Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill

Part of the debate – in the House of Commons at 9:34 pm on 10th July 2017.

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Photo of Yvonne Fovargue Yvonne Fovargue Shadow Minister (Communities and Local Government) 9:34 pm, 10th July 2017

The Opposition welcome this Bill. It is vital that our homes and businesses have access to broadband and that broadband is faster, safer and more reliable than before, which is why we will be carefully scrutinising the Bill in Committee. As the Chancellor put it, this country was late to the 4G party, so we should do all we can to ensure that the UK is at the forefront of 5G communications and has full-fibre broadband to support it.

There was some doubt that this Bill would appear. The policy was originally announced in the Chancellor’s 2016 autumn statement and was due to be implemented as part of the Local Government Finance Bill, but it was then scuppered by the general election—like a lot of things. It was not mentioned in the Queen’s Speech, and there was some industry nervousness that it had been abandoned, but here we are in early July with a stand-alone Bill and I am glad that we are.

As we have heard, the Bill has a simple premise—at least I thought it was simple before I attended the start of this debate five hours ago. It will encourage firms to install new optical fibre by providing 100% business rates relief backdated to last April for a minimum period of five years. We understand that it will cost the Exchequer around £65 million by 2022. That is sure to be welcome news to the UK’s broadband companies, many of whom wrote to the Chancellor last February to complain that the current business rates regime is not fit for purpose and discourages inward investment in upgrades.

This legislation meets some of those concerns. The fact is that those business leaders were really talking about the whole business rates regime. This Bill deals with just one aspect when we actually need to be talking about the whole system, which many hon. Members from across the House have agreed with. There are many other changes to the system that could help to support businesses, and we outlined some of them in our manifesto, including switching from RPI to CPI indexation, exempting new investment in plant and machinery and ensuring that businesses have access to a proper appeals process. I appreciate that this is a stand-alone bill dealing with digital infrastructure, but I fear that it is no more than a sticking plaster for our moribund business rates system when we really need a total rethink.

This is a framework Bill, so it is short on detail. Conditions of eligibility will be outlined in future regulations, for example, which is why we need to scrutinise the Bill carefully. I do wonder which firms will benefit. The relief is expected to boost the big data providers through, for example, Virgin Media’s £3 billion “project lightning” and BT’s Openreach subsidiary, but it is unclear whether smaller firms will benefit initially. What impact does the Minister expect the reform to have on smaller providers? It would be a great shame if this Bill was merely for big business. Would it help smaller firms if the Bill’s provisions could be applied retrospectively to capture work on full-fibre networks that has already taken place?

Like many hon. Members, I am worried about how the Bill will benefit Britain’s rural communities, who have not done quite so well out of the broadband revolution so far. Many areas of the country, including urban areas, have been dogged by poor connectivity. I could not get broadband speeds for the past seven years in my area, but we were connected just last week because the housing company that built my house did not allow it to be cabled. However, many customers still do not get the advertised speeds that they are paying for. If they want a broadband upgrade, they pay for it, but they do not always receive what is advertised, so I commend the Which? report on broadband speeds. We pay our water rates, but if the utility company merely gave us a trickle out of the tap, we would be quick to complain. Many Members have said that broadband is the next utility, so why is that not included?

Businesses have suffered from not having the proper access to markets and customers that they should have. The public have suffered from being cut off from internet sites and entertainment sources, and their children are doubly penalised because so much modern education relies on online resources.

Discussion of digital exclusion has been sadly lacking in this debate. Services are increasingly going online. In fact, jobcentres have recently closed as people are encouraged to apply online for all their benefits and council services, yet many people do not have access. In my constituency in the borough of Wigan, 99% of people have access to fast broadband, but only 74% of them have the skills to use it. The cuts in the adult education budget are particularly penalising those people by preventing them from joining the digital economy that we all enjoy.

As I said at the outset, we support the Bill, which is an important step towards securing better broadband connectivity and access, but it is about more than just access. The Bill can work only if it is part of a broader picture that, on the one hand, fully incentivises business to invest in the future and, on the other, ensures that everyone, not just a select few, benefits from the reforms. More than just this Bill, that means education to ensure that everyone has the skills to take advantage of this great step forward.