HL Deb 15 June 1981 vol 421 cc433-46

2.57 p.m.

Report received.

Clause 2 [Powers of the Corporation]:

Lord Morris moved Amendment No. 1: Page 2, line 23, leave out paragraph (b).

The noble Lord said: My Lords, I think it will be for the convenience of the House if I speak to Amendments Nos. 1, 2 and 3 en bloc. These three amendments are covered by precisely the same principle. The purpose of these amendments, as I explained at the Committee stage, is to delete three paragraphs of Clause 2, which I believe are nothing other than three pieces of declaratory law, and which are not necessary. These three paragraphs state that the corporation shall have power to perform services for the Post Office, to perform services for Her Majesty's Government and to perform services for local authorities or National Health Service authorities.

During the Committee stage, my belief that these paragraphs were unnecessary was heightened by virtue of the answer that my noble friend Lord Trefgarne gave to me. He said: The two businesses"— he was referring to the British Telecommunications side of the Post Office and the Post Office itself— have provided certain services for each other for many years". That, of course, is manifestly so. Later he went on to say: To agree to this amendment and thus prevent British Telecommunications from providing services for the Post Office would, I feel, lead to an unnecessary disruption of the activities of the two businesses".—[Official Report, 12/5/81; col. 464.] If the corporation does not have power beforehand to provide services for the Post Office, why is it then necessary to have this power placed in the Bill? Surely it would not act ultra vires. It is plain to me, at any rate, that the British Telecommunications Corporation is perfectly at liberty under the provisions of the Bill to provide services to whomsoever it chooses and in virtually in any way that it chooses. For those reasons, I beg to move.

The Minister of State, Department of Employment (The Earl of Gowrie)

My Lords, when we debated this question during the Committee stage of the Bill, my noble friend Lord Morris suggested, as he has again suggested today, that the powers of British Telecom which are contained in Clause 2(1)(b), (c) and (d) are unnecessary because of the existence of the power in Clause 2(1)(a) to provide telecommunication and data processing services. I think my noble friend is under a small misapprehension which I hope I can dispel.

The point is that Clause 2(1)(b), (c) and (d) are all necessary because they cover services provided by British Telecom other than telecommunications and data processing services. In the case of Clause 2(1)(b), the two businesses, posts and telecommunications, have provided certain services for each other for many years. The particular examples of which I am thinking are vehicle maintenance, procurement and research and development. Activities such as these obviously do not fall within the power set out in Clause 2(1)(a) and therefore it is necessary to include Clause 2(1)(b), and its parallel provision in Part II of the Bill in Clause 57, in order to allow these necessary and useful services to continue.

Similarly, as regards 2(1)(c) and (d), British Telecom already provides some services other than telecommunication services under the equivalent section, Section 7(1)(d), of the 1996 Post Office Act. The example I have in mind here is the procurement of hearing aids for the DHSS and also an agreement to provide emergency power supplies to hospitals. Again, these subsections allow these necessary services, which are not purely telecom or data processing services, to continue.

I hope therefore that my noble friend appreciates that the point is now clear. These paragraphs are necessary because they are not covered by the powers in Clause 2(1)(a). I would just add that all the services covered by Clause 2(1)(b), (c) and (d) will be performed by BT under specially negotiated contracts. In providing these services, BT will of course be competing with the private sector. Therefore the Post Office, the Government, local authorities and National Health Service authorities will all be able to choose whichever supplier they wish. I hope that, in the light of this detailed, if necessarily rather technical explanation, my noble friend can now agree to withdraw his amendments.

Lord Morris

My Lords, I am most grateful to my noble friend for that very full and careful explanation. It is an immense improvement on the explanation which we received at the Committee stage; certainly it clarifies my mind a great deal. Therefore I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 2 and 3 not moved.]

Lord Morris moved Amendment No. 4: Page 3, line 13, leave out ("requisite, advantageous or convenient") and insert ("expedient").

