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Commons Chamber

Volume 400: debated on Tuesday 4 March 2003

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House Of Commons

Tuesday 4 March 2003

The House met at half-past Eleven o'clock

Prayers

[MR. SPEAKER in the Chair]

Oral Answers To Questions

Transport

The Secretary of State was asked—

Speed Limits

1.

When the new local authorities' guide for the setting of speed limits will be published. [100177]

Guidance on the setting of speed limits already exists in the form of roads circular 1/93. The Government are committed to reducing the number of casualties and those killed and seriously injured on our roads caused by excessive and inappropriate road speed. Later this year, we will develop new guidance for setting local speed limits.

I thank my hon. Friend for that reply, and I urge him to get that new guidance to local authorities as soon as possible. Swindon parents tell me that they would like more factors to be taken into account when considering speed limits. They want speed limits to be reduced, particularly outside schools. Will the new guidance allow matters such as environmental factors, the fear of accidents and things that might encourage more people to walk their children to school to be taken into account in considering speed limits, rather than just the accidents that have taken place?

I have some good news for my hon. Friend: there is no need to wait for the new guidance. Since 1999, highways authorities have been able to apply 20 mph zones without authorisation from the Secretary of State. Road safety will always be a prime concern of highways authorities when introducing speed limits. However, they can also consider environmental and quality of life issues as well. Reducing the perception of danger encourages people to walk and cycle, particularly on the school run and in the vicinity of schools, which, in turn, improves the quality of life of people, particularly in the rural areas.

Does the Minister accept that although there is clearly a strong case to reduce speed limits in vulnerable areas, such as outside schools, it is equally important on dual carriageways where there is no possibility of encountering pedestrians to increase too low speed limits, which bring the whole speed limit process into disrepute and can often cause speeding?

The thrust of what the right hon. Gentleman says is correct. What we are talking about is speed limits that are appropriate to the circumstances, and what we need to consider, particularly in rural areas, is having appropriate speed limits for the circumstances, and ensuring that those speed limits are enforceable is very important. In particular, we need to focus our efforts on those places where there have been casualties and injuries and where people have been killed and seriously injured.

In encouraging local authorities to determine appropriate speed limits, will my hon. Friend say that they should make that decision on what is appropriate, not on guidance from police authorities, which sometimes mistakenly give the advice, "Don't reduce this speed limit because we haven't got the resources to enforce it."?

Although the resources available to local authorities have increased very substantially under our local transport plans—most authorities have had two or three times as much money in recent years—it is important, as my hon. Friend says, that those resources are used to best effect and to reduce the number of people killed and seriously injured on the roads. Of course I hope that, whenever those decisions are made, the highways authorities will work in co-operation with the local police.

I welcome the Government's commitment to reduce the number of casualties on our roads and to introduce guidance on setting local speed limits, so will the Under-Secretary now agree to accept our new clause 21 to the Railways and Transport Safety Bill, setting out a rural road hierarchy and a range of speed limits as appropriate?

We recognise the hierarchy that the hon. Lady first proposed in her new clause, but the proposals that we first saw would be deeply intrusive in some rural areas in the number of signs and engineering works that would be needed. Of course that would be very costly, and we would have to consider the benefits that any expenditure would achieve to ensure that the cost was reasonable. As I said in a previous reply, we must focus the resources where the need is greatest and where the problems exist. There is very substantial extra funding in local authorities to do that, and we hope that they will direct its use to where the dangers and problems are greatest.

Railways

2.

What discussions he has had in recent weeks with the Strategic Rail Authority about journey times to Plymouth. [100178]

Ministers have met the Strategic Rail Authority to discuss the Greater Western franchise. First Great Western introduced a three-hour service from London to Plymouth last year. A regular three-hour journey time from Plymouth to London would be welcome, but performance and capacity improvements are a greater priority at present.

I welcome the Minister's reply, but does he agree that, given the obvious difficulty of significantly improving air and road links to the far south-west, the best way to underpin the local economy is to cut journey times by train to Plymouth from London? Will he therefore put maximum pressure on the SRA to agree to a typical journey time of three hours, which has been put to the SRA in its new timetable proposals, so that business people, particularly those from Plymouth, can get to London and back for business meetings in comfort, thus underpinning and helping the local economy?

I share with the hon. Gentleman the ambition not just for road and air links to be good, but for the rail service to be good, too. Our present aim is also to improve the reliability and predictability of the service. Bringing together the Wessex, the Thames and the First Great Western franchise into a Greater Western franchise in 2006 will allow for better utilisation of track capacity and will ease co-ordination between short and long journey services. I have indicated once previously that the improvements that we will make around Reading will substantially improve the journey times to and from Plymouth.

My hon. Friend will be aware of the contrast between the successful state railways on the continent of Europe and the privatised, fragmented mess that we have over here. Is it not time that my hon. Friend advised the Strategic Rail Authority to imitate what is done on the continent of Europe and make our railways like theirs?

We are asking the SRA to make sure that the railway provides the services that we want in this country. There will be no turning back of the clock: we want to turn the clock forward to ensure that the railway delivers the high-quality service that the people in this country deserve—[Interruption.]

Order. I remind the House that we are discussing journey times to Plymouth.

Will not travellers to and from Plymouth share the assessment of 28 local authorities, 13 of them run by the Labour party, that the cutbacks by the Strategic Rail Authority in rail services are resurrecting

"the spirit of Dr Beeching"?

The hon. Gentleman is referring to a tiny number of services—less than 1 per cent.—that are there to improve the capacity utilisation of the railways. We must all dwell on what would happen in the very unlikely event of the hon. Gentleman and his party forming a Government. What kind of cuts would they make to our rail service and to the amount of money available for transport, and what kind of impact would that have on services to and from Plymouth?

Will not travellers to and from Plymouth also want to know that after two rounds of SRA cutbacks, there will not be a third? Can the Minister commit himself to that?

I can assure the hon. Gentleman that the services to and from Plymouth and the west country have and are being secured. The policies that we are carrying out will improve the service to and from that particular area. Again, what the people of the west country will dwell on very much is the policies of all three parties in this area. The Liberal Democrats, as well as the Conservatives, are considering certain cuts, and those will be in people's minds.

Buses

3.

If he will make a statement on the integration of bus services with other forms of transport in Worcestershire. [100179]

We encourage all local transport authorities to use their powers to promote through-ticketing, better co-ordination of services, improved accessibility, wider availability of information and improved waiting facilities. A new integrated rail-bus ticket named PlusBus has been introduced recently by the bus and rail industries. Although stations in Worcestershire are not currently participating in the scheme, it is expected that it will be extended progressively to cover all major towns.

I thank my right hon. Friend for that reply. One of the biggest obstacles to integrated transport in Worcestershire is the level of bus fares within Worcester city. It is claimed that Worcester city has the highest bus fares in Britain. Will he investigate that claim so that we can put pressure on the county council and the bus company to enable my constituents to pay the lower fares that seem to be paid in other parts of the county?

I am concerned to hear about that. I have been aware of previous problems with local bus services in Worcestershire following a major review of the existing network of services. In addition, Worcestershire county council had approved an additional £400,000 funding to replace some services, and was carrying out its own review of bus service provision in the county. With the additional information provided by my hon. Friend—who is as assiduous as ever on behalf of his constituents—I will investigate those points further.

I am sure that the Minister will want to pay tribute to what the private train operating companies have done to improve integration between bus and train services in Worcestershire. Does he agree that if we are to get people out of their cars and on to public transport, the integration that really matters is that between car and train? In that respect, will he join me in supporting a Worcester parkway station to provide decent parking facilities for car users, as none of the Worcester stations has decent car parking at present?

I am not sure whether I am being tempted into making a planning decision. However, on the Chiltern line in Warwickshire there is an extremely successful parkway. The Chiltern line now runs well into Worcestershire and provides an increasingly popular service down to London. That shows how the innovation and enterprise of a number of companies is causing the market to grow. I agree with the hon. Gentleman about car parking facilities; but would add that integrating public transport as effectively as possible will provide people with real alternatives. We will look into that particular aspect.

Railways

4.

What measures he has taken to improve access to rail services for citizens of South Derbyshire. [100180]

The Strategic Rail Authority is working to improve rail services across the country. We are supporting Derbyshire county council's local transport plan, which includes the setting up of a rural transport partnership to help tackle transport issues in South Derbyshire.

The Minister will forgive my lack of enthusiasm for that modest response. I draw his attention to three projects that would certainly add to the accessibility of rail services in South Derbyshire: first, progress on the east midlands parkway, which has not so far been assisted by the SRA; secondly, the opening of the Donnington loop between Willington and Nottingham, which was commended in the M1 study but has not been proceeded with by the Government; and thirdly, the national forest line between Leicester and Burton, a line which would eventually go to Derby.

I understand the demand for a new parkway station. There is pressure on budgets and, with the east midlands airport parkway, there have been some difficulties in getting agreement among all the parties concerned.

The national forest line used to be referred to as the Ivanhoe line. Strong pressure has come from Derbyshire councils on that issue, which will also require the support of Staffordshire councils. With changing travel-to-work patterns—such as those seen on the Robin Hood line—we acknowledge that the extension of services on to what have traditionally been freight lines, and the expansion of commuter services, can be of considerable advantage in helping businesses in city centres and in providing different work opportunities for people along the routes.

Last year, it was announced that a new service of 10 trains a day would operate from Matlock to Birmingham, also serving South Derbyshire. That new service has now been cut to two trains a day within three months of coming into operation. Is that a good message to send out to encourage the use of public transport?

The hon. Gentleman will be aware that expansion on a number of routes was found to be detrimental to reliability. When I considered the question of a cut in the service from Derby to Birmingham, I found that the five services an hour had gone down to four services an hour, which it had previously been. The SRA has rightly considered reliability—particularly in the Birmingham hub area— and the ability of all the rail companies to deliver their services. That was the right way to deal with the issue, because reliability is extremely important in developing the railway service. That service will undoubtedly have to be fine-tuned, and I am always prepared—as is the SRA—to consider particular services; but the principle underlying what has been done is absolutely right.

Waterloo Station

6.

What steps he is taking to improve the level and quality of services into Waterloo station. [100182]

South West Trains has ordered 785 new vehicles and Network Rail is upgrading the power supply to allow for that. The first trains should come into service in the spring. The revised South West Trains franchise requires a robust service with fewer cancellations and with more trains arriving at their destinations on time.

We have heard about cutback after cutback after cutback but the Secretary of State seems to suggest that things are getting better. In Southampton, there has been a cut not of 1 per cent., which the Under-Secretary suggested, but of 25 per cent. in off-peak services. For well-connected services to my constituency, that represents a cut of 50 per cent. How will that get people off the road and on to rail?

As my hon. Friend the Under-Secretary suggested, we have severe problems with congestion on part of the rail network. If the SRA had not taken action to remove off-peak trains, the congestion and severe problems with reliability would continue. The problem in the past, following privatisation, was that more and more trains were allowed on to a network that frankly could not take them.

The hon. Gentleman raised a point about South West Trains, and 74 out of 1,700 services a day have been withdrawn. That will allow for greater reliability and for longer trains with increased capacity at peak times. That will provide a better service. However, if the SRA had left matters as they were, the congestion and lack of reliability would continue. That cannot be in the interests of anyone using the railways.

The Secretary of State knows that my constituents have recently suffered the body blow of the cancellation of the Bristol to Oxford line and the resulting cancellation of the Corsham station project. Will he confirm the rumours that the service from Corsham through west Wiltshire and into Waterloo is also being challenged by the SRA?[Interruption.] Hon. Members are shouting, so I shall repeat my question. Will the Secretary of State confirm that the service from Corsham and west Wiltshire into Waterloo, which it is widely rumoured will be cancelled by the SRA, will not be cancelled?

I am sure that the hon. Gentleman would have got to Waterloo eventually if he had been given the time. However, I do not know whether that would help with congestion.

The SRA has an obligation to do everything that it can to make trains services reliable. It is doing no one any good at all to continue with a situation in which more and more trains that were advertised did not run on time. They were subject to delays and cancellations simply because the network could not take them. As a result of the changes that are being made—there will be further changes to the timetable from time to time—the SRA is freeing up pathways to allow trains to run particularly at peak times. It is allowing for further and increased turn-around times, so that if trains lose time they can make it up.

If the hon. Gentleman cares to listen for a moment, I shall point out to him that the situation that we inherited in which more and more trains were trying to run down track that could not take them simply resulted in there being more and more unreliability. That is totally unacceptable to the people of this country.

Aviation Fuel

7.

If he will make a statement on his policy on reducing the use of aviation fuel. [100183]

As the consultation document made clear last summer, the Government's policy is that the airline industry should meet the costs of its environmental impact and, as part of that objective, it should maximise fuel efficiency.

Is it not the truth that the Government's policy on aviation fuel is all over the shop? The Secretary of State rejected the report from the royal commission on environmental pollution, yet the White Paper on energy says that we must reduce the use of aviation fuel and meet the external costs on the environment of aviation use. If 15 per cent. of global warming by 2050 will be created by aviation use, as predicted by the international panel on climate change, what will the Government do to address that real disaster in the making? Is there not a lesson to be learned from road charging?

On aviation, the Government made it clear last summer, when we published the consultation document on airport capacity, that the airline industry should meet the costs of the environmental impact that it causes. The hon. Gentleman must realise that most agreements on the taxation of aviation fuel, for example, are international agreements. It is not open to this country to take unilateral action. Indeed, that would not be effective at all. I know that he is a Welsh nationalist, but surely even he must realise that we have obligations outside our borders. We have made it clear time and time again that the industry needs to meet its environmental costs, and we will shortly be publishing a consultation document to explore how it can better do that while we have regard to our international obligations.

Now that congestion charging in London has been successful, will the Government consider being as bold as the Mayor and advocate the extension of congestion charging—

If the Minister wants the airline industry to meet its costs environmentally in terms of aviation fuel, will he support an EU-wide tax on aviation fuel if it is not possible to secure international agreement? Otherwise, carbon dioxide emissions will double between 1990 and 2010 and a predict and provide policy will disfigure our countryside.

There are two points in relation to that. First, on reductions in air fares, even additional taxation would not put air fares back up to where they were. Many of the cost reductions have resulted from the low-cost airlines and others stripping out the costs of their operation. The policy that the hon. Gentleman advocates would not have the effect that he wants.

Secondly, a Europe-wide taxation regime might help in some respects, and it is worth considering, but it would not resolve the problem that would arise in relation to longer-distance flights or aircraft that are capable of flying outside the European Union, loading up with cheaper fuel, then coming back in. That might exacerbate the situation. I would say to the hon. Gentleman, as I said to the hon. Member for Ceredigion (Mr. Thomas), that the problem relates particularly to taxation and needs to be resolved as part of an international agreement. Other measures can be taken to improve aircraft engine technology to make engines more efficient and to reduce noise. There have been significant improvements over the past 30 years, and I have no doubt that more will follow. These are all matters that the Government will shortly consider and consult on. We cannot, however, ignore the fact that this is by its nature a highly international business, and it is not as easy as the hon. Gentleman seems to think to resolve the matter, even within Europe.

The Secretary of State, together with you, Mr. Speaker, and the rest of us regulars on the Edinburgh and Glasgow routes, will have developed a pretty good nodding acquaintance with every cubic metre of the upper atmosphere above Watford, which is pretty expensive in fuel terms. Is part of the problem the shortage of air traffic controllers, and would there be less hanging around over Watford if there were more skilled air traffic controllers?

