§ 8.18 p.m.
§ Consideration of amendments on Report resumed.
Lord Bruce of Donington had given notice of his intention to move Amendment No. 91C:
Insert the following new Clause—
§ ("Disclosure of information.
§ .—(1) A person who otherwise than in the course of his proper duty as an employee of a telecommunications operator licensed under section 7 above
- (a) intentionally discloses information relating to the destination, duration or cost of a user's use of a telecommunication system licensed under section 7 above; or
- (b) instigates any person engaged in the business of a licensee to disclose information relating to the user's destination, duration or cost of a user's use of a telecommunication system licensed under section 7 above,
§ (2) Proceedings for an offence under subsection (1) above shall not be instituted in England or Wales except by or with the consent of the Attorney General, or in Northern Ireland except by or with the consent of the Attorney General for Northern Ireland.
§ (3) The Secretary of State may, on the application of a chief officer of police or the Commissioners of Custom and Excise, issue a warrant for the disclosure of information, if he is satisfied that—
- (a) it would assist in the detection of a serious offence;
- (b) normal methods of investigation have been tried and have failed or from the nature of things are unlikely to succeed if tried; and
- (c) there is a good reason to think that the disclosures would result in a conviction for that offence.
§ In this subsection "serious offence" means—
- (i) an offence for which a person not previously convicted could reasonably be expected to be sentenced to imprisonment for a term of three years; or
- (ii) an offence in which either a large number of people is involved or there is good reason to apprehend the use of violence or the financial rewards of success are very large.
§ (4) The Secretary of State may, on the application of a chief officer of police or the Director General of the Security Service 1053 issue a warrant for the disclosure of information if he is satisfied that—
- (a) it would assist in the detection of a major subversive, terrorist or espionage activity giving rise to external or internal danger to the Defence of the Realm; and
- (b) normal methods of investigation have been tried and have failed or from the nature of things are unlikely to succeed if tried.
§ (5) An application for a warrant under this section shall be made in writing and shall specify—
- (a) the person about whom the information is sought, and the nature of the information in question; and
- (b) the facts and circumstances in support of the application.
§ But the Secretary of State may allow any information required under paragraph (b) above to be provided orally and not in writing in respect of an application for a warrant under subsection (4) above.
§ (6) Except in case of an emergency any warrant under this section shall be issued only under the hand of the Secretary of State; and, in any such case, shall be confirmed under his hand as soon as reasonably practicable after issue.
§ (7) Any warrant issued under this section should carry a time limit not exceeding two months from the date of issue and may he renewed for not more than one month at a time in the case of an application of the police, not more than two months at a time in the case of an application of the Customs and Excise, and not more than six months at a time in the case of an application of the Security Service.
§ (8) In this section "disclose" includes the doing of any act designed to enable a disclosure to take place, and "disclosure" and "discloses" shall be construed accordingly.
§ (9) Nothing in this section shall prevent a telecommunications operator licensed under section 7 above to collect and publish statistics on the operation of his telecommunication system.").
§ The noble Lord said: My Lords, the noble Viscount, Lord Whitelaw, the Leader of the House, towards the conclusion of his remarks directed to Amendment No. 91 B also referred to this particular amendment, No. 91 C. He gave an indication that the whole question of the disclosure of information, as distinct from telephone tapping, relating to the dissemination, duration or cost of the user's use of a telecommunication system would be further considered in the light of any judgment emanating from the European Court for possible conclusion within the Bill to which he was kind enough to refer in connection with the previous amendment.
§ With the leave of the House, I should like to say that I ventured to bring forward this amendment pending discussions which I take it will be held between the usual channels in order to find out more precisely the Government's intentions in regard to this amendment and the particular text incorporated within it. I would expect that we shall have an undertaking or proposal on very similar lines to that which was so freely and emphatically given in regard to Amendment No. 91 B. I would welcome a further indication from the Government as to how they propose to deal with the substance of No. 91C. There is the possibility of its being moved at Third Reading, depending of course on what indications are received from the Government, but I shall not move it now.
§ [Amendment No. 91C not moved.]
§ Clause 47 [General functions]:
Lord Orr-Ewing moved Amendment No. 92:
Page 44, line 25, after third ("to") insert ("demand and").
§ The noble Lord said: My Lords, I think it may be for the convenience of the House and would help the speed of our progress if we were to take 92, 93 and 94 together.1054
§ Amendment No. 93: Page 44, line 25, after ("collect") insert ("sufficient").
Amendment No. 94: Page 45, line 6, at end insert—
("() It shall be the duty of the Director to review and investigate information collected under subsection (2) above, particularly that collected from the subsidiaries of "the successor company" designated by the Secretary of State in section 58(1) below with a view to inhibiting anti-competitive practice").
I should like first to quote what the Secretary of State was reported to have said in the Financial Times only last Friday. He said:
The Government is determined to bring about genuine competiton in telecommunications.
He then said:
Legislation is now going through Parliament which gives the Government wide powers to ensure full and fair competition.
§ It is as to where the competition is not full and fair that some of us on these Benches and in other parts of the House differ. The amendments I have put down were submitted by the Independent Telecoms Suppliers' Association. This is a small trade association but nevertheless important, because it has 45 member companies and between them they have an annual turnover of £50 million. It feels that the Bill does not give the director sufficient powers to demand detailed accounts from each subsidiary after denationalisation. It seeks to make it a duty of the director that the successor company does not use its monopoly powers and position to take commercial advantage from cross-subsidisation.
§ The justification for these amendments, briefly, is that they will help to inhibit the introduction of goods and services at a price below the economic cost in areas where competition from small suppliers like these 45 companies is most vulnerable to unfair competition. I should like briefly to give the House an example which clearly shows that the Office of Fair Trading (also part of the DTI) does not move quickly and cheaply, as my noble friend said when dealing with an earlier amendment. It moves very ponderously and very slowly indeed. My noble friend Lord Spens mentioned two years. I have rechecked the figures and I think that the complaint about slowness and the unfairness of the finding on the question of paging took three years. Three years is far too long—
Lord Bruce of Donington
My Lords, I thank the noble Lord for giving way and I must apologise for interrupting him. He did say that the Office of Fair Trading was part of the DTI. On reflection, perhaps he would like to correct that because, to the best of my knowledge, it is quite independent of the DTI.
§ Lord Orr-Ewing
My Lords, I think it is fair to say that it comes under the umbrella of the DTI although it has a considerable measure of independence. The Secretary of State answers questions on it, because we have recently put one to him. But I agree that it has a large measure of independence. However, it does not move quickly; and if this is an example of the manner in which the Director General of Oftel is going to move, it is a very poor example. A complaint was made three years ago that there was arrant cross-subsidisation going on in respect of paging. A number of private companies started paging—"bleeping" it is called in some places—three years before Oftel came into the market at all.
1055 What is astonishing is the amount of money that BT is now spending on press and television advertising. I exclude postage, but most of our post bags are pretty full of BT advertising. This is a form of gross cross-subsidisation. In 1983—and the figures are supplied to me by Media Expenditure Limited, which I am told is a reputable assessor of this—TV and press advertising by BT amounted to £1.75 million on paging alone. At the current rate, this year it is £2.4 million. That cannot possibly derive from income from the leasing or the selling of paging systems: not possibly. The 22 companies in the paging trade association between them do not spend £2.4 million or £1.75 million: they spend £50,000. So BT is spending 35 times as much on press and television advertising, and almost all at prime time, by the way. I should like to go on to give the global figures to the House. So far I have given a small selection on paging because that is what the OFT was asked to judge on, but to give the current global figures, they are that £24.25 million is being spent on the corporate advertising of BT.
Therefore I do suggest that this is gross cross-subsidisation and that it is impossible for any private sector to prosper in the face of that sort of expenditure. They have, although they started afterwards, now built up to 70 per cent. of the market and they have put themselves in a monopoly position. They have got more than 25 per cent. of the market and normally they would be subject to investigation. I ask the House to say—and I hope that my noble friend will give some comfort—that we must hurry on to make sure that the accounts of the individual parts of BT are properly kept, because until that is done there is no question of fairness in the competition which exists. With those figures, I think anyone would be amazed that BT has set itself on this course and spent this sort of money, in the face of the very small amount that the private sector can afford to spend in return. I beg to move.
§ 8.30 p.m.
Lord Bruce of Donington
My Lords, I have listened with very considerable interest to the remarks that have fallen from the lips of the noble Lord, Lord Orr-Ewing, who I gather inserted the amendment at the request of an association whose name I have forgotten for the moment but which undoubtedly is one of the important organisations seeking to make itself articulate through the admirable agency of the noble Lord.
It is, of course, quite proper that these views should be articulated on behalf of various interested bodies. All I would respectfully suggest to the noble Lord is that, when these matters are articulated, they should be articulated a little less shrilly. Organisations of this kind have no right to suggest that the Secretary of State or the director demand information or demand sufficient information. The words in the subsection are quite adequate for this purpose and they do not need outside emphasis from an outside body that is not wholly financially disinterested as regards the outcome of the discussions.
In regard to the other matters referred to by the noble Lord which he sought to introduce under the umbrella of these three amendments relating to advertising, I do not know what the noble Lord is 1056 complaining about. The noble Lord justifies the whole process of privatisation on the basis that energy, initiative and drive must be shown in these various industries. British Telecom is already making a very substantial profit, which is one of the reasons why it is being privatised, because noble Lords on the Benches opposite are not interested in privatising anything that is already making a loss. Why, then, should BT not behave like a normal commercial organisiation? It seeks to further its future and, in so doing, it advertises. If the noble Lord wants me to give him instances of where private enterprise indulges in vast sums of money, much vaster than he has mentioned, in consumer persuasion I shall be most happy to do so. But I do not see that he has any particular reason to complain: and, if he has any reason to complain I do not think that these amendments are the best way of doing it.
We always listen to the noble Lord with interest and with some affection, but we hope that in this instance he will realise that these amendments are not the best way of articulating the views for which he is renowned and with which, if I may say so with respect, we are already familiar. If the noble Lord, Lord Cockfield, out of pure benevolence and friendly feeling towards his noble friend, cares to accept the amendment, we shall quite understand. But, in the meantime, we hope that the usual common sense and logic for which he is so renowned will prevail and that he will not see fit to accept his noble friend's amendment.
§ Lord Mottistone
My Lords, I really think that either the noble Lord, Lord Bruce, is more ignorant than I believe or he is deliberately trying to misconstrue the situation, in order—dare I say it?—to direct the House in the wrong direction, because what he omits to take into account is the fact that we are talking about a vast monopoly. When a vast monopoly uses its vast funds for advertising on a narrow front as excessively as my noble friend has been pointing out, that is a form of cross-subsidisation, because it is using funds that smaller competitors do not have.
When we talk about smaller competitors we are talking about competitors that are very much smaller. They are not just within striking distance of the size of this great monster; they are tiny and do not have the resources to match the sort of advertising that my noble friend was taking about. That is why this amendment is needed to strengthen this Bill in this area, because we are dealing with a special case. The fact is that you cannot just say that British Telecom is using its finances to advertise in a way that is comparable with private enterprise, because ordinary private enterprise is heavily restrained in the size it can be—between 25 and 40 per cent. of the market is the absolute limit—and therefore it is competing with organisations of comparable size which have the same sort of money to dispose of for this purpose.
It is very strange that the noble Lord, who is on the one hand an accountant and on the other hand has some connections with the City, should seek to suggest to your Lordships that poor little British Telecom, this poor, tiny organisation, this soft, golden-hearted body which tries its best to look after the British public—though the British public has no idea whether it is doing its best and nor has British Telecom, 1057 because it does not have the competition to prove it—needs to be specially protected. Everybody else needs to be protected against it, and the sad thing about the matter is that the Government are going the wrong way about it and going to privatisation before making sure of the competition. But we have had that argument before.
