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Jeremy Hunt: Digital dithering from a dated Government

I thank the Secretary of State for giving me prior notice of both this report and his statement.

I also congratulate him for giving his first statement to the House in his new role. With Lord Carter's surprising and rather hasty departure from government, it is now the Secretary of State, less than a fortnight into the job, who must pick up the baton in an immensely complex but vitally important area for the economy.

So I hope he recognises that I do not mean it personally when I say that today's report is a colossal disappointment.

The introduction of the report on page 3 says it seeks to achieve 7 things. What are they? The first is an analysis. The second is an analysis. The third, a statement of ambition. The fourth a restatement. The fifth an analysis. The sixth a framework. And the seventh a review. 

Where in all this is a single action? But there is one area in which this report has excelled itself: consultations. The interim report published in January announced 8 consultations. This one announces 12 - plus one new quango. This is surely government of the management consultants for the management consultants by the management consultants.

Britain has huge competitive strengths in the digital industries, particularly the production of digital content. Our performance in the Oscars, Grammies and Tony is second to none outside America. Our music industry has a major share of the US domestic market and we are the largest exporter of TV formats in the world.

But to embrace these opportunities, we need a proper digital infrastructure. So can the Secretary of State explain why, when America, France and Japan are laying fibre optic cable to thousands of homes, Britain's operators have barely started to think about it? Why has the French government been able to create competition between ISPs to lay fibre optic cable in France Telecom's ducts, while the British government has stood by as BT makes minimal investment, protected by a monopoly over the "local loop"?

Today's solution, according to the government, is a broadband tax. But rather than taxing, should we not be seeking to stimulate investment through the regulatory structure? The cable revolution happened without a cable tax. The satellite revolution happened without a satellite tax. Everyone recognises that public investment may be necessary to reach more remote parts of the country - but simply slapping on an extra tax is an old economy solution to a new economy problem.

Unfortunately the numbers don't add up either. This tax will, according to the government, raise £150m per annum. So can the Secretary of State confirm that at this rate it will take 20 years to cover the estimated £3 billion cost - and that is just to reach street cabinets, not people's homes?

We do however welcome elements of this report.

We welcome the decision on DAB. 

We welcome the moves to tackle piracy, which costs our music industry nearly £200m every year. So why, having promised to tackle this four times in four years, have we today only been promised a consultation? Can the Secretary of State make a commitment that any required legislation will be laid before this house before the next election so it can be sorted once and for all?  

We also support the roll out of a universal 2 Mg broadband connection by 2012, probably the most important practical outcome of today's report. This is all supposed to be funded by the money not used for digital switchover. But given that only 5 per cent of transmitters have switched over so far with no major urban area completed yet, can he therefore tell us what will happen if costs are higher than anticipated for the remaining 95 per cent of the country? More precisely if that money was needed for switchover, would he fund regional news through DCMS' general budget?

Let me turn now to regional news. Does the Secretary of State accept that the traditional model for regional news, based on the old ITV transmitter regions, has failed, and what people really want is not regional news but local news? Why does Birmingham Alabama have 8 local TV stations when Birmingham in the UK - four times the size - has none? Why then is he using the public's money to prop up a failed system where people in his own Exeter constituency have to watch news from Plymouth, or people in my Surrey constituency have to watch news from Southampton?

In America even much smaller cities have not one but a whole clutch of local news channels, greatly enhancing both a sense of community and vibrant local democracy. None have access to a licence fee. So instead of putting yet more burden on taxpayers why is the government not embracing a digital-era version of syndicated local TV, something that could also prove to be a lifeline for our local newspaper industry?

Now when it comes to the licence fee, this afternoon's statement shows breathtaking inconsistency from the government. Less than a month ago at this despatch box the then Secretary of State insisted the BBC needed an inflation-busting £68m rise in the licence fee to fulfil its core purposes. So why then today is the Secretary of State now saying it has a spare £100m to give to other broadcasters? If it really is spare, should we not first consider giving it back to licence fee payers, as nearly three quarters have said they want? 

Regrettably Mr. Speaker this report does not feel like an agenda for a new digital economy. It reads more like a top-down attempt to protect and prop up old business models using yet more public cash. The government calls it a "new model of industrial activism." Nothing could be older and nothing less suited to a modern digital economy.

The last Conservative government deregulated telecoms. It launched Channel Four and five. It unleashed the cable and satellite revolution. Instead of digital dithering from a dated government we need new economy dynamism from a new Conservative Government.

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