Orders of the Day — Wireless Telegraphy Bill [Lords]

House of Commons, 11 March 1998.

ACCESS TO INFORMATION

Tim Boswell (Conservative, Daventry)

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

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

With this, it will be convenient to discuss amendment No. 9, in clause 5, page 5, line 4, at end insert 'and shall be listed in the annual report of the Radio Communications Agency.'.

Tim Boswell (Conservative, Daventry)

One or two hon. Members may be aware that I have been a long-standing supporter of Aston Villa football club, whose motto is, "Be prepared". It is a principle in this place that one should be prepared for anything, as I am sure the Government are at this hour tonight, after the wise passing of the 10 o'clock motion. It is with some gratitude, as well as trepidation, that I avail myself of the opportunity for the first time to involve myself in matters concerned with wireless telegraphy. In doing so with all due diffidence, I defer to my hon. Friend the Member for South Dorset (Mr. Bruce), in respect of his technical expertise, and my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), in respect of his legal and administrative expertise, as well as to their knowledge of the subject and participation in the Standing Committee. To use a story that my hon. Friend the Member for South Cambridgeshire related to the Standing Committee, no doubt any No. 404 web server errors on my part will be duly and immediately corrected by one or the other of them. I would not wish to cause any undue trepidation by my arrival at the Dispatch Box. Although I have already announced my football allegiance, my cricketing allegiance is to my county of birth, which is Essex. One of the most distinguished cricketers of yesteryear in that county and an Essex man indeed was the late J.W.H.T. Douglas—"Johnny won't hit today". Unless severely provoked, I was not going to set myself up in the role of being typecast as Mr. I.W.G.L.T. of Daventry— I.W.G.L.T. standing for, "It will go late tonight". However, I am deeply encouraged by the support that I am receiving from my hon. Friends in that part. I have to admit that these matters were clearly exquisitely debated on Second reading and in Committee. The Government had a certain lead provided by their predecessor in this matter and had the benefit of wise advice in those considerations. The new clause and the amendment seek further elucidation of the Government's position and reinforce our determination to ensure that the changes, which we do not oppose in principle, are genuinely for the assistance of users and consumers of the spectrum. New clause 1 represents a welcome to the Government's initiative in setting up a spectrum management advisory group. We want the Government to provide as soon as possible further details of their thinking on the operation of the group. We offer them the opportunity to start sharing those details tonight. If the group is to represent users and to function properly, its members must have access to information—that is the purpose of the new clause. In complimenting my hon. Friends who drafted the new clauses, I should say that mostly they are written in plain English, so that even I can understand them.

Eric Forth (Conservative, Bromley and Chislehurst)

I hope that I am not pre-empting anything that my hon. Friend is going to say, as I may have been slightly guilty of doing so on a previous occasion. The new clause specifically says that information…shall be made available on request to something called the Spectrum Management Advisory Group and to users of the spectrum". Does that imply that information would be in the public domain, or does he intend that it should be more restricted? It is important that that is cleared up early on.

Tim Boswell (Conservative, Daventry)

My right hon. Friend has an amazing capacity for anticipating questions that even I have asked myself and, indeed, of which I was modestly hoping to dispose. Either he has some power of telepathy, which may be useful in relation to spectrum matters, or, conceivably, he has particularly keen eyesight and can read my notes over my shoulder. As I said, the advisory group must have access to information to function properly. That information will usually be properly releasable to the group and into the public domain. It may be necessary to make provision for cases in which there are aspects of that information that are properly available only in confidence.

Ian Taylor (Conservative, Esher and Walton)

Will my hon. Friend give way?

Tim Boswell (Conservative, Daventry)

I readily give way to my hon. Friend the Member for Esher and Walton (Mr. Taylor), whom we are pleased to see in the Chamber because of his close involvement with these matters in the previous Administration. His undoubted expertise will assist us in our deliberations.

Ian Taylor (Conservative, Esher and Walton)

I am grateful to my hon. Friend the Member for Daventry (Mr. Boswell), the Conservative Front-Bench spokesman on this issue. Before we experience the full charge of the radio waves between my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) and him—which I am sure will lie at a very high part of the spectrum and so should be attractively priced from the point of view of the revenues that could be raised— I remind Conservative Members that they should take credit for the Bill. We drafted it, we nurtured it and, in many cases, we would have removed many of the difficulties, not all of which have been perfectly translated by the Government. The industry has shown by its responses that it takes a keen interest in the Bill. The Government have undoubtedly picked up an interesting piece of legislation, but it requires the scrutiny that my hon. Friend is about to give it.

Tim Boswell (Conservative, Daventry)

I am most grateful to my hon. Friend, not least for his previous contribution, but also for the contribution that I am sure he will make tonight. The Bill builds on his personal achievement in taking these matters forward, but, as he has very generously, and with characteristic modesty, conceded, everything—even a good idea from a Conservative Government—brooks examination and may be capable of improvement. In tabling the new clause, we are saying that it may be sensible to provide in the Bill for the release of information either under controlled conditions, or directly into the public domain, so that the spectrum management advisory group can consider how things are going. The new clause certainly gives the Minister an opportunity to say how she believes information should be released. If the group is to do that job properly, it is essential that the information is provided. That is the major reason for the new clause, but a second and important one is that, taking the Government's declared philosophy of freedom of information, information should not be withheld by the Government unless there is a compelling reason for doing so. We sometimes have difficulties in getting information from the Government and in getting answers to our questions, but that is something that we hope to underline by introducing our new clause.

Eric Forth (Conservative, Bromley and Chislehurst)

Will my hon. Friend give way before he leaves that point?

Tim Boswell (Conservative, Daventry)

I readily do so.

Eric Forth (Conservative, Bromley and Chislehurst)

Does my hon. Friend expect that the Government will accept the new clause? It strikes me as somewhat odd, following what he has said, that, if the Government really believed in the oft-repeated philosophy of open government and freedom of information, such a provision would have been built into the Bill from the outset. Does my hon. Friend know why it has to be our new clause that puts into effect the Government's own philosophy? Why was it not in the Bill already?

Tim Boswell (Conservative, Daventry)

My right hon. Friend raises an interesting point. If there are occasions when Opposition Members have been guilty of paranoia in finding it surprising that Ministers have not accepted our entirely reasonable amendments to other legislation, that does not mean that they were not out to get us. I really do not know why the Government did not include such a provision from the start. The Minister has an opportunity of redeeming herself by explaining tonight why it should not be accepted.

David Davis (Conservative, Haltemprice and Howden)

Will my hon. Friend give way?

Tim Boswell (Conservative, Daventry)

Yes. We are anxious to make progress on these Benches, but I give way to my right hon. Friend.

David Davis (Conservative, Haltemprice and Howden)

I thank the Opposition spokesman for being so kind. May I bring him back to the point raised earlier by my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) about the extent to which the information given to the spectrum management advisory group should be made public? Giving information to a narrow group or industry group can create a barrier to entry. That is the sort of thing that the Conservative party always tries to prevent. We want to see the maximum possible competition. Surely we should draft the Bill to ensure competition by making the information available to all, not just to some narrow industry group.

Tim Boswell (Conservative, Daventry)

Indeed, Conservative Members are believers in open government for the many, not for the few. My right hon. Friend the Member for Haltemprice and Howden (Mr. Davis) performs a very reasonable task in making that point. He is essentially saying—this would be my merit order, if I may borrow another analogy—that the ideal is the release of information into the public domain. The second best is release of the information to the spectrum management advisory group, if that is as far as it may properly go. The third best—I fear that that is where the Government are unless they accept our new clause—is simply to keep the information in house.

Ian Bruce (Conservative, South Dorset)

One should give acknowledgement to the Government. Between proceedings in the other place and here, the industry was keen to see a spectrum management advisory group set up. The Government, by press release, said that they would set one up. I hope that now, because of the amount of time that has elapsed, the Government have been able to think again. Nowhere in the Bill does it say that the group will be set up. My hon. Friend rightly says that we do not know who will be members of the group. Will it be just a few Labour councillors, as there are on most quangos being setting up now, or will it really be representative?

Tim Boswell (Conservative, Daventry)

My hon. Friend and I share the common objective of preventing the group from being merely a press release. We do not want what I might call a metaphorical spectral spectrum management advisory group. We want a real one and we want to hear more details of it than have been given to us so far. But, of course, I defer to the Minister. She is an honourable Lady. I am sure that her intentions are entirely of the best, but her explanations are urgently required. In that spirit, I shall not detain the House very much longer on this group, but I wish to refer to amendment No. 9, which is bracketed with new clause 1. The amendment provides for some transparency in the issue of grants. If they are to be issued for research and to take forward the use of a limited national resource, the spectrum, they must be seen publicly to be used to best effect. That is an important matter of accountability, and my right hon. Friend the Member for Haltemprice and Howden will be as concerned with it as anyone. Some years ago, I chaired a grant-making charitable trust. We always gave considerable details of our modest grants in our annual report.

Edward Leigh (Conservative, Gainsborough)

Has my hon. Friend noticed that sitting behind him are no fewer than three former Ministers who were associated with the Radiocommunications Agency and laid the foundations for the Bill? Does that prove that for new Labour, one can read old Conservative—with one difference: we are more committed to open government than are Ministers of the so-called open Government?

Tim Boswell (Conservative, Daventry)

I would not wish my hon. Friend to tempt me too far. The Government are clearly on message tonight. It is important that there should be the maximum possible transparency. It is somewhat distressing that a Bill that received a Second Reading as long ago as 29 October should have mouldered until now, before its further consideration. There was a Committee stage, but that took place in the middle of November, long before I joined the shadow Department of Trade and Industry Front Bench. Some of us have been preoccupied with one or two other considerations up till now, but we are pleased to be here to discuss the Bill. We are here not to fight the principle, but to ensure that the details are properly secured. Like any proper attitude to legislation, those details should begin with a commitment to the maximum openness of information. That is the purpose of the new clause.

Andrew Lansley (Conservative, South Cambridgeshire)

I am grateful for the opportunity to support my hon. Friend by speaking to new clause 1. The issue of access to information arising from the Bill was discussed a little in Committee, but the discussion tonight can be more focused, now that it is clear that the Government's intention is to establish a spectrum management advisory group. It is incumbent on the House to consider the purposes for which that is to be used. The adoption of the new clause would improve the Bill and would implement the Government's intentions. The principle of openness in respect of telecommunications activities is well established. As the Minister will know, the Telecommunications Act 1984 began a process of increasing transparency in the issue of licences, which has greatly benefited the telecommunications industry. It has not helped one competitor to obtain an advantage of information over another, but, for reasons that were made clear by my hon. Friend the Member for Daventry (Mr. Boswell), transparency in the marketplace and availability of information are essential to create a better marketplace. We are moving through the system of spectrum pricing to a device that is intended to create a market. If it is our intention to create a market, we must provide the mechanisms that help to make markets work more effectively. Pre-eminent among those is the availability of information. A market in which there is differential information among those participating is a distorted market. It would be remiss of us to agree to a Bill whose later clauses should be based on a high level of transparency for those who are putting in bids for auctions for spectrum allocation, if the information available to them would be inadequate. One or two issues have arisen, and it might be helpful if the Minister referred to them. First, I wish to refer to the Radiocommunications Agency's database. I do not profess to be sufficiently expert to be able to articulate the concerns in detail, but there is concern in the industry that the amount of information available on the database, the form in which it is available, and the reasons for agency decisions—for example, in relation to the assignment of applications for fixed links and the plotting of fixed links across the country—may not be sufficient. We ought to look through the database for greater understanding of the allocation of spectrum, the reasons why spectrum has been allocated to particular purposes and the reasons why applications for particular spectrum or fixed links have been turned down.

Ian Bruce (Conservative, South Dorset)

Has not the Radiocommunications Agency always been a technical organisation—looking after worries about signals interfering with one another—but is now having to move to a market-sensitive role? The user group was clearly designed to help the agency come up with the right decisions. The Government must tell us how they will extend the agency to allow it to fulfil these new functions.

Andrew Lansley (Conservative, South Cambridgeshire)

My hon. Friend makes a good point which will inform our discussions as we proceed through Report. The agency—with which I have had dealings in the past—has acknowledged expertise and produces a fine service in relation to the technical management of the spectrum. However, we are looking towards a different structure, which includes an assessment of economic and consumer benefits, and so on. This pre-empts slightly discussions on subsequent new clauses and amendments, but it is relevant to this new clause. Within the responsibility for the assessment of consumer benefits and the allocation of spectrum on the basis of bids—and the more efficient management of spectrum for economic, and not simply technological, purposes—is an understanding of the marketplace within which the operators—those making applications to the agency—are having to work. There is considerable sensitivity in the industry which wants assurances about the degree of information it will receive. Can the Minister assure the House that, in planning and implementing changes to the agency's database, the amount of information available to operators will be at least as full as is available at present? Secondly, in designing the database and the relationship that operators will have with it, will she work closely with the industry to ensure that that is achieved to the maximum? The spectrum management advisory group will doubtless have a role, but the Minister must look beyond that group to the industry more generally. My second point is that, after the Committee stage, it was put to me that some transparency in the way in which the agency assigns links would be highly desirable, but there was concern that information being acquired by the agency was not necessarily being put into the public domain where it might have had greater value than it has simply resting with the agency and the Department. Particular reference was made to a report—commissioned, I am told, by the Radiocommunications Agency—carried out by the university of Bristol. It was designed to look into calculating spectrum congestion as part of research into trying to understand on what basis one can implement excess, not administrative, pricing to try to manage spectrum better. One needs an understanding of how spectrum congestion has occurred. It was suggested that the report could be published, but, at that time, had not been. Is the Minister aware of the report and the effect that it might have on the calculation of spectrum congestion? Perhaps it is appropriate for the report to be put into the public domain, in the spirit of openness encouraged by new clause 1. I hope that that is the Department's intention. I shall rest on those two questions and the general proposition that not only is it desirable that the availability of information should be encouraged specifically through the spectrum management advisory group, but information should go beyond that, into the industry to ensure that, when we discuss spectrum allocation, the market is fully informed through an understanding of the ways in which the agency allocates spectrum, and the terms of the licences that it offers. Licences are confidential documents between the agency and the operator. That is perfectly legitimate, but, in the marketplace, transparency in licensing has become the norm in relation, for example, to telecommunications operators. There is a case for transparency to be carried through into the agency's licences as well.

Ian Taylor (Conservative, Esher and Walton)

I wish to add just a few words, particularly on access to information. Although it does not look like it, the Bill is a dramatic step forward in how we manage a scarce resource—radio spectrum. Radio spectrum is something which people cannot see, so they do not necessarily think that it has any great value, but it has enormous implications for the running of the economy in an age of digital communications, most of which will increasingly use the radio spectrum in some form to effect those communications. The Bill also begins the transformation of the merger of fixed and mobile telephony. It will have a big impact when we move to digital television, which will free up a lot of local spectrum because the same amount of power around a particular transmitter will not be needed. The analogue spectrum needs to be kicked on from transmitter to transmitter, which creates great local disturbance. Digital signals are much clearer and travel further, and therefore will give back a considerable amount of spectrum, which we can use successfully. The way in which we use it, however, should be a function of market pricing. In each of the areas that we are talking about, the public will need to understand fully what is going on. The Bill does not introduce a hidden tax. It is not some method used by the Government to penalise people. It is, dare I say it, a Conservative measure designed to use the market to enable a scarce resource to be properly managed between willing users.

Nick Palmer (Labour, Broxtowe)

On Second Reading, we were slightly surprised that the shadow Secretary of State reversed the pledge in the Conservative manifesto and opposed the measure, saying, in contrast to what we have just heard, that the Bill introduces a disguised tax. Most other Conservative Members who spoke supported that view. However, it seems that tonight, we shall hear a reversal, and that most Conservatives will take the opposite view. I am curious about whether those mass conversions happen individually, or whether the Conservatives have a sort of session, as the Reverend Moon does in South Korea, and it all happens simultaneously.

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

Order. Before the hon. Gentleman responds to that intervention, I must point out that we are now going rather wide of the mark. I remind him that both the new clause and the amendment are tightly drawn.

Ian Taylor (Conservative, Esher and Walton)

I accept your ruling, Mr. Deputy Speaker. Far be it from me to enter into a discussion about the shadow Minister in any case. We do not always agree, but I am sure that on that occasion, he was merely probing to find out what the Government's intentions really were.

Tim Boswell (Conservative, Daventry)

Will my hon. Friend take a little advice from me, as I am a former Whip? If he praises the Bill too intensely, the Government may have a deathbed conversion to old Labour and suddenly decide that they favour it less—something which I am sure my hon. Friend would wish to avoid.

Ian Taylor (Conservative, Esher and Walton)

I was allowing ample opportunity for my hon. Friend to probe deeply into the measures, about which he has obviously thought carefully, and the proposed amendments. No Bill, whatever its origin, is perfect, and it is the job of the House to consider closely what its impact will be. The Bill is important, which is why I am anxious that we should have as much public information as possible. However, much as I support my hon. Friend's probing, I remind him that he had already said that he approved of the principle of the Bill. That is the general point on which I rest. I certainly welcome the measure in terms of the discussion and the spectrum management advisory group, but I urge the Minister to ensure that, as my hon. Friend has said, as much of the information that can be made public will be. I used to have ministerial responsibility for such matters, but sadly, the Minister now has that responsibility and I do not. Both of us, as well as my hon. Friend the Member for Gainsborough (Mr. Leigh), have at one time been responsible for the Radiocommunications Agency. For reasons that we shall not debate in the Chamber, some of the agency's work is not capable of being put into the public domain, but that is not true of areas in which there will be a dramatic move forward and a new system of management, and in which we shall also need an understanding of what will and will not be fair. When we are not auctioning but merely introducing administrative pricing, there will be a need not only for an advisory group, but for public confidence in its work. That is why I endorse the questions asked by my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), which were most pertinent.

Ian Bruce (Conservative, South Dorset)

First, I declare a financial interest in that I am a paid adviser to the Telecommunications Managers Association. However, I also make it clear that I have had no briefing on the Bill from the association, and that I speak only for myself, from my own knowledge of the issues. I am grateful for the congratulations that were offered to my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) and me on our drafting of the amendments and new clauses, but I must admit that much of what I have produced in that line comes directly from Oftel's views on the future of spectrum pricing. The quality of the drafting is, as always, due to the Table Office, which turns one's thoughts into proper parliamentary language, and I hope that the way in which the amendments and new clauses read will be clear enough to enable hon. Members to discuss the issues. This week, several people have made such comments as, "There's that fellow Bruce again, going in to bat throughout the night," so may I also tell the House that the Opposition have no intention of delaying things, filibustering or anything else. The only reason why we are speaking on the amendments and new clauses at this time of night is that the Leader of the House and the other powers that be have decided to schedule important Department of Trade and Industry Bills after other Bills have been dealt with.

Tim Boswell (Conservative, Daventry)

For the record, does my hon. Friend accept that Opposition Front-Bench Members and, in my experience, Back-Bench Members too, never intend to delay the consideration of a Bill? We are anxious to give any Bill merely that consideration which the issues that it raises and its importance properly deserve, and that is exactly what we shall do tonight.

