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Mrs. Roche: I am following the hon. Gentleman's remarks on children and access to computers with some interest. In talking about the legacy left to us by the previous Government, what does he have to say about the fact that 40 per cent. of computers in schools are five years out of date, rendering them obsolete by today's standards?
Mr. Fallon: If the hon. Lady had studied the matter, she would know that we have the best record in Europe of introducing computers into schools. We did the best that we could with the resources available to us. If she is pledging to devote new DTI money to the Department for Education and Employment, I am sure that my former colleagues in that Department would welcome it.
Dr. Ian Gibson (Norwich, North): Will the hon. Gentleman please comment on the previous Government's initiative of inducing schools to collect vouchers from shops to buy computers? How many computers were bought by that method? In my experience many schools depended on Tesco and Sainsbury vouchers to finance their computers.
Mr. Fallon: We welcomed any contributions, because we never regarded this simply as a matter of state funding.
We encouraged all schools to maximise their resources and involve parents in fund raising. I welcome the contribution that some of our major companies have made to encourage technology in schools. We never fell into the trap of believing that those new technologies should be introduced into schools for their own sake, or into accepting that computer literacy was a substitute for real literacy. We regarded those new developments as tools towards better education and higher skills.
Mr. Ian Bruce: Was not the Under-Secretary's intervention extraordinary given that the previous Government had such a good record in providing computers in schools and not a penny has been announced today to improve matters? My majority was the lowest against a Labour candidate. Many of my constituents voted for a Labour Government believing that they would provide more money. Is it not extraordinary that we should have a debate on this matter yet not get a single penny from the DTI to improve computing in schools?
Mr. Fallon: My hon. Friend's intervention is welcome. I have already warned the Under-Secretary--I thought it only fair to do so--that when my hon. Friend the Member for Chesham and Amersham winds up the debate, she will be relentless in pressing for answers on that area of funding. We need an answer on the national grid for learning, and any further answer on the budget for the university for industry would be welcome. On the Under-Secretary's final point about improving and modernising the state of computers in schools, we want to know exactly what contribution the DTI budget will make to the Department for Education and Employment. The hon. Lady introduced that topic and she can certainly answer those questions.
Mrs. Roche: Will the hon. Gentleman give way?
Mr. Fallon: I shall give way just once more, because I have a great deal more ground to cover.
Mrs. Roche: We are all waiting with bated breath for the rest of the ground the hon. Gentleman has to cover.
The hon. Gentleman has misunderstood my earlier intervention. I was talking about the previous Government's record and the legacy that they left us. Explanations there came none.
Mr. Fallon:
Let me be clear: the hon. Lady is the Minister; if she thinks that too high a proportion of the computers in our schools are obsolete, it is for her to say what new resources will be committed to solving that problem. If she has to explain every intervention that she makes, we are likely increasingly to suspect that no new money is available.
The previous Government's good record would not have been possible were it not for the privatisation, liberalisation and competition that we fostered throughout the new technologies. Those are the three graces of radical conservatism. Had we not privatised British Telecom in 1984, and encouraged competition, first through the duopolies and then through greater liberalisation, we would not now have the investment which the Minister of
State praised: some £29 billion invested by British Telecom; prices lower in real terms by 40 per cent. since 1984; and some of the cheapest telecommunication systems in the western world. Neither would we have had the massive investment by cable companies to which the Minister of State also referred: some £7 billion so far; and a further £5 billion pledged until the end of the century.
The Labour party was wrong to oppose the privatisation of British Telecom if they now seek to claim credit for successful investment 13 years later. It would be nice if, just for the record, the Minister would now admit that the Labour party was wrong to oppose that particular privatisation. I pause waiting for that final admission. We have waited for 13 years; we are content to wait a little longer.
Just as important as privatisation was liberalisation. All consumers can now access the Mercury network. More than 200 local, regional, national and international public telecommunications licences have been issued. The UK's four cellular networks are among the largest in the world and there are now some 150 cable franchises. I hope that the importance of cable will not be dismissed. It is one of the largest new technology industries in this country, indirectly employing some 17,000 people. Investment in it amounts to some £12 billion and an important point for the House to note is that virtually none of it has been financed by the Government. We did not start as a Labour Government would have, with some kind of British cable corporation or cable grants programme. On the contrary, we privatised, liberalised and encouraged the marketplace, and thus secured the investment which the Minister of State has praised.
