§ Mr. Lindsay Hoyle (Chorley)If he will make a statement on the revenue received from the auction of the third-generation mobile telephone licences. [125834]
§ The Chief Secretary to the Treasury (Mr. Andrew Smith)Receipts from the third-generation mobile spectrum auction will total £22.5 billion. That is good news. We have already received £12 billion, and I told the House on 17 April that those proceeds would be used to reduce net debt. On Monday 12 June, we set out how we plan to do that.
§ Mr. HoyleThat is very good news. Can we make it even better for certain parts of the population? This Government have helped pensioners after 18 years in which they were neglected. Here is a golden opportunity to help them even more by introducing free television licences for all pensioners. Alternatively, can full consideration be given to a windfall for all pensioners using third-generation money? If we are using that money to reduce debt, perhaps we can put the debt repayments that we will save ourselves towards helping pensioners.
§ Mr. SmithI thank my hon. Friend for his suggestions. Of course, the whole country benefits from reduced debt payments and reduced debt interest achieved as a result of having diminished the millstone of debt that we inherited from the Conservatives. People are already benefiting because debt interest payments are £4 billion lower than they were when the Conservatives left office. That enables us to re-allocate resources to priorities such as pensioners, health and education. I am pleased to reassure my hon. Friend that pensioners will share the benefit of that £22.5 billion.
§ Mr. Nick St. Aubyn (Guildford)Will the Government treat the receipt of telecom licence fees as a revenue item, which would suggest that they intend to spend it eventually? Or will they treat it as a capital item, which would mean that they intend to bank it? Which option will they take under their new resource accounting rules?
§ Mr. SmithAs the hon. Gentleman implies, the £21 billion will accrue over the 21 years of the licence, and that is how the sum is treated in the national accounts. Because it accrues over that period, the benefit is also spread over 21 years. Reducing net debt is, therefore, the prudent way of helping the public finances and benefiting the public through reduced debt interest payments, as I explained. The receipt does not alter the total managed expenditure projections set out in the Budget.