Ed McGuinness: A state-of-the-art internet infrastructure network is the key to ‘levelling up’

25 Mar

Ed McGuinness is a former Chairman of Islington Conservative Federation, founder of Conservatives in the City, and contested Hornsey & Wood Green during last year’s General Election.

The 2019 Conservative Party Conference seems like a long time ago: Manchester thronging with crowds, ministerial drop-ins to fringe events, warm wine on a terrace somewhere, enjoying the last sparkle of summer sunshine.

Amongst the policy and pints there was one that stood out to me. Not unique in the pantheon of the Prime Minister’s ambitious vision was to have, “gigabit broadband sprouting in every home.” However, what is unique is the effect this particular ambition can have on everyone in the country.

So often politics, particularly Westminster politics, can seem distant; billions of pounds spent on a scheme that is nowhere near where you live, and the effects of which will be imperceptible to you. But, there are certain times when Westminster does touch people directly, and quickly.

An obvious example is taxation. For me, genuinely overnight, the stamp duty freeze allowed us to finally think about purchasing our first home. Internet connectivity, though, is perhaps one of the most ambitious and immediate reforms this government could have, and certainly a potential lasting legacy for the Prime Minister himself.

When you look at the high level statistics for the UK on broadband connectivity you could be forgiven for thinking we are not doing too badly. According to the ONS 96 per cent of households have internet access, and within Europe, the UK is ranked 8th for internet access according to a study by the EU Commission last year (pre-Brexit). Notably this was a steady decline from 6th and 7th in 2018 and 2019 respectively. Nonetheless, these top-level statistics belie the actual experience of internet usage.

At this stage, and bear with me, it is worth talking, a little, about internet infrastructure. The Commons Library has an excellent report on this but to summarise: superfast broadband is defined as download speeds of 30 megabits per second and is available to 95 per cent of UK properties. This type of broadband has been mainly delivered by Fibre-to-the-Cabinet technology (part-fibre, part-copper). During the coronavirus pandemic this broadband, which was thought to be sufficient for fairly data intensive use, such as streaming videos, was pushed to the limit as our entire lives moved online.

The UK needs to increase its capacity and gigabit broadband (1000Mbps) is the way to do it. As an indication, a one-gigabit-per-second download speed would allow a high-definition film to be downloaded in less than a minute. There are plenty of technologies that can be used to deliver this service including full-fibre connections, high-speed cable broadband, and potentially future 5G networks, as well as emerging satellite internet technology.

However, only 27 per cent of British premises had access to a gigabit-broadband connection in September 2020. (The Library’s dashboard is a fascinating tool to work out where the most affected areas are, should you have a few spare minutes in-between Zoom calls.)

So the problem really is twofold. How do we reach those areas that are still left without adequate internet connection, which is around 100,000 premises, and how do we eventually provide gigabit capable service to the whole country?

The Government’s plan, published on March 19, is welcome. It looks at innovative ways to supply that 0.3 per cent of the country without adequate service. Whilst this may seem like a small number, or a disproportionate level of focus, let us remember that these communities are, by definition, the most isolated and potentially vulnerable in terms of mental health and educational needs, and therefore deserving of focus and attention in improving their connectivity to the rest of the country – at true One Nation idea if I ever have seen one.

The second problem is more ambitious and effectual. With 74 per cent of the country still operating on outdated and inadequate internet infrastructure the return on investment of such upgrades, for the economy and productivity, would be profound. This falls squarely into the Government’s ‘levelling up’ agenda and is a true nationwide issue.

For example, London only has 21 per cent gigabit connectivity (Westminster itself is barely above 55 per cent), the South-East is at 20 per cent, and the North-West sits at 37 per cent. This is a policy area much aligned with the Prime Minister’s pledge to level up the whole country.

The £5 billion scheme announced today, by the Department of Culture, Media and Sport, to boost internet connectivity is really welcome news and part of a broader strategy, but I urge the Government not to lose any ambition on this. So rare is the opportunity to transform a part of the nation’s infrastructure that would mean so much to people. It would allow grandparents in Banff to speak to grandchildren in Bristol, help a sole trader in Milton Keynes to sell to customers in Mevagissey and even, dare I say, a Prime Minister in Westminster to speak to colleagues in Workington.

It is not hyperbole to suggest that this project is, and should be, as significant as the creation of the National Grid in the late 1920s. We urge the Government not be swayed by the many competing issues in its inbox, and.throw its energies behind this ambitious and potentially transformative project.

Ed McGuinness: Getting everyone back to work will save the economy

27 Jul

Ed McGuinness is a former Chairman of Islington Conservative Federation, founder of Conservatives in the City and stood for Hornsey & Wood Green at the general election.

