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6 July 2006 : Column 342WH—continued

I welcome the decision by Digital UK to launch its £200 million information campaign a few months ago. As my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (Mr. Moore) said, the first area to be affected is the borders area represented by him and my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith). They are the first to enter this brave new world. My hon. Friend was absolutely right
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to demand that the procedure must be right, so that the borders are not the guinea pigs from whom others learn.

My hon. Friend raised a number of issues, but one area of comfort from a recent survey in his constituency is that 75 per cent. of people recognise what needs to be done for the digital switchover. They fully understand what will happen, whereas only 66 per cent. of the rest of us understand. His constituents are already ahead of the game in terms of understanding, but that leaves 25 per cent. who do not understand, with only 18 months to go. He is absolutely right to say that there is a lot of work still to be done.

Mr. Moore: I appeal to my hon. Friend to distinguish between people being aware that there is a big process going on and those who fully understand the details and issues arising from it. They have got to the point where they know that it is happening, but they are beginning to worry about the particulars.

Mr. Foster: I shall perhaps share the statistics later with my hon. Friend. The survey is even more encouraging than he suggests, but he is right to say that there is a lot of work to be done in a short period and it is crucial to ensure that we get it right.

My hon. Friend and a number of other hon. Members raised some issues that are important to touch on, so that we can hear the Minister’s response to them. We have already heard about the supply chain, the huge amount of work that will be done, the large number of television sets, digital boxes and 25 million aerials that will be needed and the need to ensure that orders are placed early so that the kit will be available when it is needed. Concern was also rightly expressed in the report in relation to potential problems from cowboy operators. I was delighted that in their response to the report the Government said that they would work with the relevant trade organisations to try to find ways of overcoming that. That is welcome.

Other hon. Members have raised concerns about various aspects of planning. My right hon. Friend the Member for Berwick-upon-Tweed referred to conservation areas and listed buildings and the difficulties of having a satellite dish, which are not permitted under planning rules. I declare an interest because that applies to many parts of the wonderful city of Bath, where people cannot have satellite dishes in the very area where they are unable to get Channel 5, so they do not have access to those digital terrestrial television services. They feel as though they are losing out.

As I have already said, the development of new technology and new ways of receiving satellite broadcasts, especially the flat-surface receivers that were in use some years ago, may provide part of the solution to that planning problem, but the issue must be taken more seriously. I note from the Government’s response to the Select Committee report that the relevant Departments here and in the devolved Administrations are considering the planning issues at the moment.

Another crucial matter, to which the Chairman of the Select Committee referred and which affects 25 per cent. of the population, is that of people living in
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houses in multiple occupation, or MDUs, to use the hon. Gentleman’s more recent jargon. There is concern that, in many cases, the owners of those properties, whether they are local councils, housing associations or private landlords, are not taking enough action to prepare themselves for what is necessary. A campaign is clearly needed to persuade the owners of houses in multiple occupation to take more vigorous action. I was pleased that reference was made to some of the other types of property—for example, care homes, hotels and so on—where there are similar problems.

Several other issues were mentioned. I have already referred to the assistance package. Like others, I believe that the Government will have to consider a wider range of people who will need support under that package. The matter will no doubt be debated as further research is done. However, what many of us want, very quickly, is the answer to the crucial question who will pay for it. It would be absolutely wrong if that money were lumped with the BBC’s licence fee.

It is the Government’s social policy that there should be free television licences for the over-75s, which I welcome, and the Department for Work and Pensions gives hundreds of millions of pounds to the BBC to make up for its lost source of income from potential licence fee payers. Targeted assistance is exactly the same: it is a social policy of the Government and it should be funded by them. The Minister may challenge me to say where the money will come from, but clearly there will be huge financial dividends to the Exchequer from the release of the analogue spectrum and potentially from spectrum charging, issues to which I will return in a second.

Funding is a crucial issue. I am delighted that other hon. Members have voiced their concerns about the energy consumption of some of the new equipment. I said when I intervened in the speech of my right hon. Friend the Member for Berwick-upon-Tweed that the latest survey shows that the additional energy used by the new digital set-top boxes will cost each household £30 more. That does not include the additional cost of running some of the high energy usage television sets that are increasingly coming on to the market. Those costs can be reduced if the equipment can be manufactured to have an “off” button, but at present few of them do.

I was pleased that, during DCMS questions on Monday, the Minister agreed to discuss the issue with the industry to see what can be done about it. In response to my question on the need for energy labelling on equipment, a matter that was referred to in the Select Committee report, the Minister said that the Government would work with the relevant bodies to find a form of labelling. Digital UK said that it may be prepared to incorporate it in the logos that it puts on the equipment.