The noble Lord said: My Lords, this amendment is precisely the same as an amendment which I moved at the Committee stage. I do so again, for I believe the answer given then was not so satisfactory as I might have wished. In his answer my noble friend Lord Trefgarne said: In any case it would not always be easy to prove that a particular activity was expedient and this could give rise to uncertainty as to the practical extent of British Telecom's powers".—[Official Report, 12/5/81, col. 467.] If it would not be easy to prove that a particular activity was expedient, how much more difficult, I suggest, would it be to establish whether it was convenient, not to say requisite or advantageous. I believe that the use of the word "expedient" as opposed to these three words would not make life more difficult. On the contrary, they would not limit any of the powers of British Telecommunications, because one could not go any wider than "expedient". I beg to move.

Lord Lyell

My Lords, as my noble friend Lord Morris has already said, my noble friend the Minister, Lord Trefgarne, attempted to give an explanation to my noble friend at an earlier stage about this amendment. The word "expedient" in this case could be construed as narrower than the phrase "requisite, advantageous or convenient". While the Government have no wish to narrow the powers of British Telecom, the advice we have received makes us unable to accept the addition which my noble friend seeks to make to the Bill.

I hope my noble friend will accept that the phrase which is used in this Bill, we hope satisfactorily, is common to several nationalised industry Acts which have a good track record both for clarity and for expression. The coal, the electricity and the gas industries are several examples, as well as the Post Office. All of them have similarly worded powers to those which are found in the Bill. I hope this explanation will go a little further towards satisfying my noble friend Lord Morris.

Lord Morris

My Lords, indeed it does. I am most grateful to my noble friend. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 [General duty of the Corporation]:

3.6 p.m.

Lord Glenamara moved Amendment No. 5: Page 6, line 2, after ("Islands") insert ("including its rural communities").

The noble Lord said: My Lords, the purpose of this amendment is to call attention once more to the damage this Bill is going to do to people living in rural areas. The rural areas are already suffering in a great many ways. Transport in many villages is now poorer than it was at the end of the last century. The additional 20p per gallon on petrol has added to the difficulties of people living in those areas. It is agreed by everybody who understands this Bill that it will put up by a good deal the cost of the telephone in rural areas. It is also going to make the obtaining of equipment beyond the first telephone much more difficult.

Had the Government been more open about this issue during the Committee stage, we should not have found ourselves today in the position of having to put forward an amendment at the Report stage to safeguard the rural areas. Ministers opposite know quite well what effect this Bill will have in rural areas, but they have never admitted that what we and almost everybody else who understands the Bill have said is correct.

One of the clearest features of the Bill is the restriction it now places on British Telecom's duty to provide a telephone service throughout the United Kingdom. Let us be quite clear about what the Bill does. It lays on British Telecommunications a simple duty. The only obligation it has is to provide the first telephone in every home. There is no obligation beyond that. There the duty stops. That is a fact of which the Government are well aware, since Clause 3 clearly reflects this change in duty.

During the Committee stage debate on this issue I was taken to task by the noble Earl, Lord Gowrie, on a number of occasions, but on 12th May he said: He really should not, in my view, stir up anxieties among the disabled or people in rural areas that in some way they are going to be denied access to a telephone".—[Official Report, col. 479.] If the noble Earl will look through what I said, I never at any time said that. Of course, people will continue to be able to go to British Telecommunications for the provision of the first telephone. What we on this side of the House and what many other people outside it have said, and I repeat it, is that if they live in rural areas and want any additional apparatus in their home, their office, their firms, the local auction mart or anywhere else, they may find themselves in difficulty in finding suppliers. Once installed, they may find difficulty in getting maintenance services. For both the supply and maintenance of equipment they are likely to pay a very much higher price than they have done to date.

The Government should not try to escape the logical consequences of the policy they have adopted in this Bill. BT, as a monopoly supplier of telecommunications services in the United Kingdom, has traditionally subsidised the provision of services where they are unprofitable, by provision where they are highly profitable. For example, cities have always subsidised the rural areas and there really is no other way to provide a national telephone system in this country. The Government propose to change all that. They propose to introduce competition and private sector firms will inescapably concentrate on competing with British Telecom in areas where the profit potential for them is high. It is not because they are wicked or lacking in social responsibility but that is in the nature of a private firm. It is their nature and their duty imposed by company law and the Government should recognise that. To the extent that that competition is successful—and I take it that the Government want private firms to compete successfully—BT's revenues will be reduced and its ability to subsidise unprofitable services, such as those in rural areas, will thereby be diminished.

