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Telephone Charges

Volume 201: debated on Wednesday 15 January 1992

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To ask the Secretary of State for Trade and Industry whether he will make a statement on the effectiveness of the system for regulating telephone charges since 1984.

The Government have set up an effective system of regulation. During the period of controlled prices, those that are under the regulator's eye have fallen by 27 per cent. in real terms. The three-minute cheap rate for local calls is now cheaper in cash terms than it was in 1981. That is effective Conservative regulation in action.

Will my hon. Friend confirm that 96 per cent. of phone boxes now work and that phone call charges have been cut faster in this country than in any other country, thanks to the Government's privatisation policy? Will he ensure that there is more competition in both phone and postal services, and will he bear in mind the excellent postal service provided in my constituency by Document Interlink Ltd?

My hon. Friend is right that this country has the best regulatory system for reducing real phone charges. He is also right to say that regulations improve the quality of service. Not only do a greater proportion of phone boxes work, but there are more boxes today than there were before we introduced the privatised control system. My hon. Friend may like to know that my right hon. Friend the Secretary of State today set out in a speech the importance of improving and strengthening competition in a range of postal services. I am well aware of my hon. Friend's constituency interest as I visited that company and know how good it is.

Will the Minister recognise that some of the benefits that he announced this afternoon are the result of cross-subsidy from the dirty, sleazy pornographic phone calls that he and his colleagues have encouraged for some time? Will he today resist the introduction of the 75p per minute further added value services now suggested?

The hon. Gentleman knows that that allegation is untrue, but I am glad that he accepts that the quality of service has improved and that there have been improvements in the pricing of a number of British Telecom services. Bearing in mind the hon. Gentleman's interventions and today's debates in the House, he may like to know that there has been yet further strengthening of the regulatory system in relation to the services to which he objects. I assure him that there is a common interest across the Floor of the House in seeing that nasty services of that kind are not allowed on the BT network.

Will my hon. Friend confirm that nearly half of the top 500 companies in the European Community are British, led by British Telecom?

My hon. Friend is right—United Kingdom firms have done extremely well in the list of top companies in Europe. That came as no surprise to us, as we know how good the business climate in this country has been in recent years with the success of deregulation and low taxation and the attractiveness of Britain as a home of inward investment. My hon. Friend is right to say that BT is one of the leading companies and has made an important contribution to our economy.

Why is the Minister so selective and defensive in his choice of statistics? Why will he not accept responsibility for the rise in telecommunication charges above inflation during the 13 years of the Government's misrule? Why does he not give the hon. Member for Bolton, North-East (Mr. Thurnham) a copy of last month's Department of Employment gazette, which shows that the rise in telecommunication charges during the past year has been 7 per cent. while the retail prices index has risen by less than 4 per cent? Is it not true that too many people have phone bills that are too high? Why has the Secretary of State failed effectively to tackle those problems and to take action against the excessive profits and unacceptable boardroom pay rises and perks?

The hon. Gentleman's question was as excessively lengthy as the price increases under Labour, with the nationalised industry in the 1970s, were excessively great—far greater than any under the regulatory regime set out by this Government. The hon. Gentleman should also know that the average residential bill has been falling. Of course, the extent of the fall depends on the use made of the service and on the balance between rental and call charges. Nevertheless, the average bill, assuming equal use, has been falling.