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Dr. Vincent Cable (Twickenham): I appreciate the fact that the Government intend Report to be a tidying-up exercise to follow on from the work of the Standing Committee, of which I was not a member. However, we have an opportunity to revisit some of the basic issues about whether it was wise to decapitate the Bill and remove some of its key elements.
I take a view opposite to that of Conservative Members. I believe that the original structure had much to commend it. There was a good reason for treating the telecommunications, water and energy sectors together. The underlying economic principles for all those industries are the same. In each case, there was an understandable wish to move from monopoly regulation to competition, which is encroaching on all those industries. It is being encouraged, and rightly so. However, in each sector, there was a natural monopoly deriving from the electricity and gas grid, the water
mains system--the backbone system--and the telecommunications system. It seemed eminently sensible to apply a common set of regulatory principles to them all.The integrated Bill was welcome at the time because it made two significant advances, one of which was to introduce a higher level of social and environmental protection. Consumer groups and those concerned about the environment widely welcomed that. The second advance provided more statutory consumer protection. In the integrated Bill as originally conceived, all those sectors enjoyed additional levels of regulatory protection.
We do not know what will happen now, especially to telecommunications. A White Paper and a Green Paper will be issued, and there will be a new regulatory structure dealing with communications as a whole--probably in two years, although that is not certain. Will the Minister reassure us that the genuine advances in social and environmental obligations and consumer protection in the original Bill will remain in any new communications and water Bills? It is important not to go backwards as a result of the withdrawal of those key elements of the Bill.
I am sure that the answer to my question is yes. However, I am slightly sceptical because I have dealt with other areas of regulation, especially in connection with the Financial Services and Markets Bill, and another Department strongly resisted incorporating social obligations such as those in the Utilities Bill. As an advance has been made, it is important to consolidate it.
I wish to raise a further point about the method of reaching such a decision. Consumer groups have bruised feelings--as Ministers, I am sure, are aware--because when the Bill was originally introduced, they were assured that telecommunications would henceforth enjoy a much stronger system of consumer protection. Many of them were delighted to hear that. Indeed, they issued enthusiastic press releases saying how much they welcomed it--having been encouraged to do so, I believe, by the Department of Trade and Industry. They were then told, without being consulted, that telecommunications were being withdrawn from the Bill. No reason was given for that, but of course the consumer groups were well aware of the pressures from the mobile telephone operators that led to the withdrawal.
Consumer groups are extremely anxious about the way in which the decision was made over their heads. I hope that the Government will give an assurance that the next stage in dealing with telecommunications and water will bring those groups back into the fold, and that they will consult them properly, as they have been overridden and treated rather shoddily.
Mr. Ian Bruce: I shall begin with a declaration of interest. During the passage of the Bill, I have had to give fewer and fewer such declarations as the Government remove more and more from the measure. However, the Bill still makes provision for telecommunications, in which I have some major interests. I am a professional adviser to the Telecommunication Managers Association and my family and I have shares in the gas, water, electricity and telecommunications industries.
In debating this group of amendments, we have an opportunity to probe the Government on the direction in which telecommunications and water are going. My hon. Friend the Member for Bognor Regis and Littlehampton
(Mr. Gibb) and the hon. Member for Twickenham (Dr. Cable) discussed telecommunications, as did the Minister to a certain extent.However, little has been said about water. I do not quite share the view of Conservative Front Benchers on the necessity or desirability of having a lot of consumer bodies included in a measure that concerns the electricity and gas industries, as I believe that the market is working extremely well. There have been dramatic examples of companies that do not respond to their customers and, in such cases, consumers can go elsewhere. Certainly, the consumer is starting to become king in telecommunications.
By the time that the Bill is enacted, that market will be working even better. The fixed line--the thing that allowed BT to have a virtual monopoly--is increasingly being replaced by mobile telecommunications equipment. Increasingly, in the gas, electricity and telecommunications markets, consumers have a real ability to exercise the ultimate sanction against a supplier--telling the company that they will not use it any more, because they can go to another and get a better deal.