Of course, I do not expect the process to stop there. If I were the chairman of BT, confronted with the threat of the implementation of the Beesley Report and facing competition in the provision of terminal apparatus of the kind I have just been talking about, I should be engaged in a thorough reassessment of BT's role. Indeed, I should be very surprised if the chairman of BT was not doing that already. I should be looking for a new strategy that would enable British Telecom to retain the largest possible market share in the areas open to competition. Inevitably therefore I should, to a far greater degree than up to the present, concentrate my resources, both of manpower and of finance, in areas where I expected competition to be the fiercest; that is, in the provision of certain types of terminal apparatus in the urban areas of the United Kingdom. As the Government require BT to generate most of the funds for investment, BT really has no option. The Government require BT to find most of its funds for investment itself, so it has no other course available to it except this kind of reassessment of its strategy.

I think it is fair to require a monopoly supplier to operate to some degree in an uncommercial fashion. That is the tradition which has shaped the attitude of BT. It is for that reason that it has for years been subsidising, for example, the telephone box on the village green at considerable loss and has done very much work in developing new aids for the disabled, without concern for the profitability of either of those projects. Inevitably under the new pattern which will emerge during the next three years under this Bill, those attitudes in BT will change, unless of course BT is to suffer a catastrophic drop in revenue, and I think it would be franker if the Government admitted that, but that of course is what the Government want. They want to import a harsh commercial attitude because they believe that the market can solve everything—it can solve the supply of anything we want and it can get the price right.

In the Committee stage the noble Earl, Lord Gowrie, indicated—and I quote: If British Telecom were to fail to provide reasonable service in any part of the country—it is open to the Secretary of State to give them directions to do so either under Clause 6(2) or (3) or under Clause 6(5)".—[Official Report, 12/5/81; col. 480]. Here again I am sure that on reflection the noble Earl will feel that he is in danger of misleading the House, for if BT no longer has a duty, other than the duty to provide the first telephone in any home, I should he very surprised indeed if the Secretary of State would then be acting within his powers in directing them to provide more than the first telephone in any home. But I am sure that if I am misleading the House one of the noble Lords will interrupt me. Does one of the noble Lords wish to interrupt me and say that the Secretary of State would have the power to give BT a direction to provide something apart from the first telephone? I am quite willing to give way if the noble Earl wishes to intervene. Well, perhaps he will reply later.

Today we are going to consider in more detail the position on the Beesley Report. However, I call the report to my aid in re-emphasising that the Government are well aware of the fact that the cost to the residential and rural customer of telecommunication services is bound to rise. For much of the dispute between Professor Beesley, the Secretary of State and other parties about the extent to which his recommendations would lead to increases in charges is based on the fact that Professor Beesley assumes that BT will, if his recommendations are implemented, re-balance its tariff structure. Re-balancing means, quite simply, a process of spreading the burden of profit more evenly across the services that it provides. In other words, insisting that everything shall be profitable—the telephone box on the village green, the farm telephone across a mile of fields or a remote moor in the north of England, and so on. So the extensive traditional subsidising of loss-making services which has continued in the British Post Office for very many years will have to be greatly reduced, if not altogether stopped. One of the less profitable services that BT provides is residential installations anywhere—not just in rural areas—and I do not think any noble Lord would contradict the fact that installing a telephone on the Island of Skye or in a remote Cumbrian farm is unlikely to be profitable to anybody, unless at a massive cost.

