HC Deb 16 January 1992 vol 201 cc1155-62

'The following section shall be inserted in the Telecommunications Act 1984. after section 7(4)— New Section 7(5)

(1) A licence granted under this section shall require the licence holder to produce a Code of Practice describing their services for elderly and disabled customers.

(2) A Code of Practice prepared under subsection (1) above may only be made after—

  1. (i)consultation with, and approval of, the Director
  2. (ii) consultation with persons or bodies representative of elderly and disabled people.".'.—[Mr. Henderson.]

Brought up, and read the First time.

Mr. Henderson

I beg to move, That the clause be read a Second time.

Madam Deputy Speaker (Miss Betty Boothroyd)

It will be for the convenience of the House to debate the following amendments to the new clause: No. 1, in clause 1, page 3, line 14, after 'performance', insert 'including household penetration services for the disabled, and the balance of regional infrastructure development.'. No. 2, in clause 6, page 7, line 14, at end insert

'27HA The criteria settled under section 27H above shall provide that disabled people and people of pensionable age shall be exempt from the requirement to pay a deposit.'.

Mr. Henderson

May I begin by explaining to the House the purpose of the clause and amendments before it? New clause 2 deals with the introduction of a ode of practice in utilities governing facilities for elderly people and for disabled people. Amendment No. 2 deals with deposits in regard to facilities for pensioners, and amendment No. 1 relates to a number of issues in connection with the standards of performance which a regulator will in future require an operator to meet—a subject which the House has already discussed to some extent in a previous set of amendments. Most of my comments relate initially to amendment No. 1.

If there is a particular virtue of the Bill, it is that the Government have recognised that privatisation of public utilities in itself is inadequate as a means of improving services and developing the utilities, and that, where a private monopoly has replaced a public monopoly, there is an ever-increasing need for the public interest to be recognised and to be represented in some way. There is a growing consensus in the House—already acknowledged in the debate—that the important way of representing the public interest is to make sure that a regulator is appointed and, that the regulator has teeth to make things happen in the industry.

There has therefore been a fairly discernible change in the perception of the Government of the benefits that can accrue from privatisation. Some might argue that it is a transformation in Government thinking, and the Minister may be able to confirm whether that is his view or whether he believes that it is just a turning back in Government thinking, slightly away from a purely ideological position to one that reflects the actualities of running a utility and providing a service which is desired and needed by the community.

It is on the record this evening that the Government have accepted the need to improve the status of and give greater powers to the regulator, and that one of the crucial powers of any regulator is that of determining the general standards of performance expected of a utility in the delivery of its service. The issue before us now is whether the Bill as currently constructed has sufficient teeth to enable the regulator to undertake his or her responsibilities in the regulation of those utilities.

I suggest that elements of clause 1, dealing with standards of performance, are too timid. They leave the regulator exposed to undue pressure from the private utilities and their supporters. They do not give the regulator sufficient power to say to the utility, "When I talk about standards of performance, I mean specific things." There should not be an argument on the core of what matters regarding standards of performance. There will always be scope for interpretation at the periphery, but, when dealing with core standards, the regulator should be able to tell the utility what matters and what is on the agenda, and that they affect everything in the negotiations, whether it is the provision of services or the prices paid for them.

6.30 pm

The purpose of amendment No. 1 is to lay down three items of importance to the regulator when dealing with telecommunications. The Government have made the jump from thinking that privatisation was all that mattered to recognising that privatisation in itself does little to improve the performance of utilities and that, where a private monopoly exists—as it essentially does in telecommunications—a regulator is required to protect the public interest. Is it not appropriate for the regulator to have pre-designated issues that affect standards of performance?

I hope that every hon. Member understands that, until every residential property is linked to a telephone service, one cannot begin to provide the software and the other services which can benefit the individual or society. One cannot provide those without establishing the basic physical link. I hope that, in acknowledging that technical point, the Government will go further and recognise that it is important for us to give the highest priority to establishing that link to every residential premises. Virtually all business premises are connected. Twenty years ago, we had a comparative advantage over some other countries because of our level of telephone penetration, but we are beginning to fall behind, even taking into consideration the changes made in the past few years.

In Germany, more than 91 per cent. of residential premises are connected by a fixed-link telephone. In the United States of America, more than 93 per cent. have such a connection, and in France the figure is 98 per cent. However, in Britain, as the Minister told us earlier, the figure is 89 per cent. In 1988, it was 87 or 88 per cent. Whichever figure we take, there is clearly a gap between the level of provision in this country and that in comparable industrial nations. When beefing up the powers of the regulator and setting performance standards, it is crucial that the House recognises the necessity of giving the regulator the power to extend levels of telephone penetration.

