Considered in Grand Committee
That the Grand Committee do consider the Trade (Mobile Roaming) Regulations 2023.
Relevant document: 25th Report from the Secondary Legislation Scrutiny Committee
My Lords, I am pleased to move these regulations, which were laid before your Lordships’ House in draft on 15 December. This legislation represents a world first in international trade: the UK-Norway, Iceland and Liechtenstein free trade agreement contains the world’s first provisions regulating mobile roaming charges.
Most recent free trade agreements mention mobile roaming, but provisions in those agreements talk of co-operating or even endeavouring to co-operate. However, this free trade agreement takes a further step: actually ensuring the regulation of charges in order to make a real difference to Britons travelling overseas. It is an example of the innovative trade deals we can now negotiate, bringing real benefits to British travellers.
This legislation is necessary to implement domestically the UK’s international obligations under the terms of the agreement. Technically, the legislation implements the agreement’s provisions that regulate international mobile roaming wholesale charges.
As many noble Lords will appreciate, wholesale charges are what mobile operators charge each other, as distinct from retail charges, which are what they charge their customers. The wholesale charges Norwegian and Icelandic mobile operators can charge UK operators will be capped by their domestic legislation. The legislation we are debating will cap the charges that UK operators can apply to Norwegian and Icelandic mobile operators. The caps cover wholesale charges for mobile data, voice calls and text messages. The regulation of wholesale charges in the agreement is with a view to facilitating surcharge-free international mobile roaming for British consumers to Norway and Iceland, as well as, of course, surcharge-free mobile roaming for Norwegians and Icelanders in the UK.
I note that the agreement’s provisions regulate mobile roaming wholesale charges between the UK and Norway, and the UK and Iceland. The agreement’s provisions do not apply to Liechtenstein. Therefore, this legislation is not relevant to that principality. That is because Liechtenstein decided to opt out, given its operators’ commercial relationships with Switzerland. Because of the topography and the limited geographical area of Liechtenstein, a significant part of its territory is supplied by masts from neighbouring Switzerland. I add that this legislation also ensures that Ofcom has the power to enforce the caps on wholesale charges.
Before I make way for the debate on this legislation, I will cover an issue that might form the basis of questions that noble Lords might have: the agreement’s coverage of wholesale, rather than retail, charges. The reason the agreement covers wholesale charges but not retail ones is that wholesale charges have to be covered by an international agreement. Wholesale charges are a cross-border issue; an international agreement is therefore required to cover them. UK legislation alone cannot bind the charges of Icelandic or Norwegian operators.
Retail charges can be covered by an international agreement, but they can also be covered by purely domestic legislation. This is because retail charges are between UK operators and their domestic customers. Retail charges are not a cross-border issue.
The parties concluded that this agreement should cover only wholesale charges, as these have to be covered by an international agreement. That the agreement does not cover retail charges reflects its light-touch regulatory approach. It will ensure that UK operators are protected from high wholesale charges from Norwegian and Icelandic operators. It is therefore expected that those UK operators who surcharge their customers roaming in Norway and Iceland will react at the retail level by reconsidering their approach and moving to surcharge-free services.
While the agreement is light touch in its regulatory approach, let me be clear: one of the key, publicly stated achievements of the agreement was to keep costs low for holidaymakers and business travellers in Norway and Iceland. The Government are committed to delivering that aim. They therefore expect UK mobile operators which are surcharging to reconsider their approach. If they do not, the Government have the capacity to intervene.
On this particular point—
My Lords, this is my opening speech. My noble friend will be able to join the debate in a moment. I look forward to the contributions from my noble friend and other noble Lords. I beg to move.
I wanted to ask my noble friend: what advantage does the mobile telephone user get from us having left the European Union? Is this not a rather pathetic doing of a deal with a few countries, when everybody in Britain suffers from having left the European Union and being charged extra? This deal is just with a couple of countries—even Liechtenstein is left out.
My Lords, that was a suitable start to my own small intervention. I will not trouble the Minister for too long but I want to strike a note of genuine regret, rather along the lines of what the noble Lord, Lord Deben, said.