Ian Bruce (Conservative, South Dorset)

I was certainly not accusing my hon. Friends of filibustering. I do not want to go wide of the narrow amendments in explaining our position. These are important matters. I would much rather be at home with a glass of Scotch in front of the television—would not we all?—than here with a glass of water having to speak at this late hour. However, anyone who was present for the Report stage of the Fossil Fuel Levy Bill yesterday will have heard the best speech in the Chamber this year, and possibly since 1 May, when the hon. Member for Bolsover (Mr. Skinner) spoke so eloquently. I am glad to see still in his place the hon. Member for Sheffield, Attercliffe (Mr. Betts). There is only one Whip for the Department of Trade and Industry and he seems to be here all the time. It has been suggested that that may be because the hon. Gentleman is being punished by his party for not running the National Minimum Wage Bill in quite the way that was expected. However, I hope that he has a restful week next week. I am grateful for your indulgence, Mr. Deputy Speaker, in allowing me to make those general remarks. However, I want specifically to talk about the spectrum management advisory group. As I said in an intervention earlier to my hon. Friend the Member for Daventry (Mr. Boswell), that is the creature of the Government. The industry, and certainly the Federation of Communication Services which, at various times, has briefed me, have made it clear that they felt that it was extremely important that there should be some form of industry group which would advise the Radiocommunications Agency, so that any commercial clashes or problems could be ironed out before they affected the industry. I am glad that Labour Members are now great enthusiasts for the free market in telecommunications. We shall not remind them what happened during the privatisation of British Telecom; that is much too wide of the mark. However, we genuinely welcome their conversion. At the beginning of the Bill's passage through the House, the Government said that they were persuaded that there should be an advisory group, but there is still no flesh on the bones of that. The new clause seeks to tease out from the Government what they are thinking, and to put on the record the fact that without some mechanism to ensure that the spectrum management advisory group is privy to information, it will not get anywhere. Unless an advisory group believes that there is a genuine dialogue between those with power and those who are simply advisers, it will take its bats home. If it is not listened to, and without the information that it needs to do its job, its members will wonder what is the point of giving up their time. I suspect that the members of this advisory group will be volunteers. With your indulgence Mr. Deputy Speaker, I hope that the Minister will tell us who will be on that body. There is always the worry—

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

Order. The hon. Gentleman is pushing my indulgence a little too far. Will he now stick tightly, please, to the new clause?

Ian Bruce (Conservative, South Dorset)

It is important that we know who will be on the group, and that it will be a wide spectrum—[Interruption.] I apologise; that was an unintended pun. Industry may come to the Government and say, "This is wonderful; it is exactly the group that we want", and agree what sort of information will be exchanged—but in all that cuddling of each other, no one will remember to say, "What about the consumer?" What about people who do not have technical knowledge, but who want information about how spectrum is being divvied up—so that it is not just good for the Government and the industry, but in the public interest? I know that the Government are keen to say that they want to do things in the public interest, and that is what we want to hear now. I appreciate that this is a narrow group of amendments, so, without further ado, I shall sit down and hope to hear the Minister say that she has been persuaded by our arguments on new clause 1, and that she will set us on the right track for this evening's business by accepting it.

Barbara Roche (Labour, Hornsey and Wood Green)

I welcome the hon. Member for Daventry (Mr. Boswell) not to his responsibilities, but to the issue before us. This has been Department of Trade and Industry week in the House. I understand that the hon. Gentleman was in the Chamber yesterday evening listening to the right hon. Member for Wokingham (Mr. Redwood) and that he had a little difficulty keeping awake during his right hon. Friend's speech. I heartily congratulate the hon. Gentleman on managing to keep awake for his own remarks. I am pleased that the hon. Member for Esher and Walton (Mr. Taylor) is here this evening, as I agreed with many of his remarks. He played a large part in the initial development of the Bill. I share his view that, on the surface, this does not appear to be the most exciting of Bills, but I am sure that he and other hon. Members here tonight agree that in terms of economic growth, wealth creation and job creation, it is vital to the country. I welcome the remarks of the hon. Member for Daventry on the principle of the Bill. It was right and proper of him to probe its effects. I also welcome the Opposition's U-turn. I remind the hon. Gentleman of what the right hon. Member for Wokingham said on Second Reading: We shall oppose it, but we shall not jeopardise business because I shall shortly reveal to the Minister how to handle the matter much better… The Bill sums up all that is wrong with the Department of Trade and Industry. It is bad for business and will cost us jobs and technical leadership. It is mean-minded".—[Official Report, 29 October 1997; Vol. 299, c. 933–41.] How extraordinary it is, but I am always glad when sinners repent.

Tim Boswell (Conservative, Daventry)

I thank the hon. Lady for giving way and for taking such care to read the speeches of my right hon. Friend the Member for Wokingham (Mr. Redwood) in such detail and then relaying them to the House. Does the hon. Lady appreciate that one of the major elements of our concern about the Bill is the cost to business of the proposed changes unless there are better safeguards for the possible charging regime—a matter which does not arise on this new clause but which we shall discuss in a moment.

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

Order. Can we therefore, for the time being at least, stick to the new clause that we are discussing?

Tim Boswell (Conservative, Daventry)

I think that my intervention is immediately germane to what the Minister said. Will she accept that my right hon. Friend did not seek to divide the House on Second Reading?

Barbara Roche (Labour, Hornsey and Wood Green)

Indeed. That is exactly what I said; but the right hon. Gentleman said, "We shall oppose it." I pay tribute to other Conservative Members, who did not take that course. There was a reversal of attitude in Committee, when industry representatives made it known to them how much they disagreed with their original stance. I am not in a position to accept the new clause or the amendment, but I hope that by offering some explanation and assurance I can persuade Conservative Members not to press them to a vote. I believe that both are unnecessary and would add nothing to the rights of spectrum users, and that the new clause would give rise to difficulties for the industry. 11 pm The Radiocommunications Agency is fully committed to transparency in its management of the radio spectrum and makes available a great deal of information to users. I am sure that the hon. Member for Esher and Walton agrees, as he has had responsibility for it in the past. The agency's commitment is demonstrated by the extensive consultation that it already undertakes through a network of standing consultative committees and through ad hoc consultation exercises such as that currently under way on implementing spectrum pricing. That will be further reinforced by clause 6. The agency also publishes and consults on a comprehensive survey of the use of the radio spectrum. The new clause would do nothing to help users. The Radiocommunications Agency already makes information available in accordance with the requirements of the code of practice on access to Government information and data protection. That means that it already provides information on request, subject to overriding considerations such as national security, law enforcement or commercial confidentiality: matters which are not recognised in the amendment.

Tim Boswell (Conservative, Daventry)

In no sense do I want to entrap the Minister in my question, but will she confirm that, at least broadly, the categories that she has outlined represent the limits under which the agency operates in restricting information and that, by implication, all other information is already released?

Barbara Roche (Labour, Hornsey and Wood Green)

In the main, yes. I understand entirely what the hon. Gentleman is saying, and I appreciate the spirit in which he says it. The agency is committed to transparency. Greater access to the agency's database of assignments was raised in a wide-ranging public consultation in 1994. The responses showed significant concern about national security and commercial confidentiality, as one would expect. It would be possible for a competitor to gain information from the database about frequencies used and the disposition of transmitters, and hence the extent and nature of licensees' businesses, which could be very damaging commercially.

Ian Bruce (Conservative, South Dorset)

I want to explore the other side of the argument that most of the information is already available to the public generally. Might not there be a problem about information that is quite properly given in confidence to an advisory group but would not normally be given out generally? The agency might not have the power to do that.

Barbara Roche (Labour, Hornsey and Wood Green)

I do not think that there is a problem. There are many examples of circumstances in which, within the restrictions of the code, one tries to give as much information as possible. When a special advisory group is charged by Government with a special function, it is perfectly proper, and indeed not unusual, for confidential information to be released to that group. When the Bill was discussed in the other place, similar concern was expressed by Lord Derwent—who takes the Conservative Whip there—on behalf of mobile telephone operators. He explained that operators would not wish detailed information about matters of this kind to be released. He made that point very strongly. The new clause does not provide safeguards for licensees, such as law enforcement agencies and security companies, that have a legitimate reason not to disclose details of their assignments in case the information assists criminals. I am sure that all hon. Members want the status quo to be protected. The agency is continuing to develop plans for greater access to its databases, but it must have regard to the sensitivities of licensees who have legitimate reasons for wishing information about their assignments not to be made available.

Andrew Lansley (Conservative, South Cambridgeshire)

Will the Minister give way?

Barbara Roche (Labour, Hornsey and Wood Green)

Just one more time.

Andrew Lansley (Conservative, South Cambridgeshire)

I am grateful to the Minister, who is being generous in giving way. Does she acknowledge that while both sides of the House understand the commercially confidential issues that the industry—quite properly—wants to be protected, that must be balanced against the interests of those who want to enter a market? Does she agree that we must not go too far and allow the protection of information in the marketplace to become a barrier?

Barbara Roche (Labour, Hornsey and Wood Green)

I could not agree more. In all such matters, a balance must be struck. We must ensure that there is a market for new entrants: that is how competition is promoted. On the other hand—quite legitimately—commercial confidentiality must be protected. As the hon. Gentleman will know, such issues crop up all the time, not only in relation to management of the spectrum and the Radiocommunications Agency but in relation to other matters. The new clause requires information to be made available to the spectrum management advisory group. I am glad that the group was mentioned, because it was an initiative of the present Government. Indeed, the idea was raised in another place. I see that the hon. Member for South Cambridgeshire (Mr. Lansley) agrees. Quite properly, the Government went away and considered the matter. I am delighted with the approval that has been given to the establishment of the group. I intend it to have a significant input in matters relating to the management of the of the radio spectrum. We have continued the work of setting up the group since my earlier announcement. I am pleased to say that Dr. John Forrest has agreed to become its first chairman. Dr. Forrest will bring to his position wide experience of radio use in the defence, broadcasting and telecommunications industries, and I am confident that he is ideally qualified to lead the group in its task of providing Ministers with independent strategic advice on the management of the radio spectrum. Tomorrow, I will place in the Libraries of both Houses a list of members of the group. Between them, they represent a wide range of experience and expertise covering all the major categories of spectrum user. I think it important for the group to have direct access to Ministers, and I look forward to working with it in the coming months.

Ian Taylor (Conservative, Esher and Walton)

This is only a mild criticism, but in a way it would have been helpful to have the list this evening. However, I welcome Dr. John Forrest to the chair of the spectrum management advisory group. I also recognise that this proposal has emerged since the general election. When, as a Minister, I consulted representatives of industry—not an advisory group as such, but a group of people who were advising—it was clear that information could also be publicly disseminated through improved ways of managing the spectrum and securing the efficiency that is, after all, the objective of the Bill. Dr. Forrest ran NTL, formerly the ITV uplinking and networking station, and he is very experienced in the field. Perhaps he will encourage such developments.

Barbara Roche (Labour, Hornsey and Wood Green)

I am delighted that the hon. Gentleman has given such a warm welcome to Dr. Forrest's appointment. I think that it was a very good appointment. Although, as I said, I shall put the list in the Libraries of both Houses tomorrow, I should be delighted to help the hon. Gentleman by reading out a list of the other group members. I have appointed also Dr. Mark Armstrong, who is the official fellow in economics at Nuffield college, Oxford; Professor Sue Birley, director of research and professor of entrepreneurship at the management school of Imperial college; Dr. Kevin Bond of Yorkshire Water; David Brown, chairman of Motorola; Keith Harlow, director of technology, BBC resources; Dr. Mohamed Ibrahim, chairman and founder of Mobile Systems International; Stephen Lowe, product development director of Eurobell Holding plc; Michael Short, director of international affairs for Cellnet; and Andrew Sleigh, director general of information and communication services in the Ministry of Defence.

Ian Bruce (Conservative, South Dorset)

They are Labour councillors.

Barbara Roche (Labour, Hornsey and Wood Green)

The chief executive of the Radiocommunications Agency will also be a member of the group. I hope that that list will assist the House. I am sure that hon. Member for Esher and Walton will think so, as I am sure the hon. Member for South Dorset (Mr. Bruce) will rethink his remark. It is an extremely distinguished group, and I am absolutely delighted to announce their appointment.

Ian Bruce (Conservative, South Dorset)

I assure the hon. Lady that it was a playful remark. Although some of the members may also be Labour councillors, I am sure that their expertise makes them better Labour councillors.

Barbara Roche (Labour, Hornsey and Wood Green)

I take the hon. Gentleman's remarks in the spirit in which they were intended. In the light of my comments, I hope that the House will accept that new clause 1 is unnecessary and not press it to a Division. Amendment No. 9 would require details of grants made under the powers in clause 5 to be listed in the annual report of the Radiocommunications Agency. I emphasise that we are committed to the principle of transparency in the operation of those powers, as we are in the operation of the Bill's other provisions. The annual report of the Radiocommunications Agency accompanies the agency's annual accounts, which cover all the agency's income and expenditure. The accounts will in future refer to expenditure under the powers in clause 5, but not in more detail than is required by the various directives that govern the form of agency accounts. I fully agree that additional information about grants paid or offered should be published in the agency's annual report, but I am concerned that the amendment would require an unhelpfully detailed level of information to be published, with the risk of detracting from the annual report's main messages. I do not want to give an undertaking that we will publish details of all grants, because some may be very small. It is possible, for example, that grants may be given to individuals, to assist towards training costs, and not only to businesses. I certainly agree that it would be right for significant grants to businesses to be listed in the annual report, subject—as I am sure Opposition Members will agree—to considerations of commercial confidentiality. In the light of that assurance, I hope that the hon. Member for Daventry will not press the amendment.

Andrew Lansley (Conservative, South Cambridgeshire)

Will the hon. Lady assure the House that, whereas licences granted by the Radiocommunications Agency to operators under the Wireless Telegraphy Act 1949 have been essentially confidential documents, licences granted under the Bill will be essentially public documents, from which material that is commercially confidential, for example, will be withheld? Does she expect that licences granted under the Bill will become public documents from which such information is withheld?

Barbara Roche (Labour, Hornsey and Wood Green)

The hon. Gentleman tempts me, but I shall stick strictly to discussion of the new clause and the amendment. I hope that I have given assurances that Conservative Members can accept, but, if they are unable to do so, I ask my hon. Friends to reject new clause 1 and amendment No. 9.

Tim Boswell (Conservative, Daventry)

I am a little disappointed with the Minister's response, although I welcome the fact that, from time to time, she was complimentary to Opposition Members and to some of our ideas and concepts. It is reassuring that, at this hour, early as it is, hon. Members are flooding into the Chamber. I am especially pleased to see that I have the assistance of my hon. Friend the Member for West Dorset (Mr. Letwin), who has joined our deliberations, and of my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) who, if he knows about this subject 10 per cent. of what he knows about the national minimum wage, will again enliven and embellish our consideration. I do not wish to prolong debate on this group of amendments.

Ian Bruce (Conservative, South Dorset)

It was remiss of my hon. Friend not to say that three members of the Liberal party are present and that we look forward to their contribution.

Tim Boswell (Conservative, Daventry)

I am grateful, but, in the interests of accuracy, I remind my hon. Friend that he means the Liberal Democrat party, not the Liberal party. I am sure that he did not wish to make an unfriendly remark. Those hon. Members are extremely welcome and I very much look forward to their contribution, if not to the debate on the current group of amendments—on which I now conclude my remarks—to the next. The problem with the Minister's reply, in which she sought to twit us—which nettled me, because I explained in an intervention why I thought it inappropriate—was that it revealed that she did not understand the nature of opposition. It is the duty of an Opposition to oppose, not thoughtlessly—I am sure that, as she is a generous lady, she has never opposed us thoughtlessly—or in a knee-jerk way, but to find selected points of concern, to probe the Government and to seek a response from them. To some extent, a response has been supplied. If nothing else, the debate has smoked out—or brought over the ether—an important announcement by the Minister on the membership of her new spectrum management advisory group. Although I do not know the gentleman personally, I have no reason to cavil at the appointment of Dr. John Forrest, and I have the endorsement of my hon. Friend the Member for Esher and Walton (Mr. Taylor) for that remark. That announcement is extremely welcome and it seemed to me—although I have no precise knowledge of the individual members of the advisory group—that the Minister had assembled a group of big hitters with plenty of experience. I would simply say one thing about the appointments. I am not clear in my mind about the group's status. It will advise the Radiocommunications Agency. I hope that it will be open to others with a public interest in this matter—such as Opposition Members of Parliament—to approach the advisory group to obtain briefings. In other words, I hope that the group is not regarded simply as advising Government or the agencies of Government. I do not want to embarrass the Minister into a commitment that she may feel uneasy about making, but I hope that she will reflect on the fact that it is concomitant with the spirit in which the new clause was moved, of openness, transparency and proper exchange of information, that the advisory group should at least be able to talk to us. That would be helpful. Today, I had a very useful briefing from a non-departmental public body—the Advisory, Conciliation and Arbitration Service. It is extremely useful to have that type of relationship. As my hon. Friends, with their technical expertise, have said, now that the group has been constituted, there is a real need for it to get to work as soon as possible, because some of these issues need early consideration. If the Bill is to make progress, we need to start taking some fairly early and strategic decisions about the allocation of the electromagnetic spectrum. The Minister did her best to give reasonable assurances on the specific issues raised by the new clause and the amendment. My points about the duty of an Opposition to probe and tease out the Government's intentions are relevant here. As I understood her comments, the Government have no intention of withholding information that is in the public domain, and information will not generally be withheld unless there is an operational reason for withholding it.

Andrew Lansley (Conservative, South Cambridgeshire)

My hon. Friend will know the phrase, "The proof of the pudding is in the eating." Does he agree that it might help if the study by the university of Bristol on calculating spectrum congestion, to which I referred earlier, was put in the public domain if it is regarded as being of value in the agency? If it is not put in the public domain, perhaps we should be told why.

Tim Boswell (Conservative, Daventry)

Perhaps that could be resolved by the Minister or the chief executive of the Radiocommunications Agency writing to my hon. Friend with such information about the study as they are able to give. The broad principle, which I hope is endorsed on both sides of the House, is that information should be in the public domain unless there is a compelling reason for it not to be. If there is a reason—such as national security or the commercial sensitivity of information given in confidence—we will understand that constraints are necessary, as I acknowledged in my opening remarks. The Minister's assurance was helpful, but, as my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) rightly said—miraculously anticipating my comments—the proof of the pudding will be in the eating. We shall use the Minister's remarks as a template to test any withholding of information. We shall return them to her with interest if there is any dereliction from that duty. I am sure that the chief executive and the agency will read the report of the debate and take the comments to heart. On amendment No. 9 and the release of information about grants, I have a slight feeling that Sir Humphrey may have been at work. I understand that the matter is difficult. We do not want a tedious list of ha'penny items, which, while important to the individuals involved, are less important in the national picture. The Minister gave a welcome assurance that, in broad terms—again with the term of art subject to considerations of commercial confidence—big items would be released. It might be helpful for her to consider inviting the agency to provide some details by generic type as an alternative to specifying each at tedious length.

Andrew Lansley (Conservative, South Cambridgeshire)

I am prompted by our discussions in Committee to suggest that responses to the agency's consultation document might be made available on the agency's web site. That would provide a vehicle through which information could be listed in sufficient detail for those who want it.

Tim Boswell (Conservative, Daventry)

Provided there is not a server error—as my hon. Friend said in Committee. My hon. Friend is right, although I respond jocularly. Putting material on the internet is cost free once the site has been set up. It would be available to technically sophisticated persons with inexpensive equipment. I notice my hon. Friend wrinkling his nose. He seems to be modestly implying that he is not technically sophisticated, but ever more of us are learning to use the internet. We can call the debate a no-score draw—or perhaps a score draw. We have not achieved our objective of having the new clause and amendment adopted, but we have had some useful assurances which we shall use to test the future actions and intentions of the Government and the agency. With some reluctance because of my natural combativeness, I beg to ask leave to withdraw the motion.