4.30 pm
We have never received a proper explanation of why water was removed from the Bill. The Government were, from the start, reticent about discussing the relevant clauses and they are now having to remove all record of water from the Bill. We understand that there was a turf war with the Department of the Environment, Transport and the Regions, but the House is entitled to know what the Government intend to do. We understand that Government do not intend to introduce new legislation during the lifetime of the current Government, but intend only to produce a draft proposal at some point in the future, and a Conservative Government will have to decide whether or not to proceed with it. The water industry and water consumers want to know what the Government have in mind. Ministers must share with the House the reasons why it was so difficult to manage those matters and give consumers proper protection.
The Minister for Energy and Competitiveness in Europe says that the Conservatives are the friends of the fat cats. Currently, the water industry has a regulator who decides prices after negotiations in which the water companies all say that the new prices will be impossible. Afterwards, they come back and say that, even though the pricing structure was impossible, they have made massively increased profits. Having promised the electorate that they would do something about it, the Government have failed to tackle that problem.
It is strange that the right hon. Lady says that the Opposition are trying to delay matters; in fact, two days were originally set aside for Report, but we are having only a half-day debate on the subject. At no time during proceedings on the Bill have the Opposition attempted to filibuster or delay matters. We want only to get on to the real issues, but the real issues have at no time been addressed.
Mr. Gibb: My hon. Friend will be aware that any delays in Committee occurred because the Committee had to wait for amendments to be drafted by the Government draftsmen.
Mr. Bruce: Yes, indeed--I am grateful to my hon. Friend for that intervention. I see the Government Whip,
the hon. Member for Hyndburn (Mr. Pope), who was assiduous in his duties throughout the passage of the Bill through Committee. Perhaps I should put on record how pleased I was by the number of early afternoons I was given. Often, when I expected to be in Committee from 4.30 to 7 pm and to return after dinner, we were told after an hour or so that we would be sent home early because yet another set of Government amendments was not ready.We did a workmanlike job. I rarely bestow praise on the Liberal Democrats, but I have to say that, occasionally, they turned up. A whole group of amendments was lost because no Liberal Democrat Member was there to move it, however. Perhaps more spectacular was the fact that, when only one Liberal Democrat was there to call "Aye" on a certain group of amendments, the Government allowed the amendments to go through, which shows that they had lost control. Of course, tonight, when we consider a later group of amendments, we will be asked to overturn the Liberal Democrats' victory, and I hope that they intend to protest loudly when that happens.
I digress, however, and I must not. We are in a strange position. The telecommunications industry, the provisions relating to which are about to be deleted from the Bill, has just experienced the highest stealth taxation endured by any industry or body anywhere. In the current round, bidding has reached £25 billion, and that money will come from telecommunication consumers and industry. We can all delight that the Treasury will be stuffed with such money, but the clauses that we are about to delete might have enabled that money to be used to encourage telecommunications and to ensure that the United Kingdom is the best place in which to do e-business. That issue should have been addressed.
Sir Robert Smith (West Aberdeenshire and Kincardine): I rise to speak briefly, on the back of the remarks made by the hon. Member for South Dorset (Mr. Bruce), about the future for telecommunications users in the event that the new clause and the amendments are agreed to, and particularly on the £25 billion going out of the telecommunications sector. That affects not only consumers, but the future development of the infrastructure and technology, as well as how quickly and universally the industry develops.
That brings me to an earlier point that the hon. Gentleman made about relying on competition to protect consumers of telecommunications. As a lay consumer of telecommunications, I do not find the market that clear in terms of providing effective protection and an easy choice of suppliers. Competition has not yet reached rural areas. The cellular communications network is quite well developed in urban areas, but areas such as mine have only the land line. The worry is that the free flow of unregulated competition in the early days of mobile communications may have undermined the infrastructure throughout the network. If the Bill is amended, how will the telecommunications consumer be protected in future?
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