Telecommunications Bill

HL Deb 12 March 1984 vol 449 cc504-39

4.15 p.m.

Consideration of amendments on Report resumed.

[Amendments Nos. 2, 3, 4, 5 and 6 not moved.]

Lord Stoddart of Swindon moved Amendment No. 7: After Clause 1, insert the following new clause:

("Levy

.—() There shall be paid by each telecommunications operator licensed under this Act a levy to meet the costs and expenses of the Director of Telecommunications referred to in section 1(6) above.

() The levy shall be based on a percentage of the gross annual operating receipts of each operator. Such percentage shall be fixed from time to time by the Secretary of State by Order subject to annulment by either House of Parliament.

() The proceeds of the levy shall be paid into the Consolidated Fund.").

The noble Lord said: My Lords, I beg to move Amendment No. 7 standing in my name and the names of my noble friends. Your Lordships will see that the proposal is that a levy shall be paid by each telecommunications operator licensed under this Bill, that it shall be based on the annual gross operating receipts of each operator and that the proceeds of the levy shall be paid into the Consolidated Fund.

As the Bill stands, so far as one can gather, Oftel will be a drain on the taxpayer. So far as I can see, there is nothing in the Bill which states otherwise. My noble friends and I believe that this really cannot be right because the regulatory authority under the director general is an imposition on the taxpayer, who is at present quite content with the situation as it stands. There has been no great public demand for privatisation of British Telecom. Indeed, the public, so far as one can ascertain, are either opposed to the Bill or bored to tears by the Government's doctrinaire approach to a public undertaking which has served them well for nearly 100 years without any regulatory body such as is proposed in this Bill. The public have not raised their voices to the heavens asking for privatisation, because they have been perfectly satisfied over a very long period of time with the present situation. And well they might be, because over a very long period of time the telecommunication service and Post Office Telephones have served them very well indeed.

Talking to many people—I am sure other noble Lords will have observed this, too— one finds that the public were probably more satisfied with the telephone system when it was part of the Post Office, administered by a Postmaster-General and answerable directly to Parliament, than they have been since 1981—in fact, since 1968, when Post Office Telephones became a public corporation. Indeed, there is a great hankering for the days when we had a Postmaster-General who could be questioned in Parliament and who was answerable to the public through properly-elected representatives.

Of course I realise that we have moved on since then, but certainly when I worked as a youth in training in the Post Office telephone service the whole ethos of the organisation was orientated towards giving the public a first-class service at a reasonable cost, while ensuring that the Post Office telephones were not a charge on the taxpayer in any way. Everything that I ever learned during the short perod I worked for the Post Office telephone service taught me that public service was paramount and that if you had a breakdown on Christmas Day, for example, then it was your duty to respond to a call to restore the telephone service just as soon as you possibly could. In fact, there was no need to worry, in those circumstances, as to whether directory services would be provided or whether rural subscribers would receive equal treatment; it was all taken as a matter of course. That ethos was inherited by British Telecom, and they know the public duty that they have to administer.

However, under this Bill, which is bound to put profit above service to the customer—that is what it is all about—apparently it is necessary to superimpose a regulatory organisation to protect the public from exploitation, to preserve services which have been enjoyed by the public over a very long period of time and to ensure that the integrity of the national telecommunications network is not undermined by irresponsible, fly-by-night, cowboy operators. That the taxpayer should be asked to fund directly such a regulatory body is completely unacceptable, especially as it is impossible at this stage for the Government to give a realistic estimate of the total cost of Oftel. A staff of 50 has been mentioned, but it is quite unbelievable that a staff as small as that will be able to perform efficiently and properly the duties laid upon them by this Bill.

I do not intend to go right through that list of duties which is imposed on Oftel by this Bill, because my noble friend Lord Bruce of Donington went through it when he was speaking to the last set of amendments. But there is no question that it is a formidable list of duties and some of us find it quite unbelievable that a staff as small as 50 will be able to perform those functions efficiently. In fact, I shall be interested to know whether the Government have given further consideration to the total cost of Oftel since the Committee stage, and whether they are now able to give a reasonably accurate estimate of it. But, in any event. I hope that I have been able to convince the House that the industry itself should share the cost of Oftel, and I shall certainly he very interested to hear the comments of the Government on the amendment. My Lords, I beg to move.

Lord Lloyd of Kilgerran

My Lords, while rising to support this amendment, I have been wondering whether it goes far enough. I feel, as the amendment proposes, that the costs and expenses of the Director of Telecommunications should be paid for as referred to in Clause 1(6), but that subsection is limited largely to staff and associated expenses of the telecommunications directorate. It does not say anything about the cost of advisory bodies. In view of the fact that these advisory bodies will certainly have a great deal to advise about I think that they should have been included generally and that the costs of people advising should also be paid by this means.

Lord Cockfield

My Lords, we had a most interesting account of the world as seen by the noble Lord, Lord Stoddart of Swindon, through the rose coloured spectacles of his youth when he was an employee of the Post Office, but few of the customers would recognise the glowing account that he gave. Let me leave such matters on one side, however. So far as the amendment is concerned, it is already covered by Clause 7(5)(b), which reads as follows: conditions requiring the rendering to the Secretary of State of a payment on the grant of the licence or payments during the currency of the licence or both of such amount or amounts as may be determined by or under the licence". Therefore full provision is made to do precisely what the noble Lord wishes. The fees will in fact be set at a level which will not only recover the costs of setting up and running Oftel, but will also secure an appropriate contribution from licensees to the cost of United Kingdom membership of international telecommunications bodies. In fact, we have covered the full field.

In general, fees will be fixed by reference to turnover, which is what the amendment proposes, but some variation of this may be both right and necessary. For example, it may be desirable to provide for both minimum and maximum fees, and in the case of simple general licences it may be right and proper to provide a modest fixed fee rather than have a fee related to turnover. But the matter is, in fact, dealt with under the Bill as it stands and provisions will be included in the licences issued to give effect to the provisions of Clause 7(5)(b). I hope that with that explanation the noble Lord will be prepared to withdraw his amendment.

Lord Bruce of Donington

My Lords, we are greatly obliged but a little disappointed that the noble Lord should have replied in that sense, because if he will refer to Clause 7(5)(b) he will find the insertion of the word "may"; that is to say, it gives the Secretary of State power if he wishes to do so. But your Lordships will observe that in the amendment moved by my noble friend the operative word is "shall"—"There shall be paid". That is the principal difference as well as determining the basis upon which it shall be paid.

The noble Lord described the impression given by my noble friend Lord Stoddart of Swindon of the services of British Telecom as viewing through rose coloured spectacles and he hinted that that view might not be shared by the consumers at large. It is customary for all of us to make complaints from time to time, but our satisfaction or dissatisfaction with a service is entirely relative.

The fact of the matter is that the general satisfaction of the consumers in this country in regard to the telephone system is measured by the efficiency of the system already established and being operated by British Telecom, compared with the system in other countries. The noble Lord was quite right in drawing our attention to that. The fact of the matter is that although, in common with other systems in the world, our own system of telecommunications is not perfect, nor is our service perfect, they measure up very favourably indeed to the systems in most other parts of the world.

I was very glad that the noble Lord did not echo the word used by his noble friend behind him in the course of the Committee stage, when he described the personnel of British Telecom as being "tainted". Nevertheless, the fact of the matter is that, as my noble friend said, there has been no popular demand at all for the privatisation of British Telecom. It is a matter that has been pursued by a mixture of ideological resolve and the desperate need of the Chancellor of the Exchequer to get some immediate funds in relief of what he calls "public expenditure". That is the principal reason for the Bill.

In those circumstances, it is reasonable to assume that this great industry, which, according to the party opposite, will be released from the shackles imposed on it by the state, will be imbued with new enterprise, vigour, initiative and all the rest, should pay into the Consolidated Fund certain sums in order that it can bear the costs of this very abstruse operation which is being so unnecessarily carried out.

If the new companies are to derive such benefits as will enable them to invest in this new enterprise, at whatever price it may be ultimately sold to them, it is quite right that they should pay into the Consolidated Fund the amount that the taxpayer (if I may use that term) will have to pay for the establishment and maintenance of the regulatory mechanism that is set out so tortuously in the various sections of the Bill. There is nothing wrong with that, and there should not be any "may" about it.

"May" gives discretion to the noble Lord. The noble Lord is a very benevolent person. A cross word very rarely passes his lips. He is not known to be a mean person. No doubt these various hard-pressed companies, who are sufficiently financed, apparently, to take over the whole enterprise, will come to the noble Lord or to his right honourable friend the Secretary of State and say, "Although you are allowed to make a levy on us for the cost of the operation of Oftel, we are not doing very well; therefore, we request that you do not use your discretion to impose a levy upon us". My noble friend's amendment says "shall". If the noble Lord is prepared at Third Reading to insert, at Clause 7, the appropriate "shalls" instead of "mays", we might be prepared to give the matter sympathetic consideration. I fear, however, that the noble Lord is not of that mind this afternoon. Therefore, I hope that all sides of the House will support this very necessary amendment for the protection of the British taxpayer.

Lord Cockfield

My Lords, I am very sorry that the noble Lord, Lord Bruce of Donington, does not share my view that in the last few years British Telecommunications have made great improvements in the service that they offer to their customers. I do not in any way associate this improvement with the fact that the noble Lord, Lord Stoddart of Swindon, has left the employ of the Post Office, because that would be to commit the fallacy of post hoc, ergo propter hoc. But I cannot see that it advances the noble Lord's case to denigrate the degree to which British Telecommunications have improved their services, to which I pay full tribute.

If I may dispose of that point and turn to the amendment, all that rests between us, so far as I can make out, is the use of the word "may" instead of the use of the word "shall". We have used the word "may" because there will be circumstances in which we believe it might not he appropriate to charge a fee. I mentioned the case of general licences. There may be circumstances where, instead of charging a modest flat rate fee, it might be appropriate not to charge a fee at all, and one would not want one's hands tied to that extent. I assure the noble Lord that it is our intention to ensure that the full costs of operating Oftel, including the ancillary costs which fall on the Secretary of State and the costs of international representation—two matters which are not covered by the noble Lord's amendment—should be met out of the fees charged for licences. In this respect the noble Lord will he well aware of the pressures under which departments come from the Treasury. It would be most improbable to suggest that the Treasury would let the Secretary of State off the hook in this respect.

There is also Parliamentary scrutiny. Every year a Vote has to be put to another place. If there were a deficiency on this account, it would be a matter which the other place would be fully entitled to raise.

All I can say in conclusion is that to insert the word "shall" would unduly tie our hands in circumstances in which, as the noble Lord recognises, we would wish to be reasonable. It is because we wish to be reasonable, not unreasonable, that we are using the word "may". However, I assure the noble Lord that it is our full intention to recoup the cost to which he refers.

Lord Stoddart of Swindon

My Lords, I am not usually accused of looking at things through rose-coloured spectacles. I can assure the noble Lord that my recollections of the Post Office are very good. As he says, the Post Office has made great progress over the years. One has to say that that progress has been made without any privatisation Bill from this Government. I am quite sure that, without the Bill, British Telecommunications, released from the threat which hangs over them, would be making even greater strides now than they have made in previous years.

