Non-geographic Telephone Numbers

Wednesday 26th June 2013 Westminster Hall

11:00

[Richard Burden (Birmingham, Northfield) (Lab)]

Thank you, Mr Brady. I am pleased to have the opportunity to debate this important issue. The matter is of concern to many people—all our constituents, I think. It is a complex and controversial issue, but the term “non-geographic phone numbers” generally covers numbers that start with 08, 0845, 087, 09 and 118, and which are used for everything from contacting Her Majesty’s Revenue and Customs to voting on TV shows.

All the evidence shows that people find the numbers extremely confusing and expensive. The so-called freephone 0800 numbers are guaranteed to be free only when phoned from a land-line—they are not always free from mobile phones—and it is people on low and fixed incomes who are undoubtedly hardest hit. Poorer people often do not have the security of a land-line, and they are unable to get contracts.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I congratulate the hon. Gentleman on securing the debate. He rightly says that 0800 numbers are free only from a land-line. Does he agree that the warning signal, or the acknowledgment that it could be very costly to use such numbers from a mobile, is often in such a tiny—almost insignificant—font size, either on the screen or in newspaper print, as to be illegible, particularly for elderly people?

[Richard Burden]

The hon. Gentleman makes a very good point. It is important that the information is clearer, but perhaps what is more important—and this is the case I will advance today—is ensuring that the calls are free rather than just pretending to be free for certain people.

As I was saying, people on low and fixed incomes do not have access to land-lines, and they probably do not have access to contract mobile phones either or, sometimes, to the internet. They rely, therefore, on prepay mobile phones and phone boxes, and as the former have higher call costs than contract phones poorer people end up paying more to use the telephone than those on higher incomes. A study by Save the Children, in fact, found that they could be paying about 22% more.

What is particularly unfair, and this is one of the major subjects of today’s debate, is that it is not just businesses and game shows that charge people a fortune; the Government’s own use of the numbers is a matter for concern. I have been contacted by constituents who are justifiably irate that ringing essential public services, such as HMRC, results in them having sky-high bills. The answers I have received to parliamentary questions to Departments have revealed not only the shocking scale, but the scope of Government use of high-cost phone numbers. Six out of 10 Government phone lines are high cost. The Home Office, the Department for Business, Innovation and Skills, and the Department for Environment, Food and Rural Affairs all use a high proportion of high-cost phone lines. The Department for Work and Pensions alone has 200-plus 0845 numbers. Vulnerable people are being charged rip-off rates for contacting essential services, including pension, work and welfare services—when talking to Jobcentre Plus, the Pensions Advisory Service, about disability living allowance and attendance allowance, and so on. The waiting times for the services can be long, and that drives up bills even further.

The 0845 and 087 revenue-sharing numbers are the major culprits. Calling the numbers can cost anything up to 41p a minute, and a service charge is included, which is paid to the Government. I am pleased that my right hon. Friend the Member for Wentworth and Dearne (John Healey) is here today because he has done some very important work on what he has rightly termed a telephone tax, and the National Audit Office is also looking into the scandal. It is simply beyond belief that people calling taxpayer-funded phone lines are taxed again. Some Departments have been making money, and phone companies are clearly making a fortune. It is illogical and unfair, and it cannot continue. The use of revenue-sharing numbers by the Government and all associated public agencies must stop, and it must stop now.

[John Healey (Wentworth and Dearne) (Lab)]

I welcome the success that my hon. Friend has had in securing the debate, and also the fact that he is campaigning hard on the matter, as am I. It is important to expose the rip-off rates that some people have to pay to access essential public services and information.

My hon. Friend mentions the revenue sharing, which is part of the deal for 084 numbers. Both he and I have tabled parliamentary questions, and I have had seven Departments say to me that they do not get any financial or non-financial benefit from the lines. That, however, contradicts what Ofcom believes to be the case, and I have, therefore, had to write to those seven Departments. Does my hon. Friend agree that, as a follow-up to the debate, something the Minister might usefully do is ensure that attention is drawn to other Departments that use the numbers but do not appear to know that they should be gaining a financial benefit—at a cost to many of the poorest, who pay the extra charges?

[Richard Burden]

My hon. Friend makes a very good point, and it is true that many Departments, or the people who make the decisions, did not know that they were making money out of the numbers. They assumed that something starting with 08 was free, just like the 0800 numbers. It is important that that message gets across. There are one or two Departments that, when they found out, were fairly horrified and said that they would change. The key thing, therefore, is that they make that change quickly.

