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11 Mar 1998 : Column 699

Mrs. Roche: I shall take the new clauses in the spirit in which I hope they were intended--as probing new clauses. I must disappoint the hon. Member for Daventry (Mr. Boswell) as I cannot accept any of them, but I shall try to explain why they are unnecessary.

First, the Secretary of State can already do all that the Opposition seek to empower her to do. Secondly, we believe that the powers in the Bill will bring about efficient spectrum use more effectively than regulatory intervention by the Radiocommunications Agency, which some of the new clauses seek, although of course the agency has an extremely important role to play.

With reference to new clause 2, the Secretary of State, acting through the Radiocommunications Agency, already has inherent power to allocate the various parts of the electromagnetic spectrum to a particular service, as she thinks fit. The power is subject only to certain constraints. The new clause is therefore unnecessary.

Mr. Letwin: Will the Minister give way?

1.15 am

Mrs. Roche: No, I shall not. The hon. Gentleman took a considerable time and I want to develop my argument because there are common points about the new clauses that I should like to make.

The Secretary of State possesses all the legal means necessary to reallocate the spectrum between services and to assign licences to individual licensees. There is confusion among Opposition Members. On a close reading of the new clauses, one sees confusion between assignment and the allocation of spectrum.

I fully share the concern of the hon. Members who have tabled new clauses that the spectrum should be used efficiently, but as I explained in Committee and on Second Reading, that is precisely what the Bill is all about. The powers in the Bill enable the Secretary of State to charge for licences on the basis of the economic value of the spectrum. That will permit the Radiocommunications Agency to reassign spectrum to other users.

Mr. Lansley: Will the Minister give way?

Mrs. Roche: No.

While I am not unsympathetic to the spirit of the new clause, I believe that it is unnecessary. I therefore invite the hon. Member for Daventry to withdraw it.

Mr. Ian Bruce: On a point of order, Mr. Deputy Speaker. The whole House knows that this business has been put on by the business managers--the Whips in charge of the Bill--and it seems extraordinary to my hon. Friends that the Minister, who always responds fully and takes interventions, should not be doing that on orders from the Whips.

Mr. Deputy Speaker: That is not a point of order. It is for hon. Members to decide whether they take interventions.

Mrs. Roche: Thank you, Mr. Deputy Speaker.

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I accept that there may be circumstances in which it would be desirable, for spectrum management reasons, for a particular service to be moved to a different part of the spectrum. There has been a great deal of discussion about this. For example, existing users of part of the spectrum may need to be moved to provide spectrum for a new scheme. Users may also need to be moved to comply with an international agreement allocating spectrum for a new service. That is well known. However, section 1(4) of the Wireless Telegraphy Act 1949 provides the necessary power to revoke or vary a licence if this cannot be achieved through agreement. There is therefore no need for an express statutory power to permit this kind of exercise.

Mr. Lansley: I am grateful to the Minister, who allows me to make a point I fear I may not otherwise get a chance to make. I take her point about hoarding, which we have discussed previously. The industry has clearly not been satisfied by what was said in Committee. I note from The Guardian of 5 February that the managing director of One2One said that he was concerned that some investors would buy spectrum purely to sell it on to other telecommunications companies when they were hit by capacity constraints. The Minister has not assuaged industry concerns entirely. Will that weigh in the balance in terms of adopting at least one of the new clauses on offer?

Mrs. Roche: The hon. Gentleman knows that we have consulted industry all the way through the Bill. From the consultation, we know that, broadly speaking, industry is supportive of what is proposed.

New clauses 4 and 5 raise important issues of the secondary trading of spectrum rights. I shall go as far as to say--at nearly 1.20 am--that I see attractions in what hon. Members have said about new clauses 4 and 5. I certainly agree that secondary trading has the potential to offer considerable advantages in terms of making spectrum management more flexible and allowing market forces a greater role in the process. However, at the moment, I cannot advise the House to accept the new clauses, for five main reasons.

First, despite the advantages of secondary trading, the free market in this area cannot be left to work completely unregulated. Indeed, on Second Reading, and again tonight, the hon. Member for South-East Cornwall (Mr. Breed) made that very point.

Secondly, a compulsory registration system is necessary so that if radio interference is caused, the Radiocommunications Agency will know who is responsible for using a particular assignment. Conditions must be imposed on the use to which the spectrum is put, to comply with international obligations.

Mr. Boswell indicated assent.

Mrs. Roche: The hon. Member for Daventry is nodding.

The new clauses fail to address these issues, so they are fatally flawed.

Thirdly--this is probably one of the most important areas--at present, no legal property right subsists in the radio spectrum. Licences issued under the Wireless Telegraphy Act 1949 are permissions to use radio

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equipment. They do not confer a legal property right. I understand the serious issues that Opposition Members have raised on that point and realise that this sounds a bit harsh but, as drafted, the new clauses are legally meaningless.