I am very pleased that we put down this amendment as to a levy. I believe it has made it clear that the Government intend to ensure that the full costs of Oftel, not merely the ones referred to in the amendment, will be paid for and will be met in full—perhaps even overfull, judging by the noble Lord's last remarks about the Treasury—by the people operating telecommunications systems. In the light of the very strong assurances that the noble Lord has given, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 [Abolition of British Telecommunications' exclusive privilege]:

4.37 p.m.

Lord Bruce of Donington moved Amendment No. 8: Leave out Clause 2.

The noble Lord said: My Lords, this amendment seeks to delete from the Bill Clause 2. At first sight it might be thought that this is in the nature of a wrecking amendment. It is nothing of the kind. It is moved in the hope that if your Lordships see fit to delete the clause, it will give another place cause to reconsider the progress of the Bill when it is returned to them.

It has been made quite clear in your Lordships' debates that the Bill has been very hastily cobbled together, without any real philosophy behind it, other than the necessity to raise money and the pursuit of the purely ideological exercise that all private enterprise must be superior to public enterprise. Therefore, by the deletion of the clause, which refers to the appointed day and to the declaration by the Secretary of State when British Telecommunications no longer exists, this Bill ought to go hack to another place for reconsideration.

Those of your Lordships who have had the opportunity to examine the proceedings in another place, in particular those which relate to Part V and Schedule 5 to the Bill, will realise that the public at large are unaware, as yet, of the enormity of the cost to the British public of passing the Bill. If one reads the Explanatory and Financial Memorandum, which is printed in front of the Bill which came originally to your Lordships' House, one finds that the costs to the Secretary of State of setting up Oftel are, as my noble friend has already correctly reminded the House, £1.5 million. But this excludes, of course, the other costs that will have to be borne by the British taxpayer.

I refer your Lordships to page ix of the Explanatory and Financial Memorandum attached to the Bill as it came to your Lordships' House, which states: Any conversion into equity of the successor company's liabilities to the Secretary of State in respect of loans to British Telecommunications will result in payments of principal and interest under the loan obligations concerned no longer being receivable".

That is a very modest way of expressing the financial consequences of the Bill so far as the British taxpayer is concerned because, as your Lordships will be aware, the amounts owing to the Secretary of State in terms of principal and interest by British Telecom amount, over the years, to about £6,000 million.

It is quite true that under the terms of later clauses in Part V of the Bill these loans will be converted into debentures which will be held by the Secretary of State in exactly the same way as the loan obligations were credited to him in the accounts of British Telecom. What the Bill is silent about, except for the insertion of the word "transfer" in an obscure paragraph in Schedule 5, and what is not known, is that those debentures will be transferred by the Secretary of State back to British Telecom for the satisfaction of excepted liabilities which on British Telecom's balance sheet at present are stated as a liability of £1,125 million and which, after taking indexation into account, will probably be a much greater figure.

Therefore, as a consequence of this Bill there will be an alienation from the British public, an alienation from the Government, of some £3,000 million against which, of course, will be set the receipts which the Government hope to get by reason of the sale of their share in British Telecom. This loss is nowhere shown. Indeed, the clause appropriate to Schedule 5—Clause 39—which expresses this transfer and which, I repeat, means a direct loss to the public Exchequer of a very valuable asset in the form of a debenture, is nowhere set out in the explanatory notes on Schedule 5, either. So the British public are to pay a very heavy bill in this respect. True enough, it may be deferred. True enough, all it is parting with is a right of the Exchequer to receive principal and interest in the future. But it is a very significant sum indeed. On reading through the proceedings in another place, one wonders whether they could have been aware of this particular provision and the consequences of it when they dealt with the Bill.

Therefore, having in mind these new considerations which will be debated at a later stage of our Report proceedings when the amendments to Part V of the Bill and Schedule 5 are considered, it would be wise if another place, on getting this Bill back, re-thought out whether the whole exercise is really worth while; whether it is worth providing the Chancellor of the Exchequer with immediate funds in exchange for a public asset and at the same time incurring additional liabilities which are nowhere discussed and which have so far not formed part of any public pronouncement by any Minister of the Crown, either here or in another place.

If we eliminate Clause 2 here, the other place, after hearing all the arguments deployed, could obviously restore it, if it so wished. When it comes back to your Lordships, House, in the terms of convention it would be no part of our duty to frustrate the will of the elected people's representatives in another place. Therefore, what this amendment is designed to do, after all the facts are known and have been argued about, as they have not so far been argued about in terms of the financial consequences of this ridiculous Bill, is to give the other place another chance to reconsider the clause. After all, there is by no means unanimity on the Benches of the party opposite in another place, and they could decide, after all, whether it is worthwhile doing this wretched privatisation exercise.

I repeat, there is no desire in this House and certainly it is not the desire of those who sit on these Benches to challenge the Government's will in the matter. If this Bill is sent back to another place without Clause 2, the other place has every right, and might be persuaded by Ministers, to reinstate it. On the other hand it might not. As I said, there is no unanimity in the Conservative Party in another place any more than, in reality, there is here that this Bill is at all necessary. There is certainly no view in the country as to its necessity. I therefore ask the House to support this amendment, not as a wrecking amendment but as an opportunity to give another place a further chance to consider the whole matter in a depth which, owing to its particular nature, it has not yet had the opportunity of doing. I beg to move.

The Deputy Speaker (Lord Nugent of Guildford)

My Lords, the amendment is to leave out Clause 2, so the Question is, That Clause 2 shall stand part of the Bill?

Lord Cockfield

My Lords, with respect, is not the amendment to leave out the clause, because we are on Report?

The Deputy Speaker

The Question will be put positively although the amendment is to leave it out.

Lord Bruce of Donington

My Lords, may I move, That the House do now resume, in order that the Government may assemble their thoughts?

Lord Cockfield

My Lords, I fear there are some procedural difficulties. We are not in Committee and, therefore, a Motion that we resume the House equally has no meaning. There was a little local difficulty that we were trying to resolve for the mutual convenience of your Lordships. There is nothing more to it than that.

It is, of course, a well-known rhetorical device to claim that you are not doing that which most plainly you are setting out to do. Clause 2 is one of the main pillars on which the Bill is constructed. To suggest leaving it out is, therefore, a wrecking amendment. Clause 2 provides that the exclusive privilege of British Telecom of running telecommunications systems should cease to exist. This paves the way to two things. First, it will increase the competition which exists, or should exist, in this area and, secondly, it will ensure that British Telecom is placed on an equal footing with all other providers of telecommunication services.

Before I go into that in more detail, perhaps I may be forgiven if I allow myself to be diverted by the noble Lord, Lord Bruce of Donington, to certain points that he raised on Part V of the Bill, paticularly relating to Clause 60. The NFL loans which will be extinguished under Clause 60 are required to be replaced by debentures so there is no conceivable loss to the Exchequer as a result of that transaction. The reason for it is to prevent an undue tax advantage which would otherwise accrue to the successor corporation. I should have thought that that would be a goal that both the noble Lord and I shared.

If we may come back to the main purpose of Clause 2, the proposition that the exclusive privilege should be removed is, quite frankly, that it is no longer appropriate to the world of telecommunications as it is developing. A revolution is occurring in telecommunications. A new approach to the industry is needed. A monopoly supplier, and in some cases purchaser, is not the body best suited to respond to the dramatic changes required. I do not in any way decry BT. In fact, on the contrary, I have paid tribute to the progress that it has made in recent years. Nevertheless, a monopoly is inappropriate and inadequate to deal with the circumstances and needs of a rapidly changing industry.

The problem with a monopoly is that the consumer is denied a choice. In short, there is no competition. But if there is no competition or choice, there is no incentive to improve the quality, efficiency and range of the services provided since the organisation has captive customers. It is this that we are trying to change. We wish to promote freedom of choice both for industry and for individual consumers, and where possible to ensure that industrial and commercial decisions are taken in a market-place and not by the state.

Lord Stoddart of Swindon

My Lords, I have been listening with great interest to what the noble Lord has been saying. He says that a monopoly is not appropriate in the field of telecommunications, but does not the Bill merely convert a public monopoly into a private monopoly, and shall we not still have a monopoly?

Lord Cockfield

No, my Lords. The noble Lord is taking much too narrow a view of what the Bill does. It very greatly extends freedom of choice in the provision of apparatus and in the provision of ancillary services. There is a second national network in Mercury and two additional national cellular radio networks. The argument that the noble Lord is putting forward, which finds some echoes on the Benches behind me, is that we have not gone far enough in providing effective competition for BT. If that is his argument, I find myself in some difficulty if my noble friends behind me who wish to extend the field of competition even further are to have the powerful support of the noble Lord, Lord Stoddart of Swindon.

Lord Stoddart of Swindon

My Lords, I was not putting forward an argument. I was merely trying to set on record the facts and to point out that, although the noble Lord said that a monopoly was not appropriate, that is precisely what will prevail, but it will be a private instead of a public monopoly. We are basically and diametrically opposed to a private monopoly. Furthermore, this Bill was not necessary to provide competition in certain appliance fields. That was done in the 1981 Act, and of course Mercury was set up under that Act as well.

Lord Cockfield

And, my Lords, this Bill considerably extends the field of competition in these particular areas. I am well aware of the noble Lord's views. I do not accept them. They are not accepted by my noble friends. I do not believe that the arguments which he is putting forward are well justified either on the facts or otherwise.

There is a very big improvement which has already taken place as a result of the stimulation of competition. The noble Lord says quite correctly that we started down this path in 1981. That has produced significant results. We expect to see further improvements when this Bill, of which Clause 2 is an integral part, comes into full effect.

If I may give the noble Lord two examples of this, first, the number on waiting lists for a telephone is now down to 1,500. As recently as March 1980 it was 262,000. This has taken place under the stimulus of competition. Seventy-three per cent. of residential orders are now being met within 12 working days, and this compares with 50 per cent. as recently as 1980.

Lord Weinstock

My Lords, does the noble Lord consider that that has nothing at all to do with the fact that there are a great many more people unemployed now than there were then and thus the demand for new telephones may not have risen at the same rate as previously?

Lord Cockfield

No, my Lords, I believe that the primary explanation is an improvement in the efficiency of BT. That improvement has taken place under the stimulus of competition. The more competition we can provide in this field, the better the service that is likely to be available.

It has been claimed that British Telecom—

Lord Weinstock

My Lords, I am sorry to interfere in what is rather a private matter between the two Front Benches, between which I am sandwiched, but I should like to ask the noble Lord whether he can expand a little on this competition which he thinks has resulted in a better line of supply of telecommunication apparatus, and whether he knows, for example, how many of the telephone instruments supplied to people who were previously waiting have come from BT and how many from other sources.

4.58 p.m.

Lord Cockfield

My Lords, the noble Lord, who is much involved in the manufacturing industry, is probably in a better position to answer that than I am. What has happened in this field is on the record and is perfectly clear. Under the stimulus of competition very substantial improvements have been made. We hope to—

Lord Weinstock

My Lords—

Lord Cockfield

My Lords, I am very sorry. The noble Lord has already had two attempts at this. If he wishes to make a speech, which we will listen to with very great interest, he is always entitled to do so, but there are certain limits of procedure when we come to the Report stage of a Bill.

It has been argued repeatedly from the Benches opposite that the concept of a public service goes hand in hand with a public monopoly. We do not accept this at all. On the contrary, what we are doing is firmly in the interests of consumers and will result in a better public service. I have already described the improvements that BT has made in response to consumer demand. This seems to me a much better service available to the public than existed before. I expect this process to continue and British Telecom to become even more responsive to the wishes of its consumers.