Surely the regulator should be able to insist that those providing telephone services should reconsider the amount of deposit required, as my hon. Friend the Member for Neath (Mr. Hain) said. Is the present level of deposit appropriate in the circumstances? Does it deter many people from taking the opportunity to have a telephone?

The regulator should be able to consider the cost of installation, which is way in excess of such costs in many comparable countries. Are those charges appropriate if we are trying to extend telephone penetration?

The regulator should consider the cost of local calls. Many people who want a telephone because they want that essential link with the outside world would mainly make local calls, yet they know that in this country the cost of those calls is way in excess of their cost in competing industrial nations. They know it instinctively even if they have not studied the statistics.

I hope that the Government will be able to decide that the regulator should study the industry and developments taking place, including the aspects that the Minister referred to, such as developing the provision of local loops through cable companies and others. If such developments take place, is it not essential that British Telecom, which will incur the largest burden in having to provide extensions to households throughout the country, is able to agree a price relationship with other companies that link into the BT system? That would enable everyone in the industry to play their part in extending the telephone service.

Is it not right that the regulator should encourage the various providers to extend telephone services? In that way, the potential profits, to which my hon. Friend the Member for Neath referred, could become reality. There will only be potential for those organisations which want to use BT's facilities or for BT itself to accrue such profits once there is a telephone in every residential premises.

In the past 40 or 50 years, and especially in the past 10 years, there have been serious regional disparities in economic activity in this country. Is it not appropriate for a nation with that background to put high on its agenda the provision of essential infrastructure, so that there can be a good spread of resources and investment throughout the regions? To some extent, that has already happened in the highlands of Scotland, where modern facilities have been introduced with the help of European funding, which has helped the small business community in the more remote areas. That is one good example. Surely the regulator should be given the responsibility of making that a top priority in discussions with various operators about the standards of performance essential to developing the telecommunications structure.

As we discussed facilities for the aged and the disabled extensively in Committee, I do not want to labour the point, but I want to establish the principle that a utility is not like any other company that provides a service or goods. A utility provides a core service for the community—a service on which everyone depends, whether it is electricity, gas, a telephone or water. There is something different about those commodities and the Government have recognised that fact because they are moving towards regulation. Surely, when providing those services, a special case can he made for establishing special facilities for the aged and the disabled—such as, for example, the provision of a coupler attached to the telephone so that the 3 million people who are hard of hearing have a better opportunity to use the telephone.

There might be a need for liaison between British Telecom and a local Department of Social Services office about the advantages of a mobile phone with a limited range for pensioners in a fragile physical state, so that, if they fall, they do not lie on the floor for hours because they cannot reach the fixed-link telephone on the wall. Often such facilities are made available by the operator, but the regulator should have the responsibility to ensure that operators have a code of practice which includes such provisions. That is merely one example, which good operators would probably want to provide of their own free will. However, that does not mean that there is no need for legislation.

Not every operator will always operate to the highest standards. Some new operators wishing to enter the business might not have the same social conscience as operators have demonstrated in the past. That is another reason why standards of performance need to be designated by the regulator.

If they are consistent with what they said in Committee, the Government will argue that the regulator already has the power to make those matters count in his or her negotiations with the operator in establishing a price regime. My answer is to ask why, if the regulator already has the power, it is necessary to have the Bill which identifies that the standards of performance must he a crucial element in determining whether the activities of an operator are acceptable to the regulator. If the Government have jumped that gap and reached the point where they accept that standards of performance are crucial, surely they should go that little bit further and identify the important standards of performance that will affect the future of the industry and the needs of consumers.

There is advantage in being specific. If our proposal is accepted, it will give the regulator much greater scope to do what he or she currently wants to do. I hope that the regulator would want the things that I have referred to included as important priorities by the operator. The Opposition proposal would give more power to the regulator's elbow in negotiations to force change upon the operators.

If clause 1 is to have more teeth, and if the Government are to convince the public that they are serious about regulation, they should accept that the new clause and the amendments being discussed with it are reasonable. If the Government fail to accept the changes, and if similar amendments are not accepted in another place, people will begin to ask just what kind of citizens charter we have. They will want to know whether it is a real citizens charter with teeth which, in the case of telecommunications, can do something about extending the telephone service to the 13 per cent. of the population who do not have a telephone, which can spread investment in the industry throughout the regions and which can establish strict codes of practice to assist disabled and aged people. People will want to know that the citizens charter regards such issues as important. If the Government want the citizens charter to be credible, they have an obligation to accept the new clause and the amendments.

Sir John Hannam (Exeter)

I should like to speak to amendment No. 2, tabled in my name and the names of other hon. Members from the all-party disablement group. The amendment relates to the deposit which is required before a telephone can be installed. The deposit is of tremendous importance to disabled people and the aged. The amendment seeks to give them exemption from deposits for telephone services.