This little amendment—and it is not an important, far-reaching amendment; it is a very important one for the small companies, but is not important in the view of this huge monopoly company—is one which is seeking to persuade the Government to give a little more strength in this area, to make quite certain that the big monopoly is disciplined and that its affairs and its finances are properly looked into. It would be most sensible if my noble friend on the Front Bench would accept this amendment as being a useful piece of underpinning of the Bill to achieve what is needed. One hopes that, in the next century, British Telecom will have been brought down to a reasonable size in proportion to its competitors, and perhaps we shall then have another Bill which may be able to remove what I hope is now going to be put in.
§ Lord Weinstock
My Lords, I do not share the optimistic expectation of the noble Lord, Lord Mottistone, of what may be the position of British Telecom in the 21st century, in relation to its size in comparison with its competitors. Several amendments were tabled at the Committee stage which sought to prevent unfair competition by public telecommunications operators, not only BT, resulting from subsidies for their network businesses to their supply or manufacturing businesses or between the latter two. The scope for abuse is very wide. For example, costs like connection charges for new terminal equipment or maintenance for an initial period could be recovered in high call tariffs established at an early stage—an option which is not available to any of BT's competitors or potential competitors.
In dealing in Committee with Amendments Nos. 79, 80, 80A and 80B, the noble and learned Lord the Lord Advocate, of whom I have become very fond during the course of these debates, and whose absence I currently regret, said that any public telecommunications operator should only engage in the manufacture of apparatus in a different company from that which runs the network, with a different management and different accounts. The noble and learned Lord also accepted that the arrangements should exclude the possibility of cross-subsidies.
The noble Lord, Lord Cockfield, speaking to Amendment No. 124, said that the Government intend that BT will have to conduct its network operations, its apparatus supply activities as well as its apparatus manufacturing business on an arm's length basis. Noble Lords will no doubt conclude that the conditions concerning different management, different accounts and the prohibition of cross-subsidy stated by the noble and learned Lord the Lord Advocate to apply as between network operation and manufacture, will similarly apply as between apparatus supply and each of the other two activities referrred to by the noble and learned Lord.
1058 The noble and learned Lord also made reference to a possible period of grace during which separate subsidiaries will be set up. I hope that on reflection the Government will decide than any grace period during which cross-subsidy could legitimately occur is unacceptable. Even if during the few months necessary to set up the subsidiary companies the rigour of fully detailed measures of control cannot be applied, it is surely the duty of the Government to see that no unfair competition is permitted.
For the longer term, it should be required of public telecommunications operators, in the licences, that accounting procedures are sufficiently specified to ensure that the arbitrary allocation of overhead costs between the separate activities of a licensee is avoided. This can best be achieved by requiring that allocated overheads may not account for more than a quite small percentage of total indirect costs. However, the complete separation of the supply activity from the others does give rise to some eccentricities. For example, when it installs a line and socket in a domestic subscriber's premises, the network business will be prohibited from supplying the telephone or other apparatus, or even from dispensing publicity material for such products. That is hardly an economical way of proceeding.
There is an obvious potential for the ridiculous in this Bill, but then this is a ridiculous Bill. Noble Lords will not wish to deny the Government room to make as much sense as they can out of it, but I doubt if many of your Lordships will be disposed to espouse arrangements which run counter to the Government's declared aims with regard to competition. These relatively minor difficulties should not obstruct the creation of the distinctly separate subsidiary for the supply activities of British Telecommunications, a matter of vital importance for all the companies engaged in apparatus supply and particularly of equipment and systems required for business use, which account for the larger part of the market. If the Government have the will, satisfactory arrangements can be worked out with regard to these matters and covered in the licence without sacrificing the principles involved.
With regard to Amendments Nos. 92 and 93, I am not at all sure that it is necessary to alter the words to include the word "demand". I should have thought that the noble Lord, Lord Orr-Ewing, would believe the present wording to be sufficient. I do not believe that the little Amendment No. 94 deals with all the questions I have raised, although I think that all those questions are relevant to it. However, if Amendment No. 94 is put to the House, I shall support it as a step along the way.
§ 8.43 p.m.
The Earl of Halsbury
My Lords, I must apologise for not having been in my place when the noble Lord, Lord Orr-Ewing, rose to his feet. I am not the first person to have been caught as a victim of the sudden acceleration in the tempo of debate after supper. However, I knew what the noble Lord, Lord Orr-Ewing, was going to say, so I do not think that I missed very much, and I was in my place when the noble Lord, Lord Bruce of Donington, rose to speak.
1059 I should like to support particularly Amendment Nos. 92 and 93, notwithstanding what the noble Lord, Lord Weinstock, has said. They represent a very modest increase in strength. The unamended Bill requires that information should be collected. To say that it should be demanded and collected means that initiative is expected of the director. To say that it should be sufficient means that he should follow it up. Is that so very much to ask—to drop a broad hint that the director is expected to show initiative and to follow up that initiative? I suppose that I may be met by the usual schizophrenic attitude of the Front Bench with regard to the Bill. They believe in supporting small industries. That is the declared purpose of the Government. On the other hand, they want to sell British Telecommunications to the public for the highest price possible, which means leaving it in as strong a position over its competitors as it can be. From these two entirely opposite points of view they have concentrated on the latter.
I described in Committee that it seemed to me that they were suffering from an undisclosed failure to declare an interest in the matter. In this connection, I still feel that psychologically—I am not imputing any kind of dishonourable conduct to them—the Government have a slightly blind spot. That is why I support the noble Lord, Lord Orr-Ewing, and hope that the Front Bench will be able to bend a little from their unyielding posture and give the noble Lord what he wants.
My Lords, the noble Lord, Lord Bruce of Donington, has displayed both courage and humility in accusing my noble friend Lord Orr-Ewing of shrillness. As the high priest of that particular art, the noble Lord has been very generous in giving away his position to my noble friend.
§ Lord Lyell
My Lords, I hesitate to intervene in such a lively and charming post-prandial debate as the one we have just engaged in. The noble Lord, Lord Bruce of Donington, kept the temperature at its usual healthy level, with the result that the debate was kept moving. I shall attempt to cover the many points that have been raised in the debate on this series of amendments.
We are very grateful to my noble friend Lord Orr-Ewing for saving the time of the House by speaking together to the three amendments. I am sure that my noble friend Lord Orr-Ewing and your Lordships will accept that all of the amendments seek to strengthen the duties of the director general, in requiring him to deal with such things as anti-competitive practices. Equally, I hope it is clear from the various debates we have had on the Bill that the Government are determined to give the Director General of Telecommunications adequate powers to deal with these anti-competitive practices about which we have heard such strong complaints from your Lordships. There is no disagreement between the Government and all noble Lords who have spoken, in particular those noble Lords who have moved the amendments, about that overall aim. But the fact that the amendments were tabled suggests that we on the Front Bench have not adequately explained how the Bill will 1060 achieve the objective which has been so eloquently set out by my noble friend.
If noble Lords will glance at Clause 47, they will see perhaps the most fundamental layout of the duties of the director general. He must set out to make himself an expert about telecommunications. Under subsection (1) he must keep under review the carrying on of all—I stress the word "all"—activities connected with telecommunications both within the United Kingdom and outside it. Under subsection (2) the director general has the further—
§ Lord Mottistone
My noble friend said, "I repeat `all' activities connected with telecommunications." I do not see the word "all" in subsection (1) of Clause 47. It refers simply to "activities".
§ Lord Lyell
My Lords, the subsection refers to keeping under review,the carrying on both within and outside the United Kingdom of activities connected with telecommunications".May I ask my noble friend to have patience. I have not been on my feet for very long and this has been a lively debate. I am sure that my noble friend recognises that the director general has to keep under review the carrying on of activities—and I stress all activities—connected with telecommunications both here and overseas. Under subsection (2) the director general has the further duty of collecting information about commercial activities connected with telecommunications which are carried on in the United Kingdom.
These duties provide a basis for all the director's other duties, including his role in enforcing licence conditions under Clauses 16 to 18, his role in approving apparatus under Clause 22, his role in publishing advice under Clause 48, and his role in considering complaints under Clause 51. The duties in Clause 47—which is the clause we are discussing with these three amendments—are particularly relevant to the director's functions under Clause 49. That clause gives him the power to make competition investigations under the Competition Act and monopoly references under the Fair Trading Act. For this reason, Clause 47 is modelled on Section 2(2) of the Fair Trading Act. We believe that what has worked for the Director General of Fair Trading when he investigates anti-competitive practices ought to work for the Director General of Telecommunications as well.
There is one small difference in wording between Section 2(2) of the Fair Trading Act and Clause 47. Section 2(2) of the Fair Trading Act uses the words,with a view to his becoming aware of, and ascertaining the circumstances relating to, monopoly situations and anticompetitive practices",whereas Clause 47(2) uses the words,with a view to his becoming aware of, and ascertaining the circumstances relating to, matters with respect to which his functions are exercisable".1061 The difference in wording between the Fair Trading Act and Clause 47 is accounted for by the fact that Section 2(2) of the Fair Trading Act paves the way for the functions in Part IV of the Fair Trading Act, which are concerned only with monopoly situations and anticompetitive practices, whereas Clause 47 paves the way for all the director's various functions under the Bill.
Your Lordships may in various ways have interpreted the absence of any specific reference to anti-competitive practices as meaning that the director has no duty to collect information about such practices. We believe that is simply not the case. I mentioned that Clause 47 paves the way for all the different functions of the director under Part III of this Bill, including the problems which have afflicted my noble friends—in particular, the investigation of anticompetitive practices—as well as the other functions I have mentioned.
The arrangement envisaged in the Bill before us tonight is that having kept matters under review under Clause 47(1), and having collected information under Clause 47(2), the director will then be in a position to exercise his various functions on a far more informed basis. Having collected some information, he may become aware of a possible anti-competitive practice or an abuse of a monopoly situation which he thinks requires investigation.
His duty under Clause 47(2) requires him to collect information so that he is aware of the circumstances relating to the practice, so he is obliged to collect additional information. He can demand this further information in two ways. Your Lordships will note that Clause 7(5)(c) of the Bill before us this evening means that licences granted to telecommunications operators will include conditions requiring the operators to provide information to the director when he asks for it. The director could therefore ask operators to provide the information he wants. If the practice is not carried on by an operator, the director can obtain information under Section 44 of the Fair Trading Act, which gives him power to require the production of information—and I would stress "require the production of information"—where there are grounds for believing that there is a monopoly situation.
Having used these powers the director ought to be in a position to decide whether there is an anticompetitive practice. If there is, the director has three courses of action open to him, which I hope will be of some comfort to my noble friend Lord, Lord Orr-Ewing. If the practice is carried on by a licensed operator, the director can seek to amend the operator's licence under Clause 12 or Clause 15 to include a new condition to ban the practice. If the practice is carried on by people who are not operators, the director can either institute a competition investigation under Clause 49(3) or he can make a monopoly reference under Clause 49(2). Any of these three courses can lead to an order banning the anti-competitive practice in question.
I hope this explanation has been of some help to your Lordships, particularly to those noble Lords who have spoken. I further hope that my explanation will have persuaded my noble friend Lord Orr-Ewing that 1062 these amendments are really not necessary. I want to assure my noble friend and all noble Lords who have spoken on these amendments that there is no need to create a duty to demand information as suggested in Amendment No. 92. If the director needs information to put himself fully in the picture—and I would stress that he has a duty to ensure that he does ascertain the circumstances—he already has adequate powers to demand that information. He will use those powers with discretion, but if he is given a duty to demand information he will be positively required to do things such as sending around questionnaires which I believe my noble friend Lord Orr-Ewing and many of your Lordships would consider undesirable.
