HC Deb 04 March 2003 vol 400 cc684-8

'(1) The Department of Enterprise, Trade and Investment may, in accordance with this section, make payments to persons engaged in, or in commercial activities connected with—

  1. (a) the provision of electronic communications networks and electronic communications services in Northern Ireland; or
  2. (b) improving the extent, quality and reliability of such networks or services.

(2) A payment shall not be made under this section unless in the opinion of the Department of Enterprise, Trade and Investment—

  1. (a) the making of the payment is likely to achieve—
    1. (i) one or more of the purposes set out in subsection (1); and
    2. (ii) any other purposes prescribed by regulations made by that Department with the approval of the Department of Finance and Personnel; and
  2. (b) the amount of the payment is reasonable having regard to all the circumstances.

(3) Payments under this section shall—

  1. (a) be of such amounts, and
  2. (b) be made subject to such conditions (including conditions as to repayment),
as the Department of Enterprise, Trade and Investment may determine.

(4) This section extends only to Northern Ireland.'.—[Mr. Timms.]

Brought up, and read the First time.

Mr. Timms

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

New clause 24 grants discretion to the Department of Enterprise, Trade and Investment—DETI—in Northern Ireland to fund expenditure on telecommunications infrastructure and for any other purposes prescribed by regulations made with the approval of the Department of Finance and Personnel in Northern Ireland. Under the terms of the clause, DETI will have discretion to support financially the development of a regional telecommunications infrastructure, specifically in respect of the provision of electronic networks and services and improving the extent, quality and reliability of those networks or services. It will enlarge the legal framework for funding such expenditure in Northern Ireland. That is important because of DETI's role in developing a regional telecommunications infrastructure as an integral part of the Government's strategy for broadband, which is being led by my Department.

The Bill already contains a provision, which has been carried over, in part, from the Telecommunications Act 1984, for district councils in Northern Ireland to contribute to the costs of infrastructure. The new clause confers broadly similar powers on DETI and I hope that the House will welcome it.

Mr. Greenway

Northern Ireland Members have pressing matters to address and we wish them success, but I am sure that were they here today, they would want to welcome the new clause. It appears at least to signal an opportunity for the increased roll-out of broadband in Northern Ireland.

When we debate new clause 2 a little later in our proceedings, I hope that we shall conclude that the Government's commitment to the roll-out of broadband in the rest of the United Kingdom will be undertaken with equal enthusiasm.

Mr. Richard Allan (Sheffield, Hallam)

I, too, welcome the new clause; it clearly makes sense for DETI to be given the powers to make such expenditure. Although I would not oppose that, I have some questions for the Minister, especially on the relationship of the provision to expenditure in the rest of the United Kingdom.

The notes that the Minister kindly distributed to accompany the Government's many amendments and new clauses stated that the new clause was part of the DTI's broadband initiative. Can he flesh out how DETI's possible expenditure in Northern Ireland would relate to expenditure elsewhere? For example, is the anticipated DTI expenditure to be across England, Scotland and Wales, or is it to be broadly equivalent to the expenditure to promote broadband infrastructure made by the regional development agencies in England and their counterparts in Wales and Scotland?

Can the Minister clarify whether there will be comparability throughout the United Kingdom? We are all interested in the promotion of broadband networks, so it would be helpful to know where the Government imagine that the expenditure will come from. The new clause makes it clear that in the case of Northern Ireland it will come from DETI, but questions remain about the Government's intentions for their expenditure of public money in the rest of the United Kingdom.

Secondly, I want to raise concerns that have been expressed to me about Scottish Enterprise's investment and which may also apply to expenditure in Northern Ireland. Although we all welcome funding for broadband infrastructure from various regional and national bodies, it can have a distorting effect on the market. Concerns are being expressed by some service providers in Scotland that Scottish Enterprise's investment strategy is not ideal for creating the optimal market climate. Targeted investment of that sort can distort the market to the detriment of existing providers who could supply the services that people want without additional investment.

I am fully supportive of regional investment, but I want to put down a marker that regional and national investment within the United Kingdom must be made with the full co-operation of existing providers and complete understanding of the market or it could be counterproductive. The Scottish example suggests that conditions are being created such that internet service providers based in London, because they are being encouraged to enter the Scottish market, could end up with more favourable conditions than internet service providers based in Edinburgh. I hope that our regional investment strategies will not create such anomalies.

