefore echo what my hon. Friend the Member for North Cornwall (Scott Mann) has said.

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[Neil Parish]

I thank my hon. Friend and new constituency neighbour. It is great to have her in Parliament—she really speaks up for her area. We have treated Exmoor and Dartmoor as a special entity, and most of the area will have a wireless connection. I think that we should look at the same sort of treatment for the Blackdown hills. I know that the Minister is not keen on the benefits of not having signed the contract with BT earlier this summer, but one benefit of looking at a new contract for Devon and Somerset is that there is some competition out there. Other companies are prepared to come into the area and so may be prepared to come in to the Blackdown hills. The Devon and Somerset contract is probably one of the biggest in the country—

[Mr Vaizey]

It is the biggest.

[Neil Parish]

I thank the Minister for that clarification. I think it is too big in some respects—[Laughter.] No, I do. It is too big, so it is unwieldy. Some of the other companies providing broadband are not of the same scale and size as BT, so because the contract is so large it is almost tailor-made for BT and no one else. If the Minister wants greater competition, I suggest that a smaller contract could be the way forward.

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[The Minister for Culture and the Digital Economy (Mr Edward Vaizey)]

It is a great pleasure to serve under your chairmanship, Mr Betts. I hope that you will signal the time to me, because I get so passionate and carried away about the subject. In fact, in the previous debate, I was meant to finish two minutes early, but I forgot because I had so much to say—not just a glimmer of good news, but a bucketful.

In the same way as we had a debate at the end of the previous parliamentary session, we meet early in the new parliamentary session to celebrate the world’s most successful state-sponsored broadband programme. Our cousins in Australia look at the UK and at their own broadband programme, which has not yet started and has already doubled in cost. Our cousins in America look at their rural broadband connection programme, which is much more expensive than ours and delivers to far fewer homes. Our European cousins in the big four member states look at us and see the UK powering ahead. They are celebrating our unequivocal success story. As I look at the thousands of homes being connected in the constituencies represented here today by my hon. Friends and hon. Members, I can say only that I am delighted to be the steward of this highly successful programme.

I thank my hon. Friend the Member for Tiverton and Honiton (Neil Parish) for calling the debate, because it allows me to once again rehearse some of the landmarks. Most of the debates begin with hon. Friends and hon. Members saying how important broadband is for rural communities. I get that point, which is why we started the programme in 2010. We understood that rural communities needed broadband and we also understood that it would not be delivered commercially. In Brecon and Radnorshire, not a single home in that constituency would get broadband under a commercial roll-out scheme. It is entirely subsidised by our rural broadband scheme because companies do not go where they cannot get a return on their investment. We are all agreed on that.

I notice a change of tone in the debate. Because we are now focusing on the last 5%, there is a quiet acknowledgement that the main job is done; we will get to 95% and now we need a solution for the last 5%. I understand that the role of the Opposition is to pick holes, particularly when they have no policy of their own. The hon. Member for Clwyd South (Susan Elan Jones) has to tread carefully; her party is in power in Wales. She lives in a world in which superfast broadband roll-out in Wales is going absolutely fantastically well and it is a disaster just in England, so we can discount pretty much everything she has said.

Let me remind hon. Members what the Government have said from the outset. In 2010 we said that we had a certain amount of money and would get to 90% of the homes in the UK by the end of 2015. I am still confident that we will do that. We have never changed that target. People think that we moved the goal posts; we have not. The programme was going so well that the Chancellor gave us more money, so we said that we would get to 90% by 2015 and use the extra money to get to 95% by 2017. So we have always said 90% and 95%. And I am no fool: I know that that means that we were not going to get to the last 5%. However, I also said as we approached our targets that we would look at how we get to the last 5%, and all my hon. Friends know—they have seen the curve—the enormous expense of getting to the most hard to reach premises.

Nevertheless, we have been working on that. Two Secretaries of State ago—under my right hon. Friend the Member for Basingstoke (Mrs Miller)—we set out very clearly a £10 million fund to pilot new technologies to get to the last 5%, because we did not want to go to the Treasury, give them a back-of-the-envelope costing and say, “Give us 2 billion and I think we could probably get to the last 5%.” We wanted to see whether we could drive down the cost and we wanted a good idea of what the cost would be. The good news is that we have a range of different providers already delivering to homes that count in the last 5%—in terms of competition, that is good news—and we are now actively working on a solution for the last 5%.

In the eight minutes I have left, let me address some of the points that have been raised. I completely accept the point that has been made about clarity. It is important to remember that this project is a partnership with local authorities. Every local authority that is managing one of these schemes should publish on a map where superfast broadband is going. I say to any hon. Member who has an example of a local authority that is not doing that to let me know please, and I will personally ring the chief executive of that council to ask why that is the case.