In the same vein, I hope your Lordships will accept that there is no need for a reference to "sufficient" information. We believe that the concept of sufficiency is already built into the words I quoted earlier:with a view to his becoming aware of, and ascertaining the circumstances relating to.the exercise of his functions. I will go further and say that the amendment does not point out what the information is to be sufficient for.
Finally, the new subsection proposed in Amendment No. 94 is unnecessary because the director already has functions under Clause 49 in relation to anti-competitive practices. Clause 49 empowers the director to exercise all the powers of the Director General of Fair Trading in respect of anticompetitive practices. The Government are satisfied that these powers are sufficient to enable the director to deal with anti-competitive practices in telecommunications.
My noble friend Lord Orr-Ewing raised one particular complaint concerning the problems of radio paging. I am advised that the Office of Fair Trading did indeed take a long time to investigate the complaints made by Air Call against British Telecom. The reason was that the OFT could not find information to support the claims made by Air Call. I am advised that the OFT did examine British Telecom's charges and the operating costs of its radio paging service, and was satisfied about them. I hope my noble friend will accept that we do not feel that his criticisms of British Telecom or of the Office of Fair Trading are entirely fair.
The noble Lord, Lord Weinstock, made a few particularly interesting comments about these amendments. I have to say that not all his comments were strictly relevant to Amendments Nos. 92 to 94. As he himself pointed out, Amendment No. 94 is not relative to the matters which concern your Lordships, but we are certainly considering his points separately. I hope that I have been able to give explanations which, although somewhat technical, will persuade my noble friend to withdraw his amendments.
§ 9 p.m.
My Lords, I am tempted to embark on a diatribe about Clause 49 but I have agreed with the noble Lord, Lord Glenarthur, that I will not move my two amendments concerning that clause. The explanation given for Clause 47 is not very satisfactory. The noble Lord the Minister kept on talking about "all" and used the phrase "all 1063 activities". In fact, the word "all" is not written into subsection (1). Although his attention was drawn to it by the noble Lord, Lord Mottistone, he still talked about "all".
We are at the moment very doubtful as to whether the director general is in fact empowered, or has sufficient power, to investigate everything. It is only when he gets down to detail that he will see whether the successor company's subsidiaries are acting properly. That is what we are worried about. I wonder in those circumstances whether an amendment on Third Reading to introduce the word "all" into Clause 47(1) might be acceptable. Perhaps the noble Lord the Minister will consider writing it in himself.
I am also tempted, having heard the explanation about the particular worries of Air Call with the director of the Office of Fair Trading and the time it has taken for an answer to be given, to wonder whether I shall have to wait for a similar time before I get an Answer to my Written Question, which is now more than a fortnight old.
§ Lord Orr-Ewing
My Lords, with permission, I should like to say one word in reply to my noble friend. The Office of Fair Trading has taken three years. We were told that Oftel was modelled on the Office of Fair Trading. It took three years because it could not get the information. Where could it get information from? British Telecom? British Telecom did not have the information because at that stage, and even today, it does not keep proper accounts about individual parts of its organisation. That is what we are pressing for. It must get on and speed up the accountancy processes so that people know whether or not they are exercising uncompetitive practices. At the moment the delay is intolerable. Wherever noble Lords sit in the House they must surely agree that if it is to take three years to deal with a complaint a private company could go to the wall. Three months might be too long. We have to speed up the process if we are to see justice done.
I shall not press the amendment on this occasion because my noble friend has sought to give us some assurances. However, I hope to have considerably more assurances in the Third Reading speech from the Front Bench. Certainly all the evidence we have had to date is that these investigations will not be provided with enough speed to save the smaller private sector companies from going broke. Perhaps I may be allowed to withdraw the amendment in view of the assurances given by my noble friend.
§ Lord McIntosh of Haringey
My Lords, before the withdrawal is accepted I hope that the Minister will repudiate the dreadful allegation that the noble Lord, Lord Orr-Ewing, made that British Telecom do not keep proper accounts. If that is not repudiated it will make a great deal of difference to the possibility of a successful flotation.
§ Lord Weinstock
My Lords, before the noble Lord withdraws his amendment, may I point out that the duty put upon the director—
§ Amendment, by leave, withdrawn.
§ Amendments Nos. 93 and 94 not moved.1064
§ Lord Lloyd of Kilgerran moved Amendment No. 94ZA:
Page 45, line 6, at end insert—
("() It shall be the duty of the Director to ensure that each public telecommunications operator shall comply with the conditions specified in section 8 together with the condition that such an operator do apply the same charges for the supply and maintenance of telephone lines for voice telephony and for the conveyance of voice telephony messages within a local exchange area regardless of the geographical location of the user and do also apply throughout the United Kingdom the same method for determining charges and other terms and conditions for connection of users to their local exchange for voice telephony.")
§ The noble Lord said: My Lords, in view of the very helpful, lengthy and cogent analysis of Part III of the Bill given by the noble Lord, I am sure that even the Government Chief Whip will be pleased to know that I propose to treat this as a probing amendment, hoping to get some sympathetic observations from the noble Lord the Minister when I have finished. The Minister emphasised that Clause 47 set out certain fundamental duties of the director and that it was important to have these fundamental duties clear. We on these Benches take the view that it is the duty of the director to maintain certain charges which are at present uniform throughout the country and which we want to see kept uniform by statute and not for just a limited period by a licence which can be modified. As the noble Lord, Lord Mottistone, was good enough to make an observation from a seated position, which I heard, may I say that Professor Littlechild identified the charges to which I shall refer as needing protection because protection could not be given to the charges, which I am about to delineate, by the introduction of effective competition—to use a phrase so frequently and happily used by the Government. Competition could not be effective at least for many years.
§ First, one charge that should be uniformly maintained is the supply and maintenance of telephone lines, which is part of the rental. The rental varies according to whether the line is shared or not and whether the user is business or residential, but it does not vary from one geographical area to another. I submit that it should not. Secondly, there is the charge for the conveyance of voice telephone messages within a local charge area. In my view that should not be varied. The third charge covers the connection of users to their local exchange for voice telephony. I accept of course that a higher charge should be made for remote installations—those requiring more than 100 man hours of work. That is certainly justifiable. They should at least remain the same until it is economic to make these links by cable rather than by microwave. The stipulation here is that the rules should be the same everywhere and such users will have to fall back on the undue discrimination provision to contain their charges.
§ This amendment does not cover trunk call charges at all. Therefore it seems to me appropriate that Clause 47 should contain another subsection dealing with the duty of the director in relation to these charges. In view of what the noble Lord the Minister has said in regard to Part III of the Bill, I agree that my amendment would require further drafting, but its main theme is perfectly clear. I hope that I can get some support from the Minister, at least in respect of part of the amendment. I beg to move.1065
§ 9.9 p.m.
§ Lord Cockfield
My Lords, I think that most of your Lordships will feel as I do, that we have been here not once but many times before. Frankly, there is no difference between anybody in your Lordships' House over the general principle involved. Where we differ is on how effect should be given to that general principle. Your Lordships at the Committee stage passed an amendment specifically designed to achieve the objectives set out in the noble Lord's latest amendment, and in response to that I moved two amendments at the beginning of the Report stage. Those amendments were accepted on a Division. We believe that the method of dealing with this problem set out in those amendments was much more effective than the method which the noble Lord has endeavoured to set out not only in this amendment but in various previous amendments.
If the noble Lord wishes, I can go through in great detail explaining to him why the attempts that he has made in these amendments do not work. For example, he proposes that an operator should:apply, the same charges for the supply and maintenance of telephone lines for voice telephony and for the conveyance of voice telephony messages within a local exchange area regardless of the geographical location of the user".Is it his intention that each operator should apply exactly the same charges, regardless of where the operator does business? If so, the amendment would immediately stop the city of Hull charging its present tariff, which is substantially different from that charged by BT, and it is popular in Hull because the prices are lower. Does the noble Lord wish to put up the prices in Hull? That might well be the effect of his amendment. Is it intended that the amendment should also apply to Mercury, so that when it establishes an exchange line it has to charge exactly the same price structure as BT, even though it may well be more efficient and could charge less?
Does the noble Lord really want to prevent competition having the effect of bringing prices down? What exactly is meant by the term, "the same charges"? Does it not leave the operator free to charge one price for exchange lines of one length and a different price for exchange lines of another length? Both charges would be:the same … regardless of the geographical location of the user",but the result might be precisely the higher charges for longer lines in rural areas which would have been caused by the noble Lord's earlier amendment.
I am afraid that the simple truth of the matter is that if you try to write into the Bill exactly how individual charges should be determined, this is precisely the kind of difficulty you get into. This is one of the reasons for the inclusion of the RPI minus x formula in the licence, which was recommended by Professor Littlechild, to whom the noble Lord refers, and which is designed to prevent undue increases in the price of a basket of services. In other words, you get the control by applying it to the basket and not trying to apply it to the individual service.
Briefly, I would sum up the position like this. There is nothing between the noble Lord and the Government on the desirable objectives to be achieved. It is simply that we think that we have done 1066 it in a rather more effective way than the noble Lord has succeeded in doing it.
§ Lord Lloyd of Kilgerran
My Lords, the noble Lord the Minister has been most helpful, and I was very glad to have the assurance that he gave that there was nothing beween us on the desirable objectives but merely a matter of difference of approach. The Minister has been most kind to me this evening in regard to this amendment and I am very grateful to him because so far as I could count at this late hour he asked me six questions in relation to my amendment—six very interesting and fundamental questions in this matter. I am sure that noble Lords, at this late hour, would not want me to be tempted to deal with those six questions. Therefore I am sure that all noble Lords will agree with me that the best course to take is that with your Lordships' leave I should now withdraw this amendment and raise the matter at a further date. I then will have the time to deal with the very helpful criticism of the Minister, coupled with the sympathy at the end of his speech. I beg leave to withdraw this amendment.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 94ZB and 94ZC not moved.
§ 9.17 p.m.
Lord Glenarthur moved Amendment No. 94ZD:
Page 47, line 14, leave out ("that") and insert ("the 1973").
§ The noble Lord said: My Lords, this is a technical amendment. I beg to move.
§ On Question, amendment agreed to.
§ Lord Glenarthur moved amendment No. 94ZE:
Page 47, line 18, at end insert—
("() Expressions used in this section which are also used in the 1973 Act or the 1980 Act have the same meanings as in that Act.").
§ The noble Lord said: My Lords, this also is a technical amendment. I beg to move.
§ On Question, amendment agreed to.
§ Clause 50 [Co-ordination of functions under Part II and wireless telegraphy functions]:
Lord Orr-Ewing moved Amendment No. 94A:
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").
§ The noble Lord said: My Lords, I should like the permission of the House to consider with Amendment No. 94A, Amendment No. 95, which my noble friend Lord Cockfield will I think move. I should also like to consider Amendments Nos. 100 and 101, which I think my noble friends Lord Spens and Lord Mottistone will cover, and I believe it would be convenient to take Amendment No. 126 at the same time.
§ I move this amendment, with not very much hope of success on this occasion. We have tried, persistently and steadily, first to place this responsibility in Clause 3, where we failed and we did not get a great deal of sympathy and no support from the Opposition. We 1067 are now trying to do it in Clause 50. Later I think there is an amendment suggesting that we might set up an advisory committee to deal with radio frequencies. Each time, the Government try and assure us that this is all going to be done by the Radio Regulatory Department. I can only hope that this will come about. The track record in this field has been abysmal. But I an hopeful regarding the future under new people and new ideas. I do not want to go into details (the tut-tuts come from the Opposition Benches) and I could quote—but it would take far too much time at this late hour—just what has happened in the muddle of frequencies. People have been allotted frequencies and then have to move out of the band because it was not an internationally agreed band; and someone else has had to come into the band. All the equipment has had to be modified, et cetera. But I will not go into the painful processes that others have had to suffer.