EFFICIENT USE OF THE ELECTRO-MAGNETIC SPECTRUM

Tim Boswell (Conservative, Daventry)

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

Michael Martin (Deputy Speaker, Glasgow Springburn)

With this, it will be convenient to discuss the following: New clause 3—Substitution of parts of the electro-magnetic spectrum— '.—The Secretary of State may allocate a new part of the spectrum to a licence holder in return for that licence holder relinquishing that part of the spectrum that they have previously been allocated.'. New clause 4—Secretary of State's power to purchase electro-magnetic spectrum— '.—The Secretary of State may purchase electro-magnetic spectrum from a licence holder.'. New clause 5—Selling or trading of electro-magnetic spectrum— —A licence holder may sell or otherwise trade all or part of the electro-magnetic spectrum which they have been allocated.'. New clause 6—Reallocation of electro-magnetic spectrum from broadcasters— '.—The Secretary of State may reallocate any part of the electro-magnetic spectrum from television or radio broadcasting licence holders to other users if he considers it expedient to do so, or if he considers it will promote the change-over to new technologies, or both.'. New clause 9—Requirement on broadcasters to use electro-magnetic spectrum efficiently— '.—The Secretary of State shall require holders of broadcasting licences to use the electro-magnetic spectrum efficiently, and may reallocate any part of the spectrum made available as a consequence of such efficient use for other purposes.'. New clause 11—Promotion of free market in the use of the electro-magnetic spectrum— '. Having regard to the desirability of promoting a free market in the use of the electro-magnetic spectrum, the Secretary of State may re-allocate spectrum from existing licence holders to new entrants to the market.'. New clause 12—Reallocation of spectrum within particular wavelengths— '. The Secretary of State may re-allocate electro-magnetic spectrum within particular wavelengths to ensure competition in services which require a specific electro-magnetic wavelength.'. New clause 15—Low power transmitters— '. The Secretary of State may by regulations provide that low power transmitting devices which do not cause interference to other users do not require a licence.'. New clause 19—Unauthorised use of spectrum or breach of licence conditions '.—The Secretary of State may by regulations prescribe the actions to be taken against those who use the electro-magnetic spectrum without authorisation, or who operate in breach of licence conditions.'. New clause 20—Transfer of services from electro-magnetic spectrum— '.—The Secretary of State may, by regulations, make provision to encourage the transfer of certain services from the electro-magnetic spectrum to other delivery systems.'.

Tim Boswell (Conservative, Daventry)

I suppose that it would be possible for somebody looking at this rather long list of new clauses to conclude that, in the words of a popular newspaper's motto, all human life is there. The group is comprehensive. It has a lot to say, but then it concerns some of the Bill's central objectives and issues. Basically, we are addressing the power to reallocate parts of the spectrum. We are seeking to put a bit of zip and life into the issue of reallocation by proposing alternative approaches. I come to these matters comparatively freshly. There has been so little going on recently that I am only too happy to participate. After the National Minimum Wage Bill and those small considerations, I have been most struck by the relative conservatism—I hope that I will not put off Ministers when I say that they have been guilty of that—of the Government's rather static attitude to existing users of the spectrum. They find themselves in the position of somebody drawing up a structure plan for a county, where land is either subject to development or it is not. If it is not, it stays as it is. Indeed, it is proposed that only the additional parts of the spectrum will be reallocated. In the new clauses, we are giving the Government a series of alternative perspectives and options. I hope that they will consider them seriously. It is certainly within the experience and comment of many persons in the field, as well as business users and those who are technical or academic, that some options should become available for reallocation of the spectrum. I shall pick out three comments. First, as has been discussed, there is congestion in certain areas of the spectrum. There is, therefore, a need to do something about that, although not universally to the same extent. Secondly, there is a growing technical efficiency in compression of signal use; one can do things that would not physically have been possible a few years ago. Thirdly, there will be a changing pattern of use. It is not for us to debate—certainly not in public session—whether the Ministry of Defence requires all its spectrum, and whether it makes best use of it. I certainly would not claim to be a practitioner or be able to speak with authority on that. Those who are—I do not think that they are shooting a line—express some concern.

Ian Taylor (Conservative, Esher and Walton)

I am listening carefully to my hon. Friend. He might find that there is a fourth point: where technology enables new use of existing spectrum, which therefore requires reconsideration of the allocation.

Tim Boswell (Conservative, Daventry)

I suspect that my hon. Friend has in mind—although I may be wrong—the transition from analogue to digital signals. I notice him nodding. He has added a valuable point. It is all very well to validate existing licences. There were some exchanges in Committee on this matter, and I understand the Government's argument that they do not want to destabilise people who have to invest quite a lot without giving them some assurance of reasonable security of tenure. It does not seem right that a licence should constitute what might be termed a life tenancy of a bit of the spectrum, regardless of how well it has been used or of whether it can be used more efficiently or moved elsewhere. That is a difficult balance to strike. Given that there is congestion in some areas, we have come across a very valuable resource that is available naturally through the operation of the spectrum and the electromagnetic waves. We must use the whole of it to best effect. It may not be such a good idea to rely simply on incremental changes when additional parts of the spectrum become due. I shall rehearse the new clauses in this group—although, as they are clear, they speak for themselves. New clause 2 gives the Secretary of State the power to reallocate any part of the electromagnetic spectrum that he considers is not used efficiently. That is a rather generous power—as the Minister knows, we are extremely generous with our offers to Ministers when we think that is appropriate. In this case, we are offering Ministers a significant power of reallocation. 11.30 pm The House will not be surprised to learn that the other new clauses are slightly more qualifying. They are designed to stimulate debate and discover which bits tickle the Government's fancy—metaphorically speaking—and about which they might be disposed to provide some assurances. New clause 3 states: The Secretary of State may allocate a new part of the spectrum to a licence holder"— which is consistent with the broad approach of the Bill— in return for that licence holder relinquishing that part of the spectrum that they have previously been allocated. That is an attempt to produce a better grouping or a more efficient use of the total spectrum. It offers a power to swap between one user and another. New clause 4 gives the Secretary of State the power to buy back spectrum from a licence holder. At this point, I remind the House—because I failed to mention it a moment ago—that all licences are not absolute and as of right, in the sense that they could be revoked tomorrow. I think that that would be an unreasonable act—to use the lawyers' term—in the present circumstances. However, it would certainly be much more reasonable if the Secretary of State were given the power to say, "We really want you out of this bit of the spectrum, and we are prepared to pay for you to move"—in the same way that a landlord may reach an agreement with a tenant to move.

Nick Palmer (Labour, Broxtowe)

I am puzzled by the fact that the new clauses give considerable power to the Secretary of State to act pretty arbitrarily—although the hon. Gentleman said that he thought that that would be unreasonable. There is no reference to any need to provide adequate notice, in contrast with the provisions of an amendment that we shall discuss later. It appears that new clause 6, in particular, would allow the Secretary of State to reallocate the spectrum for quite subjective reasons without compensation or notice. I wonder whether that is what the Opposition intend. If so, it seems to be a rather Marxist policy from the new Conservative party.

Tim Boswell (Conservative, Daventry)

I will not say that the hon. Gentleman is beavering away like a terrier, because that would be a mixed metaphor. However, he is working like a terrier in an attempt to create distinctions without difference and difficulties where none exists. The fact is, as will be fairly familiar to the House—I am now at least modestly familiar with Committee work, although I would not like to make too great a claim—Oppositions propose many things to tickle a Government's fancy. It is the groundbait rather than the single fly that is being cast over the Government. The hon. Member for Broxtowe (Dr. Palmer), who served on the Standing Committee, has technical expertise and a real interest in this subject. I hope that he will feel able to contribute to the debate and will respond appropriately to particular points.

Ian Bruce (Conservative, South Dorset)

rose—

Tim Boswell (Conservative, Daventry)

I shall give way to my hon. Friend in a moment, but I was concluding my remarks on the intervention of the hon. Member for Broxtowe. The hon. Gentleman does not have to follow every last word that we have put in our new clauses. If he is producing a corrective measure in the interests of civil liberties or natural justice—not that I would expect Ministers by definition to behave unreasonably—he would have my support in amending our new clauses.

Ian Bruce (Conservative, South Dorset)

The argument of the hon. Member for Broxtowe (Dr. Palmer) is valid and I put my hand up to being the person who did the sketchy drafting. I was congratulated on its clear language and the fact that it was not beset by regulation and all the rest. If I had thought for a moment that we could get the Government to do something about that, I would have taken much more care with the new clause. I assure my hon. Friend that I would certainly support the Government if they said that they wanted a little more time, in order to adjourn the House and produce better clauses, to make an even better Bill than the one that we suggest.

Tim Boswell (Conservative, Daventry)

I congratulate my hon. Friend on his intervention, because he has killed two birds with one stone. He has managed to provide an explanation for the hon. Member for Broxtowe and to support my argument—that is welcome because of the consensus about the way in which we approach this matter. I am anxious to get on and not to interrupt the flow of the argument. We are rehearsing the various possibilities that the Minister will have been considering in papers put to her, or on which she might commission papers. It would always be possible to do a number of things—if not in this legislation, then subsequently. It would be difficult to do so in the Bill, because it has already been considered by another place. New clause 3 would give the power to reallocate by exchange or buying in, and new clause 4 would provide the buying-in power. New clause 5—I am going through the new clauses seriatim for convenience—is radically different because it does not involve the intervention of the Secretary of State, although I suspect that some legislative facility would have to be provided. The new clause provides for a secondary market in the spectrum; that is an attractive and interesting concept. One does not necessarily need to get into the agonising issues of auction which we discussed earlier. However, if one wants to use the market modestly to move spectrum about between a willing buyer and a willing seller, the Secretary of State should not frustrate that.

Ian Taylor (Conservative, Esher and Walton)

This new clause is important. It takes us back to the principle of the Bill, which is to promote greater efficiency of use of a scarce resource. One matter that needs further consideration is how that can best be achieved. As long as there are rules against hoarding, the secondary market could be a useful way to promote the very efficiency gain for which we are looking in the sector.

Tim Boswell (Conservative, Daventry)

I am grateful for my hon. Friend's support. The Government should think about this matter with the caveat that he rightly introduced, because we do not want people to hoard capacity. Indeed, a straight buying-in or confiscatory power might be necessary in cases of hoarding. To continue my tour through the new clauses selected—of course, I shall not advert to the others, Mr. Deputy Speaker—I come to new clause 9, which is the more authoritarian version of the reallocation point. New clause 11 concerns the promotion of the free market and is based on the Bill's principle, as my hon. Friend the Member for Esher and Walton (Mr. Taylor) rightly said. It proposes an administrative, rather than a market solution—reallocation by the Secretary of State. New clause 12 raises an interesting consideration, as it relates to whether particular wavelengths are appropriate for particular services. I am advised that some wavelengths require a specific electromagnetic wavelength, whereas others are much more flexible, so to speak. As we want the spectrum to be used to best effect, it would be sensible to be able to reallocate. We do not specify how that should be done, but we do specify that the aim should be to ensure competition in services which require a specific…wavelength". I have a feeling that my hon. Friends who have expertise in this matter will want to speak further on that matter. New clause 15 represents an interesting deregulatory concept—or, to use the Government's current terminology, a better regulatory concept. If low-power transmitters are not likely, or in any way disposed, to upset other users, why are they required to have a licence at all? I do not know whether specific exceptions exist, but the Government should consider whether some would be appropriate. New clause 19—I have almost reached the end of my list—would provide for a power to police those who pinch a bit of spectrum without authorisation, or those who have a bit of spectrum but operate in breach of the licence conditions for that spectrum. That may be rather authoritarian, in that it could lead to punishments, one of which could be the withdrawal of the spectrum that was abused—of course, if access had not been authorised, it could not be withdrawn, in which case other punishments would be appropriate. The new clause begins to address how we should deal with people who intrude on other people's frequencies. It does not provide for an absolute power, because, even under our rather restrictive drafting, it prescribes the need for regulations, which would be debatable in the House. That would be a safeguard. New clause 19 is also designed to probe the Government's intentions if there is some market perspective, rather than only an allocation of licences. We want to know whether the Government believe that, where money and value are at stake and people have paid for their piece of the spectrum, there could be better safeguards to ensure that the market worked properly. New clause 20, the final one in the group, is again somewhat different. It would provide the Secretary of State with a regulatory power to make provision to encourage the transfer of certain services from the electro-magnetic spectrum to other delivery systems". We could hardly be less specific or prescriptive about what those delivery systems might be—they could be anything from optical fibres to carrier pigeons. There might be cases in which people could be prevented from using the spectrum, if access is scarce, because they could communicate in other perfectly sensible ways. That would be flexible, rather than prescriptive. This is a rather extended group of new clauses, but they are different from one another. I readily concede to the hon. Member for Broxtowe that they are not perfectly drafted; they are designed to raise a series of issues relating to the broad objective which we all share—better use of the spectrum—and to elicit a Government response. Our concern is that this exercise cannot operate only by the allocation of additional portions of the spectrum, however lucrative or attractive that may be to Government. The Government must consider whether the spectrum is used to best effect—indeed, the advisory group must encourage them to do so. That may be achieved through a more controlled use of market mechanisms, supported, where appropriate, by Government intervention either to take in bits of spectrum that are not properly used or to move the spectrum about. If I were to identify the new clause of the greatest salience, new clause 5, which establishes the principle of a secondary market is perhaps the most productive for the future. Given what is now a welcome acceptance of the market economy by the Labour party—we need to see how that works in practice—I hope that the Minister will think long and hard about ways in which she can assure us of her interest. Perhaps we can move towards future legislation that will establish that principle.

Ian Taylor (Conservative, Esher and Walton)

This is an important group of new clauses. They go some way towards the probing of the Government that the Opposition should be doing. Increasing the efficiency of use of the radio spectrum has taken a great deal of thought, certainly while the Conservatives were in government. People in industry who advised the previous Government were also exercised about it. How at any given moment does one find the right spectrum for an activity such as mobile telephony, which needs to group around 18 GHz, I believe—I can never remember whether it is MHz or GHz. It was difficult to accommodate all the spectrum that the industry wanted around that level. Even when I was a Minister, there was a good deal of difficulty in accommodating the four main mobile telephone operators. There had been considerations about how, if one of them was not using the spectrum properly, one might reasonably claw spectrum back, and under what terms. I am glad to say that, to some extent, reasonable negotiation was possible. The Ministry of Defence is probably now a good deal more reasonable—the Minister will confirm this—about its spectrum and how it might be used for commercial purposes when it is not fully in use by the military. Certainly, that was the case in my day as Minister, but there are some arguments as to what overarching interest the Government have in making sure that the Ministry of Defence uses spectrum with the greatest efficiency, in the interest of the economy as a whole. The MOD's age-old argument that spectrum must have national clear coverage is not necessarily viable, given improved technology and the better focusing of spectrum. I had a lively discussion with Channel 5 before it went on air. This is confusing terminology, but there is a national area of clear spectrum called channel 35. I believe that it could be one of the first clear national channels available for auction. That is not the subject of this group of new clauses, but it shows that there is potential for moving to auctions when there could be a lot of users of a particular part of the spectrum. When Channel 5 was going live, in certain parts of the country it wanted to use a digital spectrum suitable for analogue transmission in the early days. It said that up to 4 million households would benefit. There was a trade-off, which we handled by means of a gentleman's agreement, if the Minister will forgive my using that expression, between Channel 5 and the Government. I urge the Minister to keep a close eye on it. It was agreed that Channel 5 would have the right to use part of the spectrum in certain regions for five years, when it would have to hand it back to the Government, at no cost to the Government. When it connected people to Channel 5, it had to tell those who benefited from that analogue use of channel 35 spectrum that they would have to migrate to another delivery system in five years. Channel 5 accepted that happily, because it knew that in five years it would have better delivery systems and would probably be moving to a clearer digital signal. The negotiations were complex, because my overarching aim on behalf of the Government was not to lose the advantage of a clear national digital channel, which may be used ultimately for, say, genuinely mobile television. That may not be the most exciting use of it, but it is an interesting use and there are tremendous advantages in having genuinely mobile national television which, because it is a clear signal, would be available across the country, even if one was moving around from area to area.

Tim Boswell (Conservative, Daventry)

The prospect of genuinely mobile television is exciting. Does my hon. Friend agree that for our present consideration, one of the great—if not the unique—selling propositions of radio is its extreme mobility, which is why it is so attractive and why its spectrum allocation is so important?

Ian Taylor (Conservative, Esher and Walton)

I entirely agree. My hon. Friend and I agree on the principle of the Bill, and he is right to table the new clauses, because there are ways of improving the Bill before it is too late. The management of the spectrum will have to develop fairly quickly, and the more powers that are taken at this moment in the Bill, the better it will be. I urge the Minister to consider seriously the new clauses that my hon. Friend has wisely tabled. As I mentioned in an intervention, there will be cases where, because of the technology, the Government and the Radiocommunications Agency will want to move users off a particular spectrum that is not indispensable to them and which could be used more efficiently by another company and for another purpose. I am sure that the Minister is aware of such cases, and the new clauses would give powers that she would find valuable. With regard to the move to digital television, I was disappointed that the DTI did not continue to take the lead on the important matters related to digital television, as the Department had done under the previous Government. There seems to be too much interference by the Department for Culture, Media and Sport. I never criticise other Government Departments, of course, but when complicated matters are at stake involving technology and commercial interests, it is important not to let the Department for Culture, Media and Sport have too much say. In the context of digital television, it should be the DTI's overriding ambition to achieve progress towards switch-off of analogue transmission at the earliest possible date. I am not being silly and suggesting that that means denying many people the ability to receive television. We all understand that. A similar problem emerged with the move from black and white to colour television. The point is extremely serious. There would be huge commercial advantages for the United Kingdom to be in the lead. If we want to stimulate the move to digital television, a series of timetables must be set. We had set five years or 50 per cent. coverage of digital, whichever was the lesser. Those aims seem to have been fudged in recent Government statements. That will give the wrong impression to industry, which will have to make huge investments if the digital revolution is to occur.

Tim Boswell (Conservative, Daventry)

I am grateful to my hon. Friend for giving way, and I am anxious not to interrupt his flow. Does he agree that the experience of radio shows that one critical element is the cost of the receiver? That bears on the acceptability of the switch from analogue systems to digital. Does my hon. Friend further agree that one approach that can fruitfully be adopted, and has been adopted by the Radio Authority, is to allocate licences over a longer period, to give operators a greater inducement to make the shift?

