§ '(1) Where it appears to the Secretary of State expedient that apparatus which is capable of being connected (either directly or indirectly) to a telecommunication system should be marked with or accompanied by any information or instruction relating to the apparatus or its connection or use, the Secretary of State may by order impose requirements for securing that the apparatus is so marked or accompanied, and regulate or prohibit the supply of such apparatus with respect to which the requirements are not complied with; and the requirements may extend to the form and manner in which the information or instruction is to be given.
§ (2) Where an order under this section is in force with respect to apparatus of any description, any person who, in the course of any trade or business, supplies or offers to supply apparatus of that description in contravention of the order shall, subject to section (Offences under sections (Marking orders) and (Information etc. to be given in advertisements) due to default of third person), be guilty of an offence and liable:
- (a) on summary conviction, to a fine not exceeding the statutory maximum;
- (b) on conviction on indictment, to imprisonment for a term not exceeding two years, or to a fine, or to both.
§ (3) An order under this section may make different provision for different circumstances and may, in the case of apparatus supplied in circumstances where the information or instruction required by the order would not be conveyed until after delivery, require the whole or part thereof to be also displayed near the apparatus.
§ (4) Orders under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
§ (5) For the purposes of this secton a peron exposing apparatus for supply or having apparatus in his possession for supply shall be deemed to offer to supply it.294
§ (6) In this section and section (Information etc. to be given in advertisements) "supply" shall be construed in accordance with section 9 of the Consumer Safety Act 1978 and, in the case of the Corporation, shall be construed as including supply in pursuance of a scheme made under section 17.'—[Mr. Kenneth Baker.]
§ Brought up, and read the First time.
§ The Minister for Industry and Information Technology (Mr. Kenneth Baker)
I beg to move, That the clause be read a Second time.
§ Mr. Speaker
With this it will be convenient to take Government new clauses 4, 3 and 2, Government amendment No. 27, and amendment No. 48, in clause 16, page 20, line 13, at end insert—
§ '(7) The Secretary of State may, after consultation with the Corporation, by order:
- (a) impose requirements for securing that any apparatus of a description specified in the order which is supplied or offered for supply in the course of any trade or business, being apparatus of a kind capable of use (either directly of indirectly) with any telecommunications system run by the Corporation:
- (i) is to be marked as to indicate whether or not it conforms to a standard approved under subsection (1) of this section or is itself approved under subsection (2) of this section;
- (ii) if the Secretary of State thinks fit in the case of any such description of apparatus which so conforms or is so approved, that it is accompanied by information or instruction of a kind specified in the order as to any such conditions, relating to the apparatus, to its connection to such a system, or to its use, as may have been specified in the standard under subsection (1) or in the approval under subsection (2) of this section, as the case may be; and
- (b) regulate or prohibit the supply or offer of supply of any such apparatus with respect to which the requirements are not complied with; and the requirements may extend to the form and manner in which the apparatus is to be marked and any information or instruction that is to be given.
§ (8) For the purposes of an order made under subsection (7) of this section, a description of apparatus may be framed by reference to any circumstances whatsoever.
§ (9) Where an order under subsection (7) of this section is in force with respect to apparatus of any description, any person who in the course of any trade or business supplies or offers to supply apparatus of that description in contravention of the order shall be guilty of an offence punishable:
- (a) on summary conviction by a fine not exceeding £1,000;
- (b) on conviction on indictment by a fine or imprisonment for a term not exceeding two years or both.
§ (10) For the purposes of the foregoing subsection a person exposing apparatus for supply or having apparatus in his possession for supply shall be deemed to offer it for supply.
§ (11) Where a body corporate is guilty of an offence under subsection (9) of this section and that offence is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate or any person who was purporting to act in any such capacity, he, as well as the body corporate, shall be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
§ Where the affairs of a body corporate are managed by its members, this subsection shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.
§ (12) An order made under subsection (7) of this secton shall be made by Statutory Instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.'
§ Mr. Baker
These new clauses, I believe, will be generally welcome. They set out the consequential stages of the liberalisation of the British Telecom monopoly.
