Examination of Witnesses (Question Numbers
200-219)
RT HON
STEPHEN TIMMS
MP AND MS
RACHEL CLARK
24 NOVEMBER 2009
Q200 Roger Berry: Minister, could
the Committee have the evidence for that at some stage in the
future?
Mr Timms: Okay, yes.
Q201 Roger Berry: That would be good.
I am sorry, I interrupted you. You were saying that parking that
issue on one side there is the issue about what has been happening
to the cost of telecoms, and do you want to finish that?
Mr Timms: Simply that Ofcom data
indicates that the average household phone bills have gone down
by more than 50 pence just in the past year, and that is part
of a continuing trend. So I think one needs to set the proposed
increased of 50 pence a month against that trend.
Q202 Roger Berry: The information
that we have—and it is just a question of the Department
checking this—is that the cost of telecoms fell by £3.83
per annum, whereas obviously the levy would amount to £6
per annum.
Mr Timms: We have the Ofcom data
to which I am referring here. I think Rachel has it in front of
her.
Ms Clark: I do not have it in
front of me but we can certainly write to the Committee with it.
Mr Timms: We certainly have it.
Q203 Roger Berry: You do not recognise
my figures? Obviously the £6 you will recognise but you do
not recognise the £3.83? But you have other figures?
Ms Clark: I do not have the exact
figures here but I am told that on average the monthly bill has
decreased by more than 50 pence a month in the last year for average
households.
Q204 Roger Berry: If you could let
us have that obviously that will help in our considerations. Like
many other Members, I have had pensioners and others whose only
comment on all of this has been that they do not see why they
should be paying for it, for reasons that I have given. There
have obviously been calls that this is financed from general taxation,
which by and large is progressive—although it actually depends
how you do it; it is not that progressive. People have suggested
that the money should come from general taxation. Has the Treasury
ruled that out completely?
Mr Timms: I think it would be
very difficult given the fiscal consolidation that is going to
be required over the next decade, the commitment in the Queen's
Speech to pass legislation on this, and I think it will be very
difficult to commit credibly to support from general taxation
to this particular purpose. I think the great strength of this
proposal is that it gives us a ring-fenced pot that one could
be confident would continue to be available throughout the period
we are talking about, and therefore confidence for investment.
Q205 Roger Berry: I think that is
debateable but let us not debate that. Why not make those who
benefit from this pay?
Mr Timms: They will; they will
pay the 50 pence per month as well.
Roger Berry: Why not make only the people
who benefit pay as opposed to those who do not benefit?
Q206 Chairman: That is actually not
true, Minister, because those who are on Virgin Media will not
be paying the levy, surely?
Mr Timms: They will.
Q207 Chairman: They have a copper
wire line.
Mr Timms: They will.
Q208 Chairman: But if you do not
use a BT line you do not pay the levy?
Mr Timms: That is not the case,
you will pay. That is why it is called universal.
Q209 Chairman: The 50 pence tax?
I am happy to admit ignorance in public—I have long lost
any pride in that. But if you are a cable provider and you do
not use a BT service you will not pay the 50 pence levy?
Mr Timms: You will.
Ms Clark: You will.
Q210 Chairman: But there is no copper
wire involved.
Ms Clark: Technically the Virgin
Network is a copper coaxial double cable but the legislation is
being drafted to ensure that the Virgin Media Network is included.
Mr Timms: And people who only
have fibre would also pay.
Chairman: Sorry.
Roger Berry: The evidence the Committee
received from Mr Stearn of Consumer Focus, where he said that
he would not have to pay the levy because he gets broadband from
cable, seems to be behind the question that the Chairman has asked.
Chairman: Exactly; that was my understanding.
Q211 Roger Berry: We do need to clarify
precisely what is the position.
Mr Timms: I am afraid he will,
yes; I am sorry to disappoint him, but he will.
Roger Berry: If Consumer Focus has got
it wrong you can forgive the Committee for perhaps not quite understanding.
We do need to clarify this.
Q212 Chairman: Roger asked you a
question about why the beneficiaries should not be the prime contributors.
