UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 305-vii

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

WELSH AFFAIRS COMMITTEE

DIGITAL INCLUSION IN WALES

Tuesday 19 May 2009

LORD CARTER OF BARNES CBE and MR JON ZEFF

RT HON PAUL MURPHY MP, MR BERT PROVAN and MR ANDY CARTER

Evidence heard in Public Questions 413 - 482

USE OF THE TRANSCRIPT

Oral Evidence

Taken before the Welsh Affairs Committee

on Tuesday 19 May 2009

Members present

Dr Hywel Francis, in the Chair

Nia Griffith

Mr David Jones

Alun Michael

Mark Williams

________________

Witnesses: Lord Carter of Barnes, CBE, a Member of the House of Lords, Minister for Communications, Technology and Broadcasting, and Mr Jon Zeff, Director of Media, DCMS, gave evidence.

Q413 Chairman: Good morning and welcome to the Welsh Affairs Committee and our inquiry into digital inclusion in Wales. For the record could I begin by asking you to introduce yourselves?

Lord Carter of Barnes: I am Stephen Carter, the Minister for Communications, Technology and Broadcasting. I sit in two departments, the Department for Culture, Media and Sport and the Department for Business & Enterprise.

Mr Zeff: I am Jon Zeff, Director of Media at DCMS. I am responsible for the Digital Britain project within DCMS, working closely with my colleagues at BERR.

Q414 Chairman: Thank you for that. Could I begin by asking you to briefly outline the progress you have made since the publication of your interim Digital Britain report in January this year?

Lord Carter of Barnes: Certainly, Chairman, I am happy to do that. I suppose the final judgment on progress will be made when we publish the final report and people read its conclusions and recommendations. We are currently minded for that to be published on 16 June, so relatively soon for the purposes of this conversation. I would say we have made significant progress on a number of measures. The response level to the report was extremely high, both in terms of the volume of responses and the quality of those responses from a very wide range of organisations and individuals. We have had a very extensive three or four month period since then of public and private engagements across the country, including a number in Wales, and so the engagement process has been extremely detailed. On the substance of the report, there has been material progress that is in the public domain on one issue since the interim report and that is around the proposal for a universal service commitment on basic broadband services where the Chancellor, in his Budget statement, made it clear that a universal service fund would be created from the prospective underspend from the digital switchover to help the scheme and that that would be used in conjunction with other funds to create a tender process to infill the gaps in the country. In two other areas we have also seen some significant progress, although not quite so determinative, one in relation to spectrum liberalisation, which is also very relevant to next generation broadband services and where a report was published last week outlining a proposal, not from government but from an independent intermediary, as to how we could achieve the liberalisation of the spectrum market that we need to get the next generation mobile services. Thirdly, we have been working in quite some detail with a consortium of parties on intellectual property protection and the piracy question, and there have been some public statements made about an outline solution, again not by the Government but by this group who have come together under the auspices of the interim report to try and bring solutions. On those three areas, therefore - universal service, next generation mobile and piracy, you have seen in the main some substantive progress. There is a long tail of other questions, some of which Alun is very aware of, in relation to internet governance and international issues and many others where we will, I hope, have a coherent position in the final report.

Q415 Mr Jones: Minister, you referred to the proposed universal service commitment, which was possibly the most eye-catching aspect of the Digital Britain report. What distinction do you draw between the expression "universal service commitment" and the more frequently used "Universal Service Obligation", which applies, for example, in respect of landline telecommunications?

Lord Carter of Barnes: It is a deliberate choice of words. As you rightly point out, under the current European Telecoms Framework, the Universal Service Directive part of it, there is a Universal Service Obligation which is currently laid on British Telecom by Ofcom to provide basic lifeline landline telephony and so-called functional internet access, which is the European law. One of the things that we have also been doing since the publication of the interim report is working across Europe in the current discussions on the new telecoms framework to put an amendment to the Universal Services Directive (in fact, it is not to the actual directive; it is to a recital on the directive) to change that definition of "universal service" for internet service routes from functional internet access to a level of internet service deemed appropriate by the Member State, thereby allowing Member States to then move to their own interpretation of what that might be. That was a key first step and I am hopeful that that will become part of the European framework agreement literally in the next week. If you assume that is achieved, and I think it is reasonably safe to assume that, the next question is, how do you then fund any obligation? We decided to make it a commitment rather than an obligation in the interests of speed and funding because it was not clear that if we had done it as a legal obligation we could have made it happen at the speed that we wish it to. At the level of a commitment, with public money combined with a commercial tender and what we were doing on spectrum liberalisation, we felt we could get to market with a solution to the one and a half million homes that are under-provided and the 350,000 who have no service (rough numbers) by the beginning of next year.

