Rural businesses hampered by slow broadband

Six in ten rural small and medium sized enterprises SMEs suffer with poor broadband connection, research from the Federation of Small Businesses (FSB) has found.

According to the business group, which surveyed over 3,000 SMEs, 63 per cent of small firms were dissatisfied with the speed of their broadband compared to fewer than half of businesses in more urban areas.

Over a third were also unhappy with their broadband reliability, while a quarter felt they were not getting good value for money for their service.

National chairman for the FSB, John Walker, said that many businesses were failing to run effectively as a result.

"With the technology we have today all firms should be able to trade overseas, throughout the UK, and from town to village," he said.

"With both rural and urban businesses clearly looking to the internet to expand, it is imperative the Government takes action to close the digital divide between urban and rural businesses."

A reliable internet connection is crucial for rural businesses who are often situated at a distance from customers and suppliers, and because self-employment and home-based working is more prolific in rural areas.

Businesses also depend on the internet to access various Government services including information on funding, tax rates and to submit returns.

VAT registered businesses have been required to submit all VAT returns online - and pay any VAT owed electronically also - since April this year.

As well as modernising the rural economy, the FSB said that improving infrastructure would allow businesses to tap into available markets, improve their competitiveness, encourage growth and take on more staff.

It is now calling for the Government to extend its pledge to improve Britain's broadband connection by 2015, ensure that 98 per cent of rural communities and businesses have access to a 20 Mbps superfast connection.

The Government had previously announced in March's Budget that 10 UK cities are to benefit from ultra-fast broadband by 2015. The FSB however believes the commitments to improving business infrastructure do not go far enough, particularly as it found that both rural and urban businesses expect their reliance on the internet to increase in future years.