HC Deb 09 April 1984 vol 58 cc129-37

Lords amendment: No. 29, in page 10, line 16 leave out from "against" to "and" in line 20 and insert particular persons or persons of any class or description (including, in particular, persons in rural areas) as respects any service provided, connection made or permission given in pursuance of such conditions as are mentioned in the foregoing paragraphs (whether in respect of the charges or other terms or conditions applied or otherwise);

Mr. Kenneth Baker

I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker

With this we may discuss Lords amendment No. 32.

Mr. Baker

The purpose of Lords amendment No. 29 is to strengthen further the safeguards in the Bill for people living in rural areas. As such, I hope that it will be welcomed by right hon. and hon. Members on both sides of the House, even by the elderly grandmother of my hon. Friend the Member for Northampton, North (Mr. Marlow), who does not even live in a rural area.

The Government wish to safeguard the interests of those living in rural areas. We have no doubt about the importance of telecommunications service to people in rural and remote communities. It helps them keep in touch socially with each other and with people in towns. It helps them do many of the items of business such as ordering goods and arranging services which could involve them in quite difficult travelling. That is why we have included provisions in the Bill to safeguard services to rural areas. Clause 3, for example, places a fundamental duty on the Secretary of State and the Director to ensure that telecommunications services are provided throughout the United Kingdom to meet all reasonable demands for them, including especially those in rural areas.

11.15 pm

This is the first time that the interests of rural areas have been recognised in telecommunications legislation. However, in another place there was pressure to strengthen the safeguards further to ensure that people in rural areas are not discriminated against solely because they live in rural areas, particularly in respect of prices. We accepted the force of those arguments and this amendment is the result.

It may be helpful if I explain briefly how it will work. As the House knows, clause 8(1) lists the conditions that must be included in licences before an operator can be designated as a public telecommunications operator. PTOs will comprise the main operators, including BT, which. I appreciate is the main focus of attention, but also Mercury and Hull. Therefore, in effect the Bill provides that BT's licence must contain the conditions listed in clause 8(1). Clause 8(1)(d) already contains a provision preventing undue discrimination. Amendment No. 29 spells out explicity that BT's and other PTO's licences must contain a condition requiring the operator not to show undue preference to, or to exercise undue discrimination against persons of any class or description, including, in particular, persons in rural areas, in respect of any service provided or connections made.

Amendment No. 29 goes on to say that this prohibition on undue discrimination must apply not only to charges and terms and conditions but also in other respects as well. That makes it clear that the obligation not to discriminate unduly applies not only to the provision of service but also to charges made for the service and the use of the services provided. Connections made or permission given makes it quite clear that the obligation applies to installation, maintenance and usage. The amendments will be to the benefit of those living in rural areas and I commend them to the House.

Mr. Ewing

We have had debates about the need to protect services in rural areas before and the arguments have been well rehearsed. One question that we continually ask and to which, equally continually, we do not receive an answer, concerns the possible demand to be placed on local authorities as a result of clause 84. It lays down that in future where local authorities—in Scotland it would be the regional, district and island authorities —wish to have an additional telephone or telecommunications service, or wish to preserve an existing telephone or telecommunications service for the benefit of that area, they will be empowered to contribute or to make good the losses sustained by the particular telephone company, whether that company is Mercury — that is a remote possibility—or whether the company is BT plc—that is a distinct possibility.

Will the Minister give the House and the local authorities, which are particularly hard-pressed as a result of the Government's cuts in public expenditure, an absolute assurance that at no time in future will they be asked to contribute to the cost of maintaining the services in the rural areas? If what lies ahead is that the islands and district councils in the rural areas are to be asked to sustain the telephone service in their areas, the guarantees and promises that are being made by the Minister tonight are simply not worth the paper on which they are written. The Director General of Oftel, Mercury and BT plc are under an obligation to provide services where it is reasonably practical to do so. Of course, that will give a fair leeway to the companies concerned. My great fear is that clause 84 will mean that local authorities, through the ratepayers, will sustain the rural service, otherwise why is clause 84 in the Bill? This will fall not on the Government or the telephone companies, whether it be BT plc or Mercury, and we know that Mercury is interested only in the intercity trunk roads in any case. It will fall on the local authorities through the ratepayers, and the remote areas of the United Kingdom will bear heavily the cost of sustaining these services in rural areas.

I hope that the Minister will give us a specific assurance that the local authorities in those areas will not be asked under clause 84 to contribute to the costs of the services in the rural areas.

Mr. Charles Kennedy (Ross, Cromarty and Skye)

The Minister has heard me speak on several occasions about rural telephone services. In the course of those exchanges he has on several occasions indicated his awareness of my constituency—not only the enjoyment that he has derived from spending holidays there, but his recognition of the difficulties that my constituency and similar parts of Britain may face as a result of the measure and his repeated desire to try to safeguard it.