Ian Taylor (Conservative, Esher and Walton)

Yes, I accept that. We shall need a series of innovative methods to encourage investment, and longer licences is one. The prize of getting digital transmission for television is not just the fact that we may well become the world's largest set manufacturer—we do not do too badly at the moment, surprisingly. There are 42 million television sets in this country, if my recollection of DTI figures is right. The Minister is up to date, and the figure might be slightly higher now. If there are 42 million television sets, that is an awful lot to replace. My hon. Friend the Member for Daventry (Mr. Boswell) raised the cost of not only the set, but the set-top box which, at the moment, would be separate but ultimately would be integrated into the new set as the market developed. As the market starts to expand, there will be a downward pressure on prices. An innovative idea was discussed under the previous Administration. I would not say that it was Government policy; that would be arrogance on my part, and others would point out that I had not achieved any consensus. However, there was a clear possibility that moneys raised from administrative pricing—or, more particularly, from auctions—could have been put to use to stimulate the market for manufacture, distribution and installation of set-top boxes, so that the price to the consumer in the early days would not be as high as it otherwise might have been. That could have been done in two ways. The first—this is not the way I favoured—was a straight subsidy in conjunction with the television companies that would be players in the digital age, so that the burden was shared between the Government and the private sector, in recognition that there were Government advantages. The second was that the freeing up of the spectrum when the digital signal was able to pass cleanly—rather than with the distortions that occur when an analogue signal passes from transmitter to transmitter—would make the spectrum valuable. A high price could be put on the spectrum, so that an incomer—knowing that spectrum was available—would pay a certain price. That money could be deployed to stimulate the freeing up of the spectrum that the incoming investor wished to take advantage of. A pool of money could be put to good use, to stimulate the market and to get it to a critical mass. Both sides of the House agree that, invisible though it is, the spectrum is one of our most valuable resources, and the ability to make proper use of it is one of the determining factors as to whether the economy is capable of competing efficiently in the future. We need the ability not only to make use of the given current range of spectrum, but to make better use of the very high frequencies which at the moment have not attracted a great deal of investment. The range of 40 GHz would possibly open up the prospect of interactive television channels, and some experiments are going on. Frequencies at the higher end are not at present in great demand, but I suspect that that will change. That means that the Bill will be important, in how we manage and price the system. There are no such powers, but the Bill starts to provide them. In providing those powers, would it not be better to have the extra resources that would be available because of the new clauses? There are more negative aspects. What powers can we have to take spectrum away from companies—or public authorities—that are hoarding? How do we insist that a company that is not absolutely dependent on a narrow part of the spectrum—and is therefore making inefficient use of that spectrum, looked at in the widest context—is moved to a different spectrum? We may need certain powers because of interference across borders. Obviously, in our case we mostly have a sea border, but that does not stop radio waves and we get interference from northern France and Holland, and vice versa. There may well be occasions—perhaps if we were moving to a new agreement in the European Union on spectrum resource management—when we would need to move companies around. We would need the powers to do that, and we need to find the right pricing mechanism.

Tim Boswell (Conservative, Daventry)

I shall share an anecdote with my hon. Friend. I am sure that he is aware of the situation in which somebody's garage door opener in Canterbury might, allegedly, close down all the taxi radios in Calais.

Ian Taylor (Conservative, Esher and Walton)

I am sure that The Sun would approve of that anecdote, but I am not sure that it is sensible in any other way. I must not get confused into worrying about European issues, or I shall be thought to be speaking in a different debate. These powers will be important. There will be many other incidents that I have not mentioned, or which we have not even thought of, because the changes in technology have not yet occurred. I urge the Minister to look carefully at our rather generous offer. It is rare for a Conservative Opposition, fiercely keen as we are to look at the details of Bills, to come forward suddenly, in a fit of generosity at midnight, with new clauses that offer the Government more power. It would be churlish of her not to look at these offers seriously.

Ian Bruce (Conservative, South Dorset)

My hon. Friend has left out a most important point: the Minister, who is reasonably new to her job, has the advantage of my hon. Friend's experience. He did the same job for some time. I am sure that she will agree how valuable his experience is.

Michael Martin (Deputy Speaker, Glasgow Springburn)

Order. That may be the case, but it has nothing to do with the new clause before us.

Ian Taylor (Conservative, Esher and Walton)

I heard my hon. Friend's intervention, but I shall not comment on it. I hope that the Minister will say what her attitude is, as Britain has a tremendous opportunity to show leadership in the effective management of a resource where not only has British industry been successful, but Britain has been successful in attracting inward investment. The proof of that is in the list of members of the advisory committee, which includes Motorola. Motorola is an interesting company. Not only does it employ thousands of people in this country, but, as an American company, it is an inward investor. I hope that David Brown, Motorola's chairman in the UK, has the appreciation of the main board of Motorola in the United States, as Motorola in the UK is a leading player in developing digital mobile telephony—GSM—and did it almost under the noses, but without the attention, of the American company. The one country in the world where GSM is not the universal standard is the United States. The American directors of Motorola often look quite uncomfortable when I remind them of the fact that it is thanks to Motorola in the United Kingdom that we lead the world in the spread of GSM. The United States, which is a fairly backward technological market, is looking to catch up one day.

Oliver Letwin (Conservative, West Dorset)

I should declare an interest, although, having discussed it with Sir Gordon Downey's office, I am not clear whether it really is an interest. However, for the avoidance of doubt, I declare that I am a director of the bank that has been appointed by the Department of Trade and Industry to advise on spectrum bids. It is important to understand the background against which the new clauses are set, which has become more evident in many ways in other countries. Over the past 10 years or so, I have spent a large proportion of my time setting up the regulatory regimes for telecommunications in other countries. It is important to understand that even if the Government do not accept the intention behind the Opposition new clauses in the precise form in which we have put it forward, they will have to revisit the idea at a reasonably early date—unless they wish to generate some bizarre results. The first piece of background that is critical—the Minister and her colleagues and advisers, including the impressive list of members of the advisory board that she read out, will already be aware of it—is the fact that compression, which my hon. Friend the Member for Daventry (Mr. Boswell) mentioned, is not a matter of slow progress in a mature industry, analogous with the gradual expansion in the size of aeroplanes, which enables the slots at Heathrow to be used more efficiently over time. Perhaps incrementally over 10 or 15 years we might see a doubling in the size of aeroplanes. We are talking of an industry in which huge shifts have occurred, not least the effective demolition of satellite as the major means of international voice telephony.

Michael Martin (Deputy Speaker, Glasgow Springburn)

Order. I have heard the hon. Gentleman talk before about the history of why amendments were tabled. Let us simply say that the amendments and new clauses have been accepted for debate. We do not need a history or a background to them. We need only speak to the business before us; perhaps the hon. Gentleman will do that. I do not want to hear the history of why the amendments are before us. They are relevant, and they are now up for debate.

Oliver Letwin (Conservative, West Dorset)

Of course I take your guidance, Mr. Deputy Speaker, but I am offering not an explanation of why the amendments arose but an argument about why they should be accepted, which I believe is directly germane to the new clauses. We are dealing with an industry in which compression moves extraordinarily speedily. As a result, what is imagined today—even, perhaps, by the greatest experts—about the amount of frequency, the band width, that will be used may be wholly fallacious two or three years, let alone 10 or 15 years, hence. Indeed, there is a long history of false prediction about the crowding of use of spectrum, comparable to the long history of false predictions about population growth. The experts turn out to be no better than the rest of us at guessing about such things. The intent behind the new clauses is precisely to allow for the possibility of a huge mismatch between current occupation of the spectrum and what will turn out, perhaps even during the Minister's occupation of her post, to be efficient occupation of the spectrum. Of course, we all hope that the hon. Lady will progress to the dizzy heights of the Cabinet, but if she remains in the DTI and retains responsibility for the sector, she may find that, even during the lifetime of the present Government, current predictions, including those made by experts in the Department, will have been falsified by technological advance. The new clauses seek to establish an arrangement under which that would not give rise to either of two developments, both of which must be wholly antipathetic to the Minister's desires. One, which has already been much discussed tonight, is inefficient use of spectrum. I shall illustrate how extreme such inefficiency can become. Only about 10 years ago, the Government of a not very advanced country, Fiji, thought that it would be appropriate to allocate the entire 900 MHz band—that is, the entire part of the spectrum currently occupied by GSM in the United Kingdom—to one company serving Fiji, whose population is far smaller than that of a small British city. That happened because, on the best advice then available, that Government misunderstood what would be necessary. That could well occur in a different form in this country. It is a grossly inefficient use of a scarce resource, because other companies could use that but cannot. Secondly—a point that I think will matter to the Minister, as it does to Conservative Members—the deficiencies to which the Labour party has frequently alluded in recent weeks—that rail and water privatisation have generated some unanticipated profits—could be brought home to roost on a scale that even the Minister might not yet have contemplated. To be the owner, when compression has moved faster than anticipated—we must remember that we are talking about a geometric progression; it might be two, four, eight, 16 or 32 times faster than anticipated—of a large array of frequencies, which can at that time be used, but only by someone else who does not have possession of them, when a given company which has bid for them has possession of them, is an immense resource.

Tim Boswell (Conservative, Daventry)

Is it my hon. Friend's judgment that, despite the compression that he so eloquently describes and its rapid progress, the demand for these frequencies is probably rising faster still? In other words, in the race between the potential demand for frequencies and the technical compression which effectively makes more frequencies available, unless we use the spectrum to best effect we shall be losing, not gaining, ground.

Oliver Letwin (Conservative, West Dorset)

My hon. Friend makes a fundamental point, and it may be right. It is likely to be right. The difficulty is that none of us has the slightest idea whether it will be right. However, the new clauses establish a regime under which, if it proves to be right, as my hon. Friend and I suspect it will, the surplus profit, which would otherwise accrue to the monopolist, who would be able to exact a ludicrous monopoly rate, out of all proportion to the bid that he might have made or the administrative charge that he might be paying, would instead find himself in circumstances where there would be the possibility of that surplus profit being recouped. I draw the Minister's attention to the kinds of quantity about which we might, in certain scenarios, be talking. Even public switched voice telephony occupies broadly 2.5 to 3 per cent. of gross domestic profit in the UK today. It is perfectly imaginable that, under certain hypotheses about convergence, about which my hon. Friend the Member for Esher and Walton (Mr. Taylor) spoke a moment ago, and under certain hypotheses about compression and demand, which my hon. Friend the Member for Daventry mentioned, we might be talking about surplus profits equivalent to about 1 per cent. of GDP—about £74 billion a year. That would knock into a cocked hat the entirety of the surplus profits apparently generated, if one listens to Labour Members, by all the nationalised industries following their privatisations. It would still knock them into a cocked hat if one multiplied them by 10. We are talking about great quantities, a great unknown, and, accordingly, a great need for flexibility. New clause 5 is the minimum response to that range of possible eventualities. It simply argues for a secondary market; a tradeability. That in no sense eliminates the surplus profit. It allows those who possess frequencies today later to trade out of some of them, presumably at the then market value, and, hence, to realise profit. But at least it solves the first problem of inefficient use. It means that if the proud possessor cannot immediately realise—because, for example, he cannot find the financing—capital expenditure sufficient to make use of the spectrum or the frequencies that he holds, somebody else will be able to do so by buying them.

Tim Boswell (Conservative, Daventry)

My hon. Friend will be familiar with the situation in relation to certain agricultural quotas. Does he agree that it would be possible to include within the mechanism a siphon whereby a proportion of the value, or a proportion of the spectrum itself, was taken off as a necessary part of, and concomitant to, the Secretary of State agreeing to such a transaction?

Oliver Letwin (Conservative, West Dorset)

My hon. Friend's mind is so speedy in its operation that he anticipates not merely the next part of my remarks, but the part after that. The solution he envisages is one which the Minister, on mature reflection, may wish to adopt. As I said, new clause 5 represents the minimum position. 12.15 am By contrast, new clause 11 represents the opposite extreme. It allows reallocation, effectively by arbitrary fiat. The hon. Member for Broxtowe (Dr. Palmer) made the valid observation that serious issues arise from such reallocation—for example, property rights and the rights of individuals and companies that have invested. Nevertheless, the new clause would resolve the monopoly rental surplus profit problem. The new clause would allow reallocation without compensation. That could be defended on the ground that in order to exercise that power reasonably, so that it would not be challenged in the courts through judicial review, the Minister would have to allow the retention of such parts of frequencies that were originally allocated as was necessary to continue those same actions which were originally the subject of the bid or the administrative charge. Even then, dangers are attached to that option. However, it would represent a conscious policy by the state to recoup unused frequencies for the public good and to restore profitability—a normal return—to the level that the bidder had anticipated it would be, post the technological changes that had enabled the bidder, hypothetically, to be able to conduct exactly the business he had intended with a much smaller range of frequencies. There are two poles. At the one pole, there is the entirely voluntary market mechanism, posing no problems of civil or property rights and solving the problem of the efficient use of the spectrum—but leaving intact what might be enormous surplus profits under certain scenarios; a vastly over-adequate reward for the original risk. At the other pole, there is a more draconian possibility. If exercised in the true traditions of British administration, and subject to the strictures of the British legal system, it would probably result in the preservation of property rights, although it runs some risk of going too far in that respect. However, it would deprive the original holder of what might otherwise be a very excessive profit. Between those two poles lies exactly the suggestion on which my hon. Friend the Member for Daventry, with his lightning wit, alighted. On mature reflection, we may feel that we are suffering from a lack of completeness in our range of amendments and new clauses. As my hon. Friend said, what we are putting forward tonight is a menu for ministerial consideration, but I fear that it contains only the first and last courses, and may be missing the main course. We might have tabled a new clause that would have allowed for tradeability, but tradeability with some form of levy—which could be adjusted not necessarily merely for a normal return, but for a super-normal return to allow for original risk. That might also recoup vast sums for the Exchequer at a time when technology had moved in a way that was not anticipated. On the issue of immediate practice, we have to consider what will be the effect of the Bill if it is passed as it stands, which I fear may well be the case. In a perfect world, it would not matter if the new clauses were not accepted, because the Government could introduce a new Bill next week with an equivalent set of provisions; but we are all aware that that is not the reality of public administration. No doubt the Minister fought long and hard to find legislative space for the Bill. The dizzying speed with which her colleagues are introducing legislation—much of which I regret—suggests that the legislative timetable may be chock-a-block for many years. I fear that, although the House is at the disposal of the Government—I sometimes feel that it is utterly so—technology, reality and commerce are not. The speed with which the developments that I mentioned have occurred may mean that the Government cannot catch up in their legislative timetable with the pace of technological development.

Ian Taylor (Conservative, Esher and Walton)

I would go even further. Because of the speed of change—my hon. Friend rightly mentioned the advances in compression technology—it is impossible for Governments to anticipate developments in the very near future. All legislation should be technology neutral, and it should facilitate, rather than regulating a closely defined area of activity at any given moment, because that is always likely to block investment or to be simply irrelevant, because the technology has superseded it. The new clauses are designed to make the Bill technology neutral, creating powers to deal with the technology however it develops. I am interested in the lucid and erudite way in which my hon. Friend is explaining the problem.

Oliver Letwin (Conservative, West Dorset)

It is precisely because of our collective ignorance—and, alas, the ignorance of any Government—that technological neutrality, and flexibility in the face of changing technology, are of the essence. If the new clauses are not accepted, it may be too long before the Minister gets the chance to introduce equivalent provisions. If the worst happened, and the problems that I mentioned arose, it would be at the cost of some years of efficiency, perhaps to the considerable disadvantage of the economy and with long-term effects on British manufacturing and design, and the problems that the hon. Member for Broxtowe referred to might become acute. If a company purchased a wide range of frequencies and found that it did not need them all because of advances in technology, but then began to exploit some others in an unanticipated way, it would of course have established a valuable property right in those parts that it had not originally anticipated using for that purpose, and it would be extraordinarily difficult, at least at the far end of the spectrum, for the state ever to recapture the gain. The Minister may find herself in the bizarre position of having the Conservative Opposition accusing her at a later date of having failed to recapture for the state, in a virtually unattended House at 12.23 am, an amount vastly greater than the entire surplus profits to which Labour Members allude in relation to privatisation.

Andrew Lansley (Conservative, South Cambridgeshire)

I always hesitate to intervene on my hon. Friend, because the completeness with which he forms his argument leads me to suspect that I will simply anticipate a point to which he was about to come. Does my hon. Friend recall a point made by the hon. Member for Broxtowe (Dr. Palmer) on Second Reading, that if administrative pricing gets the fee wrong, either it will be too high, and act as a disincentive to investment, or it will be too low, and not affect economic behaviour at all? Does my hon. Friend agree that new clause 5—to which, inter alia, he is speaking—would assist, even where administrative pricing applies, in getting the fee right at the earliest possible moment?

Oliver Letwin (Conservative, West Dorset)

My hon. Friend makes an important point. The combination of new clause 5 with new clause 16, which we shall discuss in due course, will have that effect. I must not intrude on your good will by talking about new clause 16 now, Mr. Deputy Speaker, but perhaps we should return to my hon. Friend's point—which is very just—when we debate that new clause. The problem is not merely one of inefficiency or surplus profit. There is another dimension, which makes the flexibility that would be conferred by the new clauses—or, at least, by similar provisions—all the more necessary. If, on her return to the Department, the Minister consults widely, not just with those concerned with frequency allocation but with those with experience of the entire range of the telecommunications business and, indeed, the media business, she will hear an echo of what I am saying. We may be on the verge of a revolution in the cost structure of the telecommunications industry, to which the new clauses are directly relevant. There is beginning to be some indication—in Italy, for example—that the fundamental cost of mobile telephony is between a quarter and a fifth of the cost of fixed telephony. That applies even under the fairly efficient arrangements currently operating in the United Kingdom. If the comparison proves to be bona fide—many of us are currently studying the matter in some detail—the entire fixed-line network, not just that of BT but those of its competitors, may well disappear within the lifetime of this Government. That is not because the network's functions will disappear, but because they will be replaced by fixed-radio access. It is possible that, if the new clauses were accepted, the process could occur smoothly, and that as much as 1 per cent. of gross domestic product could be added to consumer surplus in the economy. As I have said, voice telephony accounts for between 2.5 and 3 per cent. of GDP. If we reduce its resource cost by more than 50 per cent., there may be a consumer surplus of roughly 1 per cent. of GDP. The new clauses would allow the transfer to take place smoothly. Without them, such a transfer might not be possible. The economic loss that might be entailed—I say "might", but I think there is a pretty strong probability—if the Minister fails to adopt similar measures could be very great. I hope that on all these grounds—sheer efficiency, preventing abnormal profit through an unintended monopoly rent, and, most important of all, the generation of a huge economic opportunity gain for all of us—the Minister will seriously consider whether, after all, she should opt for flexibility arrangements of this kind.

Colin Breed (Liberal Democrat, South East Cornwall)

I should like to express the Liberal Democrats' views on the Bill. We are concerned primarily with spectrum reallocation, which is a matter in which we should perhaps be more involved. As the spectrum is a scarce resource, I have some sympathy for the Bill's clauses dealing with reallocation. Three aspects of spectrum use should be controlled, the first of which is its inefficient use, or non-use. I certainly do not wish spectrum to be acquired for purely investment purposes. Secondly, spectrum use for new purposes in new technology should be controlled. I imagine that, while this debate is going on, new technologies are not only being invented but are being introduced. Indeed, by the time debate on the Bill eventually finishes, I should not be surprised if those new technologies have become obsolete. Finally, the way in which spectrum is used by spectrum holders should be controlled, to enable some of it to be released. Such controls might make spectrum reallocation possible, which would help in ensuring good spectrum use. Controls may also make it possible to use spectrum for the policing, safeguarding and security of spectrum holders—who may have paid exceedingly large sums for use of that spectrum. Surely there must be some safeguards for spectrum users. Spectrum reallocation to ensure its proper use would ensure also that the system is secure and is being used most efficiently. However, I do not know how successful the Minister will be in persuading the Ministry of Defence to reallocate spectrum. 12.30 am I am absolutely opposed to new clause 5, which deals with the secondary spectrum market, because secondary markets are an entirely inappropriate way in which to consider spectrum. Milk and fishing quotas—the spectre of quota hoppers—show how secondary markets develop contrary to all expectations. Moreover, the practice of holding spectrum for investment purposes, and even the auction process itself, may encourage undesirable practices and are not the most efficient way in which to use spectrum. I certainly would not like there to be differentiation between spectrum owners and spectrum users. We have created a system in which spectrum is acquired in auctions—not so that it will be used properly but so that it might be held for competitive advantage, or even to establish a dominant or monopoly market position, thereby preventing others from using it properly. Secondary markets in spectrum would be a dangerous development in a very immature market, particularly because we have no real understanding of what will happen in the spectrum market. We have had all sorts of problems with milk and fishing quotas which are attributable essentially to secondary markets. Similar problems may be visited upon us in a secondary spectrum market. The hon. Member for Esher and Walton (Mr. Taylor) briefly mentioned set-top boxes for televisions, which undoubtedly will soon be introduced. The boxes provide a good example of the need for care in that market, to ensure that domination is not established by one provider and that proper competition is maintained.