I should like to remind the House what will happen after this Bill is on the statute book. After vesting day, some time this autumn, it will be possible for certain equipment to be offered direct and for sale for attachment to the British Telecommunications network. The monopoly of British Telecom will be retained with regard to the main communication network, the main trunk network and the 295 right to attach the first telephone to that network. It will be possible, however, for private companies to offer for sale a wide range of equipment to be attached to the network. That equipment will range from simple handsets to answer-phones right through to small PABXs and large PABXs. That is the main element of the derogation from the monopoly of British Telecom.
The process of liberalisation, as my right hon. Friend the Secretary of State made clear when he made his announcement in July last year, will take place over three years. We have chosen three years because we want to give an opportunity for the traditional suppliers to the Post Office, as it now is, to modify their equipment and to design and bring in new equipment which they will be able to offer for sale directly, and not through the Post Office.
The period of liberalisation, as I have pointed out previously, started from my right hon. Friend's statement last July, so the clock started ticking then. Over the three years from last July, the liberalisation period will be complete.
It is our intention to liberalise the simpler equipment first, so that later this year—I hope that it will be later this year—it will be possible to buy ordinary telephone handsets and other equipment of that sort, such as answering machines, which have been approved for sale from shops or companies. It will be quite legal then to affix that equipment to the network.
The Bill, through other clauses, will introduce two main changes. Other companies will be able to supply equipment to the customer, and that will undoubtedly increase the range of choice that is available to the British public. We believe very strongly that that will improve the quality of service and the range of equipment.
Secondly, the requirement that British Telecom should be the body which approves this equipment will be removed, because it would be quite wrong for BT to be in a position of approving both equipment which it is designing and developing and the equipment of the private competitors.
The approval bodies and the approval procedures which we have announced—this is known; I announced it some months ago—are that the British Standards Institution has been asked to draw up standards for this equipment and for a whole range of equipment, and I am glad to tell the House that that work is now going ahead, and that is being done with the co-operation of BT and the private sector. Once those standards have been published it will be possible for suppliers to submit equipment which they think measures up to those standards.
§ Mr. Baker
Yes. I can absolutely assure the hon. Gentleman that safety is one of the prime requirements of the whole procedure, because it would be irresponsible and dangerous to allow equipment to be attached to the telecommunications network which would, for example, allow a very high electric charge to be passed down so that if someone were working on the line he could be killed. That is a very remote eventuality but, none the less, it is one against which we must guard. Therefore, safety is one of the factors in the procedures that I am explaining.
An independent approvals body, the British Electrotechnical Approvals Board, will examine the equipment and give approval, after it has tested it to ensure that it works properly and meets the safety requirements.
§ Mr. Baker
No, this body exists already, and I am glad to say that it exists in the private sector and has the support and confidence of many companies, including BT. [Interruption.] The right hon. Member for Salford, West (Mr. Orme) should know, because the board has been in existence for several years, during his own period as a member of the Cabinet.
The board will examine the equipment. The purpose of the new clauses is to follow on from that stage. It 'will require equipment to be stamped either "Approval to be attached to the main network" or "Approval not given to be attached to the main network." All equipment that is to be offered for sale must bear either of those marks clearly.
Hon. Members may say "Why should we allow equipment to be marked 'Not approved to be attached to the main network'"? The purpose is to recognise what is now widespread practice—that many private network exchanges within companies, or within even nationalised industries, often attach to their networks equipment which has not measured up to the stringent requirements of the Post Office as regards attachments to the general network,,, because it is a private network and it is therefore very common practice to have equipment attached to that which today has not been approved by BT. That is the purpose of new clause 5.
New clause 4, which is based upon section 9 of the Trade Descriptions Acts, will enable the Secretary of State to make orders requiring that such information should also be given in advertisements for terminal equipment. Many hon. Members will have seen advertisements during the past few months in many papers and magazines, advertising various pieces of telecommunications or telephonic attachments. Some bear the mark that they have been approved. Some have no information on that at all We intend to make it obligatory, by this clause, that the information should be contained clearly in the advertisements so that the purchaser or the would-be purchaser knows from the start whether that equipment has been approved for attachment to the network.
