Telecommunications Bill

HL Deb 12 March 1984 vol 449 cc561-621

8.32 p.m.

Consideration of amendments on Report resumed.

Lord Lyell moved Amendment No. 14: Page 3, line 6, after first ("services") insert ("directory information services").

The noble Lord said: My Lords, I hope that your Lordships will permit me, in moving Amendment No. 14, to speak also to Amendments Nos. 28, 32, 33 and 34.

Amendment No. 28: Page 4, line 5, after ("section") insert— (""directory information service" has the meaning given by section 4(2) below;").

Amendment No. 32: Page 4, line 37, leave out ("a service consisting in—(a)") and insert ("any of the following, that is to say— (a) a service consisting in")

Amendment No. 33: Page 4, line 41, at beginning insert ("a directory information service, that is to say, a service consisting in").

Amendment No. 34: Page 4, line 45, leave out ("or (c)" and insert ("and (c) a service consisting in").

All these amendments hang together. Before our dinner break your Lordships rejected the previous amendment for two reasons. First, as I endeavoured to explain earlier, we believe that the drafting is deficient. Secondly, we believe that the provision for charging would be very difficult, if not impossible, to implement in practice. I should like to elaborate briefly on both points, if I may.

As to the drafting, I explained when speaking to Amendment No. 13 that the words "directory inquiry services" are unqualified in any way. These would go far wider than what is intended; namely, to give the ability to obtain information about telephone numbers. I believe this problem could be overcome by Amendment No. 14. This refers to "directory information services", which is defined in Clause 4 as: a service consisting in…the provision by means of a telecommunication system of directory information for the purpose of facilitating the use of a service … and provided by means of that system". In other words, if Amendment No. 14 is agreed to we shall find in Clause 3(1)(a) that it will require the Secretary of State and the director to secure the provision by telephone systems of telephone directory information for the use of those systems.

There is another way in which the amendment improves the earlier drafting. I think we all understand what "directory inquiry" normally means. As has been explained, it means information which is obtained for numbers in London by dialling 142 and, for numbers outside London, by dialling 192. However, I do not think that goes quite far enough, for example, in some parts of the country, to cover information about STD codes. Your Lordships may recall that at the last stage the noble Lord, Lord Kaldor, and I had a vivid discussion about the codes all over the United Kingdom. Information about these STD codes is essential before some calls can he made. In some parts of the country this information is provided not by the directory inquiry service but by the operator: in other words, you obtain this service by dialling 100. This service is included within the wording of Amendment No. 14. We understand that there is considerable doubt as to whether it would be covered by the wording of the previous Amendment, No. 13, or by that of Amendment No. 15, if the noble Lord, Lord Lloyd of Kilgerran, will allow me to trespass briefly on to the next amendment.

I should like now to turn to the second problem; namely, whether or not the directory information service should be the subject of a charge. I want to make it quite clear that the Government fully accept that those who, by reason of blindness or disablement, do not have the alternative of using printed directories should not have to pay for directory information which is provided over the telephone. That was a wish shared by virtually everyone who spoke on the last amendment, and they want a provision written into the Bill. The problem is how to put this wish into effect in the Bill.

One way, as in the last amendment, is to place a blanket prohibition on all charges for directory information services provided by all operators. That, of course, is not just British Telecom, Mercury and Hull, but all the many operators of private telecommunications systems as well. I think your Lordships would agree that this is not appropriate, for a variety of reasons; and that is why the Government proposed that the blind and the disabled should he safeguarded against these charges through conditions in the licence which is granted to British Telecom and also to Hull, Mercury and possibly others.

However, I appreciate the view which was expressed by your Lordships on all sides of the House that there is something to be said for including some formal provision in the Bill to ensure that the blind and the disabled are not charged for directory information which they cannot obtain by reading a directory. I can therefore give the House an undertaking that if something suitable can be included without the disadvantages and the pitfalls which I sought to explain on the previous amendment, we shall bring forward an amendment on Third Reading. In saying this, I can make no promise that we shall be able to succeed, but I assure your Lordships that we shall consider the possibilities very carefully indeed. With that assurance, I hope that your Lordships will see fit to accept Amendment No. 14. I beg to move.

Lord Lloyd of Kilgerran

My Lords, it would be churlish not to thank the noble Lord the Minister for his cogent explanation and for putting forward this amendment. I produced an amendment at the Committee stage to the effect that directory services should be particularised in Clause 3(1)(b), together with things like emergency services, public call-box services and so on, for which all reasonable demands should be satisfied.

As the noble Lord the Minister indicated earlier this evening, there was some noise at the end of my speech and I did not hear the Minister saying that he would take the matter back, so I went off again full steam ahead until I was told that the Minister had agreed to take it back. The Government have now come forward with this amendment which uses the words "directory information services". But the titles in Conditions 3 and 34 in the licence refer to "directory inquiry services". The only cavil I have is: is there any difference between "directory information services" and "directory inquiry services"? That was the subject of my amendment at the Committee stage and it is the subject of my next amendment, No. 15. Otherwise, I entirely agree with what the Minister has said.

Baroness Macleod of Borve

My Lords, I am grateful for what my noble friend the Minister has said. I wonder whether when he speaks again he could answer this question. If British Telecom wishes in the future to charge for the information, and if it abides by the licence which I understand will have included in it that it should not charge disabled people or people who cannot see the written word, how are people who suffer from these ailments to know?

Lord Morris

My Lords, I believe that I can help the noble Lord, Lord Lloyd. The term "directory inquiry services" refers not so much to the service as to the request fur a service. The term "directory information services" refers more directly to the result of that inquiry and, as such, is an improvement in pure drafting terms. It describes the service rather better, and certainly more roundly, than a reference to the actual question in the first place.

Lady Saltoun

My Lords, I wonder whether the noble Lord, Lord Lyell, can clarify a point. He referred to services obtainable by dialing 100. I did not think that directory inquiry or information services were obtainable by dialling 100. I thought that those were services which one required if one's telephone call had gone wrong, and one was unable to get the number that one had dialled.

Lord Stoddart of Swindon

My Lords, like the noble Lord, Lord Lloyd, I do not particularly want to look a gift horse in the mouth and I certainly do not wish to be churlish about the olive branch that was held out by the noble Lord, Lord Lyell, following the vote on the last amendment. Furthermore, of course, I cannot now pursue the argument about a free service, since the House has just defeated that. But I should like to say that we have not yet had—and we did not receive one earlier on in our deliberations—an explanation from the noble Lord as to how we would define people who were disabled and what would be the administrative costs of so defining them.

It could very well be that the administrative costs of finding out whether a person came within the meaning of "blind" would be great. Also, it could be difficult to define a person who was dyslexic or to decide whether a person who was disabled could handle a telephone directory, and I have to confess that I think the noble Lord will have some difficulty in writing it into the Bill. Nevertheless, having said that, because it is these people in particular that the House is most concerned about, I hope that by the time Third Reading comes around the noble Lord will have been able to exercise his own mind and will have received advice from other minds, both around him and in the Civil Service, that will enable him to bring forward an amendment which is acceptable to the whole House.

Lord Lyell

My Lords, if I may briefly try to answer some of the points that have been raised as a result of my first oration in moving this amendment, my noble friend Lady MacLeod asked, as did the noble Lord, Lord Stoddart, how we would be able to define disabled and blind people. I am afraid that all I can say tonight is that we are working out how blind people and disabled people can be recognised. This is something that will come under the heading of these matters which as I said earlier we shall be considering very carefully indeed. As regards what the noble Lord, Lord Lloyd, and my noble friend Lord Morris said, I understand that the term "directory information services" is wider in scope and we shall be changing the draft licence to use the term "directory information services". I hope that that will satisfy the inquiring mind of the noble Lord, Lord Lloyd, who picks out these points.

The noble Lady, Lady Saltoun, mentioned the problem of dialling 100, I hope I said that it is the STD codes that are sometimes obtained by dialling 100—not in all areas. I understand that telephone numbers of individual subscribers are, in almost all cases, obtained by dialling from the parts of Scotland which the noble Lady and I frequent by dialling 192: and possibly 142 when we are in London. If I am wrong on this matter of obtaining subscribers' numbers by dialling 100, then I shall certainly write to the noble Lady. But I understand that it is STD codes which are obtained by dialling 100 and, of course, the noble Lady will agree that it depends upon where you live. Finally, may I thank the noble Lord, Lord Stoddart, for his kind remarks about the olive branch. I hope that this amendment will meet the concern that has been expressed on all sides of your Lordships' House.

On Question, amendment agreed to.

8.48 p.m.

Lord Lloyd of Kilgerran had given notice of his intention to move Amendment No. 15: Page 3, line 6, after second ("services") insert ("directory enquiry services").

The noble Lord said: My Lords, in view of the number of poignant and moving letters that I have had since the Committee stage, when I proposed in my amendment that directory inquiries should be particularised in Clause 3, I should like once again thank the noble Lord the Minister for introducing Amendment No. 14. In those circumstances, this amendment is not moved.

[Amendment No. 15 not moved.]

[Amendment No. 16 not moved.]

The Earl of Halsbury moved Amendment No. 17: Page 3, line 22, leave out ("effective competition between") and insert ("a free and fair competitive opportunity for").

The noble Earl said: My Lords, this is a modest little amendment and paragraph (b) of subsection (2) is so short that perhaps, with the leave of the House, I may read it as it will he if it is amended. It reads: to maintain and promote a free and fair competitive opportunity for persons engaged in commercial activities".

and so on. This is just the introduction into the Bill or the concept of what is fair, and if it is not introduced at this point I do not know at what other point in the Bill it should he introduced. The concept of fairness was first introduced into the Cable and Broadcasting Bill in Amendment No. 19 by the noble Lord, Lord Campbell of Alloway. It had a lot of support from both sides of the House but was narrowly defeated on a Division, not on the grounds of what was fair but because of a Government concession upon where consultation was requisite. The prejudice in favour of what is fair will, I feel, receive as much spontaneous support in the context of this Bill as it received in the context of the Cable and Broadcasting Bill. It is in terms of this that I justify the amendment.

Unamended, subsection (2)(b) insists upon what is effective, and no more. A lot of things are effective but not fair. Industrial espionage is an extremely effective form of competition but I would not regard it as fair. I hope that the Government will be sensitive to this point. In recent weeks they have had to endure quite a number of reverses. To employ a phrase that Aeschylus uses in The Agamemnon, I hope that they have learned wisdom through suffering and that they will receive my suggestion for incorporating the concept of what is fair into the Bill. I beg to move.

Viscount Trenchard

My Lords, I support the amendment. The concept of fair competition is very important, particularly in the context of this Bill, because of the size of one of the main operators. It is more appropriate for a government to use their best endeavours—which is what, in my view, the introduction in subsection (2) to the various paragraphs, in this case paragraph (b), really means—to ensure a free competitive opportunity than to maintain and promote effective competition. I do not know whether the Government are in a position fully to promote and maintain effective competition. In the case of an enormously powerful single operator this is a very important point at which the word "fair" should be included.

I am not sure why there is reluctance to accept the phrase, "a free and fair competitive opportunity". We have fair trading offices. There is the concept of fairness in competition in many other areas. At this stage I shall not talk about the European Community, a question which arises in later amendments in relation to Clause 3(2)(h). The term "effective competition" begs the question whether the effect is a big one, a little one, a vast one or a minuscule one. I looked at my rather old copy of the Oxford Dictionary for a definition of "effective". It did not help me very much. It says "having an effect". It gave as an example "range of weapon", which is not very appropriate. When I looked at "to effect", the Oxford Dictionary said "Bring about or accomplish, bring about competition or to accomplish competition". Again it does not say how much competition, or what sort of balance is required. I suppose that the Romans could have claimed when they let the Christians go into the arena with the lions that the competition was likely to be effective, if for no other reason than that the effect on the lions would be to stimulate their appetite. "A lair competitive opportunity" clearly is a case which many courts and lawyers would argue about for a long while on a particular issue, but, in terms of actual words, I should have thought that in this situation "fair" has a much more precise meaning than "effective". The word "opportunity" is more appropriate to what a Government and a director general can practically set out to do.

There is an obvious query in the amendment as to whether "a free competitive opportunity" is a possibility in relation to the whole of the Bill—that is, in relation to the network—because the Government have made it quite plain that their policy is based upon a limited competitive situation within the network in the United Kingdom. I have read it many times in order to see whether the licensing obligations and the declared objective of the Secretary of State and director general would be overtaken by the amendment, if agreed to. I am not sufficient of a lawyer on statutes to be able to give an answer to that question. If, however, the answer were that this would cut across the limited opportunity for competition within the network in the next five or six years, a relatively simple alternative would at least have been to stick to providing "a free and fair competitive opportunity" but at some point in clause 3 putting in the proviso, "subject to the limitations on competition in the network in the next five years". With that reservation, I very much hope the Government will see fit to support the amendment.

Lord Lloyd of Kilgerran

My Lords, I, too, support the amendment. Throughout the Bill I have found it difficult to understand the full meaning of the phrase "effective competition between". It arises, I suppose, from a kind of professional blindness, as most of my life is concerned with competition matters in the European Community context, the research and development activities of various firms and anti-trust matters. It seems to me that the words "a free and fair competitive opportunity" are an improvement.

Lord Shaughnessy

My Lords, I should like to support the amendment and to endorse what has been said by the noble Earl, Lord Halsbury, the noble Viscount, Lord Trenchard, and the noble Lord, Lord Lloyd of Kilgerran. The concept of the words "free and fair" is so important in the context of a Bill of this complexity, which has far reaching implications for all people in the United Kingdom, that it is beyond question, I believe, that this amendment, which has proper implications for the carrying forward of this great enterprise, should be agreed to by your Lordships.

Lord Campbell of Alloway

I, too, support the amendment. The object of the Bill is to abolish exclusive privilege and to lead us, in the long run, network or no network, into the arena of competition. The Secretary of State and the director are enjoined to maintain and promote effective competition at all stages as the Bill stands, but unless a free and fair competitive opportunity is provided at source there can be no true competition in any real sense. The source of such competition, the source of such competitive opportunity, is the grant or refusal of the licence, an opportunity which must surely be free and fair. In other words, in a phrase, there must be fair play for the applicant. This is not only wholly in accordance with the general intendiment of the Bill but is relevant to its due administration.

This question of fair play for the applicant is germane to the Bill and to the Cable and Broadcasting Bill. The question of consultation by mandatory provision is now disposed of, as Section 5(4) of the Cable and Broadcasting Bill is now to be supplemented at Report by a new section, 45, to impose reciprocal statutory duties. But already, as some of your Lordships may well know, there is a serious measure of concern and discontent on the part of applicants who did not succeed in obtaining the grant of provisional cable licences. It is therefore of the greatest importance that all decisions as to the grant or refusal of licences should he seen as right and fair. This means that, quite apart from this question of consultation, some reasoned explanation as to the grounds for the decision must be given; for such is the main source of discontent today on the provisional licences.

It also means that an applicant should be given a free and fair opportunity of knowing the substance of the case against him, so as to enable him to make out his own case in support of application. Both considerations to which I have referred have been held by the Appellate Committee of your Lordships' House to constitute the fundamentals of natural justice. It is surely important that this measure of concern and discontent which has arisen in the past should not arise again on the grant of substantive licences under either of these Bills. There is really no problem because the specific exclusion under Clause 3(2)(b) only comes into play at the request of the Director-General of Fair Trading. This is of no consequence as it lies within the remit of the Director-General of Fair Trading to ensure fair play for applicants. In the absence of any such request, the provisions of the proposed amendment would take effect to secure precisely the same result.

If there is a case for other specific exclusions or derogations, let them be stated as such: for example, if special measures of an exceptional short-term nature are required for the protection of the investment in Mercury; if there are special considerations for the short term protection of the network. Here I would gratefully borrow the helpful concept of my noble friend Lord Trenchard that this should be dealt with by way of a specific proviso. The hope is that the principle of this amendment will be acceptable not only as affording a safeguard for due administration but because it is in accordance with the general intendment of the Bill as expressed in its Long Title.

9.3 p.m.

Lord Morris

My Lords, this amendment worries me somewhat in that I cannot see that there can possibly be a true legal test for "a free and fair competitive opportunity". It begs the question: free and fair unto whom? On the other hand, the original wording of "effective competition between" is capable of legal test. If successful commercial endeavour, which means the provison of services and apparatus at a price which the customer wishes to pay, is the result then it is effective competition. But I remain to be convinced about how one can possibly test "free and fair competitive opportunity".

Lord Glanusk

My Lords, I am afraid that I cannot agree with my noble friend Lord Morris. For the past 30 years I have been a salesman in the telecommunications industry. As such I have been responsible for submitting several thousand tenders in my time. Time and again I have met examples of extremely unfair—if not to say dishonest—opposition in the form of other tenderers, but that has been extremely effective tendering in that they won the tender from me. However, it was certainly not fair and reasonable. I sincerely hope that we do not intend to instruct the director to carry out "effective" competition as opposed to "fair" competition.