§ We are told it will be correctly done by the RRD, and I hope so. But I hope that in replying to these amendments, my noble friend will consider whether at least some of the functions which the RRD have undertaken, like the monitoring of frequencies, the manner in which they are used or not used—because they are valuable assets and should not be lightly set aside—should be delegated to the operators themselves. As I mentioned at an earlier stage, it is very satisfactorily done in the United States and they manage to find the same number of channels on the eastern seaboard where they have roughly the same population as we do, and 10 times as many mobiles can be licensed than we are able to licence here. So there needs to be something done to use these frequencies efficiently. I hope that that function might be delegated and I hope my noble friend will assure us on that point.
§ Certainly the operator companies have an interest in squeezing the maximum efficiency and the maximum use out of these channels. So why not involve them, at no price to the taxpayer, no extra manpower—and manpower is under pressure anyhow—and no extra cost to the department? It seems to be a natural answer that those who are most interested are those who would do it best. I beg to move.
My Lords, I should like to speak for a very short moment on Amendments Nos. 100 and 101, which seem to me to give the Government the answer to Lord Orr-Ewing's question. Here if you were to set up an advisory body for matters concerned with the allocation use and licensing of civil radio frequencies, here would be the body which could be self-regulating and which could do the monitoring which is absolutely essential and which one understands is not being done very efficiently at the moment. I hope that the noble Lord the Minister will consider that option as a possible way of agreeing to the request of the noble Lord, Lord Orr-Ewing.
§ Lord Mottistone
My Lords, if I can expand on what the noble Lord, Lord Spens, says, the point about frequencies is that they are in short supply, as everyone agrees. They are essential to hold all telecommunications in the old-fashioned style of wireless. Because they are in short supply and because 1068 one of the biggest operators has a vast monopoly and is therefore always suspected of trying to rig things—all monopolies are like that, no matter who they are—it is important to have some sort of formal discussion body. This advisory group is one way of doing it.
We need to have some sort of body formally organised within the Bill which enables the users to discuss both with the director and possibly with the Secretary of State, but certainly with the director, and with the other users, how these frequencies could most fairly be distributed between all the people who need them. Having it done behind the scenes with appeals to people, and not quite knowing how decisions are made, leads to suspicions and doubts about whether the matter has been handled fairly. In the end, because this is so vital to so many industries of different sorts, it can be a matter of whether the industries, let alone the companies, remain solvent. It is terribly important to have some sort of officially recognised body—by that. I mean that it should appear on the face of the Bill—that will be available for attendance by all the interested parties.
§ 9.25 p.m.
§ Lord Glenarthur
My Lords, my noble friends Lord Orr-Ewing and Lord Mottistone have raised during the course of this Bill a number of points about radio regulation and the role of the director. In answering the points that have been made, I, too, should like, with the leave of the House, to refer not only to the amendment of my noble friend but also to Amendments Nos. 95 and 126. as well as Amendments Nos. 100 and 101, because, essentially, all deal with the same subject.
The Government recognise the need for effective co-ordination of radio matters. That is why we have resisted any attempt to split responsibility for planning the radio spectrum between the Secretary of State and the director. To do so would lead to confusion, duplication of scarce engineering resources and so on. I explained at some length, in reply to an earlier amendment last week, how the spectrum is planned and administered. I do not think that it would do much good to go over the same ground now. Suffice it to say that planning and administration are the responsibility of the Secretary of State for Trade and Industry, who is also responsible for the licensing of all civil radio uses other than broadcasting, which is, of course, a matter for my right honourable friend the Home Secretary.
The Government see the Director General of Telecommunications as playing a very important part in advising the Secretary of State for Trade and Industry on the exercise of his wireless telegraphy licensing 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 one and three, which have so far been used for 405-line television broadcasting but 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 these 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. If, therefore, my noble friend is under any fear that the other companies, I think 47 of them, will not have their 1069 cases taken into consideration, I hope he will be assured that they will be.
To ensure that all the necessary considerations are taken into account, it is 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 the power of transmissions and the avoidance of interference, because it is he who is responsible for ensuring that no undue interference is caused. I hope, therefore, that my noble friend will see from this that radio regulation is now effectively co-ordinated by a single Secretary of State who is also responsible for telecommunications policy.
That being said, the Government also see the need for proper co-ordination of the work of the director and of the Secretary of State when they are exercising their functions in respect of telecommunications. They also recognise that, whenever appropriate, there should be integration of their functions. That is why we have tabled Amendments Nos. 95 and 126.
Amendment No. 95 is designed to ensure that in exercising his functions under the Bill in cases involving the use of radio the director should have regard to the same considerations as the Secretary of State. 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 specifically relevant to the telecommunications licensing, and, on the other hand, of those to which the Secretary of State has regard when issuing wireless telegraphy licences. The amendment therefore requires the director, when exercising his functions under Parts II and III of the Bill, to have regard to such of the principles applied by the Secretary of State in exercising his licensing powers under Section 1 of the Wireless Telegraphy Act 1949 as may from time to time be notified to the director by the Secretary of State.
The principles in question are not mentioned in Section 1 of the Wireless Telegraphy Act 1949 but are nonetheless ones which the Secretary of State would be unwise to ignore. These will be based on the need to comply with international obligations, the need to promote the effective use of the radio spectrum, the need to avoid interference between authorised radio services and the need to protect national security. It is clearly right that the director should also have these in mind when he is dealing with radio communications matters. If not, there will be a risk that he and the Secretary of State will needlessly get out of step with one another.
Amendment No. 126 is a new clause to enable the Secretary of State to assign functions under the Wireless Telegraphy Acts to the director where the Secretary of State has power to delegate such functions to anybody. It will also require the director to provide the Secretary of State with such services as the Secretary of State may require of him in connection with the exercise of the Secretary of State's wireless telegraphy functions. The provision is intended to further promote the integration of telecommunications and wireless telegraphy functions wherever it is appropriate to do so. For instance, at 1070 present it is necessary for a manufacturer wishing to obtain approval for radio communications apparatus under both telecommunications legislation and wireless telegraphy legislation to obtain it from two different places. In future, where the director is responsible for approving such apparatus for the purposes of Clause 22 it would, by virtue of the present amendment, be possible for the Secretary of State to empower him to approve the apparatus for wireless telegraphy purposes as well.
The provision will also enable the Secretary of State to get the director to perform services for him in relation to wireless telegraphy matters. Such an arrangement should help to promote simpler procedures for dealing with applications to operate new radio communications services which will be subject both to telecommunications and wireless telegraphy licensing requirements. Ideally in such cases only one application to one place would need to be made.
I turn finally back to Amendments Nos. 100 and 101, of which Amendment No. 101 is the substantive amendment. My noble friend Lord Mottistone took the view that there is a need for an advisory body on radio frequency matters. There used to be a frequency advisory committee which was intended to provide advice on broad aspects of frequency planning to the Secretary of State responsible for radio regulatory matters. In the event it fell into disuse, and by the time it was finally wound up in 1980 it had not met for eight years. The director will have no responsibility for frequency allocation or the licensing of radio use. In these circumstances it would he wrong to impose upon him a statutory duty to appoint such a body. Therefore, the Government are unable to accept my noble friend's amendment.
However, your Lordships can be assured that the Government are anxious to ensure that they have adequate consultation machinery on radio frequency questions and are currently looking at the present arrangements for consulting radio communications providers and users to see how these might be improved. We are also considering a recommendation in the Merriman review that an advisory committee should be set up to advise the Secretary of State on a range of radio regulatory matters, including ones relating to frequency allocation. I am sure that those responsible for that consideration will take note of the comments made by both my noble friends.
In answer to my noble friend's particular points in relation to monitoring, the report of the independent review of the spectrum made a recommendation on delegation of functions of the sort to which my noble friend Lord Mottistone particularly referred. The report is currently being considered and I am sure that my right honourable friend the Secretary of State for Trade and Industry will also note what he says.
Of course, we share the concern expressed by all those who have spoken on this subject of radio frequencies, that the telecommunications and wireless telegraphy functions shall be properly co-ordinated, and that there shall be no fragmentation of responsibilities in regard to the latter. It is also important to involve not only the director, but the "end user", if that is the right form of words, in the decision-making process so far as is possible.
1071 I hope that my noble friends will think that this package of amendments which we have put forward goes quite some way towards meeting the concerns which they have expressed in these respects, although perhaps not quite as far as my noble friend Lord Orr-Ewing would like in so far as a total reorganisation of the role of the RRD is concerned. I hope that he will accept the difficulty of going any further, because it would require major amendments to the Wireless Telegraphy Acts. In the light of what I have been able to explain to him tonight, I hope he will think that he has been reassured and will not press his amendment.
§ Lord Orr-Ewing
Before I withdraw my amendment, I should like to point out to my noble friend that we should not over-egg the amount of work done by the Secretary of State at the DTI. We are concerned here with frequencies between 30 and 960 MHz. Over 40 per cent. of that is used by broadcasting, which comes under the Home Office; 36 per cent. is used by the military, and that comes under the Government and Downing Street. So in all these amendments we are considering only 6 per cent. of these frequencies. We all agree that they must be co-ordinated. My noble friend has not gone as far as he could, but I thank him for what he has done and for the way in which he has couched his remarks. I am 1072 sure that he is aware of the need for speed because, if we do not get on with this, many of these small companies will go to the wall. Therefore, I beg leave to withdraw this particular amendment.
§ Amendment, by leave, withdrawn.
§ Lord Glenarthur moved 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.").
§ The noble Lord said: I spoke to this amendment when I spoke to the previous one, No. 94A. I beg to move.
§ On Question, amendment agreed to.
§ Lord Mackay of Clashfern moved Amendment No. 96:
§ [Printed earlier: col. 600.]
§ The noble and learned Lord said: I spoke to this amendment when I spoke to Amendment No. 27. I beg to move.
§ On Question, amendment agreed to.1073
§ Clause 52 [Power to establish advisory bodies]:
§ 9.35 p.m.
§ Lord Cockfield moved Amendment No. 97:
Page 48, line 23, leave out ("The Director may establish advisory bodies") and insert—
("The Secretary of State shall, as soon as practicable after the appointed day, establish advisory bodies for matters affecting England, Scotland, Wales and Northern Ireland respectively; and each body so established shall consist of such members as he may from time to time appoint.
(1A) In establishing a body under subsection (1) above, the Secretary of State shall have regard to the desirability of having members who are familiar with the special requirements and circumstances of the part of the United Kingdom concerned (including, in particular, the special requirements and circumstances of consumers, purchasers and other users in that part of telecommunication services and telecommunication apparatus).
(1B) Subject to subsection (1) above, the Director may establish such advisory bodies as he thinks fit").
The noble Lord said: My Lords, perhaps it would be convenient if, when speaking to this amendment, I referred also to Amendments Nos. 98, 99, 102, 105 and 107, which are consequential on No. 97.
Amendment No. 98: Page 48, line 26, leave out ("(1)") and insert ("1B)").
Amendment No. 99: Page 48, line 30, leave out paragraph (a).
Amendment No. 102: Page 48, line 39, leave out ("the part of the United Kingdom concerned").
Amendment No. 105: Page 49, line 11, after ("The") insert ("Secretary of State or the").
Amendment No. 107: Page 49, line 27, leave out ("52(2)") and insert ("52(1) or (2)").