Together with new clause 5, new clause 4 will enable the Secretary of State to require that purchasers of attachments receive adequate information and guidance about terminal equipment and its use so that damage to the network and, indeed, injury to BT employees will be avoided.
§ Mr. Roger Stott (Westhoughton)
As the Minister knows, I was a member of the Standing Committee for only a short time. Therefore, I am not au fait with what went on. I ask the Minister one question. Who will be responsible ultimately for the testing of the equipment beyond the prime instrument? Will that responsibility lie with BT?
§ Mr. Baker
I recognise that the hon. Gentleman was promoted off the Standing Committee when I was promoted on to it. I know that he is very knowledgeable about Post Office matters. The testing of the equipment, in the approval process, will lie with the British Electrotechnical Approvals Board. It will have that responsibility. In the initial stages of the liberalised regime, the board may call upon BT and other research bodies to assist it in that process. I think that that is likely. But the board has taken on this obligation.
§ Mr. Gregor MacKenzie (Rutherglen)
I think that all of us understand the points that the Minister has been making about the testing of the equipment, whether it be handsets or anything else. I think that what my hon. Friend the Member for Westhoughton (Mr. Stott) is concerned about, as I am, is who is to test it once it has been fitted to the entire system. After all, BT has an interest in the entire system and in preserving it. We want to know who, once it is connected, will test it. Secondly, does new clause 4 contain—I cannot see it, closely as I have looked at the clause—the power of entry to ensure that such a test has taken place?
§ Mr. Baker
The testing of equipment after its original approval is the job of the BEAB. If it is approved for attachment to the network, if it is the first telephone in a home, BT has the obligation to attach it, but it could be a private telephone. If subsequent attachments are needed, as long as the equipment is approved it could be attached by either BT or, in private companies, by other suppliers. I made that clear in reply to a question yesterday.
I do not know whether the right hon. Member for Rutherglen (Mr. MacKenzie) wants to raise the question of maintenance at this stage. I think that it will probably arise later.
§ Mr. MacKenzie
I am sure that the Minister will be answering my question on new clause 4. I was speaking purely of testing. Does the new clause contain the power of entry so that such a test can be carried out once a connection has been made?
§ Mr. Baker
I have nothing more to say on testing after the equipment has been tested, installed and commissioned. For domestic homes it will be installed by BT. I reconfirm that BT will have the monopoly for the single telephone instrument in the home. This is a central part of our proposal, and has been generally welcomed by the Post Office Engineering Union and by suppliers and users, all of whom are concerned about the integrity of the network.
§ 4 pm
§ Mr. Stott
I shall hunt the hon. Gentleman on this point. Let me give him a practical example. I do not know how many shared lines still exist, but I believe that there are quite a few. If BT fits the primary instrument on a shared service line and another company later adds other instruments to the shared line, it is possible that the system would work, because a shared service works through ringing to earth. But unless a balanced test is made from a central point—the test desk in the exchange—the calls of one subscriber could be metered on the other subscriber meter. The testing must be done centrally. It cannot be done at the prime instrument. One has to ring the exchange and have a balanced test done. If a private enterprise organisation were to fit any plan set numbers from the prime instrument, would it have to ring British Telecom's test desk and ask for it to be tested? If that happens, will it be done on an agency basis?
§ Mr. Baker
That is nothing new. In fact, the matter was debated in Committee. That argument is always used in connection with shared lines. If, in the example that the hon. Gentleman gave, there were a dispute about whether the part that BT linked to the network was faulty, or whether a part linked by the private contractor was faulty, 298 both parties might need to be involved in the test process. That is quite possible. Much of the testing in future will be done by BT, as happens now.
I turn to new clause 4, which deals with advertisements. As in the case of the Trade Descriptions and Consumer Safety Acts, suppliers or advertisers who do not comply with orders under either of these clauses will be guilty of an offence and fined up to £1,000 and, if convicted on indictment, sent to prison for up to two years.
New clause 3 provides for prosecution of a person who misleads a supplier into infringing a marking or information order and creates statutory defences where a supplier or advertiser unwittingly commits an offence. This, too, is based on provisions in the Trade Descriptions Act.