Lord Spens

My Lords, I support this amendment but I want to tackle it from a different point of view. In Committee my noble friend Lord Mottistone introduced Amendment No. 42 to this subsection and which asked for the prevention of uncompetitive practices. I supported that amendment but I was told by the noble and learned Lord, Lord Mackay of Clashfern, that it was all covered under Clause 49 and that all we had to do was leave it to the Director of Oftel to exercise his functions under that clause. The noble and learned Lord, Lord Mackay of Clashfern, even went on to explain that this particular subsection would anyway be outside the scope of the Director of Oftel because of a little paragraph, Clause 3(3)(b), which takes away from the Director of Oftel any rights when exercising his competitive powers under Clause 49.

I think that this is the time to warn your Lordships that I have in fact tabled a manuscript amendment to delete that subsection, which is the first two lines of page 4, and I hope that that amendment has by now reached the Front Benches and will be dealt with in due course. The point about this is that Clause 49 gives the Director of Oftel the ability to exercise the functions of the Competition Act and the Fair Trading Act. Functions under the Competition Act, as far as I can see, do not produce any duties.

I have looked through the Competition Act. It is a very difficult one to interpret straight away. The last thing that it appears to do is to give the director anything. It talks about what will happen to various people who will be investigated and so forth, but the only provision in the Act which I can find which gives the director a possibility of doing something is in Section 3(1) which reads: If it appears to the Director that any person has been or is pursuing a course of conduct which may amount to an anticompetitive practice, the Director may…carry out an investigation". That is the tone of the whole Act—"the director may". Nowhere is there any statement that the director "shall". That is what I believe we want to get at.

In supporting this amendment, I also hope that in due course your Lordships will support my manuscript amendment to remove the first two lines on page 4 of the Bill so that the director shall have the duty to act in accordance with his own considerations on matters of competition, and the matter would not be left to Clause 49 where the director has only a function but no duty.

Lord Glenarthur

My Lords, this amendment tries to make a fairly radical change to the Bill. There is no doubt about that. As drafted, the Bill reflects the Government's policy of encouraging competition among suppliers. If suppliers compete effectively the customer and other users obtain great benefits. They are given a choice of services and of apparatus. With effective competition, market forces will ensure that prices are reduced, quality is improved and there is greater available choice. These benefits are possible only if there is effective competition. It is no good introducing ineffective competition where prices are agreed and new products arc kept out of the market place by collusion among suppliers.

The amendment as drafted would delete the reference to "effective competition" so that the Secretary of State or the director would no longer be required to have any regard for competition, effective or otherwise, and its benefits for the consumer and user. Instead it would require the Secretary of State and the director to promote what is called: a free and fair competitive opportunity". I have listened with care to the various explanations put forward about what "fair" means. Despite the way that it has been explained by my noble friends who sit behind me and by the noble Lord, Lord Spens, I am afraid that I cannot accept the word. The difficulty with it in this context is that it inserts what amounts to an evaluation element into the calculation of what is desirable at the wrong stage. The clause requires the relevant authority to achieve certain concrete ends. Those are to be balanced against each other. The word "fair" introduces a vague extraneous standard of evaluation. The point really is that it is the clause itself which is the standard of fairness.

The amendment would have no effect on the way that the director would process applications. I really cannot agree with my noble friend Lord Campbell of Alloway that it would. By introducing vagueness into Clause 3 we should do great harm to the Bill. I entirely agree with what my noble friend Lord Morris has said. Furthermore, the amendment as drafted would wreck a major part of the Bill. The purpose of Clause 3 is to give a clear framework for what goes into the licences granted to BT and others. It does not provide guidance on procedures, and nor is it intended to. The arrangements for fair and open procedures which the Secretary of State and the director must follow are in Clauses 8, 10, 12 and 15.

The noble Lord, Lord Spens, went on to describe how he proposes to deal with a manuscript amendment in due course. I hope that he agrees that it may be best to respond more fully to that when he moves his amendment. The proposers of the amendment are perhaps trying to ensure that the Government look after the interests of business men, including those like British Telecom PLC which will be engaged in running the public networks and others which manufacture apparatus for use abroad. I understand from what they have said that that is certainly the principle that lies behind the amendment. But as far as they are concerned, their interests are dealt with later in the Clause. In paragraphs (a), (b) and (c) of Clause 3(2), they look after the interest of consumers and users; paragraphs (d) to (h) look after the interests of businessmen. I see no advantage in removing the protection for consumers and users, which is generated by effective competition and replacing it by a provision which, as I have said, has no clear meaning and is vaguely of benefit to businesses. We shall of course have the opportunity to discuss the interests of businesses when we come to the amendments on paragraphs (e) and (h).

The concept of what is fair or unfair, in the way that has been advocated by those who have spoken to this amendment, would complicate the clause; they would do it and the Bill considerable harm, and I hope that with that difficult and rather tortuous explanation of what "fair" may or may not be, the noble Lord will not press this amendment,

Lord Spens

My Lords, before the noble Lord sits down, may I ask whether he would agree with me that if subsection (3)(b) is left in, that a director of Oftel will not be able to operate under subsection (2)(b) that we have been debating? That deals with effective competition and surely that must be covered by Clause 49.

Lord Glenarthur

My Lords, with the leave of the House, so far as Clause 3(3)(b) is concerned—and I know we are going to debate this at length later on—the noble Lord is concerned about its dis-application, in particular when the director acts under Clause 49. The reason for this is that when he exercises functions under the Fair Trading and Competition Acts, the director is guided by a different set of guidelines which are set out in Section 84 of the Fair Trading Act. These deal specifically with competition issues and are the same guidelines as govern the Director General of Fair Trading when he acts under the Fair Trading and Competition Acts. I hope that will satisfy the noble Lord.

Lord Spens

No, my Lords, it does not because he has not answered my question. Can the director of Oftel in fact operate subsection 2(b)?

Lord Glenarthur

My Lords, not when he is operating under Section 49.

Lord McIntosh of Haringey

My Lords, it is very tempting for us to leave this matter to the spiritual side of the House. I think what we have here is in effect a theological discussion rather of the sort of the mediaeval disputation of how many angels can dance on the head of a pin. Does it make any difference whether we use the words "effective" or whether we use the words "free and fair" when the whole tendency of the Bill, as the noble Lord, Lord Glenarthur, has made it clear, is not a liberalisation Bill at all? If the Government had accepted the Beesley Report then we might he discussing free and fair competition; but in order to do that, the Government would have had to obdure restrictions on resale.

It is true that British Telecom would have had the right to specify the prices for the use of private circuits and would he able to compete freely itself in the market, but there would never be any of this complicated licensing procedure. Instead, Beesley said that there should he no constraints on pricing and financing of telecommunications operations, and certainly that we would have had complete liberalisation in the international sphere, which, in view of amendments which are coming later, we may yet have in some form or another. But as the Bill is drafted at the moment, this is not a liberalisation Bill and what we call it here makes no difference whatsoever to the real content of the Bill.

Lord Mottistone

My Lords, if I could just quickly ask my noble friend a question, he made a lot of statements but did not produce much argument, with the greatest possible respect to him. I know how difficult it must be, particularly if you have a brief which is dogmatic, even if you arc not dogmatic yourself. But to say that putting "fair" into this subsection wrecks the Bill or seriously alters its entire tenor is really going too far. I do not know whether the House would agree, but I think that if it were possible for him to say something more explanatory rather than dogmatic, then maybe we could understand what he says. But for me, it means nothing, and I trust that my noble friends who put this amendment down, will, if they do not take this to a Division, return to the charge at Third Reading, at which time I trust that any noble Lord on the Front Bench will he properly briefed to make an explanation.

The Earl of Halsbury

My Lords, with the leave of the House, the noble Lord the Minister has not really answered the main points that I made. He says that this is a radical change. In some ways it is, because it replaces a meaningless expression with a significant one. The phrase "effective competition" is tautology, rather like saying, "a dead corpse". When you say that an object is "a corpse", you do not add anything by also saying that it is "dead". If competition is ineffective, it would not be competition. So the phrase "effective competition" is like the phrase "a dead corpse", because "effective" does not add anything whatsoever to the word "competition".

On the other hand, "free and fair competitive opportunity" may be an expression which requires construction, but at least it forces one to think. The words "free and fair" are not contained in the word "competitive" in the way that a predicate is contained in its subject, as in an analytical proposition. Therefore, my amendment imports significance into subsection (2)(b), which at the moment stands merely in support of competition as such. In those circumstances I cannot oblige the noble Lord by withdrawing the amendment. Whether it will go to a Division is another matter.

On Question, amendment negatived.

9.22 p.m.

Lord Lloyd of Kilgerran moved Amendment No. 18: Page 3, line 28, after ("techniques") insert ("and new products")

The noble Lord said: My Lords, this is a modest amendment to add the words "new products" after the words "new techniques". As your Lordships will recall, in Clause 3(2)(d) the Secretary of State and the director are to take action best calculated, to promote research into and the development and use of new techniques".

Surely that is not enough: and in this amendment I have suggested that there should he research and development in regard to not only new techniques but also new products. Therefore, my amendment seeks merely to add the words "new products" to the words "new techniques" in the clause. I beg to move.

The Lord Advocate (Lord Mackay of Clashfern)

My Lords, the noble Lord, Lord Lloyd of Kilgerran, moved an amendment with much the same intention at the Committee stage. I think that the noble Lord has decided to move his point of attack to slightly later in the Bill from where he previously attacked. I am sure that I could refresh the noble Lord's memory in that regard if he wishes me to do so. Of course I have no difficulty in agreeing with the sentiments which lie behind the amendment since, as I explained in answering the noble Lord's amendment at the Committee stage, they fully reflect the Government's policy, one of the objectives of which is to keep United Kingdom telecommunications at the forefront of technological developments. We want to encourage both research and development and, most importantly, the application of the fruits of research and development to both new services and new products, and also to new ways of providing existing services and products. That is what the present drafting achieves, because it refers to, research into and the development and use of new techniques". In our view that amply covers in a very general way the whole field that the noble Lord wishes to cover. I believe that the amendment is really unnecessary. I know that the noble Lord is fertile in producing new ideas, but the more general the phraseology the more likely it is that the new ideas are already covered: and that is what I say has happened here.

Lord Lloyd of Kilgerran

My Lords, I am very grateful to the noble and learned Lord for that explanation. What I understand is that the Government have decided that "new techniques" includes "new products". That is certainly a great advance in new technology which I have never heard about before. However, in view of the very positive way in which—I understand that the noble Lord, Lord Bruce of Donington, wants to speak. I was winding up, but perhaps the noble Lord wishes to intervene.

Lord Bruce of Donington

My Lords, all that I wanted to ask the noble Lord—I shall not detain him for as long as he has been detained from other quarters behind him on this matter—is why he assumes that use of techniques must result in the production of commercial products as distinct from pure experimentation? You can use techniques not necessarily in the production of new products but even in future research and development. I do not think that one necessarily follows from the other. This is, I suppose, pure tautology so far as the noble and learned Lord is concerned. If he gives the House the assurance that he intends to cover products, it is all right by us without any further argument.

Lord Mackay of Clashfern

My Lords, with the leave of the House, I am content to leave it at that and stop the tautology.

Lord Lloyd of Kilgerran

My Lords, I am grateful to the noble and learned Lord for including new products within the meaning of techniques. In these circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Speaker (Viscount Simon)

Before calling Amendment No. 19, I have to inform your Lordships that, if Amendment No. 19 is approved, I shall not he able to call Amendment No. 20.

Lord Orr-Ewing moved Amendment No. 19: Page 3, line 29, leave out paragraph (e).

The noble Lord said: I should like to take with this, Amendment No. 21.

Amendment No. 21: Page 3, line 37, leave out from ("Kingdom") to end of line 41 and insert— ("() to enable persons providing telecommunications services in the United Kingdom to compete effectively in the provision of such services outside the United Kingdom; () to enable persons providing telecommunication apparatus in the United Kingdom to compete effectively in the supply of such apparatus both in and outside the United Kingdom").

There is no great merit or demerit in paragraph (e). It seems to be rather ineffective and not very constructive. On the other hand, the two paragraphs that we aim to put more or less in its place are effective. The Telecommunications Equipment Manufacturing Association, representing largely the manufacturing portion of the electronic industry, feels strongly that the Bill would be better with these two paragraphs included. I see the association's point absolutely. The words have been carefully chosen so that they do not offend or transgress the Treaty of Rome. This has been done since the Committee stage. I shall speak briefly partly because I want to speak at greater length on the next amendment and therefore do not wish to bore the House, and partly because I think that the case is clearly made out in the substance of the proposed paragraphs.

I think that the manufacturers understandably feel that, on the whole, a country like France and the French Government do their industry rather better than we do ours. All they ask is that the industry is treated just as fairly as industries in France and Scandinavia, no better or worse. The manufacturers are confident that this will he helped by the two paragraphs and that the result would he better for industry and for everyone with jobs in that industry. I beg to move.

Lord Cockfield

My Lords, I do not know whether it would assist our proceedings if I say that I would be prepared to recommend that the House accept both these amendments.

Viscount Trenchard

My Lords, I think that there are other amendments that cover the same point. I had understood my noble friend would suggest that we make any points we wish on those amendments now. Clearly, if the amendment before the House is passed, which, as my noble friend has made clear, will he the case so far as the Government are concerned, it would not be possible, as I see it, to move Amendment No. 23 nor an amendment that has nothing to do with me, Amendment No. 24. I am delighted that we now have an amendment that my noble friend has confirmed would he acceptable to the Government directed towards the main aim of an amendment, Amendment No, 52, that I moved at Committee stage. I used then, and I use now in Amendment No. 23 which stands in my name and that of other noble Lords, the phrase which we have just debated; namely: a free and lair competitive opportunity", rather than enabling industry to maintain effective competition, While I am delighted that we share the same aim, I find it extremely strange, as the noble Earl, Lord Halsbury, said when discussing his amendment a moment ago, that we have had no real comment on the point that he and I think four other speakers made that, while interpreting what is lair is already the subject of courts—special and general in many eases—interpreting what is effective is quite a different matter. The effect can be in more than one direction, of more than one kind and of more than one degree.

The word "effective" does not seem to be appropriate. I personally would have thought that it would be less acceptable to EEC circles in that if we are trying to make sure that British industry is effective it could be argued that we are trying to make sure that it succeeds whether it has an over-lair opportunity or not, which was never any part of the amendments that I have sought to move.

I have been encouraged by a number of noble Lords on all sides of the House to discuss the matter more fully in relation to Clause 3(2)(h) and if my noble friend on the Front Bench would agree, 1 should like him to give the I louse the benefit of his views as to whether this would in fact be a more appropriate way of providing a lair international competitive opportunity. As I read it—and I have been reinforced in this view by various legal opinions—it does not in this case override the problems of limited competition in the network because the amendment refers to competition "on an international basis" which was the purpose of (h) as originally drafted and is the purpose of either of the two new (h) paragraphs. I should have thought it more acceptable, more definite and more of a guarantee to British industry not that a Secretary of State and a director general can he certain of succeeding, but that they will do their very best to ensure that British industry, in a market which we are partly liberalising, does not have to compete against other industries which, in many cases, are not liberalised at all.

Lord Denham

My Lords, I wonder whether my noble friend will forgive me? My noble friend Lord Orr-Ewing moved his amendment and my noble friend the Minister left a certain amount of time for other noble Lords to join in. Nobody did so, and therefore he made his reply accepting my noble friend's amendment. We are at the Report stage and I think it is right that if any noble Lord wishes to speak on a certain point he should do so before my noble friend the Minister replies, otherwise we are going to get very much out of order. My noble friend Lord Orr-Ewing, having moved the amendment and my noble friend the Minister having accepted it then, strictly within the rules of the House, that should be the end of the matter.

My noble friend left a definite pause waiting for noble Lords to come in, and my noble friend Lord Trenchard did not come in at that point but has now made what I may say is not too long but rather a long speech. Therefore, if my noble friend replies to that, he has to do so with the leave of the House. So could we possibly get more within the rules of order of the House?

Lord Weinstock

My Lords, with the leave of the House—

Lord Orr-Ewing

My Lords, may I perhaps explain? I was entirely wrong. I had agreed to move the other amendments but as I knew the Chief Whip was anxious to get to a certain point I am afraid I took a short cut and I was incorrect. My noble friend picked up an error on my part, but I equally thought that—

Lord Denham

My Lords, I must tell my noble friend that on Report he is out of order to speak again.

Lord Orr-Ewing

But on a point of order—

Lord Weinstock

My Lords, with the leave of the House, it seems to be rather a pity that the House does not avail itself of the generous offer of the noble Lord, Lord Cockfield, to accept these amendments. One of the difficulties which industrialists and other people have in dealing with Acts of Parliament and other fomal documents is to know precisely what the words in them mean. The words as at present drafted in the Bill are not particularly clear. The words proposed in the amendment are much clearer and although we have just had the noble Earl, Lord Halsbury's, definition of the tautologous nature of the "dead corpse", these amendments include the words "effective competition" or "to compete effectively", and I understood that to mean that the Secretary of State will help us to compete effectively with foreign competition. That is something which I welcome.

If the noble Lord is prepared to accept the amendment. I should have thought that the House should be grateful to him and that we should have left it there.

On Question, amendment agreed to.

[Amendment No. 20 not moved.]

Lord Orr-Ewing moved Amendment No. 21:

[Printed earlier: col. 573.]

On Question, amendment agreed to.

9.37 p.m.

Lord Orr-Ewing moved Amendment No. 22: Page 3, line 37, at end insert (";and () to ensure that the available civil radio spectrum is efficiently used.").