Growth in GDP, from an economic perspective relies on three key areas. The first is labour; both population growth affecting its size and the participation rate. The latter of which will surely take a hit from this crisis. The second factor is capital investment in the economy and with the Government’s long-term investment plan this may very well be somewhat addressed. The third factor is known as Total Factor Productivity, productivity improvement or technological advancement. Normally in economics it is addressed residually (as capital and labour are fairly quantifiable), but generally, whilst we are holed up in our houses, especially the younger generations, the ability to be productive, to innovate as part of a social group, is limited. The bottom line is economic growth may jump around for a few months, but longer term will flat-line.

Boris Johnson’s rallying call of “build, build, build” follows well known and tried Keynesian economic principles, but putting aside that a British New Deal package comparable to that in the 1930s would actually cost north of  £700 billion, “shovel ready” infrastructure projects are rarely so in the United Kingdom. One can only look at the High Speed 2 rail link project which has been ongoing since 2009, the Heathrow expansion project, ongoing since the same year, and even the Channel Tunnel, arguably a huge success, took 18 years from agreement to completion. It would likely take a herculean effort, much like that seen in the early weeks of the Covid-19 response to expedite even the most minor infrastructure projects. Whilst this will be necessary for medium to longer term growth, a short-term booster shot is necessary to mitigate the risks of a permanently smaller economy.

Whilst the levelling-up agenda could perhaps see a step-change in the national economy, the wealth generating ability of London’s financial and multinational corporations is a capability that needs to be protected and nurtured if there is to be any economic recovery at all. London contributes between one quarter and one third of the entire economic output of the country, a population greater than the next 13 largest cities combined, and 11% of the UK’s tax revenue – a considerable and much needed source of cash as we emerge from this crisis. We have already seen some positive news with regards to the future of financial services in the post Brexit City which offers some security, but to get London’s economy firing again, benefitting not just the South East but the rest of the country. We must either adapt very quickly or risk a lasting hit to one of the world’s global economic command centres.

To do this people must get back to work – a simple aim, but complex in execution. The challenges are overarching twofold. First psychological and personal, people are genuinely concerned that they might get ill and naturally do not want to travel in close proximity (as is almost inevitable) in London and other city transport networks. The second, whilst fed and influenced by the first is separate, and is practical and organisational. In order to comply with new social distancing office space and transport has had to readapt to the point where it is impossible at the moment to have 100% capacity. Some offices in Canary Wharf have indicated a 50% capacity cap on open plan offices which seen have seen desks normally fit for six now only fit for one or two.  We must address both these issues when it comes to returning to work. By addressing the latter, a proof of concept is deliverable which will go a long way to alleviating the former, psychological concerns.

It is clear that accepting the current situation as the ‘new normal’ is not a solution. It would see not only resilient industries face collapse, but also highly operationally levered sectors like hospitality; fast food and tourism fall away alongside second order effects of rental and credit defaults. Therefore, the risks must be managed and mitigated. Practically those travelling should be encouraged to wear facemasks, wash their hands and observe social distancing, but we must change our working habits fundamentally, in the short term if we are to succeed.

Younger workers should be encouraged to return to the office more quickly than the manager class. The damage to younger people’s careers from Covid-19 has been highlighted in the potential loss of hospitality, retail and other feeder professions, but younger people who work in an office environment need social interaction and personal networking with colleagues, which is of huge importance to younger staff. Development through social interaction is not just a theory isolated to infants, but extends throughout all growth phases of life. Not only that, but younger people are generally less well paid and as such live in accommodation ill equipped for a healthy working environment lacking the space for a home office or a separate room for working. The active psychological damage of an absence of delineation between work and personal life, alongside the passive damage caused by separation from peers, will have a damaging effect on younger people if they do not return to work imminently.

There also needs to be a reform of the working day. If, as it is at the moment a 9-to-5 day, it is natural that rush hour falls either side of these, considerably so in London and other cities where commuter towns exacerbate the effect. London transport should run a rush hour service, therefore increasing capacity across the system, throughout the day, Companies, particularly those who work in close proximity to one another and are served by a limited number of transport links, for example in Canary Wharf, should collaborate to reassign their working day and stagger start and stop times and more importantly enforce them. An additional point of assistance would be to alter market opening hours from 9.30-4.30 as advocated by the Association for Financial Markets in Europe and the Investment Association, but not accepted by the LSE in the most recent review. This would lose the overlap with Asia, which is arguably not statistically significant, but would retain the lucrative overlap with US market whilst allowing more time, particularly in the morning, for commuter travel.

The Government must remember the importance of London and other cities’ regional influence on productivity – a problem in the UK even before Covid-19 – without which the entire country could level-down. By focussing on only the short-term operational aspect, large office-based London businesses may see a slight recovery, but support industries around them may collapse which will lead to longer term pain. On this occasion, working together to protect the centre is protecting the rest.