Ian Taylor (Conservative, Esher and Walton)

I do not wish to go back over old ground, but the hon. Gentleman mentioned the process of conditional access, which was put in the hands of Oftel to regulate. I think that those rules will provide fair and non-discriminatory access, although the market is currently taking its positions and deciding on one set-top box and compatibility. I believe that Oftel, as the regulator, is the right organisation to consider these very detailed arrangements, and I think that, on balance, we made the right judgment.

Colin Breed (Liberal Democrat, South East Cornwall)

I bow to the hon. Gentleman's superior knowledge of that. The way in which the dominant operators in that marketplace operate in other fields causes me to fear that the so-called level playing field will not materialise. I hope that Oftel will indeed be able to control and manage that situation, which will have enormous repercussions for us all. Although I am prepared to support some of the amendments in respect of reallocation, because I believe that they give us some power to ensure that such a scarce resource is used efficiently, I am signalling our complete opposition to new clause 5, as I firmly believe that the creation of a secondary market in such an immature sector is likely to have dire consequences for the Government and for the country.

Ian Bruce (Conservative, South Dorset)

Although I was the author of most of the amendments in the group that we are debating, I am not the original author. Let me tell the House why we are discussing them, why the Speaker has selected for debate 18 of the 19 that I wrote, and why we did not debate those amendments in Committee, which seems almost an age ago. During the Bill's passage, we heard from the Minister that she had received advice from the Office of Telecommunications. There was a hint that Oftel was not quite as enthusiastic—or, at least, whole-heartedly enthusiastic—about the Bill as the Government were, and that it felt that the Bill should have gone much further on several issues. I shall not speak about the whole gamut of utilities, because I did not produce any amendments on that subject. In tabling the amendments, I tried to ask where we had gone wrong in the pricing and efficiency of use of spectrum. The Government came up with a Bill that was primarily a Conservative Bill—a Bill that was in the hands of the Department of Trade and Industry when the Minister and the Labour party came to power in May. The Bill deals with how the existing spare spectrum will be allocated. It also deals with the reallocation of spectrum that we assume will become available and which we assume will be reallocated, given the current licence criteria. It will become available, and the Government know that it will become available and, in time, by what method it is to be reallocated. After the Committee, I attended a presentation organised by Pitcom—the Parliamentary Information Technology Committee—of which I have the honour of being vice-chairman. It seemed to me, from the frank comments made to me by Oftel at what is generally an off-the-record briefing, that there was more to be said about the Bill. The amendments that we have tabled generally reflect what Oftel said about what it wanted to happen. I shall take advice from my hon. Friend the Member for Esher and Walton (Mr. Taylor), who was Minister for Science and Technology in the previous Government. He has told me that he well acknowledges that other things were wanted when he was Minister, but that, in the time leading up to the general election, for manifesto purposes, the Government felt that they could make only limited recommendations. My hon. Friend has told me that any limitation of agreed Government policy just before the general election, for manifesto purposes, should not be a limitation on the present Minister. I wrote the amendments in less than an hour, reading Oftel's clear advice to the Radiocommunications Agency and the Government. That is where the amendments spring from. I do not want to attribute any words to Oftel. After our meeting, I asked Oftel to tell me what it felt should happen, and I should like to read from the letter that I received.

Andrew Lansley (Conservative, South Cambridgeshire)

My hon. Friend raises an interesting point. Some of the issues raised by Oftel were referred to in Committee, whereas others have come up since. The Standing Committee sat about two weeks after Second Reading, but four months have elapsed since then. The Government have had an opportunity to respond, but have failed to do so. They have not tabled their own new clauses.

Ian Bruce (Conservative, South Dorset)

That is true. I pay tribute to the Minister. I often complain about not receiving replies to letters, but the Minister is very quick to respond to them. When I received a letter from Oftel, I wrote to tell her about the additional information that was available to us—which was already available to her. She rapidly wrote back, telling me that she had read the information, and that the Government had made their decisions with that advice available and did not intend to move any further forward. I understand that the Department of Trade and Industry has been very busy with legislation. This week has shown how the Department has become clogged up, not having parliamentary time to bring its Bills back on Report. That backlog of parliamentary business gave the Department time to deal with the issues that Oftel wanted the Government to move further on. If the Government reject the new clauses, they will have to find time in the remaining three or four years of this Parliament to do something about these important issues. I thought it proper not to interpret what Oftel told me, but to read the relevant paragraphs from Don Cruickshank's letter of 5 December. He says: When we met on Tuesday at OFTEL's presentation to PITCOM, you asked me to write to you setting out OFTEL's view of the Wireless Telegraphy Bill particularly how the consumer interest should be safeguarded. Under the heading, "The Bill", the letter says: OFTEL welcomes the Government's Wireless Telegraphy Bill as part of a process of reviewing the way spectrum is used. Radio makes a very significant and increasing contribution to national economic welfare". I shall not detain the House with the details of the £13 billion involved and the 410,000 jobs. He continues: It is vital that methods of spectrum management are updated to meet the increasing demands of new market requirements and to allow increasing competition and the development of innovative services. The RA— Radio Authority— review, the White Paper and the current Bill are steps in that process. That is very important—they are steps in the process. The letter continues: In providing for administrative policy and auctions, the Bill paves the way to opening up access to radio spectrum and providing an additional management tool to that of regulation. OFTEL is very keen on the use of auctions as we consider they provide the best process for allocating spectrum to operators in the most economically efficient way. Where spectrum has already been allocated administrative pricing will allow a licence fee to be set which will reflect its economic value and encourage operators to use it efficiently. The letter goes on: I attach a copy of Oftel's response to the recent RA consultation on administrative pricing so you can see Oftel's views on these detailed issues. The Bill is only part of this process of overhauling the previous regime. The RA have indicated that they will go on to look at the possibility of secondary trading of spectrum". That is very important in the context of the new clauses. Oftel strongly supports the use of secondary trading"— which is not in the Bill but is in the new clauses— which will enable spectrum to be traded between users, encouraging them to use only what they need and to sell the remainder. This will ensure more efficient use and lead to competitive and lower prices for the consumers as the surplus holdings are used by other operators. As we discussed on Tuesday, this will become increasingly important as the fixed and mobile telephony markets merge and more operators want access to radio spectrum. The RA will, in addition, be seeking to ensure that spectrum is not hoarded by public and private holders to the detriment of others who are seeking to use it for new, innovative services. Again, that is not in the Bill, but it is in the new clauses. It is extremely important to keep up pressure here in order to provide spectrum for new operators and services. I will not read the last paragraph; suffice it to say that it mentions putting consumers first. It is not relevant to the new clauses and I would certainly be out of order to read it. I know that a copy of the letter was sent to the Minister, so she is aware of the point. With the letter, I received two very important documents. One was the review of utility regulation, which is also not relevant to the new clauses. Our debate could well have lasted for several days if I had gone through that document and drafted amendments that would make the proposed changes to utility regulation, but I shall not stray from the new clauses.

Andrew Lansley (Conservative, South Cambridgeshire)

My hon. Friend referred, if I heard him correctly, to Oftel's view that the Radiocommunications Agency will ensure that hoarding does not occur. He rightly says that one of the new clauses specifically addresses that point. The implications of Oftel's letter is that it expects that the Radiocommunications Agency will be able to achieve that. I am not clear from looking at the Bill—unless it is somehow hidden in the enabling power on regulations—how the Radiocommunications Agency will achieve that without benefit of the new clause.

Ian Bruce (Conservative, South Dorset)

In short, it will not. The point made by Oftel is that the Radiocommunications Agency understands that the issue is important, will do further work on it and will come forward with proposals. One suspects that those proposals will be for further legislation, which the new clauses would short circuit. There are clever people at the Radiocommunications Agency and even cleverer people in the DTI. Some solution to enable secondary trading may be found and people may be allowed to release the spectrum early, as we seek, without the benefit of the new clauses or new legislation—but I do not see how. If I did, I would not even have spent an hour drafting the new clauses, which are directly derived from a document to which I shall refer. It is very important that the House understands where Oftel is coming from. I have simply used my own thought process to try to introduce points without being out of order. I was quite amazed that Madam Speaker acknowledged that the subject of the new clauses had not been dealt with and that the new clauses were, therefore, in order. This document is Oftel' s response to the Radiocommunications Agency's proposals for implementing spectrum pricing—which the Minister had in her hands when she was considering how the Bill should be framed. She has now had many months in which to consider the new clauses and I hope that some of them might be accepted—although I spoke to her earlier this evening and she did not give me much hope. The document states: OFTEL supports the introduction of administrative pricing as a useful step towards more efficient, market based, spectrum management. However, consideration should also be given to increasing the supply of available spectrum". That is at the heart of what we are trying to do in our new clauses.

Andrew Lansley (Conservative, South Cambridgeshire)

My hon. Friend makes a useful point. Given that one does not want to imperil those who have investments in or grandfather rights on existing licences, there will, of necessity, be only a limited amount of spectrum available in the first instance—unless one is able to recover some additional spectrum from some of the users who are relatively over-provided, such as those within Government or broadcasters. Does my hon. Friend agree that there would be some advantage in trying to win a little extra spectrum for allocation into administrative pricing, particularly if it enabled the secondary market to set more accurately appropriate administrative pricing for those who have current fees but who should not be disturbed?

Ian Bruce (Conservative, South Dorset)

In asking that question, my hon. Friend sets out the case extremely well. By chiming in with this document, we shall see how Oftel suggests that that should happen. The Bill aims to improve spectrum management, but it deals with only that little bit that is currently available and another lump that is likely to become available—but we do not know for certain when. Analogue television might have to continue if digital television proves to be a complete failure. The two components must work side by side. We need the right tools. The Liberal Democrats and my hon. Friend the Member for West Dorset (Mr. Letwin) have remarked on the speed with which things change. However, I must move on, Mr. Deputy Speaker, and I shall try to limit the number of interventions—and perhaps give way only in order to wet my whistle.

Oliver Letwin (Conservative, West Dorset)

I am grateful to my hon. Friend for giving way. The interchange between him and my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) prompts some very interesting reflections. Does my hon. Friend agree that there could come a time when it will be enormously important to use administrative pricing as a signal to the secondary market, and indeed to the primary bidding market, in order to ensure that optimisation occurs at a lower point on the price curve? For example, if we want to see a wider spread of the use of a particular technology, we might want to ensure that the bidding resulted in a low rather than a high price, with tough conditions on coverage. Administrative pricing might be used to that end.

Ian Bruce (Conservative, South Dorset)

Indeed it might. Probably the most important issue—to which new clause 5 refers—is allowing people to trade spectrum that they already own. We have seen how that becomes very popular with owners of spectrum, who find that something they are not using terribly efficiently suddenly has enormous value. They can then put their share on the market and make a profit, while releasing the spectrum for other people. If we leave only a tiny amount of spectrum for the new services, the providers will have to pay enormously high prices. If a lot of spectrum were available, the consumer would benefit. I am only halfway through my first paragraph, so I must continue. The document then states: However, consideration should also be given to increasing the supply of available spectrum, not just curtailing demand by"—

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

Order. I must remind the hon. Gentleman that although it is permissible to read from documents in the House, it should be done briefly and not at length.

Ian Bruce (Conservative, South Dorset)

Indeed, Mr. Deputy Speaker. I think that the document is relevant, but I will take your guidance and skip through it. However, it is a pity that one cannot have a document fully put into Hansard, which would have been the most efficient way to do this. I am trying not to misquote Oftel, but I will paraphrase wherever I can to speed up the process. It is important to get the first paragraph down, as it concerns the principle that Oftel is dealing with. The document continues: This means addressing the issue of spectrum allocation, to ensure that spectrum which is currently underutilised is made available to those who can use it most efficiently. In practice, this would mean adjusting fees to promote greater efficiency, not only in those areas and for those services where congestion already exists (even though efficiency may already be at a high level) but across all user groups in both public and private sectors. The next paragraph deals with the allocation of spectrum that had been given historically to both BT and Mercury, which is now known as Cable and Wireless Communications—it may even have changed the name again since the document was produced. A large amount of spectrum has been given to those two large companies and there is no incentive for them to use it efficiently or to migrate out of the spectrum allocated to digital broadcasting or fibre. Oftel certainly wants that facility to be made available. On analogue broadcasting and related fixed-link services, the licences issued under the Broadcasting Act 1990 have already been subject to a market-based process through competitive bidding. Again, Oftel points out that there is no real incentive for someone buying spectrum for broadcasting to use it efficiently. Effectively, those companies have a licence to broadcast. There are ways in which to use the very same spectrum for other services, but there is nothing to encourage the BBC, Channel 5 or whoever to use it efficiently. The document continues: Oftel believes there should be a greater loading of the fees for analogue TV fixed links to reflect the fact that these are susceptible to interference (and therefore sterilise a larger area)". Often an enormous amount of frequency is taken up by that.

Ian Bruce (Conservative, South Dorset)

All the new clauses are relevant and in order. I do not believe that it is the job of the Whip on duty to advise the Deputy Speaker on what is or is not in order. We are speaking to the group of new clauses and I can assure the hon. Gentleman that they are very much in order. The way the system works gives people the tools. I could certainly talk at great length if the hon. Gentleman would like me to. I am attempting to get on and to be as brief as I can. Sedentary interventions from the Whip on duty, who thinks that he is speeding up the process, actually slow it down. Basically, such a move to digital would be in line with using digital instead of analogue signals wherever possible. Certainly, mobile telephones, instead of having an analogue basis, are now digital. That is a more efficient way in which to use the available spectrum. The steps taken by the Radiocommunications Agency to recover spectrum allocations that are inconsistent with the market allocation are important. BT currently enjoys 30 per cent. of all the available telecommunications spectrum below 30 GHz—my hon. Friend the Member for West Dorset was right to say gigahertz, not megahertz—and 50 per cent. of the fixed-link spectrum below 38 GHz. The agency points out that a useful element of the spectrum has been allocated to BT. Cable and Wireless Communications was also given the most efficient part of the spectrum for utilisation.

Andrew Lansley (Conservative, South Cambridgeshire)

rose—

Tim Boswell (Conservative, Daventry)

rose—

Ian Bruce (Conservative, South Dorset)

This is a complicated point, and I must finish it before I give way to either of my hon. Friends. New smaller users cannot use that particular lump of the spectrum. The new clauses would allow the Government to say, "We'll take out some of that spectrum so that it can be reallocated to new entrants, but we can give other parts of the spectrum, perhaps in less efficient areas, to BT or Cable and Wireless, which could utilise them because they have a wide range of users."

Tim Boswell (Conservative, Daventry)

I am most grateful to my hon. Friend for giving way. Does he have at the back of his mind the example of airline spots, which is not identical but closely cognate? For example, at Heathrow, British Airways has a preponderant allocation of the total available slots—some people argue that that system should be relaxed.

Ian Bruce (Conservative, South Dorset)

Yes, it is historically the case that the person who arrives first bags the best area. We are all committed to encouraging competition, and Oftel is saying that competition will work better if the best areas—the Heathrows—are spread more evenly among the many operators rather than the few.

Andrew Lansley (Conservative, South Cambridgeshire)

I am grateful to my hon. Friend for giving way. I was hoping to intervene when he was rightly making his point about the switch from analogue to digital. Does he agree that the commercial imperatives that are pushing firms in the mobile telephone sector rapidly from analogue to digital are not reflected in the broadcasting sector? Is it not perverse, therefore, to implement an additional mechanism to push mobile telephones and their operators from analogue to digital when the Government do not seem to want to use the mechanism of pricing spectrum to push broadcasters from analogue to digital?

Ian Bruce (Conservative, South Dorset)

That is a problem which all Governments face. We have heard about the influence of the Department of heritage, or whatever it is now called—we used to call it the Ministry of fun.

Tim Boswell (Conservative, Daventry)

The Department for Culture, Media and Sport.

Ian Bruce (Conservative, South Dorset)

I thank my hon. Friend—it is good to have a prompt available. The idea behind making people bid for a broadcasting licence was to ensure that they acted efficiently, but broadcasters are given a massive allocation of the spectrum, which could be available for other uses. The public and the Department for Culture, Media and Sport say that we must ensure that people can continue to use their analogue television sets for 20-odd years. I understand that, as Members of Parliament, we shall all receive letters when pressure is put on broadcasters to give up their spectrum. The new clauses would provide for a pricing mechanism that could make the broadcaster say, "If we can get rid of the analogue as quickly as possible, we can make millions by transferring it to another operator." They might then spend those millions of pounds on subsidising set-top boxes for their consumers, for example. We should allow the market to help them to do what they want, and the consumer—who is barely mentioned in the Bill—to afford the new technology.

Ian Taylor (Conservative, Esher and Walton)

My hon. Friend makes a point that I made earlier, but I intervene to say that I think—I am sure that the Minister will leap to the Dispatch Box to confirm whether I am right—that the Government have announced the date on which the analogue spectrum for mobile telephony will be switched off; it will be some time after 2000. I wish that such a pugnacious approach had been applied to digital television as well.

