Budget 2012 reactions: The promise of super-fast broadband

The government has committed £150m to create super-connected cities. Is it enough?

The prospect of super-connected cities excited many when chancellor George Osborne outlined plans to make the UK ‘Europe’s technology centre’. 

By committing £100m for the creation of 10 major cities – Belfast, Birmingham, Bradford, Bristol, Cardiff, Edinburgh, Leeds, London, Manchester and Newcastle – with access to super-fast broadband, and a further £50m to connect a further 10 smaller cities, Osborne stated that 90% of the population would benefit from fatter pipes to access the internet.

However, hundreds of thousands of businesses and millions of individuals alike may not ultimately feel the benefit until 2015 when the ultra-fast broadband project is completed. So, what difference will it make? And has the government acted soon enough? Business owners and experts shared their thoughts:

Peter Gradwell, managing director, Gradwell – an internet telephony service provider for businesses:

“The Budget identified Broadband as one of four infrastructure priorities, alongside roads, railways, clean energy and water. This, alongside the forthcoming 4G license auctions, is being seen, quite rightly, by government as an opportunity to implement a broadband universal service obligation, so that we can commit to a national level of quality broadband for everyone.

“Critics argue that the plans don’t go far enough in boosting network speed, however in my experience the real problem in this country at the moment is with blackspots. I was heartened therefore to hear that money will go towards upgrading wireless networks in rural areas and on major roads – which should go some way towards addressing this issue.”

Mark Heraghty, managing director, Virgin Media Business:

“Investment in the UK’s technology infrastructure is already bearing fruit with some of the most innovative digital businesses in the world operating here. We want to see more companies from the gaming and digital TV world setting up shop in this country and taking advantage of the support network that is available to them. We have an engine room of growth over at Silicon Roundabout which is contributing to the UK’s £120bn internet economy, but there is room to grow. It’s important that we propel this forward by giving the next batch of entrepreneurial businesses the right support, infrastructure and skills they need to thrive. This is what will enable UK innovators to push the UK forward to compete internationally and help us create ‘the next Google’.”

Ed Molyneux, CEO and co-founder, FreeAgent:

“I’m pleased the government has announced plans that should enable more small businesses to access investment, in addition to plans to improve the UK’s broadband network and offer enterprise loans to young people who want to start their own businesses. We need to ensure that we have the best infrastructure possible to nurture and encourage small businesses and freelancers – and the proposals in the Budget are a step in the right direction.”

Professor Sir Peter Knight, president, the Institute of Physics (IOP):

“For Britain to be Europe’s centre for technological innovation, science-based businesses must be at the heart of the UK’s economic recovery. From the £100m announced to support investment in major new research facilities to a tax system which better rewards the registration of intellectual property, and the introduction of more appropriately targeted R&D tax credits, it does seem that the government is keen to address many concerns that science-based business leaders have.

“We welcome the government’s ambition to spur economic growth through the science and technology bases, and commend the steps already taken, but continue to encourage them to be more ambitious. To be scientific and technological leaders in Europe, yes, we need a tax system that rewards innovation but we also need a long-term commitment to greater investment in basic science. Our investment in science lags proportionately behind Germany’s, America’s and China’s. For us to ensure our place at the top table, the government must show its hand with more confidence.”

Dominic Baliszewski, Broadbandchoices.co.uk:

“The creation of 10 ‘super-connected’ cities is great news for UK businesses but it is worth noting that Virgin Media and BT have already started their own superfast broadband roll-out – the government is playing catch up here. Progress to significantly improve the UK’s broadband infrastructure has been limited to date and our reliance on the internet for business and leisure has grown faster than our outdated networks can handle.

“Only days ago a report from the Boston Consulting Group revealed that the UK has the most internet-dependent economy than any other G20 nation, highlighting the vital contribution the internet now makes to UK GDP; imagine what could be achieved if our broadband networks were even better. If the UK is to ‘future-proof’ its broadband infrastructure, we should be aspiring to hyper-fast connection speeds of 1GB which would carry us through the next 10 to 15 years, rather than the next five. For example, the announcement of funding for high end TV, animation and video gaming industries is pointless without robust internet services behind them, since these industries are increasingly dependent on a broadband connection to reach the end consumer.

“The news is also cold comfort for those living and working in the outlying rural regions, being left ever further behind in digital poverty. If you live in Shropshire (with an average speed of 5.8 Mbps and superfast availability of 3% according to Ofcom) then this means that soon someone in London will have a connection that is 17 times faster than yours.”

Julia Stent, director of telecoms, uSwitch.com:

“It was clear from the Budget that top of the broadband agenda for the government is the quest to become fastest in the world, and not just Europe. Whilst funding earmarked for ultra-fast broadband in 10 UK cities is both ambitious and heartening, and will undoubtedly benefit technology companies looking to develop and expand in the UK, the primary concern should be the provision of a quality service to rural areas before pursuing the title of fastest broadband in the world.

“The government’s chief concern should be the provision of a service to those areas lacking decent broadband infrastructure before pursuing the likes of Korea and Singapore. Bringing an appreciable average speed to those in rural areas who have been forever languishing in the slow lane must be of equal importance.”

John Cridland, director-general, CBI:

“The Government’s commitment to support private sector delivery of world-leading broadband is right on the mark, and will ensure the UK’s high-tech companies have the infrastructure they need to be global champions. We also welcome the additional £150m of public money to support the roll-out of super-fast broadband coverage in smaller UK cities, although getting the details of this funding right will be critical to its success.”



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