Telecommunications (Hansard, 8 March 1995)

§ 7. Mrs. Angela Knight
To ask the President of the Board of Trade what representations he has received on the relative costs of telecommunications services in the member states of the European Union.

§ The Parliamentary Under-Secretary of State for Trade and Technology (Mr. Ian Taylor)
Studies for my Department and by other bodies show that United Kingdom telecommunications costs are among the lowest in Europe. The UK is pressing for rapid liberalisation of European telecommunications to bring down costs throughout the Union and to stimulate multi-media communications.

§ Mrs. Knight
As low telecommunications costs are an essential element in ensuring that business is competitive, when does my hon. Friend expect liberalisation to take place throughout the European Union and does he expect that British Telecom will benefit from that?

§ Mr. Taylor
I am delighted to confirm that the Telecoms Council last November set a date of 1 January 1998 for complete liberalisation of voice telephony and infrastructure, and Commissioner Bangemann has confirmed that that is the date by which liberalisation must have taken place, not the date from which it should commence. That is tremendously good news for European industry, but it is especially good news for industry in this country competing in the newly liberalised markets, given the experience of competitive telecommunications and falling costs that we have had for many years.

§ Mr. Wigley
Does the Minister accept that one of the important considerations affecting costs in the sector is the extent to which fibre-optic linking will be made available, not only in the industrial cities and conurbations, but throughout all areas in these islands? Will he give an assurance that, in developing policy, he will bear that in mind and ensure terms and conditions of agreement with contracting companies which place an obligation on providing services to rural as well as to industrial areas?

§ Mr. Taylor
I agree entirely with the hon. Gentleman that we must ensure that access to the super-highway covers the whole country and not just parts of it. We are considering licensing those parts of the country that are not yet covered by the cable industry, but the most interesting way to take that service to the really rural areas is probably through alternative technologies, such as use of the radio spectrum. I am studying the outlying parts of Wales with the Secretary of State for Wales to find out how quickly we can produce proposals on the use of the radio spectrum to bring together the rural communities.

§ Mr. Quentin Davies
Does my hon. Friend accept that he deserves considerable congratulation, as the breakthrough in telecommunications will be of great benefit to the British telecommunications industry, as he rightly said, and to consumers throughout the European Union? Will he be emboldened by that success to press forward, together with his colleagues, to ensure that we extend the single market to energy and the airline industry, and go for complete airline deregulation in very short order as well?

§ Mr. Taylor
It is always good to have the support of my hon. Friends in this matter. I also had the support of the other Ministers at the G7 conference the weekend before last when it was made clear in the conclusions that British policies had set the agenda. There is no doubt that within the European Union we should extend the benefits of the competitive market to energy and the airline industry. That will require us to stiffen the resolve of the European Commission and to ensure that, once member states agree regulations, the European Court of Justice has adequate powers to take action if countries do not obey the rules to which their political leaders have agreed.

§ Mr. Nigel Griffiths
Does not the Minister realise that many domestic households in this country have fewer phones than households in our competitor countries because of the very high connection charges, which are 325 higher in Britain than in Sweden, Australia, Italy, the Netherlands, Norway, Austria, Belgium, Portugal, Luxembourg, the United States, France, Germany and Canada?

§ Mr. Taylor
The point about telephones is that the overall costs in this country are among the lowest in the European Union. They are slightly above those in Sweden, which has also liberalised. The key condition for telecommunications is liberalisation and Opposition Members should remember that, given the amount of opposition with which they met our telecommunications policies over the years. We have a proud record in telecommunications and it has given us, through the alternative infrastructure of the cable industry, access to even cheaper connection and standing charges, as will have been seen from the policy announced by Nynex Communications only last week, when it cut the cost of telephony by 25 per cent.

§ Sir Michael Grylls
Does my hon. Friend agree that the transformation of a sleepy British Telecommunications and a nationalized Cable and Wireless—as it was—into world-class companies that are winning orders and being very successful throughout the world is a huge tribute to the success of the privatisation programme and the fact that they are able to compete and win business in Europe? We must continue pressing to open the market, so that those very successful and now private companies can win more and more orders.

§ Mr. Taylor
Britain now has 150 public telephone operator licensees, having started with just one in the early 1980s. BT has therefore had to face competition in the domestic market and, increasingly, in the local loop from the cable industry. It is therefore a more successful company. Whenever I go to other countries and talk to their telecommunication industry leaders and Ministers, they want BT to join partnerships with them. I am delighted at the success of both BT and Cable and Wireless in helping British exports and making use of their new-found competitive instincts.