That being the case, it is interesting to note that the Government have suddenly accepted that the addition that the other place has written into the Bill is to be welcomed, having said time and again that no such addition was necessary, because the Bill, as originally drafted, safeguarded rural telephone services and needed no further amendment or elaboration. That was to be ensured because of the good will and sense of the Minister and of the regime that will exist after BT is privatised, which would safeguard rural services. It is interesting to note how the Minister and the Government now so warmly embrace the measure that was imposed upon them by the upper House. I am glad that the Minister embraces this amendment, but it leaves hon. Members who argued about rural services deeply suspicious of the motives, methods and sense of priority of the Government in the first place.

In consideration of rural telephone services, the important point about differential charging remains. We still have to look to the Minister to confirm that BT plc will not simply enjoy a carte blanche on differential charging. It is incumbent upon the Minister to point out forcibly to the House again, I hope more persuasively than before —obviously more persuasively than his opposite number in another place was able to do — that, when privatisation takes place, it will not inevitably result in the outcome that many people fear — not just hon. Members, but those concerned about the implications of the Bill—that the Mercuries or Hulls of this world will be able to buy or operate in a lucrative market, be it London, Leicester or Leeds, with no interest in the much less lucrative market of the rural areas. One recalls the threat last time the Bill was debated. Given the additional safeguard that the other place has written in, it remains a possibility that the consumers and clients in rural areas will be faced with higher servicing charges and a lower quality of service from what remains of BT plc, which will be left with the less profitable and less commercially attractive part of the network. As a result, it will have fewer profits to churn into them.

When the Minister refers to clause 3 and rural areas, he should explain why he is also defending and embracing an amendment introduced in the other place when he has said all along that no such amendment or addition was necessary. That is the contradiction in the Government's argument. Local authorities, particularly in the Highlands and Islands, which have corresponded with me at length on this subject, have been at pains to point out that contradiction. I hope that the Minister will say why they were wrong when I raised their objections earlier, and why —even though he accepts the amendments made to the Bill—he still feels that they have nothing to fear. I hope that the Minister will respond to that point.

However, it remains to be seen whether the safeguards will be as strong as we would wish, and whether this thoroughly rotten piece of legislation on rural telephone services will be any better as a result of the mild safeguards, which we welcome, which were written into the Bill in the other place.

Mr. Golding

I should point out to the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) that the Minister is very good at making the best of a bad job. He always looks content, even at his darkest hour. Month in, month out, we faced that Laurel and Hardy team, and it was obvious that the Minister was Oliver—content and happy despite all adversity.

Like, no doubt, the hon. Member for Northampton, North (Mr. Marlow), I was delighted when the Minister eulogised the virtues of legislating specifically for rural areas. I was pleased, because it meant that all the letters sent by the Post Office Engineering Union, the Union of Communication Workers and the British Telecommunications Union Committee to the women's institutes, the National Farmers Union and the parish councils had led him to accept something that his officials, at a very early stage, had told him to resist. It is one "Resist" that has changed into "Accept with charm, as though one had wanted it all the time." Yet we know that the Minister fought hard not only for months, but for years, against making a special case for the rural areas. Now he has had to succumb.

I warn the hon. Member for Ross, Cromarty and Skye, who is already a little suspicious of the Minister, not to be taken in by the Minister's smile or by his confident look and confiding manner. Incidentally, if the hon. Member for Croydon, South (Sir W. Clark) wishes to lounge, he may find the Embankment more to his taste. Despite the Minister's confiding manner, he has not told us what he is going to put in the licence. The way in which the legislation works will not depend on last-minute acceptance of amendments. What happens in the rural areas will depend on whether substantial changes are made to the licence as a result of amendments made to the legislation.

The Minister should be telling us not that he has been converted on the road to Damascus, but how he has changed the licence since the amendment was accepted in the other place. How will he ensure in the licence that maintenance and tariffs in the rural areas will be similar to those in the towns? Will telecommunications as well as telephone services in general be provided in rural areas? Having studied the licence, we know that rural areas will get a basic telephone service, but there is nothing in the licence—or there was not—to ensure that rural areas will receive the full telecommunications service. The Minister should tell us how in the licence he has improved services for rural areas. If he has not, what he has told us will be of no avail. If he has changed the terms of the licence, he should come clean and tell us precisely what he has done since the Bill was amended in another place.

11.30 pm
Mr. Gerrard Neale (Cornwall, North)

First, since my right hon. Friend has played a real part in liberalising and privatising British Telecom, its service to those in rural areas has dramatically improved over and above what it used to be. Secondly, any sensible and realistic person who lives in a rural area and who has read the Bill and my right hon. Friend's statements will draw the unavoidable conclusion that the protection that he will receive will be far greater than that which he is receiving under British Telecom's current regime.

