HC Deb 28 October 1987 vol 121 cc281-3
1. Dr. Reid

asked the Chancellor of the Duchy of Lancaster when he last met the chairman of British Telecom; and what matters were discussed.

The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Kenneth Clarke)

I have not yet met the new chairman of British Telecom. I had to cancel my appointment with him yesterday because I was engaged in proctracted Airbus negotiations. I hope that I shall meet him in the near future.

Dr. Reid

May I express regret at the difficulty that the right hon. and learned Gentleman is having in arranging a meeting? I know that he will have difficulty in getting through to the chairman on the telephone.

When the right hon. and learned Gentleman meets the chairman, will he reflect and admit candidly what a disaster privatisation has been for British Telecom? Will he admit to him and to the House that privatisation has meant low staff morale and low standards of efficiency and service? The only things that have not got lower are the quarterly bills. Will he express his frustration that, in the face of this disastrous performance, we have no power to intervene? Privatisation has meant a loss of millions of pounds to the taxpayer, a loss of power to the House and a loss of standards for consumers.

Mr. Clarke

I agree with the director general's recent report and his comments that the standard of performance is not good enough and needs improving. I am glad that British Telecom is reintroducing standards of quality statistics at regular intervals and is setting itself targets and co-operating with the director general to see what can be done to remedy the matter. I do not accept that it is any consequence of privatisation. Our telephone service has not been perfect for many years, and there has been a decline in performance at the same time as a rise in demand and expectations that must be met. The process of privatisation, with growing competition and consumer choice, will help to improve the quality, and not work in the opposite direction.

Mr. Hanley

When my right hon. and learned Friend meets the chairman of British Telecom, will he congratulate him on Telecom's decision to include postal codes in future telephone directories? Will he also pass on to the chairman the disquiet felt by many of my constituents who, for the first time, will have to pay for London telephone directories in the 01-area? They will have to pay £8 per set, and that is not a good advertisement for the efficiency of privatisation.

Mr. Clarke

I shall certainly pass on to Mr. Vallance my hon. Friend's praise and strictures, which are both matters for the commercial judgment of British Telecom.

Mrs. Margaret Ewing

In addition to the points raised by the hon. Member for Motherwell, North (Dr. Reid), will the Chancellor ensure that he relays to British Telecom the anger that many companies feel about being charged additional costs for repair and maintenance of lines? Such lines are often vital for export businesses. That has been the case in my constituency, and I am sure that it is the case elsewhere, too. Will the right hon. and learned Gentleman ask British Telecom to review this aspect of its policy?

Mr. Clarke

As I understand it, companies will continue to recieve the service that they pay for in their quarterly rentals. Those who require a higher quality, shorter notice and priority fault service will now have to pay for that. It was never free. Previously it was paid for by all subscribers. Now it will be paid for by those who receive it.

I understand the concern in Scotland about the telephone service. I trust that the hon. Lady shares my pleasure that Mercury has recently introduced its services in Scotland two years ahead of schedule.

Mr. Favell

One of the difficulties that my right hon. and learned Friend had with the privatisation of British Telecom was in ensuring healthy competition. Is healthy competition also at the forefront of his mind in connection with the proposed merger between British Airways and British Caledonian, because that one company would be 10 times as big as all its British competitors put together?

Mr. Clarke

Competition in telephones is governed by our guarantees on the duopoly which will exist until 1990 in order to give Mercury time to become established. Then we will look at the prospects of widening the field still further. I know that my hon. Friend has strong feelings about the airlines merger, but he will realise that we are awaiting a report from the Monopolies and Mergers Commission.

Mr. Stott

The right hon. and learned Gentleman is bound to be aware of the welter of criticism directed at British Telecom over the last 12 to 18 months by hon. Members, the general public, the National Communications Union and Oftel. As I spent all my working life in British Telecom, this decision is disappointing and very saddening. The Minister must be aware that my hon. Friend the Member for Motherwell, North (Dr. Reid) was absolutely right when he said that these problems and poor performance are a direct consequence of privatisation and nothing else. As the Government are major shareholders in British Telecom, will the Minister use his influence to try to get British Telcom management to improve the quality of service? We must ensure that manpower levels in the industry are raised in line with the recommendations of the telecommunications unions. If this were done, the quality of service—[Interruption]

Mr. Speaker

Order. Question please.

Mr. Stott

If this were done, the quality of service would improve and customers would get the standard of service that they require.

Mr. Clarke

I am quite prepared to join in the criticisms of British Telecom as long as they are fair and recognise the efforts of the director general and the management to remedy matters. I have already welcomed some of the recent steps and the targets that British Telecom has set for itself. The hon. Gentleman's charge that privatisation has caused all the difficulties is quite ridiculous. Although not the only contribution, the biggest single contribution to the troubles this year came from the strike held in defence of overmanning and restrictive practices. It is obvious that if the hon. Gentleman were responsible for British Telecom he would want to reintroduce to British Telecom the old overmanning and Spanish practices.

Several Hon. Members

rose—

Mr. Speaker

Order. I am anxious to have more hon. Members asking questions than we have had in the past. May I ask for brief questions, leading to briefer answers?