On this side of the House we believe profoundly that the Government are quite wrong in bringing forward this Bill and doing what they are doing to telecommunications in this country. We believe that they are moving in the wrong direction for telecommunications. We do not believe that the provision of an effective telecommunications system can be a product, like strawberries or any other product, which can be left to market forces to regulate the supply and the price. We believe that an efficient and well run telecommunications service is a social as well as an economic necessity and therefore that telecommunications has a social role to play, particularly in rural areas. The Government view the matter otherwise, but they should not seek to ride two horses and try to delude people into believing that they can import market forces (as they are doing) into the provision of telecommunications and at the same time leave the social role of BT in rural areas undisturbed. That cannot be done. They cannot ride those two horses at once. One cannot bring in market forces and at the same time enable British Telecommunications to retain that social role.

I hope the noble Earl, Lord Gowrie, will therefore take a somewhat franker line on the effect that this Bill will have in rural areas than he did at the Committee stage. The Government have been less than open about the effect that the Bill will have on rural areas and residential customers generally. The purpose of this debate has been to enable Ministers to come clean, to tell the House, to tell the country, to tell noble Lords exactly what effect the Bill is likely to have. I hope the ultimate effect of the amendment is to write a very minor safeguard into the Bill for the rural areas of this country.

Lord Mottistone

My Lords, in the mid-sixties I had the good fortune to live for a year in Canada, where the telephone is produced by the Bell Telephone Company. I can assure your Lordships that not only did they provide the telephones the people in the towns and cities and rural areas needed, but they did it more cheaply. One of the reasons they managed to do this was by not wasting a lot of money on trying to underpin things in an orderly bureaucratic fashion. The other reason was that if the communities reckoned they were not getting the service they wanted they jolly well found it themselves. The did not think they had to fall back on "Auntie" Government to provide it for them; they thought they had to get on and do it, and they negotiated hard and they found the money collectively and all sorts of things like that.

I really think the noble Lord is not allowing us to free the British people to look after themselves instead of being looked after by central Government. That is the message of this Bill. I really think we want to stop trying to cosset poor little British Telecom because the Post Office has been nationalised for centuries; and what a pity! I think we want to say: "This is a commercial operation; for heaven's sake, let us follow in the footsteps of our cousins in North America who really know the way to do things on a free enterprise basis".

As to the particular amendment, I welcome the phraseology of the Bill as it stands, though this might sound contradictory to what I have just said. Islands, as I tried to explain to your Lordships earlier, particularly in the local government Bill last year, have a special problem; they have a communication problem which involves the sea, and it is different. You can quite easily dig a trench for a telephone down the side of the road but you cannot put it under the water, to take that one example. In regard to the local government Bill we had the problem of trying to persuade the Government that we do have a special extra cost because of the sea transport situation. I will not go over that ground again. But the fact is that in Canada, about which I spoke a moment ago, they do have a very special underpinning and subsidising of all the transport to all their islands in a way that I hope to show the Government in due course, when I have a little time to do it. Therefore, I think that this amendment is misconceived. It misses the point of the Bill. It tries to put us back again in a terrible straitjacket, and it does not understand that uniquely islands require special treatment in a way that rural areas never will.

Lord Underhill

My Lords, with due respect to the noble Lord, Lord Mottistone, I wonder whether he has got it completely right. We are not talking about cosseting British Telecom. I do not like the word, but we are talking about cosseting the consumer; this is the important thing. No reference has been made, so far as I can gather, to the question of maintenance. The noble Lord, Lord Mottistone, says that in Canada it is done much cheaper. Nothing can be much cheaper than nothing. British Telecom carries out maintenance as part of its normal rental charge. What will be the position in the rural areas? If, as my noble friend Lord Glenamara has pointed out, and it cannot be denied, profitable services are to be taken away by licence from British Telecom, obviously British Telecom has to make a very important decision: Does it carry on in difficult rural areas? Many noble Lords come from rural areas; they know that telecom engineers go out in all weathers, at almost all hours, to deal with problems of maintenance, and that is included in the telephone rental charge. Nothing can be cheaper than that. British Telecom will have to take an important decision. If it is going to be denied other important revenues it has got to decide whether it carries on maintenance at its present cost.

