UK in danger of two-tier economy over rural superfast broadband connectivity

The lack of universal superfast broadband, particularly in rural areas, is creating a two-tier economy which only serves to marginalise those communities, businesses and individuals struggling to get fast and reliable connectivity to the Internet. 

The UK needs to prioritise and move much faster towards deploying universal superfast broadband for all if we intend to reap the full benefits of the digital economy, together.

More government services are now coming online as the UK strives to streamline its processes and procedures, do away with red tape, and reduce unnecessary bureaucracy. But, if users can't readily access these online services because the local broadband doesn't work, alternative, more time-consuming and less efficient ways to get things done must be found.

[one_third]There's often a disconnect between high-level policy-makers with little or no practical experience of either business or consumers, and with what's really happening at ground level.

Already HM Revenue and Customs has lost legal cases in Scotland after taking several businesses to court following their failures to file relevant VAT returns online, as required.

Two of the appellants experienced disabilities which made it excessively difficult or impossible for them to use a computer, and a third lived in a remote area of the country where broadband access was absent or unreliable.


Facts and Figures

UK SME Connectivity

  • Ninety four per cent of small business owners consider a reliable internet connection critical to the success of their business
  • 60 per cent expect to increase their online presence in the next year.
  • As many as 14 per cent of small businesses consider lack of reliable and fast broadband connectivity to be their main barrier to growth.
  • Two thirds (65%) of small businesses access broadband through a wired connection.
  • Only 12 per cent have a fibre-optic connection, while 35 per cent have a mobile connection.
  • Approximately 45,000 small businesses (1% of Britain’s 4.5 million small businesses) still have to rely on a dial-up connection.
  • Only 15 per cent of small firms say they are very satisfied with their broadband provision, while a quarter say they are fairly or very dissatisfied.
  • In a separate survey, 40 per cent of small businesses said improved digital infrastructure in their area would encourage them to invest in new technology.

Source: FSB*


All three were of an age which made learning how to use a computer particularly difficult and they would have had to incur the cost of instructing an agent. They had all filed their VAT returns promptly and accurately on paper for many years.

Many rural businesses are hard hit by the lack of fast broadband, a concern raised recently in a discussion paper* published by the Federation of Small Businesses (FSB).

The UK's trade association for small businesses has argued that whilst ninety four per cent of small business owners consider a reliable internet connection critical to the success of their business, the current broadband infrastructure is not fit for purpose. Many businesses cannot upload basic files to their websites without it taking an unacceptable amount of time. Others are experiencing difficulties when processing card payments at electronic point of sale.

I'm aware of a firm of auctioneers that has to rely on 4G mobile broadband on sales days to ensure customers can bid online in real time. But, even 4G drops connection, meaning that customers cannot bid, become frustrated and the firm loses out on valuable commissions.

In 2013, over 500,000 new businesses were established in the UK. More and more people are now seizing the moment by coming out of traditional employment and going it alone for work, or in partnership with others. Small businesses are the bedrock of the UK economy and critical to growth and job creation. In an increasingly globalised world in which technology is changing business practices, the vast majority of small firms will need access to high-quality digital communications infrastructure and services in order to succeed.

But lack of fast broadband is not just an SME problem. Whilst more people are setting up their own SOHO (small office/home office) businesses from home and require fast and reliable access to the Internet, increasing numbers of employees from much larger organisations also often work from home.

This can have enormous knock-on benefits for both employer and employee, including: less time and stress commuting each day; more time spent with family; reduced office costs; reduced carbon footprint; and a more flexible working relationship.

Rural Superfast Broadband Connectivity

In my local village of Shepley in West Yorkshire - commuter belt for Manchester, Leeds, Sheffield and London - lack of fast broadband prevents local farmers from filing mandatory reports online to DEFRA. The local health centre cannot download patient files. This means some patients have had to travel up to 20 miles in order to collect medical information from the local Health Authority.

In Shepley, we cannot quite determine just how many people in the area run businesses from home or are working from home. What we do know is that two major employers in Angela Smith's Parliamentary Constituency of Penistone next door are putting pressure on her to get superfast broadband into the area - and fast! The last thing a local MP wants are constituency businesses laying off workers because they can't get online to do business!

Even the UK Government's own digital champion Baroness Lane-Fox has calculated that the average family can save up to £600 per year by purchasing goods and services online. And for those seeking work, many jobs are now strictly advertised online. Lack of superfast broadband can be an inhibitor for job seekers looking for new opportunities.

So, I'm pleased that the FSB has raised this serious and challenging issue. But the UK does need to get its act together quickly in order to avoid potential social and economic divisions across the digital economy due to the lack of universal superfast broadband.

Further information

The fourth utility: Delivering universal broadband connectivity for small businesses across the UK