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Digital Economy Bill [HL]

My Lords, I hope that we are not going to make a mountain out of this molehill because there is not much at stake with regard to the amendment. Although I am grateful to the noble Lord, Lord Howard, for having tabled it, I am even more grateful to my noble friend Lord Maxton for having stolen seven-eighths of my speech because he has indicated exactly the position and has, therefore, cut down my remarks. The amendment would mean that Ofcom’s principal duty would be restricted to only efficient investment. I listened carefully to what the noble and learned Lord, Lord Mackay, and the noble Earl, Lord Erroll, had to say about efficiency, but my noble friend Lord Maxton identified what we all understand by "inefficient" in this area. It will sometimes be in the interests of citizens and consumers for Ofcom to promote inefficient investment. Universal service conditions may promote inefficient investment to ensure that a service is universally available. The noble and learned Lord, Lord Mackay, may say that that is then being efficient because a service is reaching recipients who would not otherwise be able to meet the costs or which it would not be in the interests of those supplying it to meet the additional marginal costs which the consumer cannot meet. We are talking about the definition of efficiency in economic terms. All that has been indicated—the noble Earl, Lord Erroll, identified this just as clearly—is that there can be additional marginal costs which no one could take on as an investor sensibly and intelligently because they do not bring a reward commensurate with the outlay, but which achieve the essential public good of providing the universal service. That is the only issue at stake with regard to "wherever possible". It is not that Ofcom could conceivably be prodigal in its recommendations on how additional investment should be developed, but there are specific circumstances where inefficient investment—in the sense of not bringing a return to the investor—might need to be encouraged. I am merely emphasising the obvious fact that we need, wherever possible, a safeguard for that position. There is no more to the issue than that.