It is also claimed that BT will concentrate on business consumers and neglect the less profitable residential user. This argument I also reject. I fully expect BT to improve its services to business customers and I hope very much that it will do so, but this does mean that it will neglect the residential customer. We have included special safeguards to this effect and indeed we have strengthened them in the Bill, as a result of the arguments that were put forward at the Committee stage.

But of course, apart from this, it is very much in BT's own commercial interests to look after its residential customers. One of its most valuable assets is the 19 million people connected to its system, and of this total no fewer than 15.6 million are residential connections. This is a huge customer base and a very great advantage to British Telecom. Its interests are best served therefore by responding to the demands of these residential customers and encouraging them to use the service as much as possible. Indeed, it is said that the system is in fact under-utilised and one would expect BT to exploit every opportunity of expanding the extent to which the system is used.

Having said this, I come back to the simple point that Clause 2 is an integral part of the Bill; and while of course it is perfectly proper for the noble Lord to move that it should now be left out, to do so would be contrary to the view taken by your Lordships when the House gave this Bill a Second Reading. I therefore hope that on this basis your Lordships will reject this amendment.

Lord Donaldson of Kingsbridge

My Lords, we have listened from these Benches with fascination to two long arguments of a Second Reading kind about the virtues and vices of privatisation. We are not even faintly convinced by the Government's version of this argument; but we are convinced that this is too near a wrecking amendment for us to support it.

Lord Bruce of Donington

My Lords, I take note of the remarks which fell from the lips of the noble Lord, Lord Donaldson of Kingsbridge, which I regret. I would, however, point out to the House—I think the House will recall—that when the noble Lord was explaining to me the operation of Clause 60 and was defining, quite correctly, how the amounts owing to the Secretary of State were going to be substituted by debentures—and therefore there being no loss on that account, either on capital or on interest account—what he was careful not to do was to answer the assertion that I made.

I repeat that now: there will be a net diminution of assets in the possession of the Treasury, and therefore of the taxpayer, to the tune of anything up to £3,000 million arising from the operation of paragraph 39 of Schedule 5, from which, as the noble Lord knows quite well, even though it is omitted from his explanatory notes, the Secretary of State will then transfer those debentures, or such proportion of them, from his own possession on behalf of the British taxpayer, to the remaining rump of British Telecom in order to enable it to discharge a pension liability that is already stated on British Telecom's balance sheet of £1,125 million and which is being eliminated from the balance sheet for the purposes of the private takeover. Perhaps the noble Lord would like to deal more with that because to the best of my recollection it was not dealt with in any of the debates in another place and has not so far been dealt with in detail here.

Lord Cockfield

My Lords, as the noble Lord, Lord Bruce of Donington, and I have both been reproved by the noble Lord, Lord Donaldson of Kingsbridge, for making Second Reading speeches, perhaps it would be more appropriate if we discuss Part V of the Bill when we come to Part V, instead of endeavouring to discuss it on Clause 2. We do of course have a complete answer to the points that the noble Lord is making; but I do not think that it would be right to go into detail in a discussion on Clause 2 on matters which are relevant to Part V.

Lord Donaldson

of Kingsbridge: My Lords, with respect, the noble Lord should have asked the leave of the House.

Lord Cockfield

My Lords, according to the Companion, a Minister may speak in reply. I read the rules very carefully before I came here. Nevertheless, if the noble Lord feels I should have asked permission—and I was really only paying him a tribute; I am sorry if he felt that that was out of order—I now repair the omission and ask for permission.

5.5 p.m.

On Question, Whether the said amendment (No. 8) shall be agreed to?

Their Lordships divided: Contents, 68; Not-Contents, 114.

DIVISION NO. 2
CONTENTS
Ampthill, L.	Kaldor, L.
Ardwick, L.	Kearton, L.
Beswick, L.	Lawrence, L.
Bishopston, L. [Teller.]	Leatherland, L.
Blease, L.	Listowel, E.
Blyton, L.	Llewelyn-Davies of Hastoe, B.
Boston of Faversham, L.	Longford, E.
Bottomley, L.	Lovell-Davis, L.
Brockway, L.	McIntosh of Haringey, L.
Bruce of Donington, L.	Mar, C.
Burton of Coventry, B.	Mulley, L.
Caradon, L.	Oram, L.
Carmichael of Kelvingrove, L.	Peart, L.
Cledwyn of Penrhos, L.	Pitt of Hampstead, L.
Collison, L.	Ponsonby of Shulbrede, L. [Teller.]
Cooper of Stockton Heath, L.
Darling of Hillsborough, L.	Rhodes, L.
David, B.	Ross of Marnock, L.
Davies of Penrhys, L.	Sefton of Garston, L.
Dean of Beswick, L.	Serota, B.
Delacourt-Smith of Alteryn, B.	Shackleton, L.
	Shinwell, L.
Denington, B.	Stallard, L.
Donnet of Balgay, L.	Stewart of Alvechurch, B.
Elwyn-Jones, L.	Stewart of Fulham, L.
Ennals, L.	Stoddart of Swindon, L.
Ewart-Biggs, B.	Stone, L.
Gaitskell, B.	Strabolgi, L.
Gallacher, L.	Taylor of Blackburn, L.
Graham of Edmonton, L.	Underhill, L.
Hale, L.	Wallace of Coslany, L.
Hatch of Lusby, L.	Wells-Pestell, L.
Irving of Dartford, L.	White, B.
Jeger, B.	Wilson of Rievaulx, L.
Jenkins of Putney, L.	Wootton of Abinger, B.

NOT-CONTENTS
Ailesbury, M.	Gainford, L.
Airey of Abingdon, B.	Glanusk, L.
Auckland, L.	Glasgow, E.
Avon, E.	Glenarthur, L.
Bauer, L.	Grantchester, L.
Belhaven and Stenton, L.	Gray of Contin, L.
Bellwin, L.	Gridley, L.
Belstead, L.	Hailsham of Saint Marylebone, L.
Bessborough, E.
Boyd-Carpenter, L.	Halsbury, E.
Broadbridge, L.	Henderson of Brompton, L.
Broxbourne, L.	Henley, L.
Bruce-Gardyne, L.	Holderness, L.
Caithness, E.	Home of the Hirsel, L.
Campbell of Alloway, L.	Hornsby-Smith, B.
Campbell of Croy, L.	Hylton-Foster, B.
Cathcart, E.	Kaberry of Adel, L.
Chelwood, L.	Killearn, L.
Cockfield, L.	Kinloss, Ly.
Constantine of Stanmore, L.	Kintore, E.
Cottesloe, L.	Lauderdale, E.
Cross, V.	Liverpool, E.
Cullen of Ashbourne, L.	Lloyd of Hampstead, L.
Denham, L. [Teller.]	Long, V.
Drumalbyn, L.	Lucas of Chilworth, L.
Ebbisham, L.	Luke, L.
Ellenborough, L.	Lyell, L.
Elton, L.	McAlpine of Moffat, L.
Enniskillen, E.	McAlpine of West Green, L.
Faithfull, B.	Mackay of Clashfern, L.
Fanshawe of Richmond, L.	Macleod of Borve, B.
Fraser of Kilmorack, L.	Mancroft. L.

Marley, L.	Sandford, L.
Marshall of Leeds, L.	Selkirk, E.
Maude of Stratford-upon-Avon, L.	Sempill, Ly.
	Shaughnessy, L.
Merrivale, L.	Skelmersdale, L.
Mersey, V.	Soames, L.
Milverton, L.	Somers, L.
Molson, L.	Spens, L.
Morris, L.	Stamp, L.
Mottistone, L.	Strathcarron, L.
Mowbray and Stourton, L.	Strathspey, L.
Murton of Lindisfarne, L.	Sudeley, L.
Nathan, L.	Swinton, E. [Teller.]
Northchurch, B.	Terrington, L.
Nugent of Guildford, L.	Teviot, L.
Orkney, E.	Teynham, L.
Orr-Ewing, L.	Thomas of Swynnerton, L.
Pender, L.	Torphichen, L.
Penrhyn, L.	Trefgarne, L.
Peyton of Yeovil, L.	Trenchard, V.
Porritt, L.	Trumpington, B.
Portland, D.	Vaux of Harrowden, L.
Rankeillour, L,	Vickers, B.
Romney, E.	Vivian, L.
St. Davids, V.	Westbury, L.
Saltoun, Ly.	Whitelaw, V.

Resolved in the negative, and amendment disagreed to accordingly.

Clause 2 agreed to.

Clause 3 [General duties of Secretary of State and Director]:

5.15 p.m.

Lord Lloyd of Kilgerran moved Amendment No. 9: Page 2, line 38, leave out ("Part II or Part III") and insert ("all Parts of this Act save Part IV").

The noble Lord said: My Lords, with the leave of the House, in connection with Amendment No. 9 I wish also to refer to Amendment No. 16. Amendment No. 16: Page 3, line 14, leave out ("Part II or Part III") and insert ("all Parts of this Act save Part IV"). I am sure that the noble Lord the Minister will be able to clarify this point very quickly, so that I shall not take up much of your Lordships' time. The point is that Clause 3 of the Bill is intituled, General duties of Secretary of State and Director". Clause 3 goes on to say that the duties of the Secretary of State and the director are related to Parts II and III only. That is my interpretation; that the clause refers to the fact that there are duties of the Secretary of State and the director only in Parts II and III. Clause 3 then sets out what are those duties.

As I pointed out at the Committee stage, that is wrong because the director is referred to in several other clauses under different parts of the Bill. At the Committee stage I therefore suggested that the reference in the clause to Parts II and III of the Bill should be entirely omitted, but I was told by the Government Minister that Part IV should be included. Although Part IV relates to cable and, as was explained on that occasion, is in due course to be excised, it was felt necessary to retain the reference to it.

So I cannot understand—though it may be entirely my fault—why the duties of the Secretary of State and the director do not apply to all the parts of the Bill, and not just Parts II and III, where the Secretary of State and the director are referred to. I do not propose to go through all the provisions where the Secretary of State or the director is referred to. I shall mention only two. The Secretary of State is referred to in Part VIII (in Clause 88) and his functions are referred to in Part V (in Clause 62). I should have thought that it would be far better if the reference to Parts II and III were cut out of Clause 3, so that the director's duties as defined in the clause apply to all parts of the Bill where he is referred to, except Part IV, which relates to, "Cable programme services". I understand that in due course Part IV will be excised or otherwise not dealt with under the Bill. I beg to move.

Lord Lyell

My Lords, I am sure that the House will be aware that the noble Lord introduced a very similar amendment at an earlier stage when he sought to apply the Clause 3(2) duties to the whole Bill. After the noble Lord moved that amendment the Government replied that we felt that it was unclear whether he had considered in detail what would be the consequences of his blanket amendment. I believe that the same question arises in the context of Amendment No. 9, as well as Amendment No. 16, to which the noble Lord was also kindly speaking, because it seems that the only concession that has been made to the arguments that we produced on the earlier occasion has been to except Part IV of the Bill from the proposed scope of the Clause 3 duties. This afternoon in mentioning Part IV the noble Lord has reiterated what I said at an earlier stage when we discussed Part IV and the cable provisions.