It is a very small crumb of comfort to be faced with this order when previously, right across the EU, there were no roaming charges for consumers. As we saw, last July the EU extended the exemption from roaming charges for another 10 years—an extensive period. I suspect we are all now much more aware of what we have lost as a result of leaving the EU, exactly as the noble Lord mentioned.
There is a small consolation offered in this free trade agreement. I do not know whether any negotiations will ever be underfoot again with the EU about taking advantage of its single market and the resulting lack of roaming charges. Maybe the Minister could say whether any kind of initiative was available.
I have only a couple of questions about these new regulations. The Minister talked about the technicalities of wholesale, retail and so on. Obviously, the retail charges—if any—follow from any wholesale charges. How are these charges to be set? What is the basis for them? Norway and Iceland are limited exemptions. Even Liechtenstein did not feel moved enough to join up to this great roaming exemption. Why has Liechtenstein excluded itself from this splendid initiative?
Of course, we support these regulations. I welcome particularly that there is a review. I am greatly in favour of government reviewing its own regulations, and the mechanism in Regulation 13 is very useful, but what does the Minister envisage? Do we do this after a couple of years, after five years, this time next year or never? What is the plan? It is useful at least to have in the department’s diary something that says, “Review these Norway and Iceland regulations”, when somebody has the spare time to do it. I hope that consumers will take great benefit from these regulations.
My Lords, I intervene briefly to ask two questions, one of which, about the review, has just been asked. Regulation 13 says that the review has to be within five years but can be in as little as a year. Can the Minister say anything about when the department might intend to consider a review? The subject of roaming charges is of pretty wide interest generally.
Secondly, in respect of the scope—which, let us face it, is modest—am I right in assuming that, under the reconsideration of the trade and co-operation agreement that has been signed and comes up for review in a year or two, this whole area might be an appropriate part of any reconsideration and renegotiation that the UK conducts with the EU?
My Lords, I am grateful, as ever, to the Minister for introducing the SI, and to the Secondary Legislation Scrutiny Committee for commenting on it in its 25th report. The scope of the SI is very narrow, as colleagues have said. But if we are looking for something to welcome, we should certainly welcome the fact that the Government have decided to work a bit more collaboratively with international partners, are bringing forward legislation that enacts rather than attempts to rip up international agreements and are seeking to negotiate somewhat with our partners in Europe.
The agreement with Norway and Iceland will give certainty to mobile operators about their costs when customers use roaming charges across the relevant jurisdictions, but this is a very limited agreement. I soon realised when I came back from Norway last year just how much more expensive it is to use a mobile device there than it used to be in the rest of Europe, so this is a small but welcome move forward.
The SI deals only with a wholesale price cap rather than with any retail-focused provisions. The Secondary Legislation Scrutiny Committee was right to query whether there is likely to be a knock-on effect. In a sense, that must be at the heart of this and a question. The Government’s response in paragraph 84 of the committee’s report is not entirely convincing. The DCMS says:
“If operators do not react appropriately, the Government will have to consider what further measures may be necessary”.
That seems to be something of an empty threat. The Government previously said they saw no reason why our departure from the EU would lead to the reintroduction of roaming charges, and we know where that led. Yet the DCMS has not introduced any further measures to address the decision of three of the four main mobile operators to reinstate charges. Why not? As well as setting the wholesale costs, the SI introduces powers for Ofcom to enforce them. Yet you would not really get that if you read the Explanatory Memorandum, which gives no explanation of how these powers will be exercised or operate in practice.
We obviously do not oppose this SI but, as is often the case with the DCMS, we are somewhat underwhelmed by the general approach to an issue that will affect millions of British travellers each year. A small crumb of comfort is the best description we can give of this SI, welcome though it is.
My Lords, I will take whatever small crumbs of comfort are offered by noble Lords. Looking around, I imagine that noble Lords will not be celebrating the third anniversary of our departure from the European Union this evening in the same way that I will, but I understand why they are taking account of that anniversary to use this opportunity to make some points about the European Union, which is tangentially linked to the issue before us.
