Procurement · 23 November 2016

Autumn Statement 2016: Philip Hammond pledges £1bn for vital digital infrastructure

Autumn Statement forecasts
Philip Hammond: “My ambition is for the UK to become a world leader in 5G”

The chancellor, Philip Hammond, has promised to invest £1bn in UK digital infrastructure by 2020/21 – implementing a full-fibre network. 

In his first Autumn Statement, Hammond said the government will make £1bn available to help the private sector introduce nationwide super-fast fibre optic broadband, and support the first 5G mobile networks, over the course of this parliament. 

To support UK businesses in the transition to greater broadband connectivity, Hammond also stated that from April next year the government will provide full, 100 per cent business rate relief on new super-fast fibre optic broadband investment for five years.

“Our future transport, business and lifestyle needs will require world class digital infrastructure to underpin them,” Hammond said in his speech to a packed House of Commons on 23 November.

“My ambition is for the UK to become a world leader in 5G. That means a full-fibre network: a step-change in [broadband] speed, security and reliability.”

The promise to invest in digital infrastructure is one of a number of commitments the chancellor has made to “turbocharge” UK productivity, which Hammond claimed had been set back by uncertainty caused by this year’s Brexit referendum.

Overall, the chancellor said that the government would invest 0.8 per cent of GDP on economic infrastructure project this year, with the proportion increasing to between 1 per cent and 1.2 per cent a year after 2020.

Hammond added: “We must sustain this effort over the long-term if we are to make a lasting difference to the UK’s productivity performance.”

Small business decision makers have welcomed the government’s renewed commitment to digital.

Commenting on the announcement, chief economist and the EEF, the UK association of manufacturers, Lee Hopley, said: “It is encouraging to see government playing a far more active role in supporting the delivery of infrastructure in this commercial market.

“The government has seen the ‘light’ in backing a full fibre digital network right to the doors of businesses across the country.”

Digital providers have also welcomed news of further investment. European vice president at fibre optic solutions provider Brocade, Marcus Jewell, said: “Availability of full-fibre broadband 5G internet trials promised by the government is especially vital if the UK is going to maintain its position as a digital innovator.

“For too long huge swathes of the country have been stuck with poor connectivity, this announcement is a key next step for the UK’s digital infrastructure.”

Lee Hopley, chief economist at EEF, commented: “The government has seen the ‘light’ in backing a full fibre digital network right to the doors of businesses across the country. This will not only deliver on speeds but also resolve the issue of reliability, latency and resilience, while also future proofing a critical national infrastructure network.”

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Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.