And for the Tories – Vicky Ford gets it wrong
On Tuesday, the European Parliament voted through EU proposals on mobile phone roaming charges. This would have gone through without debate had I not tabled an amendment to reject, which at least allowed the issue to be debated again. The roaming charges measure is being trumpeted by the EU (and by David Cameron) as evidence of the consumer benefits which we all derive from EU membership. It is nothing of the sort. It is a profoundly regressive measure – Robin Hood in reverse – which will cost ordinary people but benefit the well-off.
It will cut charges for well-heeled jet-setters and business executives, but it will result in higher costs for domestic users. The operators will have lost a major revenue stream. They will seek to recover it, and the only place to recover it is from domestic prices.
Regular travellers (including MEPs!) will get lower prices, but Mrs Lumsden in Coronation Street will pay more. Yet again we see European regulation delivering unintended consequences and perverse incentives. Non-roaming customers will be subsiding roaming customers.
This inevitable consequence will be self-evident to people who have worked in businesses and understand the impact of taxes, costs and incentives.
One MEP who seems not to understand this (or perhaps simply isn’t prepared to admit it) is Tory Vicky Ford, who was the ECR Group’s Shadow Rapporteur on the dossier, and was keen to claim the “credit”. See my exchange with her, during the debate.
She has offered two quite different justifications for her view that the roaming decision will not force up domestic prices. In an interview on BBC World Service, she said that there was a provision that no operator should be obliged to offer services below cost, and that “therefore there would be no need to raise domestic prices”. This is an evident nonsense – a complete non-sequitur. The issue is not whether the operator operates at a loss – it is that they have lost a revenue stream and will be keen to replace it. As many as fifteen telecom operators have warned that this will be the case.
However in the debate in Strasbourg, she offered a very different justification. She said that there would be wholesale price caps on domestic phone charges, and that this would prevent operators recouping roaming losses on domestic rates. Quite apart from the fact that such a provision is unlikely to stick, it is depressing to see a so-called Conservative apparently calling for Soviet-style market intervention and price controls. We know where that leads. It will be the price of bread next, and empty shelves.
This is more evidence (if more were needed) that today’s Conservative Party has lost touch with conservative values.
My colleague Jonathan Arnott (UKIP MEP North East) makes another important point on roaming changes. He tells me on his network, these charges simply don’t exist in the USA, Canada and many other countries. Indeed they don’t apply in a number of EU states. Why not? Because free-market competition between operators has made roaming charges untenable.
If the EU is concerned about roaming charges, its best course of action would be to promote free-market competition to drive down prices – not to indulge in more heavy-handed top-down legislation which in the end disadvantages the majority of consumers.