Ian Bruce (Conservative, South Dorset)

I see that the Minister does not want to intervene, but I am sure that, if she knows the date, she will want to tell us it when she winds up the debate. In the previous Parliament, I introduced a private Member's Bill on telecommunications fraud. At the time, the Bill was intended to help combat fraud on analogue telephones. As promoter of that Bill, I thought it essential to switch from analogue to digital because people who wanted to hack into an analogue telephone would hack into mine as we might upset their nice little business. I was talking about the exclusive and special arrangements that BT and Cable and Wireless, the two operators within the duopoly, had. No other operator has exclusive rights to that spectrum. Clearly, that is not compatible with the competitive multi-operator environment that now exists. Our new clauses allow the Minister to take that issue on board and to deal with it. BT and Cable and Wireless also have access to spectrum for other services, especially fixed access and carrier markets. They have almost a monopoly there. They do not even want to switch their own services into those areas of the spectrum. Those services could be more efficiently run there. We are trying to say, "Look BT, you have got all of this." If it can sit on it and not worry, and is not even given an incentive to do anything about it, we shall not get the sort of spectrum management that the Minister has introduced in the Bill. On the national channels for fixed links, the consultation document issued by the Radiocommunications Agency states: It is not possible to allocate national channels to new operators other than in the 38 GHz band, which is limited to short range links of up to 6 km. The reason for this is that most of the available spectrum is already allocated on a national exclusive basis to either BT or Cable and Wireless. That is the important issue. Spectrum should be available to other players. We should be able to open up this part of the market. Without our new clauses, there will be a continuing imbalance in a free market. We hope that regulation will decrease in the future as the free market exists. The strange thing is that often, to get a free market, one has to introduce a lot regulations at the beginning to build up a framework within which people can compete. Oftel talks about Government use of spectrum. It encourages the Government to free up their own spectrum and to use it to advantage. It is possible that the incentive for the Chancellor to get out and free up the spectrum—to go to the MOD and all sorts of people—could be in the Bill. Our new clauses provide more flexibility to allow that to happen. Oftel certainly welcomed the suggested review of the licensing procedure and the increased transparency. We talked in the debate on an earlier set of amendments about helping that process on. Oftel questions whether those services for which simple pre-packaged licences were proposed should be licensed at all. I shall not go into that paragraph of Oftel's response to the consultation document. It is very useful, but it is not directly germane to the new clauses. It is a good point to say that the less regulation that we have on things that do not require licences the better. That allows short-range spectrum not to be completely controlled. We can just let people get on with it. On the pricing principles, Oftel supports a competition based approach to diversity in the market. If prices are correctly set to reflect the supply of and demand for scarce spectrum, it may be that large differentials between different operators' charges result, depending upon the attractiveness of the spectrum concerned. We discussed in Committee how the Government would deal with those issues, but there is no mechanism within the Bill to ensure that the Government, Oftel and the Radiocommunications Agency can deal with those sort of pricing principles. That is what is contained in our new clauses. In the absence of efficient prices determined by trading and auctions, it is important that administratively set prices approximate as closely as possible to those that would emerge from a freely operating market. The new clauses deal directly with that. I shall not deal with paragraph 13 of the document, which I did not understand when I read it so it did not give rise to any new clauses. In paragraph 14, Oftel states that the methodology for setting administrative prices should take account of alternative uses for the spectrum in question, rather than just the cost of a hypothetical alternative technology for a given use. That will not necessarily produce the most accurate and sensible way to use spectrum. That approach might have an impact on prices for mobile and personal communications network use, and might allow prices to take account of the different propagation characteristics of different mobile frequency bands. A band of mobile telephony could be put up for auction, and that would create a particular price. The Minister may later allocate other spectrum for mobile telephony. If the previous band was worth £10 million, it might be assumed that the next band was worth the same amount. However, even if the two band widths were the same, they may not be equally efficient for delivering the service, and the pricing should reflect that. Our new clauses would help the Radiocommunications Agency with a more sensible and sensitive approach to pricing. The next paragraph of Oftel's response deals with enforcement, which does not link directly to the new clauses. I simply mention it so that no one will think that I am trying to hide something that we should discuss. I have gone through a complex set of amendments as speedily as I could. As we are modernising the procedures of the House, we should have a procedure that allows us to read the full document into the record. That would have saved time, and would have saved the Deputy Chief Whip from yet another visit to the Chamber. It is good to see him so cheerful at this time of night. I am sure that he is extremely interested in the subject, and that is why he is here. I urge the Minister to accept some, all or at least one, of the new clauses, which would help the Government to manage the spectrum as they wish to do.

Barbara Roche (Labour, Hornsey and Wood Green)

I shall take the new clauses in the spirit in which I hope they were intended—as probing new clauses. I must disappoint the hon. Member for Daventry (Mr. Boswell) as I cannot accept any of them, but I shall try to explain why they are unnecessary. First, the Secretary of State can already do all that the Opposition seek to empower her to do. Secondly, we believe that the powers in the Bill will bring about efficient spectrum use more effectively than regulatory intervention by the Radiocommunications Agency, which some of the new clauses seek, although of course the agency has an extremely important role to play. With reference to new clause 2, the Secretary of State, acting through the Radiocommunications Agency, already has inherent power to allocate the various parts of the electromagnetic spectrum to a particular service, as she thinks fit. The power is subject only to certain constraints. The new clause is therefore unnecessary.

Oliver Letwin (Conservative, West Dorset)

Will the Minister give way?

Barbara Roche (Labour, Hornsey and Wood Green)

No, I shall not. The hon. Gentleman took a considerable time and I want to develop my argument because there are common points about the new clauses that I should like to make. The Secretary of State possesses all the legal means necessary to reallocate the spectrum between services and to assign licences to individual licensees. There is confusion among Opposition Members. On a close reading of the new clauses, one sees confusion between assignment and the allocation of spectrum. I fully share the concern of the hon. Members who have tabled new clauses that the spectrum should be used efficiently, but as I explained in Committee and on Second Reading, that is precisely what the Bill is all about. The powers in the Bill enable the Secretary of State to charge for licences on the basis of the economic value of the spectrum. That will permit the Radiocommunications Agency to reassign spectrum to other users.

Andrew Lansley (Conservative, South Cambridgeshire)

Will the Minister give way?

Barbara Roche (Labour, Hornsey and Wood Green)

No. While I am not unsympathetic to the spirit of the new clause, I believe that it is unnecessary. I therefore invite the hon. Member for Daventry to withdraw it.

Ian Bruce (Conservative, South Dorset)

On a point of order, Mr. Deputy Speaker. The whole House knows that this business has been put on by the business managers—the Whips in charge of the Bill—and it seems extraordinary to my hon. Friends that the Minister, who always responds fully and takes interventions, should not be doing that on orders from the Whips.

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

That is not a point of order. It is for hon. Members to decide whether they take interventions.

Barbara Roche (Labour, Hornsey and Wood Green)

Thank you, Mr. Deputy Speaker. I accept that there may be circumstances in which it would be desirable, for spectrum management reasons, for a particular service to be moved to a different part of the spectrum. There has been a great deal of discussion about this. For example, existing users of part of the spectrum may need to be moved to provide spectrum for a new scheme. Users may also need to be moved to comply with an international agreement allocating spectrum for a new service. That is well known. However, section 1(4) of the Wireless Telegraphy Act 1949 provides the necessary power to revoke or vary a licence if this cannot be achieved through agreement. There is therefore no need for an express statutory power to permit this kind of exercise.

Andrew Lansley (Conservative, South Cambridgeshire)

I am grateful to the Minister, who allows me to make a point I fear I may not otherwise get a chance to make. I take her point about hoarding, which we have discussed previously. The industry has clearly not been satisfied by what was said in Committee. I note from The Guardian of 5 February that the managing director of One2One said that he was concerned that some investors would buy spectrum purely to sell it on to other telecommunications companies when they were hit by capacity constraints. The Minister has not assuaged industry concerns entirely. Will that weigh in the balance in terms of adopting at least one of the new clauses on offer?

Barbara Roche (Labour, Hornsey and Wood Green)

The hon. Gentleman knows that we have consulted industry all the way through the Bill. From the consultation, we know that, broadly speaking, industry is supportive of what is proposed. New clauses 4 and 5 raise important issues of the secondary trading of spectrum rights. I shall go as far as to say—at nearly 1.20 am—that I see attractions in what hon. Members have said about new clauses 4 and 5. I certainly agree that secondary trading has the potential to offer considerable advantages in terms of making spectrum management more flexible and allowing market forces a greater role in the process. However, at the moment, I cannot advise the House to accept the new clauses, for five main reasons. First, despite the advantages of secondary trading, the free market in this area cannot be left to work completely unregulated. Indeed, on Second Reading, and again tonight, the hon. Member for South-East Cornwall (Mr. Breed) made that very point. Secondly, a compulsory registration system is necessary so that if radio interference is caused, the Radiocommunications Agency will know who is responsible for using a particular assignment. Conditions must be imposed on the use to which the spectrum is put, to comply with international obligations.

Tim Boswell (Conservative, Daventry)

indicated assent.

Barbara Roche (Labour, Hornsey and Wood Green)

The hon. Member for Daventry is nodding. The new clauses fail to address these issues, so they are fatally flawed. Thirdly—this is probably one of the most important areas—at present, no legal property right subsists in the radio spectrum. Licences issued under the Wireless Telegraphy Act 1949 are permissions to use radio equipment. They do not confer a legal property right. I understand the serious issues that Opposition Members have raised on that point and realise that this sounds a bit harsh but, as drafted, the new clauses are legally meaningless. Fourthly, if secondary trading were introduced at the same time as we started to phase in spectrum pricing, there would be a grave risk of windfall gains and a disorderly market. The hon. Member for South Dorset (Mr. Bruce) alluded to that on Second Reading.

Ian Bruce (Conservative, South Dorset)

Will the Minister give way?

Barbara Roche (Labour, Hornsey and Wood Green)

Just on that point, as I mentioned the hon. Gentleman.

Ian Bruce (Conservative, South Dorset)

I appreciate that the new clauses that I have drafted are thin on technical detail. We all understand that windfalls would occur, but surely if the hon. Lady believes in secondary trading she should table new clauses that claw back the windfall or redistribute the money to the benefit of consumers.

Barbara Roche (Labour, Hornsey and Wood Green)

As the hon. Gentleman will know, we are breaking new ground in this area, and we are anxious to get it right. There was much discussion—rightly—in Committee on examples throughout the world, particularly where auctions had been used. We are anxious to learn, but it is important that we do not to rush into this. The hon. Gentleman might be interested in a couple of things that I have to say. There are considerable legal doubts about whether the proposed system of secondary trading would be consistent with the licensing directive. Overall, it would take much more extensive legislation than the two new clauses to introduce tradeable spectrum property rights. The hon. Member for South Dorset invited me to respond with some new clauses. I shall give him an example of what that would mean. In New Zealand, it took about 100 clauses, which gives some idea of the complexity of the issues and the problem that the Government have with these new clauses.

Oliver Letwin (Conservative, West Dorset)

rose—

Barbara Roche (Labour, Hornsey and Wood Green)

No, I shall make some progress. In case all this seems too negative, I repeat that I see considerable attractions in secondary trading that is properly instituted and introduced at the appropriate time. However, the new clauses do not meet the criteria that I have mentioned. I shall deal with new clauses 6 and 9 together, because they both deal with broadcasting and are closely linked. I have every sympathy with the objective of securing the efficient use of all parts of the spectrum, but I do not believe that the new clauses would do anything to improve spectrum management. As I have already explained, the Radiocommunications Agency, on behalf of the Secretary of State, has the power to allocate spectrum between services, so the provision already exists. New clause 11 is also unnecessary, as the Secretary of State already has unfettered powers under section 1 of the Wireless Telegraphy Act 1949 to revoke or vary licences and reassign spectrum. The powers are clearly defined in that Act. In so far as the stated objective of promoting a free market in spectrum is meaningful, it could already be pursued under the 1949 Act without any amendment to that Act. The new clause is unclear and unnecessary. I have no quarrel with the intention behind new clause 12, but it is unnecessary as it does no more than restate the current position. The Secretary of State, acting through the Radiocommunications Agency, already has inherent powers to allocate spectrum to specific services—again, subject to international agreements—and has power under section 1 of the Wireless Telegraphy Act 1949 to assign spectrum to individual licensees. As the hon. Member for Daventry said, new clause 15 deals with exemptions from licensing for low-power devices. I understand the intention behind it, but it is not necessary because the appropriate power is already specified in section 1(1) of the 1949 Act. The Government of that day had great foresight in the areas that we are discussing. The power in that Act is to make regulations exempting specific radio equipment from licensing—a power that has been used extensively. I hope that that gives the hon. Gentleman some reassurance. New clause 19 deals with the Radiocommunications Agency's enforcement powers. Section 1 of the 1949 Act requires the use of the radio spectrum to be licensed unless an exemption has been made. That Act already gives the Secretary of State enforcement powers and stipulates the penalties that the courts may impose. Enforcement is carried out by the authorised officers of the agency, who are subject to the Criminal Procedure and Investigations Act 1996. The powers already exist and hon. Members will know that the Radiocommunications Agency pursues a vigorous and effective enforcement policy. There is no need to provide a power for the Secretary of State to make regulations to prescribe enforcement actions against those who use the spectrum without authorisation or operate in breach of licence conditions as the 1949 Act already makes adequate provision to that effect. The new clause is therefore unnecessary, although I understand why the hon. Gentleman raised the issue. As for new clause 20, I fully agree that priority should be given to using the radio spectrum for services that are not technically feasible by any other means, such as those for which mobility is required. However, it is difficult to see what effect the new clause would have, as the idea of encouraging the transfer of services by regulation—again, I use the word used in the new clause—is rather vague. In any event, the new clause is unnecessary. The whole purpose of clause 2 is to allow the Secretary of State to set fees which take into account a wide range of economic and other factors, and which will therefore reflect the economic value of the spectrum to users. Administrative pricing should ensure that economic pressure is brought to bear on operators to consider whether they are using spectrum in the most effective way. We have had a full and effective debate. I hope that I have persuaded Opposition Members to withdraw the new clause, but if not, I urge my right hon. and hon. Friends to vote against it.

Tim Boswell (Conservative, Daventry)

As the Minister says, we have had a constructive debate on some extremely important issues. We are disappointed that the Minister is disinclined to accept any of our new clauses, but she has made some noises that give us some comfort. In particular, we were interested to hear her support for the principle of a secondary market. If such a great trading Bill were to be initiated—one hopes that it would be less complex than that introduced in New Zealand—Conservative Members, if not Liberal Democrats, now absent, would wish to give it a fair wind. Having listened carefully to the Minister's assurances, I beg to ask leave to withdraw the motion.

REPORT OF DIRECTOR GENERAL OF TELECOMMUNICATIONS ON USE OF ELECTRO-MAGNETIC SPECTRUM

Tim Boswell (Conservative, Daventry)

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

Tim Boswell (Conservative, Daventry)

This is a somewhat more manageable group of new clauses and amendments or, to use more modern phraseology, a rather more focused group, which centres on Conservative Members' concern for consumers' interests. They are very much informed by the contribution of Oftel, and that of my hon. Friend the Member for South Dorset (Mr. Bruce) in reading some aspects of that report, on which he is a greater expert than I am, into the record. The Minister has shown some encouraging signs of response to the Opposition's position, and it is important that the interests of the consumer and user of radiocommunication services should be built into our consideration and, more particularly, the operation of the spectrum allocation in practice. My hon. Friend the Member for South Cambridgeshire (Mr. Lansley), who restrained himself during our previous debate, mentioned earlier his concern that the Radiocommunications Agency, which is essentially a technical body with great expertise in that area, might not be by itself the most appropriate vehicle for representing that consumer interest. Our position on the new clauses and amendments is that there should be an Oftel input. That is written across the group. An analogy could be drawn with the relationship between the Radiocommunications Agency, where the technical experts look at the frequencies and the parts of the spectrum from the point of view of their technical compatibility, and the Radio Authority, which issues licences for broadcasting services with regard to other factors, including the entirely welcome growth of community radio. We may have some reservations about the exact way in which that may be done in future, but it is broadly along the right lines and has been positive for the commercial radio industry. New clause 8 provides a consumer input into what might become an annual version, albeit perhaps a rather shorter one, of tonight's debate. We could have a debate every year on the annual report. We could ask questions about it and see where we were going. It would not merely be a report in the narrow, historic and archival sense; it would enable the Director General of Telecommunications to recommend to the Secretary of State measures to achieve a more efficient use of the spectrum. We envisage a rolling process of review, assessment and update. As my hon. Friend the Member for West Dorset (Mr. Letwin) said in his very powerful contribution on the previous group of amendments, we realise how fast technology is moving. Therefore, it will be necessary annually to analyse the position—partly the demand side and partly the supply side, such as the new availability of compression. It is terribly important that that process has a consumer input, and that would meet the Oftel case for involvement. Many aspects of telecommunications services have an Oftel input, almost by definition. It is important to bear that in mind, given the success—I think I can reasonably claim—of the previous Government, the inclination of the present Government not to reverse at least the basis of that thinking and the structure of regulation in the industry. Of course, the consideration is not specifically about licensing; it is about the policy issues that have arisen, in the director general's opinion, during the year. The House will appreciate that new clause 13 is closely related to that matter. However, rather than having a technical efficiency test, it has a rather different one— whether the allocation of the spectrum has had an adverse effect on competition. In other words, to take the hypothetical case mentioned by my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), there might be a problem with someone hoarding a series of licences and unfairly occupying an attractive part of the spectrum. That could be deemed to be anti-competitive, which would generate an adverse comment from the director general. In turn, that could lead the Secretary of State to reallocate the spectrum as she thought fit. I envisage that process of report and decision making strengthening the Secretary of State's position, not least in administrative law. If the Secretary of State were disposed to make the reallocation, it would not be easy for her to establish the grounds under which it would be made. If there had been a separate report from Oftel, that would provide a much stronger basis for her decision. That would be principled, and a good way of going forward. New clause 14 imposes a duty on the Radiocommunications Agency, and invites it to oversee the management and regulation of the electromagnetic spectrum. Indeed, that is essentially its remit. The new clause is worded to ensure the effective operation of plans for the efficient use of the spectrum and to make recommendations to the Secretary of State on the most efficient use of available capacity. That, again, would underpin her position in administrative decisions, whether on pricing or on reallocation of spectrum, because there would be some principled basis on which she could proceed, rather than it being done arbitrarily. That would help to safeguard her position. The important point about the three new clauses is that, in different ways, they provide a means of running past both the House and public debate—as well as providing advice to the Secretary of State—some important and sensitive issues relating to the operation of the Bill's objectives. Amendment No. 4 relates to clause 2, which lists some issues to which the Secretary of State should have regard when exercising powers under section 1 to prescribe sums payable in respect of wireless telegraphy licences". The list is pretty comprehensive, but the amendment would provide for the fact that, if there is to be a pricing structure, and the Secretary of State is to make decisions to modify the existing practice, that is likely to affect consumers. The effects could be direct—for example, how much people would pay for their radio services. They could also be more oblique—if services were no longer available, were priced out of the market or suddenly became increasingly attractive. One of the most attractive features of the radio regime to which I referred is that it has brought in many operators with quite small catchment areas. The arrangement may not be ideal, but it is certainly a step forward. Oftel could rightly comment on such matters. The overall track record is of a great deal of market liberalisation and some world leadership in the allocation of scarce resources. Amendment No. 11 would require the Secretary of State to take Oftel seriously. The regulatory process would allow matters to be discussed in the House, so we could look at them and see how they shake out. The amendments come from slightly different directions, and taken together they send an important signal—from the Opposition and, I hope, from the Government—that the consumer should come first. The new clauses and amendments would provide a suite of measures to ensure that our objective—I hope that it is shared by the Government—can be delivered. We hope that the Minister will consider whether our proposals are the best way of building the consumer element explicitly into the Bill and whether there are alternatives or, at least, give us the assurances that we, and the consumers that we claim to represent, would want.