Q416 Mr Jones: So, correct me if I am wrong, does that mean that a commitment is something less than an obligation and is more akin to an aspiration?

Lord Carter of Barnes: No. I would say the difference is that an obligation is something laid by the Government or the regulator on a commercial party. A commitment is a statement by Government that we are going to make it happen and fund it.

Q417 Alun Michael: To what extent have you had co-ordination with the Welsh Assembly Government, both before the interim report and since, as you move towards the final report?

Lord Carter of Barnes: I am always conscious when I am in Wales that I am not from that part of the world, but I would hope that your colleagues in Wales would say we have had a lot of engagement.

Q418 Alun Michael: You did undertake a visit there, I believe.

Lord Carter of Barnes: We have had a number of visits. We have also had a number of engagements with the Assembly. We have been in front of the Assembly's standing committees. My observation is that Wales, Scotland and Northern Ireland, partly because some of the delivery issues, as you will know quite well, are more challenging in those areas, have done some quite innovative work on putting together partnership structures for delivery, so we have been very alive to how we can learn from those when we design the tender for the universal services commitment. We have had quite a lot of engagement on that question, and indeed also on the broadcasting questions which are equally very real in Wales in particular.

Q419 Alun Michael: Sometimes innovative approaches, for instance, when BT changed their approach to ADSL access, can overtake local partnerships and developments. Is your feeling that the sort of partnership work that is going on is constructive and is going to be consistent with the plans you come forward with in the final report?

Lord Carter of Barnes: I genuinely do not know if we know enough, but you raise a very good question about how at a minimum you ensure that you have what I would call interoperability between different solutions. In people's understandable desire to get a solution for their area and their region and their town and their village what you cannot end up with is a sort of patchwork of solutions that in network terms do not talk to each other or in cost terms are very inefficient. You are always seeking to get a balance between avoiding that downfall and not being so centrally controlled that you do not get anything done, which is why I think working constantly in engagement is important. I think in the way in which we design the tender process for the universal service contract we are going to have to make sure it is regionalised and localised to take into account local issues but has some common standards so that we do not end up with so many solutions that we look back in three or four years and think that we have just built cost into the system.

Q420 Alun Michael: By coincidence, last week members of this Committee visited North Wales and looked at the facilities at the technium and the spine of fibre access that is being provided to the towns in North Wales. We also heard from BT in an informal meeting about the things that they are doing in experimenting with far bits of the exchange to the home, and some of us also heard in this place from people in Manchester who are developing a community-based programme for providing access that the city council is also involved in. Then finally you have got the former NTL provision, now Virgin, in South Wales. In the case of BT, obviously, there is a requirement on them to allow communication providers to use that infrastructure. That is not there for NTL. It may or may not produce benefits from the spine in North Wales. I am sorry it is a longish question, but it goes directly to your response. Will your final plans find a way of making sure that all such developments help to get the best quality broadband to the end users, whether they be small businesses or communities, that are not part of the direct network?

Lord Carter of Barnes: I am not sure it will answer all of those questions. The ex-NTL business in Wales I know well and, as you rightly point out, it is concentrated in one area of Wales, and, secondly, its reach is more domestic than business orientated, even SME orientated, and that in Wales I think puts more of a demand on the BT network deployment and on the wholesale access obligations and costs for other providers to gain access to it, and we are very alive to both of those issues.

Q421 Alun Michael: You did mention earlier that you had had a good response to the consultation, including from organisations in Wales. Would you say a little bit about the consultation you had with organisations in Wales and their responses?

Lord Carter of Barnes: They fall crudely into, if I use my own rather colloquial division of labour in this report, pipes and poetry responses.

Q422 Alun Michael: We do poetry in Wales.

Lord Carter of Barnes: You do a lot of poetry in Wales. On the pipes, there was a very strongly expressed view that some of the access and inclusion issues were of a significant order of magnitude in Wales, but the technical questions, because of the topography of Wales, required a particular level of detailed understanding. We could not design a sort of central solution and then just roll it out, and there was a particular observation that there were still some significant mobile coverage issues in Wales that needed to be addressed. On the poetry, there clearly is the complexity (and I mean that in a non-judgmental sense) of the Welsh language, so therefore when you are looking particularly around the provision of competitive news and local news and regional news and national news in Wales, there is the issue of how you provide that in English and Welsh alongside what is provided by the BBC. As you probably know, S4C have put some proposals on the table to suggest a contestable pilot around a provision in Welsh and English and we are very actively looking at their proposals and others. As I say, good engagement.

Q423 Alun Michael: Are you aware of the work of the Wales E-Crime Forum, which in some ways is matched in Yorkshire by the Yorkshire E-Crime Business Centre? Is that something that you would find a useful contribution?

