Directory Inquiry Service: Competition (Hansard, 6 May 2004)

§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville)
My Lords, the matter raised is the responsibility of the Office of Communications, Ofcom, as independent regulator. Accordingly, my officials have asked the chief executive of Ofcom to respond directly to the noble Lord and copies of the chief executive's letter will be placed in the Library of the House.

§ Lord Bradshaw
My Lords, I thank the noble Lord for that Answer as far as it goes. In fact, however, all the published information shows that calls to directory inquiries have decreased very markedly since the introduction of competition to the sector. Moreover, subscribers dialling the number are often offered an inferior service and one where they can be misled into paying extra money for the calls they are making. Therefore, while I accept that it is a matter for Ofcom, I question the purpose of competition policy generally; whether the interests of the consumer should not always be paramount; and whether we are about protecting the interests of producers to the exclusion of consumers.
I can give examples in the bus industry where the Office of Fair Trading pursues competition that is absolutely against what customers want. Customers want through journeys and through tickets. Those things are often not available because of the rigorous adherence to the theory of competition law. I wonder whether the Minister might say something about that.

§ Lord Sainsbury of Turville
My Lords, the regulation of directory inquiries takes place through the Independent Committee for the Supervision of Standards of Telephone Information Services and a code of practice with which the premium rate service providers have to comply. That is about the quality of the services, not about the commercial interests of the providers. ICSTIS has already fined several of the directory inquiry companies for breaches of the code of practice. So there is a regulatory system that requires that the code of practice is put into place.
The number of calls has decreased. It is difficult to interpret that information as it has occurred against the background of a steady decline of about 15 per cent per year in the number of directory inquiries. The decline is not entirely surprising given the increase in the number of mobile phones and the development of the Internet, but the figures seem to have stabilised.

§ Lord Borrie
My Lords, does my noble friend the Minister agree that while competition in the provision of services is generally good for the consumer and enhances consumer welfare, there might be exceptional cases? Perhaps our experience since the introduction of competition in this field demonstrates that, in place of the public service ethic, we have so-called "competition" and a number of companies have come into the field that are not capable of giving good service. If that has resulted in a decrease in the number of calls to the directory inquiries services, it would hardly be surprising, because the public have been suffering.

§ Lord Sainsbury of Turville
My Lords, this is a very interesting situation. I do not think that the service that is being given is satisfactory. However, when one asks how the current service compares with the previous one in terms of accuracy, one learns that it is very much in line with the previous service. We should not take the romantic and charming view that we used to have a wonderful public service. We have had a rather consistently low standard of service both before and after this event. It is encouraging that Ofcom is now taking action by means of mystery shopping information to study the accuracy levels of the service so that appropriate action can be taken. That work was done in March and April and will be published in the next few weeks.

§ Baroness O'Cathain
My Lords, who did the Minister ask about the satisfactory nature of the service? According to everyone I have asked, and based on my own experience, the service is appalling. There are at least twice as many mistakes as there were prior to this nonsense of the 118 numbers. It is also extremely expensive. So who did he ask, and who are these wonderful people who are getting such great service?

§ Lord Sainsbury of Turville
My Lords, I do not think that that follows on from the information that I gave. I said very specifically that I do not think it is a good service. However, I think it extremely encouraging that Ofcom is now doing a proper mystery shopping exercise. The National Audit Office is also playing a part in developing the methodology for that so that we will have reliable information. I do not think it is a satisfactory service, but it follows on from a previously unsatisfactory situation. The important action is being taken, and it is not relying on anecdotal information but entails a proper survey. As I said, the survey will be published in the next few weeks so that people can see the situation and proper action can be taken.

§ The Countess of Mar
My Lords, can the Minister say how many of the original 118 numbers are extant and how many have gone to the wall?

§ Lord Sainsbury of Turville
My Lords, the number of service providers has remained fairly constant since the liberalisation.

§ Lord Dubs
My Lords, does my noble friend agree that when the new competition opened there was adverse press publicity indicating that, coupled with inaccuracies, the previously high charges had become extortionate? Was it not therefore almost inevitable that there would be a decline in the use of the service? I have not used directory inquiries since the introduction of the new numbers because of my fear that I will he taken for a big ride by whichever company I phone up. Is that not the problem that Ofcom will have to tackle?

§ Lord Sainsbury of Turville
My Lords, one of the interesting factors here is that, before liberalisation, 1216 many people thought they were getting a free directory inquiries service. So the large amount of advertising saying that people will get a cheap service has probably put a lot of them off. That is one factor that has almost certainly influenced the situation. People thought they were getting a free service, but now there are other ways of obtaining the information.

§ Lord Ackner
My Lords, a free service is provided by at least one competitor. You do not pay One Tel for any inquiry, as it emphasises when you ring up its number—118 111, I think.

§ Lord Sainsbury of Turville
My Lords, I am sure Members of the House will be very grateful for that information about how they can proceed in future.