I hope that I shall not take your Lordships over too much of the ground over which we earlier trod, but I should like to point out, by reference to one example, why we still regard the approach of the noble Lord as unacceptable. The noble Lord, Lord Lloyd, also referred to Part V of the Bill, which was the subject of some comment when the matter was raised at an earlier stage. As your Lordships will be aware, Part V confers a number of powers on the Secretary of State in relation to the transfer of the assets of British Telecom to the successor company, in relation to the flotation, and also in relation to his position as a residual shareholder in the successor company. We believe that it would run quite counter to one of the key objectives of the policy of privatisation to require the Secretary of State to manage his shareholding by reference to the duties that are set out in Clause 3.

I am sure the noble Lord will accept that those duties represent the Government's view of where the public interest lies in telecommunications—as does the separate decision to privatise the corporation. One of the reasons for taking that decision was our perception that British Telecom needed to be freed from interference by the Government, so as to act as a commercial company, subject to the normal commercial disciplines. The result of applying the duties set out in Clause 3 to the Secretary of State in this context would be effectively to guarantee a continuation of the constraints and the second guessing which over the years have hampered the operations of British Telecom, as they have in some degree all the nationalised industries. Looked at in that light, we think that Amendments Nos. 9 and 16 would deny a major element in the Government's overall policy towards telecommunications.

I should like to turn to just one other subject and ask your Lordships not necessarily to accept Amendments Nos. 9 and 16. In reply to the noble Lord, Lord Lloyd of Kilgerran, at an earlier stage on this subject, I implied that there might be a case for examining whether particular functions at present outside Parts II and Ill of the Bill should be brought within the ambit of the duties set out in Clause 3. It was at that stage that my noble friend Lord Morris drew our attention in particular to the merits of making what is now Clause 93, which gives the director a power to require information, for example in the context of enforcing licence conditions or investigating complaints, subject to the duties in Clause 3.

We looked again at this point in the light of the debate that arose on the amendment of the noble Lord, Lord Lloyd. We think that there is a case for moving Clause 93 into Part III of the Bill, which would achieve the result. There may be a case for bringing forward certain of the other clauses in Part VII for the same purpose. I think, however, that the selective and discriminating approach is the correct one. With the leave of the House, we propose to put down the necessary amendments for your Lordships' consideration when we reach the relevant clauses later in our proceedings. On the basis of that undertaking, I hope that I have been able to explain to the noble Lord, Lord Lloyd, why we do not agree with his amendment.

Lord Bruce of Donington

My Lords, we on this side of the House would like to associate ourselves with the noble Lord, Lord Lloyd of Kilgerran, on these two amendments. I was a little surprised to hear that the Secretary of State would find it extraordinary if he was required to exert the responsibilities that still lie with him in holding on behalf of the public at large, the taxpayer, some 49 per cent. of the shareholding of the new PLC. If the Government dispose, as is their intention, of some 51 per cent. of the holding in the new PLC, that will still leave them with 49 per cent. On the assumption that closely follows those that have so far been made officially by the Government, that the shareholding in the new PLC will be widely diffused—although I venture to suggest that the effect of that can be exaggerated—it will be clear that even after disposing of some 51 per cent. Of their holding in the PLC shares, the Government will still he left, in effect, with control lying with the 49 per cent. The Government will still he left with the responsibilities.

Alternatively, is the noble Lord saying that the Government holding of 49 per cent. is to be so absolutely passive that all the duties associated with shareholdings are to be completely negatived? If so, it would appear to negative the entire theoretical reason that lies behind privatisation. If the Government say that all the functions of the shareholder are to do nothing, where are the advantages of transferring ownership from one party to another? It has long been our case that the actual ownership in shareholding terms will exercise very little impact at all on the whole running of telecommunications. The noble Lord knows full well that, in the world of commerce outside this House and outside Westminster, a 30 per cent. shareholding in a PLC is very often sufficient to ensure control.

All that the amendment really seeks to do is to say that when it comes to exercising their responsibilities as the controlling shareholder of the PLC the Government shall exercise them in a manner that is governed by the whole spirit and content of the earlier parts of the Bill: in other words, they shall behave in exactly the same way as they are enjoining, by regulation, everyone else to behave. Surely, there can be no objection to that. The noble Lord, Lord Lyell, has already indicated that there are certain specific clauses that the Government may feel inclined to include in the category to which the noble Lord, Lord Lloyd of Kilgerran, has referred. That being the case, why should there be any resistance to the provisions of this part of the Bill, Part I and particularly Clause 3, being regarded as all pervasive? Why should the Secretary of State not be bound to them in his actions in regard to any part of the Bill, aside from those specifically mentioned?

The noble Lord, Lord Lloyd of Kilgerran, has presented his case very reasonably. We are gratified by some of the remarks that fell from the lips of the noble Lord, Lord Lyell. We believe, however, that the Government would be well advised to go the whole way; otherwise, all that they are really saying is that the change of ownership of shares in the company has no effect whatever on the conduct of its affairs. This is very largely, it must be admitted, giving us the case that we have propounded from the very beginning.

Lord Morris

My Lords, it would be most uncharitable if I was not to say how grateful I am to my noble friend for the fact that the Government are considering the impact of Clause 3 on Part VII of the Bill, the miscellaneous and supplemental clauses to the Bill. I am most grateful to my noble friend and also to the noble Lord, Lord Lloyd of Kilgerran, whose stimulating arguments at an earlier stage made me consider this point. It would never have occurred to me until he spoke. Yet again, the noble Lord has been a goodly influence upon me, and I am most grateful to him.

Lord Lyell

My Lords, if I might reply briefly to the noble Lord, Lord Bruce of Donington. I think that his concluding remarks made my case. The noble Lord accepted my remark that we believe that a selective and discriminating approach to the problem is best. I hope that I have explained to the noble Lord, Lord Bruce, and also to the noble Lord. Lord Lloyd. why we feel that the broad brush approach, especially in relation to Part V, would be wrong in this instance.

I would certainly not wish to follow the noble Lord, Lord Bruce. once again down the avenue of the arguments on privatisation and about what constitutes effective control. I wonder if the noble Lord, Lord Bruce, himself would not agree that he is deducing far too much from my reply as to what does or does not constitute effective control. The main thrust of my first reply to the noble Lord, Lord Lloyd of Kilgerran, was that we believe that Parts II and III are the relative parts of the Bill that should be adduced in respect of the director's duties and the powers here. To go outside that to Part V is, we believe, far to broad.

Lord Lloyd of Kilgerran

My Lords, I am grateful to the Minister for his succinct reply on this occasion. When I last raised the matter in Committee there was considerable confusion over what I thought was quite a simple matter. I am also grateful for the statesman-like way in which the noble Lord, Lord Morris, has approached this matter and has precipitated the Government into making some observations which go some way towards the points that I was making. I will read what the Minister said in Hansard; but if I understood him correctly, he was considering whether a selective and discriminating approach was best in regard to the activities of the director in this matter. In view of the Minister's observations, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.31 p.m.

Lord Cockfield moved Amendment No. 10: Page 2, line 43, leave out from ("services") to end of line 3 on page 3.

The noble Lord said: My Lords, with permission, perhaps it would be convenient if I move Amendment No. 10 and speak also to Amendment No. 47: Amendment No. 47: Page 10, line 16. leave out from ("against") to ("and") in line 20 and insert ("particular persons or persons of any class or description (including, in particular, persons in rural areas) as respects any service provided, connection made or permission given in pursuance of such conditions as are mentioned in the foregoing paragraphs (whether in respect of the charges or other terms or conditions applied or otherwise)").

Amendment No. 10 is essentially a paving amendment for Amendment No. 47 in the sense that it simply omits certain words to leave the way clear for better words later on. That is the only effect of this amendment. But the effect of the two amendments taken together is to give effect to the wishes of the House when noble Lords passed Amendment No. 24 in Committee on 13th February.

It was admitted by the supporters of that amendment at the time that its drafting might be defective—thus, the noble Lord, Lord Taylor of Gryfe, at col. 22: the noble Lord, Lord McIntosh of Haringey, at col. 32; and my noble friend Lord Alport at col. 21. Other noble Lords drew attention to possible pitfalls into which the amendment as then drafted could easily fall—for example, the noble Lord, Lord Somers, at col. 20, quoted with approval by the noble Lord, Lord McIntosh of Haringey, at col. 32. Other noble Lords suggested that we should take the amendment away and rewrite it in more appropriate language on Report—for example, the noble Lord, Lord Lloyd of Kilgerran, at col. 31 and the noble Lord. Lord Weinstock, also at col. 31.

The doubts expressed by noble Lords in all parts of the House about the drafting of the Committee stage amendment have proved to be correct. It is difficult to say what the courts would make of the words inserted by that amendment; it is even more difficult to say what the effect of the amendment in practice would be. However, I would not wish to delay your Lordships with a dissertation on those matters. What your Lordships intended was perfectly clear and what we have set out to do in the amendment that I am now proposing. taken with Amendment No. 47, is to give effect to those intentions.

There were two main strands in the argument. The first was that charges, whether for installation, maintenance or use, should not discriminate against rural areas because they were rural areas. The second strand was that the protection should be written in the Bill. The course we have adopted is to build on Clauses 8 and 9 which, incidentally, are proving to be a very willing workhorse. Clause 9 provides for the status of public telecommunications operator; and Clause 8 sets out the special obligations applying to public telecommunications operators. The term "public telecommunications operator" embraces all those who will he operating the major telecommunications networks—not only British Telecom, but Mercury and Hull as well, and the two cellular companies. This then defines the group of operators with which we are concerned.

The debate in Committee concentrated on British Telecom, but I think that your Lordships will agree that the rather wider coverage proposed in the amendments in my name is of advantage. Clause 8(1)(d) prohibits "undue discrimination against," or "undue preference to", any person or classes or descriptions of persons in respect of any service provided or connections made, and so on.

The amendments we are now proposing in effect do two things. First, Amendment No. 47 proposes inserting the words: including, in particular, persons in rural areas". That makes it abundantly clear that the prohibition of "undue discrimination against" applies in particular to persons in rural areas. That was the nub of the complaint made by your Lordships in the debate on 13th February. Secondly, we propose inserting the words: in respect of the charges or other terms or conditions". That is to make it abundantly clear that the obligation not to discriminate unduly applies not only to the provision of the service but also to the charges made for the service. In this respect the coverage I am proposing goes wider and the protection is better than now proposed by the noble Lord, Lord Bruce of Donington, under his Amendments Nos. 11 and 12.

The use of the description: service provided, connection made or permission given makes it quite clear that these provisions apply, as the House wishes, to installation, maintenance and usage.

Finally, by incorporating these new provisions in Clause 8 we ensure that the protection appears in the Bill itself and is not relegated to the licence. I should say something further about "undue discrimination". It might be argued that all discrimination should be prohibited. In the popular sense of the term "discrimination" that, broadly speaking, is what in fact we are doing. But if the words were incorporated simpliciterin statute, they could be strictly interpreted. As a result, perfectly reasonable and acceptable practices would be held to offend against the law. For example, I can make a telephone call from Westminster to Lambeth for the same price as for a call from Westminster to Ealing. As Ealing is further away than Lambeth this, technically, is discrimination: but of course it is perfectly sensible. Similarly, British Telecom have recently introduced lower unit charges on the most used trunk routes. Technically, this too is discrimination; but it is perfectly sensible and no one would wish to see it stopped. That is the reason we have adopted the phrase already in the Bill about "undue discrimination",

On installation, the first 100 hours of work is included in the fixed charge. This again is technically discrimination in favour of difficult connections and discrimination against easy connections. All these practices are perfectly normal, and indeed beneficial. The qualification "undue" is inserted simply to allow these normal, sensible arrangments to continue. In this respect the way in which the Government propose dealing with the matter does in fact give the consumer better protection than would be the case under the amendments of the noble Lord. Lord Bruce of Donington.

