HL Deb 13 December 1990 vol 524 cc573-5

Lord Sharp of Grimsdyke asked Her Majesty's Government:

What steps are being taken to ensure that British companies are offered equal access to United States and EC telecommunication service markets commensurate with the unrestricted access to the British domestic long-distance and international telecommunication markets proposed in the consultative document presented by the Secretary of State for Trade and Industry onl3th November.

The Minister of State, Department of Trade and Industry (Lord Hesketh)

My Lords, the Government take every opportunity to impress on the other member states of the European Community and on the United States the desirability of removing regulatory barriers to the development of competition in telecommunications.

Lord Sharp of Grimsdyke

My Lords, I thank my noble friend for that short but informative reply. Is he aware that under the United States Federal Communications Act 1934 British companies are limited to 20 per cent. ownership of United States companies operating the radio spectrum? Is he further aware that the US authorities have sought exemption from most favoured nation provisions for telecommunications in agreements under GATT in order to support the overseas operations of US companies? Why do not Her Majesty's Government similarly support the entry of British companies into the telecommunications markets of the US and the EC?

Lord Hesketh

My Lords, I am aware of the United States 1934 communications Act. I can assure my noble friend that we continue to press our concern on this matter at every opportunity available to us. With regard to most favoured nation treatment, again the Government have in Brussels, particularly during the last week of the GATT round, pushed our unhappiness with the proposals in regard to derogation to which the United States refers. We constantly refer to the bilateral basis.

Lord Mulley

My Lords, while our American friends are understandably active in seeking concessions to assist their companies, they are very much less forthcoming in the other direction. Can we not obtain a little more reciprocity in the general trade picture?

Lord Hesketh

My Lords, it is fair to say too that by leading the way in the liberalisation of telecommunications policy we can also show some results. It is worth recording that we have the highest value added content of about £700 million per annum, and climbing, of any European country; it is over twice that of any other European country. It is significant that IBM is moving its world communications centre from New York to London, partly on the basis of the liberal regime that exists in this country.

Lord Lloyd of Kilgerran

My Lords, in his reply the Minister said that the Government are taking every opportunity available to them to deal with the matter. In view of its great importance to this country, can he be more precise about when the next opportunity will be available to the Government to press forward in this respect?

Lord Hesketh

My Lords, further discussions on the GATT round will be taking place at the beginning of January. This is an on-going situation—to use an appallingly hackneyed phrase. I believe that a combination of government pressure and a liberalised regime which is paying dividends will benefit this country.

Lord Williams of Elvel

My Lords, can the Minister tell the House as a matter of information whether the Secretary of State has granted any licences to companies in foreign ownership to operate in our domestic telecommunications market? If so, which companies are they and under what ownership?

Lord Hesketh

My Lords, that question is somewhat wide in its specific nature of the Question on the Order Paper; otherwise I would be more than happy to answer it. However, I can assure the noble Lord that having privatised British Telecom we do not wish to see nationalisation by the back door occurring by single-owned nationalised companies coming into this country.

Lord Morris

My Lords, looking at this problem from the other end of the telescope, so to speak, is my noble friend aware that the vast majority of holdings in the cable companies in the United Kingdom are by United States companies and not British companies? Will he assure the House that that is an example of the desirability of reciprocity with the United States?

Lord Hesketh

My Lords, cable companies do not fall within the Question on the Order Paper.

Lord Sharp of Grimsdyke

My Lords, the Government rightly reject unilateral disarmament in defence matters, so why are they so enthusiastic about unilateral disarmament in trade matters?

Lord Hesketh

My Lords, we believe that a free market is a unilaterally more successful way of conducting business.

Lord Williams of Elvel

My Lords, I press the noble Lord on my question, which refers directly to the Question on the Order Paper. Do the Government support unrestricted access to the British telecommunications market? In what form has that access been granted and to whom?

Lord Hesketh

My Lords, the Government will pay close attention to the degree of state ownership when considering the granting of a licence. Privatisation has been successful and we do not wish to encourage nationalisation by the back door.

Lord Leatherland

My Lords, is the Minister aware that the Benches behind him are almost empty? Is that a mass desertion?

Lord Hesketh

My Lords, I fear that I did not entirely get the point of the noble Lord's question, due to my own fallibility.