HC Deb 22 March 1982 vol 20 cc673-5
9. Mr. Michael Marshall

asked the Secretary of State for Industry what continuing responsibility he has for the development of Project Mercury; and if he will make a statement.

12. Mr. Neale

asked the Secretary of State for Industry when he expects the Mercury consortium to start providing services under the licence issued by him in February.

Mr. Kenneth Baker

The development of Project Mercury is primarily a matter for the Mercury consortium, although my Department will sponsor its interests where they involve the Government. I understand that Mercury plans to begin providing services early next year.

Mr. Marshall

I thank my hon. Friend for that reply and declare my interest. Does he accept that it is necessary for Project Mercury to agree with British Telecom on linkage, both domestic and international, and can he tell us what would happen in the event of a failure to reach agreement? What powers do the Government have on the international networking of telecommunications?

Mr. Baker

The first point made by my hon. Friend is a problem arising on a more general front. It is how to police competition when a nationalised industry ceases to have a monopoly. That is happening not only in the case of Project Mercury. The consortium and British Telecom have agreed that if they fail to reach an agreement within, I think, the next four months, the Secretary or I shall decide on the terms.

Mr. Orme

Does the Minister agree that the linkage with BT could hamper the developments that it wants to make, particularly in cabling, which is the major development that needs to take place? We need investment, including Government investment. Will not the Mercury development get in the way of that?

Mr. Baker

I do not think so. I believe that the right hon. Gentleman is unduly apprehensive. I agree that cabling and recabling of the country is the biggest industrial prospect before the country for the next decade. We published today the information technology adviser's report on cable systems to start a process of consultation with all the interests involved. I do not see a conflict between BT and Mercury.

Mr. Neale

Is my hon. Friend satisfied that his enthusiasm to liberalise the BT monopoly for projects such as Mercury is being matched by co-operation from BT? Does he agree that the time has come for the establishment of an independent regulatory authority that would approve attachments and independent networks that touch on the BT network?

Mr. Baker

One thing that I have learnt in the past few months is that monopolies in the process of having their monopoly taken away are most tenacious bodies. I am considering ways in which there can be more competition, and that will involve BT withdrawing from some of its licensing functions. As from 1 April it will cease to be able to license value added network services. That will be done by my Department, so that competitors do not have to submit their business plans to BT. That would be very unfair.

Mr. Wrigglesworth

Does the Minister agree that the terms between BT and the Mercury consortium are of fundamental importance to both parties and to their future development? I am sure that neither he nor the House wants to see one undermine the other. Will he, therefore, give an assurance that the terms of the agreement between the two will be published?

Mr. Baker

I think that some of the terms will be of a commercial nature and it will be difficult to publish them. However, I shall consider what can be published.

Mr. Henderson

Have not the Government substantially increased investment in British Telecom, and is it not likely to enhance the prospects for rapid development of the telecommunications industry if there is even greater scope for private investment?

Mr. Baker

I certainly agree with that. It is a historic fact that the trough of BT's investment was in 1976–77. Since then it has risen consistently, and the recently published public expenditure White Paper envisages it rising to the huge amount of £3 billion a year by 1984–85. We are examining ways in which there can be partnership between public and private funds to finance that investment.

Back to