The Autumn Statement 2016 is Hammond’s first since taking over from George Osborne as chancellor and broadband investment is high on his agenda.
Among the numerous announcements was an agenda to transform the UK’s connectivity problem – something Real Business has been investigating.
Aware of the issues that businesses face with poor connectivity, Hammond committed to a broadband investment of more than £1bn to spread fibre networks and 5G across the UK. This, he said, will benefit businesses, transportation and lifestyles of the British.
“Our future transport, business and lifestyle needs will require world class digital infrastructure to underpin them. So my ambition is for the UK to be a world leader in 5G,” Hammond declared.
“That means a full-fibre network; a step-change in speed, security and reliability.
So we will invest over £1 billion in our digital infrastructure to catalyse private investment in fibre networks and to support 5G trials.”
He also promised a 100 per cent business rates relief for a period of five years for fibre infrastructures with a view of “supporting further roll out of fibre to homes and businesses.”
Some £400m will be issued to a Digital Infrastructure Investment Fund, to be matched by private finance, for broadband investment in fibre networks over the next four years.
Hammond said the broadband investment effort must be a long-term goal to increase the UK’s productivity, thus he has sought the counsel of the National Infrastructure Commission for recommendations on the country’s needs.
“Using the assumption that government will invest between one per cent and 1.2 per cent of GDP every year from 2020 in economic infrastructure covered by the Commission,” he said. “To put this in context, we’ll spend around 0.8 per cent of GDP on the same definition this year.”
The broadband investment will mean faster and more reliable connections, according to Hammond, thus propelling Britain’s homes and businesses to “the next generation of mobile connectivity and [to]keep the UK in the forefront of the development of the Internet of Things.”
Below, company leaders have reached out to Real Business to share their thoughts on the broadband investment plan.
Jason Downes, MD, Powwownow, said:
“At a time when workplace productivity relies on employers offering smarter ways of working, be it through flexible hours or remote working, every household in the country should have access to an internet connection that allows them to get online quickly and simply.
“From research we know that businesses will ask their employees to adopt smarter ways of working in early 2017 and beyond, and while we actively encourage them to do so, productivity will be hampered if people don’t have basic access to a good broadband connection outside of central London.
“He should have started by helping the areas of the UK which are still struggling to achieve a basic internet connection.”
Will Stewart, VP of the Institution of Engineering and Technology, said:
“Fast, reliable broadband is crucial for the success of industry – including small businesses, which are vital to the economy and innovation but currently have to operate with sporadic and unreliable broadband, particularly in more rural areas.
“The government investment will help us move to a full fibre-wireless future encompassing 5G and fibre, eliminating our outdated dependence on copper. This will ensure that our communications infrastructure is future proofed, as fibre doesn’t need replacing.
“It will also open the door for networks to be shared, opening up competition and ensuring that millions more people have access to this vital service and enable us to build on our strong global position at the forefront of the e-economy.”
Dan Howdle, consumer telecoms expert and director of communications, Cable.co.uk, said:
“There still remains millions of households in the UK for whom adequate broadband is a daily struggle.
“The DCMS and Openreach are already pushing hard to reduce this number substantially through it’s Broadband Delivery UK programme (BDUK) which aims to, and indeed is on target to achieve 95% of homes in the UK receiving at least 24Mbps by next year.
“While it is commendable that the Treasury considers broadband provision in the UK worthy of additional governement funding, it is utterly absurd that this funding should provide to a minority speeds for which there is no known or useful purpose while so many others struggle for anything approaching basic adequacy.
Marcus Jewell, VP EMEA at Brocade, said:
“For too long huge swathes of the country have been stuck with poor connectivity, considering the UK’s position as a technology powerhouse this was never acceptable.
“This announcement is a key next step for the UK’s digital infrastructure, as it will not only improve connectivity for homes and businesses, but provide the critical foundations needed to handle the huge data demands of our future smart cities.
“The increased availability of full-fibre broadband and the trials of 5G internet promised by the government investment is especially vital if the UK is going to maintain its position as a digital innovator and keep up with economies where fibre broadband has been the default install for some time.”