Andrew Lansley (Conservative, South Cambridgeshire)

New clause 13 and amendment No. 111 concern two important aspects of the Bill that were debated in Committee but were in a sense remitted to a later stage. As the Minister will recall, it was said in Committee that, if the Minister did not feel able to accept the amendments that had been tabled—their objective was that the duty to pursue consumer benefits should be included in the Bill—the Government should consider, and perhaps table, amendments on Report. Although four months have intervened, the Government clearly have not seen fit to table an amendment in such terms, but it is very desirable for us to achieve a related but different objective by means of the intervention of the Director General of Telecommunications. 1.45 am Although the Minister was careful to reflect accurately in Committee the representations made to her by the director general, it should be said that the director general has been quite clear about the advice that he would give. Let me pre-empt my hon. Friend the Member for South Dorset (Mr. Bruce), and quote from the letter that the director general sent to my hon. Friend. The director general takes the view that An unambiguous primary statutory duty to promote the interests of consumers would ensure their welfare underpinned all regulatory decisions. I well understand why the director general takes that view. Under the Telecommunications Act 1984, he has an obligation to ensure that there is a statutory duty to promote the interests of consumers. On the basis of what is now approaching 14 years' experience of promoting competition and consumer benefits in the telecommunications industry, he rightly sees no reason why he should not, and every reason why he should, impress on the Government the view that the Bill should provide for a similar duty. That is clearly not the route that the Government wish to take, but, if they object, there could be a valuable proxy in the form of the intervention of the director general in the way provided for by amendment No. 11. Under clause 3, consumer benefits might readily be assumed to be realised in the economic utilisation of the spectrum arising from the auction process, because—in theory, at least—those who are buying will do so on the basis of their best estimates of the economic value that can be derived, and on the assumption that that will be achieved by provision for consumer benefit. The amendment is therefore not designed to have an impact on clause 3. It is designed to add to clause 2 the provision that the matters that the Secretary of State must take into account in exercising powers under section 1—as it will become—will be circumscribed, in that the powers can be exercised only when the director general has expressed a view on, in particular, the competition and consumer benefits. Until he has expressed such a view, regulations under section 1 should not be made. That will bite on the issue of licences where auctions do not apply. The point was not responded to in Committee. The Minister may have had a chance to reflect on it since then, and may wish to answer now, but in Committee the Government asserted that all the matters to be taken into account under clause 2 would also, of necessity, be taken into account in issuing licences under clause 3 where auctions applied. It is a matter not just of selling to the highest bidder but one of taking other matters into account. The Government's clear intention in the Bill was to ensure that the matters specified in clause 2 were dealt with in clause 3. However, curiously—as Ministers have been told—clause 1(5) is designed specifically not to include in clause 3 the regulatory power of clause 1. Moreover, the duty that amendment No. 11 would impose on the Secretary of State to consider the opinion of the Director General of Telecommunications should not be read as implying that an opinion from the Director General of Telecommunications must be received on competition and consumer benefit before, for example, a licence is sold at auction. It might be useful if the Minister were to tell us whether she has had an opportunity since our debates in Standing Committee to reconsider whether our construction of the Bill was accurate. The question—which is perhaps best dealt with in debate on the next group of amendments—arises of how, despite Ministers' assertions, those important matters to be considered are dealt with in clause 3. The debate in Standing Committee on consumer benefits was important. Although the Director General of Telecommunications is not the final arbiter of consumer benefit—in all markets, the consumer is the final arbiter on that matter—that person is a good proxy as the final arbiter. As Members on both sides of the Committee felt that it was desirable that consumers should be the ultimate beneficiaries of the process, I was surprised at the length to which Ministers went to specify in the Bill provisions that they themselves regarded as something of a proxy in delivering benefits to consumers, and at the fact that they would not make that clear. In Standing Committee, the Minister said, for example: Consumers are important, but why should they be singled out above all other interests, such as operators and manufacturers?" —[Official Report, Standing Committee A, 13 November 1997; c. 120.] That is a very strange approach. If I were to talk to operators and manufacturers, I do not think that they would say, "We think we should be treated on an equal basis with consumers; we all have interests as stakeholders in this industry. The Government should not put consumer interest above the interests of mobile telephone operators or of fixed-link radio operators." I think that they would say, "Yes, you should put consumer interest first, because we think that that is the primary interest. If we in industry do not serve consumers first and provide them with benefits, there is no purpose in being in industry or in utilising spectrum for commercial purposes." If—as I have always found to be true—industry is prepared to put consumers first, it is extraordinary that Ministers should themselves be unwilling to put them first, as can readily be done. The possibility open to Ministers is to use the Director General of Telecommunications, who has proved to be a tried and tested pursuer of consumer benefit. In the past few days, we have been reminded—by the strictures of the retiring Director General of Telecommunications to mobile telephone operators on their charges for fixed-link calls to mobile telephones—of the vigour with which the director general pursues consumer interest. It would be very difficult to dispute that the current director general, or his successor, is anything but a useful and valuable proxy in establishing consumer benefit. The second value of new clause 13 and amendment No. 11—the point was well made by my hon. Friend the Member for Daventry (Mr. Boswell), so I shall not elaborate—is that, by taking that route, we diversify the sources of advice to the Secretary of State on the utilisation of spectrum, not only for technological purposes but in relation to the development of compression techniques and other uses which are not necessarily in the commercial arena. The advice of the Director General of Telecommunications will enable the Secretary of State to link decisions taken on the allocation and use of spectrum to an economic analysis—with which the Director General of Telecommunications is increasingly concerned, because of the pricing control mechanisms applied in the telecommunications industry generally—and to an analysis of the convergence of different technologies of broadcasting, telecommunications and radio telephony. I take the point made by my hon. Friend the Member for Esher and Walton (Mr. Taylor) that, as those technologies converge, legislation should not become too tied to technology. If we include the Director General of Telecommunications explicitly as a source of advice to the Secretary of State on issuing licences, the Secretary of State will be better equipped to take decisions, having benefited from an intimate understanding by the appropriate regulatory body of the convergence of communication industries and of telecommunications services. That will improve decision making. We need not elaborate the advantages that the Radiocommunications Agency brings to these questions. Notwithstanding those advantages, the agency would not necessarily assert that its specific expertise on telecommunications industries generally, or its economic analysis, was superior to that of the Office of Telecommunications. I believe that the Radiocommunications Agency would acknowledge that the Office of Telecommunications can add value to decisions taken in this context. I single out for the Minister, from the valuable group of new clauses and amendments before us, new clause 13 and amendment No. 11 as measures that would especially serve to improve the Bill. They would help the Secretary of State to take decisions, and they would provide reassurance. The latter aspect has been strongly emphasised tonight by Conservative Members, and it was emphasised in Committee by Liberal Democrat Members, who are not now present. The benefits of explicitly providing for the consumer interest were very much to the fore in our deliberations in Committee. The Minister has an excellent opportunity to respond positively to the debate in Committee by amendment on Report.

Ian Bruce (Conservative, South Dorset)

I am grateful to be called to speak at this early hour, and I do not intend to make a long speech on this group of amendments.

Ivor Caplin (Labour, Hove)

Hear, hear.

Ian Bruce (Conservative, South Dorset)

I am grateful to the hon. Gentleman, who has just come into the Chamber.

Ivor Caplin (Labour, Hove)

I have come in specially.

Ian Bruce (Conservative, South Dorset)

I am pleased to hear that he came in specially. I am even more grateful because, obviously, all this will make the newspaper headlines. I shall be brief. An aspect to which we drew attention by tabling the new clauses and amendments was that we felt that there was ambiguity as to which regulator did what. In Committee, I made a detailed speech about the large number of regulators. I said that, in every Bill of this nature, one regulator seems to be asked to do everything, even though it is not quite appropriate, and I said that it was difficult to choose the appropriate regulator for the purpose. In these new clauses and amendments, we have tried to express our preferences in terms of who does what—the Office of Telecommunications or the Radiocommunications Agency. One factor is the consumer interest, which we touched on earlier. I always rely on the Director General of Telecommunications—or the two that we have had—to give us an honest answer. When he is leaving his job, no one can suggest that his comments are directed at trying to play himself in for another five years. Mr. Cruickshank's valedictory message was that the legislation should be consumer-oriented. I also think that, as well as a convergence of technology, we must ensure a convergence of regulators. What I am saying is Labour party policy. Before the general election, Labour came to certain conclusions about reducing the number of regulators.

Clive Betts (Labour, Sheffield, Attercliffe)

Can the hon. Gentleman take a little more time?

Ian Bruce (Conservative, South Dorset)

The Whip would like me to spend a long time explaining that the Radiocommunications Agency is one agency, the Telecommunications Agency is another and they are both in new clauses 8, 13 and 14 and the amendments. I can go into more detail if the hon. Gentleman would like, but I would rather sit down in a couple of minutes. I hope that he will contain himself a little longer. We must try to bring the agencies together, to ensure that we have the most appropriate agency in the short term. We have tried to draw up helpful new clauses and amendments to ensure that. In the longer term—not too long, I hope—we must try to bring the agencies together. I should like to give a plug to a report by EURIM—I must spell that for Hansard, because I am always sent a note otherwise: E-U-R-I-M. It stands for the European Informatics Market group—I seem to be the only person who knows that. The report concluded that, instead of some 15 agencies dealing with the issues, there should be just one. That is a radical proposal, because it would require the removal of 14 director generals of other agencies. I understand the difficulties of the proposal, but I should like to flag it up in my short contribution. We cannot look at legislation in isolation. We cannot simply say, "This is a radiocommunication; this is a telecommunication; this is broadcasting; this is satellite." They are all electromagnetic signals. They are all caught in some ways by the relevant legislation. It would be logical to bring them all together as soon as possible. That would help us to use electromagnetic spectrum in the most efficient way. I promised to make a short speech. I hope that we can rely on the Minister to spend a bit more time telling us either that she will accept the new clauses and amendments or how she will work towards the issues that they deal with in the near future.

Barbara Roche (Labour, Hornsey and Wood Green)

I have listened carefully to the debate. It is right to have a discussion about consumers, but I hope to convince Conservative Members that the new clauses and amendments are not necessary. New clauses 8 and 13 deal with reports by the Director General of Telecommunications. Section 55 of the Telecommunications Act 1984 requires the director general to report annually to the Secretary of State with a general survey of developments during the year, on matters falling within his functions. The Secretary of State is then required to lay the report before Parliament. Therefore, that is already laid down in the Act. The director general also has a specific duty under section 51 to advise on licensing under the Wireless Telegraphy Act where that involves telecommunications, and to give advice to the Secretary of State on spectrum management issues. I consider, and the director general agrees, that new clause 8 is completely unnecessary, as it merely duplicates the effect of existing provisions. New clause 13 also requires the director general to report to Parliament if he believes that the allocation of spectrum has had an anti-competitive effect, and empowers the Secretary of State to act to reallocate the spectrum, to encourage competition. The director general already has a general duty under section 3(2)(a) of the Telecommunications Act to maintain and promote effective competition in telecommunications and, under section 49, to consider any matter that relates to telecommunications services. The director general therefore already has an obligation to report to Parliament on developments in spectrum management that adversely impinge on competition. I understand completely where the hon. Member for Daventry (Mr. Boswell) is coming from; I understand his concerns, but the legislation is already in place to enable the director general to do just what the new clause would require. I consider, and the director general agrees, that the first leg of the new clause is completely unnecessary, as it merely duplicates the effect of existing provisions. The second leg of the new clause is also unnecessary. The Secretary of State already has inherent power to allocate and reallocate spectrum and has wide discretion in the granting of licences. She may already pursue the promotion of competition in the exercise of spectrum management power. I hope that that provides some reassurance for the hon. Member for Daventry. Amendments Nos. 4 and 11 also refer to reports from the Director General of Telecommunications. In supporting them, Conservative Members raised important issues about consumers. I emphasise, as I did in Committee, when we had a lengthy debate on a similar amendment, that the Government attach considerable importance to consumer interests both generally and in the context of spectrum pricing.

Linda Perham (Labour, Ilford North)

As my hon. Friend knows, I represent a constituency where there are many licensed taxi drivers. Is she aware of how much members of the National Federation of Taxicab Associations appreciate the open, fair and constructive way in which the Government have consulted consumers and how much they appreciate the reassurances that have been given?

Barbara Roche (Labour, Hornsey and Wood Green)

I thank my hon. Friend very much for that important intervention. The Government are extremely grateful for the continuing contact that we have had with the federation and the contribution that it has made.

Andrew Lansley (Conservative, South Cambridgeshire)

Will the hon. Lady give way?

Barbara Roche (Labour, Hornsey and Wood Green)

No, I want to make some progress. The House will no doubt agree that effective spectrum management and the promotion of innovation and competition are powerful forces acting on the consumer's behalf. Effective spectrum management enables more service providers to access the spectrum. That promotes competition and innovation, which increase consumer choice and drive prices down. It is no coincidence that competition and innovation are listed in clause 2(2) as matters to which my right hon. Friend the President of the Board of Trade is required to have particular regard. In addition, clause 2 requires the Secretary of State to have regard to economic benefit. That includes benefits for consumers. There can be no doubt, therefore, that clause 2 already provides for consumers' interest to be taken into account and will work to the benefit of consumers. As part of the consultation process, my right hon. Friend the Secretary of State and I would welcome the views of the Director General of Telecommunications on any aspects of proposed licence fees. We regard that as very important. When we seek that consultation, it will include the effects on consumers and other users. We shall give them the most serious consideration. It is appropriate to take this opportunity to pay tribute to the distinguished record of the present director general in promoting consumers' interests. Don Cruickshank has done an excellent job, and I am sure that all hon. Members wish to express their warm appreciation of his great contribution. That contribution is also recognised internationally—the director general is held in extremely high regard. However, there is no need to amend the Bill as proposed, as it already effectively requires that the director general's views be taken into account. Because we place such weight on consumers' views, we consulted bodies representative of consumers at an earlier stage of the Bill. The National Consumer Council advised: we are not supporting or opposing any amendments to it". The Consumers Association said that it was not aware of anything contained therein that we would object to". We have also consulted, and listened to, other groups. There was mention in Committee of the views of the Joint Radio Company of the energy companies. I am pleased to say that the chairman of the JRC wrote to me afterwards, and said: I am writing to express our appreciation for the extent to which the Government expressed its commitment to issues of importance to the utilities during the Committee stage of the Wireless Telegraphy Bill… The debate showed a very full and comprehensive understanding of our concerns and we are grateful for the assurances given. The Telecommunications Advisory Council of the water industry also wrote confirming that it has been fully supportive of the spectrum pricing process". We are very grateful for those comments. I hope that I have provided the assurances on those points that Conservative Members were seeking. Amendment No. 11 suffers from the serious defect that it would place an implicit duty on the director general to submit observations on the implications of all fee proposals for all consumers. If the director general decided, for whatever reason, not to express views, the Secretary of State would be prevented from making the regulations, even if they involved fee reductions. It is not acceptable that the Secretary of State should be subordinate to the director general in the way that amendment No. 11 would provide. I am sure that Opposition Members did not intend that to occur. It would place the director general in a very difficult position, and I do not believe that it is appropriate. In summary, amendments Nos. 4 and 11 could distort the operation of spectrum pricing. As to new clause 14, I note the interest on the part of Opposition Members to put the spectrum management duties of the agency on a statutory basis. However, I cannot help but observe that the Conservative Government established the agency in 1990 under the next steps programme. The agency's aims and objectives are set out in its framework document, which is agreed by Ministers. It specifies that its mission is to facilitate access to radio spectrum of the appropriate quality, for the widest range of services, and so promote the creation of wealth, competition, quality and choice. Therefore, there is no need to have further statutory powers to define the agency's duties—and indeed to do so in the way that the new clause seeks would unnecessarily restrict the future range of operations. I hope that I have answered the points raised by Opposition Members, and I invite them not to press the proposed new clauses and amendments.

Tim Boswell (Conservative, Daventry)

In the light of the Minister's assurances, and adding, solely as a point of substance, that we echo her warm praise for Don Cruickshank's record, I beg to ask leave to withdraw the motion.

DIFFERENTIAL LEVELS OF FEES

Tim Boswell (Conservative, Daventry)

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

Michael Martin (Deputy Speaker, Glasgow Springburn)

With this, it will be convenient to discuss the following: New clause 16—Allocation of licences other than under section 3— '.—When allocating licences other than by the procedures set out in section 3 (Bidding for licences), the Secretary of State shall have regard to the level of bids received in any similar circumstances when setting the fee to be charged.'. New clause 17—Administrative pricing— '.—When setting the level of administrative pricing for a particular section of the electro-magnetic spectrum, the Secretary of State shall have regard to the fee that might be levied if that section of the spectrum was used for a different purpose.'. New clause 18—Pricing for different parts of the electro-magnetic spectrum— '.—When setting prices for the use of different parts of the electro-magnetic spectrum for the same purpose, the Secretary of State shall take into account the variations in cost to the operators of using different parts of the electro-magnetic spectrum.'. Amendment No. 2, in clause 1, page 1, line 15, at end insert— '(2A) The sums prescribed or determined under subsection (2) shall not in total exceed by more than twenty-five per cent. the sums charged for licences in the financial year in which this Act is passed.'. Amendment No. 12, in clause 2, page 2, line 38, at end insert— '(d) the relative investment required to provide a service utilising the respective parts of the electro-magnetic spectrum.'. Amendment No. 14, in clause 3, page 2, line 45, after 'regard', insert 'both'. Amendment No. 15, in page 2, line 46, after 'spectrum', insert 'and the securing of investment in development of telecommunication services.'. Amendment No. 16, in page 3, line 18, leave out 'as a cash sum'. Amendment No. 17, in page 3, line 22, leave out 'as the amount of a single payment or'. Amendment No. 18, in page 3, line 23, at end insert 'subject to a limitation that the payment which may be bid shall not exceed 5 per cent. of the income wholly or partly attributable to the holding of that licence'. Amendment No. 7, in page 4, line 10, at end insert— '(9) The sums payable to the Secretary of State under this section shall not exceed £1,000 million.'. Amendment No. 10, in clause 10, page 6, line 3, at end insert 'except as provided in subsection (3) below. (3) Section 3 of this Act shall not come into effect until Community legislation is passed setting for all Member States rules for bidding for wireless telegraphy licences.'.

Tim Boswell (Conservative, Daventry)

Although the new clauses are set out at the beginning of the group, those in my name and the names of my hon. Friends essentially rehearse matters to which the Minister has already replied concerning the flexibility of pricing. I do not intend to reopen those issues at this hour. The group contains a number of amendments tabled by my hon. Friends, and it is for them, rather than me, to comment on any matters that they want to raise. Briefly, I shall return to the points of substance that stand in my name. These are matters of great import and I am not sure that I would necessarily and realistically expect the Minister to accept them as they stand, but they send out an important signal about the costs of the operation. The hon. Lady will recall from debates on Second Reading and in Committee that there is a real doubt—perhaps I should say a suspicion—on the Conservative Benches that the mechanism offers the potential for a significant revenue-raising operation. We tabled the amendments in that spirit and to give some flesh to the assurances that the hon. Lady has already floated in Committee. To deal with them briefly, amendment No. 2 prescribes that the total uplift in income should not exceed by more than twenty-five per cent. the sums charged for licences in the financial year in which this Act is passed. That might be a reasonable extra accrual of revenue. Indeed, at an earlier hour my hon. Friend the Member for South Dorset (Mr. Bruce) was metaphorically licking his lips at the almost boundless revenue-raising possibilities that he envisaged from that source. We will not hold that against him, but we want a practical limit. An alternative way would be found through amendment No. 7, which imposes a limit on the total return to the process of £1 billion. I invite the Minister to comment on those amendments. Equally, amendment No. 18, on the bidding process, would restrict the cash sum payment to 5 per cent. of the estimated income from the issue of the licence. That would curtail any attempt to buy licences regardless of cost, perhaps to close them down or put competitors out. Finally, to make the point, amendment No. 10 suggests that commencement of the Act might be deferred until the Community rules on spectrum allocation are clear. That echoes a point that the Minister made earlier, which is that we clearly cannot conduct our operations purely in a vacuum and it is important that we are sensitive to that, that we have some awareness of what is going on in other countries, learn from their experience and share it. There is also a practical point. I think that I reversed my anecdote. It should have been that the car radios set off all the garage doors in Kent—I cannot remember which way it went, but it does not really matter. The point is that, if two radio systems adjoin each other, they will inevitably impact. Therefore, I am convinced that it is important for the Government to take serious account of what is going on in the near continent. Ministers should have regard to the fears that have been expressed that this is a major fund-raising exercise. Next week, the Chancellor will open his Budget. I doubt whether he will be talking explicitly about this, but we would deprecate any attempt to raise incalculably large sums through the back door in a way that had not been covenanted, has not been flagged by Ministers and would amount to a substantial breach of faith. I hope that the Minister will give us assurances, which we can then test against the way in which these measures and the pricing formula pan out in practice.