Fourthly, if secondary trading were introduced at the same time as we started to phase in spectrum pricing, there would be a grave risk of windfall gains and a disorderly market. The hon. Member for South Dorset (Mr. Bruce) alluded to that on Second Reading.

Mr. Ian Bruce: Will the Minister give way?

Mrs. Roche: Just on that point, as I mentioned the hon. Gentleman.

Mr. Bruce: I appreciate that the new clauses that I have drafted are thin on technical detail. We all understand that windfalls would occur, but surely if the hon. Lady believes in secondary trading she should table new clauses that claw back the windfall or redistribute the money to the benefit of consumers.

Mrs. Roche: As the hon. Gentleman will know, we are breaking new ground in this area, and we are anxious to get it right.

There was much discussion--rightly--in Committee on examples throughout the world, particularly where auctions had been used. We are anxious to learn, but it is important that we do not to rush into this. The hon. Gentleman might be interested in a couple of things that I have to say.

There are considerable legal doubts about whether the proposed system of secondary trading would be consistent with the licensing directive. Overall, it would take much more extensive legislation than the two new clauses to introduce tradeable spectrum property rights.

The hon. Member for South Dorset invited me to respond with some new clauses. I shall give him an example of what that would mean. In New Zealand, it took about 100 clauses, which gives some idea of the complexity of the issues and the problem that the Government have with these new clauses.

Mr. Letwin rose--

Mrs. Roche: No, I shall make some progress.

In case all this seems too negative, I repeat that I see considerable attractions in secondary trading that is properly instituted and introduced at the appropriate time. However, the new clauses do not meet the criteria that I have mentioned.

I shall deal with new clauses 6 and 9 together, because they both deal with broadcasting and are closely linked. I have every sympathy with the objective of securing the efficient use of all parts of the spectrum, but I do not believe that the new clauses would do anything to improve spectrum management. As I have already explained, the Radiocommunications Agency, on behalf of the Secretary of State, has the power to allocate spectrum between services, so the provision already exists.

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New clause 11 is also unnecessary, as the Secretary of State already has unfettered powers under section 1 of the Wireless Telegraphy Act 1949 to revoke or vary licences and reassign spectrum. The powers are clearly defined in that Act.

In so far as the stated objective of promoting a free market in spectrum is meaningful, it could already be pursued under the 1949 Act without any amendment to that Act. The new clause is unclear and unnecessary.

I have no quarrel with the intention behind new clause 12, but it is unnecessary as it does no more than restate the current position. The Secretary of State, acting through the Radiocommunications Agency, already has inherent powers to allocate spectrum to specific services--again, subject to international agreements--and has power under section 1 of the Wireless Telegraphy Act 1949 to assign spectrum to individual licensees.

As the hon. Member for Daventry said, new clause 15 deals with exemptions from licensing for low-power devices. I understand the intention behind it, but it is not necessary because the appropriate power is already specified in section 1(1) of the 1949 Act. The Government of that day had great foresight in the areas that we are discussing. The power in that Act is to make regulations exempting specific radio equipment from licensing--a power that has been used extensively. I hope that that gives the hon. Gentleman some reassurance.

New clause 19 deals with the Radiocommunications Agency's enforcement powers. Section 1 of the 1949 Act requires the use of the radio spectrum to be licensed unless an exemption has been made. That Act already gives the Secretary of State enforcement powers and stipulates the penalties that the courts may impose. Enforcement is carried out by the authorised officers of the agency, who are subject to the Criminal Procedure and Investigations Act 1996.

The powers already exist and hon. Members will know that the Radiocommunications Agency pursues a vigorous and effective enforcement policy. There is no need to provide a power for the Secretary of State to make regulations to prescribe enforcement actions against those who use the spectrum without authorisation or operate in breach of licence conditions as the 1949 Act already makes adequate provision to that effect. The new clause is therefore unnecessary, although I understand why the hon. Gentleman raised the issue.

As for new clause 20, I fully agree that priority should be given to using the radio spectrum for services that are not technically feasible by any other means, such as those for which mobility is required. However, it is difficult to see what effect the new clause would have, as the idea of encouraging the transfer of services by regulation--again, I use the word used in the new clause--is rather vague.

In any event, the new clause is unnecessary. The whole purpose of clause 2 is to allow the Secretary of State to set fees which take into account a wide range of economic and other factors, and which will therefore reflect the economic value of the spectrum to users. Administrative pricing should ensure that economic pressure is brought to bear on operators to consider whether they are using spectrum in the most effective way.

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We have had a full and effective debate. I hope that I have persuaded Opposition Members to withdraw the new clause, but if not, I urge my right hon. and hon. Friends to vote against it.


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