Telephone Services (Hansard, 2 December 1982)

Lord Belhaven and Stenton
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ Lord Glenarthur
My Lords, no individual who at present has access to telephone services will be deprived of them in the future. I can also confirm that anyone who is able to obtain a telephone at present will be able to obtain a telephone under the new arrangements.

Lord Belhaven and Stenton
My Lords, I thank my noble friend for that Answer. Can he tell the House whether there is any truth in the allegations which have been made in certain quarters that rural kiosks will be removed because they do not pay the operators?

§ Lord Glenarthur
My Lords, there is no truth in that allegation at all. It would not, I think, be sensible for any particular distribution of kiosks to be laid down in any licence issued as a result of the Telecommunications Bill, but the licence will oblige British Telecom to continue to provide both the telephone kiosks and, of course, the 999 service, which makes much use of the telephone kiosks. It would be wrong of me to go into the Bill in detail now because it is already under discussion in another place, but Clause 3 of the Bill sets guidelines for my right honourable friend the Secretary of State in issuing licences. Moreover, in the functions relating to licences specific mention is made of these services and those to rural areas as needs to which both the director and my right honourable friend must have regard.

§ Lord Beswick
My Lords, is the question here not one as to whether any present subscriber will be physically deprived of a line but whether, under the new commercial policy required by this Bill, the said subscriber will in future be able to afford a telephone?

§ Lord Glenarthur
My Lords, there is nothing to indicate that rural services cost more to run other than in the initial arrangements for connecting the telephone. The charges remain the same for rural areas and, broadly speaking, for urban areas as well. There 1306 is nothing at all to suggest that it will be far too expensive for people living in rural areas to be connected.

§ Lord Orr-Ewing
My Lords, is it not true that there are two good reasons why there will be a tendency for charges to fall? To start with, there will be competition, and therefore the price is likely to fall; and, secondly, British Telecom are henceforward going to be able to borrow, and in any particular year they will not have to charge in order to raise the finance to invest in better telephone services. So on two scores there should be a reduction in charges rather than an increase. Is that not right?

§ Lord Glenarthur
My Lords, I am very grateful to my noble friend for what he has said. He is absolutely right; and it is also true that technological advances, such as satellites, should mean that it will become more practical to provide services to more areas than in fact exist at present.

§ Lord Glenamara
My Lords, is the noble Lord aware that most rural call-boxes are run at a considerable loss, and will he say whether there will be any subvention from public funds to British Telecom in order to keep these call-boxes in existence, similar to the payments made to British Rail to keep unremunerative lines open?

§ Lord Glenarthur
My Lords, I do not believe that this would be an appropriate way to secure these services, and neither does the chairman of British Telecom. It will provide no incentive to improve efficiency or quality of service. I think it is also true that the 999 service and telephone kiosks are an integral part of the British Telecom services, and it is far better to recognise this by an obligation placed on British Telecom in its licence, supported as necessary by revenues obtained from other services. But this support will be made explicit to prevent hidden inefficiencies.

§ Lord Beswick
My Lords, on the question of competition as raised by the noble Lord, Lord Orr-Ewing, is the noble Lord, Lord Glenarthur, saying seriously that there is any possibility at all of a private company offering a competitive service to rural telephone subscribers?

§ Lord Glenarthur
My Lords, it will be competitive and, yes, there will be opportunities for commercial undertakings to compete with British Telecom when the Bill has been passed and the licences issued.

§ Lord Glenamara
My Lords, will the noble Lord say how competition will improve the rural call-box service? Does his reply to my supplementary question mean that the Government will be quite prepared to see large numbers of rural call-boxes go out of existence?

§ Lord Glenarthur
No, my Lords; there is no question of large numbers of call-boxes in rural areas being removed. Perhaps the noble Lord could repeat his first supplementary question.

§ Lord Cledwyn of Penrhos
My Lords, is the noble Lord aware that there is considerable fear that the new arrangement will in fact militate against those who are living in rural areas, and especially the more remote rural areas, of the three countries? Can he give us a clear assurance now, at the end of this exchange, that the rural areas are not going to be at a disadvantage by comparison with the urban areas? Is he also saying that profitability will not be a criterion in future?

§ Lord Glenarthur
My Lords, my right honourable friend the Secretary of State has made it perfectly clear that these claims are entirely without foundation. As I said earlier, licences will be issued as a result of the Telecommunications Bill—and I think it would be wrong to go into the Bill in detail now—and British Telecom's licence will oblige it (and I emphasise those words) to provide these services throughout the United Kingdom, which includes remote and rural areas. It means that anyone who has access to a phone under the present arrangements will, as I said in my original Answer, continue to do so under the new arrangements. In their statement issued when the Bill was published, the British Telecom Board publicly accepted a continuing responsibility to provide services to both rural and outlying areas.

§ Lord Clifford of Chudleigh
My Lords, will the noble Lord do something to make more positive the replies he has given this afternoon, especially on the question of rural telephones? As president of the Devonshire Association of Parish Councils, I ask the noble Lord whether he is aware that parish councils all over the country, especially in my part of the world, are more than convinced that they are going to lose their rural telephones. Following on his statements this afternoon, can the noble Lord do something to put their minds at rest?

§ Lord Glenarthur
My Lords, I really do not think I can be any more specific than I have been already. In any case, your Lordships will have plenty of opportunity to discuss this in further detail when the Bill comes before your Lordships.

§ Lord Walston
My Lords, will the noble Lord elucidate one point for me? He has told us that British Telecom have willingly undertaken the obligation in respect of rural telephone boxes and rural remote supplies, and he has also told us that there will be benefits from competition which will be of value to the consumer. How is it going to be possible for British Telecom to compete on an equal footing with other suppliers who are not under the obligations that British Telecom are under to provide expensive and unprofitable services?

§ Lord Glenarthur
My Lords, I thought I had explained that in British Telecom's case the licence will oblige it to continue to provide those services. As I understand it, if anybody else undertakes to provide the services they, too, will be under the same obligations. But at the present time it is British Telecom who, under the new arrangements, will be obliged to maintain those services.

§ Lord Molloy
My Lords, can the noble Lord say—

Several noble Lords
Oh!

§ Lord Molloy
I wish noble Lords opposite would not wince before the lash comes. Can the noble Lord say what will be the qualification required of the entrepreneurs who will compete with the British element, and who will select them?

§ Lord Glenarthur
My Lords, that matter really is wide of the original Question and it will be discussed when the Bill comes before your Lordships.

§ Lord Derwent
My Lords, are we not now completely out of order? We are away from the Question and we are discussing the Bill.

§ Lord Glenarthur
My Lords, I quite agree with my noble friend.