I shall refer now to sources of income from the Government, particularly the use of the release spectrum. Most people accept that there are two potential uses and that we will end up with a mixture of both. One will be social use—the release spectrum might be used for hospital television, local TV and so on. The economic benefits will be from the sale of the spectrum to a range of potential users, for example, the provision of television services through mobile phones. Many other options are being considered.

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The hon. Member for Maldon and East Chelmsford referred to the box that he was sent; I, too, was sent one. There is no doubt that the BBC, ITV and others are pressing hard to persuade us of the merits of high-definition television. However, we should be aware that, under current technology, high-definition television makes a great deal of use of the spectrum.

If we are to go in the direction of high-definition television and we stoke up too much demand at this stage, we will remove some of the potential alternative uses. I am not saying that that is a bad thing, but we need to think about it. That is why the Select Committee was absolutely right to say that the decision on what we will do in respect of the release spectrum must be made very quickly, or we will be in all sorts of difficulties further down the track.

The Government have consistently hinted at the possibility of spectrum charging. We keep being told in parliamentary answers that taxation is a matter for the Chancellor and that the Chancellor has made no decision in that respect. However, we know that Ofcom is looking at the matter at the moment.

Once we move into the exciting digital arena and the Chancellor starts considering the introduction of a charge for the use of the spectrum, I hope that the Minister will lobby his right hon. Friend definitely not to use it to charge for those services that provide what we call public service broadcasting. That is crucial.

We must not underestimate the huge challenges ahead. If they are properly handled and dealt with, there will be great benefits.

3.57 pm

Mr. Malcolm Moss (North-East Cambridgeshire) (Con): May I begin by commending the Chairman of the Select Committee on Culture, Media and Sport, my hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale), and his team on an extremely important report? I was about to say that it was overdue, but it got there in time.

From my reading of the conclusion, it appeared that the Chairman chose his words extremely carefully, perhaps with some content from his Clerk. It stated:

The two key words in that quotation are grossly understated; as one reads the report, the word “rash” springs to mind, and the word “spatchcock”, which was used in a Select Committee report when energy was being privatised in the 1980s. It had the press rushing out to consult their dictionaries on what “spatchcock” meant. Hon. Members can rush to their dictionaries tomorrow to find out. It means a cobbled-together process that does not stack together in a meaningful, logical way.

Behind the Select Committee’s report is an assessment that, if the Government are not careful, they will have serious problems on their hands that will affect the whole electorate. It will not be piecemeal; it will affect everybody, not just one or two people.

I urge the Minister to address the matter, as I am sure he will. He probably did not realise when he took
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up his position as Minister in the Department for Culture, Media and Sport with responsibility for the creative industries that, in the words of David Elstein,

I do not suppose the Minister realised that he was landing himself with a project of that size.

The report states that the project needs leadership. It needs a central organisation and critical leadership, probably from the Minister who is designated to deliver it. I hope that the Minister will confirm that he is also the Minister who will be seen to deliver the package, to whom Parliament can turn, and who bangs heads together, as my hon. Friend the Member for Maldon and East Chelmsford said earlier. That will be necessary, because there are so many vested interests. Bringing together all those involved will be a massive task. It needs ministerial authority to push that through, as is well stated in the report.

If I were in the Minister’s shoes, I would listen carefully to the experts who gave evidence to the Select Committee. I would carefully read what they said and wrote, and would have them in to discuss their experiences. Those who gave evidence to the Committee have been in the business for 30 or 40 years and know that what is proposed will be incredibly difficult to do. One commentator, Chris Goodall, said that:

that is, digital terrestrial TV—

He went on to say that it would be “costly and extremely stressful”. He was involved in the introduction of Channel 5, during which Channel 5 had to do all the video cassette recorder tuning. That went well over budget; I think that it cost £165 million in the end. However, that is nothing compared with what is proposed for the switchover.

Of course, it is the Government who are undertaking the programme, which is compulsory, as was mentioned earlier. They have dictated that it will happen, and they have set a time scale. The Government took that unilateral decision, and I agree with other hon. Members that their level of responsibility is therefore elevated right to the top. They cannot just move problems on and pass the buck to individuals in other organisations. They decided on this major undertaking, so they must have a critical responsibility. Of course, as many hon. Members have said, that means that they will have to put their hand in their pocket along the line.

It might be helpful, in selling the idea to all who will be involved, if the Government came clean on their cost-benefit analysis. They are saying, “This is good for you; we believe there are benefits here,” but they are not showing transparently the figures for the workings that they have had done internally, so that others can come to their own conclusions on whether this incredibly expensive project will be worth all the trouble.