Like my hon. Friend, I, too, have a nodding acquaintance with every inch of sky between Edinburgh and London. He makes a fair point. There are fewer air traffic controllers than there should be, but their numbers are increasing. National Air Traffic Services has plans to recruit more air traffic controllers, which will result in less delay around Heathrow and other airports. I looked at the figures over the weekend, and it is encouraging that delays attributable to air traffic control are decreasing, but an awful lot more needs to be done.

Congestion Charging

8.

If he will make a statement on the timetable for introducing guidelines on exemptions and concessions in relation to congestion charging. [100184]

We will consult on a uniform minimum standard of exemptions and concessions once we have had an opportunity to consider the experience gained from road user charging schemes in London and Durham.

Does the Secretary of State agree that although the congestion charge in London has so far been a considerable success in traffic terms, there are many unfair exemptions deriving from the blue badge scheme? Will he urgently introduce new guidance to deal with cruel anomalies such as the situation faced by 150 thalidomide victims who have been refused exemptions, despite the fact that they are not capable of using public transport?

The hon. Gentleman is right that the London congestion charging scheme has worked far better than many people thought that it would. However, as I have said on many occasions, it will take several months to evaluate its effect. Another point that I have often made is that it is for the Mayor to decide which exemptions he wishes to put in place. The way in which the legislation was framed made it absolutely clear that it would be for the Mayor in London, just as it is for local authorities around the country, to decide on the nature of the scheme and its exemptions. When the Government consult on minimum standards, they will be high level and generalised standards to ensure that there are no glaring inconsistencies between local authorities. I would say to the hon. Gentleman, or to anyone else who believes that the London scheme needs refinement in relation to exemptions, that that is a matter for the Mayor to resolve, as the legislation always intended.

Will my right hon. Friend make it clear whether or not the Government support the extension of congestion charging?

I made it clear to my hon. Friend's Committee, and many times to the House, that congestion charging is one of a number of options that local authorities can use. Whether it is appropriate for particular towns and cities depends on the local authority. That is how the legislation is drafted. I have also made it clear that I know full well that many local authorities have been waiting to see what happens in London before deciding whether to proceed with congestion charging. As I said last week in relation to congestion charging and other developments, such as the tolling of the M6 when the toll road opens—probably at the beginning of next year—developments are taking place that will allow people to learn from what is actually happening rather than what might happen in theory. That will better inform local authorities and the Government on what measures are workable and acceptable in managing demand for road space.

The Secretary of State is trying to absolve himself from responsibility for the exemption scheme. The Government took the power in legislation to impose exemptions and concessions. Why do they not use that power to ensure that the scheme does not inflict so much damage on their policy of social exclusion? The latest report from the social exclusion unit shows that householders who are car owners and in the 20 per cent. lowest range of incomes have to pay 24 per cent. of household income in car taxes. That is unjust. Why do not the Government do something about that in the name of social inclusion?

I must say that I had no idea that the hon. Gentleman was bothered about social inclusion. There was not much sign of that when he was a Minister.

On the specific scheme, it has always been the case that it would be up to the Mayor of London to put arrangements in place and to decide the appropriate exemptions. It is his scheme and for him to decide what exemptions are justified. On social inclusion, it is worth bearing in mind that about 90 per cent. of people who come into central London do so on public transport. Many of the remaining 10 per cent. may be in a difficult position, but it is for the Mayor to sort that out. One of the best things that can be done to help social inclusion is to invest in public transport. The hon. Gentleman and his party want to cut public investment by 20 per cent. That would be bound to have an adverse effect on social inclusion.

Railways

9.

What recent assessment he has made of the plans Network Rail have to improve the signalling and track from Nottingham to London. [100185]

None. I understand that the Strategic Rail Authority and Network Rail are working together on a range of strategic measures to include in the midland main line route plan. This will form part of Network Rail's 2003 business plan, due to be published in April.

Given the billions of pounds that are being invested in St. Pancras station as part of the channel tunnel rail link, would not it be sensible to invest a significant amount in the midland main line so that we have a fast link between Nottingham and that part of the east midlands into London? Although there is a need to invest in the west and east coast main lines, many of us in that part of the east midlands think that the midland main line is often neglected when it comes to investment decisions.

I know of my hon. Friend's considerable interest in the subject, which he regularly raises with us. He will be aware of the major transport interchange in the St. Pancras and King's Cross complex. We are keen to encourage development of the midland main line. As for the details, we will have to await the outcome of the work by Network Rail on, for example, signalling, which will no doubt cover the famous Trent signal box.

Speaking as an hon. Member who represents Sheffield, I add my voice to the calls for the midland main line to be a higher priority. Will the Minister consider doing something about the rolling stock on that route? It is distinctly inadequate and there are frequent cancellations simply because trains are not available.

As the hon. Gentleman will be aware, considerable work is being done on the renewal and replacement of the high-speed train fleet. That is of particular significance to the midland main line and other routes. I must say that when I have used the midland main line, it has been remarkably reliable.

Airport Security

10.

If he will make a statement on airport security. [100186]

The terrorist threat to UK interests and UK aviation remains a very real one. Heightened aviation security measures have been in place since September 2001 at all UK airports for all airlines operating from the UK and for UK airlines overseas. These are kept under constant review and are amended or supplemented as and when required.

On the police service parliamentary scheme, I recently studied policing at Schiphol and Manchester airports. In the Netherlands, one security force is responsible for all aspects of security at major airports like Schiphol. However, in British airports we have the local police, special branch, the immigration and nationality directorate and Customs and Excise. Even the individual carriers and baggage handlers have their own security people. Is my right hon. Friend as concerned as I am that while there is a lot of good will among those individual forces, there may not be adequate consultation between them?

My hon. Friend raises a matter that was acknowledged by Sir John Wheeler, whom the Home Secretary and I asked to carry out a review of airport security. He identified cases in which we could improve the working relationship between the police and others, and we are in the process of doing so at the moment. I would caution against a wholesale organisational change, as that can often lead to people taking their eye off the immediate problem. However, where there are problems concerning organisations not working together as closely as they should, we will deal with them as and when the occasion demands. However, both the Home Secretary and I are concerned that Wheeler's recommendations should be implemented as quickly as possible, and are working to do so.

Can the Secretary of State confirm that following a recent new risk analysis, aeroplanes coming in from certain countries can no longer park at the main stand but must park and disembark their passengers away from the stand? If so, which countries are involved? Can the Secretary of State also explain why, 16 months on since the first occasion on which I raised the matter, it is still possible for staff to work airside—the most vulnerable part of the airport—without full security clearance, as long as they are supervised? Does he not accept that supervision can never be 100 per cent. secure? Surely action should have been taken a long time ago?

On the first point, I am anxious to be as helpful to the hon. Gentleman and the House as possible, but it would be unwise of me to disclose what is done for operational reasons from time to time. I think that, on reflection, the hon. Gentleman will accept my reasons for doing so. However, I can say that we keep the nature of the threat and the places where it may come from under review all the time. From time to time, it is necessary to do things at Heathrow and other airports to try to control or mitigate that threat. As my right hon. Friend the Home Secretary said a short while ago in a statement to the House, it is neither possible nor wise of Ministers to provide a "running commentary" on what is happening from day to day.

The threat at our airports is real in nature and is likely to continue for a long time. In this country, we have lived under the threat of terrorism from the IRA for some 30 years, and I am afraid that we are going to have to come to terms with living with a different, and in many ways more substantial, threat. It will be necessary for us to take appropriate action from time to time, but it would not be wise of me to maintain a running commentary in public on what we are doing.

Will the Secretary of State comment on the illogical situation whereby some airports pay for policing while other expanding, quite large, airports do not? It is not fair competition policy, nor is it fair to the council tax payer that that disparity should endure.

It is no doubt one of things that we will look at. My concern, and the concern of my Department, is to make sure that there is adequate policing, no matter what the source of finance. It is for the Home Office to decide the appropriate funding of police forces. I need to be satisfied that there is an adequate police service at every airport, depending on their size and the nature of the threat that may exist.

In recent weeks, armed police have been deployed in my constituency to protect the flight path from Manchester airport as a result of the recent scare. Without providing a running commentary, as the Secretary of State said, does he nevertheless agree that it is vital that airport communities be provided with clear information about what is being done, and that we should avoid alarmist statements from members of the Government and others?

Alarmist statements, no matter where they come from, should be avoided because they are usually unhelpful. Yes, we will try and keep the public and everybody who has a direct interest informed as much as we can, but no doubt the hon. Gentleman will accept that there can be occasions when information becomes available and action needs to be taken immediately. Sometimes it is overt, sometimes it is covert, but it is not always wise to make a public announcement about what is happening all the time. I should have thought it was obvious to the hon. Gentleman that to reveal what we know, and therefore possibly, by implication, what we do not know, would not help anyone at all.

We all appreciate the need for tighter airport security, but what is being done to get more X-ray scanners operational? The number of times I have been stuck at Heathrow with huge numbers of people trying to get through one or two scanners is ridiculous. What discussions has my right hon. Friend had with BAA and other airport authorities to tackle the problem?

As it happens, I had an interesting discussion about just that matter a couple of weeks ago. The problem at Heathrow, particularly in relation to the domestic departures area, which is probably the one where my hon. Friend was held up, is not a lack of scanners, but a failure to deploy the right number of staff at specific times. It has been a problem at Heathrow since Christmas. There is a system in place to step up the numbers of staff to meet the flow, which is fairly predictable, but on a number of occasions that has not been done. We have spoken to BAA about that. People will put up with the inconvenience of being searched, but they cannot understand why the queue sometimes stretches right out across the concourse because staffing levels are inadequate. It is a staffing problem, rather than a problem with the scanners themselves.

Metronet Bond Issue

11.

If he will make a statement about the public bond issue by Metronet. [100188]

The first three PPP contracts were completed with Tube Lines on 31 December. I expect the other two contracts to be completed with Metronet shortly. Metronet plans to raise part of the necessary finance through a bond offering.

Can the Secretary of State confirm that when the disclosure period for the Metronet bond issue starts, there will be full disclosure in line with previous practice; or will it be like the recent PFI bond issued in connection with the upgrading of the Al in Yorkshire by Road Management Services (Finance) plc, in which important information was blacked out before the documents were deposited at the lawyers Freshfields, so that taxpayers cannot find out what is going on?

I am sure that Metronet will comply with all the obligations incumbent upon it in relation to its bond launch. That is what it must do.

Buses

12.

What recent assessment he has made of the impact of modern, reliable bus services on reducing car usage; and if he will make a statement. [100189]

Current and potential bus users consistently rate improvements to frequency, punctuality, reliability and cost as the factors most likely to encourage them to make better use of bus services. Significant increases in patronage, typically between 5 per cent. and 25 per cent., but occasionally significantly more, have followed major improvements on bus corridors. Studies suggest that about one third of new users previously made the journey by car.

My constituents will be greatly heartened by that. We are undergoing a huge programme to introduce the Fastway bus system, which I am glad to say my right hon. Friend visited a few weeks ago. Inevitably, there is much disruption, and my constituents need to know that that disruption will pay off in the long run, and that they will have a better environment and a better way of getting to Gatwick airport, in particular. Does my right hon. Friend agree that the disruption is well worth the effort?

I was very impressed by the partnership between the local council, the county council and the bus company in producing a scheme that they and I believe will be of real benefit to the people of Crawley and will enable Crawley to continue to be an economically dynamic city. It has been encouraging to see that. My hon. Friend can take heart from the increases in patronage that have taken place in other areas where similar systems have been introduced—as I said, between 5 and 25 per cent. That has been a real benefit to existing bus travellers and an encouragement to those who previously went by car to consider the new system as a sensible alternative.

Does the Minister accept that in many parts of the country, particularly rural areas, there is little or no public transport, so cars are essential if people are to have an acceptable form of mobility? Does he agree that if people are to use public transport, particularly buses, there must be adequate park and ride or car parking for those who come from areas where there is no public transport to link up with bus services? What encouragement is he giving to councils throughout the country to introduce more park and ride, so that there is adequate parking for people who have to get to a bus service before they can use it?

Of course, far more people in rural areas now have access to bus services than previously, not least because of various rural bus grants that have been of significant advantage. However, I take the hon. Gentleman's point. As I told the hon. Member for Mid-Worcestershire (Mr. Luff), there is considerable scope for park-and-ride facilities that link with either bus or rail stations. That requires proper partnership between local authorities, bus companies and rail companies. In some areas, that is working very well, and some companies are extremely innovative, while others are not moving so fast. We are trying to encourage the average companies to come up to the level of the best. If he has a particular problem in his area that he would like me to address, I shall be more than happy to receive representations from him.

My right hon. Friend will be aware that in some areas where bus services have been deregulated, largely outside London, the promised increased reliability has failed to materialise. That has happened because some of the operators choose to run buses that are not properly maintained and, in some cases, not even properly cleaned. That has obvious implications for safety as well as reliability. Does that not imply that at the very best we should be considering some extension of public ownership such as that which has already been made on some routes in London, or at the very least an increase in regulation?

Even in London, the buses are run by private companies, although under a different regime. If my hon. Friend believes that companies are running vehicles that are unsafe or not properly maintained, or has information in that regard, the matter should be referred to the traffic commissioners, who are responsible for considering such matters. He is right to say that there are variations in performance. That is exactly why we have established between local authorities and bus companies the Bus Partnership Forum, which is considering a number of the issues that have been nagging away at those bodies for years. It is also starting to thrash out the details and new policies needed to achieve much better practice throughout the country, to the benefit of bus passengers and transport as a whole.

May I point out to the Minister that there has been a serious reduction in bus routes in south Oxfordshire, affecting the Reading-Goring and Chinnor-Thame routes and several others? May I also invite him to explain why the 20 million rural bus challenge seems to have done very little except make life more challenging for rural bus users? Can he allay the justified suspicions of those who think that that is caused partly by money being cynically skewed away from well run councils in the shires and the south and directed towards badly run Labour councils in the north?

Local authorities throughout the country have had a significant increase in their moneys for local transport plans. I shall, of course, check the increase that Oxfordshire has received. Perhaps the hon. Gentleman should address his remarks to the local authority as to how it spends its money. The rural bus challenge has had a significant effect and made a considerable improvement in many areas. I cannot instantly recall what schemes have been introduced by Oxfordshire county council and whether they have been agreed by us. However, in general, the rural bus challenge has made a significant improvement. More people have been given access to bus services, and the initiative has helped to reduce rural isolation and provide access to shops and employment, as well as health and education facilities.

A1

13.

In line with the Government's policy of reducing congestion and improving safety on trunk roads, there are plans to carry out major improvements at several junctions on the Al in Bassetlaw. Those include replacement of the roundabouts at Blyth, Apleyhead and Markham Moor with flyover junctions and the provision of a new junction to provide access to Elkesley village.

After 30 years of procrastination, my constituents are delighted that we have a Government who are prepared to put in the investment. Indeed, my constituents will be singing and dancing alongside the traffic queues, soon to go. So enthused are they that should the Minister contemplate going further and bringing motorways in as part of that investment, there will be further support. Will he consider the enthusiasm of my constituents in terms of future motorway improvements?

I am sure that I will have the opportunity to do that when I visit my hon. Friend's constituency in just over a week, when the enthusiasm of his constituents will no doubt be manifest.

Cabinet Office

The Minister of State was asked—

Ombudsman

20.

