My Lords, in 2015 a former Conservative Party chairman said:
“Bureaucratic pen-pushers seem content to think it is OK to leave people in the countryside in the internet slow lane”.
The former Prime Minister, David Cameron, announced in November 2015 a proposal to introduce a universal service obligation to give people the legal right to a 10 megabits per second connection no matter where they lived. As noble Lords will know, that means the speed of delivery of broadband.
So what has happened? Not much. Why is this critical to the Government’s agenda in the forthcoming Session of Parliament? The experience of the south-west of England, which is where I live, is perhaps typical of many rural areas in the United Kingdom. The problems are a combination of a slow rollout programme, poor download speeds, poor mobile signals and poor adoption rates—that is, people not taking advantage of the services that they have. Despite funding programmes from Europe and other initiatives such as the get-up-to-speed programme by Connecting Devon and Somerset, the south-west, including Devon and Somerset, performs badly in relation to the rest of UK for digital connections.
In 2014, the Heart of the South West local enterprise partnership area, which covers Devon and Somerset, was ranked 36th out of the 39 LEPs in England for the proportion of internet users with access to broadband speeds of over 30 Mbps. Only two LEP areas had slower download speeds. Somerset ranked 161st out of the 189 local authorities, with 59% of postcodes having access to such superfast services. Devon ranked 163rd, with 57% of postcode coverage. I am sorry to quote all these statistics, but they help to make the case. These figures mask even greater deficits in the rural areas.
Why is this so important? First, productivity is part of the critical agenda that forms part of the Government’s industrial strategy. The south-west currently languishes 12% behind the average UK level of productivity. We know that, as a country, we are way behind other countries in the G7—20% behind France and Germany. However, there is a huge opportunity to improve output by tapping into the growing army of new small and micro businesses. In the south-west, over the last five years 60,000 jobs have been lost from the public sector, yet unemployment levels are at historically low rates. The majority of these people are not now private sector employees, but have become self-employed and many work from home. Most have made this decision because of the power of digital access to national and global markets. This country, in particular the south-west, needs these new businesses, which are nimble and motivated. They are better able to adapt to the challenges of Brexit than many larger companies, but cannot do so without the essential toolkit of superfast connections, reliable mobile and improved services, such as 4G and 5G technology.
Secondly, there is the demographic time bomb. The south-west, like many rural areas, experiences net in-migration from urban areas. Currently, the predictions are that the south-west’s population will grow by 400,000 by 2025. The sobering figure, however, is that only 65,000 of those people will be of working age. I need not spell out to noble Lords the pressure that this will impose on already stretched local authorities struggling to maintain health and social care services. Broadband is the unique opportunity to ensure that our ageing population can remain independent, self-supporting and even part of the drive for increased national productivity. Access to broadband could also mobilise another army of those who are no longer economically active—this time either as mentors able to use their life experiences to help the growth of our new businesses or even to establish themselves as entrepreneurs.
The prize is significant to UK plc. In a recent survey by Oxford Economics, it was estimated that digital capabilities within businesses are currently generating £123 billion in performance improvements across the economy, equivalent to 3.4% of total GDP. Companies project that over 1 million new jobs could be added as a direct result of enhancing their digital capabilities over the next two years.
The message is clear. We must finally ensure that this country, and particularly the rural economy, joins the digital age. It is not good enough just to provide the service: we need to ensure that we use it to harness its vast potential. The lack of progress so far is little short of a national scandal.