Broadband

Richard Bacon Excerpts

Wednesday 4th March 2015 Westminster Hall

[Mr Richard Bacon (South Norfolk) (Con)]

I am enjoying my hon. Friend’s speech. Does he agree that the point made by my hon. Friend the Member for York Outer (Julian Sturdy) is of the essence and that we will not get to 100% without using the technologies that he spoke about? Crucially, those facts were not only predictable and predicted, but were fully known five years ago in 2010, during the discussion about what kind of contract should be let. It was known at the time that the introduction of alternative players is a prerequisite for getting full coverage. Does my hon. Friend the Member for Tiverton and Honiton (Neil Parish) feel, as I do, rather let down by BT and, to some extent, the Government, given that they did not take account of those important facts five years ago when they contracted with BT?

[Neil Parish]

I thank my hon. Friend very much for his comments. He is right. What happened is that the contracts—certainly, the Devon and Somerset contract, which I know the most about—were far too secretive, so it was difficult for people to know exactly who was going to get broadband and who was not and for other companies to come in and provide it. We are doing better, and it is getting better—I am not here just to beat up BT—but we need firm and friendly criticism. We need to say, “Get on with it. You’ve got the contracts to deliver, so let’s have it done. If you are not going to be able to deliver it, let’s know about it, and if we can get in competition, all the better.”

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[Neil Parish]

I stand corrected by the hon. Lady. It is indeed our money that is being spent and we expect this service to be delivered.

The National Farmers Union has warned that its members do not have the infrastructure connections to enable fast enough broadband to comply with online Government services, including complying with the new agriculture policy, because all the mapping now has to be done online. I can understand that because of the need to map all the hedgerows, but it is essential that we get broadband out to those businesses.

The Federation of Small Businesses conducted research in July 2014 that shows that 94% of small business owners consider a reliable internet connection as critical to the success of their businesses and that 14% of UK small firms view the lack of a reliable broadband connection as being their primary barrier to growth. That has been recognised by the Government, but this is again about delivery. As small firms become more reliant on a high-quality broadband connection to do business, that will become even more significant in future.

As the EFRA Committee’s report rightly noted,

“2 Megabits per second (Mbps) is already an outdated figure, and 10 Mbps is increasingly recommended as a suitable USC for standard provision.”

The Government must reassess whether the current universal service commitment is still valid and right.

I would like to get a little more parochial. The Connecting Devon and Somerset programme that covers my constituency is on track to deliver superfast broadband to 90% of premises across Devon and Somerset by the end of 2016, up from 64% overall when the programme began. The programme is supported by a £32 million investment from BDUK.

I am pleased that the Department for Culture, Media and Sport announced on 25 February 2014 an additional £22.75 million for rural broadband in Devon and Somerset from the Government’s—from the taxpayer, from us all —£250 million broadband fund. However, my constituency of Tiverton and Honiton is ranked as the 611th worst constituency for broadband out of 650 constituencies. Only 33% of premises have high-speed broadband. A large number of communities in my constituency, such as Upottery, Stockland and Rousdon are being left in digital darkness. Some business owners in parts of Dunkeswell have told me that they may be forced to relocate because of the lack of reliable broadband. I have been working with local campaigners, Graham Long in Upottery and Rebecca Pow in Churchinford and Otterford.

CDS has now published its procurement tender for the next stage of the roll-out, to extend superfast broadband coverage as far as possible in Devon and Somerset, with the aim of getting to 100% coverage by 2020. I welcome the progress made in connecting more premises in Devon and Somerset, but I am deeply disappointed that we are not farther along this road. Communities in my constituency should not have to wait until 2020 for broadband delivery. I do not buy the argument constantly put to me by BDUK that, “It’s all too difficult, Mr Parish.” It is not too difficult, because a contract was given and money has been provided to deliver in those difficult areas. The contract is there to provide exactly what we want—broadband in our rural communities. Greater focus is needed on helping hard-to-reach areas and exploring innovative technologies.

[Mr Bacon]

While my hon. Friend is on the subject of Connecting Devon and Somerset, can he say why he thinks that CDS refused to consider compliant bids or would-be bids from bidders who were proposing to provide 100% coverage?

[Neil Parish]

I think that the argument has gone even as far as state aid rules and whether Brussels was involving itself in the letting of contracts and whether being able to extend the existing contract with BT and BDUK was the best way forward. Those types of argument have been used. I am not against BT or what BDUK is doing, but I do feel that not enough competition has been brought into the system to keep BT and BDUK up to the mark.