The noble Lord said: My Lords, I am sorry we got into a slight confusion over the previous amendment. Out of a total of 136 amendments, 80 are Government amendments, and the last ones were tabled so recently that we have not all had time to do the preparation which we should have liked and which the Bill deserves. As I have spoken to this House for only two minutes in three days of debate so far, being absent for the other three days, I only wonder what would happen if, according to the Labour Party's policy, this House were abolished: because if a guillotine were to fall in another place a great deal of any Bill would go undiscussed and would presumably go straight onto the statute book. I think that by the number of amendments we have dealt with and by the care we have taken over them, we have underlined just how important it is that there is a second Chamber to look at Bills which have been heavily guillotined.

Noble Lords, particularly on this side of the House, will know that in the 1979 manifesto, in the 1983 manifesto and in all policy statements this Government have said that they believe very strongly that the growth points in the economy will come from small—mainly small, anyhow—private sector businesses and particularly, of course, from those in the service industries. It is in the service industries that job growth is quickest and equally effective. In the manufacturing industries it takes rather longer to construct factories, to install the tools, to train the people, to produce the product and the like.

Nowhere is the growth faster than in the electronics industry. Having spent some 50 years in that industry, or associated with it, I am absolutely staggered at the manner in which the breadth and conception of this industry has changed in the last three decades. The Prime Minister underlined this point in a recent speech at Marconi, at Frimley, where she made the point that it was in the electronics industry that growth and jobs will be most quickly created. In the course of this speech I hope to show one of the really substantial bottlenecks which are preventing 47 companies in the private sector from expanding as they deserve and as they could do if they were allowed that freedom.

Last Friday, in answer to a Written Question, the Prime Minister made some very appropriate remarks on this issue. She said: ."We shall continue to transfer industries from the public to the private sector where they will be subject to competition".—[Official Report, Commons, 8/3/84; col. 664.] I am only sorry that in this Telecom Bill the competition will be very strictly controlled, in that, as a result of Government measures, two immense duopolies are being created. The first one is in trunk lines, where 97 per cent. of the market will remain with British Telecom and 3 per cent. will go with Mercury, and the other is in the mobile radio field in the 900 MHz band, where Racal will have approximately 50 per cent. of the market and British Telecom with Securicor will have another 50 per cent. of the market.

That is the scenario in which we are desperately trying to create a reduction in public sector borrowing requirement, and in which, of course, the privatisation in the autumn of British Telecom will play a considerable part. I must say that in our manifesto I did not read much about reducing the public sector borrowing requirement, but I read a great deal about introducing competition, and that is the theme of what I am continuing to preach tonight.

In the private sector there have been 47 mobile radio companies operative. They have provided services for businessmen, doctors, taxis, and all sorts of other manifestations of industrial and civil life. Incidentally, three of these should not be described as local companies. The majority are local, it is true, but three had national coverage long before British Telecom came into this field. The biggest ones were founded some 25 years ago, and it was only 10 years ago that British Telecom decided to compete with their mobile radio.

In several areas the initiative of these small companies created not only communications from cars but also, of course, paging. All that was pioneered by the private sector. These 47 companies provide their service on the VHF band—the very high frequencies, for those who are blind on these points—around 160 MHz. Again for those who are blind, that is two metres. This is a good mobile band and it is reserved on an international basis for such operations.

The existing Radio Regulatory Department has, sadly, had a pretty chequered career. It has changed its name and its Ministry man times, and it has not had a terribly good track record. As I say, the name has changed and of course the people have changed. But since 1921 we, as a country, have had a pretty nasty record about making frequencies available. Of course I am talking about the civil field. In the defence field the matter must be decided by the Cabinet Office. They must look after the overall co-ordination and make sure that our defence services have an adequate number of frequencies to help to defend our country, and to see that our allies are looked after as well.

Defence has tended to be a little greedy. I was once responsible in the Royal Air Force for frequencies, and I know that in those wartime days one held on to every channel one conceivably could because one thought it might help one's service in the long run, and I just wonder whether some of that habit has carried on. It should be pointed out to our defence chiefs that if we do not have a prosperous civil infrastructure to our country with a high manufacturing and high export capability in electronics, they are not going to get any weapons or money at all, because that is where the earning capacity of our country comes from. The DTI must look after all the other fields, but in fact we have a fragmentation of the control mechanisms.

The department concerned is the Radio Regulatory Department, and it was moved from the Home Office in 1983 to the DTI. The DTI has some divided responsibilities in this field. First, there is the Civil Aviation Authority, where they have a responsibility for securing the frequencies. Incidentally, the Radio Regulatory Department is relatively small, with 234 people, so we are not talking in terms of 10,000. The DTI has responsibilities in the civil aviation field; the telecommunications division; it has the Radio Regulatory Department, or the bulk of it, and that is concerned with allocating frequencies; and it has the directorate of radio technology. The Home Office has held on to part of RRD; it looks after broadcasting frequencies for the BBC and all the competitive schemes; it looks after the Directorate of Telecommunications, which means radio frequencies for the prisons. It also looks after the police and the fire service. But, as I said before, the Cabinet looks after the co-ordination. It is my submission that it is time that we had a better system for running our systems. I suggest that Oftel is the natural place in which to put these limited radio responsibilities.

It is always argued, and it has been for 80 years, that no frequency is available. Many of your Lordships will remember "Radio Caroline" which had a tremendous listening public in the 1950s. We were told that there were no medium frequencies available for it and it was putting the sea traffic and aeroplanes at risk. Incidentally, that is exactly the same excuse given in 1921 when the Marconi Company from "2 Emma Tocle (Writtle)", broadcasting experimentally for half an hour a week, was told that it was putting ships and aircraft in the air at risk. It must have been the same excuse, from the same pigeonhole, given in 1951, 30 years later.

Now we have 40 local radio stations with frequencies available for all of them. We listen to two or three in London, we listen in the Chilterns, We listen all over the country. Of course it was perfectly possible all the time. There were frequencies available without interference and they now provide a service, and the same applies to mobile radio. There are frequencies available, but there must be somebody who is responsible and we must not have the responsibility divided among many Ministries.

The facts are that 112 channels on VHF have been allotted to BT, with 8.000 clients. The biggest of the private companies, Air Call, has 17 channels, also with 8,000 clients. That is hardly the fair and free competition we have been debating in recent amendments. All the 47 companies share between them 49 channels, yet they have 20,000 clients, two and a half times as many as BT, and look at the difference there! Is that fair and free competition? Since it clearly is not, who will look after the allocation in the future and make sure that it is better controlled? I suggest that Oftel is the only possible organisation.

In nine months' time, at the end of this year, the whole of Band 3, which is adjacent to the VHF band used for mobile radio, will become available. The Government will put a paper before us. I hope in a few weeks. Five weeks ago it was promised that it would be available in five weeks. The frequencies between 174 and 210 MH3 should he available and I hope many of these will go to mobile radio. Those channels have been cleared because the BBC and the ITA have been occupying them with 405-line black and white television all these years.

Racal never had a mobile service and BT has built up a service in competition with the private sector, but Racal and BT are moving these on to 900 MHz, which is what the licence was given for. That is a cellular radio system. That will again leave many of the frequencies available to be redeployed. One hundred extra channels could create several thousand extra jobs. It would prevent some of these smaller local companies from going bust and having to reduce the number of people and the jobs that go with them.

I wanted to say a word about the amendments.

Noble Lords

Hear, hear!

Lord Orr-Ewing

My Lords, surely it is fair to give the background. If the RRD is perfect, and I have sought to show that it is not, there would be no point in moving it. I have had to show that it has had a very bad track record in order to say that it is worthwhile giving this responsibility to Oftel. Together with the amendment that was called, I should like to consider two other amendments on the same subject. They are Amendments Nos. 94A and 95, which is a Government amendment.

Amendment No. 94A: Clause 50, page 47, line 27, after ("involved") insert— ("including advice for the purpose of ensuring that the administration, allocation, licensing and use of civil radio frequencies are effectively co-ordinated within a single administrative unit or government department").

Amendment No. 95: Page 47, line 30, at end insert— ("() The Director shall, in exercising his functions under Part II or Part III of this Act, have regard to such of the principles applied by the Secretary of State in exercising his licensing powers under section 1 of the said Act of 1949 as may from time to time be notified to the Director by the Secretary of State for the purposes of this subsection.").

I think I have dealt with the content of Amendment No. 94A in my speech. Amendment No. 95 seems to suggest that all will be well: it is not necessary to accept this amendment, they argue (and I shall listen with care to my noble friend developing it) because this is all taken care of under the Wireless Telegraphy Act 1949.

To start with, if it was, I still would not necessarily accept that an Act which was passed 35 years ago in totally different circumstances had to be swallowed hook, line and sinker in 1984. I have a copy of Section 1 of the WT Act of that date. This is referred to in the amendment. I can find in it absolutely no reference to frequencies whatsoever. It comprises three quite simple pages and copies are in the Library so that my noble friends could go and see it. There is no reference at all. I shall listen with interest to what my noble friend says to find out just what he has in mind and why he thinks that his amendment is better than the one I am putting before the House.

I should like to say finally that it has been argued that America does this better than we do. I would endorse that 100 per cent. It is sometimes said that we are more crowded than they are. This is not true. In the areas of Washington, New York City and Boston, a high density eastern seaboard area of America, they have the same problem about frequency; but they have 10 times as many mobile radios in that area—with over 45 million people, they manage with the same frequency bands that we have here.

My noble friend may say in answer that we may be creating a bureaucracy under Oftel if we follow this amendment; but I would make the point that it should he self-regulatory and industry accepts that probably they are the best people to make sure by monitoring these channels that they are properly used. At present, a number of people get channels and they sit on them. We found one not too long ago which was given to a trawler in the Pool of London. The trawler had been sunk three years ago, but the channel was still allocated to it.

Somebody must make sure that valuable national assets are properly utilised because, if they are not utilised, we are forgoing jobs which would otherwise be created. I would say to my noble friend that, for the sake of the jobs, it is important to release the maximum number of channels so that these companies and many other small companies could expand and give worthwhile employment in all parts of our country. If your Lordships vote against this amendment—and I would remind those sitting opposite who feel as keenly as I do about this—your Lordships would be cold shouldering jobs.

Several Lords

Oh!

Lord Orr-Ewing

These are valuable assets and I am sure that they would want them to be efficiently used nationally. I am sure that they want to see the growth of companies. If they do not want to see the growth of companies, then they do not want to see the growth of jobs. It is as important as that. High technology jobs go with small service companies. That is why I move Amendment No. 22.

9.54 p.m.

Lord Peyton of Yeovil

My Lords, my noble friend Lord Orr-Ewing is very knowledgeable in this complex field but at the same time I have to say, with deep regret, that he lost me fairly early on in his argument. But in so far as I may have guessed aright and he is troubled about the confusion of Government departments and their activities in this field, then I very much hope that my noble friends on the Front Bench will agree to take a serious look at that; because that is one of the problems which habitually plague our affairs. Beyond that, I should like to say that I wish so much—and of course that is why I am on my feet—to enjoy the good opinion of my noble friends on the Front Bench. Therefore I would say to them that I very much hope they will reject Amendment No. 22, because, try as I may, I cannot attribute to it any meaning whatsoever.

Lord Mottistone

My Lords, perhaps I may be able to help my noble friend Lord Peyton. My noble friend Lord Orr-Ewing explained, I thought very thoroughly, how important the civil radio spectrum is to industry, which is developing at all times. It is important to telecommunications, not only in the sorts of areas he mentioned, but it is used extensively by British Telecom at the moment for ordinary linkage. The point at issue is that it is absolutely vital that the radio frequencies are allocated fairly in respect of all those seeking to use them so as to develop this great resource for the benefit of all of us in the future.

It is absolutely true that this particular feature of the efficient use of the radio spectrum is the one area which is not covered at the moment by Clause 3(2). This particular feature is one which experience, as my noble friend Lord Orr-Ewing said, has shown to be one which has been very slowly, reluctantly and carefully handled by the people who have been responsible for it for almost the last 100 years.

My noble friend said he had experience when he was responsible for frequencies in the Royal Air Force. I had experience when I was in the Royal Navy some 20 years ago, and it was quite painful to see how carefully the frequencies were held on to. Fortunately, over the years the technology of communications generally has improved quite dramatically, and it has been possible to be much freer with the allocation of frequencies than it was, say, some 20 or 30 years ago.

The people responsible for this, initially in the Post Office and then, as my noble friend said, moved from one department of state to another, have been overcautious in restraining people from having their fair share of the frequencies. So the point at issue is whether it is reasonable to include Amendment No. 22 within the general heading of Clause 3(2); and, because of its particular, peculiar importance, I strongly recommend to your Lordships and to my noble friend Lord Peyton that this is a subject which requires particularly picking out as one in which the Secretary of State and the director will take it as their special duty to see that the available civil radio spectrum is efficiently used. I strongly support this amendment and I trust that my noble friends on the Front Bench will accept it. I also trust that, if they do not, the rest of the House will support it.

Lord McIntosh of Haringey

My Lords, I do not know whether this is a family quarrel or whether anybody else can join in, but I yield (as do other noble Lords, I am sure) to the technical knowledge of the noble Lord, Lord Orr-Ewing. I just wonder whether the wording he has here will achieve his objectives. I say that for two reasons. First, it seems to me that he is throwing in his hand when he uses the word "available", because the Government are simply going to accept the word "available" and use it in a different sense. Secondly, if his complaint is about the Radio Regulatory Division, that is now in the Department of Trade and Industry—

Lord Mottistone

My Lords, the word "available" is there because we are talking about the civil use of the radio spectrum, and there are an enormous number of frequencies which are held by the Ministry of Defence—also, I think, unreasonably. But it has to be there for that reason.

Lord McIntosh of Haringey

My Lords, I was never in doubt about what was in the mind of the noble Lord, Lord Mottistone. What I suspect is that the Government could accept the word and mean something very different by it. That would be my only comment at this stage. The other concern that I have about the wording is that it uses the word "efficiently". I heard a number of noble Lords on the Government Benches attacking the use of the words "efficiently" and "effective". They are not all that different in this sense, as one could check from the Oxford English Dictionary. After a demolition job on the word "effective", the way that they accepted it so readily in Amendment No. 21 took me somewhat by surprise, and I wonder whether they are digging a hole for themselves in the wording of this clause. Like the noble Lord, Lord Peyton, I wonder whether this amendment means anything, and I shall await with interest the Minister's reply.

Lord Weinstock

My Lords, the amendment may or may not be suitable to achieve the result which the mover, the noble Lord. Lord Orr-Ewing, desires. But what is certainly the case is that there has been difficulty in obtaining frequencies for civil use. If the frequencies which could be made available are not made available to those who wish to use them in free and fair competition, the degree of fair competition will be limited in ways which the Bill does not contemplate. I therefore commend to the Government, whether or not they accept the amendment. that this is a matter which is worth their consideration.

Lord Glenarthur

My Lords, the Government of course appreciate the need for efficient use of the radio frequency spectrum, and the need for both the Secretary of State and the director to have due regard for this when exercising their respective functions. Indeed, I suggested in Committee that it might be sensible to make this clear on the face of the Bill, possibly by way of amendment to Clause 3. After very careful consideration, we have concluded that the right place for an amendment to give effect to this point in the way that my noble friend wants is in Clause 50.

The Secretary of State exercises his wireless telegraphy functions under the Wireless Telegraphy Act, as my noble friend explained. He does not do so under the powers proposed in the Bill. The considerations to which he has to have regard include national security, safety of life, international obligations and a great many others, including efficient use of the spectrum. It would be quite wrong to state these in Clause 3 of this Bill. This Bill does not, and could not, properly apply to the exercise of the Secretary of State's functions under the Wireless Telegraphy Act. But so far as the functions of the director are concerned, which may involve wireless telegraphy, these matters are, of course, exercisable under this Bill, and it seems right to ensure that in exercising them the director should, in cases involving the use of radio, have regard to the same considerations as the Secretary of State.

When my noble friend spoke to this amendment, he indicated that he would speak about Amendment No. 94A and about our proposed Amendment No. 95, so I am doing the same as he. In particular, when offering advice to the Secretary of State under Clause 50 the director must be able to take account, on the one hand, of the considerations which are specifically relevant to telecommunications licensing, which are listed in Clause 3, and, on the other hand, to those considerations to which the Secretary of State must have regard when issuing wireless telegraphy licences. They are two separate points.

That is what our proposed amendment. Amendment No. 95, seeks to achieve. Its effect is to require the director, when exercising his functions under Part II or Part III of the Bill, to have regard in appropriate cases to such of the principles applied by the Secretary of State as may from time to time be notified to the director by the Secretary of State. One such principle is the need for efficient use of the spectrum. But it is not the only one, nor can it always be the overriding one. The Government therefore do not feel, on reflection, that it should be singled out for special mention.

My noble friend Lord Orr-Ewing explained how he saw the spectrum being correctly used. May I explain to your Lordships how it is planned and administered and where the functions are at present located. The allocation of frequency bands to various uses is largely determined by international agreements which are the work of international conferences like the 1979 World Administration Radio Conference at the International Telecommunications Union. Since the transfer last June of the Radio Regulatory Division from the Home Office to the Department of Trade and Industry, the responsibility for United Kingdom representation at these international gatherings has been brought together under my right honourable friend the Secretary of State for Trade and Industry, who is also responsible for telecommunications policy.