If he will make a statement on the Public Administration Committee's third report, on ombudsman issues, with special reference to the role of the Cabinet Office. [100197]

We will study the Committee's report and respond in the normal way.

This report deals, first, with the Hinduja cover up and, secondly, a less known cover up, which was described by the ombudsman as the only occasion on which the Government have refused to accept the ombudsman's findings on a matter of access to Government information. We hear a great deal about freedom of information from this Government, but when it comes to reality there is no freedom of information and one cannot find anything out because they are so secretive.

The report's second recommendation is:
"We recommend that the Government reconsider its decision to refuse to accept the Ombudsman's findings in the case of Mr Robathan and publish the required information."
Will the Government accept the findings of the Public Administration Committee, which is dominated and chaired by Labour Members?

As I have made clear, the Government will consider the Committee's recommendations and respond formally in the usual way. In the first place, that will, of course, be to the Select Committee.

I am one of the Members who "dominates" the Public Administration Committee. Will the Minister take note of the fact that the new ombudsman is appearing before us this week? We might want to ask also about press reports that the Government are resisting releasing information on gifts to Ministers, so will he perhaps enlighten us further as to Government policy on freedom of information regarding gifts to Ministers?

The final decision on what is in the report is obviously a matter for the ombudsman, Ann Abraham. I should point out that I had a constructive meeting with the new ombudsman last week in which we discussed the evolving role of the ombudsman. There is the basis there for an extremely constructive relationship.

Correspondence

21.

If he will make a statement on steps that he is taking to reduce the time taken by Ministers to reply to Members' letters. [100198]

The Cabinet Office issues guidance to Departments on handling correspondence from Members of Parliament. However, it is up to individual Ministers to ensure that their Department responds to all correspondence promptly and accurately.

When that issue was raised with me last month by Members, I wrote to the Cabinet Secretary, who has in turn written to Departments reminding them to ensure that every effort is made to handle correspondence efficiently.

I am grateful to the Minister for that informative reply. Given that the Cabinet Office guidance states that the handling of correspondence with Members of Parliament, peers and the general public is an issue to which the Government "attaches the greatest importance", can he explain to me why the letter that I sent on 7 May 2002 on behalf of my constituent, Mr. Steve Watkins of 72 Embleton Way, Buckingham, on the national health service human resources and payroll system, did not receive a reply from the Minister of State, Department of Health, the right hon. Member for Barrow and Furness (Mr. Hutton), until 16 January this year? On the assumption that the Minister regards that delay of eight months and nine days as unacceptable, when will he do something about it?

Thank you, Mr. Speaker. First, I am happy to take that matter up with my right hon. Friend. Indeed, I have already corresponded with him since the last Cabinet Office Question Time in relation to correspondence to the Department of Health. It is important to point out for the benefit of the House the scale of the challenge facing Departments: about 160,000 letters from Members were received across Departments in 2001 and the Prime Minister alone received more than 1 million letters from the general public in 2002.

Are Ministers encouraged to deal with letters in a number of ways? Some communications are urgent and need swift responses, while others may be more routine. Of course we do not want to wait for as long as eight months for answers to those, but should not important communications be upgraded?

I am sympathetic to that point. Obviously it would be wise to identify the relevant Minister in such correspondence, but the fact remains that we should try to answer all letters as expeditiously as possible. Targets are set by specific Whitehall Departments, and it is on that basis that individual Ministers are responsible, consistent with Cabinet Office guidance.

As the Minister will know, many organisations have become considerably more efficient by using electronic mail for communications of this sort, in terms of both the time taken to reply and the cost involved. Unless such systems are implemented properly, however, they are worse than useless: e-mails are diverted all over the place, or disappear into the ether. Would the Minister consider commissioning work in his Department to bring together the various players in Departments, Parliament and so on, and to establish whether an efficient system of e-mail between Members and Ministers could be devised for Members who wish to communicate electronically?

I know of the hon. Gentleman's expertise in this area. It is a matter of record that the House has considerably improved its facilities for electronic communications in recent years, which is all to the good, but I will give some thought to the hon. Gentleman's question and then write to him.

Will the Cabinet Office undertake to publish a league table showing how rapidly Ministers respond to correspondence? Will it introduce sanctions so that the worst performing Ministers suffer some penalty, such as the loss of their exemption from the London congestion charge?

That would seem a curious sanction indeed.

The guidance is set by the Cabinet Office, and it is then for individual Departments to set responsive targets. The average Whitehall target is 15 working days. Clearly some Ministers and Departments could do significantly better. That is why, after the most recent Cabinet Office questions, I was keen to ensure that the matter was raised with the Cabinet Secretary, who in turn has raised it with individual Departments.

Lord Birt

22.

If he will list the subjects on which Lord Birt has advised the strategy unit in the last six months. [100199]

Lord Birt was appointed by the Prime Minister as an unpaid adviser under paragraph 51 of the ministerial code. His role is to provide the Prime Minister and other Cabinet Ministers with long-term internal strategic analysis and policy thinking.

We need more freedom of information. I asked which subjects Lord Birt was advising on, but the Minister did not give me the answer to that question. Why is what Lord Birt is doing such a secret? Is it that embarrassing?

I am well aware of the correspondence between the Prime Minister and the hon. Gentleman about this. I remind him that, in his letter to the hon. Gentleman dated 21 May 2002, the Prime Minister made it clear that Lord Birt provides private internal advice to the Prime Minister and other Cabinet Ministers on a range of issues.

Would my hon. Friend be prepared to ask Lord Birt to advise the strategy unit on Government policy on waste? As he knows, the unit recently suggested that the Cabinet Office should conduct a review of the current division of responsibility between the Department of Trade and Industry and the Department for Environment, Food and Rural Affairs. If Lord Birt would not be the right person to conduct the review, could the Minister ask someone else to do it on behalf of the Government?

Two distinct issues are inherent in that question, but I will certainly consider how we can best deal with the issues relating to waste.

Civil Service

23.

What plans he has to review whether the requirement that each civil service agency undergoes a quinquennial review of its public sector status should continue. [100200]

The Government no longer require quinquennial reviews of executive agencies and non-departmental public bodies. Because our focus is on the effectiveness of delivery of public services rather than on individual structures, Departments are now being asked to look holistically at the contribution that agencies, NDPBs and others make to achieve their delivery objectives.

Now that the agency system is mature, might this not be the time to review the whole basis on which agencies work, especially smaller agencies? Could the system be refined to match more closely the size and function of an agency, rather than the focus being on the undertaking of reviews?

My hon. Friend will be aware that a joint review of agency policy was recently carried out by the Cabinet Office and the Treasury, and the report, "Better Government Services: Executive Agencies in the 21st Century"—copies are available in the Library was published in July 2002. On my hon. Friend's specific point about the function of the reviews of agency work, I agree that the challenge is not solely to look at individual structures, but to ensure that the structures that are in place reflect the delivery objectives of the Department. That view is shared by the Cabinet Secretary, who, through his work on advancing performance partnerships, is undertaking significant work in this area.

Points Of Order

12.30 pm

On a point of order, Mr. Speaker. I seek your guidance about the confused messages coming out of the Department for Education and Skills today on university admissions. This morning, the Minister for Lifelong Learning and Higher Education, the hon. Member for Barking (Margaret Hodge), is reported to have said that she was going to set a specific target for the percentage of children from poorer backgrounds going to university. She is reported to have said:

"I'm actually going to set a target—where we want to get to by 2010."
Several hours later, however, after the intervention of the Secretary of State for Education and Skills, she was quoted as saying that
"an overall target would be inappropriate and we have no plans to introduce one."
Given that, so far, we have had one message about university admissions from the Prime Minister, a different one from the Secretary of State and two different ones from the Minister with responsibility for higher education, has the Department for Education and Skills requested the chance to make a statement to the House this afternoon, so that we can clear up this terrible confusion on one of the key areas of education policy?

On a point of order, Mr. Speaker. Have you had a moment to look at the lead letter inThe Times today, from Professor Sir Bernard Crick, the constitutional expert, in which he compares Ministers' respect for the House of Commons somewhat less than flatteringly with the Government of Lord North's? Against the background of your own repeated statements that Ministers making important announcements should come to the House of Commons first, have you been able to reflect on the Chancellor of the Exchequer coming not here, where he surely ought to be, but to Canary Wharf, to tell us that the costs of any war against Iraq will be met, whatever they are, or on the fact that theEvening Standard can refer to the prospect of a rise of 4p in the pound in income tax? If income tax is to rise by 4p in the pound, should not the House of Commons be told first, rather than the distinguished company at Canary Wharf?

The hon. Gentleman, the Father of the House, applied for an urgent question today. I am rather worried that, when he is refused urgent questions, he tries to raise points of order on the same matters. That is what he is trying to do now. He sought an urgent question to try to bring the Chancellor of the Exchequer to the House, and I refused his request. I need not give any reason for doing so. It is quite improper that the hon. Gentleman should then raise a point of order and try to raise the matter in this way.

Welfare Of Laying Hens (Enriched Cages)

12.33 pm

I beg to move,

That leave be given to bring in a Bill to prohibit the keeping of laying hens in enriched cages.
First, may I pay tribute to Compassion in World Farming, whose campaign has inspired this Bill? Secondly, may I say that the Government have done much to improve the welfare of farm animals? They led the way in securing the EU protocol, which gives animals a new legal status as sentient beings rather than agricultural products, as they were previously defined. They have banned fur farming and played a key role in winning an EU-wide ban on battery cages, which is due to come into force in 2012. I am aware that the Government are in the process of consulting on whether to ban enriched cages, and I hope that they will do so. The purpose of my Bill, which has all-party support, is to give Ministers a little prod in the right direction. I was hoping that there would be a Minister from the relevant Department here today, and I am sorry that there is not.

I am sorry to say, however, that as things stand much of the egg industry plans to side-step the ban by going over to the cynically named enriched cages, which, sadly, have not been banned by the EU directive. An enriched cage will give hens just 150 cm—about the area of a postcard—more floor space than a conventional cage. It will contain the same number of hens—usually four—and provide a tiny nest box, a perch and litter for dust bathing, all of which will be woefully inadequate in the tiny space available. The hens will still be unable to turn or to flap their wings, and competition for the nest box is likely to lead to aggression. I defy anyone who has seen it to say that this represents a serious improvement in farm animal welfare.

These so-called enriched cages are little more than glorified battery cages. They have nothing to do with humane egg production, and have been designed principally as a device for getting around the EU ban. They will enrich only the egg producers, not their wretched hens. The 2012 deadline for phasing out conventional cages is, by any standards, generous. Producers have ample time to prepare for it, and what they ought to be doing is investing in perchery or free range systems; indeed, the better egg producers are already doing so.

There are, of course, those who argue that more expensive welfare systems in the EU will lead only to increased imports from countries where EU welfare standards do not apply. I understand this concern, but it need not be the case. Of course, the obvious solution would be for the EU, once its own cage ban comes into force, to ban the importing of cage-produced eggs from elsewhere. I am aware that both the Government and the EU make the pessimistic assumption that the rules of the World Trade Organisation do not allow restrictions on such imports. We should challenge this view. I note that the WTO recently ruled that an importing country may make it a condition of access to its markets that the exporting countries adopt policies of environmental protection comparable to its own. I also note that the EU, which bans cosmetic testing on animals, has recently decided that a ban on the sale of imported animal-tested cosmetics is consistent with WTO rules. I therefore see no reason why the same principle should not be extended to farm animal welfare, and I trust that Ministers will press for this.

Whatever the position with the WTO, however, there are other steps that we can take to prevent welfare standards in our egg industry from being undermined by imports. Supermarkets should follow the example of Marks and Spencer and Waitrose in refusing to sell battery eggs, and fast food chains should do the same. Believe it or not, UK branches of McDonald's use only free range eggs. If McDonald's can adopt this principled position, so can other food chains and manufacturers. Where the market goes, industry will follow.

In any case, the cost of change is often exaggerated. Industry figures show that barn eggs cost about 8.5p a dozen more to produce, and free range eggs about 18.5p a dozen more. Given that we consume about 180 eggs per person a year on average, this amounts to about tuppence a head per week for free range eggs, or 5p a head per week for barn eggs. That is not a high price to pay for rescuing hens from a lifetime of misery, or for injecting a little morality into factory farming.

I repeat: these so-called enriched cages are a cynical device designed to undermine the little progress that we have already made towards mitigating the worst excesses of factory farming. Germany has already undertaken to ban them, and if Germany can do without them, so can we. I note that the egg industry is arguing that the Germans can afford to take this principled stand because their industry is migrating across the border into Poland. This overlooks the fact that by the time the ban comes into force in 2012, Poland will be well inside the EU, and the rules that apply to German egg farmers will also apply to Polish ones.

I trust that Ministers will not fall for any of the special pleading coming from the egg industry. Instead of looking for ways round the ban, the industry should put its energy into ensuring that there is a level playing field and expanding the market for eggs that are humanely produced. If they were to do that, they would have the full support of the House and the public.

Question put and agreed to.

Bill ordered to be brought in by Mr. Mullin, Ann Clwyd, Mr. Tony Banks, Sir Teddy Taylor, Bob Russell, Mr. Gwyn Prosser, Mr. John Horam, Sue Doughty, Mr. Eric Martlew, Mr. Roger Gale, Mr. Bill Etherington and Peter Bottomley.

Welfare Of Laying Hens (Enriched Cages)

Mr. Mullin accordingly presented a Bill to prohibit the keeping of laying hens in enriched cages: And the same was read the First time; and ordered to be read a Second time on Friday 28 March, and to be printed [Bill 65].

Police (Northern Ireland) Bill Lords (Programme) (No 2)

Motion made, and Question proposed,

That the programme order of 10th February in relation to the Police (Northern Ireland) Bill [Lords] shall be amended by the substitution in paragraph 2 (conclusion of proceedings in standing committee) for "Tuesday 4th March" of "Thursday 6th March".—[Joan Ryan.]

Question agreed to.

Orders Of The Day

Communications Bill

2Nd Allotted Day

As amended in the Committee, further considered.

New Clause 23

Secretary Of State Guarantees For Ofcom Borrowing

'(1) The Secretary of State may guarantee—

  • (a) the repayment of the principal of any borrowing by OFCOM;
  • (b) the payment of interest on any such borrowing; and
  • (c) the discharge of other financial obligations incurred by OFCOM in connection with any such borrowing.
  • (2) The power of the Secretary of State to give a guarantee under this section is a power (subject to subsection (3)) to give it in such manner and on such conditions as he thinks fit.

    (3) The Secretary of State must not give a guarantee under this section if the aggregate of—

  • (a) the amounts that he may be required to pay for fulfilling that guarantee, and
  • (b) the amounts that he may be required to pay for fulfilling other guarantees previously given under this section and still in force,
  • exceeds £5 million.

    (4) The Secretary of State may by order substitute another amount for the amount for the time being specified in subsection (3).

    (5) No order is to be made containing provision authorised by subsection (4) unless a draft of the order has been laid before Parliament and approved by a resolution of the House of Commons.

    (6) Immediately after a guarantee is given under this section, the Secretary of State must lay a statement of the guarantee before each House of Parliament.