I suggest that revenue sharing is particularly unfair, but that it is part of a wider picture. Calling any public service on a geographic or a non-geographic number means that people with very little money—those with prepay mobile phones—get bills they simply cannot afford. That covers accessing central Government services and those of other public bodies, agencies and local authorities and, until very recently, even GP surgeries. I was made aware of the case of a homeless family in my constituency who clearly did not have a land-line or a contract phone, and were trying to reach Birmingham city council a couple of years ago. They were kept hanging on for ages, just trying to find out if they had any chance of getting a home. How can we seriously expect people calling a homelessness helpline to maintain regular direct debits or have been able to negotiate cheap phone tariffs? We need clear criteria for all public services—in central and local government—if we are to overcome the problems.

I sought to have this debate because there is a chance for the Government to change, and to initiate change. I understand that, in July, Ofcom will make clear recommendations for simplifying the system. It will make 0800 numbers free for all, including from mobile phones and, going back to the point that the hon. Member for East Londonderry (Mr Campbell) made, it will ensure that the costs of calling 084 and 087 numbers are clear. It will also encourage greater use of 03 numbers, which are priced the same as the traditional 01 and 02 geographic numbers, and they will not have a revenue-sharing element.

Of relevance here is article 21 of the EU consumer rights directive. An amendment to the directive, which could stop businesses using a service charge when consumers call under certain circumstances, is under consideration, and more work needs to be done on that. I therefore ask the Minister: will the Government continue to charge what has been rightly termed a telephone tax when they begin to regulate businesses in that regard?

There is already best practice in some Departments. HMRC has been one of the worst culprits, but it has now rightly responded to the Public Accounts Committee’s recommendations and is switching to 03 numbers, which will save many people a fortune. That must be linked to the more recent PAC recommendation for improving waiting times so that people are not left in a queue for hours.

We need more clarity and co-ordination, as my right hon. Friend the Member for Wentworth and Dearne said. That is not a new idea; it has been on the agenda since 2006, when Sir David Varney called for change in his Cabinet Office report, “Service transformation.” He called for clear public sector telephone number strategies that would end confusion and provide a better service to people, as well as a better deal for the taxpayer. Seven years on, Ofcom is now providing the Government with a framework to achieve that.

I have some questions that I hope the Minister will be able to answer. First, does the Minister agree with me—and, I am sure, countless members of the public, and campaigners, such as the fair telecoms campaign, which has done a great deal of work—that it is fundamentally wrong to place a service charge or, to put it another way, a telephone tax on calls to phone lines that are already funded from taxation? If so, what is the Government’s time scale to end its use across all Departments and agencies?

Secondly, what progress has been made on implementing the recommendations on contact centres in Sir David Varney’s “Service transformation” report, which was taken over by the Cabinet Office’s Contact Council? The report called for an exploration of the scope for single access numbers for all non-emergency public services, which would provide complementary support for the 999 service; more urgently, for the implementation of a clear public sector numbering and tariffing strategy using the 03 number range; and for the establishment of a set of cross-Government benchmarks, such as calls answered per minute, to improve the performance of public sector call centres.

If no progress on implementing those recommendations has been made since the abolition of the Contact Council, will the Government now take the opportunity provided by Ofcom’s consultation and its results to establish a whole of Government solution? Such a solution would need to be clear and comprehensive, and it would need to make access to all public sector services less confusing and more cost-effective for the taxpayer. It would end the use of revenue sharing—the telephone tax—and establish clear numbering criteria for different services, with essential services using freephone for all 0800 numbers and all other services using 03 numbers.

Thirdly, will the Government enforce Ofcom’s recommendations that the costs of revenue-sharing numbers must be declared, which goes back to my right hon. Friend’s point? What is Ministers’ time scale for such an implementation? Ofcom has outlined an implementation period of 18 months from when the recommendations are published, which means organisations would not have to declare their charges until at least 2015. We know the costs, and we know that many people are currently confused about the price of the numbers, so why delay? The Cabinet Office should issue directions to enforce transparency now, and I invite the Minister to agree with me.

The success of the gov.uk website—it provides one point of access for all Departments and public bodies—demonstrates that better Government co-ordination in communications can be done simply and effectively. As face-to-face services are cut back—not all of us think that that is a good thing—and more people are directed online and on to the telephone, it is important that the Government do not ignore those sections of the population that find it difficult to access the internet and do not have access to contract phones or land-lines. We know that they are the people most likely to need the Government’s help and advice.