Oliver Letwin (Conservative, West Dorset)

I intend to be enormously brief. I want to amplify the point made by my hon. Friend the Member for Daventry (Mr. Boswell) on new clause 16, with a slight nod towards new clause 17. I hope that, not only in her closing remarks this morning, but, more important, in her subsequent considerations in the Department, the Minister will take account of the intention behind the new clauses. It is extraordinarily important that no future holders of her office should disjoin the administrative prices that are set for some parts of the spectrum and the bid prices that are established in the open market. That is not to say—my hon. Friends have been careful in phrasing new clause 16—that there may be no difference, but we tabled the new clause to ensure that any Minister responsible for administrative pricing refers back to the relevant information from the bid prices. Any decision that is made about a particular part of the spectrum without regard to the bid prices could distort the entire market. I am sure that the Minister will assure us that it would be her usual practice to refer to the bid prices—the main intention behind new clause 16 is to ensure that she puts that on the record, so that we have a clear understanding of how Ministers will deal with administrative pricing.

Andrew Lansley (Conservative, South Cambridgeshire)

I welcome what the hon. Member for Ilford, North (Ms Perham) said about radio taxis, which reminded me—this may amuse the hon. Member for Cambridge (Mrs. Campbell), who has been very patient during our proceedings—that Camtax, which operates in both her constituency and mine, has radio licence No. 1 for these purposes. I do not know whether she knew that, but it is another distinction which falls on our constituencies. New clause 18 would enjoin the Secretary of State to take into account the variations in cost to the operators when setting administrative pricing. An example of what I hope the Minister would take into account is the difference in the infrastructure costs of delivering services between operators at 900 MHz and those at 1.8 GHz. The propagation characteristics of the two affect the costs incurred in providing a service. It would be wrong for administrative pricing not to reflect the infrastructure costs of providing a service at that higher frequency, which would necessitate the construction of more telecommunications masts. Amendments Nos. 14 and 15 are linked. They would enjoin the Secretary of State to take into account the securing of investment in development of telecommunications services". I hope that the value of that is self-evident, but I shall relate the amendments to a specific issue on which I would welcome the Minister's reassurance. In our previous debates, Ministers said that they had no intention of applying spectrum pricing to the fixed-link radio operators operating at 10 GHz. The issue is an important one for them. Such operators have an onerous roll-out obligation, which involves the acquisition of additional spectrum in order to meet the obligations that they have taken on. Having done that under one regime, operators have a sense of jeopardy about moving to a different regime. To pursue the issue of Ministers' present and future intentions, will the Minister confirm either that the Government will not impose spectrum pricing while the 10 GHz operating companies meet their current roll-out obligations, which means not before 2003, or that, in the event that the Government impose spectrum pricing before 2003, Ministers will accept that that will cancel or, perhaps by agreement, mitigate companies' roll-out obligations?

Ian Bruce (Conservative, South Dorset)

There has been quite a long time between the Committee and Report stages of the Bill. I emphasise my hon. Friend's point about commitments from the Government Front Bench about funding. Although we are only a few days away from the Budget, I wonder whether we can have a better steer from the Minister about exactly how much she is now expecting. Has there been any change in her expectation?

Andrew Lansley (Conservative, South Cambridgeshire)

I am grateful to my hon. Friend, not least because he takes me directly to the third set of points that I want to make, which relate specifically to amendments Nos. 16, 17 and 18. To save time, I shall not explain why those three amendments are linked. There are two questions. The first is slightly tangential. We have not really found out anything much, even since the Committee proceedings four months ago, about what Ministers expect to be the broad quantum of increases in charges to operators by way of administrative pricing. Many of us would be hard put to know the orders of magnitude. Will the cost of licences increase by perhaps 20 or 30 per cent? One might say that that is a significant increase. Are we talking about much greater increases? It would be helpful if the Minister would say what orders of magnitude of increases—

Ian Bruce (Conservative, South Dorset)

Or decreases.

Andrew Lansley (Conservative, South Cambridgeshire)

Of course. The purpose of administrative pricing is not necessarily to raise money but more efficiently to utilise the spectrum, which, in certain circumstances, may mean reducing fees to promote active use of the spectrum.

Ian Bruce (Conservative, South Dorset)

I do not want to delay the proceedings, and I know that I do not really need to remind the Minister of this, but I recollect that, in Committee, we talked about fishermen's and other licences. The new regulations will give the Minister the opportunity to make adjustments. Pleasure craft pay far less than fishermen, and fishermen get very upset about that, especially as their radios are a safety mechanism.

Andrew Lansley (Conservative, South Cambridgeshire)

I agree with my hon. Friend. He will forgive me if, being quite so landlocked as we are in Cambridgeshire, I do not know as much about the fishing industry as he does. It would be helpful if the Minister would tell us both the quantum of the increases that are contemplated under administrative pricing and why Ministers feel that relatively large increases in some cases might be justified by reference to the benefits in the utilisation of spectrum. Some operators, including some of the mobile phone operators, have considerable commercial pressures to utilise spectrum as efficiently as they can. It does not necessarily follow that paying much larger fees will change their behaviour. One wonders whether the increases in fees that they might have to pay are objectively justified by reference to the economic utilisation of spectrum allocated to them. 2.30 am The benefits of amendment No. 18 may not be immediately obvious to hon. Members. An auction where people can bid whatever they like, which maximises income, might seem the most obvious course. By extension, to stipulate no more than 5 per cent. of the income attributable to the holding of the licence might simply restrict the Government's revenue and might therefore seem undesirable. However, Ministers should actively contemplate the amendment, as it has specific benefits. The first benefit, which is related to amendments Nos. 16 and 17 as well, is that instead of a cash sum being payable up front, periodic payments are implied. The income to Government is specifically related to the roll-out of investment and the undertaking of the economic activity in question. The Government become, in that sense, a risk sharer. That reminds me of the time when, in the Department of Trade and Industry, we were engaged in launch aid for aerospace activity. If the Government are to be involved in commercial decision taking, it is good that they should be a risk participant. The second benefit is that people who are making bids to the Secretary of State will have to specify not just what they are willing to pay, but how that is to be raised by economic use of the spectrum. That means that one will see, from those who are making bids, how the utilisation of the spectrum will generate income. The heart of the purpose of the Bill will be disclosed in the bidding process, whereas, otherwise, many of those who are making bids may meet the stated requirements that the Secretary of State may stipulate by regulation, but rest the burden of their case simply on the amount that is to be raised. That may lead us into a situation where the less valuable economic utilisation is the highest bidder, but comes to grief. Ministers may not warm to the third benefit of amendment No. 18. It sets a limit on the amount that is to be raised in the tax, in relation to the income stream to which it is to be applied. Conservative Members, and perhaps Labour Members to a lesser extent, hold the view that, if we must have taxes, as we do, the taxes applied at a relatively low percentage rate in relation to the income stream to which they are applied will have less damaging economic effects than those that rise to a relatively high percentage level. The sum of £1.5 billion, which is the maximum figure referred to in the explanatory and financial memorandum to the Bill to be raised through auctions, may be 5 per cent. of the income stream attributable to those licences, or it may be 10, 15 or 20 per cent. I have no way of knowing. All I know is that about £2.7 billion of turnover is attributable to the mobile phone operators. If that is any guide, £1.5 billion by way of revenue on the auction seems to be an extremely high sum, and therefore potentially a very high percentage sum in relation to the income stream to which it is to be applied. I endorse all that was said by my hon. Friends, especially by my hon. Friend the Member for Esher and Walton (Mr. Taylor), who had responsibility for these matters, about the fact that the first-mover advantages of telecommunications liberalisation, mobile telephony and so on in British industry have been tremendously important in wider economic terms. The last thing we should do by way of auctions of spectrum is to leave that important section of British industry in a position where it is effectively taxed to a relatively higher proportionate level on its income stream, and therefore on its investment and its opportunity to exploit economically the spectrum it has bought. If the Minister can assure us that the £1 billion or £1.5 billion about which she is speaking will be less than 5 per cent. of the income stream—a figure which I picked because it was a modest percentage—I would be happy not to press my amendment. However, we need some sign from the Minister of what tax level she is contemplating by way of the auction pricing mechanism.

Barbara Roche (Labour, Hornsey and Wood Green)

The amendments and new clauses in this group concern the operation of spectrum pricing in the form of administrative pricing or auctions. New clause 10 would allow higher fees to be set for less spectrum-efficient technologies. I understand the underlying thought behind it, but clause 2(2)(c)(i) already obliges the Secretary of State, in setting fees, to have regard in particular to the desirability of promoting the efficient use of the radio spectrum. I am grateful to hon. Members for explaining the purpose of new clause 16. I do not believe that it would serve a useful purpose. I would point out, however, that among the matters the Secretary of State is required to take into account, are the demand and likely future demand for the use of the part of the electro-magnetic spectrum to be used under licences of that description". To the limited extent that the experience of auctions is likely to be relevant to decisions on administrative pricing, the Secretary of State will take into account the lessons to be learnt. In the light of this assurance, I hope that the hon. Member for Daventry (Mr. Boswell) will be willing to withdraw the amendment. I do not believe that new clause 17 would improve the operation of administrative pricing under clause 2, which requires the Secretary of State to have regard to factors such as spectrum efficiency, economic benefits, innovation and competition. The new clause refers to the fee that might be levied if the section of the spectrum was used for a different purpose, but it leaves completely undefined the nature of the different purpose. Much spectrum may have more than one alternative use. How the fee would be assessed is left open. Moreover, the new clause could lead to some substantial increases in fees, especially for fixed links occupying spectrum around 2 GHz that could be used for mobile communications. New clause 18 also concerns the setting of administrative prices. I have sympathy with the underlying proposition that spectrum pricing should take into account differences in the intrinsic value of different parts of the spectrum and should not distort competition, but it is not necessary to amend the Bill to achieve this. It is axiomatic in spectrum pricing that fees should reflect the value of the spectrum. Clause 2(2)(c) already requires the Secretary of State to have regard to the desirability of promoting the efficient use of the spectrum, any economic benefits arising from the use of wireless telegraphy and, most important in this context, competition in telecommunications. I hope that I have convinced the hon. Member for Daventry that it is not necessary. Amendment No. 2 would undermine the effective operation of spectrum pricing. We have given repeated assurances during the passage of the Bill that spectrum pricing will be used for the purposes of spectrum management, not revenue raising. As the hon. Member for Daventry knows, we have continued to work closely with the industry since the consultation document was published. One of the most significant issues that we addressed was the fees to be paid by cellular and personal communications network operators whose fees under the present cost-based regime are much less than those of other mobile communications users. I am pleased to tell the House that my officials have held a series of meetings with each of the four main mobile telecommunications operators to consider how the new fee arrangements might best be introduced. There has been an open and transparent consultation process with the operators and I am grateful for the contributions that they have made and their helpful and constructive participation. We agreed with the operators that the increase in the forthcoming regulations would be the first step in phasing in the higher fees over a period of at least three years. As a first step towards the new fees, we agreed with the four operators to apply a single percentage increase of 120 per cent. to the fees that cellular and PCN operators would have paid under the current regulations. The new fees will take account of changes in the spectrum assigned to them and the original escalator applied to PCN operators' fees. The other change that we propose to make in the first regulations is to introduce reduced fees for users of on-site private business radio systems. These are typically used in industrial applications or in high street stores. There are some 22,000 on-site services that currently pay on the same basis as systems that cover a wide area. At present the minimum fee is £140, increasing progressively with the number of mobiles used, irrespective of the number of sites, so that, for example, a licensee with 26 to 60 mobiles would currently pay £500. I am pleased to announce that we propose to introduce in July a flat fee of £125 for each on-site system, irrespective of the number of mobiles used. The majority of users will therefore benefit from a significant reduction, although a few users with multiple sites and only a few mobiles may pay slightly more than under the current regulations. We intend most users to benefit from a further reduction in 1999, although those in areas of heavy congestion, and users with multiple frequency assignments at a single location, may face an increase. We intend to undertake further consultation on the proposals for the new regulations prior to the statutory consultation under clause 6. Subject to the passage of the Bill, the new regulations will represent an important step forward in levelling the playing field between the various categories of radio users. It is important that we continue that process. The hon. Member for South Dorset (Mr. Bruce) mentioned the important issue of fisheries. I have considerable sympathy with the view and have concluded that we do not need to wait for the introduction of new powers to rectify the situation. Therefore, last week, I laid before Parliament amending regulations to introduce a number of helpful changes to the current regime. As a result, from 1 April, up to 10,000 commercial vessel owners will benefit from a reduction of 45 per cent. in the ships radio licence fees that they now pay. I am grateful to the hon. Gentleman for his approval; I was slightly disappointed that his hon. Friends prayed against the order. I am rather confused about that, as the hon. Gentleman raised the issue, which found favour with me.

Ian Bruce (Conservative, South Dorset)

I thank the Minister for announcing the reduction. I am sure that my fishermen will be pleased. My hon. Friends may have prayed against the order so that it would come to the Floor of the House, or at least into a Committee, so that we could congratulate her and, perhaps, press her a bit further.

Barbara Roche (Labour, Hornsey and Wood Green)

I congratulate the hon. Gentleman on his ingenuity and look forward to the congratulations. I hope that I have succeeded in my attempt to persuade hon. Members of our good faith, as shown by our actions, and I remind them that the Bill contains vital safeguards against excessive fees. Amendment No. 12 is similar to new clause 18. For exactly the reasons that I have already outlined, I advise the House not to proceed with it. Amendments Nos. 14 and 15 concern auctions. I ask the House not to proceed with them as they would not serve a useful purpose. Hon. Members have explained them by saying that the requirement for substantial cash payments for licences would weaken licensees' financial position and ability to roll out services. I cannot accept that idea. Businesses must be the best judges of what they can afford to pay for a licence. In deciding whether to bid in an auction and determining the level of their bids, they will naturally undertake their own financial projections. They will need to balance the capital cost of setting up and rolling out a service against the expected revenue from the provision of that service. Such calculations are an essential part of the business world, and will be well understood. 2.45 am I must also ask the House to reject amendments Nos. 16, 17 and 18 which, as Opposition Members may intend, would emasculate the auction provisions. Perhaps I shall give hon. Members the benefit of the doubt and trust that they did not intend their amendments to have that effect, but that is what would happen. The amendments would eliminate the possibility of the most common kind of auction, in which bids are expressed as a simple cash sum, but leave open the possibility of the so-called royalty auction in which a bidder undertakes to pay a proportion of anticipated revenue. I can see no merit in the amendments. The straightforward cash auction has been favoured in the great majority of wireless telegraphy auctions throughout the world. I accept that in some circumstances the royalty auction may have value, but the precise level of payment appropriate under a royalty auction depends on the circumstances of each individual case and to seek to specify a maximum level of payment in the Bill, as amendment No. 18 proposes, is pointless and would deprive the Secretary of State of the flexibility that will be crucial in considering which auction designs might be appropriate for the wide range of potential auction candidates. Amendment No. 7 suffers from similar defects, and I find it hard to see the logic behind it. It would serve no useful purpose. A properly designed auction will achieve a price that balances supply and demand and, as I hope Opposition Members will agree, it would be wrong to put an artificial ceiling on that process. It must also be borne in mind that amendment No. 7 would apply to all future auctions held on the basis of the power in clause 3. The financial ceiling would be reached sooner or later and the amendment would then rule out any further auction in the absence of amending legislation. The amendment is both unnecessary and unworkable, and I invite the House to reject it. As for amendment No. 10, the arguments in favour of auctions as a method of assigning licences should be well understood by Opposition Members. After all, it was their own party's White Paper that proclaimed the importance of using the method. Legislating at Community level on such a detailed technical matter as auction procedures would be unwise and inconsistent with the principles of subsidiarity. The licensing directive already provides a sufficient Community framework for auctions, and I urge the House not to proceed with the amendment. Finally, I was asked about radio fixed access. Those services are relatively new entrants to the telecommunications market and we recognise their pioneering work in increasing competition and choice in telecommunications. To avoid disrupting their business plans, and in the interests of promoting competition, we do not at present intend to increase their spectrum fees. I hope that I have now convinced Opposition Members not to press their new clauses and amendments.

Tim Boswell (Conservative, Daventry)

I do not accept every line of argument that the Minister has deployed, but in view of the helpful assurances that she has been able to offer us, I beg to ask leave to withdraw the motion.

Barbara Roche (Labour, Hornsey and Wood Green)

I beg to move, That the Bill be now read the Third time. The House will be relieved to know that I do not intend to detain it for any great time. I feel the presence of the Deputy Chief Whip beside me and I know how anxious hon. Members are for this important Bill to complete its passage through the House. It is impressive how far radiocommunications have come since the first wireless messages were sent around the world 100 years ago. We all know about the great contribution that radio makes to our economic and social life. The radio spectrum is a finite resource and, unless we can continue to create spectrum headroom for future growth, we will not realise the full economic benefits and competitiveness gains from this dynamic and successful sector of the economy. The importance of the Bill is that it will provide new tools to manage the spectrum resource more effectively. The Bill is important. It was introduced in the other place and I gladly acknowledge their Lordships' contribution and commitment to its development. The Bill is about Britain's economic well being and it will provide wealth, jobs and economic opportunities for the British people. I commend it to the House.

Tim Boswell (Conservative, Daventry)

I recall, as I was growing up, an elderly friend of our family—a Cornishman—who, as a very little boy, used to meet Mr. Marconi on the beach. As a result of that connection, he went to work for Marconi in Chelmsford for his whole life. Despite the huge technical changes that have taken place in the radio industry, there is a certain stability in the legislative framework. We legislated in 1904 and in 1949. We are legislating again now, and it is important that we get it right. Our debates have helped to test the Government's intentions, for which they are particularly welcome. To the Minister's thanks to all those who have participated—I add my thanks to the Minister for some of the explanations that she has been able to give us—I add my personal thanks to my colleagues, many of great expertise, who have participated in and adorned the discussions and helped to get assurances on the record. I also single out, although she is not now with us, the contribution of my hon. Friend the Member for Chesham and Amersham (Mrs. Gillan), who has sat through almost all our deliberations this evening and has supported me in my first excursion into wireless telegraphy at the Dispatch Box. Inevitably, there are areas of unfinished business in the Bill. One is the way in which, in practice, the pricing structure of the licences will develop and, related to that, how the management of the spectrum will develop. We have had assurances on those points tonight; we shall need to test them in the event. Secondly, we heard the Minister's interesting forward look on the possibility of further legislation, possibly on secondary pricing, for example. We welcome that in principle and hope that she will bring it forward in this Parliament. We should like to be part of the process of taking that matter forward. For tonight, the Minister has given assurances and, in the light of those and the earlier discussions that we have had, I shall not seek to divide the House on Third Reading.

Ian Bruce (Conservative, South Dorset)

Earlier, I was asked whether I had anything left in my carafe. It is half full or half empty, depending on whether one is an optimist or a pessimist. I want to set hon. Members' minds at rest by saying that I rise only to congratulate the Minister on the way she has brought this Bill to its conclusion. It is interesting that a Minister can, despite being pressed in all sorts of different directions, keep her cool and continue to be charming at almost 3 o'clock in the morning. She has shown that despite the blandishments of the Whips around her, we were able to complete our business in sensible time. I remind the House that the full Report stage and Third Reading of a major Bill which has major implications, have been completed in four and a half hours. That is four and a half hours at a very late hour not because of Back Benchers and not because of the Opposition, but because the Whips decided to put on a major Bill after other business. I am not, therefore, in any way apologetic. I never go to bed before 3 am anyway, so this is an ideal time for me. I thank the Minister for her contribution to my fishermen. They will be very pleased at the reduction that is coming, even before the Bill reaches the statute book. I congratulate her on what I think is the first Bill that she has taken through all its stages to the statute book.

NORTHERN IRELAND GRAND COMMITTEE