Comment

It will not be Covid that kills the city… but the cloud

If Britain’s rural economies are set for a revival – our superfast broadband must extend to every corner

Many argue that the Covid-19 pandemic means we have passed “Peak City”. Workers are abandoning their commutes to strive from home offices – and inquiries at estate agents for homes in more bucolic settings are sharply on the rise. But is the seemingly unstoppable urbanisation trend, which started in the last century, about to snap into reverse? Will the value of mega offices in central London plunge – and floods of people start to move to the greener parts of our pleasant land?

Britons’ desire to move to greener pastures is certainly true. Online estate agency Rightmove noticed an increase in searches for rural property starting in April, the peak of Britain’s lockdown gloom. These online searches have started to turn into offers.

“Back in May, when the market reopened in England, we wondered how long the desire to move to the country or to smaller towns and villages would last,” Tim Bannister, Rightmove’s director of property data, said. “It’s clear that this short-term shift has turned into a medium-term trend, as our data is showing that home hunters looking at what’s available are also turning into serious buyers putting in offers.”

Many of these moves are made possible by the ability to work online – and more people have discovered they prefer life without an exhausting daily commute while obeying government guidance on Covid-19 (see graph below with numbers currently working from home). There also appears to be a growing acceptance by many executives that home working is not greatly damaging to productivity in many individual roles. It may also lead to substantial fixed-cost savings if fewer offices are needed, so it is an attractive cost-cutting measure for companies at a time of economic strife.

Strictly speaking, it is not Covid-19 that will end the rise of the metropolis – it is the growth of cloud-computing technology developed by Silicon Valley. But, if you can’t connect to the internet because your broadband access is so poor and intermittent, cloud computing is as much use as an inflatable pin cushion.

Even worse, because Covid-19 has accelerated the switch to a digital economy globally, regions with poor or substandard internet connections will be left even further behind, as the gap between internet “haves” and “have nots” grows wider still.

Each year, the National Farmers Union (NFU) publishes the results of its survey of several hundred members on their access to the internet and just 17pc said they had access to “superfast broadband”. These figures are slowly improving. In its January 2019 survey, 16pc of respondents had superfast broadband. In 2015 that figure was a minuscule 4pc. However, in the survey released this year, 15pc of farmers said they had no indoor mobile signal at all.

The lamentable quality of rural broadband in some areas of the UK – and indeed the rest of the world – means that the decentralisation of economic activity away from major urban areas will probably be an evolution, not a revolution. But the pace of change has been speeded up by the emergence of Covid-19.

This makes it more important than ever that Boris Johnson’s administration ensures everywhere in the UK gets access to reliable, high-speed internet – and it can’t happen fast enough. It is the singular most-important piece of infrastructure needed to boost opportunities and growth in the regions, an aim of most governments for decades whatever their political hue. Britain’s rural broadband needs to easily compete with the best the rest of the world can offer.

So, if Peak City has arrived – and Britain’s rural economies are set for a stunning revival – the issue of superfast broadband needs to be fixed now. It’s the main piece of infrastructure Britain requires to compete in the economy of tomorrow. And, if we can’t compete, we decline.

The results of the NFU’s survey of farmers showed an improving trend in their access to the opportunities presented by the web. But these changes are not happening anywhere near fast enough now the pandemic has accelerated the move to a digital world. For Britain to be able compete in the top economic tier in a post-Covid world, this limping improvement needs to turn into a sprint. It also looks like the Government has the tools at its disposal to make this happen.

Last month, a US bankruptcy court gave the go-ahead for the UK Government’s £400m rescue of OneWeb, alongside partner Bharti Global. The company hopes to launch 650 broadband satellites that form a constellation that will provide superfast broadband in rural areas from near-space orbit. It currently has 74 of its small satellites in position – and will resume launches in December.

OneWeb’s longer-term plans appear even more ambitious. In May, management submitted a modification request to the US Federal Communications Commission that would allow it to increase the number of satellites in its constellation to up to 48,000.

So, Boris Johnson now has a tool at his disposal that could help provide Britons with the infrastructure we urgently need to compete in the economy of the future – even those of us living in distant corners of the land.

Complete UK coverage will come with other benefits. Not only will the UK have a tool it needs to compete in tomorrow’s economy, it may even help solve the problematic over-centralisation of business and 
 wealth-creation in London, levelling up the regions.

It appears that a shift from city to country or suburb is genuinely starting to happen. But, for it to continue successfully, access to the cloud needs to be cheap and easy whether you live in Orpington or Orkney. Let’s hope OneWeb’s execution matches its ambition.

Garry White is chief investment commentator of wealth management company Charles Stanley

Do you agree that it will be the cloud, not Covid, that kills the city? Let us know in the comments section below.