Finally, we need to ensure that people’s contact with the Government or local government is not just that of being transferred from one Department to another, while watching their phone bills go up and up as they hang on the line. As the Government introduce huge changes to the benefits system, with universal credit and so on, we know that there are likely to be very big increases in the number of inquiries. That underlines the fact that we need an efficient system, which recognises that people calling Government advice lines have complex concerns and problems that need to be dealt with sensitively and effectively.

The idea of today’s debate is to invite the Government to seize this opportunity drastically to improve public services and end the scandal of rip-off rates that hit the most vulnerable in their time of need. I invite the Minister and the Government to take up that opportunity.

11:15

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

It is an enormous pleasure to serve under your chairmanship, Mr Brady, for the first time, at least in this Chamber.

I congratulate the hon. Member for Birmingham, Northfield (Richard Burden) not only on securing the debate, but on how he presented his argument. I extend those congratulations to the right hon. Member for Wentworth and Dearne (John Healey), because they have together done an excellent job. They have taken a forensic approach to using the parliamentary question process to expose some, frankly, awkward and inconvenient truths about a system that, as Ofcom has said, clearly does not work for anyone at the moment. It is quite right to raise that substantive issue.

The right hon. Gentleman, who was a distinguished Minister, will recognise that I feel, in coming to this for the first time, that this is one of those situations in which Departments have been allowed to do their own thing, without very much effective co-ordination from the centre, over many years and during different Governments. We have reached the point at which we have to acknowledge that the current system does not work for anyone. Ofcom was quite right to make that point, and it is also right that the National Audit Office should look at the issue. My congratulations are therefore quite genuine.

The hon. Member for Birmingham, Northfield mentioned that the Cabinet Office previously had a role, but it has not been directly involved in recent years. We are now reviewing whether there is a case for central control to play a more proactive role. The reason for that is straightforward: we see ourselves as champions, first, of transparency across Government—there is a failure of transparency here—and secondly, of the taxpayer in ensuring that those who supply services to the Government and the public deliver best value.

Through the Efficiency and Reform Group, we take great pride in ensuring that historical contractual arrangements with large corporates are much less cosy than they were. I refer the right hon. Gentleman and the hon. Gentleman to its recently published report, which demonstrates that, through a much more rigorous and robust process, we saved the taxpayer £10 billion last year—this is serious money—by doing things that we consider to make hard commercial sense but had not been applied. For both those reasons—as champions of transparency and of driving a hard deal with the taxpayer and the public—we are taking an increasing interest in this area.

The timing of the debate is slightly awkward in the sense that we are all waiting for the NAO report. As a former Minister, the right hon. Member for Wentworth and Dearne will know that Ministers sometimes read a brief that is not quite what they want to have to say, and this is one of those moments. Having looked at what is happening, I sense that there is frankly a substantial problem, as I have said. It is not just about the cost, which is real and of course massively relevant at a time when our constituents are very stretched; there are also big issues around complexity and transparency, and the system does not work.

There is clearly a real problem, but I see some encouraging signs of movement and transition. It probably needs to go further and faster, but there is clearly movement in some areas. One area is around transparency, which matters a lot because it is the great disinfectant. The Ofcom policy proposals are all about simplifying the matter and making it less complex and more transparent. Responding to those proposals is now under way.

I also see progress in the action taken by Departments to reduce costs. The hon. Gentleman did not mention this, but we should recognise that HMRC, which is a hugely important Department in the context of this debate, has already moved two of its helplines, the tax credit and Welsh language helplines, from 0845 numbers to 03 prefix numbers to reduce the cost to callers. It is also committed to moving all of its personal tax, expenses and benefits helplines to 03 numbers by the end of the summer, which was welcomed by the Public Accounts Committee and the voluntary sector in particular. Clearly, there has been movement both on transparency and to reduce costs.

Another area, which was mentioned by the hon. Gentleman, is about reducing the need for the public to use the phone in engaging with the Government. He makes a fundamental point that we will always be in a situation in which a proportion of the population will not be online or comfortable with being online and will need what we call in our clunky Government language “assisted digital”. The Government will shortly announce plans to invest taxpayers’ money in a radical, ambitious process to go digital by default, which will ensure that no one is left behind and which should transform the experience of dealing with Government—online as often as possible and practicable. We all know the benefits of online communication, and success on that mission will mean that we reduce the need for people to use the telephone and be exposed to some of the vagaries, complexities and costs that we are debating here now. It is important for that to be registered, because the Government digital strategy, which was published last November, sets out how we intend to redesign digital services to make them straightforward and convenient so that all who can use them will choose to do so while those who cannot are not excluded. That channel shift, as we call it, will result in a reduction in the use of call centres, telephones, post and in-person centres, thereby reducing the problem of higher non-geographic phone charging, which is the subject of this debate.