Michael Fabricant (Lichfield)

Northern Ireland is largely rural—rather like Scotland, as the hon. Member for Sheffield, Hallam (Mr. Allan) pointed out. How will the provision affect rural areas of Northern Ireland? What consideration has the Minister given to the wireless and satellite provision of broadband? He will be aware of the excellent document produced by the Communication Workers Union, which shows that Britain is 20th in the world for the provision of broadband.

I want to pursue the line of questioning taken by the hon. Member for Sheffield, Hallam. Will there be a distortion in the market? Assuming that the problems of the provision of broadband in rural areas can be overcome, will we find that Northern Ireland becomes a Mecca for the application of broadband while the rest of the United Kingdom is far from being so? The Minister will be aware, from the many hours that we spent on this subject in Committee, that many of us are concerned not only that broadband is not yet available in rural areas in England but also that it is not available in suburban areas and even some urban areas. How will he ensure that there is no imbalance between various parts of the UK?

Mr. Chris Mole (Ipswich)

Will the Minister comment on the fact that although we have the second highest growth rate in Europe for broadband, some locations are still struggling to make their case for broadband to service providers? Does he welcome initiatives such as that announced last week by the regional development agency for my area, the East of England Development Agency, of investment of about £5.8 million of its funds and Government funds to identify for network providers locations where broadband could be promoted? Of the two initiatives announced last week, one was in rural Diss, in Norfolk, and the other in urban Ipswich; both are good examples of the joint initiatives undertaken by the DTI and RDAs.

Mr. Timms

We have had a brief but interesting discussion on the roll-out of broadband and we shall come back to that subject in a later amendment.

I accept the important points made by the hon. Member for Sheffield, Hallam (Mr. Allan) about the need for care in the use of public spending on telecommunications infrastructure. I am aware of the case in Scotland to which he referred. There are clear rules about state aid problems and it is essential to respect and comply with them. None of the proposals is in conflict with that.

I agree with the hon. Gentleman that there is a role for public participation in some circumstances. As I said earlier, local authorities can already contribute to the costs of telecommunications infrastructure. The new clause simply allows DETI to do so as well.

It is becoming increasingly clear that such interventions are most helpfully made regionally. My hon. Friend the Member for Ipswich (Mr. Mole) rightly drew attention to the work of the East of England Development Agency. Last week, I visited Birmingham and held similar discussions with Advantage West Midlands. A growing number of interesting initiatives are being taken by the RDAs, using, in part, the £30 million broadband fund provided for them by my Department. Such initiatives help to extend the availability of broadband services to businesses and residential users.

The hon. Member for Lichfield (Michael Fabricant) asked about wireless provision. Several of the EEDA initiatives involve wireless. In rural areas, there will be an increasing use of wireless to extend broadband rapidly to places where it has not yet been possible to upgrade the existing telecommunications infrastructure.

The hon. Gentleman also mentioned satellite provision. SEEDA—the South East England Development Agency—has done some interesting work in subsidising small businesses, so that they can use satellite-based broadband services.

1 pm

I agree with the hon. Member for Lichfield in his statement of admiration for the Broadband Britain campaign, run by the Communication Workers Union. I was present at the launch of that campaign, and I very much welcome the contribution that it is making. Of course things are changing very rapidly. We reached only 1 million broadband connections last October; we are now past 1.5 million, and the number is increasing by in excess of 30,000 new connections a week. So we are certainly no longer in the position that we appeared to be in when the CWU document was published. As my hon. Friend the Member for Ipswich suggested, we have now got the second biggest broadband network in Europe—after only the German network—so a great deal of progress has been made.

Michael Fabricant

Will the Minister take this opportunity to praise BT for reducing the threshold at which it will enable its exchanges when people have registered an interest in it? In many areas, but not all, the threshold has dropped from 650 to 350 people. However, will he use his particular powers of persuasion to ensure that the threshold is reduced to 350 people in all areas, not just some?

Mr. Timms

I very much welcome BT's announcement to reduce those thresholds. Of course, the level at which they are set is a commercial decision for BT. It should be recognised that the cable companies play an important part in extending access to broadband—they still have more than half the market, I believe—and there are about 200 resellers of BT services, so the industry is making a big effort, and I welcome the progress that has been made.

The House generally welcomes the change for Northern Ireland in the new clause, but it is important to underline my agreement with the points made by the hon. Member for Sheffield, Hallam about ensuring that such a route does not permit inappropriate state aid, and I assure the House that that will not occur.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

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