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6 July 2006 : Column 354WH—continued

I was asked whether the cost should be met by the Exchequer rather than through the licence fee. I know that hon. Members across the House have been concerned about that. I appreciate the arguments, but I remain unconvinced of the conclusion reached by some
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that it should be funded by the Exchequer. We believe that it is a broadcasting cost. We also want to ensure that everybody has access to all BBC services. Licence fee payers will benefit from more choice, better picture quality and new services. That best fits with the principle of maintaining universality of access to the broadcasting system. It should be remembered that people buy their television sets: we do not give them sets as part of the licence fee arrangements. In our view, it is more analogous to the purchase of a television set than to the receiving of the programmes.

Paul Farrelly: Clearly that issue exercised the Committee more than most. In fact, during some of our discussions on tax theory and practice I found myself drifting off to the dreaming spires and the economic tutorials of half a lifetime ago.

Although we commended the Government on most of their recommendations, we did not agree on this one. Given subsequent debates about the licence fee, I fear that if the BBC were to fund it the issue would become even more of a political football. Another thing that exercises me is the question of accountability. If it goes wrong—if it is insufficient—can Ministers of whichever political hue simply blame the BBC? I note that in their response, the Government said that they are working with the BBC to address accountability issues. How does the Minister see those issues being resolved?

Sir John Butterfill (in the Chair): Order. May I give the Minister some brief comfort? I have now been informed by the Clerk that following representations about the lack of air conditioning, the Speaker has ruled that the dress rule can be relaxed. If the Minister wishes to remove his jacket at this rather late stage, he is at liberty to do so, and other hon. Members may remove theirs.

Mr. Woodward: As always, Sir John, your characteristic generosity knows no bounds. I shall remove my jacket, not least because it will complete the picture being taken by the camera behind me—if the BBC is generous enough not to caricature it.

My hon. Friend makes an important point. I am unable to answer him as he would wish. Our discussions with the BBC are ongoing, but I do not want to give him a false sense of hope. We are committed to the present route. My hon. Friend should not expect it to change. None the less, I hear what he says.

Our discussions with the BBC on accountability, too, are ongoing. My hon. Friend will have the chance to ask the Secretary of State that question on Monday, and I am sure that he will wish to avail himself of that opportunity. He may be a little disappointed, and he may have to wait for clarity on the subject. However, I respect the question, and I believe that we will shortly be able to answer it.

The hon. Member for North-East Cambridgeshire and the Select Committee Chairman asked about the sale of spectrum. We have not yet got a precise estimate. It is not possible at this stage to make a reliable assumption of the market value or of the potential auction proceeds of the spectrum to be released by the switchover. Indeed, it will be a matter primarily for Ofcom. However, it clearly has a value.

In answer to the questions posed by the hon. Member for North-East Cambridgeshire—and,
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perhaps, the hesitation that he encouraged—I would simply say that there are values to be received by the Treasury. They are worth having, and delaying and frustrating them will lead not only to a loss of sales for the Treasury; it will lead also to a significant loss of opportunity for the television and broadcasting industries, the telecommunications industry and the other public service bodies that would wish to make use of that spectrum.

It is necessary to provide clarity as soon as we can, within a decisive framework that recognises that we are dealing with a fast-moving target. The technologies that may wish to avail themselves of the use of spectrum are fast-changing, both in hardware and software, and the true value can be determined only once the spectrum space is available. It would be foolish to speculate on its value. Equally, it would be foolish simply to prevaricate for the sake of it.

Mr. Don Foster: Will the Minister clarify something? He said that it is primarily a matter for Ofcom. Given that there are two options—one is the social benefit accruing from the use of the released spectrum, and the other is the economic benefit, largely to the Treasury—the Government have a key role in deciding which bit of the spectrum they intend to release for economic reasons and which for social. That, surely, is not for Ofcom to decide.

Mr. Woodward: The answer is yes and no. There are good reasons for that. It is important to recognise the nature of the fast-moving technology with which we are dealing. The anticipated value of the spectrum sale two years ago was very different from what it would be now, and I dare say it will be different in two years’ time. It will depend on the demands made of that spectrum space. The way spectrum is going in the long term, with the ability to get more and more on ever less width, is another dimension that has to be considered. In the pre-Budget report, the Government stated their position and declared policy that the future use of spectrum released through the digital switchover should be determined in a technology-neutral auction or auctions, and that Ofcom would apply administrative incentive pricing when spectrum had not been auctioned.

