Asked by
To ask His Majesty’s Government what plans they have, if any, to
prevent internet providers from increasing the price of broadband
connections by up to 3.9 per cent above the Consumer Price Index
measure of inflation.
The Parliamentary Under-Secretary of State, Department for
Digital, Culture, Media and Sport ( of Whitley Bay) (Con)
My Lords, this is clearly a difficult time for households across
the country that are struggling to pay their bills as a result of
the global rise in the cost of living. While operators are
continuing to invest in gigabit-capable services, the UK benefits
from some of the cheapest retail pricing of broadband in Europe,
with only around 4% of a typical household’s monthly budget going
on telecommunications services. However, we understand the
challenges many families are facing at the moment, so we are
calling on operators to consider carefully the need for
above-inflation price increases and the impact they may have on
people across the country.
(Lab)
My Lords, there is absolutely no justification for the
inflation-busting 14% price rise for broadband. BT, EE, PlusNet,
Shell Energy, TalkTalk and Vodafone are acting in unison; they
have trapped millions of people into 18- to 24-month contracts
and are forcing them to pay 14% more, mid-term. Those wanting to
leave are being forced to pay a £200 exit fee. I ask the
Minister, first, to ban mid-term contract price hikes and,
secondly, to change the law so that customers can exit free from
any broadband contract longer than 12 months.
of Whitley Bay (Con)
The Government believe it is important that consumers are fully
aware of the clauses in their contracts so that they are
empowered to make informed decisions, but we also are mindful of
the impact on families at this time. That is why my right
honourable friend the Secretary of State earlier this month met
chief executives from major broadband and mobile providers and
asked them to consider very carefully the need to make
above-inflation price increases at this moment. Households
struggling to afford telecoms services should speak to their
provider. Social tariffs are available, as we heard in a Question
earlier this week, but also, since last July, providers have
committed to support any customers struggling to pay their bills.
(Con)
My Lords, is this not an opportunity for the Government, in
rolling out their digital programme, to ensure that this area is
properly regulated? Could Ofcom not play a crucial role here? All
of us are bound by our contracts, as my noble friend the Minister
rightly pointed out, which in most cases are locked in for 24
months, and we are going to face an average 11% increase. For
vulnerable households, this is just too much.
of Whitley Bay (Con)
Ofcom does have an important role to play here as the independent
regulator, but, as I say, mindful of the particular challenges
that households are facing, my right honourable friend the
Secretary of State spoke directly to companies, asking them to
consider very carefully the decisions they are making and the
impact on their customers.
(LD)
My Lords, was the Minister struck, as I was, by the observation
in Ofcom’s December pricing trends report that there are millions
of consumers who are out of contract, and so free to switch, but
have not yet done so? Does he agree that these people could make
significant savings, often without having to switch at all, as
many providers will drop their prices as soon as you ring and
threaten to leave? What are the Government doing to make this
group aware that they can do this?
of Whitley Bay (Con)
Yes, it is very striking. Many people could be saving money and
are not aware of it. That is why it is important that contracts
are clear, but it also highlights the importance of consumer
advice groups and, indeed, debates such as this, to draw the
attention of people to the contracts they have signed.
(Lab)
My Lords, of course everybody should read the contracts they
sign, but has the Minister read his broadband provider’s
contract? These contracts are impossible to understand. They have
subcontracts and other regulations—there is no possibility that
people will understand the contracts that they have to sign if
they want broadband. What my noble friend describes is
anti-competitive, inflationary and likely to drive down digital
inclusion. This is a matter for the Competition and Markets
Authority. The Minister should think about referring this to the
Competition and Markets Authority for profiteering and setting up
a cartel.
of Whitley Bay (Con)
At the risk of sounding like a geek, I have read my contract. I
did so because some operators permit their customers to exit
their contracts penalty-free when there is a price rise. Mine
did; I looked at it, I shopped around and I saved some money.
People would be well advised to do the same, but it is important
that the industry tells people about the decisions it makes. That
is why the Secretary of State brought chief executives in and
asked them to consider carefully the impact of the decisions they
make and how they communicate them.