It may be argued that the private sector will take over the maintenance. That may be, but it will be at an additional cost. No private sector is going to take over maintenance in the rural areas unless it can make a useful remuneration. I do not expect any private company to carry out maintenance work for the love of doing it. Therefore, that aspect has got to be dealt with when we are considering this amendment. An obligation must be placed upon someone to ensure that the services in the rural areas are continued. Many noble Lords come from the rural areas. I hope they will look at this, and, if mine is not the answer, perhaps they will tell me what the answer is. The only answer can be private sector charges at a profit, which will be far greater than the charges made by British Telecom at the moment.

Lord Hawke

My Lords, may I ask my noble friend about one point that rather troubles me? Living in a rural area, with some extensions to the telephone—many people are in the same boat, of course—those extensions belong to, and are rented from, the Post Office at the moment. After the passage of this Bill, the Post Office will presumably come and mend my main telephone free of charge, as they do at the moment, but will it be incumbent upon them to come and mend the extensions free of charge, as they do at the moment, or will they be able to levy a charge for doing that?

The Earl of Gowrie

My Lords, I would have to take advice on my noble friend's question. I think the position would be that, where British Telecom are freely competing for the provision of services with the private sector, as against any undertakings they have given to my noble friend or others, on the mainframe system they would be able to levy a charge. But I will take advice about that and come back to my noble friend, if he will be so kind as to allow me that passage of time.

My Lords, I think the noble Lord, Lord Glenamara, is a marvellous addition to your Lordships' House, in that, in keeping with the traditions of the House, he is very experienced, very lucid, and extremely conservative. One of the real puzzles, I think, of political life over the last 10 years in which I have been engaged about it is the steady progression of the Labour Party towards being the party principally of the defence of the status quo. We have had time and time again in this debate, and indeed in other debates, the argument put to us which, if I may synopsise it, and the noble Lord, Lord Glenamara, put it very clearly, goes something like this: in order to provide the bread of the social service we should be allowed a monopoly on the jam to put on it. I think there is a false logic here.

The same arguments were heard most conspicuously about 15 to 20 years ago when it was suggested that the BBC monopoly should be done away with. The implication then was that if the BBC lost its monopoly all forms of the admirable Reithian tradition would be thrown out of the window and the effects would be calamitous on our broadcasting system. In fact, while we can all find things to criticise in the BBC or the ITV, or indeed in any of the media, just as they find things to criticise where we are concerned in the legislature, I think most of us agree without sentimentality that we have probably one of the finest broadcasting systems in the world, if not the finest, and that the process of competition between these two services has been to the immeasurable benefit of both. Therefore, I simply do not accept the central premise of the noble Lord's argument.

Turning away from the central premise to some of the detail, the amendment itself of course is extremely curious, since there can surely be no doubt that the term "British islands" includes the whole country, including the rural communities. It would be very odd if we had, as it were, hived them off in our description of this country as the British Islands. The duty as contained in the Bill makes it absolutely clear that British Telecom must have regard to the social, commercial and industrial needs of the British Isles. As I have already said, this necessarily includes the rural communities. British Telecom will continue to provide the public network and the prime instrument throughout the country. Even if it is more expensive to provide a prime instrument on the island of Skye than it is to provide one in, say, Belgravia, think of the number of prime instruments required in Belgravia and how perfectly delicious it is in commercial terms to have that monopoly of supply. There should not be too much difficulty for British Telecom in meeting its social and commercial obligations, given that it has been allowed to retain the prime instrument and the basic network, which is where most of the demand is. Whatever the fantasies all of us may have in respect of wonderful new processes and inventions, I believe most of us accept that over the next 10 or 20 years the bulk of the market will still be in the provision of the basic prime instrument.

The noble Lord, Lord Glenamara, has suggested that this Bill will result in an increase in charges in rural areas. This is a seductive argument and I believe that the noble Lord was being a little too sensitive when he appeared to have had his feelings rather hurt by my implication at Committee stage that the noble Lord was running around stirring up anxiety. The reason why I believe that the noble Lord opposite is being a little disingenuous is because he knows perfectly well that tariffs are affected by a wide range of factors. Pay has something to do with the tariffs that are charged by a large public sector monopoly. Staffing levels have something to do with charges. While I very much welcome the passionate concern expressed by the noble Lord, Lord Glenamara, and shown by the Labour Party for the fate of customers in rural areas, I do hope that they will bring equal pressures to bear on the public trading sector unions in these large monopoly industries, to see that they are equally sensitive to the costs which devolve on consumers in rural areas.