It has been costed that the average household will pay between £80 and £570, but, again, what is the average household? Apparently it is 2.4 television sets. The figures of between £80 and £570 were in the Culture, Media and Sport Committee press release of 29 March. Even the lowest level of £80 is, for many
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people, a pretty substantial amount. It is nearly as much as the licence fee, which many people at the threshold of claiming benefits find incredibly difficult to pay. There will be significant financial pressure on a large number of people who will not fall into the group that qualifies for the assistance.

The Government have answered that compulsory switch-off is necessary because about 27 per cent. of UK households will be unable to watch digital television via the terrestrial freeview service until the analogue signal is switched off. That first surfaced in the Government’s Green Paper on the future of the BBC, which went on to conclude that digital switchover would be pursued as the only way to ensure that the benefits of high-quality free-to-air television were available to all. But of course, as has been mentioned, high-quality free-to-air TV is already available to that 27 per cent. through satellite delivery.

Why have the Government opted for the least useful of all the digital platforms as an essential requirement for consumers, irrespective of the cost of provision? Digital terrestrial television offers the least choice, little or no interactivity, the smallest number of channels and limited scope to upgrade to the newer technologies that have been mentioned, such as high-definition TV. As the Select Committee Chairman said, “Switch-off 2” looms large in the not-too-distant future.

Who benefits? I would argue that it is not the consumer. Everyone will pay higher costs, and for many there will be limited increases in viewing choice. Nor will the satellite and cable TV companies benefit. The main benefits will of course go to the terrestrial broadcasters, led by the BBC. In fact, it would seem that it was the BBC that pushed for DTT when no one else wanted it. The reasons are obvious: the BBC will get a digital platform to which it has been given privileged access—a platform that, by restricting the number of channels available, protects both the BBC from the competition of new entrants and its audience from a proliferating digital market.

Ironically, when the BBC argued for DTT, it certainly did not factor in the fact that it would be made responsible for the assistance package and would have to load the licence fee to cover the costs. That is all linked in with the negotiations that are now going on about not just the charter, but the licence fee.

Sir John Butterfill (in the Chair): Order. All I can see of the hon. Gentleman is his back. There is a convention that Members address the Chair.

Mr. Moss: I beg your pardon, Sir John.

The BBC argued for DTT to end the unfairness of a significant group of licence fee payers funding BBC digital channels without having access to them, so it seems bizarre that it is now tasked with addressing that so-called unfairness by increasing the licence fee burden, with which many people already struggle. It is those people, of course, who cannot afford digital, whether satellite or cable. They are the people on benefits and the elderly. Is it right that that most regressive of funding mechanisms be used for a Government-determined engineering project, rather than for the broadcast services that it was originally designed to pay for?

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The Government have yet to announce the details of the targeted assistance programme to help the vulnerable groups with switchover, although they have said that the BBC will be expected to fund the programme. Although still uncosted, the assistance scheme could end up costing

That is a direct quote from the director-general of the BBC, Mark Thompson, from October last year.

The BBC’s bid for a new licence fee settlement of the retail prices index plus 2.3 per cent. includes the technical cost that the corporation will face in switching over, but crucially it does not include the targeted assistance package. We are therefore still waiting for the final licence fee figure and for the details of the assistance package. At the BBC, there are concerns that, if the amount of targeted help needed is high, the figures in other parts of its licence fee bid may end up being cut in order to keep the overall settlement at a politically acceptable level.

On the assistance package and who it will help, 57 per cent. of the elderly respondents to the Help the Aged survey that was commented on earlier saw digital television as a threat and not an opportunity. Furthermore, it has been estimated that some 10 per cent. of UK households are likely to be either unable or unwilling to switch to digital. The Select Committee estimated that training local voluntary workers to visit isolated people would cost as much as £100 per household.

It seems strange that all those figures have not been factored in at this early stage. Some so-called pilots have been done; there were two in Wales, and of course the Boston pilot alluded to earlier.

Mr. Don Foster: Bolton.

Mr. Moss: What did I say? [Hon. Members: “Boston.”] I apologise; I meant the Bolton pilot.

Mr. Foster: That is wishful thinking.

Mr. Moss: Yes.

People in the industry would argue that those pilots were not proper pilots; a very small number of households were involved. However, they found that introducing the new technology, particularly to the elderly, took repeated visits by skilled technicians and people who were able to take them through the whole process. It might be argued that, if one were to roll that out throughout the country, one might not have the problems that were met in the small, focus communities. However, I would argue the opposite. We must not underestimate the ability of many elderly people to embrace that technology, but with all the channel-switching opportunities that it presents, it is confusing for them. To satisfy those people who, at the end of the day, take delivery of the new system, the people introducing the switchover must factor in and cost more hours than they have hitherto.

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