Rural Phone and Broadband Connectivity

Lord Herbert of South Downs Excerpts

Tuesday 3rd February 2015 Commons Chamber

[Nick Herbert (Arundel and South Downs) (Con)]

First, I add my thanks to my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) for initiating this debate and the interest he has taken in the subject, which concerns a large number of us who represent rural constituencies and who believe that access to broadband is now essential, not a luxury. Despite its relative proximity to London, I had in my constituency two of the country’s four not spots. Even though the villages are just 50 miles from London, broadband was not available at all. The latest House of Commons figures suggest that only 52% of my constituency has superfast broadband access, making it one of the worst for broadband coverage. Many of my right hon. and hon. Friends who represent rural constituencies will be familiar with that situation.

[Richard Drax]

Does my right hon. Friend agree with me that we must not forget the plight of farmers, who now have to apply online for their money from the EU? Between 10% and 15% of farmers do not have the capability to do so, which will have a serious impact on their livelihoods.

[Nick Herbert]

I strongly agree. That is a good example of why access to broadband is no longer a luxury but a necessity, particularly when people such as farmers are required to file information in that way.

Three and a half years ago, I held a summit in conjunction with West Sussex county council. The then Culture Secretary, my right hon. Friend the Member for South West Surrey (Mr Hunt), attended and we had a good meeting to discuss how to improve the situation. Following that, the Government announced their programme to extend broadband access across the country and West Sussex county council announced its Better Connected programme. With £6 million-worth of central Government support, which was matched by the county council, the programme will fulfil the Government’s ambition to ensure that 95% of the county has access to superfast broadband and the whole county has broadband coverage by 2017.

I welcome the Government’s support and commitment. I recognise what they have done to make improvements, but we have to look ahead and test whether what is being done will be sufficient to ensure access for those in rural areas who will not benefit from the programme. The Rural West Sussex Partnership, which is a branch of the local enterprise partnership, Coast to Capital, has suggested that in fact the coverage delivered by the programme will not be 95%, but could be 90% or even as little as 85%. Even if 95% coverage were to be achieved, there would still be the matter of the 5% of people who did not have access to superfast broadband. They are often the people who do not have access to mobile phone coverage, either, and are therefore effectively disconnected.

I know of the strong interest taken by my hon. Friend the Minister for Culture and the Digital Economy and my right hon. Friend the Secretary of State for Culture, Media and Sport, who met me recently to discuss these issues. I was grateful to him for the interest that he showed and for listening to the concerns that I set out. I have a few observations which I hope he will not mind my repeating to the House.

First, as other hon. Members have pointed out, there is a problematic lack of competition in the sector. That is one of the reasons why we are not seeing the necessary roll-out, an effective roll-out or sufficient customer service. There was a problem in the initial contracts awarded by BDUK because, although there were originally two bidders, one—Fujitsu—dropped out. We ended up, therefore, with one bidder for the contract, BT. So there is an effective monopoly and that is unsatisfactory. That is not the Government’s fault; it is simply the reality.

[Chris Bryant]

The right hon. Gentleman makes an important point. We need greater competition because that would deliver results faster for everybody. However, I query his last comment. With 44 small tenders, it was remarkably difficult for anybody to presume that they might gain more than one, other than BT. My worry is that the way the tender process was set up created the monopoly in the first place.

[Nick Herbert]

I am not sure whether that is the case, but we can look ahead at how we can inject more competition into the sector to ensure the competitive pressures needed to improve customer service. I would look again, as hon. Members have suggested, at BT’s relationship with Openreach and see whether there is a case for splitting them, injecting more competition there and potentially breaking up Openreach. We need more competition in this sector.

Secondly, we should not be fixated on the fibre-based solution, which will never be realistic in the hardest-to-reach rural areas. In those areas, wireless technology or access to 4G or faster mobile data signals will become the solution. I do not believe that satellite will be the solution. We therefore need to ensure that the kind of solutions being advanced in public-private partnership recognise that different solutions will be necessary in rural areas.

[Mr Graham Stuart]

Does my right hon. Friend, like me, welcome the £10 million fund that the Government have created to develop new technologies? Does he, like me, hope that the Government might be able to go further to make sure that small companies, such as those in my constituency, can be supported to develop the technology, show proof of concept and thus challenge BT and deliver for rural communities?

[Nick Herbert]

Indeed. Like my hon. Friend, I welcome the Government’s funding initiative in this area. I had intended to go on to say that. None of what I say is a criticism of the Government; they are merely suggestions as to how we can improve the situation further.

Thirdly, we need to ensure that the technologies adopted are future-proof. There is a danger that in seeking to meet the commitment to wholesale coverage by 2017 or superfast coverage for 95%, technologies are adopted that will not stand the test of time and will quickly be found to be insufficient.

Fourthly, I have a general observation to make about subsidy. Given that we all agree that access to broadband is an essential public service, there is a role for public subsidy in this area. That role should be to correct instances of market failure. We need to be careful to ensure that subsidy is not directed at companies or providers where the market would provide a service. With the current BDUK roll-out, there is a danger that public money is being used to close the gap in areas where it would have provided the service anyway, and the remaining 5% or 10% is not being covered. We must ensure that in future subsidy is directed to the hardest-to-reach areas and that the market is left to fill the gaps. That is a hard judgment to make, given that we are trying to ensure that the market operates properly.

In my constituency villages are being connected one by one. There is a tremendous improvement, which reflects the initiative of the Government and the county council. I welcome that, but I suspect that many of those villages would have been connected anyway to fibre. What is happening is that the rural areas are being left out. I remind the House that these rural areas comprise a great number of people and rural businesses who need to be connected. There is the danger of a growing digital divide, which might in turn become a further manifestation of something we need to avoid: a rural-urban divide. We see that in many other aspects of policy, and I think that we should strive to prevent it.

I mentioned that three and a half years ago I convened a summit to discuss how to improve the situation in West Sussex, and I believe that it bore fruit. I therefore suggest holding another similar event in West Sussex, not to criticise but to look forward and see how we can close the gap and ensure that we do not have a digital divide in rural West Sussex in future. I would be grateful if my right hon. Friend the Secretary of State considered attending the summit, partly because of the lessons I think there would be for other rural areas. The summit would have the active support of the South Downs National Park Authority, for instance, which is very interested in the issue. The Government have done a great deal to improve the situation. We must now ensure that we go further and close the digital divide.