I can assure your Lordships' House that if British Telecom did choose to discriminate in some way against their customers in rural areas—and I cannot imagine that they would—then the Secretary of State would be able to direct British Telecom to cease doing so, because the Secretary of State has very considerable powers in Clause 6—his social override powers, if you like. Therefore, it seems to me that the duty of British Telecom to have regard to the interests of rural communities quite clearly remains. The Government are convinced that consumers of British Telecom communications will benefit from the introduction of competition. I must say that I find it obscurely insulting, as someone who spends some of his time in rural areas, to think that those who live there would be less interested in receiving the new products, technology and services than their counterparts in the towns. I should have thought that the more remote one's community was, the more likely one would be to wish it to be clocked-in to the central communications system which we all enjoy and wish to improve. I hope that what I have said will persuade the House that the noble Lord, Lord Glenamara, has raised something of a red herring—although admittedly he has dyed it blue in doing so.

Lord Hawke

My Lords, before my noble friend the Minister sits down, may I just ask him—

The Earl of Gowrie

My Lords, I did say to my noble friend Lord Hawke, that I would come back to his point and in fact, mirabile dictu, my original answer was correct, and what I said to him was confirmed by the Box. The contracts entered into in respect of the primary network obtain, but if new services are provided by British Telecom they could levy a charge for that maintenance.

Lord Hawke

My Lords, I do not believe my noble friend quite got the point. I was asking whether there would be a charge in respect of existing ancillary services; those that are being maintained free of charge at the moment. I refer to those cases where British Telecom own the apparatus and rent it out to the subscriber. In future, after this Bill passes, will there be a charge?

The Earl of Gowrie

My Lords, at the moment, the corporation, regardless of the passage of this Bill—and this is the point that I really want to get across—can seek Parliamentary assent to levy charges if it finds that it cannot maintain a service economically. The short answer to my noble friend is that the position changes in no way.

Lord Mottistone

My Lords, will my noble friend the Minister confirm that what he said earlier in his speech indicated that where this clause mentions "British Islands" it is not, as I had assumed, the islands surrounding Britain, but the "British Isles" as I learnt about them in school, including the Republic of Ireland?

The Earl of Gowrie

My Lords, I do not think my noble friend is right in thinking that. As one who hails from the Republic of Ireland, the phrase we use there in this context is "these islands". That has become a tactful and general geographical expression. Quite clearly "British Islands" means the United Kingdom, and the emphasis is on the provision of services to off-shore communities within the United Kingdom.

Lord Kilbracken

My Lords, I do not know that I can agree. I come from the same Republic and I too talk about "these islands". Is it not the case, however illogical and unjustifiable it may be, that the term "British Isles" as defined in British legislation does in fact include the 26 Counties?

The Earl of Gowrie

My Lords, it is a confusing issue, as the noble Lord is aware, because the technical definition of the word "Scot" is an Irishman. Our history and geography and culture are pretty confused on these issues, but I do not think our legislation is.

3.38 p.m.

Lord Glenamara

My Lords, with the tremendous honesty that characterises him, if I may say so, the noble Lord, Lord Mottistone, let the cat out of the bag. He said that people in rural areas could look after themselves. He said that they could club together to buy the services that they wanted, and if the Post Office finds that it is no longer able to provide a telephone box on the village green, the local community can have whist drives, beetle drives and dances to raise the money for one. That illustrates the divide between us. We believe that it is right and proper for more lucrative areas to subsidise those areas which cannot pay their own way. The noble Earl, Lord Gowrie, mentioned Belgravia; I wish my noble friend Lord Lever were here because I am sure he would agree that it would be right and proper for Belgravia to subsidise Benbecula in the Hebrides.

The Earl of Gowrie

But Belgravia does do that, my Lords.