    (7) Where any sum is paid by the Secretary of State under a guarantee given under this section, he must lay a statement relating to that sum before each House of Parliament as soon as practicable after the end of each of the financial years—

  • (a) beginning with the one in which the sum is paid; and
  • (b) ending with the one in which OFCOM's liabilities under subsection (8) in respect of that sum are finally discharged.
  • (8) If sums are paid by the Secretary of State in fulfilment of a guarantee given under this section OFCOM must pay him—

  • (a) such amounts in or towards the repayment to him of those sums as he may direct; and
  • (b) interest, at such rates as he may determine, on amounts outstanding under this subsection.
  • (9) Payments to the Secretary of State under subsection (8) must be made at such times and in such manner as he may determine.'.— [Mr. Timms.]

    Brought up, and read the First time.

    12.42 pm

    I beg to move, That the clause be read a Second time.

    With this it will be convenient to discuss the following: Government new clause 25—Power of OFCOM to retain costs of carrying out spectrum functions.

    Government amendments Nos. 241 to 243, 256.

    Clause 1(3) and (4) of the Bill will allow Ofcom to borrow money commercially. That will enable Ofcom to smooth out uneven cash flows that may arise as the result of the unevenness of receipts. New clause 23 will allow the Secretary of State to guarantee Ofcom borrowing to ensure that it is able to obtain the most advantageous terms.

    New clause 25 will enable Ofcom to retain out of its spectrum receipts an amount to cover the costs of carrying out its spectrum functions. Clause 390 of the Bill requires amounts received by Ofcom under the Wireless Telegraphy Act 1998 to be paid to the appropriate consolidated fund. In practice, an administrative arrangement will allow the necessary amount to meet the costs of Ofcom carrying out its spectrum functions to be netted-off from those moneys and paid to Ofcom. Under the new arrangement proposed in new clause 25, Ofcom would make a statement of principles, which would be approved by the Treasury, setting out the basis on which it would calculate the costs of carrying out its spectrum functions and retain the necessary amounts accordingly. I hope that the House will welcome that.

    Amendment No. 243 requires that Ofcom should include in the account prepared under clause 390(4) the amount retained by it in accordance with any statement of principles it may make under new clause 25, and the cost to Ofcom of carrying out the functions to be covered by that retained amount. Amendments Nos. 241 and 242 are minor consequential amendments.

    As a result of the requirements of clause 390 that some of the amounts received by Ofcom should be paid to the consolidated fund, Ofcom will be unable to comply with the duty in paragraph 8(1) of the schedule to the Office of Communications Act 2002 to secure that its revenues are at least sufficient to meet its obligations. Amendment No. 256, therefore, amends paragraph 8(1) to require Ofcom to conduct its affairs so as to secure that revenues from fees and charges which do not fall to be paid to the consolidated fund are at least sufficient to cover the cost of carrying out the functions to which they relate.

    We welcome the new clauses, although we should prefer new clause 25 to go further. If the new clauses are accepted, the Bill will have more than 400 clauses. I hope that the House will recognise that this afternoon's debate brings to an end a lengthy process. Some of us have been engaged in it for the best part of three months, but it has been a happy time. As we progress through the afternoon, we will discover the joy of Government amendments that put into effect changes that we advocated in Committee. That shows that the Committee debate was a constructive process. The past 24 hours has been quite good, as we have seen that all our work did not come to nothing. We are grateful to the Minister for that.

    However, if new clause 23 is relatively uncontroversial, new clause 25 addresses an issue that I raised with the Minister in Committee—the extent to which all the income payable to Ofcom could be used to defray some of the costs of its activities, instead of all of it being paid to the consolidated fund. I do not want to delay the House, as there is a lot of business to get through. However, the Minister will recall that I impressed on him my thought that, although I understand that Ofcom would not necessarily have an incentive to impose penalties if it could keep the money, it still seems a mistake for new clause 25(5) specifically to except the imposition of penalties and fines and some of Ofcom's enforcement powers.

    We still believe that a lot of activity will be involved in policing the provisions of the Bill and ensuring that Ofcom achieves proper enforcement. The cost of that will still fall on all the organisations that must pay fees and administration expenses to the regulator, as we discussed in Committee.

    Although there is not a complete meeting of minds between us on that matter, we are nonetheless grateful that the Government have accepted some of what we said. I hope that the Minister will recall the Opposition argument as the Bill progresses through the other place and when it receives Royal Assent. If I am right about it, we may need to return to the matter in the future.

    I agree with the hon. Gentleman about the happiness of the past three months. He is right that the House has before it a number of amendments that reflect the discussions that we had in Committee. They deal with matters raised by the hon. Gentleman and other hon. Members, which is how the process should work.

    We debated in Committee the matter that the hon. Member for Ryedale (Mr. Greenway) raises, and I think that he will welcome the change proposed in new clause 25, as far as it goes. It means that the arrangement will be much more transparent, and that people will be able to see how payments are being used to fund the work that Ofcom needs to do. We disagreed about penalties, for the reasons that the hon. Gentleman set out. I am satisfied that the proposals before the House today are the right ones, and I am grateful for the hon. Gentleman's general welcome for the changes.

    Question put and agreed to.

    Clause read a Second time, and added to the Bill.

    New Clause 24

    Grants For Electronic Communications Networks And Services In Northern Ireland

    '(1) The Department of Enterprise, Trade and Investment may, in accordance with this section, make payments to persons engaged in, or in commercial activities connected with—

  • (a) the provision of electronic communications networks and electronic communications services in Northern Ireland; or
  • (b) improving the extent, quality and reliability of such networks or services.
  • (2) A payment shall not be made under this section unless in the opinion of the Department of Enterprise, Trade and Investment—

  • (a) the making of the payment is likely to achieve—
  • (i) one or more of the purposes set out in subsection (1); and
  • (ii) any other purposes prescribed by regulations made by that Department with the approval of the Department of Finance and Personnel; and
  • (b) the amount of the payment is reasonable having regard to all the circumstances.
  • (3) Payments under this section shall—

  • (a) be of such amounts, and
  • (b) be made subject to such conditions (including conditions as to repayment),
  • as the Department of Enterprise, Trade and Investment may determine.

    (4) This section extends only to Northern Ireland.'.— [Mr. Timms.]

    Brought up, and read the First time.

    I beg to move, That the clause be read a Second time.

    New clause 24 grants discretion to the Department of Enterprise, Trade and Investment—DETI—in Northern Ireland to fund expenditure on telecommunications infrastructure and for any other purposes prescribed by regulations made with the approval of the Department of Finance and Personnel in Northern Ireland. Under the terms of the clause, DETI will have discretion to support financially the development of a regional telecommunications infrastructure, specifically in respect of the provision of electronic networks and services and improving the extent, quality and reliability of those networks or services. It will enlarge the legal framework for funding such expenditure in Northern Ireland. That is important because of DETI's role in developing a regional telecommunications infrastructure as an integral part of the Government's strategy for broadband, which is being led by my Department.

    The Bill already contains a provision, which has been carried over, in part, from the Telecommunications Act 1984, for district councils in Northern Ireland to contribute to the costs of infrastructure. The new clause confers broadly similar powers on DETI and I hope that the House will welcome it.

    Northern Ireland Members have pressing matters to address and we wish them success, but I am sure that were they here today, they would want to welcome the new clause. It appears at least to signal an opportunity for the increased roll-out of broadband in Northern Ireland.

    When we debate new clause 2 a little later in our proceedings, I hope that we shall conclude that the Government's commitment to the roll-out of broadband in the rest of the United Kingdom will be undertaken with equal enthusiasm.

    I, too, welcome the new clause; it clearly makes sense for DETI to be given the powers to make such expenditure. Although I would not oppose that, I have some questions for the Minister, especially on the relationship of the provision to expenditure in the rest of the United Kingdom.

    The notes that the Minister kindly distributed to accompany the Government's many amendments and new clauses stated that the new clause was part of the DTI's broadband initiative. Can he flesh out how DETI's possible expenditure in Northern Ireland would relate to expenditure elsewhere? For example, is the anticipated DTI expenditure to be across England, Scotland and Wales, or is it to be broadly equivalent to the expenditure to promote broadband infrastructure made by the regional development agencies in England and their counterparts in Wales and Scotland?

    Can the Minister clarify whether there will be comparability throughout the United Kingdom? We are all interested in the promotion of broadband networks, so it would be helpful to know where the Government imagine that the expenditure will come from. The new clause makes it clear that in the case of Northern Ireland it will come from DETI, but questions remain about the Government's intentions for their expenditure of public money in the rest of the United Kingdom.

    Secondly, I want to raise concerns that have been expressed to me about Scottish Enterprise's investment and which may also apply to expenditure in Northern Ireland. Although we all welcome funding for broadband infrastructure from various regional and national bodies, it can have a distorting effect on the market. Concerns are being expressed by some service providers in Scotland that Scottish Enterprise's investment strategy is not ideal for creating the optimal market climate. Targeted investment of that sort can distort the market to the detriment of existing providers who could supply the services that people want without additional investment.

    I am fully supportive of regional investment, but I want to put down a marker that regional and national investment within the United Kingdom must be made with the full co-operation of existing providers and complete understanding of the market or it could be counterproductive. The Scottish example suggests that conditions are being created such that internet service providers based in London, because they are being encouraged to enter the Scottish market, could end up with more favourable conditions than internet service providers based in Edinburgh. I hope that our regional investment strategies will not create such anomalies.

    Northern Ireland is largely rural—rather like Scotland, as the hon. Member for Sheffield, Hallam (Mr. Allan) pointed out. How will the provision affect rural areas of Northern Ireland? What consideration has the Minister given to the wireless and satellite provision of broadband? He will be aware of the excellent document produced by the Communication Workers Union, which shows that Britain is 20th in the world for the provision of broadband.

    I want to pursue the line of questioning taken by the hon. Member for Sheffield, Hallam. Will there be a distortion in the market? Assuming that the problems of the provision of broadband in rural areas can be overcome, will we find that Northern Ireland becomes a Mecca for the application of broadband while the rest of the United Kingdom is far from being so? The Minister will be aware, from the many hours that we spent on this subject in Committee, that many of us are concerned not only that broadband is not yet available in rural areas in England but also that it is not available in suburban areas and even some urban areas. How will he ensure that there is no imbalance between various parts of the UK?

    Will the Minister comment on the fact that although we have the second highest growth rate in Europe for broadband, some locations are still struggling to make their case for broadband to service providers? Does he welcome initiatives such as that announced last week by the regional development agency for my area, the East of England Development Agency, of investment of about £5.8 million of its funds and Government funds to identify for network providers locations where broadband could be promoted? Of the two initiatives announced last week, one was in rural Diss, in Norfolk, and the other in urban Ipswich; both are good examples of the joint initiatives undertaken by the DTI and RDAs.

    We have had a brief but interesting discussion on the roll-out of broadband and we shall come back to that subject in a later amendment.

    I accept the important points made by the hon. Member for Sheffield, Hallam (Mr. Allan) about the need for care in the use of public spending on telecommunications infrastructure. I am aware of the case in Scotland to which he referred. There are clear rules about state aid problems and it is essential to respect and comply with them. None of the proposals is in conflict with that.

    I agree with the hon. Gentleman that there is a role for public participation in some circumstances. As I said earlier, local authorities can already contribute to the costs of telecommunications infrastructure. The new clause simply allows DETI to do so as well.

    It is becoming increasingly clear that such interventions are most helpfully made regionally. My hon. Friend the Member for Ipswich (Mr. Mole) rightly drew attention to the work of the East of England Development Agency. Last week, I visited Birmingham and held similar discussions with Advantage West Midlands. A growing number of interesting initiatives are being taken by the RDAs, using, in part, the £30 million broadband fund provided for them by my Department. Such initiatives help to extend the availability of broadband services to businesses and residential users.

    The hon. Member for Lichfield (Michael Fabricant) asked about wireless provision. Several of the EEDA initiatives involve wireless. In rural areas, there will be an increasing use of wireless to extend broadband rapidly to places where it has not yet been possible to upgrade the existing telecommunications infrastructure.

    The hon. Gentleman also mentioned satellite provision. SEEDA—the South East England Development Agency—has done some interesting work in subsidising small businesses, so that they can use satellite-based broadband services.

    1 pm

    I agree with the hon. Member for Lichfield in his statement of admiration for the Broadband Britain campaign, run by the Communication Workers Union. I was present at the launch of that campaign, and I very much welcome the contribution that it is making. Of course things are changing very rapidly. We reached only 1 million broadband connections last October; we are now past 1.5 million, and the number is increasing by in excess of 30,000 new connections a week. So we are certainly no longer in the position that we appeared to be in when the CWU document was published. As my hon. Friend the Member for Ipswich suggested, we have now got the second biggest broadband network in Europe—after only the German network—so a great deal of progress has been made.

    Will the Minister take this opportunity to praise BT for reducing the threshold at which it will enable its exchanges when people have registered an interest in it? In many areas, but not all, the threshold has dropped from 650 to 350 people. However, will he use his particular powers of persuasion to ensure that the threshold is reduced to 350 people in all areas, not just some?

    I very much welcome BT's announcement to reduce those thresholds. Of course, the level at which they are set is a commercial decision for BT. It should be recognised that the cable companies play an important part in extending access to broadband—they still have more than half the market, I believe—and there are about 200 resellers of BT services, so the industry is making a big effort, and I welcome the progress that has been made.

    The House generally welcomes the change for Northern Ireland in the new clause, but it is important to underline my agreement with the points made by the hon. Member for Sheffield, Hallam about ensuring that such a route does not permit inappropriate state aid, and I assure the House that that will not occur.

    Question put and agreed to.

    Clause read a Second time, and added to the Bill.

    New Clause 25

    Power Of Ofcom To Retain Costs Of Carrying Out Spectrum Functions

    (1) OFCOM have power to make a statement of the principles under which they may retain any or all of the amounts paid to them in pursuance of obligations imposed by or under the Wireless Telegraphy Act 1998 (c. 6).

    (2) Where such a statement of principles authorises the retention of an amount, OFCOM are not required to pay it into the appropriate Consolidated Fund in accordance with section 390.

    (3) Principles contained in a statement made by OFCOM under this section must be such as appear to them to be likely to secure, on the basis of such estimates of the likely costs as it is practicable to make—

  • (a) that, on a year by year basis, the aggregate amount of the amounts retained by OFCOM does not exceed the amount required by OFCOM for meeting the annual cost to OFCOM of carrying out the functions mentioned in subsection (4);
  • (b) that the amounts retained by OFCOM are objectively justifiable and proportionate to the costs in respect of which they are retained; and
  • (c) that the relationship between meeting the cost of carrying out those functions and the amounts retained is transparent.
  • (4) Those functions are—

  • (a) OFCOM's functions under the enactments relating to the management of the radio spectrum except those specified in subsection (5); and
  • (b) the function of taking any steps that OFCOM consider it necessary to take—
  • (i) in preparation for the carrying out of any of the functions mentioned in paragraph (a) of this subsection; or
  • (ii) for the purpose of facilitating the carrying out of those functions or otherwise in connection with carrying them out.
  • (5) The excepted functions of OFCOM are—

  • (a) their functions under section 19(2);
  • (b) their functions under subsections (1) and (2) of section 147 so far as carried out in relation to the use of the electromagnetic spectrum at places outside the United Kingdom, and their functions under subsection (5) of that section;
  • (C) their functions under section 150;
  • (d) their functions under section 153;
  • (e) their functions under section 163;
  • (f) their functions under sections 170 to 172;
  • (g) any functions conferred on them under section 5 of the Wireless Telegraphy Act 1949 (c. 54); and
  • (h)any function not falling within the preceding paragraphs in so far as the costs of carrying it out are met from payments made to OFCOM by virtue of section 25 or 147(8) of this Act.
  • (6) A statement under this section may include provision which, for the purposes of the principles contained in the statement and of the preparation of accounts in accordance with section 390(4), requires an amount actually received in one year—

  • (a) to be treated as referable to costs incurred in that year and in one or more subsequent years; and
  • (b) to be brought into account, in each of those years, in accordance with an apportionment for which provision is made in the statement.
  • (7) A deficit or surplus shown (after applying this subsection for all previous years) by an account prepared under section 390(4) is to be carried forward and taken into account in determining what is required by OFCOM in relation to the following year for meeting the costs of carrying out the functions mentioned in subsection (4) of this section.