Amendment No. 97 is the principal amendment, and it fulfils the promises I gave during the Committee stage to bring forward amendments to strengthen the role of the four national advisory bodies for England, Scotland, Wales and Northern Ireland. Amendment No. 97 brings about two changes in respect of these bodies. First—and this meets a point made by the noble Lords, Lord Ezra and Lord Donaldson, as well as other noble Lords—the first new subsection of this amendment ensures that these bodies shall be appointed by the Secretary of State and not by the director. The second change is brought about by subsection (1A) of Amendment No. 97, which ensures that, in appointing members to these bodies, the Secretary of State must have particular regard to the desirability of members familiar with the circumstances of
consumers, purchasers and other users in that part [of the United Kingdom] of telecommunication services and telecommunication apparatus".
We believe that this is the best way to underline the fact that these bodies will be mainly concerned with matters affecting consumers.
§ There are two points upon which I should like to expand. The first is the reference to "consumers, purchasers and other users", which follows a pattern established elsewhere in the Bill; for example, in Clause 3(2)(a). This wording ensures that not only are the interests of the ordinary domestic consumer looked after but also those of business users—something that I believe the noble Lords, Lord Spens and Lord Mottistone, are concerned to ensure. The second point is that, while we wish to emphasise the role of these bodies in consumer and user matters, we do not want to exclude them from looking at other 1074 issues; for example, the interests of manufacturers. We have therefore attempted to strike the right balance, and I think that the wording in Amendment No. 97 achieves this.
§ It may be helpful if I set out in more detail what functions these national advisory bodies will undertake. Under existing legislation, there is a three-tier structure of consumer representation. At the bottom there are the local, non-statutory bodies such as the Post and Telecommunications Advisory Committee (the PATACs, as they are called); at the next level there are the Users' Country Councils; and at the top there is at present the Post Office Users' National Council (popularly and affectionately known as POUNC). This three-tier arrangement works well, and it is replicated in the Bill. The continuation of bodies such as the PATACs is assured by Clause 27, which enables the Secretary of State to help meet their expenses. The country councils' functions will be taken over and expanded by these national advisory bodies established under Clause 52, and the director will take over, and greatly enhance, the functions of POUNC.
§ It is on the national advisory bodies that I should like to concentrate. These bodies will continue the present functions of the country councils in considering complaints or representations made by consumers and in offering advice on their own initiative. In addition, the functions of the advisory bodies will be wider than before. Whereas the country councils are restricted to complaints about British Telecom, the advisory bodies will be able to consider complaints made by consumers in relation to all telecommunication services and apparatus, no matter by whom they were provided or supplied. I think that this will be of real advantage to consumers. Our proposal to set up a separate advisory body for England, again, is something which there has not been before, and will be a further help to consumers. We have, with the help and encouragement of your Lordships, greatly improved the arrangements for the advisory bodies. We now have a thoroughly sound system and a well-balanced structure. I beg to move.
Lord Bruce of Donington moved, as an amendment to the amendment, Amendment No. 97A:
Line 4, leave out from ("establish") to ("appoint") in line 7, and insert ("an advisory body for the United Kingdom, which shall consist of such members as he may from time to time appoint. The UK advisory body shall appoint advisory bodies for matters affecting England, Scotland, Wales and Northern Ireland respectively; and each body so established shall consist of such members as the UK advisory body may from time to time appoint.").
The noble Lord said: With the leave of the House, I propose to move Amendment No. 97A and Amendment No. 97B together, my Lords.
Amendment No. 97B: line 10, leave out from ("are") to ("apparatus).") in line 15 and insert ("representatives of consumers, purchasers and users, trade unions in the telecommunications industry, and manufacturers of telecommunication equipment and apparatus.").
§ We have travelled the whole area of these advisory bodies on a number of occasions. They were touched on in the course of Second Reading; they were certainly dealt with in Committee and the noble Lord 1075 has already addressed himself to the subject on Report and I do not propose to detain your Lordships over much on this.
§ We regard it as important that the Secretary of State shall be responsible for the appointment. Where we differ is that we would prefer to have an advisory body for the United Kingdom as a whole, and that the United Kingdom advisory body should appoint the various other advisory bodies for matters affecting England, Scotland, Wales and Northern Ireland respectively. On balance—we do not wish to reiterate the arguments—we think that this arrangement is much more sensible, having regard to all the circumstances.
§ I am well aware of the preference by the noble Lord to have various other advisory bodies concerned with what I will term, for the moment, specialist interests. We would prefer to have on these various advisory committees, representatives of consumers, purchasers and users, trade unions in the communications industry, manufacturers of telecommunications equipment and apparatus. We regard this of some importance.
§ Most of the time that has been spent in your Lordships' House in debating the issues on the Bill has mainly been in protection of the operators as distinct from what has been termed the monopoly position of British Telecom, which is likely to subsist—as I am sure we can believe the Prime Minister who has asserted the principle herself—for the next nine years at least as the private monopoly. The interests of the consumers have been debated, though not quite as extensively as the class to which I have just referred. We think that there ought to be some role in the advisory committees, which will be appointed by the Secretary of State, for the trade unions themselves.
§ I do not think it can be reiterated too often that the fortunes of this great industry have depended for some time, and will depend for a long time, on the efforts of those who work in the industry. It ought not to be incongruous for this House to agree that there should be representatives on the advisory committee of the various trade unions that are involved not merely in BT itself, but in the manufacturing side and the service side of the telecommunications industry. In fact it is remarkable in this modern age, with the consciousness of the role that the skilled individual plays in this vast industry, that it should be considered extraordinary that the name "trade union" should be mentioned in this connection. Surely, there is a vital interest in that. I should have thought that the success of the whole industry, whether or not it is privatised, and even to what extent it is privatised, the welfare of the consumer, the value for money of the consumer and the variety of services received by consumer, can be influenced to their benefit by having on the advisory council specifically members of trades unions who have day-to-day working experience of the various branches of the industry itself.
§ I should have thought that the advantages of the amendments to the amendment submitted by the noble Lord. Lord Cockfield, were obvious enough without any further argument from me and without 1076 any further elaboration. I sincerely hope that the noble Lord on this occasion will find himself able to accept these amendments without any demur at all. I beg to move.
§ Lord Lloyd of Kilgerran
My Lords, it would be churlish if I did not thank immediately the noble Lord the Chancellor of the Duchy of Lancaster for having at last introduced into the Bill an advisory body which is to be established by the Secretary of State. I have on several occasions talked about a council or an authority to be set up by the Secretary of State: and, at last, we have got one of that kind. I should like to speak with the leave of the House to Amendment No. 97C.Amendment No. 97C: Line 15, after ("apparatus)") insert ("and members associated with trade unions concerned with the telecommunication industry.").This is an amendment to the main amendment of the Government in this matter. I should like to ask the Minister when he replies to say why he has deliberately excluded from the list he has given of potential members of this advisory council members associated with trades unions concerned with the telecommunication industry. I should like to echo the words of the noble Lord, Lord Bruce of Donington, in this respect. I should have thought that it would have been helpful to have had one or two members of important trades unions on this advisory body. But the Government have deliberately left out the members of trades unions in this matter. They have cited consumers, purchasers and other users but there is no mention of the trades unions. There must be some special reason why the trades unions, of which so many tens of thousands are on the staff of British Telecom and would be on the staff of British Telecom when it is privatised, have been deliberately left out.
§ Lord Mottistone
My Lords, my remarks are directed to the Government amendments and not to the amendments to the amendments which the Government will deal with themselves. POUNC—and I note that the noble Lord. Lord Somers, is not here—have a couple of points to make about this. They have not led to amendments, but I think it is reasonable on their behalf to ask the Government to give consideration to them. They say that they do not object to the identification of special interest groups such as are currently in subsection (3) (and, of course, now in subsection (1)(a)) but they are fearful that too many such special interest groups will detract from the overall responsibilities of the four national bodies. I think that that is a sensible comment which needs to be borne in mind when these bodies are appointed.
The other main point is that they greatly regret that the four national advisory bodies do not have the right of independent publication of their reports. As the Bill now stands after the Committee stage, the four advisory bodies report to the director—which the Government have explained was so that the could take action on what they reported—and then he has to include their reports (under Clause 53(2)(b)) when he makes his report for the year. I can see there is a disadvantage for these bodies which will be the 1077 reincarnation of POUNC not being able to report direct to the Secretary of State and to publicise their own reports directly and comment upon them, rather than having to put them through the director. I have not included an amendment on these lines because one was not recommended, but it seems to me that the Government might care to see whether they would not give further thought to this with a view perhaps to making a change when we come to Third Reading. It is not a strong point, but it is an important one in practical terms, because we know these bodies are not very effective if they have to report through someone else. They do not have the same impact or publicity, and the comments by POUNC are deserving of consideration. Indeed, my noble friend did say that he very much appreciated their activities—or words to that effect—in his own introductory speech. I hope the Government will be able to take these matters into account.
§ 9.50 p.m.
§ Lord Cockfield
My Lords, I speak to the amendment to the amendment. Amendment No. 97A seeks to establish a United Kingdom advisory body. Amendment No. 97B prescribes that its members shall be:representatives of consumers, purchasers and users, trade unions in the telecommunications industry, and manufacturers of telecommunication equipment and apparatus.
§ Lord McIntosh of Haringey
My Lords, I apologise for interrupting, but it does not prescribe that its members "shall be"; it prescribes that the Secretary of State shall.have regard to the desirability of having members who are",and that is not quite the same thing. It is not meant to be exclusive.
§ Lord Cockfield
My Lords. I entirely take the point made by the noble Lord, Lord McIntosh of Haringey. I was not endeavouring to erect any argument on the use of the word "prescribe", but merely trying to summarise the general effect of the two amendments. But the kind of body proposed in the amendment to the amendment in fact is not all that dissimilar from the Telecommunications Council or the telecommunications advisory body which we discussed in very considerable detail earlier in our proceedings. I do not in any way dispute that the director has a difficult job to do and that it would be useful for him to have specialist advice and information which will guide him in the exercise of his functions. But I really do not think that a general advisory body of the kind proposed in these amendments is the best way to provide the director with such advice.
If we look carefully at this body we see that in fact it will be composed of competing interests, consumers on one side of a triangle, the trade unions on another and the manufacturers on the third. I am interested in the fact that the noble Lord has specified only these three particular interest, but I take the point that what 1078 he is putting forward is illustrative rather than as comprehensive, because obviously, if one appointed people representing those interests, one would find that the operators or telecommunications systems, the providers of telecommunications services or the suppliers of telecommunication apparatus would all feel that they had a legitimate role to play and that they, too, ought to have representatives on this advisory body. In fact, if there were a body of this kind composed of these various disparate interests, what the director would receive would be either a great deal of conflicting advice or, if it were unanimous, the advice would tend to be the lowest common denominator.
The noble Lord, Lord Lloyd of Kilgerran, raised the question of trade union membership. This of course also appears in the amendment itself. Let me start by making it absolutely clear that we believe individual members of trade unions may well have a very valuable role to play; but they need to play that role as individual members of these committees and not as representatives of a particular trade union. This is particularly true because these bodies are designed to represent the interests primarily of the users and consumers. They are not intended to represent the interests of people employed in the industry. That is a matter for the ordinary industrial relations inside the organisation itself; but I can say from personal experience how valuable trade union members of bodies of this kind very often are.
On a purely personal note, I may say that I was one of the founder members of Neddy right back in 1962, and in that capacity I got to know many of the leading members of the trade union movement at that time. I have known many of them since, and in their individual capacity they are people of real consequence who can be extremely helpful. What we do not feel to be right is to put people on these advisory bodies in a representative capacity, as opposed to appointing them in a personal capacity.