It is the case that sometimes the target is relatively flexible, because when someone is on the ground actually delivering broadband it is important for us to remember that they are part of an engineering project. Delivering broadband is not about flicking a switch; trenches have to be dug, cabinets have to be put in and power has to be put in. Sometimes, providers allow an element of wiggle room, but people should be able to get clarity.

As far as competition is concerned, the process was competitive; the 44 contracts were let as part of a competitive process. However, let us not forget that European state aid rules require open access for anyone who builds a network using state aid money. That is why Virgin did not compete with BT for these contracts. But there will be competition for the last 5%, because we are showing that smaller providers can come in for these smaller contracts. Nevertheless, we wanted to get to as many homes as quickly as possible.

My hon. Friend the Member for Tiverton and Honiton asked about new technology. BT is already introducing new technology, G.fast, which uses existing infrastructure to get speeds of up to 300 megabits a second, as well as fibre to the remote node. As I said earlier, one of the reasons that we have these pilots is to test new technology for the last 5%.

My hon. Friends have asked about vouchers, which brings me to the solutions for the last 5%. We are looking at a whole range of solutions. Funnily enough, some of the last 5% is in cities and we are looking for a bespoke solution for that; there might be a voucher solution, or a fund that companies can bill into. And yes, it is no secret that a universal service obligation is under consideration. We hope to announce our proposals towards the end of the year, to coincide with the spending review. However, it is our intention to get to 100%, in effect, by the end of this Parliament.

My hon. Friend also asked us to keep BT’s feet to the fire. We keep BT’s feet to the fire; we meet with BT regularly. As he will know, any Member of this House who comes to me with concerns about roll-out in their constituency will have a meeting with me, and BT will be asked to respond to those concerns.

I was asked whether we could rely on BT’s statistics. In the middle of August, I was very pleased to be able to say that we had passed the landmark of 3 million homes, and by the end of 2017 we should have about reached about 5 million homes. The 3 million figure is an audited statistic of premises that are capable of receiving speeds of at least 24 megabits a second. Roughly speaking, probably by the end of this month we will have reached 3.5 million homes, but we will not announce that as an official figure because it will not have been audited. We only announce figures that have been properly audited.

My hon. Friend the Member for Wells (James Heappey) talked about making people aware of superfast broadband. It is important to make people aware of it, because the more people who take it up the more money we get back. In fact, under the terms of the contract BT has paid back £129 million early; by the way, it did so earlier than it had to under the terms of the contract. That means that with the same money we might reach 96% of the country rather than 95%. We had a superfast broadband campaign towards the end of last year. Of course, we were mocked for spending money on that campaign, but it drove up take-up and pulled back money to allow us to go further.

I also take the point made by my hon. Friend the Member for Tiverton and Honiton about a time limit for BT where it has said that it will roll out broadband commercially in an area and is effectively putting a block on a competitor that might wish to go into that area. I will take that point away with me and ensure that we can make progress.

I am an unequivocal fan of this programme, because—obviously—I am responsible for it but also because I am the only one who seems able to talk about its benefits. I always like to hear speeches that refer to how well we have done and that simply request improvements, because that is the approach I take. We are doing well; we have hit all our targets; we are technically under budget; and this project is probably the most impactful and most successful Government infrastructure project of the last five years.

I will not take lessons from the Opposition. We had to write off £50 million of investment in South Yorkshire from a contract negotiated by the last Labour Government to deliver superfast broadband. They had a pathetic target of 2 megabits a second by the end of 2012. Members can imagine what kind of debate we would be having today if I was standing before you now and saying, “Well, we reached our 2 megabits target in 2012. What on earth are you complaining about?”

As for the absurd suggestion that London has worse broadband than Ukraine, that is for the birds. It is the finding of a bogus survey put forward by a rival of BT, and my hon. Friends must remember that everyone in this debate always has an angle; this marketplace is a highly competitive one and we will always hear from other people saying that they can do a better job. My hon. Friends should also remember that we lead the big five; that this country has the highest rate of e-commerce, so some people must be able to get online to buy goods; that two thirds of the people in the country have smartphones; that we have the fastest roll-out of 4G anywhere in the world and we will reach 98% of premises with 4G by the end of 2017; and that the Government have also negotiated a landmark deal with the mobile companies to get to 90% geographical coverage, because we do not forget rural areas or the roads that our rural constituents have to drive on. So I look forward to a weekly debate on broadband, so as to continue to celebrate this fantastically successfully programme.

[Mr Clive Betts (in the Chair)]

I call Neil Parish to wind up, on behalf of himself and, no doubt, Mrs Parish. [Laughter.]