    (8) A statement of principles under this section—

  • (a) if it is expressed to apply for a limited period, does not apply to any amounts paid to OFCOM after the end of that period; and
  • (b) in any event, does not apply to amounts paid to them after a withdrawal of the statement takes effect.
  • (9) OFCOM may revise a statement made under this section.

    (10) The consent of the Treasury is required for the making, revision or withdrawal of a statement under this section.

    (11) Where OFCOM make or revise a statement of this section they must publish so much of the statement or revised statement as appears to them necessary for demonstrating that the statement or revision complies with subsection (3).'.— [Mr. Timms.]

    Brought up, read the First and Second time, and added to the Bill.

    New Clause 1

    Deterrence Of Piracy, Counterfeiting Etc

    'OFCOM may, if they think fit, undertake discussions with, and seek agreement from, broadcasters, producers, service providers and telecommunications companies, in order to assist the deterrence of piracy, counterfeiting and the unauthorised digital transference of moving image material; including in such discussions the promotion of common technical standards in order to facilitate deterrence, prevention, and detection.'.— [Mr. Chris Smith.]

    Brought up, and read the First time.

    That the clause be read a Second time.

    At the outset, I remind the House of my declaration in the Register of Members' Interests—I am an adviser to Disney. However, this issue spreads much wider than a single company; it concerns the serious and growing problem of the dangers of piracy, counterfeiting, illegal copying and downloading across the internet of audiovisual material. That is already widespread in relation to music, and the music industry has suffered grievously.

    The music industry is extremely important to this country. Our share of music production across the globe is about 16 per cent., and the threat to the music content industry from the illegal downloading of material is serious indeed. A recent poll in the United States found that 62 per cent. of the 18 to 29 age group—nearly two thirds of everyone in that age group—had copied or downloaded music or movies across the internet, and three quarters of those knew that it was illegal when they did so. That shows the extent of the problem that exists in relation to music.

    Equipment capable of burning pirated material permanently on to CDs is readily on sale. Of course, that is possible in a narrowband environment with music. However, we are moving into a broadband environment, the development of which makes it possible to download not just music, but moving image material across the internet. Indeed, equipment now available in the shops enables pirated moving image material to be burned permanently into DVD form.

    It may be instructive to consider what happened last year. In May 2002, "Spider-Man" and "Star Wars: Episode II" were released in the United States. Within seven days of those movies being released, 9 million attempts were made to download them across the internet from pirated copies that had been recorded at pre-release screenings. It is estimated that probably only about 2 million or 3 million of those 9 million attempts were successful in completely downloading the entire movie because in many cases the technology was not sufficiently sophisticated to enable that to happen, but that indicates the extent of the problem, the desire to download illegally and, as technology improves, the possible threat, particularly to the content industries.

    The right hon. Gentleman makes a persuasive case about the amount of illegal material available on the web. However, during debates on the Bill in Committee and on Report, hon. Members on both sides of the House, particularly the Government, have made it clear how little control Ofcom will have over the internet. It is not a regulatory body for the internet, which will remain unregulated on the whole. How will the new clause, or any work by Ofcom, tackle that problem, as it involves the expression of free will through a medium with which we cannot interfere?

    The hon. Gentleman is running ahead of me; I shall come to precisely that point in a moment. I am arguing not for control over the internet by Ofcom or anyone else, but for the ability of Ofcom to draw together all parts of the industry—both the content and the servicing industries—to identify technological solutions to the problem, but I will come to that point in just a moment.

    Of course, the content industries suffer particularly from the illegal downloading of material. The obvious point to make is that, if material can be obtained for free across the internet, people are unlikely to pay for it, so less remuneration goes back into providing the content and it is much more difficult to provide content in the first place in the future.

    I understand the right hon. Gentleman's concerns for the industry—I hope to catch your eye, Mr. Speaker, and to speak at length on the issue later—but it is helpful to say as we are talking about movies that cinemas are doing better than ever and more money is coming into the contents sector than ever. Yes, people are ripping off stuff by downloading it, but we should not pretend that that is the death of the movie industry quite yet.

    The point that the hon. Gentleman makes is valid at the moment. The problem is that the technology is in an embryonic state at present. It is still quite difficult to download an entire movie across the internet, but that will not be so for all time, especially as broadband becomes much more readily available throughout the country, as we all hope it will. The ability to download moving image material, not just music and speech, will grow. The hon. Gentleman is right as far as things stand at the moment, but considerable potential exists for the problem to grow much more than it has done up to now.

    I am anxious to establish whether the right hon. Gentleman believes that his proposal is merely necessary, or whether he judges that it is also sufficient. In the light of the concern that he has expressed, and the evolution of technology, does he think that his concerns will be adequately allayed by the passage of new clause 1, or does he believe that the scale of the problem will in due course necessitate an overhaul of copyright design and patent law?

    The hon. Gentleman will be aware that the European copyright directive is on the table at the moment, and the Minister's Department is actively engaged in developing the legislation that will come before the House in due course about the implementation of that directive. These issues, particularly in the digital environment, are absolutely germane to that work on the development of copyright legislation. My new clause is by no means an entirely sufficient answer to the problem; it is an attempt to raise the issue and to develop some mechanisms for drawing together a cross-industry approach to try to find some answers. I doubt whether we will ever address the issue 100 per cent. If we can move towards that point, however, I will be much happier.

    The new clause does not require Ofcom to do anything; it enables Ofcom. If Ofcom, in its judgment of the overall nature of television and film in this country and across the world, decides that it wants to act, under the new clause, it can. Nor does the new clause seek to enable Ofcom to impose anything on any parts of the industry: the telecoms companies, the content providers or any of the service providers. What it enables Ofcom to do is to draw all those parties together into a discussion, and, I hope, into a voluntary agreement to examine what technological standards can be introduced to try to make piracy more difficult. Although technology facilitates the activity, it also provides some of the answers to the problem, through digital signatures, watermarks, tracing the digital origin of material and so on. Those are examples of how technology can come to our assistance in combating piracy, counterfeiting and illegal downloading. To make that possible, we need common standards to be agreed across the industry as a whole. My new clause seeks to enable Ofcom to encourage that to happen.

    My right hon. Friend makes a powerful argument. What would he do about companies that, in effect, make and sell the DVDs and music CDs, but also make the equipment that allows copying to be done? How do we combat that?

    My hon. Friend makes a valid point. A number of companies are both equipment manufacturers and content providers. I do not think that we can prohibit the manufacture of particular types of equipment. What we can do, however, is remind companies of their responsibilities in this matter. I hope that some of them will listen carefully to what my hon. Friend says.

    I am grateful to the right hon. Gentleman for tabling the new clause, which is very important, especially as technology changes. Does he think that all this is a question of hoping to have an effect? Is not the new clause an example of wish over practical application? Does not he think that it is rather wishy-washy? Does he really think that it will change anything?

    I absolutely think that it has the potential to change things. I do not believe that we bring about change on every occasion by legislating to prohibit or require something. We can bring about change by legislating to encourage things to happen, which is precisely what the new clause seeks to do.

    In response to the sedentary intervention of the hon. Member for Buckingham (Mr. Bercow), that is not simply the preserve of Conservatism.

    1.15 pm

    Before the right hon. Gentleman moves on from this point, I want to congratulate him on trying to find a technological solution to the problems of counterfeiting and piracy. I suggest to him that that is a long way from coming, and we will need to go a big distance before it is achieved. Does he have any comments about the general cultural environment in which many young people do not regard this activity as a crime and are happy to be involved in it? Does he think that we must tackle that type of culture, too?

    The hon. Gentleman is absolutely right. There is a particular problem with the younger age groups, among whom this activity is regarded as an entirely natural phenomenon, even though, as I mentioned, many of them are aware that it is illegal. It is regarded in a way that is similar to the way that some people regard speeding on a motorway: they know that they should not do it, but they do it none the less. It is absolutely essential to change the culture and to get across the message that this is not a pain-free exercise and that doing it to too great an extent will kill the goose that produces the eggs in the first place. I hope that Ofcom and others can play a role in helping to change the culture in the way that the hon. Gentleman has described.

    In proposing this new clause, I am seeking to put down a marker or two and I hope that the Government will accept that this serious issue requires a serious approach. We want as much broadband as possible, as rapidly as possible, in this country, but also want our creative industries, particularly the music and moving image industries, to thrive as they have done in the past and can do in the future. This country is very good at those industries, and long may that remain the case. To put those two things together, we need to achieve the best possible technological answers to ensure that those things can happen legitimately and that the digital reception of moving image material can be properly and legitimately done, rather than illegally done through piracy and counterfeiting.

    I want the digital environment and the advent of broadband to be an opportunity for the content and creative industries, not a threat. To turn it into an opportunity, we need to make sure that structures and standards are in place to ensure that that can happen. Ofcom can play a role in making sure that that occurs. The new clause seeks to enable Ofcom to play precisely such a role.

    I start by welcoming the overall thrust of new clause 1, which was moved by the right hon. Member for Islington, South and Finsbury (Mr. Smith). We sought to raise this issue several times in Committee. I moved an amendment to clause 3, on the general duties of Ofcom, the intention of which was not vastly dissimilar to that of the new clause. At that time, I expressed some reservations about Ofcom deciding the direction of technological development. I was glad, therefore, to hear the right hon. Gentleman say that his aim is not to allow Ofcom to impose a standard on the industry or decide between competing technologies. That would not be an appropriate role for Ofcom.

    The right hon. Gentleman is right to say that the scale of the problem will have to be made clear to Ofcom. Piracy and illegal copying are not new developments—they have been going on for a long time. Nearly 20 years ago, I was a special adviser in the Minister's Department. At that time, we wondered whether a levy should be imposed on blank tapes in recognition of the fact that the vast majority of them were being purchased to record music off the radio or off vinyl albums; almost all those purchases probably breached copyright. The industry accepted that the practice could not be stopped and a second-best solution was offered—a levy on tapes that would be redistributed to the music industry as compensation for lost sales.

    One of the limitations of copying on to blank tapes was that the quality of reproduction was not especially good. In addition, people had to buy an album before copying it. Since that time, there have been a succession of technological developments: the replacement of vinyl albums with compact discs of almost perfect quality; recordable CDs; DVDs; recordable DVDs; movies and music being made available on a massive scale through the internet; and MP3 players, which allow one to take music off the internet quickly and to keep it in a convenient format so that it can be reproduced at almost the original quality. All those developments are a huge threat to the music industry. In due course, they will be a threat to the movie industry, too.

    In the past we have wrestled with the problem of illegal copying—piracy—by factories that produce counterfeit CDs in China or other countries. The CDs are then brought to this country and sold in car boot sales and elsewhere. That remains a huge problem.

    The hon. Gentleman may know that the copyright directive, in its post-negotiated form, allows for different countries in the European Union to resolve this issue in different ways—in particular, in respect of video and cassette tapes. The directive allows countries to enforce a levy on blank tapes, but it also says that the levy may be a levy of nothing, because the British Government have insisted that we should maintain the system that allows individuals to copy for their own private use so as to time-shift. When the directive is eventually incorporated into United Kingdom law, would the hon. Gentleman wish us to abandon that tradition or to maintain it?

    We have moved a long way from the issue of copying on to blank tapes, which is no longer the main problem. I have always regarded the levy as very much a second-best solution. In respect of the current problem, I do not think that a levy is necessarily the solution, and I want to pick up on some of the points made by the right hon. Member for Islington, South and Finsbury on what could provide a solution.

    In the previous Session, the House passed a Bill on copyright theft to strengthen the penalties available to tackle illegal copying. All parties supported its passage, but the problem now is finding the resources to enforce it. Local authorities do not necessarily pay enough attention to enforcing the legislation. The industry has raised that matter with the Minister's Department and the Department for Culture, Media and Sport, which may have to get together to come up with a more co-ordinated approach.

    The problem has changed from being one of mass reproduction of discs, in factories outside this country, which are imported and sold in car boot sales. The problem is now much more serious, because it goes on in children's bedrooms. Technology now allows young people, in particular, to burn CDs. They do not even have to purchase CDs in the first place; they can download music from the internet using peer-to-peer file sharing programs. That is a quick and simple procedure and it achieves a very high quality.

    The root of the problem, to which the right hon. Gentleman referred, is the attitude of young people to the practice. He quoted a survey that shows that a majority of young people are now downloading and copying music and movies, and that the fact that they are in breach of the law does not stop them from doing it. Part of the problem has been the perception that taking music is somehow a right and that the only people who lose out are the big, fat record companies, which can well afford it. To some extent, that perception has grown because of the view that CDs have been priced higher in this country than elsewhere and the view that the record industry has been exploiting consumers. I have never believed that to be true. All the investigations that the Office of Fair Trading and others have conducted have shown that it is not true. However, even if that case was once arguable, it is no longer arguable. The record industry is on its back and one of the main reasons for that is the practice of copying. The really frightening thing is that the situation will get worse.

    The right hon. Gentleman referred to an American survey. I understand that the survey concluded that it may now be impossible to save the music industry and that we may have to concentrate instead on trying to protect the film industry, which will be the next to suffer. In some countries, the number of blank CDs sold now exceeds the number of pre-recorded CDs sold. Even in this country, recent figures show that 308 million blank recordable CDs were sold in Britain. The industry estimates that about 128 million of those CDs were used to copy music rather than computer programs—although copying computer programs is not necessarily any better. The figures show the scale of the problem.

    Will the hon. Gentleman suggest some answers to the question that I asked my right hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) about companies that not only make the music and CDs but make recordable CDs and the recording equipment? What should we do with those companies?

    Sony is probably the best example of a company in that position, and a question does arise about the responsibilities of manufacturers. When DVDs were first launched, regional encryption was used to protect copyright. The intention was that we in this country would purchase region 2 DVDs, and that if we purchased a DVD in the United States it could not be played on equipment purchased in this country. However, Dixons on Victoria street stocks multi-region DVDs—they are everywhere. Manufacturers have produced multi-region DVDs that are designed, I presume, to overcome the protection that the copyright owner has installed.

    Someone who perfectly legitimately buys a copy of "The Two Towers" in the United States should have a perfect right to watch it in this country. The attempts to foil the interests of consumers are crazy.

    1.30 pm

    I am sympathetic to the hon. Gentleman's point. I was about to say that the technological solution will always fail. Attempts to counter the problem by trying to build in technological safeguards merely provide a challenge to the hackers and those who seek to get round the safeguards. They will always win. That has happened in a number of cases recently. For example, a court in Norway dealt with the case of someone who was 15 when he developed a computer program to overcome the technology in DVDs that prevents copying. He was taken to court by the copyright owner, but the court upheld his right to do what he wanted with the DVD. That included copying it.