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[Tessa Munt]

I tend to agree. Rather than looking at percentages, we should look at people. Back in the 1980s—I can remember all of this—we had British Rail trying to move trains from A to B and forgetting that its job was to move passengers from A to B. Exactly the same lack of focus on people has led us to where we are with broadband.

When my children were in senior school, they found the internet essential because they had to access their homework online. When they were at college, they had to send all their submissions online to their tutors, and they have to do exactly the same thing now that they are at university. It is difficult for someone who has no broadband and who lives some distance from the library, if they cannot drive or do not have a car and there are no buses. How the hell is anybody meant to be able to do these things?

I have a wonderful constituent who is 94 years old, who moved into Cheddar and found herself waiting weeks and weeks for some sort of connection. She used Skype, Twitter and Facebook to keep in contact with members of her family, who were all over the world. We must remember that in order to keep older members of the community living in their own homes, it is absolutely essential they can access services such as having their heavy shopping brought in from the supermarket by ordering online. They can still pop out to the shops every day and do the small items of shopping. Using the internet in such a way will help to keep them in their own homes.

Many of the businesses in my area are tourism-based, and if they do not have a reliable online connection and cannot use broadband at the right speed, they do not have a competitive edge. It is also difficult to buy, sell and communicate if the connection drops out all the time. Without a decent broadband connection, life is so much harder.

I wrote to the Competition and Markets Authority asking it to look into BT’s apparent refusal to join an open bidding process to increase high-speed fibre broadband access in Somerset. There is slight confusion over this, but it looks as though BT has held back information that might have enabled other organisations to join the bidding process. By saying that that information is commercially sensitive, it has prevented anybody from being involved in tendering for the phase 2 superfast extension programme.

[Mr Bacon]

I have no doubt the hon. Lady is right that BT has engaged in anti-competitive behaviour, and broadband is now a regular source of complaint among residents and businesses in my surgeries in Norfolk. However, is the situation not even worse? BT inflated its budgets for the BDUK rural broadband programme, thereby obtaining more state aid than it was entitled to. At the same time, it invested less in the programme than it communicated to the Government.

[Tessa Munt]

The hon. Gentleman has taken the words right out of my mouth. I hope the Minister will be in a position to address our concerns.

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[Mr Vaizey]

I get the point. I am running out of time, so let me simply say that BT is free to bid or not to bid, and it is free to say to a contracting authority that it wants to use the framework contract to save time and make life more efficient, and that if the authority is going to use a different contract it will not bid. That is entirely up to BT and I do not think that is anti-competitive behaviour.

Obviously, we have a debate—a constant to-ing and fro-ing—with BT, because we audit its figures and invoices. Again, it is worth making the point that BT invests this money up front; it does not receive any money from the Government or the taxpayer until it has done the work. It is not handed a cheque to meander kindly down the road and do the work when it feels like it, and if there is some good football on the telly on Wednesday night, it will not do the work. It does the work and then it gets paid.

As I say, we audit those figures and they show value for money. BT is a national provider, and therefore it was in a very good position to win those contracts. However, there is competition throughout the country.

[Mr Bacon]

Interestingly, the Minister said earlier that Fujitsu bid against BT. No, it did not. It bid to be inside the contract, even though it had told the previous Secretary of State, my right hon. Friend the Member for Basingstoke (Maria Miller), that if it got inside the contract it would not bid for any work. She got down on her hands and knees and begged it to be inside the framework contract, because otherwise there would be only one successful bidder inside the framework contract. That is what happened, even though the Department knew that if Fujitsu entered the framework contract, it would not be bidding for any work.

[Mr Vaizey]

That is not my understanding, but I will happily write to my hon. Friend and explain what I think happened. However, I still fail to see the point that he is trying to make. The point I have just made is that these were quasi-national contracts—big contracts, to cover 360,000 homes—and very few players were willing to participate in that competition. Nevertheless, it was a competition—

[Mr Bacon]

Will the Minister give way?

[Mr Vaizey]

No, I will not give way again, because I want to make the point—

[Mr Bacon]

The Minister said he failed to understand my point—

[Mr Vaizey]

We could keep going to and fro, but you have made it clear, Sir Alan, that you want this to be a debate—

[Mr Bacon]

rose—

[Sir Alan Meale (in the Chair)]

Order. The Minister is not giving way to the hon. Gentleman.