Lord Glenamara

Of course it does, my Lords. That is our whole point—and it should continue to do so, but the noble Earl does not believe that.

The Earl of Gowrie

My Lords, if the noble Lord will allow me, the point I was making is that Belgravia does subsidise the Isle of Skye and I am sure the noble Lord, Lord Lever, is very content that it should do so. It will continue to do so in respect of the monopoly over the primary network. All we are suggesting liberalising is the secondary apparatus, which should generate a great deal of development employment in this country, and I should have thought that the noble Lord, Lord Glenamara, would have welcomed that.

Lord Glenamara

My Lords, I have listened carefully to the noble Earl's interjection, but I cannot see that it is very relevant to what I was saying. What we are saying is that it is right and proper that Belgravia should subsidise the islands in the Hebrides. The noble Earl criticised me for saying that. If I could return to remarks made by the noble Lord. Lord Mottistone, for a moment, he accused me of wanting to put the country back into a straitjacket. I hope that noble Lords have looked at what my colleagues and I are suggesting. In Clause 3 it says: It shall also be the duty of the Corporation, in exercising its powers, to have regard to"— and then there are listed a number of matters, including: the social, industrial and commercial needs of the British Islands". We are suggesting that we then insert: including its rural communities". I should hardly have thought that such a step would be putting the country back in a straitjacket. To say that is really coming it a bit much, even from the noble Lord, Lord Mottistone.

The noble Lord, Lord Hawke, raised the important question of maintenance. The Post Office will, of course, have to charge maintenance in future. It is now included in the rental, but in future, as certain as day follows night, when this Bill becomes operative they will have to charge separate fees for maintenance.

The noble Earl, Lord Gowrie, criticised me for wanting to preserve the status quo. I think that the status quo is a highly desirable state of affairs sometimes. If I am standing on the top of a cliff and the option is to be pushed over it, then I shall want to preserve the status quo—and that is just about what this Bill proposes. The noble Lord said that the term "British Islands" included rural areas. Of course it does, but we are all agreed, I think, that they are at special risk here and we simply wish by this very innocuous amendment to underline their importance and to emphasise the need to safeguard them.

As regards tariffs, I hope that noble Lords listened to what the noble Earl, Lord Gowrie, said. He still has not told us whether or not, in the opinion of the Government, this Bill will cause tariffs to rise in rural areas. What did he do? He got off on to the old red herring about the unions and pay demands. It was a little unfortunate because in this particular industry the unions—and there are two—are probably the most responsible unions in the British Isles, so he really cannot put forward that plea in this case. Noble Lords should note that we have still not yet been told whether, as a result of this Bill, telephone bills and maintenance charges will go up in the rural areas. We say that they will and everybody who is informed about this matter and who has considered the Bill agrees that they will go up. The noble Earl, Lord Gowrie, still has not told us the Government's view.

We are still confused (are we not?) about the Minister's power to direct. The Minister may well have the power, as the noble Earl says, to direct BT if it is seen to be discriminating against rural areas—that would be very difficult to prove, but I agree that he would probably have the power to direct it in those circumstances. But what happens if BT refuses to install a PABX in a local auction mart; the one I quoted earlier? Would he have the power to direct it to do that?—of course he would not. The Minister has no power to direct in matters of that kind.

Finally, the noble Earl criticised me—and I am amazed about this—saying that I was not in favour of rural areas having up-to-date equipment. The whole of my argument is that I am in favour of them having the best equipment but they will not have it under this Bill. That is the whole point. I am sorry that the noble Earl missed it. I want them to continue to have the best equipment available in the Islands and Highlands; the remote areas; Cumbria where I was born, brought up and live; and areas like that. The whole point is that I am afraid that under this Bill they will not get that. So please; I did not say that they ought not to have it. I am sorry that the Government have taken the view which they have taken. This is a very sensible amendment and I hope that many noble Lords—for example, those who voted on the question of rural transport—will feel that they can support us in this matter.

The Lord Chancellor

My Lords, it is up to me to put the Question. However, if there is likely to be a Division I wonder whether the House would prefer me to make the Statement next or to put the Question? I shall take it upon myself to make the Statement.