Before dealing with powers of entry, I shall explain new clause 2, which is being taken with amendment No. 27. It is consequential upon new clauses 4 and 5, which introduce marking order and information order provisions for telecommunications attachments. It is a standard provision, which enables the responsible individual to be prosecuted when a body corporate commits an offence. Otherwise, technically, only the body itself could be proceeded against. We want the provision to apply to offences under new clauses 4 and 5, as it applies to offences against similar provisions in the Trade Descriptions Act. It already applies to offences under clause 12(3). The simplest method is to introduce this new clause, which will apply to all offences under the Bill, and remove subsection (3), which will be done by amendment No. 27.
We consider that this is an effective regime to police the quality of equipment that is offered for sale. It is a matter of real concern in the new liberalised regime that the equipment should not only work but be entirely safe. It should be clear to anyone who is offered the equipment for sale whether it is so approved.
The hon. Gentleman mentioned enforcement powers. We are still considering the matter. We have been advised that the existing powers under the Trade Descriptions Act are sufficient and that the powers of entry are sufficient. However, I wish to be certain that that is so, because the powers of entry will be to the premises of retailers—and possibly suppliers, wholesalers and manufacturers—to ensure that the equipment that they are offering for sale is properly marked. I accept that the clauses, as drafted, do not include specific enforcement powers of entry. We are considering whether specific powers are necessary, and if we so decide we shall add them in another place.
Considerable doubt has been expressed on the question whether the powers are necessary, and I want to satisfy myself before asking the House for new powers of entry which are extremely wide. Certainly, we have doubts about them where they affect retailers, because the evidence could be easily acquired by someone going into a shop and buying the equipment. It will be marked "Approved for attachment" or "Not approved", or there will be no mark at all. So the evidence will be there. However, there may be difficulty if the equipment is not offered for sale through a shop. I am considering the matter, and I hope that what I have said will satisfy the Opposition.
Fraudulent or incorrect marking will be enforceable under the Trade Descriptions Act whenever it amounts to a false trade description. It will be in the interests of the private suppliers of equipment, just as much as in the 299 interests of BT, that the approval procedure that I have outlined should be properly followed. It is in the interests of BT for obvious reasons. It is in the interests of private suppliers because they go through an elaborate procedure and a long process of design and developing equipment, and they do not want their equipment, to be undercut by equipment which does not meet the specification and which may be faulty.
I hope therefore, that the Opposition will welcome the new clauses. I gave undertakings in Committee to bring forward proposals on those lines, and I hope that they will be found satisfactory.
§ Mr. Speaker
Before I call the right hon. Member for Salford, West (Mr. Orme), I wish to say that I looked with care at new clause 8 while the Minister was speaking. Bearing in mind the arguments that were advanced by the hon. Member for Bethnal Green and Bow (Mr. Mikardo), I propose to allow new clause 8 to be discussed with amendment No. 54 and the group of amendments that are being taken at the same time. Therefore, the main debate on amendment No. 54 will be brought forward. The discussion will take place on new clause 8 together with amendment No. 54, amendment (a), amendment (b) and Government amendment No. 53. It will be possible for hon. Members to vote both on new clause 8 and on amendment No. 54.
§ Mr. Orme
I thank you for that decision, Mr. Speaker. My hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) is elsewhere on business affecting the Bill. Your decision means, of course, that new clause 6 will be discussed after the debate on this group of new clauses, and it thus alters the seriatim of the debate. Your decision is most welcome.
§ Mr. Speaker
I am obliged to the right hon. Gentleman. My decision may please him more than it pleases other right hon. and hon. Members, but it means that new clause 8 will now be debated after new clause 6, and that the series of amendments on telephone tapping will be taken at the same time.
§ Mr. Orme
My hon. Friend the Member for Westhoughton (Mr. Stott) raised an important point on the development of private industry which could be brought into the home—a point on which the Minister was trying to offer protection. I hope that the hon. Geentleman's assurances are better than those that he gave about PABXs in Committee, because he has obviously changed his mind on that point.
We shall be discussing the detailed and central issues on later amendments and therefore we shall not pursue the matter on the new clauses. The Minister has gone some way to meet the case that we put in Committee, but we shall debate that in detail on later amendments.
§ Question put and agreed to.
§ Clause read a Second time, and added to the Bill