The line to be taken at such international gatherings and, subject to the outcome of those international negotiations, the allocation of the spectrum in the United Kingdom—that is to say, decisions on which frequencies should he made available to what types of user—are a matter for collective Government decision. Such decisions must rest with Ministers, since they often involve conflicting considerations of national security, safety of life, broadcasting, Government administration, international obligations, avoidance of interference, enforcement, and generally the effective use of the spectrum as well as the commercial needs of users. For example, aeronautical and marine needs have to be weighed against those of mobile and fixed land users. As the spectrum becomes more and more crowded, so the planning and administration become more and more complex if maximum use of the spectrum is to be achieved. This planning and administration is the responsibility of my right honourable friend the Secretary of State for Trade and Industry. He is also responsible for licensing all civil radio uses other than the broadcasting ones to which my noble friend referred. Those are a matter for my right honourable friend the Home Secretary.

The Government of course expect the Director General of Telecommunications to play a very important role in advising my right honourable friend on the exercise of his duties relating particularly to fixed and mobile land services. In particular, the Secretary of State will seek the director's advice on the use of Bands 1 and 3, which have so far been used for 405, line television transmitting but which become available from the beginning of next year for land mobile services. The director will advise on the number, size and variety of service providers to be licensed in those bands so as to achieve effective competition in the provision of the widest range of radio services. He will also advise on the selection of operators.

There is an additional Government amendment, tabled to Part VI of the Bill, Amendment No. 126, which will further enable the director to assist in other ways, such as perhaps receiving and evaluating applications from potential operators on the Secretary of State's behalf and possibly issuing licences on his behalf. However, to ensure that all the necessary considerations are taken into account, the Government consider it essential that the actual assignment of frequencies should remain co-ordinated in one place under the responsibility of my right honourable friend the Secretary of State for Trade and Industry. He must also be responsible for setting the technical specifications governing such matters as power transmissions and the avoidance of interference, since he is responsible for ensuring that no undue interference is caused to countries overseas, national security, safety and life, and a host of other important services as well.

I have tried to explain to my noble friend's satisfaction that with the recent transfer of the Radio Regulatory Division to the Department of Trade and Industry radio regulation is now co-ordinated by a single Secretary of State who is also responsible for telecommunications policy. I have also explained the important role that the Government hope to see the director play. My noble friend's Amendment No. 94A, to which he referred, would imply an involvement of the director in organisational and machinery of government matters, which would be totally inappropriate.

Therefore, in the light of the assurances I have given and with the explanation of the ways in which the various amendments relate—the Government amendment to Clause 50 and the amendment to Part VI—I hope that my noble friend will not press the amendment.

10.11 p.m.

Lord Mottistone

My Lords, before my noble friend sits down, he mentioned Amendment No. 95. When we come to that amendment I hope we will be debating it fully. Can he reassure me on that point?

Lord Glenarthur

Yes, my Lords.

Lord Lloyd of Kilgerran

My Lords, I am not quite sure whether the question put by the noble Lord, Lord Mottistone, was an answer to the one that I was about to put. However, I put my question to the Minister before he sits down, to use the normal formula. I understood that the noble Lord, Lord Orr-Ewing, was saying that Amendment No. 95, with its reference to Section 1 of the 1949 Act, was in no way an answer to his amendment to ensure that the available civil radio spectrum would be sufficiently used. He was in effect saying, as I understood him, that the 1949 Act is irrelevant now to this matter. I should like the Minister to say either yes or no to that position.

Lord Glenarthur

My Lords, with the leave of the House, the wireless telegraphy Acts are long and complex as well as 35 years old. They are another subject. To charge the director with the duties that this amendment seeks to do would be quite inappropriate because the director himself will not be responsible. The whole allocation of radio matters under the terms of the wireless telegraphy Acts embodies a completely different set of circumstances; but as I have said, the director general will have the interests, which I explained when I spoke to the amendment.

Lord Orr-Ewing

My Lords, before the noble Lord sits down, there is a difference between granting a licence and granting a frequency on which to operate it. These come quite separately. One gets a licence to do something and other people allocate a frequency on which to carry it out. There is no mention of frequency in Section 1, to which the amendment refers, of the Wireless Telegraphy Act. There is no mention of the frequency side which could easily be allotted by Oftel and monitored by Oftel.

Lord Glenarthur

My Lords, with the leave of the House once more—and I am not sure how often I can return to the Dispatch Box—the noble Lord is quite right. The Wireless Telegraph Act does not mention frequencies but nor does it mention many of the other considerations which apply and which of course any Secretary of State or responsible person must take into account when trying to allocate frequencies which are a scarce resource and which can conflict, by interference, in the way I have described.

Lord Orr-Ewing

My Lords, subject to what my noble friends in the group will think, I have to say that I am not very contented by the manner in which this matter has been shelved but we are to have a full scale debate later on Amendments Nos. 94 and 95. I only mentioned it because I felt it was not a good excuse. I still think we have the best solution, and I seem to be supported in that by the noble Lord, Lord Weinstock; and there is no other who has a greater knowledge of this subject in this House than he. It seems a shame that the Government have not been more forthcoming since I have for the past year told them that this is one of the key points if the private sector is to survive. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 23 not moved.]

Lord McIntosh of Haringey had given notice of his intention to move Amendment No. 24:

Page 3, line 38, leave out paragraph (h) and insert— ("() to maintain and promote the interest in the United Kingdom and overseas of persons producing telecommunications services of United Kingdom origin in a manner that, within the restraints imposed by international obligations, encourages the competitive abilities and development of the United Kingdom telecommunications manufacturing and service industries and reflects the positions that obtains between overseas network operators and their indigenous suppliers.")

The noble Lord said: My Lords, I appreciate that most of the paragraph that the amendment refers to has already been removed and has been replaced by other wording, and also that the wording in Amendment No. 21, which has been accepted by the Government, is an attempt to achieve the objective which a number of individuals and groups in the House have been striving to achieve. But I believe that the wording in Amendment No. 24 has a number of advantages in terms of its explicitness, honesty and objectivity over some of the other alternatives that have been put forward.

Amendment No. 24 refers to: Telecommunications services of United Kingdom origin",

and: the United Kingdom telecommunications manufacturing and service industries",

rather than to: persons providing telecommunication services or … apparatus in the United Kingdom".

It was the understandable wish of the noble Lord. Lord Weinstock, among others, to see that we were talking about the British telecommunication industry and not simply about those companies, providing telecommunication services or … apparatus within the United Kingdom".

Secondly, it would have been better had the Bill actually said that what we were doing was contained: within the restraints imposed by international obligations".

I assume that the wording of Amendment No. 21 is an attempt to achieve that: but I think it would have been better to have been explicit and open about it.

Thirdly, although no doubt I should have said this on Amendment No. 21,I find it difficult to see how the Government or the director can even use their best efforts to enable anybody to compete effectively outside the United Kingdom. We have been told by the Government before that the provision runs in the United Kingdom and not in other countries, yet here we have two additional paragraphs being accepted which purport to encourage the director to enable things to happen outside our natural boundaries. I find that slightly less than consistent with the arguments which have been put forward.

However, by one means or another we have reached a conclusion on the matter and the proposals have been accepted by the House. On that basis, I think that it would be inappropriate for me to move the amendment.

[Amendment No. 24 not moved.]

Lord Lloyd of Kilgerran moved Amendment No. 25:

Page 3, line 41, at end insert— ("; and () to prevent discrimination between any users on the basis of the geographical location of the installation in respect of charges for the connection of users to their local exchange for voice telephony and the supply and maintenance of telephone lines for that purpose and for the conveyance of voice telephony messages within a local charge area.").

The noble Lord said: My Lords, this is a most important amendment directed to safeguarding the interests of persons living in rural areas. It specifies the particular charges for which geographical uniformity is desirable—in other words, that charges for the specific apparatus and installations to which I shall refer should not be increased merely because of geographical position.

I shall take your Lordship through the text of the amendment. Its substance will be clear from the way in which I shall analyse it. The intention is: to prevent discrimination between any users on the basis of the geographical location of the installation in respect of charges for the connection of users to their local exchange for voice telephony". That is one class— the installation … for the connection of users to their local exchange for voice telephony". The amendment continues: and the supply and maintenance of telephone lines for that purpose". That is another area in which no geographical discrimination should arise. That is, the supply and maintenance of telephone lines for that purpose". Lastly, and for the conveyance of voice telephony messages within a local charge area". There are three specific areas where particular charges should not give rise to discrimination because of their local situation.

The noble the Lord Minister will be aware that this kind of limitation may be introduced in the licence and in fact it does follow the wording of Condition 24 of the draft British Telecom licence. That section of the licence of course sets out the famous RPI-minus-X formula. It is felt from these Benches that it would be more satisfactory to include the wording that I have indicated in this amendment in the Bill rather than to keep it in the licence. I beg to move.

Lord Bruce of Donington

My Lords, we on this side of the House would wish to support this amendment. We do not consider that the explanation given by the noble Lord, Lord Lloyd of Kilgerran, needs any further explanation from us. In fact, we entirely agree with the whole line he has taken in the matter and cannot do better, so we would just support it.

10.22 p.m.

Lord Cockfield

My Lords, I would equally just oppose it. I spoke at great length on this specific subject in detail in moving Amendment No. 10. That amendment was approved by your Lordships by a large majority. There is really nothing for me to add to what I said on that occasion or to add to the verdict of your Lordships.

Lord Lloyd of Kilgerran

My Lords, I understand from what the noble Lord the Minister is saying that he accepts this amendment because I have not so far heard any amendment moved—perhaps it has been spoken to—to protect the interests of people living in rural areas on the lines that I have done. It may be that the noble Lord has made some speeches about this on many occasions: but this is the first amendment that has been moved in this House in relation to the protection of persons in rural areas for the charges which I have set out in my amendment.

Lord Cockfield

My Lords, I started by saying that I would oppose the amendment, and I thought I had made that quite clear. If I did not, perhaps I might repeat it. The second point is that when I spoke on Amendment No. 10, with permission I spoke also at great length on Amendment No. 47 because Amendment No. 10, as I then explained, was a mere paving amendment to make way for Amendment No. 47. Amendment No. 47 does in fact specifically refer to rural areas. The noble Lord's Amendment No. 25 does not, in fact, refer to rural areas at all. It refers to all users; but I had gone much further than the noble Lord, and in Amendment No. 47 I said "including, in particular, persons in rural areas". This was done to make it absolutely clear that I was meeting the point which had been raised by your Lordships at Committee stage.

If the noble Lord insists, I am perfectly prepared to go through all the arguments again, but I felt it would be for your Lordships' convenience, as I had done this once in extenso, and the matter has been taken to a Division and the House reached a verdict on the matter by a substantial majority, if I did not go over the same ground again.

Lord Lloyd of Kilgerran

My Lords, before the noble Lord sits down, I have not yet heard any argument put by the Government in relation to this specific amendment. As the noble Lord said, rural areas are not mentioned in my amendment, but they are mentioned in another amendment to which he referred; namely, Amendment No. 47. I am talking about geographical areas. I apologise if I have misunderstood the noble Lord, but so far he has put forward no specific points as to why my amendment cannot be accepted. I agree that he has spoken at length in relation to Amendment No. 10, and I listened to him very carefully when he mentioned aspects of Amendment No. 47. But the amendment now before the House is a totally different one. It deals with charges associated with Condition 24 of the licence, and I am on record, I hope, as saying once again that so far I have heard no criticism of the amendment of any substance at all.

This is a late hour, and I do not want to become involved in a tangle on procedure with the noble Lord the Minister at this stage. I do not know whether he wishes to make any coment on what I have said before the matter is decided.

Lord Cockfield

My Lords, I shall do so if the noble Lord presses me. He says that there was no reference to geographical location, but indeed there was. The whole point of Amendment No. 10 was to remove, among other things, the words, "geographical location", because that is what gave rise to the difficulty in the case of usage charges. I said specifically that under the present system operated by British Telecom—and it is a very good system; I do not want the noble Lord to think that I am criticising BT—I could put through a telephone call from Westminster to Lambeth and have to pay the same amount that I should have to pay for a telephone call between two other places. It is that kind of discrimination which in fact at present exists, but it is a perfectly proper and legitimate form of discrimination, and I really do not see what objection there is to it.

In fact, the difficulty with the noble Lord's amendment is that it would make the operation of the telecommunications system as it at present exists quite impossible. It would not be possible, for example, to have a uniform telephone charge irrespective of distance, which in fact we have at present over quite large areas. We also have a system under which certain highly used trunk lines—perhaps "trunk" is not the right word—or highly used lines are charged, relatively speaking, at a lower rate compared with lines which are not very intensively used. That form of discrimination is perfectly legitimate. It takes place at present and we should want to see it continue.

We have the same kind of problem over installation charges. The first 100 hours of work are charged at a uniform rate, and this is a discrimination as between those people who can easily be connected to the system, where less than 100 hours' work is required, and those people who are involved where the connection is a difficult one and where, therefore, they get more value for money or for the charge that is imposed upon them.

The effect of the noble Lord's amendment would be to impose a straitjacket which bears no relationship to the perfectly legitimate practices that British Telecom now indulge in and always have indulged in; and one would expect to see BT continue these practices. They are generally regarded as being in the interests of the subscribers. I explained at considerable length why in Amendment No. 47 we were proposing that there should be banned, not all discrimination but undue discrimination, because that was intended to reflect precisely what happens at present. Frankly, I believe that the amendment to which I was speaking when I moved Amendment No. 10 in fact achieves the objective that the noble Lord seeks and that it achieves it in a more effective and more acceptable manner. I hope, on the basis of this much longer explanation, the noble Lord will be prepared to withdraw his amendment.

Lord Lloyd of Kilgerran

My Lords, I am grateful to the noble Lord the Minister for his explanation, and particularly for the assurance he gave in almost the last sentences, when he said that his Amendment No. 47 will achieve more effectively the objective that I have in mind in my amendment. At this late hour I do not wish to become involved in a procedural wrangle with noble Lords on the Government Front Bench. I shall read in Hansard what the noble Lord has said and consider whether it is a matter that should be taken up on Third Reading. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Stoddart of Swindon moved Amendment No. 26:

Page 3, line 41, at end insert— ("() to promote the need to protect the well-being of employees in the telecommunications industry").

The noble Lord said: My Lords, as noble Lords will see, the amendment standing in my name and that of my noble friends Lord Bruce of Donington and Lord McIntosh of Haringey is to the effect that we wish to underline the need to protect the well-being of employees in the telecommunications industry. I make no apology for returning to this subject at this stage of the Bill. I wish to reiterate that, although protection is given, quite properly, in the Bill to many interests, the interests of employees have been singularly neglected. Employees in the industry continue to be concerned about their future terms and conditions, about the level of consultation, and, above all, about the rumours mentioned by the noble Countess, Lady Mar, at Committee stage that up to 65,000 people in British Telecom might lose their jobs. That is a legitimate area for people to have concern.

There is no doubt that people within British Telecom believe that this large number of jobs is under threat. There is nothing in the Bill to reassure them that they will be consulted or that their interests will be properly looked after. Under those circumstances, people working in the industry face an unknown future—and there is bound to be fear of the unknown. That fear is also hound to be exacerbated by the knowledge that the Bill is being promoted and forced through Parliament by a Government who have shown scant regard for the rights and well-being of workers in many industries and, in the case of GCHQ at Cheltenham, have removed those rights without proper consultation and without regard for the individual liberty of the subect. It is little wonder that people working in British Telecom get more, rather than less, concerned as time goes on about what is occurring and what is likely to occur as a result of the Bill when it becomes an Act.

At Committee stage, the noble Lord, Lord Glenarthur, referred to Section 46 of the Companies Act 1980. In our view, this gives little or no real protection to employees in the way that we see the need for such protection. Furthermore, unless Clause 18, which we shall probably reach next Monday, is amended in the way that we suggest, telecommunications workers will be in a worse position than employees in other industries. There is also the question of consultation. In my experience, employers, particularly when there are 3,200,000 people unemployed, are reluctant to consult in any meaningful way. I have had a certain amount of experience of this through my service in the electricity supply industry at a power station. There—as I mentioned during the Committee stage—it was written into the law that there should be consultation on health, welfare, safety and efficiency.

The employers—who in actual fact had previously been private owners of an electricity undertaking—did not mind consulting about health. They certainly did not worry about consulting about welfare; they were quite prepared to provide us with a sports club, bowling green and what have you. They were a little less inclined to consult about safety. However, when we wanted to consult about efficiency there was a word coined which was always thrown at the faces of the workers in the industry whenever they wanted to suggest anything that might be more efficient, or that would make the undertaking work better. If they queried the financial management of the industry, they were always told. "Ah, yes; you might have the right to discuss efficiency, but you know really all these matters are the managment's prerogative." That is simply not good enough.

As I have said from this Dispatch Box before, if we really want British industry and the telecommunications industry to work well, if we really want it to be efficient, and if we want it to be staffed by people who are concerned about that undertaking and who will give their best to that undertaking and to the public generally, then they have to be treated as human beings who count. There is nothing in this Bill which will give them that assurance. That is why we are trying to write in this amendment, which will give them certain rights to decent conditions of service and, above all, the right to be consulted about matters which affect their industry and which, therefore, affect them.

