19 November 2019

Practical steps, not ideology, will close Britain’s digital divide


The rural economy has extraordinary potential.  Food production will always be the backbone of any farm, but landowners are now increasingly likely to be building affordable homes, renting holiday cottages, running renewable energy plants and converting old buildings into modern offices.

However, the rural economy is 16% less productive than the national average – and a large part of that is down to the lack of digital connectivity in the countryside.  Closing the productivity gap will add a much needed £43bn boost to the national economy, a statistic which shows the scale of opportunity that lies ahead for rural Britain.  It is a central pillar of our Rural Powerhouse campaign, launched this week.

Yet nearly half a million homes and around 125,000 businesses in rural areas have poor or slow broadband. When it comes to investigating poor productivity, weak internet access is suspect number one.

Indeed, we are lagging far behind other countries.  South Korea has an incredible 97% gigabit broadband coverage.  Most of the investment that delivered it was privately funded in a highly competitive market place.  While the UK has a reasonably competitive market itself, it has just 8% full fibre coverage.

Now, the Labour Party has announced that should it be elected in December it will seek to nationalise BT’s Openreach network. This they claim would more easily bring full-fibre broadband to every home and business in the country at a cost of £20 billion – although most believe the real cost of 100% connectivity is at least £30bn. Though we welcome the attention our politicians are now paying to the wide digital gap that exists in this country, Labour has to prove that their plans speed up rather than slow down existing efforts to roll out full-fibre broadband in rural areas.

Nationalisation is likely to create a great deal of bureaucracy and invite all manners of legal challenges – all of which will bring about extensive delays.  Under these proposals private investment would end immediately, and thus all progress will stop until nationalisation occurs. That could be years away. The risk here is that the move would do more harm than good.

Yet we can agree that connectivity is central to unlocking the potential of rural businesses and bringing the wider rural economy into the modern era. The only mystery is why this potential remains unexploited—why, in other words, the digital divide remains. As it is, digital workers and entrepreneurs have little choice but to move to the cities, which only widens the gap and harms almost every aspect of rural life.

If we were to improve connectivity in rural areas, not only would we unleash the potential of those areas, but we would preserve the health of our rural communities. In areas blighted by deprivation we could create jobs and affordable living – making it a viable option for young families.

The Country Land and Business Association has consistently argued that to close the digital divide and both create and exploit existing opportunities, universal coverage should be our goal. Irrespective of where people live or work, they should have access to an affordable and effective Internet connection. The Government has accepted this argument and adopted an ‘outside-in’ approach to the rolling-out of full-fibre broadband, which entails spending £5 billion by 2025 to connect the hardest to reach places.

What rural businesses now need, and what we are campaigning for, is a clear policy framework that does not risk tearing up the progress we have already made. This will have to involve a finalised funding and delivery plan, with achievable interim targets for broadband providers as well as a legal demand on those operators to deliver.

Now is the time to get going. Political uncertainty continues to slow down the national economy; we need an economic boost quickly.  It is great to have political support for closing the digital divide between rural and urban communities.  It shows we are finally seeing some ambition to become a world class fully connected digital nation, with all the economic and social benefits that brings.  But breathless announcements made during the election rarely make good policy.  If we are to succeed, then the plans need to be realistic, based on good strategy and sound investment, not political ideology or opportunism.

Click here to subscribe to our daily briefing – the best pieces from CapX and across the web.

CapX depends on the generosity of its readers. If you value what we do, please consider making a donation.

Mark Bridgeman is President of the Country Land and Business Association