    For the sake of accuracy, may I make it clear that the person accused in Norway had written the computer program to be able to play his legitimately purchased DVDs on the Linux and not the Windows operating system. That is why the court found in his favour. There was no suggestion that he was copying for resale or anything like that. He merely wanted to watch his DVDs and was smart enough to find a way of doing that.

    As I understand it, however, the problem was that he made available on the internet the program that he had developed. It was then downloaded by millions of other people who used it not to watch DVDs on a different operating system but to crack the safeguards built into DVDs. That enabled them to copy them, which demonstrates the limitations of technology. Each time that someone develops a new method of trying to safeguard copyright through technology, someone else will find a way round it.

    A couple of months ago, I read that the record companies in this country were developing something called Cactus data shield to try to prevent the copying of CDs. That gives rise to the question that the hon. Member for Rhondda (Mr. Bryant) asked. Once people have made a purchase, should they not be allowed to make a copy? I suspect that it will not be long before someone overcomes this technological constraint and finds a way of making copies.

    The problem will get worse. At present, one at least has to have an original that has been purchased before one can copy it. The real danger, however, comes from the internet. At present, the copying of music is relatively simple using the normal broadband access that is available in parts of the country if not in others. We shall deal with that issue in the next debate. Even broadband is not capable of providing high-quality movie reproduction, but it is only a matter of time before it will be able to do that.

    I visited Dolphin house, which is wired by ntl. It offers much faster access than conventional ADSL technology, and I believe that 2 or 3 megabytes a second are on offer. It is possible to log on to a site that streams DVD quality movies down the fibre direct on to the screen. It would obviously be very simple just to record that, and that constitutes the same threat to the movie industry that is currently destroying the music industry. If the practice of logging in free to sites that offer movies becomes widespread, and if those movies can be downloaded rapidly and simply on to a recordable DVD in a bedroom or an office, that will pose real dangers to the movie industry.

    I have been following my hon. Friend's remarks with interest. Does he not realise that even now there is a danger resulting from the digital terrestrial and satellite transmission of movies and from digital audio broadcasting? In theory, there is nothing to prevent someone from burning a DVD of something taken off air with digital quality.

    That is perfectly true. To some extent, it is a question of the desirability of the films involved. The right hon. Member for Islington, South and Finsbury referred to "Spider-Man" and "Star Wars: Episode II" and it will be some time before they become available on television. Part of the attraction is having a copy on DVD before one's friends have even had a chance to see the film in the cinema. My hon. Friend is right about the threat.

    The new clause tabled by the right hon. Member for Islington, South and Finsbury is welcome in that, if nothing else, it allows us to talk about issues that are of huge importance to the industries concerned. I very much hope that Ofcom will at least be aware and take account of these issues in all its consideration of the development of technology and in its regulation of the communications sector in general. However, if an answer exists, I suspect that it does not lie in regulation by Ofcom. I do not think that it even lies in the technological solutions that we have been discussing.

    If there is a solution, it is that of the industry exploiting the internet and viewing it as a new opportunity to make material available. It should try to persuade people to purchase products from internet sites rather than accessing them illegally and downloading material without any payment being given to the copyright owner. The way to do that is by providing added value. The music industry is now examining ways of making music available with all sorts of additional bonuses that come with its purchase from an internet site. The same approach could be adopted by the movie industry.

    I have seen research from America that shows that a variety of additional items could be attached to the purchase. For example, additional material can be provided about the making of the product or concessions could be offered on theatre tickets. A variety of bonuses and attractions could be provided and they might persuade people that, rather than break the law and deprive copyright owners, artists and performers of the money to which they are entitled, they should go to a legitimate site that makes available the same product for a small payment. That is a market-based solution and the only long-term solution.

    I do not decry the attempts of the right hon. Member for Islington, South and Finsbury to raise this issue and to get Ofcom to take account of it. I support those attempts, but the new clause will not solve a problem that will increase in the coming months and years. I suspect that the only answer is for the industry to adapt and to try to use the market opportunities in the way that I have suggested. If it does not do that, its future looks very bleak.

    I, too, am delighted that my right hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) has tabled the new clause, but I am hesitant about supporting it. I am broadly sympathetic to the thrust of the issues that he has raised in relation to piracy and counterfeiting. It must be a major concern to any right-thinking person that acts of theft occur on a daily basis as the result of organised crime. My hon. Friend the Minister for Tourism, Film and Broadcasting has been on a number of busts with the police and other organisations in the past three months, and he has tried to point out that the buying of CDs that have been manufactured deliberately to get round the copyright law is clearly wrong and immoral. However, I do not share the apocalyptic version of the future with which my right hon. Friend and the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) have presented us.

    In the debate about piracy, we all too easily forget the role of consumers. As my hon. Friend the Member for Glasgow, Anniesland (John Robertson) pointed out, consumers are bombarded with two messages by the same companies. The first is "Come and buy our wonderful technology, which enables you to tape pieces of music from other sources and put them on to your own CD." The second is that they are engaged in an act of piracy that is wholly illegal and immoral. That presents a difficult problem for consumers. The marketing of some organisations has been downright hypocritical. In fact, when I worked for the BBC in Brussels and I was engaged at some length on the copyright directive, it was almost impossible to find a music or film industry company that was not in some way tied to a business that manufactured some kind of copying machinery or technology.

    Can the hon. Gentleman not make a distinction between the young person sitting in his bedroom making a copy of a CD for his own use and the mass production of illegally counterfeited and copied products that one sees in marketplaces around the UK?

    I am sorry that I am not making myself plain enough, as that is indeed the distinction that I want to draw. It is sometimes not drawn sufficiently clearly in the debate about piracy. My right hon. Friend the Member for Islington, South and Finsbury referred to the 62 per cent. of young people who think that it is perfectly legitimate to download music from the internet without payment. Probably 95 per cent. of the people with whom 1 was at school at the age of 18 copied "Top of the Pops" on to a cassette on a Sunday evening so that they could listen to it at various times during the week. I see hon. Members around the Chamber nodding, including Conservative Members and the hon. Member for Sheffield, Hallam (Mr. Allan)—who as I can remember his constituency will get intoHansard for having engaged in that illegal activity.

    There is a real onus on the manufacturers, the record industry and the cinema industry to provide a new revenue stream of their own. It is simply inaccurate to say that a digital copy is a perfect copy, as there are many different qualities of digital copy. The hon. Member for Ceredigion (Mr. Thomas) said that the cinema is nevertheless doing well at the moment, and my right hon. Friend the Member for Islington, South and Finsbury said yes, but that will not be the case in future. I suspect that the cinema will continue to flourish owing to the simple fact that often people go to the cinema not only to see a new film, although that is part of it, but because they have a completely different experience as part of an audience in front of a large screen with digital stereo.

    My hon. Friend is right that it is likely that people will still want to have a night out in front of a big screen at the cinema. All the evidence of the past 20 years, especially at the time when video technology was developing, confirms that, and I would not argue against it. However, he should bear in mind that the technological ability to download movies will rapidly increase, and we shall have to take that into account.

    My right hon. Friend is right. I only wish that the capacity to download into the Rhondda valley was available rather swifter, as we seem to have no prospect of broadband technology for some years to come—2007 is the most likely date at the moment. I worry that we are perpetuating a gap between the information rich and the information poor.

    Be that as it may, one of my concerns is this: when I was first elected, one of the first things that I did was to ask the Department of Trade and Industry when the copyright directive would be incorporated into UK law. I was originally told that it would be last March, then last July, then definitely by the end of the year—and it is still not quite ready. Major issues need to be resolved if we are to achieve the balance between the rights of the consumer and the individual and the rights of the industry, including the need for competition and for a strong music and cinema industry.

    Some of the issues are recondite, but must none the less be swiftly addressed if we are to stand any chance of halting piracy. They include embedded phonograms, the time-shifting of recordings, and incidental reproductions in the many processes that are involved inside a computer of material that would otherwise be seen as copyright. The many exemptions from copyright that exist in this country—for the blind, for the hard of hearing, for libraries, and for many other public interest reasons—are still important, and we need to get the balance right. That is why the new clause is wrong and, furthermore, relates to the wrong part of the Bill. I simply do not believe that handing over such a power to Ofcom would be the right means of ensuring that there is a proper debate about piracy, that we properly strike the balance between the needs of consumers and the needs of industry—

    1.45 pm

    My right hon. Friend pre-empts me, and I know that he is not in favour of pre-emption. I would merely say that the Patent Office, which historically has responded only to complaints and to changes in the law, should have a proactive role, and it is undoubtedly where the power should remain. Of course, different elements of the law are implemented in different ways. The private Member's Bill introduced last year by the hon. Member for Twickenham (Dr. Cable) would have ensured that certain aspects of the matter were dealt with much more robustly. That is why I do not support the new clause.

    I find myself very much in sympathy with the comments made by the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale). I remember that a famous battle of Maldon was fought a couple of millennia ago. The hon. Gentleman said that he did not think that hardware copyright protection was the right way forward. It is in that spirit that I rise to speak, because I am concerned that the thrust of the new clause is in that direction—a direction that has been very much advanced in the United States through measures such as the Digital Millennium Copyright Act 1998 and which is causing huge controversy between people in the industry. That is particularly true in relation to the internet, where people in Europe and in the US often represent different points of view.

    We discussed "Top of the Pops" in Committee, and it was bound to raise its head on repeated occasions. I am grateful to the right hon. Member for Islington, South and Finsbury (Mr. Smith) for giving us another chance to talk about it. Yes, I freely confess that I was a "Top of the Pops" taper in my youth.[Interruption.] I am asked whether I drank R. White's lemonade. I was not such a slave to advertising.

    Taping represented a system of "try before you buy". The important shift that has occurred in the music context is that the trying is taking place but the buying no longer necessarily does so. In the 1970s we would tape "Top of the Pops", and if there were a couple of songs we liked, we went out and bought them. We bought the vinyl because we liked having the record sleeve to touch—that is the added value that the hon. Member for Maldon and East Chelmsford talked about. We have not yet developed a comparable system in the digital world. The problem arises in trying simply to transfer what was done in the analogue world to the digital world. That is why I am sceptical about hardware protection. In the analogue world, one controlled the physical media—vinyl, compact disc or whatever—and had some way of policing them. In the digital world, there are no physical media to control. That creates a raft of problems, and the question is how to address them, not whether they need to be addressed.

    There is a particular problem in the audio and music business in that the material can be shifted around and no comparable legitimate channel has yet been established. That is a specific market problem. The industry maintains as its primary distribution channel the traditional retail system whereby CDs cost in the range of £10 to £15, but those prices will not stand in the digital world. It is hard to maintain a system under which, effectively, one has two price ranges for the same material—one of £10 to £15 and another that perhaps reflects the real costs of distribution over the digital system, whereby the record company and the artist can still get the same amount of money, but have transferred the costs to the end consumer and taken out the distribution costs, so that the product sells more in the £3 to £5 range. It is therefore essential to develop that second digital distribution channel.

    Does the hon. Gentleman agree that we need to shift from the ownership of a particular item of music to micro-billing or micro-payment for the rental of an item on demand, be it a video or music track? The challenge is that video-on-demand trials have not competed economically with the comparable physical space model, the video hire shop. Perhaps he would agree that when a video arrives in broadband form for the first time in the constituency of my hon. Friend the Member for Rhondda (Mr. Bryant), it should be called "A Fish Called Rhondda".

    No doubt the hon. Gentleman is about to say that he has never heard that one before.

    Different competing models may be successful, and I think we agree on the objectives of finding a successful model.

    I just want to say that a fish and chip shop in my constituency is called "A Fish Called Rhondda".

    I am pleased to hear that.

    The hon. Member for Ipswich (Mr. Mole) makes an important point about different competing models. One is the micro-payment at time-of-use model by which the customer pays by usage rather than for obtaining copyright material. I do not think that that is likely to work. The more effective model is to make a reasonable payment to obtain fair use, which is the traditional method. People could then do whatever time, format and space shifting—those are the technical terms—they wanted with the material. For example, they might have an iPod device or a computer for listening to MP3s. That approach is more likely to succeed than micro-payment at the time of use.

    Surely the problem is lack of regulation of the internet. Records and movies will still be available for free if people place them on the internet. Until we have effective regulation that benefits the companies involved, such ideas and projects will fail.

    The hon. Gentleman is right to mention the internet. The valid point has been made that by encouraging broadband access we are creating the conditions in which even more piracy can occur. If the Government succeed in meeting their target of millions of broadband users, they will create millions of potential piraters. Who would be liable for that? I fear that the new clause would steer us on the route of making internet service providers responsible for content. I am not convinced that that is right. I would be loth to tell an internet service provider that, as part of its licence condition, it must implement a particular hardware or software copyright protection, just as I would not want the Royal Mail to be prosecuted if people used it to send dodgy pirated videos. In general, the Bill establishes that internet service providers are more like the Royal Mail than a publisher, and that is the correct approach.

    The people who should be prosecuted are those who put up the sites. We should go after the publishers of the material, and we can do that under current law. As someone who enjoys music and film, I find it offensive to see people with dodgy videos at car boot sales and people on the street with dodgy CDs. I want to crack down on them. The same is true of abuses of the internet. There is a debate on whether such controls should be extended to other jurisdictions. Certainly, the EU should have a common framework as part of the copyright directive. However, if people are malicious or stupid enough to have a site that says, "Come and get illegal pirated material here", and they have a locus in our jurisdiction, we should go after them under the general law. I do not think that the best way to deal with the problem is to create specific internet law because the legal provisions already exist.

    Does the hon. Gentleman accept that the use of notice and take down is one of the most effective means to date of dealing with the problem? Under that approach, ISPs are made aware that materials are being downloaded from their servers which are in breach of copyright on a large scale. They then have to take some responsibility by removing the site that is making such material available illegally.

    Absolutely, and more work could be done on that. There are specific issues for internet service providers, which have a legal responsibility in both directions. The problem is more than a breach of copyright material; it also involves libellous material. ISPs do not want people to use their services to publish such things, but they have a contract with the publisher and do not want to be sued for removing material.

    The internet industry is rightly asking for greater legal certainty when it gets a request for notice and take down from a member of the music or film industry who thinks that material is illegal. The industry wants that to happen in a sensible, consistent and standardised way so that it does not get requests from every Tom, Dick or Harry. It also wants to be sure that when it responds, its position is governed by legal certainty so that it is not exposed to action by its customers. We could make considerable advances on that and allow something positive to come out of the debate. Improving the notice and take down procedures on copyright material would be welcomed by all the industries concerned. I do not know anyone in the internet industry who is keen to see their mechanisms abused in that way. They want them to be used sensibly, responsibly and legitimately.

    As hon. Members on both sides of the Chamber have said, I hope that we can create a proper market for digital material in which artists and record companies receive fair recompense. By introducing over-elaborate physical protection measures for software or hardware, we may accidentally create a bigger incentive for people to go into the illegitimate market. If people cannot have fair use of their legitimately bought material, they will go for the illegitimate material that they can move between different devices.

    I hope that we find a sensible approach. The debate is important in the context of Ofcom because the people whom it will regulate are creating the infrastructure over which the material will move. However, I agree with the hon. Member for Maldon and East Chelmsford that Ofcom does not have a specific role for dictating what material is transmitted across the internet.

    This is one of the rare occasions on which my opinion has been swayed by the debate. Although I welcomed the new clause, I was not keen to include it in the Bill. I now think that it should be included, although I hold by the original view that I expressed when I intervened on the right hon. Member for Islington, South and Finsbury (Mr. Smith). The new clause is wishy-washy. Nevertheless, the problem needs to be addressed.