[John Healey]

I am grateful to the Minister for the way in which he is responding to this debate. I am intervening before he returns to his brief, because his response so far has been genuine, open and welcome. He recognises that there is a significant problem, which is very welcome. He says that the Government are now reviewing the area, which is also welcome. He talks about a problem of timing. May I perhaps help him with that? The NAO has indeed now agreed to carry out a cross-Government review of the use of non-geographic numbers, some of which have these rip-off rates. The Comptroller and Auditor General tells me that he expects that report to be completed next month, in July, so the Minister may not have to wait long before he considers action. I invite him to tell the Chamber how he intends, from the centre of Government, to respond to that NAO report and the findings that it may have.

[Mr Hurd]

I am grateful to the Opposition for any offer of help, but I approach such offers with some wariness, and my instinct was right on that one. The right hon. Gentleman is right to say that the NAO report is imminent; I do not have an exact date, but July seems to be the month. My awkwardness comes from trying to give the hon. Gentleman and the right hon. Gentleman as robust a response as they would like. None the less, we must wait for that report and its recommendations to see to what degree they encourage a higher level of central co-ordination and control, which both Members are instinctively calling for.

We will also have to wait to see whether the NAO gives the Cabinet Office some sense of mandate to play a more proactive role in this exercise, which is a move towards not just greater rigour and transparency, but a great deal of commercial awareness when it comes to conversations with the suppliers of services, who, as the hon. Gentleman has said, might have benefited disproportionately in the past with regard to the charges that they have effectively made to the public. The point that I was labouring is that we now have a real body of experience that is saving billions of pounds of taxpayers’ money in negotiating and renegotiating, often in flight, these contracts with suppliers to ensure that the taxpayer gets a better deal.

What I am asking of hon. Members is patience. Let us see the NAO report and what signals it sends in terms of the deficiencies of the current system and the need for a bit more central control, and then the Cabinet Office will respond. We are now a great deal more interested in this subject than in the past because we recognise that the system is not working for anyone. I just hope that I can reassure the hon. Gentleman and the right hon. Gentleman on that.

[Richard Burden]

Like my right hon. Friend, I am sure that the Minister is being absolutely genuine in what he is saying. We are waiting for the NAO report and the Ofcom recommendations, both of which will be published in July. I completely understand that the Minister needs to wait for them. There will be complex negotiations with suppliers. There is one thing on which I should like to push him a little further. On behalf of the user of services, the public, would it not be reasonable to say that there are certain principles here to which we aspire? The first is that an essential public service should be free to the public. Secondly, phone lines should be as cheap as they can be for other Government services. The obvious way of doing that is using something like the 03 numbers. How we get to those points could be the subject of detailed discussions, but, presumably, we should be able to agree that if the call is essential, it should be free, and if it is non-essential, it should be as cheap as it can be.

[Mr Hurd]

If we are trying to create a culture of greater simplification, transparency and trust, principles are important in terms of bringing people together, communicating and building that trust. Some Departments need to think through quite carefully the implications of some of the changes that the hon. Gentleman is proposing. For example, if they cannot make a particular charge for a service, they have to consider how they can continue to provide it. It is reasonable to build into the process some time for them to think through that carefully, because, presumably, the services are valued by the people using them. The principles of transparency and of keeping it simple and as cheap as possible are ones that we endorse, along with the commitment to try, as far as we can, to move people to a situation where most of this stuff is done online. We also want to make sure that all the services that we provide to people who are not online and who are not comfortable with that—we hope the number of those will be smaller—are as easy to navigate as possible.

The hon. Gentleman usefully made the point—we know this from our own constituencies—that it drives the public nuts to be transferred around the system, not get answers and be kept waiting. A large part of what we do as MPs is to try to disentangle such things. The onus is on us to try to make that process of engaging with Government as easy as possible, because we know that, on too many occasions, it is far too difficult.

In conclusion, the hon. Gentleman has raised a substantial point. It is something that the Cabinet Office is taking increasingly seriously. We are waiting for the NAO report. We see encouraging signs of transition towards greater transparency, and a desire to reduce costs and the need for telephony services. We also recognise that there is value that we can add in ensuring that the taxpayer is not ripped off.

11:29

Sitting suspended.