We believe that the best way in which the director can be given advice is by the establishment of separate advisory bodies as we propose in Clause 52, as amended, and not by some form of composite body. Under the clause we have specifically provided for the establishment of advisory bodies on those subjects where it appears to us that the need for specialist advice is greatest. For example, we have the four national advisory bodies primarily for consumer matters and the advisory bodies on the disabled and the elderly, together with the body on small businesses. The director is also given power under Clause 52 to establish such advisory bodies as he sees fit. In this way he will be able to obtain advice on particular subjects from people who are particularly experienced in the fields in which he is interested.
Since I have mentioned the four national advisory bodies, I should like to explain a little further just how they would lit in with the United Kingdom body which is proposed in the amendment. It seems to me that to have an overall United Kingdom body could only he to the detriment of these four national advisory bodies. It seems from Amendment No. 97A that the United Kingdom body is intended to be superior to the four national advisory bodies, thus 1079 creating a four-tier regulatory arrangement, which is one more than at present. This would be clumsy and unnecessarily bureaucratic. It would diminish the direct link between the national advisory bodies and the director, and this might well lead to a blurring of the different requirements of the four countries. For example, we all know that Scotland has a highly specialised and well-developed electronics industry. It would also seem to make the director even more remote from the ordinary consumer; and in fact what we have endeavoured to do is to ensure that the director is closer to the consumer and not further away from him.
My noble friend Lord Mottistone raised the question of the publication of the individual reports of the four national advisory bodies. The reason that these reports are made to the director is that it is for the director to take action on them. We felt that it would be sensible to gather all the annual reports together into a single overall report, which would then be presented by the director to the Secretary of State and thence to Parliament. I do not think this is in any way detracting from the value of the individual reports. In fact, they are far more likely to make an impact if they appear, as it were, under the umbrella of the director's main report to the Secretary of State. On all the grounds that I have mentioned, while I appreciate the objective that the noble Lord, Lord Bruce of Donington, has in mind—namely, to ensure strong representation of the consumer's voice—which is a very legitimate objective and one which we entirely share, we believe that the structure which we have proposed, and which follows closely on the undertakings that I gave to your Lordships in Committee, effectively achieves our objective.
Lord Bruce of Donington
My Lords, I am grateful to the noble Lord for his explanation and for the detail into which he has gone. I beg leave to withdraw the amendments to the amendment.
§ Amendments to the amendment, by leave, withdrawn.
§ Lord Lloyd of Kilgerran had give notice of his intention to move Amendment No. 97C:
§ [Printed earlier: col. 1076.]
§ The noble Lord said: My Lords, the noble Lord the Minister has already spoken to this amendment—
§ Lord Cockfield
My Lords, may I, with the leave of the House, ask whether we have really put Amendment No. 97? We had an amendment to No. 97. That amendment having now been withdrawn, do we not now have to have Amendment No. 97 put?
§ The Deputy Speaker (Earl Cathcart)
My Lords, I understand that Amendment No. 97C is an amendment to Amendment No. 97.
§ Lord Lloyd of Kilgerran
Yes, my Lords. Amendment No. 97C is in my name and is an amendment to the noble Lord's amendment. He has already spoken to it. It is an amendment which suggests that the members of trade unions should be considered to be members of the advisory body. But he has explained that he prefers to have on that body people who are dealing with matters from a personal point of view, rather than representatives of employees. In those circumstances, I do not propose to move this amendment.
§ [Amendment No. 97C not moved]
§ On Question, amendment No. 97 agreed to.
§ 10.2 p.m.
§ Lord Cockfield moved Amendment No. 98:
§ [Printed earlier: col. 1073.]
§ The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.
§ On Question, amendment agreed to.
§ Lord Cockfield moved Amendment No. 99:
§ [Printed earlier: col. 1073.]
§ The noble Lord said: My Lords, I have spoken to this amendment. I beg to move.
§ On Question, amendment agreed to.
§ [Amendment Nos. 100 and 101 not moved.]
§ Lord Cockfield moved Amendment No. 102:
§ [Printed earlier: col. 1073.]
§ The noble Lord said: My Lords, I have also spoken to this amendment, which goes with Amendment No. 97. I beg to move.
§ On Question, amendment agreed to.
§ Lord Lloyd of Kilgerran moved Amendment No. 102A:
Page 49, line 6, at end insert—
("() In the event of the advice offered under subsection (4) by an advisory committee appointed by him being rejected by the Director that advisory body may refer the matter to the appropriate advisory body appointed by the Secretary of State under this section.").
§ The noble Lord said: My Lords, the noble Lord the Minister has already said that the Government have made great changes in relation to the clause dealing with advisory bodies, and in that I agree with him. My amendment relates to what would happen if the advisory body set up by the director has its recommendation rejected. My suggestion is that, if the director refused to accept the recommendation of the advisory body which is set up by him, then that matter could be referred to the main advisory body which is set up by the Secretary of State.
§ Your Lordships will realise that under Clause 52 there is an advisory body set up by the Secretary of State, and there are then a number of what I might call minor bodies set up by the director himself, at his discretion, when he wants help. Would it not be helpful to the director, I ask the Government, if the 1081 problem arises that the advisory council and the director differ very considerably, for this matter to be referred to the main advisory board set up by the Secretary of State? It is not a question of two-tier government but of whether, in the circumstances of the difficulty which the director will experience, it would help him in dealing with some of these matters if the advisory body formed by the Secretary of State could be called in to help. I beg to move.
§ Lord Cockfield
My Lords, it is not at all clear just how the system proposed by the noble Lord, Lord Lloyd of Kilgerran, would in fact work, because his amendment would appear to have been written in the light of the earlier amendments, which have been withdrawn, for the appointment of a top-tier advisory body. If there were that kind of situation one could understand a proposal that in effect there should be a requirement or a proposal that if the recommendation or the views of one of the other bodies was not acceptable to the director it could be referred to the top body. But under the proposal which we now have there is no such top body. The director performs that function. If a recommendation is made—for example, by the advisory committee on the disabled or the elderly—it then becomes a matter for the director himself specifically to consider it.
If the noble Lord is trying to ensure that if there is a conflict between two bodies there should be some way of sorting it out, I should have thought that ordinary administrative arrangements—the straightforward day-to-day consultation between bodies—would effectively do this: that we should not think that these bodies would necessarily all want to operate in watertight departments and that they would consult one another over matters of mutual interest. If, on the other hand, the noble Lord is trying to ensure that the director does not ignore advice given to him by the advisory bodies, I do not think that an amendment is necessary to achieve that aim. First, in his functions under this Part of the Bill the director is bound by his Clause 3 duties. This means that if the advisory bodies alert him to some matter—say, for example, some practice of interest to consumers to which his functions relate—then he must, under the duty in Clause 3(2)(a), consider how to exercise his functions in the way best calculated to,promote the interests of consumers, purchasers and other users in the United Kingdom.I ought also to draw attention to Clause 51, which places a duty on the director to consider any matter which relates to telecommunications services or to apparatus which is made by anyone with an interest in that matter or on his behalf, which of course includes the advisory bodies. Therefore the director must consider matters put to him by the advisory bodies, provided they relate to telecommunication services or apparatus, which I imagine in practice they will. Therefore, the point is effectively covered by this provision in Clause 51.
In effect, therefore, the situation envisaged by the noble Lord, Lord Lloyd of Kilgerran, would be dealt with either under the existing provisions of the Bill or under the normal, sensible, administrative arrangements that one would anticipate the director would make for liaison with the advisory bodies.
§ Lord Lloyd of Kilgerran
My Lords, I am very grateful for the very full reply which has been given by the noble Lord. I did not quite understand why he should refer to Clause 51, which deals with the investigation of complaints. I had not got that kind of matter in mind when I moved the amendment. However, in view of the lateness of the hour I shall read Hansard tomorrow to see what the noble Lord has said and will consider then what further action, if any, may be taken. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
Lord Cockfield moved Amendment No. 103:
Page 49, line 7, at end insert ("(1) or")
§ The noble Lord said: My Lords, this amendment also is associated with Amendment No. 97. I have already spoken to it, I beg to move.
§ On Question, amendment agreed to.
Lord Bruce of Donington had given notice of his intention to move Amendment No. 104:
Page 49, line 10, at end insert ("and there shall be included in the report a statement relating to progress on matters concerning disabled people".)
§ The noble Lord said: My Lords, upon further study of this amendment, I have come to the conclusion that the point which this amendment seeks to make is already covered by reading subsection (5) in conjunction with subsection (2)(c). I take it that the noble Lord will be quite willing to confirm that that is so. On that basis, and subject to any correction by the noble Lord as to my construction, I do not propose to move this amendment.
§ [Amendment No. 104 not moved.]
§ Lord Cockfield moved Amendment No. 105:
§ [Printed earlier: col. 1073.]
§ The noble Lord said: My Lords, this amendment also goes with Amendment No. 97. I have spoken to it, and I beg to move.
§ On Question, amendment agreed to.
§ Clause 53 [Annual and other reports]:
§ 10.8 p.m.
Lord Stoddart of Swindon moved Amendment No. 106:
Page 49, line 24, after ("businesses") insert (", the provision of public call boxes in inner-city and rural areas,")
§ The noble Lord said: My Lords, I beg to move this amendment standing in my own name and that of my noble friends Lord Bruce of Donington and Lord McIntosh of Haringey. As your Lordships will note, this amendment seeks to ensure that the director includes in his annual report to the Secretary of State a survey of developments relating to public call boxes in inner city areas and in rural areas.
§ A similar amendment was moved at Committee stage, which would have included among the general duties of the Secretary of State and the director the duty to satisfy demand for public call boxes without 1083 regard to their profitability and only with regard to social need—especially in areas of social deprivation and in rural areas.
§ However, in the light of the debate in Committee and the Government's attitude we did not proceed to a vote on the matter on the basis that we could in any event return to this point at Report stage. We are doing so by moving this amendment. Amendment No. 106 is so designed as to make it, in our view, acceptable not only to the House but also to the Government, since all it will do in effect is to ensure that the position relating to public call boxes is monitored annually
§ The House will be aware of the reasons for our concern about the future of public call boxes, since these were put forward very cogently by my noble friend Lord Bruce of Donington at Committee stage. We feel that public call boxes are a vital public and social service which is under threat of severe contraction due both to this Bill and to the pressure after privatisation to maximise profits even at the expense of services which have been taken for granted over the past 70 or 80 years.
§ We are aware that British Telecom at present lays down criteria for the retention of public call boxes and that overall there is a total loss of some £77 million per annum on this service. Clearly, then, we are worried about the future of public call boxes—especially in inner city areas and rural areas, where this service is at most risk.
§ It has been mentioned—as it was in our previous debate—that there is some 70 per cent. to 80 per cent. penetration of the telephone service to private households. But that percentage is certainly not true of inner city areas, where only about 30 per cent. of households have a telephone service. Therefore, the need for public call boxes is correspondingly greater. Furthermore, since the crime rate and probably the sickness and accident rate are higher in the inner city areas than elsewhere, any reduction in public call box facilities will impose a further burden on these communities, especially in relation to the 999 services; in other words, where the public call box 999 facility is most needed, it is at the greatest risk under this Bill of being reduced in size and effect. Similarly, in the rural areas, where public call box facilities are essential and the 999 service is vital in many instances, the risk is that the service will he reduced due to below average public call box receipts.