I suspect that this discussion could delay us a long time. I am happy for it to do so, but I imagine that some hon. Members would prefer me to enter into correspondence with the hon. Gentleman, which I would be pleased to do.

Mr. Moss: I commend the Minister for his honesty. This is the first time that we have heard from the lips of a Minister that this is being driven partly by the Treasury’s need to fill its black hole. Will he give us some indication in percentage terms of the impetus on the Treasury to get this thing through within the time limits, and the impetus on DCMS and the service industry to broaden out digital reception for the bulk of people?

Mr. Woodward: I am obviously being invited to talk about the state of the Government’s economic affairs; as you are aware, Sir John, they are in excellent condition, thanks to the undoubted and highly commendable prudence of the Chancellor. The hon. Gentleman invites me to talk about black holes, and no
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doubt I could delay the Chamber for some time on the subject. However, I have the feeling, Sir John, that you would quickly bring me to order—

Sir John Butterfill (in the Chair): You are absolutely right.

Mr. Woodward: —and remind me that the subject of debate was the digital switchover, not the incompetence of the Conservative party, in government or otherwise. I shall therefore attend to the matters before us.

I congratulate the hon. Member for Berwickshire, Roxburgh and Selkirk (Mr. Moore) on setting up his Borders digital forum, which is enlightened and right. The hon. Gentleman is bringing together the core people and focusing particularly on bodies in the voluntary sector that can help older constituents and those with disabilities. That is vital, and it is good to hear of their role. The hon. Gentleman is an example to everybody in leading his constituents in the right direction, to ensure that they are best able to take full advantage of digital switchover. As has been observed, the hon. Gentleman’s region will be the first to switch over, in the second half of 2008. I am a little cautious about the mention of 18 months; by my count, it will happen in 24 months, although my maths may not be as good as the hon. Gentleman’s.

We should get the expectation gap right; needs have to be addressed in respect of that. The hon. Member for Bath brought up the other dimensions of services, touching on high-speed broadband. We have a fast-moving target and we need to look closely at the correlation between digital switchover and high-speed broadband. It is perfectly clear that convergence is taking place between the creative industries—the broadcasting, digital games, film and music industries and others—and that services that have traditionally used analogue, or now digital, will also develop interactive programmes that require high-speed broadband. Such channels may well be offered.

The issue is moving fast, and a fast-moving target is before us, with which the Government are trying to keep pace. We will endeavour to do so and recognise the issues in respect of the constituency of the hon. Member for Berwickshire, Roxburgh and Selkirk.

Questions were asked about the involvement of the Scottish Executive. We are working with all Government Departments and the devolved
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Administrations to ensure that they are fully engaged in the process—particularly in helping to ensure that the public are as informed they can be and that their television sets are converted on time and as they should be. Of course, we always welcome advice from hon. Members if they feel that, for example, the Scottish Executive are not at the same speed as us. In a spirit of constructive dialogue I say, let me know and we will deal with it.

Questions were asked about energy use in respect of digital switchover. On Monday, I said in the House that we welcome the action taken by Intellect to support the use of energy labelling and investment in energy-efficient products. All hon. Members are becoming increasingly aware of such issues, and we shall play our part in ensuring that the industry factors in the energy issues and makes them a part of the digital switchover.

The right hon. Member for Berwick-upon-Tweed (Mr. Beith) raised questions about access to other television regions. Although we have no plans to change the boundaries of the ITV regions, I am happy, having noted his comments, to ensure that those representations are passed to Ofcom for further discussion. In a spirit of constructive dialogue, I am happy to enter into correspondence about suggestions made by the right hon. Gentleman. However, I should say that those currently able to tune their aerials to more than one transmitter should be able to continue to do so after switchover, although, as now, they will need an aerial adjustment or upgrade to make the change.

I have tried to cover the points raised by hon. Members. This issue will be ongoing and we must recognise that, as we roll out switchover from 2008 to 2012, things will change. The Government have a duty to get the framework right and work with Digital UK, Ofcom and all partners to ensure that we get maximum benefits from digital switchover for all consumers and everybody who pays a licence fee.

We also have a duty to recognise the needs of the industry and those creating the many jobs in this country that will come from the benefits of switchover. At the same time, we should try to avoid any possibility of waste, which might be caused if switchover were delayed and if dual transmission, which would be money wasted, were to happen. I am sure that there will be plenty of opportunity for us to debate the issues again, and I welcome the Select Committee’s report.

Question put and agreed to.

Adjourned accordingly at fifteen minutes to Five o’clock.

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