I do not want to repeat the long speeches that have been made from the other side of the House. But before I sit down and in case I am told that there is no precedent for this sort of thing. I want to refer to the Broadcasting Act 1981, which was passed by a Conservative Government and which, under Section 25, lays down conditions about wages, the settlement of disputes and training which shall be followed by the programme companies. So, in that Act of 1981, which was a consolidating Act, a Conservative Government did put conditions upon the IBA to ensure that the operating companies take the interests of their staff into account in many different fields, and also laid down ways in which disputes should be settled. So there is, in fact, a precedent.

I believe this to be a sensible and reasonable amendment to which the Government simply cannot object in any way, but which would reassure the workers in the industry and perhaps make them more ready to accept other aspects of the Bill. I beg to move.

The Countess of Mar

My Lords. I agree with the amendment of the noble Lord, Lord Stoddart. I was talking to one of my ex-colleagues only the other day, and he described to me the exodus from British Telecom as "rats deserting a sinking ship". There are young men of 25 to 29 years who are taking early redundancy. They had hoped, nine or 10 years ago, to make a lifetime's career in British Telecom. I think that noble Lords in the Government will find that a great many men and women have spent a lifetime working for the Post Office and for British Telecom. The uncertainty that is pervading not only British Telecom but the industry generally, with the lack of a definitive statement from the Government about the employment prospects of the employees in the industry, is causing a great deal of concern. I hope that noble Lords in the Government will accept this amendment in the spirit in which it is intended. The Government say that they care for people. Please let us see that.

10.41 p.m.

Lord Glenarthur

My Lords, there is absolutely no difference between the Government and the noble Lord, Lord Stoddart, and the noble Countess, Lady Mar. who has spoken in support of this amendment, on the desirability of promoting the well-being of all those employed throughout the telecommunications industry. The issue between us is how it ought to be done. Although this amendment goes wide, the noble Lord, Lord Stoddart (and he made this perfectly plain), sees it as being addressed in particular to the employees of British Telecom. Once again, that is a matter that we shall be debating on a later amendment.

As regards the relevance of the Broadcasting Act 1981, that is something that I shall happily study, but, as I have said, it is a point to which I shall return on a later amendment. However, the question we have to address now is whether it is desirable or appropriate to add to Clause 3 a duty on the Secretary of State and the director in carrying out their various functions to: promote the need to protect the well-being of employees in the telecommunications industry". There is no doubt that there is a fundamental difference of approach between those of us on this side of the House and the noble Lord opposite. We believe—and he anticipated what I would say—that matters like this are much better handled between employers and employees against the background of the minimum statutory framework and with as little interference as possible by government. Yet the party opposite still cherishes a much more interventionist role in these matters.

The question I ask is how it would be possible to give effect to this amendment without imposing on the Secretary of State and the director a duty positively to interfere in the internal affairs of individual companies. I see no justification whatever for this approach. The general law sets out the limits of government involvement in this area; for example, in relation to terms and conditions of exmployment, health and safety at work, and so on. In addition, I made clear in Committee—and the noble Lord, Lord Stoddart, again referred to this—that Section 46 of the Companies Act provides that, among the matters to which the directors of a company are to have regard in the performance of their functions, are the interests of the company's employees generally as well as the interests of its shareholders. This reinforces my point that it is for employers and employees to deal with this matter, and not for the Secretary of State or the director. I hope that the noble Lord will withdraw his amendment.

Lord Bruce of Donington

My Lords, we on this side of the House are a little sorry that the noble Lord should take this attitude. If the noble Lord looks at the Bill as a whole, he will find that it has been designed specifically to protect, above all, the interests of the future shareholders of British Telecom. They are of some importance. Everybody's interests are being looked after because it says: to promote the interests of consumers, purchasers and other users … to maintain and promote effective competition". Once again, all these things are complete intervention. You will not find that an ordinary company has to function within any of these particular constraints. This Bill has been devised to protect a particular section of the community.

What I am surprised about is that the noble Lord knows perfectly well that, apart from buying the shares that will become available, the shareholders of British Telecom will make no contribution whatever to British Telecom. They will buy its shares. If they are fragmented, nor will they exercise any particular control over its management. But they are going to be looked after, and the balance sheet is going to be recast and restructured to make it more attractive to investors. So far as Her Majesty's Government are concerned, these are the only people who matter.

What the noble Lord does not realise is that no telecommunication system will function without the dedication of people working in it day by day. Not in the Stock Exchange, not in the banks, not in the investment institutions, but in the actual installations that they make; in the installations that they maintain and repair; and in the other general services that they provide. They are the people of real importance.

My noble friend Lord Stoddart of Swindon made it clear that it was not merely a question of welfare within the concept that the noble Lord understands that, if indeed he understands it. It is treating people as though they matter, and that is what is meant by wellbeing. Well-being is not merely seeing that the workplace is properly ventilated; that it is properly heated: that there are proper conditions of work on the bench. It is making people feel that they matter. This is the larger sense of well-being. This is why my noble friend correctly brought in the whole question of consultation which makes the noble Lord so dismayed.

These are matters that are far better left to the management itself. If all these things are far better left to the management, it is far better to leave British Telecom alone altogether rather than bring it within a Bill of this kind. If he is going to intervene, as he is intervening with this Bill, in a living organisation composed of living individuals who are giving this country very good service at the moment—

Lord Mottistone

Not good enough.

Lord Bruce of Donington

"Tainted", my Lords, as the noble Lord, Lord Mottistone, was kind enough to put it at the Committee stage, without withdrawal. If this is going to be the noble Lord's attitude towards the employees of British Telecom, then I warn the noble Lord that both he and his government are riding for disaster. You can drive people so far, but, if you try to drive them too far, beware of what will happen: the British people are known to be long-suffering, to be tolerant, but if they try to push them over the edge the Government will reap the whirlwind.

I should have thought that a Government composed of people who really and truly wished to look after the interests of the whole of the nation and not merely one section—and in particular the monied section—of it would have taken on board the simple responsibility of at any rate putting in as a pious aim, if nothing more than that, that those who do the real work to run the system should have their well-being studied by the director and by the Secretary of State as a responsibility under the Act.

10.48 p.m.

On Question, Whether the said amendment (No. 26) shall be agreed to?

Their Lordships divided: Contents, 19; Not-Contents, 44.

DIVISION NO. 5
CONTENTS
Airedale, L.	Lloyd of Kilgerran, L.
Attlee, E.	McIntosh of Haringey, L.
Bishopston, L. [Teller.]	Mar, C.
Bruce of Donington, L.	Ponsonby of Shulbrede, L. [Teller.]
Dean of Beswick, L.	Simon, V.
Halsbury, E.	Spens, L.
Hooson, L.	Stoddart of Swindon, L.
John-Mackie, L.	Tordoff, L.
Kilmarnock, L.	Underhill, L.
Lawrence, L.

NOT-CONTENTS
Airey of Abingdon, B.	Mackay of Clashfern, L.
Avon, E.	Marley, L.
Bauer, L.	Marshall of Leeds, L.
Belstead, L.	Maude of Stratford-upon-Avon, L.
Brabazon of Tara, L.
Bridgeman, V.	Morris, L.
Cockfield, L.	Mottistone, L.
Coleraine, L.	Murton of Lindisfarne, L.
Craigmyle, L.	Norfolk, D.
Denham, L. [Teller.]	Orr-Ewing, L.
Elton, L.	Peyton of Yeovil, L.
Glanusk, L.	Rankeillour, L.
Glenarthur, L.	Renton, L.
Gray of Contin, L.	Saltoun, Ly.
Hailsham of Saint Marylebone, L.	Sandford, L.
	Skelmersdale, L.
Home of the Hirsel, L.	Swansea, L.
Hornsby-Smith, B.	Swinton, E. [Teller.]
Liverpool, E.	Trefgarne, L.
Long, V.	Trenchard, V.
Lucas of Chilworth, L.	Trumpington, B.
Lyell, L.	Vaux of Harrowden, L.
McAlpine of West Green, L.	Whitelaw, V.

Resolved in the negative, and amendment disagreed to accordingly.

10.56 p.m.

Lord Lloyd of Kilgerran moved Amendment No. 26A:

Page 3, line 41, at end insert— ("() to ensure that the charges for the installation and maintenance of apparatus for voice telephony, in respect of premises connected by a single line, and for the conveyance of voice telephony messages within a local charge area, in respect of premises connected by a single line and of public call boxes, are not increased more often than annually and then only by a percentage not exceeding the percentage increase in the Retail Price Index since the last increase in such charges.").

The noble Lord said: My Lords, this is a probing amendment which I can introduce to your Lordships quite shortly. In the monopoly situation which arises as a result of this Bill, the intention of the amendment is to ensure that the charges for installation and maintenance of apparatus for voice telephony in certain circumstances set out in the amendment are not increased more often than annually, and then only by a percentage not exceeding the percentage increase in the retail price index since the last increase in such charges.

The noble Lord the Minister will no doubt recognise that this is also an attempt to put into the Bill what is intended to be included in the RPI minus X formula, to be included in the licence. In order to save time this evening and to avoid complexity, I have assumed for the purpose of my submission that X in the formula will be zero.

I have not recited in this brief speech the particular aspects in relation to which charges should not be increased, as the amendment states. I beg to move.

Lord Glenarthur

My Lords, the noble Lord moved his amendment very shortly and very swiftly. I am bound to say that I was expecting to reply at rather greater length, but I shall avoid the temptation to do so. I have to say to the noble Lord that his amendment is inappropriate, I am afraid, and undesirable, but I appreciate the efforts he has made to draft his amendment carefully so as to remove some of the main problems associated with the earlier amendment tabled at Committee, which addressed the same subject.

I must make it clear that the essential problem remains. We do not believe that it is desirable to have such a limitation on price increases embodied in statute. What this will mean is that for as long as this Bill, when it becomes an Act, remains in force, anyone, public or private operator alike, who provides voice telephony services within the description in this amendment will never be able to increase prices of any individual service by more than the rate of inflation. The same would apply to any private firm which installed or maintained apparatus for voice telephony. This would have serious implications for any new firm entering into the market. Would it, for example, be allowed to charge any prices where it had not made any charge before? There would also be implications for the more complex apparatus now coming on to the market. This will take more man hours to install, but the amendment would stop firms charging more for the increased work they do.

I could go on at length to give other reasons as to why this amendment is unacceptable, but in saying what I have said I hope I have made it as clear as I need that we cannot accept this amendment. I hope that the noble Lord will withdraw it.

Lord Bruce of Donington

My Lords, I am very surprised that the noble Lord should have taken this attitude. One of the earlier statements made by the noble Lord's right honourable friend the Secretary of State was to the effect that the RPI minus X factor was one of the most commendable parts of the whole process of privatisation. It was intended to be a reassurance.

The noble Lord will recall that when the Bill was being discussed in the country at large, when the whole intention to privatise British Telecom was first bruited, there was wide public doubt as to whether this would do anything other than increase charges to the consumer. The noble Lord's right honourable friend sought to allay these fears by making the most emphatic statement in a letter which he wrote to the Economist, to which I can refer the noble Lord if he wishes. It was a quite unequivocal statement, made by letter, to the effect that the RPI minus X factor would be in operation.

What the noble Lord has said this evening is not only that it is inappropriate—the term "inappropriate", of course, is always used by governments in regard to any proposal they find inconvenient because "inappropriate" is a far better term—but that it is undesirable. Is it undesirable that the pledges given by his right honourable friend should not be carried out? How can it be undesirable, the DTI having given the undertaking that this would be the case, for this to be incorporated into the Bill? It only goes to show that for all the talk and the bluff that has gone on, the Government do not believe in fact in what they themselves have promised. They know perfectly well that privatisation will result in increased prices to the consumer unless they are restrained. And so the promises that were given are so much eyewash, so much complete eyewash.

The noble Lord may think he can ride away with it on a short explanation. I have not taken up very much of your Lordships' time in contributing to this debate, but I deplore the whole attitude of the Government towards this very reasonable proposal, which, after all, assumes the X factor to be nil—which I am bound to say is as far as the noble Lord, Lord Lloyd of Kilgerran, could go. If the Government will not accept that, what asurance can they give to the public that the privatisation of British Telecom will not result in increased charges to the consumer in respect of these various services that are specified in the amendment? I do not think the noble Lord can give any such assurances, and therefore the promises and undertakings by the Government in regard to this are so much eyewash, and the Government's attitude towards this amendment shows it.

Lord Peyton of Yeovil

My Lords, I hesitate to address your Lordships' House at this hour of night but the word "eyewash" brought me to my feet—coming, as it does, from the noble Lord, Lord Bruce of Donington. I know of no-one who is a greater specialist in the art.

Lord Bruce of Donington

My Lords, I am grateful. The noble Lord compliments me.

Noble Lords

Order!

Lord Lloyd of Kilgerran

My Lords, I suppose it is my fault, really, in trying to save time, that I led the noble Lord the Minister into something of a trap, so that he therefore felt that he should abbreviate his reply much more extensively than he otherwise would have done. At this late hour I do not want to bring the noble Lord the Minister to his feet again. I will consider what little he has so far told the House in reply to this amendment.

It is a little upsetting that no assurances have been given, and that the fears of people with apparatus of this kind have in no way been allayed, so I reserve the right to raise this matter at a later stage of the consideration of this Bill. It is with regret, therefore, and with some reluctance, that I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

11.5 p.m.

Lord Spens moved manuscript Amendment No. 26B: Page 4, leave out lines 1 and 2.

The noble Lord said: My Lords, I apologise for having put down this manuscript amendment, but it covers a point which is worrying a number of members of our group. The effect of the first two lines on page 4 is to exclude subsections (1) and (2) of Clause 3 from the functions assigned to the Director of Oftel, in so far as they relate to competition which is covered under Clause 49. We believe that the prevention of anti-competitive practices is a vital part of the duties of the Director of Oftel. I regret to state that they are happening at present in certain respects and we have no reason to believe that, with the passing of this legislation, there will be any real lessening of those practices.

Clause 49 transfers to the Director of Oftel the functions under the Competition Act 1980 which he will exercise concurrently with the Director General of Fair Trading, but nowhere in the Competition Act 1980 is there any mention of the word "duty". The nearest that I have been able to get to it, in looking at the Act, is in Section 3 which states, "the Director may"; and that, to my mind, is not a duty. If these words remain in Clause 3, the Director of Oftel will specifically not have any duty to deal with anticompetitive practices, because there is no duty given to him under Clause 49. Therefore, I should like to see these words deleted, so that the Director of Oftel will have the duties which everyone thinks he has, particularly in relation to Clause 3(2)(b) which we debated earlier, to maintain and promote effective competition between persons engaged in commercial activities". There is no duty now on the Director of Oftel to do that, unless these words are taken out of the Bill. I beg to move.

Lord Glenarthur

My Lords, the purpose of the noble Lord's amendment is to ensure that the director general's powers exercisable under Clause 49 are subject to the duties set out in Clause 3. I believe that this proposal is founded upon a misunderstanding of the structure of the Bill. Clause 49 makes provision to enable the Director General of Telecommunications to exercise certain functions of the Director General of Fair Trading, under the fair trading and competition legislation, in the telecommunications field. It is important to appreciate that Clause 49 provides for these powers under that legislation to be exercised in different ways according to the subject matter. Subsection (1) requires the Director General of Oftel to exercise the functions of the Director General of Fair Trading under Part III of the Fair Trading Act. Subsection (2) and subsection (3), on the other hand, confer a concurrent jurisdiction on both directors general in relation to monopoly situations and anticompetitive practices.

I hope that the noble Lord will appreciate that whichever director is exercising these functions in this field—and the choice as to which it should be will no doubt depend on convenience in each case—the same powers must be exercisable by reference to the same criteria. The basic idea of the clause is to ensure that as a long stop, so to speak, telecommunications operators and others with telecommunications related businesses are to be subject to general competition law. It is obviously desirable that if, in the main areas of competition law, Oftel has useful relevant knowledge and experience it should carry on the function of the OFT.

In the light of that explanation, I hope that it will be apparent to your Lordships why it would be wholly inappropriate to subject the Director General of Oftel to the Clause 3 duties in exercising these powers which are conferred by different Acts and which are complete in themselves. The considerations by reference to which the Fair Trading Act and Competition Act powers are to be exercised are set out in Section 84 of the Fair Trading Act, which defines the public interest for the purposes of merger and monopoly references, and in Section 2 of the Competition Act, which defines an anti-competitive practice for the purposes of that Act.

Much that is in Clause 3 of this Bill duplicates the considerations set out in these two Acts but much is inappropriate, being designed with a view to the licensing system. It would in any case be quite in-appropriate to attempt to overlay the fair trading legislation in this way. It would also lead to radical distortions, according to which director general was exercising the relevant powers. If I may put it as simply as this, you cannot have two policemen operating different laws in the same town.

I hope that it is clear from these remarks why I must advise your Lordships—while I fully understand the wish of the noble Lord, Lord Spens, to improve the Bill—not to accept the amendment. If I could put my main point again in a nutshell, you cannot have a procedure where, if the Director General of Telecommunications is seized of a case, but not if the Office of Fair Trading is, he is subject to one set of duties at his stage of the proceedings but once it gets into the hands of the Monopolies and Mergers Commission, and after that the Secretary of State, those duties do not apply but a wholly different set of statutory objectives become relevant. After that explanation of a fairly tortuous piece of legislation, I hope the noble Lord will be able to withdraw his amendment.

