Openreach must open doors for rural areas
It is, of course, fantastic that backbenchers, customers and, yes, the media have given the Government and BT a proper kick in the pants to ensure that Openreach, BT’S network subsidiary, is upgrading rural business lines. That too many households and businesses don’t have an adequate internet connection is one of the scandals of modern Britain. The Daily Telegraph has spearheaded a longrunning campaign to push for better broadband in remote areas and it is great to see steps being taken and cable being laid.
It is, however, worth having a think about what we’re going to do with the better internet infrastructure once we’ve got it. The UK has several issues – stagnant productivity and a Londoncentric economy to name but two – that could be addressed by harnessing the power of the internet.
That’s why it is great news that Rural England and Scotland’s Rural College have launched a consultation that is attempting to discover how best to support the digital economy in the UK’S regions. The aim is to come up with a number of policy ideas that will help businesses based in the countryside benefit as fully as possible from digital technology.
The report has been commissioned by Amazon. Cynics will be wary. They will say that the US tech giant is only doing this so that it can promote its Marketplace service, where businesses and sole traders list their products, and Amazon Web Services, its cloud computing offering. That’s true; big companies rarely do things that are completely altruistic. But if Amazon can help the UK’S rural businesses to reach their full potential then it deserves to also benefit from the resulting boom.
There were 537,000 businesses registered in rural areas across just England in the 2015/16 financial year, according to statistics from the Department for Environment, Food & Rural Affairs – that’s 24pc of all registered businesses employing a total of 3.5m people.
However, the productivity of those staff (as measured by gross value added) is much lower than the national average – £43,900 compared to £49,400 across the whole of the country. Raising the rural number up to the national average would therefore result in a more than £19bn benefit to the economy (and that’s before taking into account Scotland, Wales and Northern Ireland).
As Doug Gurr, the UK country manager for Amazon, said: “As long as you have a laptop, internet connection and a great product, you can now be local and sell global.” Amazon points to Second Nature, a fair trade home furnishings company set up by Karen Riddick in Dumfries that now has an annual turnover of around £350,000.
The investments in the UK’S digital infrastructure are increasing the potential of rural communities and businesses. The Government and local authorities would do well to pay heed to this report when it comes out to ensure that potential is fully unlocked.
Fever-tree not losing fizz
Some gold miners made money during the California gold rush. But it is said the companies that made the big bucks were those that supplied the pickaxes and tents. Similarly, there are plenty of distillers and drinks companies that have made money out of the world’s increasing obsession with gin. But no one has quite benefited to the extent of the company that has supplied the tonic water.
Fever-tree’s share price shot up, yet again, yesterday after it surpassed expectations, yet again, and upgraded its profit forecasts, yet again. The company floated at 170p in November 2014. Yesterday, after rising another 18pc, they ended the day at £20.58. This surely can’t go on much longer, can it? Investors have leapt on the slightest sign of slowing momentum to take profits. The trouble is there weren’t many signs of that yesterday.
Growth in the UK, its main market, has slowed but only to 113pc from 118pc. The company was responsible for fully 99pc of all growth in the retail mixer sector last year. And at the same time, it’s expanding abroad. Not only that, it’s attempting to move into providing mixers for dark spirits.
In some ways it’s better than the gold rush. Mines run dry. But our thirst for booze never does.
‘Let’s help the countryside benefit as fully as possible from digital technology’