    Cable and ADSL are delivering broadband at about 1.5 megabytes per second. My hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale) mentioned the Dolphin Square experiment, which is delivering broadband at between 2 and 2.5 megabytes per second. I have no doubt that in years to come we will be discussing the delivery of 5 to 6 megabytes per second. At that speed, it would be the same as digital terrestrial and digital satellite television, which makes even more prescient the point made by the right hon. Member for Islington, South and Finsbury.

    People will be able to download entire film productions from the internet. There are grave dangers in trying to define a standard that would provide a block to that. As my hon. Friend the Member for Maldon and East Chelmsford said, 15-year-old hackers will always be able to work out a way to break through that block. The other problem is that the internet allows material to be originated anywhere in the world. We need international agreement because we will have a problem if an internet site originates in, say, the West Indies, where gambling sites are based, or China. The right hon. Member for Islington, South and Finsbury was right to raise the problem. Although people may prefer to go to the cinema, as the hon. Member for Rhondda (Mr. Bryant) pointed out, there will be a disincentive to creativity if people believe that they cannot maximise their return because their copyright can be breached by individuals downloading their material.

    2 pm

    We are talking about restructuring the business model used by the audiovisual industry, particularly film and music. One of the expectations inherent in the decision to invest in broadband technology throughout the country is that consumers will spend significantly larger sums, perhaps £50, £60 or £70 a month, on audiovisual services. Is not the important thing to make sure that the money that is going to cable and other forms of digital television is getting through to the creators?

    Yes, but it is important that the provision of such audiovisual services should involve a legally or morally binding provision. There was a debate in the Chamber way back in 1900 or 1910 about the provision of books to libraries. Members debated the question of whether authors should benefit from the availability of their books in libraries. Of course they should—if everyone read books from libraries and did not buy them there would be no incentive for creativity—there would be no incentive for authors to write or publish books, unless they simply wanted the gratification of seeing their name in print. Thinking about it, that probably satisfies the desires of most authors but, nevertheless, many of them want some income from their work as well.

    I maintain that the issue has to be addressed. I was amused when the right hon. Member for Islington, South and Finsbury asked, "If Ofcom is not going to assume that responsibility, who is?" That is a good point. Ofcom, whose functions are defined in the Bill, is the ideal organisation to try to produce standards to ensure that digital piracy does not occur. It is all very well for Ofcom to perform that role, but I must enter a great caveat: if it does so in isolation, it will be pointless, as worldwide agreement is needed—[Laughter.] I do not know why the hon. Member for Rhondda is laughing from a sedentary position, if that is possible. If someone does not take the first step, there will not be worldwide agreement, so Ofcom should assume that role.

    One can, indeed, laugh from a sedentary position.

    One problem with the new clause as currently worded is that it is an enabling power that Ofcom may choose not to use. Historically, there has been phenomenal difficulty in getting the organisations listed in the new clause to co-operate and work together. Without a robust power and a duty, Ofcom would not stand a chance of getting anywhere. If the international community has to agree as well, that is cloud cuckoo land legislation.

    By saying that such legislation is wishy-washy, the hon. Gentleman amplifies the point that I made in an earlier intervention, but someone has to start somewhere. Of course, he is right. He alluded in his speech to the fact that organisations such as Sony produce movies and music on the one hand and the very equipment that can be used to cut DVDs and CDs on the other. I accept that there is a problem but I repeat that someone has to start somewhere. No doubt, there are organisations similar to Ofcom, such as the Federal Communications Commission in the United States, but Britain ought to have a role too.

    I agree with the hon. Gentleman. One reason why these technologies have become more pervasive is that they are the by-product of worldwide standards groups such as the Moving Picture Experts Group which defines the MPEG standard behind the DVD format and the MP3 music format.

    I thank the hon. Gentleman for his intervention.

    Going back to the intervention of the hon. Member for Rhondda, of course standards have to be established by the G7 and, beyond that, the World Trade Organisation. The fact that China has joined the WTO is a major achievement, because it was one of the main producers of illegal CDs and DVDs. Some Members may argue, even from the Front Bench, that that is still going on. We do not know whether that is so, but now that China is part of the WTO, at least there is a disincentive against such production and an incentive to obey international copyright law. However, international standards are needed. It is remarkable to hear that there is a peculiar system in which there are regional DVDs. One of the problems with analogue television is that there are different standards. There is SECAM in France—I do not know what that stands for, but many people think that it is "Contrary to the American method". In the United States, there is NTSC, which many people think stands for "Never twice the same colour". In Britain, we have PAL—peace at last. There are different standards. It only costs £190 to go to New York city and buy from Tower Records a DVD that one may not be able to play in the United Kingdom, not because the technology is not standardised but because people have deliberately made a system that is not compatible with other systems.

    The problem needs to be addressed, and I congratulate the right hon. Member for Islington, South and Finsbury on tabling the new clause. I am persuaded that, if not in its present form, such a provision ought to be included in the Bill. If the Minister resists its introduction, I hope that a similar provision will be included when the Bill is considered in another place.

    Before I conclude, I will be generous and give way to the hon. Gentleman.

    The irony of multi-region DVDs is that most manufacturers will sell a multi-regional DVD player in this country because there was a massive market in pirated software to replace the firmware in DVD players to enable people to play DVDs from other regions.

    The hon. Gentleman is quite right. Where there is a will, there is a way, and where there is a 15-year-old hacker, he will hack through it.

    We have had an interesting discussion. The Government certainly believe that copyright theft over the internet is a serious issue for many rights holders. It is essential that those who invest in creative activity can gain a fair reward from their work, whether in movies and music, as my right hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) said, or in other parts of the publishing industry. I am grateful to my right hon. Friend for underlining the importance of the matter in new clause 1.

    The lead responsibility, as my hon. Friend the Member for Rhondda (Mr. Bryant) said, lies with the Patent Office in consultation with the Department of Trade and Industry and the Department for Culture, Media and Sport. The Patent Office is responsible for intellectual property, including copyright, in the UK. The DTI and DCMS sponsor the affected industries. It is important not to confuse those responsibilities by suggesting that somebody else might share them.

    The Minister is surely not suggesting that the DTI and more especially the Patent Office would pull groups of people together to try to agree international standards?

    I am suggesting that the Patent Office can and does bring together different parts of the industry. Indeed, the Patent Office acts as the chairman for the counterfeiting and piracy forum, which brings together the relevant interests in the public and private sectors to discuss better co-operation and co-ordination against this crime. In the past year, for example, its members have discussed closer working between affected industries and the police hi-tech crime unit. In addition, the proposals that we have made in the context of the UK implementation of the copyright directive include a new criminal offence in copyright law to apply to those who wilfully make copyright material available on the internet without a licence in the course of business proceedings or on a commercial scale. That will assist enforcers seeking to deal with piracy of digital material.

    Different approaches are needed to combat illegal private copying on the internet. The proposals for implementation of the copyright directive would strengthen the action to be taken against those who circumvent technical protection measures or provide equipment or services for doing so, which we discussed. Those are particularly important in the internet environment and provide copyright owners with statutory backing to develop their use of the technology. However, the copyright directive does not mandate the use of particular technology; that is an issue for rights holders to decide for themselves. The fact that recent pirate copies of films were reported to have been traced back to unprotected copies given pre-release to academy award judges suggests that the film industry needs to reflect on its own use of appropriate technology.

    The recitals in the copyright directive emphasise the importance of all the parties involved—rights holders, intermediaries and equipment manufacturers—reaching voluntary agreements on standards. That must be the right way forward, not least in view of the inherently international character of the net.

    Digital rights management is important for the content industries. We are already working with industry on that as part of the work of the broadband stakeholder group. It is aimed to create an inventory of current content management systems, and to spread wider knowledge about likely value chains and the major economic, legal and technical issues at different points in those chains. A framework is to be set up within which to evaluate the various elements of digital rights management. Much work is going on in this area. I hope that my right hon. Friend will be reassured that we are taking the issue seriously.

    The hon. Member for Sheffield, Hallam (Mr. Allan) called for better procedures around notice and take-down for internet service providers. He has given us an example of why, the week before last, he was designated "internet hero" at the annual award ceremony of the Internet Service Providers Association. The e-commerce directive, which we have implemented in the UK, provides a defence for internet service providers as mere conduits. Officials are discussing with internet service providers whether there is a need for guidance on notice and take down—the point that the hon. Gentleman made.

    I would not favour giving Ofcom a specific remit in this field, as that would have only tangential relevance to its core remits set out in clause 3(1) or to the functions set out in the Bill or in existing legislation that the Bill will transfer to Ofcom. Of course, there is nothing to stop Ofcom conducting the kind of discussion envisaged in the new clause and proposed by my right hon. Friend. I know that those at Ofcom will read with great interest the discussion that we have just had, and what he and others said in the debate. The issue is one to which the Patent Office is fully committed, in consultation with the two Government Departments. I believe that that is the right institutional lead for policy work in this area, and on that basis I hope that my right hon. Friend will withdraw the motion.

    The debate has been extremely interesting and valuable. Part of my purpose in tabling the new clause was to ensure that the House had a chance to air some of the issues around the developing problem. Every contributor to the debate recognised that the issue is real. There is a serious problem, and as the hon. Member for Lichfield (Michael Fabricant) said, there is potentially a disincentive to creativity if unauthorised downloading of material takes off in a major way.

    Various solutions have been proposed by hon. Members in all parts of the House, highlighting the need to change the culture, as young people in particular see unauthorised downloading as a natural activity; the need to get a move on with the implementation of the ELI copyright directive; the need to improve the notice and take down procedures where unauthorised material has been identified; the need to make the legitimate purpose of material more valuable, more desirable, more affordable and more accessible; and the need to make the opportunity to take material legitimately more attractive than the opportunity to take material in an unauthorised way. There may well be some technological answers too, especially if global agreement can be reached. I hope that all the issues raised will be taken into account by the DTI and DCMS, and even by the Patent Office, perhaps.

    2.15 pm

    That brings me to my final point. I was a little disappointed that the Minister placed such emphasis purely on the role of the Patent Office. One of the reasons for wishing Ofcom to take an interest in this area of activity is that Ofcom has the clout vis-à-vis the parts of the industry concerned. It is Ofcom that will be the regulator of broadcasting and telecommunications. It therefore has considerable muscle to persuade the various parts of the digital landscape to get together and find various means to tackle the problems. Ofcom has that muscle; the Patent Office does not. The Minister says there is nothing to prevent Ofcom taking an interest in this area of activity. I hope Ofcom will take note. As soon as Ofcom is up and running, I hope that it will discuss with the Patent Office how they can work together to develop the lines of attack necessary to make sure that the problem is taken seriously.

    With that hope in mind, and with the hope that the matter may be aired in another place, I believe that it will assist the progress of debate if, at this stage, I beg to ask leave to withdraw the motion.

    Motion and clause, by leave, withdrawn.

    New Clause 2

    Duty To Promote New Telecommunications Technologies

    'It shall be the duty of OFCOM to promote competition and reduce regulation in order to secure lower prices and higher quality services for telecommunications consumers and encourage the rapid deployment of new telecommunications technologies, including broadband.'.— [Mr. Yeo.]

    Brought up, and read the First time.

    With this it will be convenient to discuss the following:

    New clause 27— Creator consultation—

    '(1) It shall be the duty of OFCOM to establish and maintain effective arrangements for consultation about the carrying out of their functions with—

  • (a) creators, including a person from the United Kingdom music creating community, in the markets for television content supply for independent producers and the public service and commercial broadcasters in relation to which OFCOM have functions; and
  • (b) creators, including a person from the United Kingdom music creating community, in the markets for radio broadcasting in relation to which OFCOM have functions.
  • (1) The arrangements must include the establishment and maintenance of a panel of persons (in this Act referred to as "the Creator Panel") with the function of advising both—

  • (a) OFCOM; and
  • (b) such other persons as the Panel think fit.
  • (3) The arrangements made by OFCOM under this section must also secure that the Creator Panel are able to do each of the following—

  • (a) make arrangements for the carrying out of research into matters appearing to the Panel to be relevant to the carrying out of OFCOM'S duties and the Panel's functions as they think fit;
  • (b) give advice to OFCOM in relation to any matter referred to the Panel by OFCOM for advice;
  • (c) publish such information as the Panel think fit about the advice they give, and about the results of research carried out by them or on their behalf.
  • (4) It shall be the duty of OFCOM, in the carrying out of their functions, to consider and, to such extent as they think appropriate, to have regard to—

  • (a) any advice given to OFCOM by the Creator Panel; and
  • (b) any results notified to OFCOM of any research undertaken by that Panel.
  • (5) It shall also be the duty of OFCOM (subject to subsection (6))—

  • (a) to provide the Creator Panel with all such information as, having regard, in particular, to the need to preserve commercial confidentiality, OFCOM consider appropriate to disclose to the Panel for the purpose of enabling the Panel to carry out their functions; and
  • (b) to provide the Panel with all such further information as the Panel may require.
  • (6) OFCOM is not required to provide information by virtue of subsection (5)(b) if, having regard to:

  • (a) the need to preserve commercial confidentiality; and
  • (b) any other matters that appear to OFCOM to be relevant, it is reasonable for OFCOM to refuse to disclose it to the Panel.
  • (7) It shall be the duty of OFCOM, in the case of any advice or opinion received from and published by the Panel which OFCOM propose to disregard in whole or in part, or with which OFCOM disagree in whole or in part—

  • (a) to ensure that the Panel know of OFCOM's reasons for disregarding or disagreeing with the advice or opinion; and
  • (b) to ensure that those reasons are or have been published in such a manner as OFCOM consider appropriate for bringing them to the attention of persons who are aware of the Panel's advice or opinion.'.
  • Amendment No. 3, in page 3, line 4 [Clause 3], after 'markets', insert 'and the public interest'.

    Government amendment No. 215.

    Amendment No. 278, in page 3, line 33 [Clause 3], at end insert

    'and, in particular, the desirability of encouraging investment and innovation so as to secure the availability to users of electronic communications networks of services of ever greater bandwidth;'.

    Government amendment No. 216.

    Amendment No. 151, in page 3, line 39 [Clause 3], at end insert—

    '(gg) the position of employees in the industry;'.

    Amendment No. 187, in page 4, line 3 [Clause 3], at end insert—

    '(n) the impact of developments in relevant markets upon creators and performers.'.

    Government amendments Nos. 217 to 221.

    Amendment No. 188, in page 11, line 24 [Clause 11], at end insert—

    '(5A) In appointing persons to be members of the Content Board, OFCOM must also secure that certain members have experience to represent the interests of the creators and producers involved in the programme and music to be included in the services relevant to the duties of the Board.'.

    Amendment No. 189, in page 13, line 6 [Clause 12], at end insert—

    '(6A) The power of OFCOM to authorise the establishment of a Committee or Panel by the Content Board includes power to authorise the establishment of a Creators Panel, including persons from the United Kingdom music-creating community.'.

    It is generally accepted that the rapid introduction of broadband technology in Britain is important to our country. Schools, universities, hospitals, medical practices, businesses and domestic consumers will all benefit from being able to receive and transmit web-based information. The Government, too, have a big interest in the roll-out of the technology. As the Confederation of British Industry stated, broadband is central to the growth of the knowledge-based economy.