(Con)
Has my noble friend, as well as having the experience of reading
a contract, had the experience of trying to communicate with
these providers? You sit on the phone for hours and hours and
then get passed from pillar to post. Can we do something to make
sure that their customer relations are rather more efficient?
of Whitley Bay (Con)
On that, my experience was indeed a bit more painful. It is
obviously for commercial providers to decide how they provide
services to their customers in a way that allows them to keep
costs down and keep bills down while satisfying people so that
they want to stay with them.
(Lab)
My Lords, there is a pattern here. The Government are keeping
down wages for our heroes in the public sector, such as teachers,
nurses and firefighters, but at the same time, they are doing
nothing to curb the profiteering by energy, broadband and other
companies, even though, as my noble friend just said, this is
inflationary. Can the Minister explain the double standards that
they are operating?
of Whitley Bay (Con)
My Lords, the action we are taking is to beat the evil of
inflation, which is what lies behind these price rises. At the
same time, we have acted quickly to support families, through
such things as the energy price guarantee and the energy bills
support scheme, as well as further help for the most vulnerable
households of up to £200.
(Con)
My Lords, will the Minister comment on the problems faced by
vulnerable older people who might just have started trying to get
tech-enabled and just signed up for a broadband contract? They do
not understand how these things work, then are suddenly faced
with a penalty if they try to change to a better rate and are
locked into a contract that was never properly explained to them.
of Whitley Bay (Con)
In July last year, the previous Secretary of State also spoke to
mobile and broadband suppliers and secured a list of commitments
from them, including a commitment to support their customers who
may be struggling with the cost of living and to treat them with
compassion and understanding. All providers committed to support
customers who are struggling with their bills, offering them ways
to keep connected, including allowing them to move to cheaper
packages without charge or penalty, or agreeing manageable
payment plans.
(CB)
To revert to a question asked previously by a noble Lord, is this
not a matter that should be referred to the Competition and
Markets Authority?
of Whitley Bay (Con)
At the moment we are pleased to have seen the commitments made by
the companies following their meetings with the Secretary of
State and her predecessor. We will keep it under review.
(Lab)
My Lords, earlier this week your Lordships’ House discussed the
Government’s efforts to ensure that eligible households are aware
of social tariffs for broadband, which the Minister referred to.
I asked the Minister whether the Government would contact benefit
claimants directly, given that their data is available to the
Government, and in response the Minister cited a more general
information campaign of adverts and leaflets. I ask the Minister
today whether consideration has been given to contacting
claimants directly so that households know that these special
tariffs are ones for which they are eligible?
of Whitley Bay (Con)
We are advertising the support which is available generally. The
social tariffs are available to people who are in receipt of
universal credit and other means-tested benefits, but there is
help for anyone who may be struggling to pay their bills, thanks
to the commitments we secured from the industry last July. That
is why we are advertising all of the help generally, through the
Help for Households campaign, but of course that is being
monitored for its success in getting the message out, and all
ideas are welcome.
(Lab)
My Lords, BT businesses are operated under a special government
regulation through Ofcom. In view of the fact that throughout
rural areas in the UK, BT Openreach is providing broadband
connections at highly difficult and challenging costs for many
consumers, will the Minister, as a result of today’s questions,
talk directly to BT Openreach about reducing its costs and
ensuring that infrastructure issues are better dealt with,
including wayleave permissions, because many people in rural
communities cannot access the broadband they require to undertake
their work?
of Whitley Bay (Con)
As the noble Baroness notes, Openreach’s prices are fixed by
Ofcom as part of its five-year wholesale fixed telecoms market
review and have been allowed to increase by CPI to reflect the
significant additional costs faced when deploying new
infrastructure. Our £5 billion Project Gigabit programme is
delivering lightning fast and reliable broadband to hard-to-reach
areas right across the UK, as the noble Baroness says. That
funding is available to a range of suppliers; where
infrastructure is built using public subsidy, suppliers must make
their networks available for use by other operators so that
everybody can benefit.
