HC Deb 23 November 1994 vol 250 cc586-8
7. Mr. Martyn Jones

To ask the President of the Board of Trade what further discussions he has had with the National Consumer Council about the level of service provided by telecommunications companies.

Mr. Ian Taylor

Although my officials met the National Consumer Council following its September 1993 report, "Paying the Price", which covered the work of all the utility regulators, the level of services provided by telecommunications companies is primarily monitored by Oftel. Oftel deals directly with representations from consumers.

Mr. Jones

I am glad that the Minister has mentioned the NCC report, "Paying the Price", as it says that since privatisation the cost of connecting a telephone has increased by 20 per cent. How does he justify that?

Mr. Taylor

Matters of interconnection are now being assessed by Oftel, which has said that a report will be published early next month. Oftel has kept continuously under review the question of whether the consumer is best protected and the necessity, in a highly complicated sector, of providing a proper balance between access to BT and enabling it to perform properly as a company.

The key point to bear in mind, however, is that since the liberalisation of BT call costs have been reduced by 35 per cent. in real terms. Cheap communications are important not only to customers but because they will enable the information super-highway to grow.

Mr. John Marshall

Does my hon. Friend agree that many pay phones did not work when BT was in the public sector, whereas many more do so today? Does not that show that competition and privatisation give a better service to the consumer?

Mr. Taylor

My hon. Friend is quite right: shareholders are not known to vandalise telephone boxes. Since competition began, universal service provision—a matter of considerable debate 10 years ago during the phase of liberalisation, which was not supported by the Labour party—has increased. There are now more telephone boxes—most of which now work—and more people have a telephone. That is a tremendous success for a policy, which the Labour party could well reconsider—with guilt for not supporting it.

Mr. Nigel Griffiths

How can the Minister be satisfied with Oftel's record when fewer of our citizens have phones in their homes than those of France and Germany? Why do British customers pay higher connection charges than most of our competitor countries, and should not the regulator be given powers to reduce connection charges to the French and German levels of under £30?

Mr. Taylor

The hon. Gentleman makes unreasonable comparisons with other countries' telephone systems. [Interruption.] Opposition Members should listen to what I have to say. I attended a European Telecommunications Council meeting last Thursday, at which Minister after Minister complimented us on the way in which liberalisation had given the British public an excellent telephone network based on competition.

Each of the cases that Oftel is investigating contains detailed proposals backed by reports, and another report in December will propose protection for the consumer. As a result of liberalisation, the British public has received a better quality of telephones and lower prices. Where there are problems, BT and the other new companies have offered special bargains such as the low-pay tariff. Those are excellent moves by a competitive market that is responding to customer demand.

Mr. Fabricant

Is my hon. Friend aware that this country now has more digital links than France or Germany, that long distance and international phone calls are cheaper here than in France or Germany and that—to be precise—less than 30 per cent. of call boxes worked before privatisation, whereas now more than 95 per cent. work?

Mr. Taylor

Britain is the best place in the European Union for international businesses to conduct their business. It is interesting that, from Paris, it is cheaper to phone somewhere else in France via New York than it is to use France Telecom. That is a remarkable fact, and it would not occur in this country. We have just found a United States equivalent for telephone purposes, and there is now the possibility of extremely cheap lines across the Atlantic. That again will assist British business.