Lord Spens

My Lords, I am not at all happy with that explanation. I have said that there are no duties under the Competition Act 1980; yet the noble Lord the Minister began to talk about duties under that Act. There are functions, yes, but there are no duties. I want to see imposed upon the Director General of Oftel the duty to take positive action against anti-competitive practices. At this late hour I do not propose to divide the House; but I propose to have another look at whether or not I can bring back at a later stage of the Bill the point that I am making. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

11.15 p.m.

Lord Mackay of Clashfern moved Amendment No. 27: Page 4, line 4, after ("10(3)") insert ("or (7A) or (Power to give assistance in relation to certain proceedings)").

The noble and learned said: This amendment obliges me to refer to a whole sequence of related amendments to Clauses 10 and 16 and to the new clause which we propose to insert after Clause 50. The amendments concerned are Amendments Nos. 51, 53 to 59, 74 and 96.

Amendment No. 51: Clause 10, page 12, line 1, leave out from beginning to ("in") in line 2 and insert ("subject to such exceptions and conditions as may be included").

Amendment No. 53: Clause 10, page 12, line 16, leave out ("(5) Any condition falling within subsection (4) above") and insert ("and any condition falling within this subsection").

Amendment No. 54: Clause 10, page 12, line 27, leave out from ("of") to end of line 29 and insert ("the exceptions and conditions subject to which he proposes that the code should have effect as so applied").

Amendment No. 55: Clause 10, page 12, line 32, leave out ("to specify") and insert ("that the code as so applied should have effect subject to").

Amendment No. 56: Clause 10, page 13, line 5, leave out from ("of") to ("and") in line 7 and insert ("the exceptions and conditions subject to which the code has effect as so applied").

Amendment No. 57: Clause 10, page 13, leave out lines 10 and 11 and insert ("the code as so applied has effect subject to those exceptions and conditions").

Amendment No. 58: Clause 10, page 13, line 11, at end insert— ("(7A) Where the Secretary of State has granted a licence under section 7 above which applies the telecommunications code to a particular person in relation to any part or locality of the United Kingdom, he may—

1. (a) with the consent of that person; or
2. (b) if it appears to him requisite or expedient to do so for the purpose mentioned in subsection (4) above,

modify the exceptions and conditions subject to which the code has effect as so applied.

(7B) Before modifying the exceptions and conditions subject to which the telecommunications code has effect as applied to any person in relation to any part or locality of the United Kingdom by a licence granted under section 7 above, the Secretary of State shall publish a notice—

1. (a) stating that he proposes to make the modifications and setting out their effect;
2. (b) stating the reasons why he proposes to make the modifications; and
3. (c) specifying the time (not being less than 28 days from the date of publication of the notice) within which representations or objections with respect to the proposed modifications may be made,

and shall reconsider his proposals in the light of any representations or objections which are duly made and not withdrawn.

(7C) If the Secretary of State, on reconsidering in pursuance of subsection (7B) above any proposals specified in a notice under that subsection, modifies the exceptions and conditions subject to which the telecommunications code has effect as applied to any person in relation to any part or locality of the United Kingdom by a licence granted under section 7 above, he shall on making the modifications publish a further notice—

1. (a) stating that the modifications have been made and setting out their effect; and
2. (b) stating the reasons why the modifications have been made.").

Amendment No. 59: Clause 10, page 13, line 12, leave out ("subsection (6) or (7) above") and insert ("this section").

Amendment No. 74: Clause 16, page 20, line 44, at end insert— ("(8) References in this section to conditions of a licence do not include references to conditions relating to the application of the telecommunications code.").

Amendment No. 96: After Clause 50, insert the following new clause: Power to give assistance in relation to certain proceedings. (" .—(1) Where, in relation to any proceedings or prospective proceedings to which this section applies, any actual or prospective party to the proceedings (other than the telecommunications operator) applies to the Director for assistance under this section, the Director may grant the application if he thinks fit to do so—

1. (a) on the ground that the case raises a question of principle; or
2. (b) on the ground that it is unreasonable having regard to the complexity of the case or to any other matter, to expect the applicant to deal with the case without any assistance under this section; or
3. (c) by reason of any other special consideration.

(2) This section applies to any proceedings in which there falls to be determined any question arising under or in connection with—

1. (a) the telecommunications code as applied to a telecommunications operator in relation to any part or locality of the United Kingdom; or
2. (b) any exception or condition subject to which that code has effect as so applied.

(3) Assistance by the Director under this section may include—

1. (a) giving advice;
2. (b) procuring or attempting to procure the settlement of the matter in dispute;
3. (c) arranging for the giving of advice or assistance by a solicitor or counsel;
4. (d) arranging for representation by a solicitor or counsel, including such assistance a is usually given by a solicitor or counsel in the steps preliminary or incidental to any proceedings, or in arriving at or giving effect to a compromise to avoid or bring to an end any proceedings;
5. (e) any other form of assistance which the Director may consider appropriate,

but paragraph (d) above shall not affect the law and practice regulating the descriptions of persons who may appear in, conduct, defend, and address the court in, any proceedings. (4) In so far as expenses are incurred by the Director in providing the applicant with assistance under this section, the recovery of those expenses (as taxed or assessed in such manner as may be prescribed by rules of court) shall constitute a first charge for the benefit of the Director—

1. (a) on any costs or expenses which (whether by virtue of a judgment or order of a court or an agreement or otherwise) are payable to the applicant by any other person in respect of the matter in connection with which the assistance is given; and
2. (b) so far as relates to any costs or expenses, on his rights under any compromise or settlement arrived at in connection with that matter to avoid or bring to an end any proceedings.

(5) A charge conferred by subsection (4) above is subject to—

1. (a) any charge under the Legal Aid Act 1974;
2. (b) any charge or obligation for payment in priority to other debts under the Legal Aid and Advice (Scotland) Acts 1967 and 1972; or
3. (c) any charge under the Legal Aid. Advice and Assistance (Northern Ireland) Order 1981,

and is subject to any provision in any of those Acts or that Order for payment of any sum into the legal aid fund. (6) Any expenses incurred by the Director in providing assistance under this section shall be paid out of money provided by Parliament; and any sums received by the Director by virtue of any charge conferred by subsection (4) above shall be paid into the Consolidated Fund.")

My explanation falls into two parts, but there is an underlying theme, which is that the Government recognise the concern expressed during the Committee stage of the Bill that there should be adequate safeguards to ensure that the environment is protected and that operators do not abuse the privilege that will he conferred on some of them by being able to install their apparatus under the provisions of the telecommunications code. As your Lordships know, our view is that these environmental protections are best applied through exceptions and conditions incorporated in the licences which apply the code. Part 5 of the draft British Telecom licence gives some idea of the kind of conditions that will be included in licences.

Unfortunately, however, as the Bill is currently drafted, the necessary flexibility only exists when the initial licence conditions are being set. When that is done, Clause 10 requires the Secretary of State to publish a notice of his proposals to apply the code to an individual operator and to reconsider his proposals in the light of any representations or objections made. But once the licence is granted no modification is possible. Clause 10 was not drafted in this way because of any oversight. Rather it was thought that the licence modification procedures devised in relation to what I shall call the commercial licence conditions were inappropriate for dealing with the environmental matters which would be of concern in connection with the code. We took the view that these matters transcended the public interest in telecommunications and that decisions on them should be left with the Secretary of State. It was also felt that the Monopolies and Mergers Commission, with its commercial and business orientation, was not an appropriate body to make recommendations about the operation of the telecommunications code and whether associated licence conditions should be modified.

We still believe that it would be unacceptable to empower the director to initiate changes in code-related licence conditions or to give a role to the Monopolies and Mergers Commission. But at the same time we have also concluded that if our approach of safeguarding the environment is to carry complete conviction, there must be a power to modify the initial licence conditions, not least to ensure that any restrictions or qualifications can be strengthened should experience indicate that in their original form they are inadequate. On that basis I shall seek the approval of the House for Amendment No. 58, which seeks to give the Secretary of State a power to modify the exceptions and conditions subject to which the code was applied. He would not have an unfettered discretion to make modifications. He would be able to make modifications where he obtained the agreement of the licensee or, even if such agreement was not forthcoming, where he was convinced that the modification was necessary in order to protect the physical environment, or to ensure that there was no greater damage to streets than was absolutely necessary, or that funds were available for meeting any liabilities which might arise from the exercise of code powers. In other words, he would be guided by the objectives already set out in Clause 10(4). I hope I have said enough to convince your Lordships that this is a desirable amendment.

I should like now to turn to the other amendments I mentioned at the opening of my remarks. The substantive ones are Amendments Nos. 74 and 96. The effect of these amendments is easily perceived. The first is designed to remove telecommunications code conditions and exceptions from the ambit of the director's powers of enforcement through the making of orders. The second seeks to give the director a new power in certain circumstances to assist any person contemplating or taking action against an operator in connection with an alleged failure to comply with a code-related exception or condition either by giving advice or by attempting to get the dispute settled or, if that fails, by arranging legal help.

So far as the present amendment is concerned, as I have said, the House has already accepted the principle that the Clause 3 duties should not apply in relation to matters affecting the application of the telecommunications code. That appears from the words that we were considering just a short while ago. This is because it would not be appropriate to subject the protection of the environment to duties which, for example, refer to the promotion of competition. The environment is of crucial importance and needs to be considered on its own merits. That is the explanation for this amendment and the others to which I have spoken. I beg to move.

Lord McIntosh of Haringey

My Lords, these are extremely complex matters. I am grateful to the noble and learned Lord for his explanation not only of this amendment but of the consequential amendments. I confess that before his speech I had not fully appreciated the full complexity of the relationships among the different clauses and amendments and indeed the telecommunications code. As your Lordships know, there are a considerable number of amendments to Schedule 2 in the names of myself and my noble friends which are concerned with the adequacy of the code to protect the physical environment. I have a suspicion that the noble and learned Lord is going three-quarters of the way round the house in order to come somewhere near the place that we want to be.

In the absence of complete certainty and in the presence of his undoubted, and several times repeated, concern for the environment, I think it is better that we do not challenge the amendment at this time but read very carefully what he said and continue to press the amendments that we have down to improve the explicitness of the code in the protection of the environment.

Lord Lloyd of Kilgerran

My Lords, I also find these amendments complicated. I do not want to delay the House any longer, but I should like to a ask the noble and learned Lord a question in regard to Amendment No. 96. It is a simple question. The amendment proposes to give power to the director to give assistance in relation to certain proceedings. Can the noble and learned Lord say whether the ordinary terms of the Legal Aid Acts will apply in regard to the proceedings contemplated in the amendment?

Lord Mackay of Clashfern

My Lords, as I would understand it, the need for the director's help and assistance would arise possibly in a situation where the person who might otherwise seek to enforce the condition was not eligible for legal aid. This is really an additional method of assisting a person over and above the ordinary provisions of legal aid, as I would see it.

Lord Lloyd of Kilgerran

My Lords, I am grateful to the noble and learned Lord.

On Question, amendment agreed to.

11.22 p.m.

Lord Lyell moved Amendment No. 28:

[Printed earlier: col. 561.]

The noble Lord said: My lords, this is part of the group of amendments to which I spoke when I moved Amendment No. 14. I beg to move.

On Question, amendment agreed to.

Clause 4 [Meaning of "telecommunication system" and related expressions]:

Lord Mackay of Clashfern moved Amendment No. 29:

Page 4, leave out line 21 to 25 and insert— ("(1A) For the purposes of this Act telecommunication apparatus which is situated in the United Kingdom and—

1. (a) is connected to but not comprised in a telecommunication system; or
2. (b) is connected to and comprised in a telecommunication system which extends beyond the United Kingdom,

shall be regarded as a telecommunication system and any person who controls the apparatus shall be regarded as running the system.").

The noble and learned Lord said: My Lords, together with this I should like to take Amendments Nos. 31, 35, 36, 128 and 130.

Amendment No. 31: Page 4, line 33, leave out from ("use") to end of line 36 and insert—

1. ("(a) in transmitting or receiving anything falling within paragraphs (a) to (d) of subsection (1) above which is to be or has been conveyed or switched by means of a telecommunication system; or
2. (b) in conveying or switching, for the purposes of such a system, anything falling within those paragraphs;").

Amendment No. 35: Page 5, line 9, leave out ("has been or is to be") and insert ("is to be or has been").

Amendment No. 36: Page 5, line 13, leave out from ("use") to ("energy") in line 16 and insert—

1. ("(a) in transmitting or receiving anything falling within paragraphs (a) to (d) of subsection (1) above which is to be or has been conveyed or switched by means of that system; or
2. (b) in conveying or switching, for the purposes of that system, anything falling within those paragraphs;

and references in this subsection to anything falling within those paragraphs shall include references to").

Amendment No. 128: Clause 99, page 89, leave out line 11 and insert ("subsection (1) of section 4 above (read with subsection (1A) of that section)").

Amendment No. 130: Schedule 4, page 126, line 19, leave out from ("by") to end of line 20 and insert ("subsection (1) of section 4 above (read with subsection (1A) of that section)").

Your Lordships may remember that there were some criticisms made of Clause 4 at the Committee stage. One or two noble Lords—and your Lordships will be very surprised at this—expressed some difficulty in understanding Clause 4. To try to assist, we have seen whether we can change the system a little. It looks as though the complications of Clause 4(1) will fall away if we treat as separate telecommunications systems in their own right any items of apparatus which are connected to any one or more telecommunications systems but are not comprised within any of them. This approach would also deal with the problem which we think will cause increasing regulatory difficulties in future when single items of apparatus become more complex. As technology develops, more and more functions are being included within single telephone instruments, some of which now include video screens, storage facilities, memory devices and switching functions. It is hard to say that such items of apparatus are not systems in their own right. On consideration, we think it would be best not to rely on what may be a fundamentally blurred distinction between what constitutes apparatus and what constitutes a system.

The first part of Amendment No. 29 therefore says that telecommunication apparatus in the United Kingdom which is connected to a telecommunications system without actually being comprised within a system is to be treated as a telecommunication system in its own right. It will need to be licensed accordingly. This is simpler to understand and we think that the existing general licence granted by BT in respect of apparatus connected to the public networks already makes this assumption.

This arrangement does however not deal adequately with apparatus connected by wireless telegraphy to systems extending beyond the United Kingdom. Such apparatus as a satellite ground station is connected by wireless telegraphy to an orbital satellite and comprised in a system which extends beyond the United Kingdom. Similarly, a radio telephone transceiver could be connected by wireless telegraphy to a radio telephone system in France or Ireland. In both cases the apparatus might not be connected to any other apparatus in the United Kingdom. The result is that individuals would be able to control such items of apparatus and to connect them to systems outside the United Kingdom without any licensing controls applying. Such controls are, however, needed for international relations reasons and to protect British operators whose commercial operations could be undercut. We have decided therefore that apparatus which is comprised in a system which extends beyond the United Kingdom should be treated as if it was a telecommunication system in its own right and therefore subject to licensing.

Amendments Nos. 31 and 36 tidy up an ambiguity. The definitions in Clause 4(2) and (4) of "telecommunication apparatus" and of the circumstances when such apparatus is "connected" to a system assume that they are used for transmitting, conveying, switching or receiving messages for the purposes of a telecommunications system. We have considered this question in the light of discussions earlier and counsel has advised that technically apparatus which transmits or receives may not transmit or receive for the purposes of a system; it merely transmits messages which are to be conveyed by a system or receives messages which have been conveyed by a system. As amended, Clause 4(2) and (4) will apply to apparatus which is used or connected for the use to transmit or receive messages whether or not the transmission or reception is for the purposes of a telecommunication system.

Amendment No. 35 makes subsection (3) consistent with subsections (2) and (4). Amendments Nos. 128 and 130 are purely consequential. I beg to move.

On Question, amendment agreed to.

Lord Mackay of Clashfern moved Amendment No. 30: Page 4, line 29, leave out from ("services") to ("apparatus") in line 30 and insert (", the supply or export of telecommunication apparatus and the production or acquisition for supply or export of such").

The noble and learned Lord said: My Lords, this is a small but important amendment to remedy a defect that has recently been spotted in the definition of "commercial activities connected with telecommunications" in Clause 4(2). As drafted, it does not include the acquisition of apparatus for supply, either in the United Kingdom or abroad. This is, of course, an activity that is an important part of British Telecom's operations. It should therefore be covered in the definition of "commercial activities" in Clause 4 and this amendment does just that. I beg to move.

On Question, amendment agreed to.

Lord Mackay of Clashfern moved Amendment No. 31

[Printed above.]

The noble and learned Lord said: My Lords, I have already spoken to this amendment, and I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment Nos. 32 to 34:

[Printed earlier: col. 561.]

The noble Lord said: My Lords, Amendments Nos. 32, 33 and 34 were all spoken to by my noble friend Lord Lyell when he spoke to Amendment No. 14. I beg to move these amendments en bloc.

On Question, amendments agreed to.

Lord Mackay of Clashfern moved Amendment No. 35:

[Printed above.]

The noble and learned Lord said: My Lords, I have already spoken to this amendment, and I beg to move.

On Question. amendment agreed to.

Lord Mackay of Clashfern moved Amendment No. 36:

[Printed above.]