I believe therefore that we have fully met all the points which were raised in Committee. I hope on that basis your Lordships will accept these amendments. I formally beg to move Amendment No. 10 to insert the words which appear in the Marshalled List.

Lord Bruce of Donington

My Lords, in his presentation of this amendment the noble Lord, Lord Cockfield, has been at his most seductive. In point of fact he has sought to produce a reasoned explanation for overturning an amendment, admittedly imperfect in its text, that passed through your Lordships' Committee with quite a substantial majority against the Government on the last occasion.

The noble Lord, Lord Cockfield, expresses himself to be suitably contrite about the text of the original Bill as it came from another place, which your Lordships, against the wishes of the Government, amended in Committee. He now says, of course, that he really accepts the general sense of the Committee; that he has taken account of the great feeling that was behind that acceptance of the amendment that we proposed; that he has given it very careful consideration indeed and does not intend in any way to try to overturn what your Lordships decided in Committee; and that what he is really trying to do, with his usual helpfulness, is to make it even more effective than your Lordships' Committee sought to make it when we made that decision. This is a most pleasant approach, and is characteristic of the way in which the noble Lord approaches these matters. Unhappily. of course, there are certain pitfalls in it.

If your Lordships will go back to Clause 3 of the Bill you will see that Clause 3 imposes a duty on the Secretary of State and the director. It is expressed in these terms: The Secretary of State and the Director shall each have a duty to exercise the functions assigned or transferred to him by or under Part II or Part III of this Act in the manner which he considers is best calculated (a) to secure that"— and paragraph (a) includes the non-discriminatory provision that your Lordships' Committee inserted against the wishes of the Government on the last occasion.

The noble Lord says that there are much more effective ways of doing that, and that they will put all the operative parts in Clause 8, which, of course, relates to the licence. Let us just take that on its merits for the moment. The one thing about Clause 3, which charges the Government with a complete responsibility, is that it cannot he amended at all without a new Bill being introduced to amend the Act. But licences can be changed, and they can be changed under the provisions of Clause 12. Unless the noble Lord can persuade me that it is not possible in any way to get round Clause 8(1)(d), as now amended, by a subsequent change in the licence, I shall seek to persuade your Lordships' House that the protection offered by him is rather illusory.

My, own impression—and I speak subject to correction—is that a licence issued under Clause 7 can, in fact. be amended by Clause 12. I am very anxious to avoid a situation where, after a time, certain operators find the provisions of their licence a little too arduous. I am rather nervous, particularly in view of the noble Lord's generous disposition, that he might be persuaded to give way to them and sympathise with them, and in fact agree to a licence that contains less than what was required by the original amendment to Clause 3.

However, even on the assumption that Clause 8(1)(d) has the full force of the equivalent amendment to Clause 3, there are certain further pitfalls. The noble Lord has been good enough to refer to them. Of course, paragraph (d) of Clause 8(1) reads as follows: not to show undue preference to, or to exercise undue discrimination against". That is not quite the same wording as Clause 3 unamended, which provides that they shall secure that, in charging, there is no discrimination on the basis of any geographical location.

The words used here are "undue preference" and "undue discrimination". The noble Lord was quite right in pointing out that there is a certain legal connotation attached to both those words. Indeed, I have the cases before me, to which the noble Lord may wish to refer, where some of the effects are outlined. There is the case of British Oxygen Co. Ltd. v. South of Scotland Electricity Board in 1959, which is reported in Volume 1 of the Weekly Law Reports at page 587. He will see that in that case it was decided that the cost to the producer is a relevant consideration in determining questions of undue discrimination and undue preference.

That is precisely the point to which the original amendment to Clause 3 was directed. It was designed to avoid a situation in which, because of the extra costs incurred in installing telephones in rural and other non-urban areas, there would be a discrimination, that there would, in fact, be an unfairness, as between the rural communities and the town communities. The prohibition of undue preference or undue discrimination would not. therefore, protect the rural users in the same way as our original amendment to Clause 3 would, because in any case alleging that there had been undue preference or undue discrimination the noble Lord could cite in reply the case of British Oxygen Co. Ltd. v. South of Scotland Electricity Board. Indeed, there is a whole host of other precedents which, under those circumstances, entitle him to charge more for a comparable installation in the country than he would in the town without being outside the law. That is the problem.

There is no real protection (in the same sense as we originally incorporated it in our amendment to Clause 3. which the noble Lord now seeks to overturn) in the words that he has chosen to use in his amendment to Clause 8 of the Bill. As I say, the case law is quite clear, and the noble Lord can refresh himself on it. The insertion of the words, not to show undue preference to, or to exercise undue discrimination against", is no protection for the consumer where the costs to the supplier are, in fact, more. For this reason, I sincerely hope that the House will not agree to the amendment that the noble Lord has moved.

Lord Lloyd of Kilgerran

My Lords, I entirely agree with what the noble Lord, Lord Bruce of Donington, has said: that the wording of Amendment No. 47, to which the noble Lord the Minister has referred, does not protect the consumer or the persons in the rural areas in the way in which he is suggesting. I understand that the Minister is saying that there is something defective in relation to the amendment that was passed by your Lordships at the Committee stage, and that he is seeking to put that right. But, with respect, the wording of Amendment No. 47, at any rate alone, does not do anything except add words to an already very large Bill. It is a cosmetic amendment, and adds nothing of value to protect consumers or the persons in rural areas.

5.50 p.m.

The Countess of Mar

My Lords, I would agree with the noble Lords, Lord Bruce of Donington and Lord Lloyd of Kilgerran. I do not think that Lord Cockfield's amendment goes anywhere near far enough to protect rural customers. We must remember that rural industries and people living in the country are just as valuable to our society and to our business well-being in this world as people who live in towns and cities. To discriminate against them because they happen to live in the country—perhaps they are producing food; perhaps they have a small factory in a rural area providing work for people who live in the country—is wrong.

I know that at the present moment if a customer wants a special type of data circuit, for example, and his telephone exchange does not have the right relay set he is asked to pay the extra money to provide that relay set. If a customer lives in London or Glasgow and wants any sort of special equipment he can get it at a standard charge. If we can abolish that discrimination, we will have done very well.

Lord Donaldson of Kingsbridge

My Lords. I am not happy about this. When the Minister was speaking I thought that he really was trying to meet the amendment, but when I look back at the amendment I cannot see that he has improved it. He has put it somewhere else and, as the noble Lord. Lord Bruce of Donington, says, being the licence it is amendable without an Act of Parliament. He has not included the main part of the original amendment which was on the basis of the geographical location of the installation. That is what the amendment was about. That is what the Committee carried. In spite of the fact that I feel that the noble Lord and his advisers have had a shot at doing this. I do not think they have done it well enough, and the noble Lord ought to take it away, as he sometimes takes away our amendments, before we turn it down.

Lord Mottistone

My Lords, something I did not quite follow in Lord Bruce's statement was when he said that licences can be amended. But they obviously cannot be amended contrary to Clause 8, because every licence must comply with Clause 8. Therefore any amendment that is put in, if it was originally in accordance with the new wording in Amendment 47, would have to continue to be in accordance with that.

I should have thought that my noble friend the Minister is perfectly right in saying that what he is proposing to put in covers all the ground that the Committee at Committee stage wanted in paragraph (a) of Clause 3, and have put it in another part of the Bill. It is just as important and as binding on the licensee in Clause 8 as it would have been binding on the Secretary of State and the director in Clause 3. In fact, in some ways it is better where my noble friend has it because it specifically requires that there should not be discrimination in the extended meanings given in Amendment 47. I think that noble Lords opposite are making rather a meal of this, and that we can well accept my noble friend's argument as being a good way—indeed, better way—of putting in what the Committee at an earlier stage thought should be added to the Bill.

Lord Somers

My Lords, I hesitate to differ from my noble friend Lady Mar but I think that an instance such as she suggested could be described legally as undue discrimination. I cannot see a situation like that occurring without legal protest. I think that what the noble Lord, Lord Cockfield, has said about maintaining the word "discrimination" simply for purely hypothetical purposes is quite correct. This amendment, so far as I see it, is perfectly satisfactory.

Lord McIntosh of Haringey

My Lords, the noble Lord Lord Cockfield, made great play with the admitted defects of the original amendment. Since he mentioned my name in connection with those apologies to the Committee at that time about the defective wording I looked back at the nature of those defects as we saw them and the arguments put forward successfully to the Committee at that time.

It seems to me that there were two kinds of defect referred to by noble Lords and by myself. The first was about installation. A number of noble Lords expressed ignorance about British Telecom's current practice on installation. It was only towards the end of the debate that it became clear to all noble Lords taking part in the debate that British Telecom has a rule that there may be additional installation charges when the time taken for the installation exceeds 100 man hours. It seemed to us, and to the Committee at that time, that this was an acceptable form of pricing which did not constitute discrimination against rural areas. That was the basis on which the Committee accepted that form of words. Therefore those apologies for defective wording, I submit, now fall.

The second case of defective wording was on the question of discrimination on usage. It is true that there is a difficulty. The difficulty is that British Telecom already discriminates in favour of certain customers on the basis of the cost of usage. It is already the case that the London telephone area is much larger than telephone areas in other parts of the country, and therefore that London telephone users get a better, more widespread, and more effective use of local call charges than people in other areas.

It is also the case that on certain trunk routes, mainly to and from London—but also, according to my information, between about 10 or 15 other cities—there are preferential rates available to users living in those cities. Therefore, there does not seem to be much doubt that British Telecom does discriminate on the basis of charges for usage between people living in one geographical area and another. It is for that reason that my noble friends and I have put down Amendments Nos. 11 and 12, which omit the word "usage" from the amendment that we proposed at that time. Amendments Nos. 11 and 12 remove the only other defect in the wording of the amendment which was carried in Committee.

The noble Lord, Lord Cockfield, proposes that the combination of Amendments Nos. 10 and 47 now provide adequate coverage of the points that your Lordships were trying to achieve with the amendment carried in Committee. This is far from being the case. This is not just a matter of the wording of Amendment No. 47, which is more limited than the wording of Clause 8, which at the moment applies to discrimination against, any person or persons of any class or description". But it is also the fact that Clause 8 is extremely restricted in its scope. Clause 8 is not saying that all licences shall contain these provisions against undue discrimination. What Clause 8 says is that where there are certain requirements on licensees in a licence, then in subsections (3) and (4) there is the right that notice should be given and that objections should be heard. That is all that Clause 8 says.

The only concession which the Government are purporting to give to the House is that where there is thought to be discrimination against subscribers in rural areas there shall be the right of a notice, and there shall be the right of objection before the licence is approved. That is far from the intention when the amendment was moved in Committee. I put it to your Lordships that there is no reason for a single Member of this House who voted for the amendment in Committee to vote in favour of the Government amendment now. If your Lordships will forgive me, I will repeat what I said when I moved the amendment at that time: If we are told that Conditions 17, 25, and 26 of the licence provide the protection that is required, why cannot that protection be written into the Bill? That is what noble Lords were asking for and that is what the Government should concede. If they gave any indication of that, I should be the first to say, 'Let us consider the Government's own proposals at Report stage'. Failing that I fear that I have no alternative but to ask the Committee to support the amendment".—[0fficia/ Report, 13.2.84; col. 32] The Government have not in any way responded to the wishes of the House at Committee stage and they have not in any way made a case for the amendment now being proposed.