Mr Timms: The beneficiaries, that
is to say people receiving next generation broadband services,
at the moment there would be rather a small number of those. I
think that we do require a broad-based levy in order to raise
the scale of funding that is required.
Q213 Roger Berry: This does look
dangerously regressive to some people, Minister.
Mr Timms: I get a fair number
of letters, as you can imagine, making the point that nobody likes
an additional tax. I think the question is: is this purpose sufficiently
important for the country as a whole to warrant 50 pence a month
on a phone line? And my view is that the answer is yes.
Q214 Roger Berry: Currently we have
many people who can access broadband who do not because either
they do not want to or they cannot afford it; 40% do not access
it at the moment either because they cannot afford to do so or
do not wish to do so. Is that not 40% a more pressing concern
than next generation?
Mr Timms: That is of concern but
I do not think it is a question of one or the other; I think we
have to deal with both and we have a big commitment to digital
inclusion. Martha Lane Fox has been doing some very good work
on this for us. We set up the Digital Inclusion Consortium and
it needs to be both/and rather than one or the other.
Q215 Roger Berry: I accept that.
The 50 pence levy will raise about a £1 billion for next
generation access.
Mr Timms: That is £1 billion
over seven years.
Q216 Roger Berry: The Digital Inclusion
Taskforce's budget is £12 million over three. It does suggest
to me that greater parity is being given to one rather than the
other, rightly or wrongly; but surely £1 billion over seven
years compared to £12 million over three, if that is the
extent of government effort it does seem to me that NGA has been
given a very significantly higher priority than inclusion.
Mr Timms: I would point to other
parts of government spending which are contributing to digital
inclusion—the budget for the UK Online Centres, for example,
and other things we are already doing. If you look at the targets
that Martha Lane Fox, for example, wants to set those are pretty
ambitious and we think that we can make very substantial progress
on this. Clearly investment in infrastructure is a heavy draw
on funding inevitably, but we can make progress on digital inclusion
as well.
Q217 Roger Berry: We all know where
the popular discussion is of public finances and it does seem
to me that the reason you have given for wanting to put the 50
pence levy is that the Government is not brave enough to say,
"We will finance it through taxation because that would be
a fairer way of doing it." But actually lots of our infrastructure
projects—hospitals, schools, et cetera—are financed
by billions of pounds of government investment and yet the outcomes
of those investments seem to me more obvious and the benefits
are obviously more obvious than this one. Do you not think that
people who are not going to benefit from this for quite some time
are rightly feeling that the 50 pence levy is just unfair? Is
my sample of constituents atypical and are they being unreasonable?
Mr Timms: The case that I would
want to argue to them is that they will also be better off once
Britain is able to take full advantage of next generation broadband.
We will see a growth of new businesses; we will see an increase
in prosperity; we will see better public services and everybody
will benefit from that, and I hope increasingly that we will see
people who write to me as well and say they are not planning to
use broadband actually able to take advantage of the services
and enjoying them.
Roger Berry: I think we may just agree
to disagree on this.
Q218 Chairman: I am fascinated with
this argument but open-minded, believe it or not, despite my aggression
at some times during today. But we do not tax aspirin to build
new hospitals. We do not say, "We will put a levy on every
Paracetamol sold in Boots to build a new hospital in a town."
I am very struck by Roger's parallel; we do not do it that way.
Why is this different? You are saying that broadband access is
more important than health, or the other way around?
Mr Timms: I think that the commitment
of the current Government and indeed the Opposition to funding
for the Health Service, together with all the other public services,
is going to absorb the resources that are going to be available
realistically to governments over the next few years. What is
needed to make progress in this area is a clearly separately identified
pot of funding. That is what the levy will provide.
Q219 Chairman: I must say that I
am moving rather to Roger's view that I think we will have to
agree to disagree on this. I just do not understand why my in-laws,
who are perfectly wealthy, should pay another £6 a year for
a service that they are never, ever, ever, ever going to take
up, while my son, who is an obsessive broadband user, will get
the benefit of it. If we do it this way at all why are we not
taxing the users of broadband, rather than the people who do not
want broadband?
Mr Timms: I do not think we can
tax the users of broadband because how does one identify who they
are?
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