Those concerned with the telecommunications industry are certainly in no doubt about the risks to public call boxes when this Bill becomes law. Mr Alan Taffin the General Secretary of the Union of Communication Workers, who is a respected and moderate trade union leader, has forecast that within two years 17,000 telephone kiosks could be removed, and that within five years the number of kiosks could be halved. The Society of Telecommunication Engineers is equally gloomy and cites the experience in the United States to back its view that there will be a significant reduction in public telephone kiosks after the passing of this Bill. I do not wish to weary the House: nevertheless, I think it would be as well if I quoted an article which appeared in the magazine Computing on 8th December 1983. The headline says:
STE warns BT could dump call boxes
The article reads:
The Society of Telecommunications Engineers casts doubt on the future of British Telecom's 77,000 public call boxes after BT is privatised, in a report published this week.
The society, which represents most of BT's junior managers, argues maintenance of the loss making network and the inevitable profit pressures facing a private company will prove mutually exclusive objectives.
John Jordan, president of the STE, said: 'Simply recovering the annual £77 million loss on our kiosks would entail a revenue increase of 80 per cent. However, in practice, revenue would probably need to rise by 125 per cent. if, as might be expected, usage levels dropped by say 20 per cent. in response to increased charges.'
The STE fears BT will be forced to use the 'get out' clause included in its licence. In its present form the licence to BT will allow kiosks to be removed where 'continued provision is impractical.'
The experience of the New York Telephone Company is quoted as an example of the kind of pressures likely to face a privatised BT. There, 4.000 kiosks were removed in 1981 and a further 1,400 last year because a price rise had been refused by the regulatory body charged with overseeing the company's activities.
The decision to remove the boxes was defended on the grounds that even if the price rises had been permitted, they would still have lost 25 dollars a year.
The STE would like to see the public call box issue clarified before the licence to BT comes into force.
§ Those are very cogent reasons that have been put forward by STE in its concern about the future of call boxes. It seems clear that there is a need for some safeguard for this vital service. Although the amendment is a mild one—and it is a very mild one—it will at least give some protection and ensure some public involvement in the future fate of the British public telephone kiosk. I commend the amendment not only to the House but also to the Government and I sincerely hope that they will accept it. I beg to move.
§ Lord Lloyd of Kilgerran
My Lords, from these Benches we share the widely felt anxieties about the future provision of public call boxes, particularly in inner city and rural areas. Briefly, we would support the amendment so cogently and persuasively submitted to your Lordships by the noble Lord, Lord Stoddart of Swindon.
§ 10.20 p.m.
§ Lord Cockfield
My Lords, the provision of public call boxes is one of the extremely important matters covered by Clause 3(1)(a). Under Clause 3 the director is required to exercise his functions so as to satisfy all reasonable demands for such services, subject to the conditions stated. This function will be discharged through conditions inserted in BT's licence, and it is one of the director's duties to monitor compliance with licence conditions.
Clause 53 as at present drafted requires, by virtue of subsection (2), that the director's report should contain:a general survey of developments … in respect of matters falling within the scope of the Director's functions".Clearly in the light of Clause 3(1)(a) the provision of public call boxes is one of the matters falling within the director's functions.
Again, another of the director's functions is to consider consumer complaints and representations under Clause 51, and no doubt some at least of these will be concerned with the provision of public call 1085 boxes. Thirdly, I should like to draw your Lordships' attention to the function in Clause 47. This is a very wide-ranging function and requires the director to keep under review, and also to collect information on, commercial activities connected with telecommunications in the United Kingdom. This of course will include such things as public call boxes, services to rural areas, and so on. It is very clear, therefore, that Clause 53 as drafted does require the director to report on these matters.
It may be asked, therefore, what harm is done by including the words proposed. This is unnecessary, and would simply clutter up the statute with detailed provisions which added nothing to what was already in the statute. I do not think that in drafting statutes one needs or ought to follow the Bellman's injunction—"What I tell you three times is true". It is enough to say it once.
There is another objection. That is that singling out some matters for mention tends to cast doubt on other matters not mentioned: for example, the emergency services, the maritime services, services to rural areas, and so on. Indeed, even this present amendment, by referring to,public call boxes in inner-city and rural areas",suggests that public call boxes elsewhere are not important. If one tried to meet this argument by mentioning everything, one would simply be duplicating and repeating large areas of the Bill in Clause 53.
While, therefore, I appreciate the good intentions behind the amendment, it deals with a matter already fully covered. It would therefore simply unnecessarily add to the length and complexity of the Bill. I would stress that what we are dealing with in this amendment is not the substance of the matter. Despite what was said by the noble Lord, Lord Stoddart of Swindon, we are not dealing with the substance of the matter. That was covered in Clause 3 and was extensively discussed by your Lordships.
What we are dealing with here is simply the content of the director general's report. The arguments advanced by the noble Lord, Lord Stoddart, are relevant to Clause 3 and were discussed there. They do not relate to Clause 53, which simply follows up the duties and functions imposed in the Bill itself. I would hope that with this explanation the noble Lord would not wish to press his amendment.
§ Lord Stoddart of Swindon
Very briefly, I of course noted what the noble Lord, Lord Cockfield said. We shall read what he said with the greatest of interest, and so will other parties who are concerned about public telephone boxes throughout the country. I recognise—and on this side of the House we recognise—that Clause 3 deals with public call boxes in a general sort of way; and, like him, I would not want to see the statutes cluttered up with irrelevances. But of course the fact of the matter is that when we looked at Clause 53, we did see that subsection (2)(a) did refer in particular to matters affecting small businesses or persons who are disabled or of pensionable age. It seems to me that there would have been no harm—and there will still be no harm—in including the wording of the amendment which I 1086 proposed in that particular clause and subsection of the clause. If you can refer to small businesses in that particular subsection, what on earth is wrong, and how is it cluttering up the statute, if you refer to public call boxes? I would have thought quite frankly, that the noble Lord would wish to set at rest all the concerns that have been expressed about public call boxes and I think he would be doing himself, the House and the consumers—and certainly me—a great service if he would relent and accept this amendment. If he does not, I will withdraw it.
§ Lord Cockfield
My Lords, with permission of the House, I do not rise to the bait offered by the noble Lord; but I simply wish, if I may be permitted to do so, to give an explanation on one specific point the noble Lord raised. That was the question of the disabled, the elderly and the small businesses. The Government amendment on that point, which required the director's report to cover matters affecting them, flowed from the decision to appoint special advisory bodies for the disabled the elderly, and for small businesses. These bodies were required to report annually to the director, and it was therefore perfectly natural that the director should specifically refer to matters falling within the remit of these bodies in his own annual report. So that in that respect it does not differ from the way that the director would deal with the reports from the four country advisory councils.
§ Lord Stoddart of Swindon
My Lords, I can see that the noble Lord is not disposed to be kind to me tonight, so I will be kind to him and the House and withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Lord Cockfield moved Amendment No. 107:
§ [Printed earlier: col. 1073.]
§ The noble Lord said: This amendment also goes with Amendment No. 97. I have spoken to it. I beg to move.
§ On Question, amendment agreed to.
§ 10.29 p.m.
§ Lord McIntosh of Haringey moved Amendment No. 108.
Page 49, line 28, at end insert—
("() a report on the system of charges levied by telecommunications operators for access by other telecommunications operators to their networks.")
§ The noble Lord said: My Lords, with the leave of the House, I would wish to speak to Amendments 108 and 109.
Amendment 109: Page 49, line 28, at end insert—
("() a report on the financial arrangements made for the continued provision of services under section 3 of this Act, including a five year financial plan, updated each year.")
§ The noble Lord, Lord Cockfield, in his response to amendment No. 106 criticised the attempt to put what he called detailed provisions into this part of the Bill, and he cited the Bellman in support of his argument that things should not he said three times. I would remind him that the Bellman was not exactly and admirable example to follow. When he was asked about his map for the ocean, he said he did not have 1087 Mercators, North Poles and Equators, tropic zones and meridian signs because they were merely conventional signs: what he had, he said, was a perfect and absolute blank. He also had only one notion for crossing the ocean and that was to tinkle his bell—not a means of navigation, I suggest, that would commend itself to the House.
§ However, the accusation cannot be made that these two amendments are detailed provisions. The reports that are asked for are absolutely fundamental to the economics of British Telecommunications after the passage of the Bill. It will not be enough for the noble Lord to respond in the vein that he responded to my noble friend a few minutes ago. It is true that the device that we are now adopting of asking for further detail in the annual report of the Director General of Telecommunications is not a very strong device. It is nothing like as effective as it would be actually to spell out the provisions for the funding of the uneconomic services in the Bill. A report does not do that. All that it does is draw attention to what might go wrong after the damage has already been done. But it is the best that we have left to us at this time until we have the opportunity to come back on Third Reading.
§ The question of the system of access charges has been growing in seriousness as the Government have attempted to take note—I believe genuinely—of the concern expressed on all sides of the House about the various uneconomic services, and as the Government extended the provisions of Clause 3 to that effect. It is true that on the most important of all, the provision of rural services, the noble Lord the Minister succeeded in persuading the House last week, on what I believe was a wholly fallacious argument, that there should not be adequate protection for rural services. We shall have to put that right next week. In the meantime, there is now a whole series of provisions within Clause 3(1) and Clause 3(2) which refer to uneconomic services. When we come to the issue of who shall pay for these uneconomic services, we are told without any further explanation that it will be done on the basis of access charges. Access charges are a very two-edged weapon. They can be an extremely effective way for British Telecommunications itself to screw down all possible competition and maintain its virtual monopoly of the most profitable services. That would be the case if British Telecom was to set access charges high and to have the ability to set access charges high. But the problem for British Telecom in doing that would be that in equity—and indeed in the terms of the Bill—access charges would have to be the same for British Telecom itself seeking to access its own networks as for the other operators.
§ I suspect that what will happen in practice is that access charges will be set extremely low. The danger is that the access charges will simply not be adequate to the demands made upon them by the provisions of Clause 3. I can make these assertions with impunity because the Government have made no attempt to help the House over what will be the cost of the commitments made for uneconomic services in Clause 3. They have made no attempt to tell the House, even in the most general terms, what will be the level of access charges necessary to meet those demands on services, and what effect this will have on 1088 the competitive position as between British Telecom, and other telecommunications operators.
§ I would suggest to your Lordships that in the absence of any indication on either of those points the Government's map of the economics of telecommunications, after the passage of the Bill is, like the Bellman's map, a perfect and absolute blank. Although it is too much now to expect, after well over a year of legislative activity, the Government actually to come clean on the matter, it is necessary to say that in the future there must be a continuing obligation on the Director General of Telecommunciations to report on the way that things actually work out in practice and to report in his annual report on the sytem of charges levied for access, and, turning to Amendment No. 109, for the continued provision of services under Clause 3 including a five year financial plan up-dated each year.
§ Unless we have those two essential elements in our telecommunications strategy reported on, made available by the Secretary of State to Parliament and debated in Parliament each year, we shall not have gone any way towards expressing what, presumably, is in the Government's mind—namely, the relationship between British Telecom and other operators. Moreover, we shall have done nothing—and this is perhaps not of greater importance, but it is certainly of very great importance—to ensure that the provisions in Clause 3 for the protection of those most in need (on behalf of whom your Lordships have voted on a number of occasions throughtout the passage of the Bill) actually mean anything. I beg to move Amendment No. 108.
§ Lord Lloyd of Kilgerran
Let me briefly say that we on these Benches would have liked to see reports such as have been described by the noble Lord, Lord McIntosh, included in the publications by British Telecom. I should like to support the statements made by the noble Lord.
§ Lord Cockfield
I do, indeed, congratulate the noble Lord, Lord McIntosh of Haringey, on his knowledge of The Hunting of the Snark. I would, however, simply make the point that I quoted the Bellman as an example of what we ought not to do. Therefore, his more detailed quotation supports the case that I was putting forward and does not in any way cast doubt upon it.