As I mentioned, this statutory instrument covers only Norway and Iceland, but I am happy to respond to the points which noble Lords have taken this opportunity to make, not least to reiterate that, during our negotiations leading up to our departure from the European Union, UK negotiators did propose to the European Commission the continuation of reciprocal arrangements between the UK and the EU for surcharge-free roaming. The EU, regrettably, did not agree with that proposition. We subsequently proposed a review clause to consider the need for these agreements, should roaming surcharges return for consumers. The EU did not agree to that either, and we are unaware of any shift in its position on this issue.
My noble friend Lord Deben says that the SI refers to just a couple of countries. It is, as I say, world-leading legislation because it is the first agreement which refers to this important issue and its impact upon the bills of mobile phone users. There are nearly 200 countries around the world, only 27 of them member states of the European Union, and this issue affects travellers—holidaymakers and those from businesses—when they travel across the globe. We are proud that this agreement sets out a way for co-operation on this issue.
I will not hold my noble friend up, and I know this is difficult, but the countries to which most people go most of the time are those in the rest of Europe. That is the fact of the matter. Will he tell me how much the average person will benefit from this deal and how much they have lost from us not being members of the European Union? What I am really fed up with is that the Government never tell us the facts about the loss from our leaving the European Union, so people cannot understand whether this is something to be cheerful about or miserable about. Today, we had a Minister referring to our freedom from the European Union; the freedom is that we now pay more and we are blaming the European Union for not giving way to the fact that we left the EU. All I want to know from my noble friend—I know this is on unfair on him—is how much the average person loses by our not having a deal with the European Union and how much they gain, on average, from being able to go to Iceland and Norway, although they will miss out on Liechtenstein.
Even if I had the statistics to hand, I do not think I would be able to satisfy my noble friend entirely. I do not have the numbers to compare UK travellers visiting Norway and Iceland with, say, Bulgaria or any other EU member state. What they have gained, as the UK has gained by our departure from the European Union, is the ability to sign free trade agreements and agreements such as this which allow us to pursue these benefits. They are a model for our co-operation with countries around the world, whether they are in the European Union or not.
Decisions about imposing roaming charges on customers who travel to the EU is a matter for operators themselves. I note that some, including Virgin Mobile and O2, do not so consumers in the UK still have the option of using that network and travelling without any charge to the European Union. I do not suppose any of that fully persuades my noble friend, but I hope it addresses the points that he has raised.
As I say, this represents a world first in a free trade agreement, and we expect it to make a real difference to Britons travelling to Norway and Iceland. It was one of the key and publicly stated achievements of the agreement, when we signed it, to keep costs low for holidaymakers and business travellers going to those countries, and the Government are committed to delivering that aim.
The noble Lord, Lord Clement-Jones, asked about wholesale charges. They are set out in the statutory instrument and took the EU rates as a benchmark. The agreements sub-committee recommended to the joint committee that the current rate found in the EU roaming regulation would be appropriate for the UK, Norway and Iceland. That is consistent with the agreement’s language, which concerns looking at “relevant international benchmarks”. I should say that the sub-committee is made up of officials, while the joint committee is the senior body chaired by Ministers.
Thank you—that is really helpful—but will those rates change when the EU benchmark changes?
That is not set out in the agreement, but, as is set out in it, the joint committee will review the rates every two years, unless it decides otherwise, with a view to determining whether they are still appropriate. An option in any of the reviews could indeed be to follow the rates in the EU and EEA, as the agreement talks about “relevant international benchmarks”, but that will be for the joint committee to decide.
The noble Lord, Lord Bassam, asked whether we plan to legislate to intervene if surcharges are imposed and endure. Obviously, I cannot make commitments on the Government’s future legislative programme, but I can stress the Government’s firm desire to see the benefits of this agreement flowing to consumers in the form of surcharge-free roaming to Norway and Iceland. If that does not happen, the Government have the capacity to intervene, and we will of course keep that under consideration. We will review these in due course, noting the five-year limit set out. I fear I cannot give a more precise timeframe to the question posed by the noble Viscount, Lord Stansgate.
I think that covers all the points raised, but I will consult the Official Report and write if I have missed anything. With that, I commend the Motion.
Committee adjourned at 5.21 pm.