I have two pieces of advice to offer the Government. The first and most important is that they should not meddle further in those markets. That advice may already be too late. We now hear that there is to be a new regulatory authority, "Ofcom", to bring together the different functions of regulators. We also hear that the principal regulatory formula of RPI minus X may be interfered with. We now have a utilities review, which will lead to months of uncertainty. That shows clearly that Ministers do not understand that the new technology industries need a stable regulatory framework, not some eternal year-long review.
Mr. Battle:
The companies themselves asked for a review of regulations, as the hon. Gentleman knows from our consultations in opposition. The energy industry said that we need a framework to address the future because the one that we have already is 13 years old. The telecommunications industries point out that, with convergence, the present regulatory framework is not sufficient. Conservative Members write to me asking whether there will be a regulatory framework. I wonder whether the hon. Gentleman is totally opposed to one. If so, why does he suggest that the Government should interfere and intervene in, and get a grip on, some areas?
Mr. Fallon:
Of course there must be a regulatory framework. We set one up. What the Minister does not understand is that it must be reasonably stable if we are to continue to secure the investment levels which the previous Government delivered.
My second piece of advice to Ministers is not to attempt to second-guess the market by doing cosy deals with preferred providers. However, that advice, too, may be
almost too late. The Labour party has made that mistake not in government but when it was in opposition. Some 18 months before the Labour Government came to power, my hon. Friends will recall the spectacular fiasco of the British Telecom schools deal. Let us refresh our memories about that fiasco. I can offer the Minister and my hon. Friends the headline:
Our policy was clear. We treated British Telecom and the other British telecommunications operators on an equal basis. They could run individual cable franchises, but they were not allowed to broadcast services over national networks to residential customers until the review in 2001 when we expected competition to have matured. It is important to put it on the record that the operators were allowed to offer full access to businesses and schools.
That arrangement was broken by the then Leader of the Opposition--now the Prime Minister--who decided, in a smoke-filled room, to offer British Telecom privileged access ahead of the other telecommunications operators in return for cabling up schools that it was cabling anyway at almost no charge to the corporation. That deal was heralded in a speech by the current Prime Minister as
BT has learned a lesson and, with the windfall tax applying to it to the tune of £500 million, it is a very expensive lesson. But I hope that Labour has learned a lesson also--that there is no such thing as a free telephone line. Such deals remind us that this is not new Labour, but old-tech Labour--it is not to be trusted. When it has the chance, Labour always prefers to do cosy deals with single monopoly providers. Confronted with a choice between monopolistic centralisation and private competition, all Labour's old instincts come to the surface. That is the fundamental difference between the Opposition and the Government. The Government see information technology as an opportunity to direct and to control. We see it as an opportunity to liberate and to empower.
The BT deal is in question, as the Minister has conceded. The regulator said last month:
"Blair, BT and Smoke-filled Rooms"
and an article in which the correspondent explains why the Labour party's sweetheart deal on the super-highway is a mistake. Back in October 1995, the Labour Leader announced with great fanfare that British Telecom was to be given special early permission to provide broadcast services over the national network in return for cabling schools, colleges and libraries.
"new Labour, public and private, working together, building a dynamic economy."
Within weeks, the deal collapsed. The regulator condemned it as anti-competitive, and the cable companies rightly were up in arms about their investment. It was even attacked by the Labour party's friends atThe Independent--not a noted critic of the Labour party--which wrote:
"Labour is in effect advocating a one-off boost to BT's monopoly power where some of the excess profits are used to do what the state wants, rather than allowing the regulator to ensure that this surplus is passed back to the consumer . . . Mr. Blair should ditch the BT deal, back customer power not big business, and, above all stop making policies on the hoof."
"This is just not the way to proceed."
Perhaps the Under-Secretary would do us the courtesy of telling us in her wind up where we have got to with the BT deal. If she cannot do so today, I hope that she will
write to me on this point. What kind of licence might be devised by the regulator? What reassurance will there be for the cable companies?
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