Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill

Lord Ashton of Hyde Excerpts

2nd reading (Hansard): House of Lords
Monday 9th October 2017 Lords Chamber

Moved by

[Lord Ashton of Hyde]

That the Bill be now read a second time.

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Ashton of Hyde) (Con)]

My Lords, I am very pleased to be able to assist my noble friend Lord Bourne in moving the Second Reading of this short but vital Bill.

In our modern world, businesses and individuals depend on being connected, and the ways in which this happens are becoming more and more diverse. We are fast moving beyond mere mobile phones to increasingly digital communications, and in the future this will include ultrafast broadband technology and 5G—the next generation of mobile connectivity. Fibre is crucial to both of these. The Bill will support that progression for both fixed and mobile or wireless networks by delivering a vital part of the Government’s package on fibre investment. The Bill will provide the framework to implement the Chancellor’s promise in the Autumn Statement 2016 to allow 100% business rate relief for new fibre up to 2022.

Many noble Lords have raised the problems of slow internet or poor mobile phone services. These matters are important to people. They affect the enjoyment of their lives and the success of their businesses. By delivering world-class connectivity we can transform our public services, bringing efficiencies to business and improving the lives of individuals. Central to this challenge is providing the digital infrastructure that can support these demands. All these connections rely on more fibre-optic cable. Fibre is the gold standard, and we are committed to delivering it, but we have heard concerns from operators that business rates acts as a barrier to that investment.

The commitment given at the Autumn Statement in 2016 will mean that new fibre investment made after April 2017 will not be subject to business rates until 2022. Telecom operators will continue to pay rates on their existing network, alongside all other ratepayers who pay business rates on their business properties, but by providing a temporary relief for new fibre we will give this sector the boost it needs to meet demand. The sector has been calling for this and telling us it will make a difference in the delivery of new fibre. We have made great progress in the last few years to improve connectivity across the UK. Superfast broadband is already available to 93% of homes and businesses; we are on track to reach 95% by the end of the year. We want to go further and providing rate relief on new fibre will help achieve this goal.

We will have the opportunity to discuss the Bill in more detail in Committee but I will briefly outline what it does. This short Bill contains six clauses and, essentially, gives us the powers we need to deliver the relief through regulations. The first three clauses contain the powers for those regulations covering occupied and unoccupied properties on local rating lists, and those on the central rating list held by the Secretary of State. The remaining three clauses deal with consequential and financial matters, allowing the relief to be backdated to 1 April 2017.

In order to calculate how much relief should be awarded on telecom networks, the regulations made under these powers will require the valuation officer to issue a certificate of the rateable value attributable to the new fibre. This will then be used by the local authority to calculate the amount of relief which should be awarded, ensuring that we will give relief only on the new fibre and not on any existing networks. We have already published draft regulations, in August, explaining how this will work and started discussions with the sector on its implementation. Consultation on the draft regulations will run for 12 weeks. The Valuation Office Agency will also hold discussions with the sector on how the relief will operate in practice. So I hope noble Lords will appreciate that we have already explained how the powers will work, thereby ensuring that the scheme operates smoothly.

More widely, the Bill is just one of several measures we are taking to boost Britain’s connectivity, including our ambition for more fibre. Over the summer we announced more details of the universal service obligation, so that every household will be able to get acceptable broadband by 2020. This will provide a vital safety net to ensure that no one is left behind. In the Digital Economy Act we reformed the Electronic Communications Code, which regulates agreements between site providers and communications operators, to make it easier to deploy, maintain and upgrade electronic communications infrastructure. We are also forming a dedicated team to look at how government can remove barriers to deployment, which will work with other departments and industry.

We will see a more competitive market as a result of the agreement between BT and Ofcom to separate out Openreach. A legally separate Openreach will serve not just all its customers but the whole of the United Kingdom. We are supporting fibre rollout through a £400 million Digital Infrastructure Investment Fund. This will help accelerate the rollout of fibre by providing better access to commercial finance for alternative developers of full-fibre infrastructure. In turn, that will help smaller operators compete with larger players. The Government’s investment will be at least matched, on the same terms, by private sector investors. As a result, we expect to see private sector investment into full-fibre broadband reach around £1 billion overall. We are also investing £200 million in our local full-fibre programme, supporting local bodies to stimulate new fibre development.

In total, our efforts are worth £1.1 billion to support the sector, and once this Bill receives Royal Assent the Department for Communities and Local Government and the Valuation Office Agency will move quickly to implement the rate relief for new fibre retrospectively to 1 April 2017. We want to see a country where people are better connected, where everyone can get online and reach their full potential and where no one is left behind. This Bill provides a step on that journey. I beg to move.