The noble and learned Lord said: My Lords, I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Clause 6 [Exceptions to section 5]:

Lord Glenarthur moved Amendment No. 37:

Page 6, leave out line 29 to 32 and insert ("in the case of which every conveyance made by it is either—

1. (a) a transmission, by wireless telegraphy, from a transmitting station for general reception of sounds, visual images or such signals as are mentioned in paragraph (c) of section 4(1) above; or
2. (b) a conveyance within a single set of premises of sounds, visual images or such signals which are to be or have been so transmitted.")

The noble Lord said: My Lords, perhaps with this amendment it would be convenient also to take Amendment No. 38. Amendment No. 38: Page 7, line 14, at end insert ("(whether run by a broadcasting authority or by any other person)") Both these amendments are technical amendments to the exemptions from licensing in Clause 6. Amendment No. 37 concerns the exemption from licensing for the broadcasting authorities. What we wish to do is to ensure that they are exempt from licensing when they are engaged in activities which are strictly broadcasting, but are not exempt from licensing in respect of other activities. As drafted, the exemption is defective in that in some circumstances it appears too wide and in others too narrow.

In particular, it is too wide because it covers some activities which we do not wish to exempt; for example, where the broadcasters run links from their studios to their transmitters, and from outside broadcast locations back to their studios. In addition, the exemption is too narrow because there is a doubt whether it covers, as we think it should, the relay stations run by the broadcasting authorities. These are stations which boost broadcast signals by receiving them off-air and then rebroadcast them.

Amendment No. 37 deals with both these problems. The new paragraph (a) provides an exemption from licensing both for transmissions made from the originating broadcasting station and for those which are made from broadcast relay stations which transmit for general reception. The new paragraph (b) provides an exemption for any conveyance within the premises on which any of these stations (that is, the originating broadcasting station and the relay station) are situated.

Amendment No. 38 to the tailpiece of subsection (2) is purely for clarification and is designed to aid understanding of the Bill. It has always been the intention that a radio or television set should be exempt from licensing when it is connected normally by wireless telegraphy, to either a United Kingdom broadcasting station or a foreign broadcasting station. However, this provision has been read by many to imply that connection of a radio set to a foreign station was not exempt. Amendment No. 38 removes that implication and makes the intention clear. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 38:

[Printed above.]

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 39: Page 7, line 16, leave out ("purpose") and insert ("purposes").

The noble Lord said: My Lords, this amendment merely corrects a typographical error. I beg to move.

On Question, amendment agreed to.

Lord Mottistone moved Amendment No. 39A: Page 7, line 18, leave out from ("system") to end of line 19.

The noble Lord said: My Lords, I should like to suggest that with Amendment No. 39A we take also Amendment No. 39B. Amendment No. 39B: Page 7, line 20, leave out subsection (4). These are probing amendments, which result from the answers given to a question from my noble friend Lord Boyd-Carpenter by my noble friend Lord Cockfield following this particular matter being raised at the Committee stage. The reply given by my noble friend Lord Cockfield is most unsatisfactory and adds nothing, or very little, to what was said by my honourable friend Mr. Kenneth Baker in his statement on 17th November last.

Perhaps I may make a few quick remarks about what was said and why we think that it is inadequate, in order that the Government might perhaps consider giving us a rather fuller and more satisfactory explanation of their policy, which would take us a little further than the statement of 17th November. I should say first of all that at this stage there is no chance of resale of complete circuits, as was mentioned in an earlier debate; that is to say, buying bulk circuits from BT or Mercury and then renting them out as individual circuits to third parties. So we can forget the question of resale, which was gone into in some detail in my noble friend's reply.

The business customer wishes to have the right to have private circuits linking him with other businesses not owned by him; for example, as in the case of a motor manufacturer, with his dealers. Where both businesses have networks of private circuits, the need is for the networks to be interlinked. This does not involve connection to the public network, which is stated in the answer to be the main problem. The problems of signalling and transmission limit of circuits linked in tandem are well understood by those who operate private networks and they do not require the proposed further study by BT and the Government. In fact, since the public are not involved, the business network operator feels that such paternalism is unwarrantable interference in his affairs. If BT would concentrate on improving faint speech and noise on calls across London over the public network, it would be much more to the point.

The only parties affected in this arrangment are BT and the business network operator. The businessman wants the facility in order to make his business more efficient. He is not selling telephone calls to anyone. If he is avoiding calls on the public network he is doing so by making better use of national resources for which he is paying a fair price, surely something to be encouraged. In resisting this entirely logical development, BT has no real grounds for complaint and is only seeking to preserve its monopoly stranglehold for as long as possible.

Nothing in my noble friend's statement disputes the logic of allowing complete freedom for the provision of private circuits between unrelated companies and the linking of private networks. The Government could announce now that this will be permitted. I hope that my noble friends will take that point.

It is recognised that connection between public and private networks could lead to resale of telephone calls for profit and that the Government have decided that this is not to be encouraged just yet. I had hoped that the statement might have permitted the connection of private circuits and private networks to the public networks in order to allow businesses to transfer customers calling-in to other company locations, and for their private network calls to be extended to their own staff at home. No question of payment arises in such transactions and business efficiency is greatly increased. It seems to me to be a failure if the Government cannot find a suitable formula to permit this desirable arrangement to operate while preventing resale of calls on a commercial basis at this stage.

I hope that my noble and learned friend will be able to give an answer that takes some account of the points I have made. If he cannot do so at this stage, perhaps we can have yet another and more explicit statement from the Government before the Bill leaves this House. I beg to move.

11.38 p.m.

Lord Mackay of Clashfern

My Lords, may I say first and possibly quite briefly, that it does not appear to me that the amendment that my noble friend proposes would, in fact, effectuate the purpose that he had in mind in the discussion that followed. So far as statements are concerned, I think that if I have learnt anything from the Committee's proceedings, it is that it would be most unwise for me to promise any further statement, and I do not propose to be unwise on this occasion.

I shall certainly undertake that my noble friend's remarks will be the subject of study by my colleagues and myself. Further than that, it would not be appropriate for me to go this evening. I am sorry that I cannot assist my noble friend further, but I think that he will understand the situation.

Lord Bruce of Donington

My Lords, the noble Lord, in his statement, said that conversations were proceeding with British Telecom on this and associated questions. We are reassured to some extent that this is taking place. We would express our agreement with the noble and learned Lord in resisting the amendment put forward by the noble Lord, Lord Mottistone, and his group.

Lord Mottistone

My Lords, as I said, my amendment was a probing one. I hope that my noble and learned friend will perhaps go a little further in view of the fact that the next day for the Bill's Report stage is not until next Monday. Possibly, before Third Reading, there can be a more explicit statement taking into account the points I have just made. Is my noble and learned friend able to go that far?

Lord Mackay of Clashfern

My Lords, while I should be glad to give any assistance that I properly could to my noble friend, it would be unwise for me to go further than I have already gone.

Lord Glanusk

My Lords, before my noble friend sits down, there is one question that I should like to ask him. It is said that the complexity of the issues means that the Government, BT and Mercury must consider what is to be done with care. Is there no opportunity for the businesses involved in these paragraphs, of which there are several hundred, being involved in those talks? It will seriously affect them, and to have just three very biased people talking together seems unreasonable.

Lord Mackay of Clashfern

My Lords, as I have already said, I am very happy to draw to the attention of my colleagues, as well as studying myself, what my noble friend Lord Mottistone has said. If the interests to which my noble friend has referred, wish to make representations on these matters, then of course they will be very carefully considered.

Lord Mottistone

My Lords, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 39B not moved.]

[Manuscript Amendment No. 39C not moved.]

Clause 7 [Power to license systems]:

Lord Glenarthur moved Amendment No. 40: Page 8, line 24, after ("any") insert ("telecommunication").

The noble Lord said: My Lords, I beg to move Amendment No. 40 and perhaps it would be convenient to take also Amendment No. 40A: Amendment No. 40A: Page 8, line 30, after ("any") insert ("telecommunication")

Both of these amendments are simply designed to ensure consistency throughout the Bill. Elsewhere in the Bill references to a telecommunications system are spelt out in full to avoid any possible misunderstanding. But it has recently been spotted that in Clause 7(4)(a) and (b) the reference is only to "any system". These two amendments ensure consistency by inserting the word "telecommunication" in both places. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 40A:

[Printed above.]

On Question, amendment agreed to.

Lord Lloyd of Kilgerran moved Amendment No. 41:

Page 8, line 32, at end insert— ("; and () the use of the relevant intellectual property rights").

The noble Lord said: This is a probing amendment in relation to the powers to license systems and to ask whether the licence to be granted, particularly in relation to subsection (4) of Clause 7, will also include the granting of the use of the relevant intellectual property rights.

I am very glad to see the noble Lord. Lord Peyton, in his place, because I have been encouraged to put down this amendment in view of the observations of the Prime Minister in the introduction to a Green Paper which was issued in December last and entitled, Intellectual Property Rights: an Innovation. To paraphrase the words of the Prime Minister in her introduction to this important document, she refers to intellectual property rights as a subject often overlooked. It may be therefore that it would be helpful to draw attention to such rights if they exist in the grant of licences.

I fully appreciate that when we look at Clause 7, subsection (5) says: A licence granted under this section may include— (a) such conditions as appear to the Secretary of State or the Director to be requisite or expedient having regard"—

and now come the words which I am not quite sure cover the point I have in mind— to the duties imposed on him by section 3 above". I am really seeking assurance, no doubt from the noble and learned Lord who is glancing at me and nodding, I suppose, that he approves of my submissions; but we shall soon hear whether or not that is so. I want to know whether I can have an assurance from the Government that relevant intellectual property rights fall within the scope of the powers of the Secretary of State who, after consultation with the director, according to Clause 7(1)(a), can grant these licences. I beg to move.

Lord Mackay of Clashfern

My Lords, I do not think that the noble Lord, Lord Lloyd of Kilgerran, has shown precisely how his amendment would work in this connection, but perhaps I may just go to the substantive point that he makes. I think that his concern is that there should be power to deal with problems relating to intellectual property rights that might arise in connection with the operation of the licensing system.

So far as we understand the provisions and position, we intend, through the terms of British Telecom's and other public telecommunication system operators' licences, to interpose the director between the licensee and users or competing suppliers by providing, first, that the licensee shall not require any connectable telecommunications system, apparatus or service to he run in a way that necessitates use of any product subject to industrial or intellectual property rights, or of any other industrial or intellectual property, unless this is available on terms which the director considers reasonable; otherwise there would be a real hamstringing of freedom in this context; and, secondly, that the licensee shall not require any connectable telecommunications system, apparatus or service to he approved or comply with any standard or test except where this has been approved by the Secretary of State or the director. In this way we intend to provide a flexible means of control over the intellectual property issues relating to telecommunications which we know to be of concern to users and manufacturers, without conflicting with the existing industrial property rights legislation. The detailed licence conditions obviously require to be discussed with the interests directly concerned, but I hope that this sufficiently explains our intention to assure the noble Lord and, of course, it would do so without conflicting with the existing regime, through the Comptroller of Patents and so on, for the regulation of intellectual property rights.

Lord Lloyd of Kilgerran

My Lords, before the noble and learned Lord sits down, in order to clarify my mind on what can be a very important subject for industrialists at any rate, when the noble and learned Lord says that "he intends", what does he have in mind? Is he proposing to put terms in the licences? Is that what he means by "intending" to do something?

Lord Mackay of Clashfern

My Lords, the intention is that, to have the effect which I described, the terms would go in the licences of British Telecom and other public telecommunications systems operators.

Lord Lloyd of Kilgerran

My Lords, I am very much obliged to the noble and leaned Lord for this cogent explanation. I am not completely satisfied. Nor do I quite understand the scope of his answer at this stage, and I reserve the right to raise the matter again if need he at a later stage of the Bill. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

11.48 p.m.

Lord Glenarthur moved Amendment No. 41A: Page 8, line 34, after ("conditions") insert ("whether relating to the running of a telecommunication system to which the licence relates or otherwise)").

The noble Lord said: My Lords, this is purely a technical amendment and is designed to remove a possible ambiguity in the powers to include conditions in licences. Licences are granted for the running of telecommunications systems and may include conditions which are thought necessary, having regard to the duties imposed on the Secretary of State and the director under Clause 3. These duties relate to all commercial activities connected with telecommunciations systems.

It is clearly necessary for licences to include conditions about the supply of apparatus or the provision of services. It has, however, been argued that Clause 7(5)(a) permits the inclusion in licences of conditions which relate only to the actual running of the system concerned and matters directly connected, and would not permit the Secretary of State to impose conditions about the manner in which BT supplied apparatus. This amendment removes that doubt. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 42: Page 8, line 40, leave out first ("amounts") and insert ("amount").

The noble Lord said: My Lords, this amendment simply corrects a typographical error. I beg to move.

On Question, amendment agreed to.

Lord Mottistone moved Amendment No. 42A: Page 9, line 8, at end insert— ("() A licence granted under this section shall include conditions to prevent—

1. (a) monopoly situations within the meaning given to that expression by section 5(3) of the 1973 Act;
2. (b) such practices as are mentioned in section 78(1) of the said Act;
3. (c) anti-competitive practices within the meaning given to that expression by section 2 of the 1980 Act.").

The noble Lord said: My Lords, this amendment is in parallel with the manuscript amendment of the noble Lord, Lord Spens, in that, with regard to competition, it seeks to strengthen both Clause 3(2)(b) and also Clause 49, neither of which seem to he firm enough, and require duties and action as opposed to just being. in their present form, somewhat advisory. The Fair Frading Act 1973 and the Competition Act 1980 were enacted, in part at any rate, to allow us to carry out EEC obligations under the European treaties with regard to the subjects concerned. From that your Lordships will be aware that where a licensee acts in a matter contrary to treaty regulations the Commission are empowered to call upon a member state to stop the action.

Indeed, the Commission are empowered to insist under Article 90 of the treaty that the member state takes statutory action. The object of this amendment is to provide the safeguard for the Government to ensure that this legislation is in accordance with the treaty at this stage of the game, because it could be that a licensee—and I am not specifying which one—might he found to have special powers that were outwith the Treaty of Rome. It is really to safeguard the Government more than any other purpose that I beg to move this amendment.

Lord Mackay of Clashfern

My Lords, I must say that so far I have not quite understood why it is thought that these provisions are required to be inserted in the Bill as proposed in this amendment in order to assist the Government to deal with the European Economic Community and its laws and requirements. I do not think I have much to add to what my noble friend Lord Glenarthur said in answer to Lord Spens' manuscript amendment, which appears to cover very much the same ground as this amendment. This situation is covered by the provisions of Clause 49, and the relationship between Clause 49 and the rest of the Bill has been plainly explained.

It may be that there is more to this amendment than I have understood, in which case it is my fault that I have not understood my noble friend's explanation fully. It may be that we could explore that with more profit outside the Chamber.

Lord Mottistone

My Lords, I think that would be as well, because it is much too late to go into a long and complicated argument. Basically—and I think the noble Lord, Lord Spens, feels the same—it seems that Clause 49 is not strong enough in this area, whereas the Government think it is. Perhaps we can discuss it outside the Chamber, and if your Lordships agree I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Glenarthur moved Amendment No. 43: Page 9, line 24, leave out from ("as") to ("appropriate") in line 25 and insert ("the Secretary of State or the Director considers").

The noble Lord said: My Lords, this is simply a tidying up amendment and replaces the word "grantor" in Clause 7(7) by the words "the Secretary of State or the Director". This follows an earlier change to Clause 7(5)(a), where the word "grantor" was also replaced by those words. The effect is to give flexibility to enable the director to publish a licence granted by the Secretary of State. This might be appropriate, for example, in the case of the branch systems licence, but no decision has been made about proceeding in this way. I beg to move.

On Question, amendment agreed to.

Lord Lloyd of Kilgerran moved Amendment No. 44: Page 9, line 43, at end insert— ("() A licence granted under this section shall apply to all parts of the telecommunication system so licensed that are used for conveying or switching the service.").

The noble Lord said: My Lords, I beg to move Amendment No. 44, and with the leave of the House I should like to speak to Amendment No. 45. Amendment No. 45: Page 9, line 43, at end insert— ("() The rights conferred upon a telecommunication system provider operating under a licence granted by the Secretary of State under this section or under section 15(1) of the British Telecommunications Act 1981 shall not be infringed by the privileges conferred upon a public telecommunications system operator").

These are two probing amendments, and I must apologise to the House because this will take some little time. I had not anticipated that these amendments would not have been reached earlier. They relate to what are known as VAN licences. In seeking to liberalise and introduce an element of competition into telecommunications the Government have, in the 1981 Act, provided for the Secretary of State to grant licences to persons wishing to provide telecommunication systems for the provision of services as defined in that licence. Many of these licences have already been granted and it is, apparently, the intention to continue to grant such licences under this Telecommunications Bill.

In particular value added network licences are granted. These are known as VAN licences. By way of explanation, it may be helpful if I say that a value added service is broadly one that uses telecommunications to convey and to switch the service, but adds an additional service to the pure act of carrying or switching. Examples are telephone answering, view data and protocol conversion services. There are many others that your Lordships may be aware of in industry and which can be cited in the generic term VAN licences.