Several noble Lords


The Lord Chancellor

My Lords, if that is the case then I must put the Question.

3.45 p.m.

On Question, Whether the said amendment (No. 5) shall be agreed to?

Their Lordships divided: Contents, 52: Not-Contents, 101.

Ardwick, L. John-Mackie, L.
Bacon, B. Kilbracken, L.
Beswick, L. Leatherland, L.
Bishopston, L. [Teller.] Listowel, E.
Blyton, L. Lovell-Davis, L.
Briginshaw, L. Molloy, L.
Brockway, L. Morris of Grasmere, L.
Bruce of Donington, L. Oram, L.
Cledwyn of Penrhos, L. Pargiter, L.
Collison, L. Peart, L.
Crowther-Hunt, L. Phillips, B.
David, B. [Teller.] Ponsonby of Shulbrede, L.
Ewart-Biggs, B. Reilly, L.
Fisher of Rednal, B. Sefton of Garston, L.
Gaitskell, B. Shinwell, L.
Glenamara, L. Stewart of Alvechurch, B.
Greenwood of Rossendale, L. Stewart of Fulham, L.
Hale, L. Stone, L.
Hall, V. Strabolgi, L.
Hayter, L. Strauss, L.
Henderson, L. Taylor of Mansfield, L.
Howie of Troon, L. Underhill, L.
Jacques, L. Wallace of Coslany, L.
Janner, L. Wedderburn of Charlton, L.
Jeger, B. Wilson of Radcliffe, L.
Jenkins of Putney, L. Wootton of Abinger, B.
Alport, L. Grimston of Westbury, L.
Ampthill, L. Hailsham of Saint Marylebone, L.
Amulree, L.
Auckland, L. Hankey, L.
Avon, E. Hanworth, V.
Balfour of Inchrye, L. Hawke, L.
Beaumont of Whitley, L. Hives, L.
Beloff, L. Home of the Hirsel, L.
Bellwin, L. Hylton-Foster, B.
Belstead, L. Ilchester, E.
Bessborough, E. Kennet, L.
Boyd-Carpenter, L. Kinloss, Ly.
Byers, L. Lane-Fox, B.
Caccia, L. Long, V.
Campbell of Croy, L. Lothian, M.
Cawley, L. Loudoun, C.
Clancarty, E. Luke, L.
Cockfield, L. Lyell, L.
Cottesloe, L. McAlpine of Moffat, L.
Croft, L. McFadzean, L.
Cullen of Ashbourne, L. Macleod of Borve, B.
Daventry, V. Mansfield, E.
Davidson, V. Marley, L.
De La Warr, E. Montgomery of Alamein, V.
Denham, L. [Teller.] Morris, L.
Dundee, E. Mottistone, L.
Effingham, E. Moyne, L.
Elibank, L. Murton of Lindisfarne, L.
Elliot of Harwood, B. Northchurch, B.
Evans of Claughton, L. Nugent of Guildford, L.
Exeter, M. Nunburnholme, L.
Faithfull, B. Orkney, E.
Ferrers, E. Orr-Ewing, L.
Fortescue, E. Penrhyn, L.
Fraser of Kilmorack, L. Rankeillour, L.
Gainford, L. Rawlinson of Ewell, L.
Gibson-Watt, L. Reigate, L.
Glenkinglas, L. Renton, L.
Gore-Booth, L. Robbins, L.
Gormanston, V. Rigby, L.
Gowrie, E. Sainsbury, L.
Gridley, L. St. Aldwyn, E.
Sandford, L. Trefgarne, L.
Sandys, L. [Teller.] Trumpington, B.
Savile, L. Vaux of Harrowden, L.
Seear, B. Vivian, L.
Skelmersdale, L. Wakefield of Kendal, L.
Soames, L. Ward of Witley, V.
Strathcarron, L. Westbury, L.
Strathspey, L. Wigoder, L.
Sudeley, L. Young, B.

Resolved in the negative, and amendment disagreed to accordingly.