Lord Weinstock

My Lords, I feel obliged to intervene as I supported the amendment which now appears in the Bill against the Government at Committee stage on the grounds that the Government seemed impervious to suggestions coming from all sides of the Chamber that the matters of which the amendment was cognisant should be taken into account. It seems to me that the proposals that the noble Lord, Lord Cockfield, has now put—as the noble Lord, Lord Bruce of Donington, has said with considerable generosity—remove the need for those who doubted the Bill in its present form to vote for that amendment. I will support him in the amendments he now proposes.

Baroness Macleod of Borve

My Lords, I, too, was one of those who voted against the Government last time; but I submit that this amendment now put before us by my noble friend the Minister covers everything that we wanted. Indeed, I think he has gone even further. He is not only dotting the i's but crossing the t's, and I would vote for the amendment.

Lord Spens

My Lords, I also supported the amendment last time, and I will continue to do so because I think the point made by the noble Lord, Lord Bruce of Donington, that anything in Clause 8 can be modified by Clause 12 is valid, particularly if one reads Clause 12(7) which says: References in this section…do not include references to modifications relating to the application of the telecommunications code". That is a specific exclusion and I suggest that because it is specific that means that any other general clause could be included in the modifications. Unless the noble Lord, Lord Cockfield, can say that he will include in Clause 12(7) a reference to Clause 8, I shall have to support this amendment—

Noble Lords

Oppose!

Lord Spens

My Lords, yes; I am sorry.

Lord Cockfield

My Lords, I wonder whether I might reply briefly to the points that have been made. I am most grateful to my noble friend Lord Mottistone and to my noble friend Lady Macleod of Borve as well as the noble Lords, Lord Somers and Lord Weinstock, for their support for the proposals that the Government have put forward. We have genuinely tried to meet the wishes of the House in this matter. There was hardly a noble Lord who spoke on the last occasion who accepted that the amendment as drafted in Committee stage, that is Amendment No. 24, had been satisfactorily drafted. We were trying to get the words right and to put it in the right place.

I am a little surprised at the noble Lord, Lord Bruce of Donington. I realise that he was scratching around trying to find an argument. I am surprised that he should accuse me of trying to overturn the decision of the House, because the person who is trying to overturn the decision of the House is the noble Lord, Lord Bruce, who proposes in a subsequent amendment to remove altogether the protection of people in rural areas against undue discrimination on user charges. What I have done, as I explained, is to offer much better and more comprehensive protection than noble Lords opposite have proposed.

May I deal with why this provision is in Clause 8 and also with the point raised by the noble Lord, Lord Spens. Clause 3 is of general application and it applies to every licence issued, including licences to operate local mobile radio services. For many of these an obligation of this sort would be completely inappropriate and might, in fact, stop such local services operating altogether. It is difficult to say what the impact of the words as they appear at present in the Bill would have on the operation of local mobile radio services.

We have put this in Clause 8 for the simple reason that Clause 8 deals with those very large network operators, who were the people to whom noble Lords were primarily referring—namely, British Telecom, Mercury, the national cellular systems, and so on. It is simply not possible to get around the amendment I am proposing to Clause 8.

The condition imposed under the amendment I am proposing could not be amended in a way that would avoid the requirement, because if it were amended in a way which avoided the requirement I want to put into Clause 8, the operator would cease to be a public telecommunications operator under Clause 9. But he dare not be put in that position. Therefore, by putting this in Clause 8 we give a complete safeguard. It is entrenched in a way that there is no other means of doing. This is why in introducing the amendments I said that one of the important things was that I had written this, or proposed that it should be written, into the Bill itself, so the safeguard is there. In practice it cannot be avoided. I hope very much on this basis that your Lordships will agree with Amendment No. 10, which will carry Amendment No. 47 with it in due course.

6.7 p.m.

On Question, Whether the said amendment (No. 10) shall be agreed to?

Their Lordships divided: Contents, 116; Not-Contents, 93.

DIVISION NO. 3
CONTENTS
Airey of Abingdon, B.	Fortescue, E.
Auckland, L.	Fraser of Kilmorack, L.
Avon, E.	Gainford, L.
Bauer, L.	Glanusk, L.
Belhaven and Stenton, L.	Glasgow, E.
Bellwin, L.	Glenarthur, L.
Belstead, L.	Gormanston, V.
Bessborough, E.	Gray of Contin, L.
Birdwood, L.	Gridley, L.
Boyd-Carpenter, L.	Hailsham of Saint Marylebone, L.
Brabazon of Tara, L.
Brougham and Vaux, L.	Halsbury, E.
Broxbourne, L.	Henley, L.
Bruce-Gardyne, L.	Home of the Hirsel, L.
Caithness, E.	Hornsby-Smith, B.
Campbell of Alloway, L.	Hylton-Foster, B.
Cathcart, E.	Kaberry of Adel, L.
Chelwood, L.	Kinloss, Ly.
Cockfield, L.	Kintore, E.
Coleraine, L.	Lane-Fox, B.
Colwyn, L.	Lauderdale, E.
Constantine of Stanmore, L.	Lawrence, L.
Cottesloe, L.	Lindsey and Abingdon, E.
Craigavon, V.	Liverpool, Bp.
Cullen of Ashbourne, L.	Long, V.
Daventry, V.	Lucas of Chilworth, L.
Denham, L. [Teller]	Luke, L.
Drumalbyn, L.	Lyell, L.
Ellenborough, L.	McAlpine of Moffat, L.
Elton, L.	McAlpine of West Green, L
Enniskillen, E.	Mackay of Clashfem, L.
Faithfull, B.	Macleod of Borve, B.

Mancroft, L	Selkirk, E
Mar, C.	Sempill, Ly.
Marley, L.	Shannon, E
Marshall of Leeds, L.	Shaughnessy, L.
Maude of Stratford-upon-Avon, L.	Simon of Glaisdale, L.
	Skelmersdale, L.
Merrivale, L.	Somers, L.
Mersey, V.	Stamp, L.
Milverton, L.	Strathcarron, L.
Morris, L.	Strathspey, L.
Mottistone, L.	Sudeley, L.
Mowbray and Stourton, L.	Swinton, E. [Teller]
Murton of Lindisfarne, L.	Teynham, L.
Nathan, L.	Thomas of Swynnerton, L.
Northchurch, B.	Thorneycroft, L.
Nugent of Guildford, L.	Torphichen, L.
Orkney, E.	Tranmire, L.
Orr-Ewing, L.	Trefgarne, L.
Pender, L.	Trenchard, V.
Penrhyn, L.	Trumpington, B.
Peyton of Yeovil, L.	Vaux of Harrowden, L.
Portland, D.	Vickers, B.
Rankeillour, L.	Vivian, L.
Renton, L.	Weinstock, L.
St. Davids, V.	Whitelaw, V.
Saltoun, Ly.	Windlesham, L.
Sandford, L.

NOT-CONTENTS
Airedale, L.	Kennet, L.
Amherst, L.	Kilmarnock, L.
Ampthill, L.	Kirkhill, L.
Ardwick, L.	Leatherland, L.
Attlee, E.	Leathers, V.
Aylestone, L.	Listowel, E.
Beaumont of Whitley, L.	Llewelyn-Davies of Hastoe, B.
Beswick, L.	Lloyd of Hampstead, L.
Bishopston, L.	Lloyd of Kilgerran, L. [Teller]
Blease, L.	Longford, E.
Boston of Faversham, L.	Lovell-Davis, L.
Bottomley, L.	McGregor of Durris, L.
Brooks of Tremorfa, L.	McIntosh of Haringey, L.
Bruce of Donington, L.	McNair, L.
Burton of Coventry, B.	Molloy, L.
Carmichael of Kelvingrove, L.	Mulley, L.
Chitnis, L.	Ogmore, L.
Cledwyn of Penrhos, L.	Oram, L.
Collison, L.	Phillips, B.
Darling of Hillsborough, L.	Pitt of Hampstead, L.
David, B.	Ponsonby of Shulbrede, L.
Davies of Penrhys, L.	Rhodes, L.
Dean of Beswick, L.	Sainsbury, L.
Delacourt-Smith of Alteryn, B.	Seear, B.
Denington, B.	Sefton of Garston, L.
Diamond, L.	Serota, B.
Donaldson of Kingsbridge, L.	Shackleton, L.
Elwyn-Jones, L.	Simon, V.
Ennals, L.	Spens, L.
Gaitskell, B.	Stallard, L.
Gallacher, L.	Stedman, B.
Gladwyn, L.	Stewart of Alvechurch, B.
Graham of Edmonton, L. [Teller]	Stewart of Fulham, L.
	Stoddart of Swindon, L.
Grey, E.	Stone, L.
Grimond, L.	Strabolgi, L.
Hale, L.	Taylor of Blackburn, L.
Hall, V.	Tordoff, L.
Hampton, L.	Underhill, L.
Hanworth, V.	Wallace of Coslany, L.
Harris of Greenwich, L.	Wells-Pestell, L.
Howie of Troon, L.	White, B.
Irving of Dartford, L.	Wigoder, L.
Jeger, B.	Wilson of Rievaulx, L.
Jenkins of Putney, L.	Winterbottom, L.
John-Mackie, L.	Wootton of Abinger, B.
Kaldor, L.	Young of Dartington, L.

Resolved in the affirmative, and amendment agreed to accordingly.

[Amendments Nos. 11 and 12 not moved.]

6.16 p.m.

Lord Stoddart of Swindon moved Amendment No. 13: Page 3, line 5, after ("services") insert ("directory enquiry services free at the point of use").

The noble Lord said: My Lords, I beg to move Amendment No. 13 standing in my name and in that of my noble friends Lord Bruce of Donington and Lord McIntosh of Haringey. This amendment seeks to ensure that directory inquiries are provided free at the point of use; and it is coupled with several others which do not provide that they should be provided free at the point of use. I believe it is essential that this service is protected for the sake of all subscribers; but certainly and in particular for those subscribers who are blind and disabled in many ways. Those who are blind and disabled will be particularly disadvantaged; and they will be confused and most unhappy if they have to pay one way or another for directory inquiry services.

On 13th February, in Committee, we had a long discussion on the question of providing directory information services, and the noble Lord, Lord Lyell, referring to the situation as it would be under the licence, said at column 45: Put simply, this means that either they will not have to pay a charge"— and he was referring to blind, dyslexic or other disabled people— or an appropriate means of compensating them will be established. I hope that answers the concern that has been expressed by your Lordships, particularly by the noble Lord, Lord Lloyd of Kilgerran". Then, in column 47, when further pressed, the noble Lord, Lord Lyell, said: For one section of the law I am partially sighted". He was referring to his own particular disability, I believe. He went on: I have been given some instructions. I understand the licence will stop charges for directory inquiries until the director is satisfied about the refund arrangements". I believe that we have taken a very large hammer to crack what is a relatively small nut. I would remind your Lordships that at present directory inquiry services are free at the point of use; and, because they are free at the point of use, nobody is confused or disadvantaged. The blind, who have great difficulty in finding numbers, can simply lift up the telephone and telephone directory inquiries by dialling three digits, and they get the answer. The same is true of all other disabled people. Indeed, it is true for all of us. It seems to me that it would be right and proper that we should write into the legislation that this particular service, above all, should continue to be provided free at the point of use.