The two amendments to which we are now speaking both relate strictly to the content of the director general's report. The arguments put forward by the noble Lord relate to the substance of the Bill. I suggest, with respect to the noble Lord, that he is raising these matters in the wrong place. As I have explained in connection with the earlier amendments, the obligation is on the director general to report on all matters which fall within his competence or within his functions. He will, therefore, be producing a very wide-ranging report.
On the question of the access charges, I can of course go into the matter in some considerable detail. As the amendment is drafted, it would cover not only access charges but also the commercial charges agreed between the two operators for interconnection. I doubt whether that, in fact, is what the noble Lord has in 1089 mind. But even if the amendment were drafted more restrictively so as only to cover the actual access charges, I do not think that it would be appropriate.
First, BT has discretion as to whether or not to levy access charges. It is possible that it may decide not to do so, in which case it will be odd to have a requirement on the director to report on something which does not exist and which is not being done. But, more importantly, I do underline the general argument that I used before—namely, that, by highlighting one subject, you do in fact cast doubt upon the importance of the other subjects. I agree that access charges (if BT decides to levy them) are important, but they are only one of the many important matters that are provided for in the licence. It is, we think, wrong that we should single out one particular aspect for a special report. There are the questions of prices, interconnection, the provision of services in rural areas, emergency services and so on. Once again, if you do in fact set down in Clause 53 all the matters on which you think that the director should report, then in fact you are virtually reproducing the whole of the earlier provisions in the Bill.
The other amendment, No. 109, in fact, goes very considerably further than the substantive provisions of the Bill itself. There is an obligation on the Secretary of State and the director to ensure that:any person by whom any such services fall to be provided is able to finance the provision of those services".That is in the Bill. But from that it does not follow that it is right or appropriate that the director should be conducting what is, in effect, an efficiency audit of British Telecom and producing financial plans for it for the next five years. This would almost amount to the director general trying to run British Telecom.
The amendment says:a report on the financial arrangements made for the continued provision of services … including a five year financial plan, updated each year".I suggest that that goes far beyond anything which it is reasonable to expect the director general to do. He is required to exercise his powers in a way which does not mean that the operator is unable to finance the services. But the Bill does not go into the kind of detail provided by this amendment. While, therefore, I entirely understand what the noble Lord has in mind—and on many of these matters we in fact sympathise with him because we want to see a good substantial annual report which covers all the matters which are relevant and all the matters in which consumers, manufacturers and users as well as Members of both Houses of Parliament are interested: we want to see a first-class report—we do not think that the right way to go about it is by trying to lay down in great detail what the content of that report should be.
Lord Bruce of Donington
The noble Lord is at his most disarming this evening. He is so sympathetic towards us that we are almost bowled over by the consideration that he has for our feelings in these matters. When the successor company goes into operation, we shall be in a different ball game, particularly about information in regard to British Telecom. Noble Lords will be well aware that the accounts and reports published by British Telecom go far beyond 1090 the requirements of the Companies Acts 1948 to 1981, under which the successor company will operate. Indeed, if it so wishes and if it confines itself to the strict requirements of the Companies Acts, the successor company will be far less informative than the accounts produced by British Telecom over this past six years, which even sworn enemies must agree are certainly presented in a most comprehensive manner, are most informative and contain a tremendous amount of informative data.
Of course, it may be said that the terms of the amendment will require the director to extend himself over a slightly larger field. Once again, I am sorry to rub it in but, according to the Prime Minister, for the next nine years at least the successor company that takes over British Telecom will be a private monopoly subject only to the bare requirments of the Companies Acts 1948 to 1981. I trust, therefore, that the noble Lord, Lord Mottistone, and, even in his absence, the noble Lord, Lord Off-Ewing, will he in favour of extending the amount of information that they will no longer receive from British Telecom and for which, therefore, they will look to the director general.
I do not think that these are unreasonable proposals. The noble Lord has used the argument many times before that we cannot specialise or particularise in one field without somehow down-grading the ones that we do not mention. This is an argument that has been used by politicians now for the past two centuries and there is nothing new in what the noble Lord has said in regard to that. May I draw his attention to the word "include" which is incorporated in Clause 53(2)? There is certainly nothing wrong in particularising. Otherwise the noble Lord's entire Bill would be full of particularisations that do not mention, and therefore downgrade, other matters. If the noble Lord counts up tomorrow how many times in this Bill the words "may include" are used he will be surprised at the number, so I do not think we really ought to pay overmuch attention to that.
On the assumption that the public at large want information about a private monopoly to which in law they are not necessarily entitled, and on the assumption that they still want some information—and the noble Lords, Lord Mottistone and Lord Orr-Ewing, seemed to want a lot of information—I should have thought it was best to encourage the maximum publicity prudently in accordance with the size of the director general's staff. As I go through this Bill again and again—and I have been through it many times—and I look at the explanatory note about the director general and his 50 staff and his total cost, the mind boggles as to how the director general is going to do all this. But in order to satisfy the noble Lord sitting behind the noble Lord he will most certainly have to do it. Out of sheer generosity, if for nothing else, to the noble Lord, Lord Mottistone, and the other liberalisers who have supported him this past few weeks, the noble Lord really ought to assent to the amendment so ably moved by my noble friend Lord McIntosh of Haringey.
§ Lord McIntosh of Haringey
My Lords, the noble Lord the Minister is quite rightly resisting any temptation to seek the leave of the House again. The 1091 reason why I would wish if it were not this time of night to pursue these amendments is first because the noble Lord, Lord Cockfield, actually misunderstands the second amendment. "A report on the financial arrangements made" means the financial arrangements made by operators. It does not mean making the director general make the financial arrangements himself. Nor does it require an efficiency audit. It requires that the operators produce the report of the financial arrangements and that that be collated into the five-year financial plan. I do not think that that is at all the interpretation that the noble Lord put upon it.
The other reason why only with great reluctance shall I seek leave to withdraw this amendment is because it is not simply a matter of a report which is being made up for the purpose of satisfying the amour proper of the director general or anybody else. It is because it is this report which is made to the Secretary of State and laid by him before Parliament and which ought to form the basis of informed debate in the country as a whole about how the Telecommunications Act is operating.
My reason for feeling so strongly about these matters is that these are the heart of the operation of the Act, and they are the heart both of the financing of the telecommunications operators themselves and of the provisions on which noble Lords have argued hard and long for uneconomic services. But on the basis only that we may find some way of attracting a larger House for further amendments at Third Reading, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendment No. 109 not moved.]
§ 10.49 p.m.
§ Lord Lloyd of Kilgerran moved Amendment No. 109A:
Page 49, line 28, at end insert—
() the results of an examination in consultation with the Boards of Directors of public telecommunications operators and with advisory bodies established under section 52 above of the actions taken during the preceding year and of the policies which should be adopted in future years—
§ The noble Lord said: My Lords, I must confess at this late hour that I have been tempted to put down this amendment for a further report because of the great change in atmosphere in relation to this Bill that has been created by the Government under a certain amount of pressure, particularly in their attitude in regard to advisory bodies. This report that I suggest should be put forward is intended to be a succinct one recounting the results of what has happened in consultation with public telecommunications operators and with the advisory bodies that have now been set up under Clause 52, and to set out what positive actions have been taken for two matters. The first is what positive steps have been taken in regard to the promotion of telecommunciations developments. I emphasise the word "promotion". One of the duties 1092 of the director, with his advisory bodies—one of which has been set up by the Secretary of State—is to promote the development of telcommunications in the United Kingdom. It would be simple to have a list of such activities.
§ I am sure that the noble Lord, with his delight in referring to Victorian literature and other ancient doctrines of that kind, with that charming humour that he has in these matters, will be able to tell me that there are various parts of the Bill where this has been dealt with. When I read the Bill I cannot see any duty for the director to list out what are the positive steps that he has taken with the advisory bodies to promote the development of telecommunications in the United Kingdom.
§ My second point is that there should be a report to show what positive actions have been taken by the director with his advisory bodies to do something which is considered by the Government to be of the utmost importance; that is what steps they have taken to maximise effective competition in the provision of telecommunications services and apparatus in the United Kingdom.
§ We have been told over and over again that it is essential to have this effective competition. I take the words that have been used by the Government and accept them for the moment. I shall not analyse what they mean. The Government must know what they mean. Therefore it would be helpful from time to time for reports to be given as to what positive steps have been taken to maximise effective competition. This could be just another list. I am not suggesting that the reports should be long essays in relation to these matters. These are technical matters that can be listed or referred to quite briefly in any annual report.
§ I hope that the noble Lord will not introduce the Bellman argument against me because I must again confess that I have always been brought up to believe that when I have a good point and I have to present it to a tribunal, whether it is the High Court or a judicial committee of your Lordship's House, I have always been advised to put the point at least three times, but to take care that when the point is put it is wrapped up in such a way that the tribunal thinks that it is a new point. I beg to move.
§ Lord Cockfield
It was a charming admission by the noble Lord, Lord Lloyd of Kilgerran, that he was wrapping up an old point to try to make it look like a new one.
§ Lord Cockfield
It was a confession, because I think that in this instance I entirely agree with him. There have been many matters on which we have had disagreements, and there have been important points on which we have had agreements. As a result, the Bill has been amended to the advantage of everybody.
But this amendment runs into exactly the same difficulties that I have already outlined to your Lordships. This is a matter on which there is a disagreement between us. We believe that the functions and the responsibilities of the director are fully set out in the Bill, both in Clause 3, which deals with his general functions: later in the clauses which 1093 deal with his licensing functions and then in Part III, particularly Clause 47, which deals with his other functions which include the duty to keep under review the carrying on both within and outside the United Kingdom of activities connected with telecommunications. The reporting requirement in Clause 53 follows naturally and properly from the substantive provisions of the Bill. We think it is both unnecessary and potentially misleading—and I do not want to underline it too much—to repeat all these things again in Clause 53.
I resisted the temptation to get up and reply to the noble Lord, Lord Bruce of Donington, but I should like to make this one comment. He instinctively starts from the point of view that the director general will want to produce a poor, thin-gutted report. In fact, the natural inclination of the director general will be to do precisely the opposite; namely, to set out to produce an extremely good, detailed report which goes into all these matters of public interest. I myself, over the years, have been responsible in varying capacities for producing statutory reports, and, if I may say so, I took very great pride in the reports that I produced. I hope very much the director general will take the same attitude towards his responsibilities. This is why the choice of individual is very important.
I am not in any way disputing the importance of any of these matters which have been listed by noble Lords. They are all very important. The only point on which I diverge—for "dispute" is a very strong word—from the views expressed by noble Lords opposite is that I think that these are matters that are covered by the general words in the Bill and do not require to be specifically set out in the terms of Clause 53 itself.
§ Lord Lloyd of Kilgerran
My Lords, it was very good of the noble Lord to spend so much time in dealing with my simple amendment. His view on these matters is totally different from my view. I was brought up to deal with hard commercial and industrial realities, perhaps, in a field with which, in his very distinguished career, he has not been so intimately connected as he has been with his own field. With those words, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 54 [Cable programme services]:
Lord Lyell moved Amendment No. 110:
Page 50, line 11, leave out ("which is not within a dwelling-house")
§ On Question, amendment agreed to.
§ Clause 55 [Prohibition on unlicensed cable programme services]:
§ Lord Lyell moved Amendments Nos. 110A and 110B:
§ [Printed earlier: col. 1031.]
§ The noble Lord said: Amendments Nos. 1 10A and 110B are consequential upon Amendment No. 91 A, 1094 to which I spoke this afternoon. With the leave of the House, I beg to move the two amendments en bloc.
§ On Question, amendments agreed to.
§ Lord Denham
My Lords, I think that this is the place that we have agreed we should get to tonight. I beg to move that further consideration on Report be now adjourned.
§ Moved accordingly, and, on Question, Motion agreed to.