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Moved, That the House do now resolve itself into Committee.(Lord Clinton-Davis.]
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 1 agreed to.
Clause 2 [Matters to be taken into account]:
Page 2, line 21, leave out ("may") and insert ("shall").
The noble Lord said: In moving my amendments, I declare an interest as an adviser to the Federation of Electronic Industries. That body has helped me with the amendments. I apologise to the Minister and the Committee for not having taken part in Second Reading. I had not at that stage been alerted to the interests which the FEI had in this Bill. For me, this Bill returns to a subject with which I was concerned 35 years ago when as deputy director of the signals division in the Admiralty I had to defend the frequencies allocated to naval shipboard communications and radar from predatory moves by the Post Office and, in the 1960s, only a few commercial interests. The latter have certainly multiplied extensively since.
I turn to Amendment No. 1. I am delighted to note that the Minister has added his name to this amendment which is grouped with Amendment No. 2. I and FEI members are particularly concerned that as the Bill currently stands there is no explicit commitment to consult the radio industry when setting fees above cost recovery published in regulations. If the primary aim of this Government is to use administrative pricing as opposed to auctions covered in Clause 3 to ensure more efficient use of the spectrum rather than as a form of covert taxation on the radio industry, the reasons given in subsection (1)(a) to (c) of the clause are the only arguments in favour of fees exceeding cost.
If the Secretary of State is required to take into account the matters listed in Clause 2(2) it will be incumbent upon him to gather the necessary supporting information which will of necessity require consultation with the radio industry. Fears regarding the imposition
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of a tax rather than administrative pricing were expressed by many of the organisations who responded to the previous Government's White Paper of June 1996. That being so, perhaps the Secretary of State will welcome the opportunity to ensure that there is support from the industry in the form of participation in the necessary consultation process. I beg to move.
Lord Clinton-Davis: I note the careful way in which the noble Lord has introduced this amendment. Both I and the Committee will note his own expertise and antecedent interests in this area of policy. As the noble Lord has pointed out, I have added my name to this amendment. I have also tabled an amendment in my name on this matter. I believe that the two must be closely linked together. Both amendments are acceptable to the Government on the understanding that they stand or fall together. I am glad to see that the noble Lord affirms that that is the position.
On Second Reading I said that I had carefully reflected on the question whether the Secretary of State should be required to have regard to the matters in Clause 2 when setting licence fees. It was the noble Lord, Lord Derwent, who made that suggestion in the debate. I am grateful to him for having done so because it has enabled me to reflect further on the matter. I am also grateful to the noble Lord, Lord Mottistone, for tabling his own amendment.
The intention of the Government is that spectrum pricing must be driven by spectrum management. I have said that on numerous occasions, and I believe that it has been accepted by your Lordships. I do not propose to argue that case in any detail. We believe that the noble Lord is right in principle. For that reason I have added my name to his amendment, subject to the addition of some words in the second of the two amendments. The drafting of Clause 2 is a matter of considerable legal complexity. That has been indicated by the representations that have been made on behalf of the industry to my department about these issues. Simply to replace the word "may" with "shall" has a very serious negative effect; namely, that the list of matters set out in Clause 2(2) will become closed. In the particular circumstances of this industry I believe it is undesirable that that should be the case.
In those circumstances, the Secretary of State would be required to have regard to the matters listed and would be foreclosed from making any allowance for changes in the market or technology. That situation is bound to occur from time to time. If that were to be the case, it might well be desirable to take other spectrum management considerations into account. Such changes are by their very nature unpredictable but also inevitable given the dynamic nature of the business that we are talking about here and the diversity of the services that are brought into question. Moreover, the replacement of "may" with "shall" would make the situation mandatory and prevent the Secretary of State from allowing fee concessions for deserving cases, for example safety of life charities, as such concessions are granted for broad social or policy reasons that strictly speaking are not directly connected with spectrum management. That situation
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was welcomed by the noble Lord, Lord McNally, on Second Reading. I believe that your Lordships would wish that that should continue to be offered under the Bill. I believe that most of all in this industry inflexibility and rigidity would be inadvisable.
It is for that reason that I have tabled a complementary amendment that adds the words "in particular". That would foreclose the problems about which I have been speaking. While emphasising the matters listed as those to which the Secretary of State should have regard, nonetheless this will provide an element of necessary flexibility which will enable the Secretary of State to respond to unpredictable changes in the circumstances that may prevail and allow for concessionary fees. I believe that both amendments will be acceptable to your Lordships but both stand or fall together.
I hope that the noble Lord will regard that as a helpful reply. Things can only get worse later this afternoon, but at least we start on a very helpful basis.
Lord Derwent: I declare an interest as a director of Orange PLC, which is directly affected by this Bill. In speaking to this and other amendments, I shall also be reflecting the reviews of all four mobile telephone operators and the Federation of Communication Services, which is their trade body.
My chief purpose in rising to speak on this amendment is to thank the Minister for the courteous way in which he listened to my suggestions at Second Reading. We believe that his Amendment No. 2 is an improvement and we enthusiastically accept the second amendment as well as the first.
Lord Inglewood: Perhaps I may enter into the spirit of the afternoon by saying that what has been proposed sounds eminently sensible. However, I should like to refer to one matter arising from the Minister's remarks. At Second Reading on 5th June, he gave an assurance relating to the emergency services when he said (col. 717):
"We are committed to ensuring the continued availability of spectrum to essential public sector users: the Armed Forces, emergency services, police, fire",
and so on. I should be grateful if the Minister could amplify that statement and make it clear whether that assurance relates also to providers of essential services, such as electricity, gas, water and sewerage, which are not only vital to modern life but which also have major safety implications. I shall, of course, fully understand if the Minister does not want to make a precise response now.
Lord Clinton-Davis: I thank the noble Lord for introducing the question of the emergency services. However, I should prefer to deal with that in its proper sequence. We shall come to that matter later. I believe that the noble Lord will get a pretty affirmative reply then.
Lord Mottistone: I am grateful to the Minister for his encouraging response to my amendment. I fully
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agree that his amendment, Amendment No. 2, is totally complementary to it. In fact, it both strengthens and makes possible my amendment achieving what was intended in the first place. Therefore, I hope that other noble Lords will agree that that amendment should be accepted also. I commend Amendment No. 1 to the Committee.
On Question, amendment agreed to.
Page 2, line 21, after ("regard") insert ("in particular").
On Question, amendment agreed to.
Page 2, line 24, at end insert ("but he shall not prescribe sums which are greater than are in his opinion necessary to promote the optimal use of the electro-magnetic spectrum").
The noble Lord said: Both the President of the Board of Trade and the Minister on Second Reading and just now have stated that the powers in this Bill are intended to be exercised only for the purpose of improving spectrum efficiency and that the sums payableI think that I quote the President of the Board of Trade correctlyshould not be regarded as a tax. That is a very important and welcome assurance which is fundamental to the way in which the Act will be enforced. For that reason, we feel that the provision should be on the face of the Bill. This amendment is intended simply to do that. I beg to move.
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