    Ministers have said that they are committed to a fast and efficient roll-out of broadband. The Government's target is for Britain to have the most extensive and competitive broadband market in the G7 by 2005—a target set by the Secretary of State herself when she was the e-Minister. In pursuit of that, the Government have promised to work to ensure that broadband is accessible in all parts of the country. They claim to have developed a strategy to achieve that goal and to measure our success. Unfortunately, the strategy is not yet working as effectively as everyone would wish. As the CBI points out,
    "lack of competition in the telecommunications market has stalled investment in the required infrastructure".
    The broadband stakeholder group estimated last November that terrestrial broadband services were still unavailable to a third of Britain's 24 million households. Two out of five people living in suburban areas are still excluded. The proportion of people who can access broadband in rural areas is so small that it is simply described as "significantly lower".

    There is immense frustration that the Government are talking a good game while doing very little to deliver on their promises. The CBI states that Britain lies sixth among the G7 countries in terms of broadband connections and that few small and medium-sized enterprises are yet connected. According to the broadband stakeholder group, only one household in 25 is currently subscribing to broadband. Fewer than one household in every 30 that has a computer is hooked up to a broadband service, and in the business community, among firms employing more than 10 people, fewer than one in five has a broadband connection. In January this year, only 1.4 million households and businesses were connected to a broadband service. According to Oftel, Britain has only slightly more than half as many lines connected to broadband per head of population as Germany and just over a quarter as many as Sweden.

    Of course, broadband is not yet attractive to everyone. Some users are content with lower speed and a lower price, but broadband offers such potential to enhance knowledge and deliver competitive advantage that I believe that it will not be long before it is as much a part of national infrastructure as the road system, the railways, mains drainage and telephones—

    As my hon. Friend says, we hope that it will be in a better state than the roads or railways.

    It is the Government's job to create an environment in which broadband services are widely accessible. A critical part of such an environment is effective competition. The House will be aware that broadband is not synonymous with ADSL—asymmetric digital subscriber line—technology, but can be delivered by ADSL, cable, wireless or satellite. In this country, ADSL is associated with BT, whose subsidiary, BTopenworld, has roughly 50 per cent. of the market of retail broadband services based on ADSL infrastructure.

    Technology changes and develops in unpredictable ways, so it would unwise for the Government or even the Opposition to be prescriptive about the form of broadband distribution that is used. In Britain, we are fortunate, as distribution is not confined to BT. Ntl and Telewest also provide cable modem services, although only to a minority of households.

    In spite of Oftel's optimistic comments, it is worrying that the Government's targets are still not being met. There is a lack of clarity in the institutional and competitive framework that the Government have created, and their failure to create an adequate competitive environment is damaging. Actions and legislation that seek merely to promote broadband without regard to how that should be done are insufficient. The Government should have a duty to promote competition and reduce regulation.

    Does the hon. Gentleman agree that, in requiring BT to carry out the local loop unbundling exercise, a framework was created for competition in the provision of broadband services in the local loop? The difficulty was that after the delay of carrying out the exercise, there was no apparent demand from other suppliers to act as competitors through the local loop.

    The other suppliers might say that that had something to do with the terms of availability. In any event, I do not think that the speed with which BT addressed that objective is a cause for much congratulation. Different people will attribute to a variety of reasons the failure to develop a more competitive market more quickly.

    The preamble of the American Telecommunications Act 1996 sets out a purpose that the House should take to heart. I have incorporated the words of that preamble into the new clause. The promotion of competition is an essential ingredient of a successful telecoms policy, especially when one major provider is a former state monopoly. The role of the regulator is to introduce conditions for a fair, open and transparent market, particularly where there has previously been market failure. Regulators must be free from day-to-day political interference and should not form part of the central planning apparatus of government.

    Under Labour, Oftel's cutting edge has been eroded and its accountability reduced. Ministers have done that through the creation of the new and separate office of the e-envoy in the Cabinet Office—a typical prime ministerial initiative that owed more to spin and optimism than to analysis or hard work. Like many such initiatives, the e-envoy initiative is not proving conspicuously successful. The House will recall the fanfare that was given when the Small Business Service was set up in April 2000 under a chief executive whom we were told had direct access to the Prime Minister. Two years later, after heavy spending and little delivery, that privilege was quietly withdrawn.

    The House will also recall the Prime Minister's endorsement of heady recommendations of the Cabinet Office's performance and innovation unit for the ill-named Consignia. Today's reality is a shrinking post office network, the withdrawal of cash payment benefits and a charge card that post office staff are unable to process. Similarly, the reality of the UK's broadband roll-out under the e-envoy initiative is a constricted footprint and lamentable take-up—the consequence of the Government's conviction that institutions and former state monopolies are better at delivering economic dynamism than commercial undertakings operating in liberalised markets.

    The Government's approach can be seen in their grant of £30 million for broadband to the regional development agencies. According to the Secretary of State, her largesse was given so that
    "a digital divide in high speed Internet access does not open up between urban and rural communities."
    In Cornwall, the RDA took that as a signal to launch an advertising campaign designed to steer business customers to BT. In the east midlands, the RDA blames the lack of adequate broadband services on the Government's decision to induce telecoms companies to tender large bids for third-generation mobile phone licences. It plans to use its grant on a wired-up communities competition that will take three years to come to fruition. That same RDA blames the failure to provide a broadband service to rural areas on a slowdown in the international IT industry.

    The RDAs are the last bodies that the Government should use. The futility of their efforts is illustrated in a test project named RABBIT—remote area broadband inclusion trial—that aims to tempt remote broadband users through a £700 grant to identify alternative sources of broadband supply whose prospects of success are uncertain. Instead of more rabbit stew, the Government should create a more competitive environment to encourage new entrants to the market. They should entrust the regulator with a remit to protect against market abuse until a competitive market evolves. It is for the regulator and not the e-envoy, and certainly not the RDAs, to protect users and consumers of national services and utilities and to stimulate national competitiveness. It is for the regulator to encourage progressive liberalisation of the marketplace to bring about universal access and a uniform and transparent tariff.

    My right hon. Friend the Member for North-West Hampshire (Sir George Young), whom I see in his place, has identified BT's jealousy as an impediment to progress and pressed for greater transparency. Like other former state monopolies, BT honed formidable skills for protecting its interests. It is aware that opening up consumer access to broadband services potentially opens up access to its own competitors. It focuses on how it can meet the demands of the Government and the regulator to expand the service while ensuring that that is done not only at high profit levels, but in a manner that deflects the challenge from competitors.

    I believe that the Government should restore the authority of the regulator. The regulator should impose a regime of greater transparency on BT, which should provide clear forward plans for its national ADSL footprint and reveal which exchanges are to be ADSL enabled and how many telephone connections they have. BT should explain the financial criteria and broadband targets by which such decisions are made. It should speed up the provision of unbundled loops and shared line access and the release of wholesale products, and targets should be published for those goals.

    Without that transparency, the public will be disadvantaged. People cannot plan broadband investment through a cable network or alternatively through wireless or satellite. Business and individuals in rural areas and out-of-town communities are losing out. All that information would help individuals, businesses and community groups to make sensible decisions. It would help firms with competing technologies in broadband supply to fine-tune their investment criteria, attract funding and identify market openings. That information would build market confidence and stimulate competition in both ADSL itself and in respect of alternatives. It would encourage liberalisation of the market, which would lead to expanded choice and lower prices for service users throughout Britain.

    Universal broadband access will drive economic growth and reduce rural isolation, and could slow the drift of employment and population to the south-east. It will help businesses large and small nationwide and enhance Britain's competitiveness. Due to the market-distorting actions of the Government, remedial action is needed. The new clause would impose a duty on the Government to promote competition in order to secure lower prices, increase choice and higher quality services for users of broadband services in the UK. I commend it to the House.

    2.30 pm

    I am delighted to participate once again in the debate on the Bill, and I draw my entry in the Register of Members' Interests to the attention of the House.

    Before entering Parliament, I worked for BT for 31 years and, unlike Opposition Front Benchers, I will not try to vilify or undermine BT or the work force, as I have much to thank them for. I shall not interrupt those Members as they do so, as only they can say why they want to mount an onslaught on a company such as BT, and the BBC for that matter. I am also chair of the all-party telecommunications group, so it might be said that I have a passionate interest in the subject.

    Next year, Ofcom will replace the existing system of regulation, which dates from the last century. Telecommunications, television and radio developed more or less independently and could therefore be monitored individually. The existing regulatory framework is complex and the pace of convergence is still accelerating.

    I draw the House's attention to the Bill's endorsement of interested parties as stakeholders. I am disappointed that employees are not identified as key stakeholders whereas others, such as businesses and consumers, are highlighted as such. At the last meeting of the all-party group, my hon. Friend the Minister for E-Commerce and Competitiveness and Lord Currie, the new chair of Ofcom, said that they recognise that employees have a large part to play and are, of course, stakeholders in the industry, but nothing in the Bill says so. Consequently, my hon. Friend the Member for Gloucester (Mr. Dhanda) and I have tabled amendment No. 151, which would close a loophole. Employees know the business from the sharp end and have much to contribute.

    The communications industry has a number of endemic problems, which need not be the case as they could be addressed by the Bill, thus remedying them in the long term. The industry often fails to focus on key issues for employees—for example, skills levels, appropriate provision for training and personal development, which are not always expensive but are much needed. Those factors, among others, have resulted in difficulties in long-term retention of employees. Furthermore, some companies—in my experience, BT is one—place important emphasis on training and personal development, although perhaps not as much as they used to.

    The problem is that when the industry is buoyant, the highly trained employees are head hunted by other companies that place little value on training. The European Union high level taskforce on skills and mobility reports that 80 per cent. of today's skills will be obsolete in 10 years. When such employees, who were once highly skilled, do not undergo sufficient training, that is detrimental to the industry, as employers cannot fill vacancies and a skill shortage becomes apparent. Ultimately, that makes it harder for employees to find alternative employment should the industry slump. I do not want to come back to the House in 10 years and say, "I told you so." That, of course, assumes that I will be re-elected. I hope I am, along with a Labour Government.

    Lifelong learning is essential to tackle such shortages and mismatches, which hold back economic development and job growth. Since mid-1999, business throughout Europe has increasingly reported production constraints due to labour shortage. Although I have used these figures before, I shall do so again to illustrate the chronic skills shortage that we are set to see. According to the European Information Technology Observatory, the number of unfilled vacancies in the EU information and communications technology and e-business sectors is expected to rise from 2.23 million in 2001 to 3.67 million in 2003. That is an increase of 65 per cent. If the full economic and employment potential of the telecommunications sector is to be realised, a training responsibility for the sector's employers must be stipulated in the Bill. How else can we expect to fill those jobs in the years to come?

    Unfortunately, the amendments to clause 24 tabled by my hon. Friend the Member for Gloucester and I were not selected, but what applies to that clause also applies to clause 3, and my points on a specific duty on Ofcom regarding the promotion of equal opportunities and training for employees are relevant to it.

    The need to recognise employees as stakeholders is obvious, but that training mandate applies only to those working in the broadcasting industry. The communications industry has a key role to play in the development of the national skill stock, but such a mandate is not in the Bill. How can we expect to have "Broadband Britain" without a well-trained and motivated work force? Although I would have liked clause 24 to be amended to extend that duty to cover employees in the telecoms industry, I am pleased that my amendment to clause 3 has been selected. I hope that we can incorporate the issue of employees as stakeholders in the Bill for the reasons that I have stated.

    I am concerned that, as the focus is so firmly on competition and consumer interest, the interests of employees could be disregarded. This is an opportune time to address those issues, and I would like Ofcom to have a specific mandate in that regard.

    I shall address my remarks to amendment No. 3, which stands in my name and those of various Members from both sides of the Chamber. I shall also speak to new clause 27 and amendments Nos. 187, 188 and 189.

    Amendment No. 3 and Government amendment No. 215 consider the wider public interest beyond that simply of the consumer. An important change is being made to the Bill, which will fundamentally alter what Ofcom is and what it does. The amendments are hugely significant. Last summer, a Joint Committee of the two Houses considered the draft Bill, and one of its recommendations was that the wider public interest ought to be added to Ofcom's general duties. That issue was debated at length in Standing Committee, and I am particularly pleased that Government amendment No. 215 has been tabled. It is important for Ofcom to have a wider perspective and wider duty.

    The interests of consumers are important, and it is entirely right that Ofcom will have the duty to protect those interests, where possible through competition, but they are not the same as the interests of the wider public. Indeed, there can be circumstances in which the interests of the consumer may be contrary to those of the wider public.

    There are instances in which economic forces can apply a perverse effect, so it is therefore absolutely right that Ofcom should have a wider responsibility. I am particularly pleased that the Government have arrived at that conclusion and have introduced their own formulation, which refers to the interests of the wider community. It will have much the same effect as the wording in other amendments. I am glad also that, having not initially accepted the recommendation made by the Committee last summer, the Government have been persuaded during consideration to reach that conclusion, which will make the entirety of the regime more effective. It will also make Ofcom more effective and make the Bill altogether more successful.

    New clause 27 and amendments Nos. 187, 188 and 189 deal with interests of creators, whether they be composers, musical performers or other performers—indeed, creators of every kind. The UK's media creative industries are very strong, and are at the cutting edge of content creation in the communications revolution. Original creative input is a vital ingredient, and often serves as a stimulus for both the production of new services and the improvement of existing ones. Music, for instance, is fundamental to our existing television and radio services, and will become even more so with the arrival of multi-channel television.

    The amendments would give Ofcom specific obligations to protect the interests of the creative sector. Given the intended revolution in ownership rules and the potential for greater American ownership of British media interests, British consumers might well not accept huge quantities of American content on our television channels, but I wonder whether they would be able to tell the difference between, say, British and American incidental music. If we are to go on giving creative industries and creators opportunities in the UK media, it will be important for Ofcom to consider their interests and future viability at all times.

    The success of individuals and companies in our music industry depends heavily on opportunities for the creation of music for—and, indeed, the broadcasting of music by—national and regional radio and television services. Any reform of the regulatory environment on the scale that we are discussing will have a direct impact on all our creative industries. Composers and music publishers' earnings from the exploitation of music by television and radio exceed £100 million a year. Amendment No. 187 would ensure that our regulatory structures support and have regard to the impact of developments on creators and performers.

    Amendment No. 188 suggests that the content board is the obvious part of Ofcom to secure the best conditions for the creation and supply of new creative content. Following the Joint Committee's recommendations last summer, the Government moved swiftly to authorise a review of programme supply, which was conducted by the ITC. That was welcome, but I do not think we should see it as a one-off: we need to keep the issues of programme and content under constant review.

    The hon. Gentleman suggests that the creators panel would be part of the content board. As the content board has no real control over or responsibility for the content of the BBC's output, should the panel apply to the BBC? Or is this yet another Liberal Democrat proposal to micro-manage commercial broadcasting but not the BBC?

    I do not accept the hon. Gentleman's premise. He and his colleagues are preoccupied with the idea that Ofcom has no responsibility for examining the BBC's activities, but that is not the reality that confronts us in the Bill. Of course I think that the content board's creators panel should look at creative issues in the widest possible sense—including, certainly, what goes on at the BBC. The board is the obvious body to look at such issues, which is why I suggest the inclusion of a creators' representative, preferably one with working experience of the creative industries. That would ensure that their interests were not just understood but taken into account in decisions that would have a direct impact on them.

    2.45 pm

    The hon. Gentleman is, as usual, advancing an excellent argument. Does he agree that the content board should also consider issues involving the various regions and nations?