A person who lives in a constituency such as mine knows only too well that in a scattered area he cannot possibly expect to get exactly the same standard of services as someone who lives in the middle of a town or city. It is ridiculous when Labour Members produce synthetic enthusiasm for the provision of services in rural areas similar to those provided in towns and cities. They know that it is utterly impracticable to try to do so. The protection that my right hon. Friend wishes to insert in the Bill goes as far as it is realistically possible to go to meet the requirements of those living in rural areas. He should be congratulated on seeking to put it in the Bill.

Mr. Ashdown

I did not intend to intervene until I heard the contributions of the hon. Members for Newcastle-under-Lyme (Mr. Golding) and for Cornwall, North (Mr. Neale). The hon. Member for Newcastle-under-Lyme and, to a certain extent, my hon. Friend the Member for Ross, Cromarty and Skye (Mr. Kennedy), who were both involved in the Bill's consideration in Committee, gave a warmer welcome to the terms of the amendment than some with a colder eye might wish to do. It is right and proper that the hon. Gentleman and my hon. Friend should give it that welcome because we recognise that a good deal of pressure had to be put on the Minister to get him to agree to the introduction of the amendment that he now espouses with such enthusiasm. I look forward to hearing the reasons for his change of heart.

My right hon. and hon. Friends are happy to support the amendment because it is an improvement to the Bill, but it includes words that are dripping with conditionality. If one were rather meaner, they could be described as weasel words. There are terms such as "undue preference" and "in particular". The hon. Member for Cornwall, North was right to say that the amendment declares a commitment that is not in the Bill. We need the commitment because BT is moving into private hands. When that process is completed, we shall not be able to question the Minister of the responsible Department of state on these matters. We shall not be so effective an instrument of safeguard as we have been in the past.

Mr. Neale

Does the hon. Gentleman accept that in the past BT has not had the same level of commitment and has not discharged its commitment in areas such as mine?

Mr. Ashdown

I recognise that that commitment has, from time to time, been lacking. But there are many examples of good Members of the House having been able to push BT locally. Many of the recent moves in BT, due to competition opening up, have brought about a beneficial aspect. That is, however, not the reason why we are going as far as we are going now.

The Minister said that the Government wish to safeguard the needs of rural areas. That safeguard will remain inadequately expressed. Nothing that could have been done under the original Bill could not now be done under the amended Bill. The wording of the amendment drips with conditionality, such as the word "undue". That must be defended by the Director General of Oftel and his tiny staff of only 50.

What the Government have said about increasing charges by RPI minus X per cent. will be equally applied throughout the country and will protect rural charges for the next five years. But what will happen after that? I do not envisage a significant differential rental or significant differential call and maintenance charges for rural areas within the next five years because they are protected from that, but what will happen then? The words in the amendment are so conditional and so much to be defended by the Director General, who will have more than enough to do, that I doubt whether the Bill will honour the Minister's magnificent rhetoric about the protection and safeguarding of rural services.

We may support the amendment, but with a good deal of scepticism.

Mr. Marlow

We have just heard rather a lot of special pleading. I found it a little disturbing and unsettling, and I expect that my hon. Friend the Member for Croydon, South (Sir W. Clark) feels much the same — [Interruption.] I am sure that he will disagree with me if he feels like doing so.

Let us return to Animal Farm—all animals are equal, except that pigs seem to be more equal than others. Why is it that in this legislation rural areas are more equal than urban areas? I am proud to represent an urban area I have no rural constituents. If there is to be no discrimination against particular persons or persons of any class or description why should that include especially persons in rural areas? If there is to be no discrimination, there is to be no discrimination. That is what the legislation means. Why do we have to qualify "no discrimination"? Why should we have a special privileged class—those who live in the leafy shires who are, perhaps, better breeched than my constituents — who must be looked after better than anyone else?

Mr. Kenneth Baker

With permission, I shall reply to some of the points that have been raised.

The hon. Members for Newcastle-under-Lyme (Mr. Golding) and for Ross, Cromarty and Skye (Mr. Kennedy) chided me for accepting amendments from the Lords. When the Bill went down the corridor to another place, it was almost perfect. There were just one or two blemishes that needed to be brushed off and one or two hidden delights that have been burnished in another place.

If the Lords wanted, in Shakespeare's phrase To gild refined gold … To throw a perfume on the violet", I am not the person to object. I am fully justified in accepting these amendments because they are in the spirit of the whole thrust of the Government's legislation to ensure that services are protected in rural areas.

I draw the attention of the House to two of the clauses in the draft licence. Clause 25 provides for a uniform charge for maintenance for five years. For connection, provided that that takes less than 100 hours, again there is a uniform charge across the country for five years. That represents considerable protection.