Again, in column. 43 of the Official Report on 13th February, the noble Lord, Lord Peyton of Yeovil, summed up the matter very well indeed. If he does not mind, I will read the relevant passage from his speech on that day. He said: If I may now address my noble friend the Minister, I would say this. I do very much wonder whether the successor to British Telecom would not want to make its services available as easily as possible to the largest number of people. I cannot believe that it is not now in their contemplation to offer this service free. I would be rather suprised, I must say, if the Government did not feel inclined at least to take this amendment away and give it careful thought. I cannot think that it would add to the load on the successor, those who are going to operate the telephone services in this country, if an undertaking were given in their name now by the Government and even put into the Bill to offer such a service as directory inquiries free of charge". I think that really puts the matter very ably and succinctly, and I am sorry the noble Minister has not felt able to listen to his noble friend and to bring forward a relevant amendment to say that the directory inquiry service would be free at the point of use.

As I say. I believe this is a very large hammer being used to crack a very small nut and that the service ought to continue to be free. It really is absurd—is it not?—that people who have to make an inquiry to use a service provided by an undertaker should have to pay for that information. I find that most odd and most strange. If I, as a customer of Marks and Spencer, want some details of their products and I go to their information counter, the young lady behind the desk does not say, "Ah, but we will have to make a charge". If I go to British Rail and ask for the times of their trains, they do not say, "Hand over 10p and we will tell you the times of our trains". Of course they do not; they want us to use the trains.

In many cases the only way that people can use the telecommunications service is by making an inquiry about the number of the person they wish to contact. If we want to get on a bus, whether it is London Transport or anywhere else, we do not expect to pay for information as to whether and where and how those buses run—whether they go to this part of the country or this part of the town. I honestly cannot think of an undertaking, private or public, which charges people for answering inquiries about the use of their services.

Therefore, I hope that the noble Lord will understand that this amendment is really trying to help him. He would do himself and the Government a lot of good if he would accept this amendment, because I am quite sure that the ordinary members of the public see it as reasonable that they should be able to make inquiries free of charge. I feel quite convinced that your Lordships will see the sense of that and therefore, if the Government will not accept it, will come into the Lobbies and support it.

Lord Mottistone

My Lords, if this were not about directory inquiry services, I might think it something that one could support, but this particular service is the most obviously inefficient of all those services that British Telecom currently provide to us. Furthermore, it has got very much worse since 1969, when the Government which noble Lords opposite used to support made British Telecom independent of its Civil Service position. I admit that before that time it was much more efficient, and to that extent I agree with what the noble Lord, Lord Stoddart, was saying earlier.

I fear that this amendment—and even, I fear, my noble friend's next amendment—will have the effect of continuing the extraordinarily inefficient service that we get at the moment. The most important thing for the bulk of us is that this must be made efficient. I would support special arrangements being made for blind people and those who suffer from other forms of handicap—that is not really in issue. The fact is that we can on1), get this going by making the directory inquiry services around the country competitive as between themselves. I think it is most important that they should be. Whether it is necessary to pay or not is another matter. It might be that that would be a way of making them competitive, but I do not say that it definitely is. This sort of area as to whether one should pay for this or that service must surely be left to the operator. We cannot write that sort of detail into the Bill. The noble Lord, Lord Stoddart, is quite right to the extent that the directory inquiries service gets more business for the operator and so of course it is a good thing for him and he should make it easier for people to use.

However, the key thing for all of us is that the service must be made efficient. Anyone who has had experience in this connection overseas will be well aware of the fact that efficient. currently. it certainly is not. I believe that putting this service into Clause 3 of the Bill gives it a position that it does not deserve, as it is at the moment, and it risks the soggy, inefficient treatment that we currently get being continued. I hope for that reason that not only will we resist this amendment but that my noble friends on the Front Bench will take serious thought and tell me whether there is a risk of the inefficiency continuing.

Lord Donaldson of Kingsbridge

My Lords, this is just the sort of thing that made us nervous of privatisation. Here we have a service. The noble Lord says it is inefficient. I use it perhaps 10 times a week, because I am lazy and do not always have a telephone book. I am asked: "What town?" and I usually know what town it is. I say, for example, "Norwich". They say, "What name?" I say: "Tom Smith". I am then given the number in a flash. If that is inefficient, then let us stay inefficient! It simply is not inefficient. It may be inefficient on international calls, but I never make any, and that is not what we are talking about.

As I said, this is what we all feared would happen. We have a service and in many ways it is not half bad. It is a great deal better than it used to be. We used to have great fun in this House over the telephone service. There is hardly any fun in criticising the service now. We have a service which is for everybody, the poor as well as the rich. The first thing that happens when we have a Bill of this kind is to make everybody inevitably pay more for this kind of service. That is what the noble Lord says should be left open. It is the one thing I want to prevent. I want to prevent the desire to make profits, which is an inevitable and perfectly respectable part of privatisation, from hurting the ordinary customer. Therefore, I hope that your Lordships will support this amendment, which was extremely modestly and clearly put forward by the noble Lord, Lord Stoddart. It is exactly the same as British Rail, with the difference that British Rail do not always answer the telephone whereas the telephone people always do.

6.30 p.m.

Lord Peyton of Yeovil

My Lords, the noble Lord, Lord Stoddart, has eloquently reminded me of what I said on this subject at an earlier stage of the Bill. I am bound to say that I had no idea that I had delivered myself of so cogent and eloquent an argument; at least, it sounded very good coming from his lips. I should like to say to the noble Lord, Lord Donaldson, that I entirely agree with him on the question of the improvement of service. If I may say so to my noble friend Lord Mottistone, it seems to me that he is relying too much on memory which stretches back too far into a remote past. But my own personal experience from use of the service is that over recent months and years it has very greatly improved, in terms of both the courtesy with which it is given and the speed. I have certainly noticed that improvement and I am rather surprised to hear my noble friend so denunciatory in his opinion of it.

But any suggestion that it is easy to get information—whether from private or public sources, whether paid for or not—is very ill-founded. It is often exceedingly difficult to obtain even the most rudimentary information about a service offered by either public or private sources. So I am driven to the conclusion that the mere fact of payment or not may not alter the situation drastically.

The fact that influences me at the moment is that British Telecom in its present guise—spurred on, as I believe, by the prospect of privatisation—has provided and continues to provide an improving service and that service is free. I now revert to the very simple view which I expressed before, and which the noble Lord, Lord Stoddart, has repeated, that anyone who seeks to provide a service for money must be unusually daft in a fairly crazy age not to make that service available as freely, as easily and as widely as possible to anyone who wishes to use it. Therefore, I conclude that were it not for this amendment, the idea would never have occurred to British Telecom to make a charge for this service—I do not know.

I hope that my noble friend in answering the debate will not simply rely upon the argument that this amendment would fill up this Bill with unnecessary and unreasonable content, because during the time that I have been in Parliament I have very rarely met with a Bill which was not filled up with unnecessary and unreasonable provisions. So this comparatively innocent amendment—it is merely a nudge to British Telecom not to forget its common sense, which I am sure it will not do—could not really do all that much harm to anyone.

I am slightly horrified by the fact that I should be on my feet arguing in favour of a Bill being made longer, even by so much as a line. Nevertheless this particular line has the quite unusual merit of being easily comprehensible. So I hope that my noble friends—whoever is to answer this short debate—will feel that they will not be going too far in just letting common sense be expressed in one line of the Bill. It would not make all that much difference, and certainly I could not possibly bring myself to oppose such an amendment.

Lord Molloy

My Lords, it seems to me that the Government must now take full cognisance of the speeches made by the noble Lords, Lord Donaldson and Lord Peyton, which supported absolutely the superb submission made by my noble friend Lord Stoddart of Swindon. In a way, they must totally reject the argument submitted by the noble Lord, Lord Mottistone. Even if what he said is correct, that at this moment this aspect of British Telecom's services is inefficient, it will, according to his argument, remain like that so nobody will have anything free, when we have been told time and time again how everything will be much more efficient and how everything will be much more improved, except for this service.

The only thing that can give us some heart is the fact that, as the noble Lord, Lord Donaldson, said, it is a nice service as well as an efficient one. The experience of every noble Lord, except the noble Lord, Lord Mottistone, is that the people who work on that service are extraordinarily helpful, and that is also the opinion of the general public. If the noble Lord's argument is correct, the Front Bench opposite have been leading us up the garden path, because they have been telling us that everything will be much more efficient and better. So they must make very certain that the noble Lord, Lord Mottistone, understands that this service will not only be free, but that, because of the poignancy of the submission made by my noble friend with regard to all sorts of people who are disabled in some way or other, it must be free.

It does not matter who is asking for information. People are seeking information so that they can make paid use of the telephone service of British Telecom. I should have thought that all the nation would support that. But to Britain's great joy, they will be able to pick one figure out of the entire British Isles who is opposed to it, and that is the noble Lord, Lord Mottistone. But he still has time to withdraw his banality and join those of us who wish this service to continue in the way it has done and, if necessary, even in a more efficient manner. I would only add that the people who work on it cannot improve much on the nice manner in which they work for the general public.

The Countess of Mar

My Lords, I must heartily support this amendment from a purely practical point of view. At the Committee stage, I asked the noble Lord, Lord Lyell, how much it would cost to find out who was blind, who was dyslexic and who was disabled. It would involve people going to visit. I know that the RNIB have certified blind people in their association, but nobody certifies someone who is dyslexic and nobody certifies someone who is disabled and cannot turn the pages of a telephone directory. It would involve a huge visiting staff to decide that they could not cope with an ordinary telephone directory and it would be unfair to penalise them because they could not do so by charging them for the service. It might amuse the noble Lord, Lord Peyton, if I say that when 1 had one of my first interviews with British Telecom I was asked what were my thoughts on charging for directory inquiries and I gave exactly the same reasons as I am giving now. The sheer cost of administering the refund of charges to people who are unable to use telephone directories would be too immense.

Baroness Macleod of Borve

My Lords, very briefly I wonder whether my noble friend Lord Mottistone is having so much difficulty—which I certainly have not had—because he lives in the Isle of Wight. Am I right in suggesting that it is the piece of water between us that is responsible? I am afraid that I cannot agree with him, and I agree with other noble Lords who think that it is a very courteous and a very good service. But when we are discussing this service we are not necessarily discussing disabled people. Obviously, the blind might not be employed if their employer had to pay a charge because they had to ask for a telephone number through directory inquiries every single time they made a call on behalf of their employer. That is one of the arguments. But surely this applies to everybody. Everybody has enjoyed this facility, which is not free. We are not charged for this facility but it is included in the charges that British Telecom have always made and is swallowed up in them.

There is no reason why this charge for directory inquiries, for the reason which the noble Lord, Lord Stoddart of Swindon, gave, which seemed to me to be very apt indeed, should be made by British Telecom. We should encourage British Telecom to let everybody have this service. As I have already pointed out, this service has never been free but it should not be charged for. I hope that when the Minister replies he will be able to clear up that point.