The citizens advice bureaux—I am sure that we are all great admirers of the work they do throughout the country—are particularly anxious that the exemption is given, because they are in the front line in dealing with the numerous cases of clients who are unable to afford the deposit and installation cost of several hundred pounds which are asked of them.

The CABs very much welcome many of the Bill's provisions, which will assist them greatly. They and the disability organisation, RADAR, also welcome the Government's attempt to regulate the criteria relating to deposits and particularly the upper ceiling of £150 placed by British Telecom on deposits for its customers. However, I share their belief that, for very elderly and disabled people, particularly housebound disabled people, a telephone is an essential service. It is more often a lifeline than a luxury.

Telephones provide the link not only with the medical and paramedical support that disabled people need but also with social services, family and friends, all of whom may be necessary in an emergency. In addition, we all know that most disabled people have lower incomes, yet have to pay higher costs than the non-disabled. They have to pay extra for heating, laundry, clothing and medicines. It is punitive for them to have to pay a deposit on what for many is an essential piece of equipment for everyday life.

We all know that, in today's society, the telephone plays a pivotal role in interactive communications. The services that can be accessed via the telephone often provide disabled people with the ability to function in mainstream life when inaccessible buildings would deny them that ability. It is important that disabled people are automatically exempt from telephone deposit charges so that that channel of communication and access is not barred to them.

6.45 pm

A couple of cases from CABs will illustrate the point. The first involves a couple in Greater Manchester who are on income support. They were recommended by their general practitioner to have a telephone installed. They were asked to pay a £150 installation cost plus a £200 deposit. They could not afford those amounts. In another case, in the Chilterns, an elderly disabled pensioner wished to have a telephone installed. As a new subscriber, the pensioner was asked to pay a deposit of £350, which he was unable to pay. After negotiation, British Telecom would only reduce the deposit to £200, which was still far in excess of what the pensioner could afford.

Under the electricity and gas legislation, it is already a statutory requirement that particular regard shall be paid to the needs of elderly and disabled people. Under the Telecommunications Act 1984, British Telecom is required to design special services for disabled consumers. I pay tribute to it for the technology which it has introduced and the practical changes which it has made over the last few years.

The amendment would be a logical extension of existing statutory duties to assist disabled people to lead as normal lives as possible and to be protected in emergencies. In the spirit of the Government's community care policies, I hope that the principle will be accepted and that the necessary changes will be made to the Bill, probably when it reaches the other place.

Mr. Alex Carlile

I too should like to make a brief intervention on amendment No. 2. I agree with everything that has been said by the hon. Member for Exeter (Sir J. Hannam), but I should like to put a slight gloss on the matter in relation to two issues: first, the very elderly and, secondly, the problem of the very elderly living in rural areas. In my constituency there is a high proportion of elderly people; that applies throughout rural Wales and similar rural areas.

In rural Montgomeryshire there are approximately 6 per cent. more elderly people than in the average rural district in the United Kingdom. We are proud of our elderly population. It is a fact that in areas like Montgomeryshire people live longer because the climate is pleasant and the way of life is perhaps a little more peaceful. Certainly the work that the people have done over the years has tended to be more healthy than working in the House and in many other more sedentary occupations.

The average rural village, certainly in my part of Wales, tends to be high, somewhat isolated, with little or no public transport. Although unemployment is low, wages tend to be low, too. Usually people want to stay. if they can, when they become very old.

Care in the community is doing well by and large in rural mid-Wales, and the Government are to be commended for the emphasis that has been placed on trying to ensure that elderly people retain their independence for as long as possible. In my Christmas round of hospitals and old people's homes, both public and private, I noticed that their population had aged, with the average age of the residents being much higher than it was some years ago. The reason is simply that more elderly people can stay in their own homes. They are being provided with home helps, nursing care and the excellent general practitioner care.

Medical care in rural Wales is of an exceptionally high standard and is an example to other parts of the country, but because there is no public transport and people can become isolated and lonely—an emotional viewpoint which becomes overwhelmingly subjective as they become much older, perhaps being widowed—it is essential for them to have the one means of communication which can keep them in touch with the outside world on a person-to-person basis. The television tells them what is going on in the outside world, but does not enable them to speak directly to anybody.

A deposit for an elderly person who may have done without a telephone until becoming older, as is common in rural Wales, may be too much to meet. The great majority of pensioners in my constituency do not have occupational pensions. They do not complain about that. They just get on with life and live on their state pension, and they manage surprisingly well, considering the level of the pension. But when the time comes and they are isolated and must choose between going into an old person's home —possibly going into a council pensioner's bungalow—and staying in their own home, their ability to communicate with other people is a key factor.