An anomaly exists where the detailed licence granted to British Telecom, or other public system operators, may appear to give them the right to convey or switch services within the networks operating under a VAN licence. Therefore it can be seen that the VAN licence is a simple statement of authority to operate a telecommunications service. It does not go into technical detail in such a licence, for it would be quite inappropriate.

I was advised that a serious matter arises in certain cases. There are cases where a public telecommunications system operator seeks to exploit this situation by claiming that the VAN licence which he is being granted may only communicate the service he is offering over those parts of the telecommunications system that themselves generate or provide the service. Other parts of a licensee's telecommunications system, which a licensee requires to convey or to switch the service, are held to be excluded from the licence.

I apologise about the complexity of this matter so late in the evening, but I assure your Lordships that these are matters of considerable commercial interest. I am glad to see that the noble Lord, Lord Morris, who is always watching me very intently when I am speaking, is nodding his head in agreement with me. At least one Member of the House has not been put to sleep so far by my speech.

By claiming this the public system operator seeks to maintain a monopoly situation which the Bill intends to remove, though not totally because it will be limited by the new licensing arrangements. That is the crunch situation, that the public system operator will be seeking to obtain a monopoly situation which in fact it appears the Bill intends to remove.

The proposed amendments prevent the monopoly continuing. Without these amendments if would appear that the operators of services covered by these VAN licences will find their telecommunications systems impossible to operate economically because of the need to convey signals repeatedly in and out of public systems when a telecommunications operation is required and that is not specifically providing the value added service.

I am sure it is obvious to all noble Lords that the intentions of the Bill are to provide for the Secretary of State to license the whole telecommunications system over which the service is carried; but unless this is specifically stated, there will be those who will gain by opposing it. To allow them to do so will inhibit seriously the spread of information technology in this country by those who offer value added services to those who would benefit from them.

I am now coming to the conclusion of this matter. These two amendments would establish the right of the holder of a telecommunications system licence issued under Clause 7 to operate that system and sell applicable services over the whole of his telecommunications system which conveys or switches the service. The amendment also seeks to include those licensees who are already licensed under Section 15(1) of the 1981 Act so that they do not have to reapply for licences in order to obtain the benefits conferred by Clause 7 of the new Bill. Again, I apologise for the length of my speech. I have been very good so far this evening. This is an important industrial matter for certain commercial users relating to VAN licences. I beg to move.

Lord Mackay of Clashfern

My Lords, the noble Lord has explained his amendment very clearly. If I am going to answer, I am afraid that I shall have to do so at some length. I should be happy if he would think it appropriate for me to write to him with the explanation; but, if he would prefer that I give it now, I am very willing to launch into it.

Lord Lloyd of Kilgerran

My Lords, I am in your Lordships' hands. I want to reduce the time taken on many irrelevant matters in this Bill, as your Lordships no doubt will have noticed by my attitude towards many things during the course of this Bill. If it will be more convenient for the noble and learned Lord to write to me, then I am willing to accede to that on one condition: that I get his letter fairly soon so that I can study it with my advisers on this matter.

Lord Mackay of Clashfern

I would hope to be able to give it to him almost immediately. The answer is that we believe that the points he makes are already covered in the provisions of the Bill and the amendments are unnecessary. But I will give him a slightly more elaborate answer than that in writing, if he will agree to that.

Lord Mottistone

My Lords, will my noble and learned friend send me a copy of the letter that he will write to the noble Lord, Lord Lloyd of Kilgerran?

Lord McIntosh of Haringey

My Lords, I was going to make the same request but I wonder whether we have a constitutional precedent here. Do we have a Minister reading something into the Congressional Record, now?

Lord Mackay of Clashfern

My Lords, I think not. I would not wish to set up such a precedent. I was giving my answer to both amendments. They are unnecessary. I shall elaborate that for those who wish it. If the noble Lord, Lord McIntosh of Haringey, wishes to join in this, by all means.

Lord Lloyd of Kilgerran

My Lords, I am grateful to the noble and learned Lord. I hope that I have not tempted him to do something which is unconstitutional at this late hour in the morning. But, having regard to what he has said, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 45 not moved.]

The Deputy Speaker

My Lords, I should inform your Lordships that, if Amendment No. 46 is agreed to, I shall not be able to call Amendments Nos. 47 and 48.

Clause 8 [Special provisions applicable to certain licences]:

12.3 a.m.

Lord Morris moved Amendment No. 46: Page 10, line 1, leave out subsections (1) and (2).

The noble Lord said: My Lords, I have no intention at all of shooting down Amendments Nos. 47 and 48. This amendment must be read with (and, indeed, I shall speak to) Amendment No. 49. Amendment No. 49: Page 11, line 5, at end insert— ("4A) This section applies to any licence granted under section 7 above to a particular person which includes conditions requiring that person—

1. (a) to provide such telecommunication services as are specified in the licence or are of a description so specified;
2. (b) to connect to any telecommunication system to which the licence relates, or permit the connection to any such system, of such other telecommunication systems and such apparatus as are specified in the licence or are of a description so specified;
3. (c) to permit the provision by means of any telecommunication system to which the licence relates of such services as are specified in the licence or are of a description so specified;
4. (d) not to show undue preference to, or to exercise undue discrimination against, any person or persons of any class or description as respects any service provided, connection made or permission given in pursuance of such conditions as are mentioned in the foregoing paragraphs; and
5. (e) to publish, in such manner and at such times as are specified in the licence, a notice specifying, or specifying the method that is to he adopted for determining, the charges and other terms and conditions that are to be applicable to such services so provided, such connections so made and such permissions so given as are specified in the licence or are of a description so specified.

() It is immaterial for the purposes of subsection (4A) above whether the licence also includes conditions requiring the person to whom the licence is granted to refer for determination by the Director such questions arising under the conditions mentioned in paragraphs (a) to (e) of that subsection as are specified in the licence or are of a description so specified.").

The purpose of this amendment is very simple. It is purely a drafting amendment to Clause 8 and, as such, your Lordships will no doubt agree that it is an impertinence; because Clause 8 is designed in such a way that the very long subsections (1) and (2) of the clause comprise the application of the clause. Subsection (3) comprises its purpose. I believe that in the interests of clarity—and this Bill will not be read by lawyers alone—it is much easier to understand if one reads, first, the purpose of the clause and, second. the application of the clause. It is only in this spirit that I move this amendment. The mere fact that it has been designed in this way has meant that to date this clause has caused considerable confusion. No doubt the Government have achieved their purpose with regard to this clause, but now that we are at a later stage of the Bill it would help if the clause were to be properly designed.

I will accept the point that subsection (1) of Clause 8 contains certain substantive points. That is in the sense that there is an implication that these conditions will be contained in the major licences. However, it jars very strongly indeed in my heart that a clause should be designed whereby you put the application of the clause before the actual purpose of the clause. In terms of pure drafting style, it does somewhat offend. I beg to move.

Lord McIntosh of Haringey

My Lords, I do not know whether it was the intention of the noble Lord, Lord Morris, but he has really let the cat out of the bag—has he not?—with this series of amendments. He has confirmed very precisely why Amendment No. 10 is inadequate and why No. 47, which is about to be moved, is inadequate. A number of your Lordships clearly failed to realise, unlike the noble Lord, Lord Morris, that the substance of Clause 8 is in subsection (3) and that the substance consists only in a requirement that the Secretary of State or the director shall give notice that he proposes to grant certain kinds of licences and the reasons why those certain kinds of licences are to be granted, and in providing for the possibility of objections to licences.

In other words, Clause 8 and its essence, subsection (3). are not what the noble Lord, Lord Cockfield, claimed to your Lordships when he moved Amendment No. 10 and when he took away the right of telephone subscribers living in rural areas. It is not the case that the amendments proposed to Clause 8(1)(d) provide any effective security for the rights of telephone subscribers living in rural areas. Unfortunately, it has taken the consistent and wise intervention of the noble Lord. Lord Morris, to make that clear more effectively than I was able to do on an earlier amendment.

Lord Mackay of Clashfern

My Lords, I think it must be the lateness of the hour, but I certainly do not see the cat. I think it is an invisible cat so far as most of us are concerned and exists only in the imagination of the noble Lord, Lord McIntosh of Haringey, because, of course, the purpose of Clause 8(1) is to define a particular type of licence, namely, one which includes certain conditions; and then it applies to that type of licence the procedural requirements of subsection (3). I must say that appears to me to be a very logical and reasonable way of doing it. I would not, myself, think that subsection (3) is more substantial or more purposive than (1).

Of course, the other point the noble Lord, Lord McIntosh of Haringey, has to take account of is that Clause 9 requires conditions such as are specified in Clause 8(1) to be in a licence before it can be a public telecommunications system licence. Therefore it is an essential qualification of a public system that it should have conditions in its licence of the type specified in Clause 8(1). So the basis on which my noble friend Lord Cockfield was proceeding when he spoke to Amendment No. 47 before is perfectly sound and satisfactory; and no doubt at the appropriate time and in the appropriate place—when Amendment No. 47 is again called—he will be able to make that even plainer.

Lord Morris

My Lords, if I had gone the whole hog, I think I should have tried to redesign the Bill in the sense that I think Clause 9 is actually in the wrong position. I am talking only about matters of pure style and nothing else. The implication that the noble Lord, Lord McIntosh of Haringey, read into this, of course, has no relation whatsoever to my intention. I was merely suggesting that it would be easier and more clear for the people using this Bill to understand the provisions of Clause 8(1) if it was switched round the other way. However, in the light of the explanation given by my noble and learned friend, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Cockfield moved Amendment No. 47:

[Printed earlier: col. 520.]

The noble Lord said: My Lords, I spoke to this amendment when moving Amendment No. 10, which commended itself to your Lordships on a Division. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 48: Page 10, line 30, leave out from ("whether") to second ("to") in line 31 and insert ("the person to whom the licence is granted is required").

The noble Lord said: My Lords, this is a technical amendment. Clause 8(1) sets out the sort of conditions which must be included in an operator's licence before that operator is eligible for designation as a public telecommunications operator. The purpose of subsection (2) is to give flexibility to the form these conditions may take, but not to their subject matter, which is governed by subsection (1).

This is because, in some circumstances, the Secretary of State may want to include conditions which, while following the principles and content laid down in subsection (1), in fact leave certain matters arising to be determined by the director in the light of prevailing circumstances. A licence condition which does this does not represent any lessening of the director's role in licence enforcement, but it does enable him to tailor his enforcement role more closely to what is actually happening.

The purpose of subsection (2) of Clause 8 is to enable conditions of this form to be included in respect of the matters listed in subsection (1). But it has recently come to light that subsection (2) is slightly defective and may not fully achieve its intended purpose. There would, therefore, be a risk of an operator becoming inadvertently ineligible for public telecommunications operator status, and this amendment is simply designed to put this right and to remove such a risk. I beg to move.

On Question, amendment agreed to.

[Amendment No. 49 not moved.]

Clause 9 [Public telecommunication systems]:

12.13 a.m.

Lord Cockfield

moved Amendment No. 50: Page 11, line 12, at end insert— ("(1A) An order under subsection (1) above shall not come into operation until after the end of the period of 28 days beginning with—

1. (a) the day on which copies of the order, and of the licence to which section 8 above applies, are laid before each House of Parliament; or
2. (b) if such copies are so laid on different days, the last of those days.").

The noble Lord said: My Lords, this amendment gives effect to an undertaking that I gave in Committee to ensure that there would be effective parliamentary scrutiny of British Telecom's licence. I then said that it was important also to ensure that the arrangements made preserve the independence of the director general in carrying out his regulatory functions, and equally preserve the flexibility of the licence modification procedures. I proposed, therefore, that we should proceed by huilding on the procedures in Clause 9 under which a system, the running of which is authorised by a licence to which Clause 8 applies, can be designated as a public telecommunications system and the licensee as a public telecommunications operator.

We have done this by providing that any order made by the Secretary of State under Clause 9, for the purposes of designating as a public telecommunications operator an operator authorised to run his system by a licence to which Clause 8 applies, must be laid before Parliament for at least 28 days before it can come into effect. This means that the privileges and powers that follow from public telecommunications operator status will not be available to British Telecom until the order takes effect at the end of this 28-day period. The amendment also provides that the order cannot come into effect until at least 28 days after the licence to which the order relates has been laid before Parliament.

Our aim is to lay the British Telecom licence and the order together, but if for any reason it proves necessary to lay the order and the licence separately, then this amendment ensures that the 28-day period runs from after the last to be laid. This amendment therefore provides an effective way for Parliament to scrutinise the British Telecom licence. All orders subject to the negative resolution procedure can be debated, if it is sought to annul the order. This amendment ensures that your Lordships will have an opportunity to look at and study the licence before it comes into force.

If the licence is thought to be unsatisfactory in the form that it is laid, it will then be possible to pray against the order. In that eventuality, the Government will grant an opportunity for a debate on the order which will, in effect, be a debate on the licence. I very much hope we will he able to produce a licence for British Telecom which will generally be regarded as satisfactory; but if for any reason this did not prove to be the case, Parliament could defeat the order. In that event, we would then have to come back to the House with a new order and a new licence meeting the objections which had been raised.

I should now like to say a few words about the timing of the laying of the order. There are two time periods which will start from the day the order is laid and run concurrently. The first is the 28-day period in this amendment before which the order cannot come into effect. The second is the normal 40-day period in which orders subject to negative resolution can be prayed against and annulled.

It may well be asked why we have not provided that both periods should be the same. I quite appreciate this point, and it is a matter to which we did give specific consideration. We do not favour 40 days for both periods because we wish to avoid undue delay not only with British Telecom's licence but also with the various other licences to which Clauses 8 and 9 will apply. We think it desirable that the licensing arrangements and other measures to put British Telecom on an equal footing with its competitors should be brought in as soon as possible.

In providing a 28-day period, we believe we are providing a reasonable and sensible period of consideration before the order takes effect. But I can give your Lordships a firm assurance that we will lay British Telecom's licence and the order designating British Telecom as a public telecommunications operator while Parliament is sitting and that the 28-day period will also run while Parliament is sitting. It would be our intention that if noble Lords were to indicate that they wished to debate the order and the licence, such a debate would, business of the House permitting, also take place during the 28 days. I beg to move.

Lord Mottistone

My Lords, this amendment has been moved in response to an amendment moved by me in Committee, and I should like to thank my noble friend very much both for the amendment and for the careful explanation that he has given of how it meets the requirements we then sought. May I also say that POUNC support the amendment, as do many others.

On Question, amendment agreed to.

Clause 10 [The Telecommunications code]:

Lord Glenarthur moved Amendment No. 51:

[Printed earlier: col. 600.]

The noble Lord said: My Lords, this amendment has already been spoken to. I beg to move.

On Question, amendment agreed to.

Lord Stoddart of Swindon moved Amendment No. 52: Page 12, line 5, leave out ("may") and insert ("shall").

The noble Lord said: My Lords, I beg to move Amendment No. 52 which stands in my name and those of my noble friends. No doubt many noble Lords will have received correspondence from the Association of County Councils and other local authority associations which makes it clear that they are concerned that in drafting Clause 10 of the Bill which, together with Schedule 2, creates the telecommunications code, the Government have included only a permissive power rather than a duty for the Secretary of State to take into account environmental, highways and financial matters in imposing conditions on licensed operators.

The objective of the amendment is to convert "may" into "shall". We had a debate in Committee as to what "may" and "shall" mean. These matters, referred to in paragraphs (a), (b) and (c) of subsection (4) on page 12, involve questions relating to the physical environment, to damage to streets and highways and interference with traffic on streets and highways and also to the financial status of firms which carry out work on the environment and on the highways and byways of our land. I think it would be as well, and certainly helpful, before I proceed any further—I do not want to take up the time of the House at this hour of the morning—if we could perhaps have an explanation as to whether "may" in this context actually means "shall". I beg to move.

Lord Glenarthur

My Lords, I shall not go into a lengthy explanation but will merely accept the amendment.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 53:

[Printed earlier: col. 600.]

The noble Lord said: This amendment has also been spoken to. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendments Nos. 54 to 59:

[Printed earlier: col. 600.]

The noble Lord said: These amendments have already been spoken to. I beg to move them en bloc.

On Question, amendments agreed to.

Clause 12 [Modification of licence conditions by agreement]:

Lord Mackay of Clashfern moved Amendment No. 60: Page 15, line 24, after ("modifications") insert ("of conditions").

The noble and learned Lord said: My Lords, this is a minor drafting amendment. I beg to move.

On Question, amendment agreed to.

Clause 14 [Reports on licence modification references]:

Lord Mackay of Clashfern moved Amendment No. 61: Page 18, line 29, at end insert ("for bringing the report to the attention of persons likely to be affected by it").

The noble and learned Lord said: This amendment fulfils an undertaking I gave to my noble friend Lord Morris, who tabled a similar amendment during the Committee stage. I beg to move.

On Question, amendment agreed to.

Clause 15 [Modification of licence conditions following report]:

Lord Mackay of Clashfern moved Amendment No. 62: Page 19, line 28, leave out ("2") and insert ("3").

The noble and learned Lord said: My Lords, this is a minor drafting amendment. I beg to move.

On Question, amendment agreed to.

Lord Denham

My Lords, I think we have now reached the stage when it is generally agreed that we should adjourn for the evening. In moving that consideration on Report be adjourned, I should like to thank your Lordships for the forbearance shown in carrying us through to this stage tonight. I beg to move.

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