Earl Attlee

My Lords, I do not believe that anybody has made the point that if you can find a telephone directory it will be A to D when you require it to be S to Z. And if the telephone directory you require is there, the chances are that the page you want has been torn out. I was in Oxford Street a short time ago and could not find a single telephone box which contained even one telephone directory. If the telephone service can supply all the directories, which would fill up a rather large room, I see no reason why people should not pay for this service. However, since that is impossible, I agree with the noble Lord that this service should be made free of charge. I trust that your Lordships will have noticed that I am the first person who has not taken the noble Lord. Lord Mottistone, to task for being the only person in your Lordships' House who has not found the telephone directory service to be fast, efficient and courteous.

6.42 p.m.

Lord Lyell

My Lords, we have had a lengthy debate on the subject and we are in danger of going over some of the ground that we covered at an earlier stage. I hope that I shall not repeat myself. I hope, too, that we shall not have a repetition of the noise which accompanied the concluding remarks of the noble Lord, Lord Lloyd of Kilgerran, during the previous stage of the Bill, when there was some confusion.

The House may agree with me that the amendment is not dissimilar to that which has been tabled by the noble Lord. Lord Lloyd of Kilgerran—Amendment No. 15—and to the Government's amendment. Amendment No. 14, to which I hope we shall turn later. I would suggest to your Lordships that Amendment No. 13 goes extremely wide—we believe too wide—and I shall try to explain why we take this view.

First, I will deal briefly with the first half of the amendment, which is designed to ensure that the Secretary of State and the director general should be under a duty to secure the provision of directory inquiry services. We do not have any quarrel with this part of the amendment. We believe that it should be done but that it can be done better by our amendment, Amendment No. 14. However, the second part of the amendment causes us some difficulty. It seeks to place a duty on the Secretary of State and on the director general to secure the provison of directory inquiry services, free [of charge] at the point of use". While we understand what the noble Lord, Lord Stoddart of Swindon, is trying to achieve, we believe that the amendment is misconceived. First, perhaps I may spell out its deficiencies.

As the amendment is drafted, the duty of the Secretary of State and of the director general would apply to all systems and to all directory inquiry services. I do not know whether that is what the noble Lord had in mind, but that is what his amendment would achieve. It would also mean that anybody who wished to provide an inquiry service for the value added network services or an inquiry service for Telex numbers would have to provide those services free of charge. We do not believe that that is desirable. It would mean that any initiative in providing new inquiry services would never have a chance of getting off the ground.

We do not believe that that is what the noble Lord. Lord Stoddart of Swindon, or those of your Lordships who spoke in support of the amendment want or have in mind. We believe that those who have spoken this evening are seeking to ensure that British Telecom continue their present practice of not levying a specific charge for calls made to directory inquiries for information about telephone numbers. This point was beautifully made by my noble friend Lady Macleod of Borve. She pointed out that the service is not free. She said that it is "swallowed up". The noble Lord, Lord Stoddart of Swindon, will agree that the attractive young lady at Marks and Spencer who provides one with information does not provide that service free of charge. Again it is swallowed up or subsumed in the general overheads of the business.

If I may deal with calls made to directory inquiries for information about telephone numbers, if we dial 142 or 192 we are not charged for those calls. However, the Government do not believe it to be appropriate to place a blanket prohibition upon British Telecom at no stage in the future to introduce a charge for that service. Our view is that it is a matter for British Telecom's own commercial management. My noble friend Lady Macleod of Borve made the point that no specific charge is made at present; the costs of the service are borne by all customers. Therefore it can be argued that it might be better if the costs were borne by those who use the service. However, we do not believe that we should impose a total prohibition. We believe that it is better to leave it to the judgment of British Telecom.

The noble Lord, Lord Molloy, referred to one area—an area in which my noble friends Lady Macleod of Borve and Lady Lane-Fox both have an interest—where we believe that it is right to intervene; namely, over the provision of directory information to those who cannot use the normal printed directories. In this connection I think in the first instance of the blind. However, I have in mind other people who, by reason of disability or illness, cannot use the ordinary printed directory. We appreciate the concern which has been expressed: that if British Telecom were to introduce charges for directory inquiries, these people would be put at a financial disadvantage. That is why we have included a condition in the draft licence. Condition 34 ensures that if British Telecom were to decide to introduce charges for directory inquiries, the blind and those who, for various reasons, cannot use the printed directory should not be put at a financial disadvantage. In advance of any such decision by British Telecom, we cannot say exactly how this would be done, but the effect of Condition 34 is that British Telecom will be unable to introduce charges unless the director general is satisfied that British Telecom will not put the blind at a financial disadvantage. I hope that this provision meets the major concern about charges for directory inquiries. I should add that the Government intend the licences to be granted under the Bill for Mercury and Hull to contain a similar provision.

I should like to reply briefly to the two points raised in his introductory remarks by the noble Lord, Lord Stoddart of Swindon. There is no point in providing, as British Telecom already provide, free directories to subscribers as well as free directory inquiry services. I am sure your Lordships will agree that it is far cheaper for all except those who are blind or otherwise disabled and unable to use the printed directories.

We take the point made by the noble Earl, Lord Attlee, on the mutilation of directories and where, at various points of public access, the directories do not exist at all. It is far cheaper for subscribers to consult the directories. I have a note here that most people do so; but some people are idle. I had doubts about stating that until the point was made for me by the noble Lord, Lord Donaldson of Kingsbridge. The noble Lord probably has a point in that it is far swifter to obtain information rather than search through the directories. However, even the noble Lord, Lord Donaldson, will agree that where printed directories are provided they should be used.

I believe the best way to proceed would be to include a reference to directory information in Clause 3(1)(a), and this is achieved in Amendment No. 14, which I hope we shall come to, and to include, as I explained, a provision in the British Telecom licence of the sort that I have spelled out. We hope this provision will ensure that the blind and other disabled people are not put at a disadvantage by charges. To take possibly hypothetical charges for such services, we do not think that a blanket prohibition, as the amendment seeks to impose, is the right way. For that reason, I would not accept the amendment straight away.

Lord Donaldson of Kingsbridge

My Lords, the noble Lord suggested that the words "directory enquiry" can apply to all sorts of other things apart from asking for a telephone number which is what we are all talking about. I see that the conditions do not take that view. Condition No. 34.1 states: If the Licensee introduces charges…with directory enquiry services", which means exactly what we all mean. I believe that the refutation of the amendment is absolutely wrong and should not be accepted. The real reason for the amendment is perfectly clear. It is the last reason that the noble Lord gave. They do not want to interfere with the right of an independent company to make what profits it can in whatever way it likes, but we do in this particular case.

6.53 p.m.

On Question, Whether the said amendment (No. 13) shall be agreed to?

Their Lordships divided: Contents, 84; Not-Contents, 92.

DIVISION NO. 4
CONTENTS
Airedale, L.	Kinloss, Ly.
Ardwick, L.	Kirkhill L.
Attlee, E.	Lawrence, L.
Aylestone, L.	Llewelyn-Davies of Hastoe, B.
Barnett, L.	Lloyd of Kilgerran, L.
Beaumont of Whitley, L.	Lovell-Davis, L.
Beswick, L.	McGregor of Durris, L.
Bishopston, L.	McIntosh of Haringey, L.
Blease, L.	McNair, L.
Boston of Faversham, L.	Mar, C.
Bottomley, L.	Milner of Leeds, L.
Brooks of Tremorfa, L.	Molloy, L.
Bruce of Donington, L.	Mulley, L.
Carmichael of Kelvingrove, L.	Napier and Ettrick, L.
Chitnis, L.	Nathan, L.
Cledwyn of Penrhos, L.	Ogmore, L.
Collison, L.	Oram, L.
David, B. [Teller]	Ponsonby of Shulbrede, L. [Teller.]
Dean of Beswick, L.
Diamond, L.	Rhodes, L.
Donaldson of Kingsbridge, L.	Seear, B.
Elwyn-Jones, L.	Sefton of Garston, L.
Ennals, L.	Segal, L.
Fitt, L.	Serota, B.
Gaitskell, B.	Shaughnessy, L.
Gallacher, L.	Simon, V.
Graham of Edmonton, L.	Spens, L.
Gregson, L.	Stallard, L.
Grey, E.	Stedman, B.
Grimond, L.	Stewart of Alvechurch, B.
Hall, V.	Stewart of Fulham, L.
Hampton, L.	Stoddart of Swindon, L.
Hanworth, V.	Stone, L.
Hooson, L.	Strabolgi, L.
Houghton of Sowerby, L.	Taylor of Blackburn, L.
Howie of Troon, L.	Tordoff, L.
Hylton-Foster, B.	Underhill, L.
Irving of Dartford, L.	Wells-Pestell, L.
Jeger, B.	Whaddon, L.
Jenkins of Putney, L.	White, B.
John-Mackie, L.	Wigoder, L.
Kaldor, L.	Winterbottom, L.
Kilmarnock, L.

NOT-CONTENTS
Airey of Abingdon, B.	Drumalbyn, L.
Avon, E.	Elton, L.
Bauer, L.	Enniskillen, E.
Belhaven and Stenton, L.	Fortescue, E.
Bellwin, L.	Gainford, L.
Belstead, L.	Glanusk, L.
Boyd-Carpenter, L.	Glasgow, E.
Brabazon of Tara, L.	Glenarthur, L.
Bruce-Gardyne, L.	Gormanston, V.
Campbell of Alloway, L.	Gray of Contin, L.
Cathcart, E.	Gridley, L.
Chelwood, L.	Hailsham of Saint Marylebone, L.
Cockfield, L.
Coleraine, L.	Henley, L.
Colwyn, L.	Home of the Hirsel, L.
Constantine of Stanmore, L.	Hornsby-Smith, B.
Cottesloe, L.	Kaberry of Adel, L.
Craigavon, V.	Kimberley, E.
Craigmyle, L.	Kintore, E.
Cullen of Ashbourne L.	Lane-Fox, B.
Daventry, V.	Lindsey and Abingdon, E.
Denham, L. [Teller]	Liverpool, E.

Long, V.	Portland, D.
Lucas of Chilworth, L.	Rankeillour, L.
Luke, L.	Renton, L.
Lyell, L.	St. Davids, V.
McAlpine of Moffat, L.	Saltoun, Ly.
McAlpine of West Green, L.	Sandford, L.
Mackay of Clashfern, L.	Selkirk, E.
Marley, L.	Sempill, Ly.
Marshall of Leeds, L.	Skelmersdale, L.
Maude of Stratford-upon-Avon, L.	Somers, L.
	Strathspey, L.
Merrivale, L.	Sudeley, L.
Mersey, V.	Swinfen, L.
Molson, L.	Swinton, E. [Teller]
Morris, L.	Thomas of Swynnerton, L.
Mottistone, L.	Thorneycroft, L.
Mowbray and Stourton, L.	Torphichen, L.
Murton of Lindisfarne, L.	Tranmire, L.
Northchurch, B.	Trefgarne, L.
Nugent of Guildford, L.	Trenchard, V.
Onslow, E.	Trumpington, B.
Orkney, E.	Vickers, B.
Orr-Ewing, L.	Vivian, L.
Pender, L.	Whitelaw, V.
Penrhyn, L.	Windlesham, L.

Resolved in the negative, and amendment disagreed to accordingly.

Lord Denham

My Lords, I think that this is probably the moment when we should adjourn. While I move that further consideration on Report be now adjourned. I think that it would be fair to tell your Lordships that we shall not reconsider the Report stage of the Telecommunications Bill before eight o'clock.

Moved accordingly, and, on Question, Motion agreed to.