It would be consistent with Government policy for care in the community to say that if not for all pensioners—amendment No. 2 perhaps aims high in that respect—at least for pensioners who are 75 or over, telephones should be provided without a deposit having to be provided. I hope that the Government will give a sympathetic response on that point.

Mr. Redwood

I am grateful to hon. Members who have contributed to the debate for the sympathy that they have shown to disabled people, and of course the Government and the regulator wish to see progress made in providing the right kind of services to such groups of people.

I remind hon. Members that under the telecommunications legislation, the director general has a duty to promote the interests of consumers, purchasers and other users in the United Kingdom, including, in particular, those who are disabled or of pensionable age. That is the first requirement in section 3, which lays down the duties. The director is also obliged by section 54 to set up a body to advise him on matters affecting the disabled and elderly.

Disabled and elderly people are specifically covered in British Telecom's general code of practice, and the director general has established a committee to advise him on their needs. Licence condition 31 requires BT to consult the director general from time to time about the supply and connection of apparatus for the disabled. Condition 32 requires BT to ensure that telephones with sound amplification facilities and telephones capable of being inductively coupled to hearing aids are available. BT also provides a wide range of other services, and has established an action for disabled customers' department to help it meet the needs of the disabled. It has also issued a publication setting out in detail the facilities it has to offer people with difficulties who need special treatment.

The regulator has not been inactive. He obtained a change in British Telecom's policy on deposits which was announced in August, and I am grateful to my hon. Friend the Member for Exeter (Sir J. Hannam) for mentioning that favourably. The House might wish to know some of the detail. As a result of that change of policy by BT, there are now four new categories of customer and customers seeking different kinds of service.

The first comprises those who need pay no deposit—that is a large category—being those who have had a BT service in the past and have paid their bills when requested. They will rarely be required to pay a deposit. One would be requested only if there had been some other problem, relating to their credit-worthiness, which had cropped up more recently. So, many people are asked for no deposit because they have been past customers and there has been no problem with their credit rating.

There are then three categories—low, medium and high risk. The—low risk new customer is asked for a deposit of £75; the medium risk, £100; and the high risk, £150, as my hon. Friend the Member for Exeter mentioned. About 40 per cent. of new customers pay a deposit. Such deposits are repaid, with 9 per cent. interest after a year.

I am, of course, concerned if it is felt that that is still an impediment to disabled people who need access to the service and are not an extreme credit risk to BT. If a customer is asked for a deposit and is unhappy with the position, he can go to the director general. This legislation will be of assistance, because the director general may decide, with his duties under the telecoms legislation and given the new powers that this measure will give him, that he wishes to influence the decision by BT.

I should like to see the system in operation before going all the way with my hon. Friend the Member for Exeter and Opposition Members in their proposals. I shall make sure that, on this important issue, the strong feelings of hon. Members are relayed to the director general in the context of his general powers for disabled people.

Mr. Hain

I appreciate the sympathetic response that the Minister is giving. Is he aware that, in addition to the deposit charge levels which he has identified, there is a connection charge in respect of telecommunications of £163? In other words, people are being asked to find a great deal of money. That double charge is the key problem.

Mr. Redwood

I am grateful to the hon. Gentleman for that intervention, and I agree that it can make things difficult, as my hon. Friend the Member for Exeter implied. A deposit of £150, or even more before the new policy was introduced, on top of the full connection charge, represented a substantial sum. I suggest that the right approach is to start with the deposit, which is what the director general has been doing as a result of that new policy of BT. I hope that I have helped the House by what I have said about how we would like to see the director general use his powers and how he may wish to be involved in some cases where difficulties still arise.

The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) asked whether there had been a latter-day conversion or U-turn by the Government in seeking stronger regulatory powers. Not at all. The bulk of the regulatory powers are already in existing legislation. The Bill looks at those powers in the light of experience and brings the powers of all the regulators broadly up to the level of the best in the different pieces of legislation evolved over time for the various industries.

The Government have always said that there will be large monopoly areas in many industries for the foreseeable future and that those areas need careful regulation in the customer interest, as we have identified in previous debates. We have also said that we believe that the best regulator of all is competition. That is why we have taken measures to promote competition, and as competition builds up, our point will be even better established that competition is the customer's best friend and can provide an excellent deal on price, service quality and range of services available.

BT already sets out its services for disabled customers, and the regulatory framework does much of what the House is seeking to achieve in this short debate. So, while expressing much sympathy with the aims of some hon. Members, I suggest that the new clauses are not required and that the director general should get on with his work in the way I have described.

Question put and negatived.

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