One must appreciate that the first clause of the draft licence imposes a universal obligation. The hon. Member for Falkirk, East (Mr. Ewing) asked whether this measure was to pave the way to withering away that universal obligation to allow local authorities to take over BT's telecommunications services. I assure the hon. Gentleman that the measure does not do that. He must take my word for it. The Director General will be obliged to enforce that licence condition.

Specific obligations on rural services under clause 3 are being strengthened by the amendments. The obligations lie upon not only the Director General, but the Secretary of State.

The hon. Member for Yeovil (Mr. Ashdown) said that, because of the implementation of the Bill, the capacity of Members of Parliament to take up telecommunications matters on behalf of their constituents will be diminished. I do not agree with the hon. Gentleman. Since telecommunications ceased being dealt with as a Department and became a nationalised industry, the capacity of Members of Parliament to take up specific cases with the Secretary of State or, previously, the Minister of Posts and Telecommunications has diminished. That was the policy behind turning it into a nationalised industry. It will still be possible for an hon. Member to question the Secretary of State on whether he has discharged his responsibilities under clause 3. Hon. Members will be able to question in the same way as Ministers are presently questioned during Question Time and Adjournment debates and when hon. Members are sufficiently awkward to cause matters to be discussed on the Floor of the House.

The Bill greatly enhances the powers of our constituents. They will be able to complain directly to the Director General of Oftel instead of the Post Office Users National Council. Oftel has the only consumers' complaints body with powers of direction. A constituent could complain directly to that body, which would not only have to examine his or her complaint, but have the power to give a direction to remedy that complaint. As far as I am aware, that power of direction does not lie with any other consumer body in the United Kingdom.

Mr. Kennedy

I appreciate the right hon. Gentleman's point about the Director General. Is not Oftel's central problem the ability to attract skilled and talented manpower within the salary structure? Will that not render Oftel a good deal less useful and less important than the right hon. Gentleman would give credit for when defending the structure he is setting up in the Bill?

Mr. Baker

I cannot agree with the hon. Gentleman. The effectiveness of Oftel is a key to the regime the Bill is setting up. We want to ensure that Oftel's personnel are suitably qualified and capable of fulfilling the considerable obligations placed upon them. In the past, we have thought that that could be done with a staff of about 50, but time will tell. I believe that will be the initial figure.

The Post Office Users National Council deals with many thousands of consumer complaints each year, with a staff level well below that figure. Oftel has much wider responsibilities than dealing with consumer complaints —the policing and regulation of a market which we want to become more competitive.

Mr. Ewing

I was anxious not to interrupt the right hon. Gentleman when he was explaining the point to the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy). I return to the point about clause 8 and the ability to ask local authorities to contribute to loss-making services. Is the right hon. Gentleman saying that under clause 8 there is no possibility that local authorities will be asked by British Telecom plc to contribute to a loss-making service in rural areas? We should get that statement on record because it is important.

11.45 pm
Mr. Baker

I am saying that there is a universal obligation imposed by the licence and it is strengthened by the provisions of clause 3(2)(a). That is the background against which any derogation below that service has to be measured.

If BT said that it would not carry out telecommunication services in Ross, Cromarty and Skye, or any other remote part of the country, that would be in contravention of the licence and would lead to considerable pressure on the Secretary of State and the Director to ensure that the universal obligation is continued.

I think that the hon. Member for Ross, Cromarty and Skye is more concerned about public call boxes which, collectively, lose a lot of money. The system that operates now will continue, but will be regularised by the lengthy condition 11 of the licence which spells out the procedure that must be followed if BT wishes to close a public call box. Various checks and balances are included in the procedure and knowledge of such a proposal must be spread widely throughout a community. Closure could not even be considered unless revenue from a box had fallen below a level that is to be agreed by the Director.

If, after the procedure has been followed, the Director decides that a box should be closed, it will be open to a local authority, if it wishes, to contribute to the cost of the phone box. Before Opposition Members relish that fact too much, they should bear in mind that such a system operates at present and only seven of the 77,000 call boxes are supported by local authorities in those circumstances —at a cost of less than £3,000 a year.

I understand the anxiety on this matter, but clause 84 allows, in extreme conditions, the possibility of a local authority deciding that a call box is so important to its community that it will make a contribution to the running costs. The amendments improve the position for the rural areas.

Mr. Marlow

There is to be no discrimination against rural areas, but can my right hon. Friend assure the House that there will also be no discrimination against urban areas?

Mr. Baker

Yes. Under the licences granted under clause 8, public telecommunication operators must not show undue discrimination or preference. That is a comprehensive obligation to all subscribers.

Question put and agreed to.

Subsequent Lords amendments agreed to.

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