Lord Carter of Barnes: I am not sure I have come across enough of the detail of the e-crime work in Wales, so any information on that would be welcome.

Q424 Alun Michael: How is the Digital Britain work being co-ordinated with the Digital Inclusion Action Plan for which the Secretary of State for Wales in his wider remit has responsibility? Will we be able to recognise a close fit between the two?

Lord Carter of Barnes: You will be able to judge after the Secretary of State for Wales gives his evidence whether or not we are both on message. There has been no pre-rehearsal, so I would be interested to see what Paul says in answer to that question. I can only give you my own view, as ever, which is that digital inclusion came before Digital Britain. I think Paul and his team have driven that agenda with a lot more gusto and tenacity than those cross-government ventures often get, as you know better than anyone, and to that end I think digital inclusion has got some bite across government. I think there is a very open question to be asked and debated following the publication of the final Digital Britain report as to how we stitch these initiatives together because there is at the moment minimum overlap and in some areas duplication, and that is both a structural question and also a responsibility question. I think that is something Paul and I have to work out.

Q425 Mr Jones: You have already mentioned the topographical challenges posed by Wales. Is it your anticipation that Wales will continue to suffer disproportionately from "not-spots" compared to other parts of the country or do you envisage more investment in Wales to cure that problem?

Lord Carter of Barnes: We have constructively avoided getting into a debate about how much of the Universal Services Fund gets spent where because I do not think we know enough yet to be able to answer that. The network engineers would say to you that because of the topography of Wales, and indeed other parts of the country, including some parts of Scotland and indeed south west England, the sheer physics of physical or even mobile networks (and mobile networks are actually physical networks too, with a bit of mobile radio in between the masts) are more expensive on a per capita basis, but we are not yet at the point of divvying up the pot. The other observation I would make is that, whilst the Government has very expressly committed itself to using the vast majority of the underspend on the digital switchover fund and has said that there will be a call on the Strategic Investment Fund that was also allocated in the Budget, the way in which we design that tender process and then execute it my judgment is that if it is done well it will leverage other sources of funding. I think one of the things we need to do in areas which have needs, like some parts of Wales, is to work out how we can bring other partners into that, whether they are strategic health authorities or PCTs or local education establishments or universities, or indeed even local towns and communities who wish to make their own contribution, so we can get to the point where two and two make five in terms of the financial investment in each area.

Q426 Mr Jones: The commitment, as I understand it, is to a minimum level of service of 2Mb/s by 2012, which many regard as a fairly low target. I seem to recall that in a newspaper interview you gave some time ago you expressed some pessimism as to whether even that would be achievable. Could you expand on the remarks you made?

Lord Carter of Barnes: Yes. I must say I find those people, if I am allowed to say this, who find our commitment to a universal service commitment of up to 2Mb by 2012 as lacking ambition almost always know almost nothing about the subject. As it stands at the moment there is no country in the world that has a commitment to do that other than us at that level. There is no country in the world that has laid out a process for a timetable or a funding commitment to do it. There is no other country in the world that is putting together a technical process with solutions to deliver it. We have never said that 2Mb is the ceiling of our ambition because that would clearly be ludicrous. You can already get average speeds of 3.5Mb to 4Mb in a dense urban area and in some locations you can get up to 50-100Mb, so we are not trying to set a ceiling rate. Will there be any households, any houses, any individuals, living in a dwelling somewhere in the United Kingdom who will get less than 2Mb? Probably. It would be a foolish individual, let alone a politician, who would guarantee that every single household and every single dwelling will get a guaranteed 2Mb because there will be somebody living in some place somewhere where the cost of service delivery will be hundreds of thousands of pounds because of where they live, but do we have a confidence that we will get pretty close to it? Yes, we do.

Q427 Mr Jones: It is just that in your newspaper interview you appeared a bit more pessimistic than the terms in which you have expressed your views just now.

Lord Carter of Barnes: Let us not get into intermediation by newspapers.

Q428 Mr Jones: So you do not think that you were properly represented in that interview?

Lord Carter of Barnes: I think it is a technical subject that does not often lend itself to the detail of newspaper summary.

Q429 Mark Williams: I was going to ask about the incentives for industry but I think you have explained about how in the fullness of time of the tendering process and some of the sources of funding that will happen. How successful do you feel the project has been in terms of community engagement? You mentioned that we need community engagement and a regional dimension to that. I will just cite a constituency case. A constituent in a challenging geographic area is unable to pursue that route. There are alternatives out there, there will hopefully be funded alternatives that will be commercially attractive to different providers. How do you get that message out to the broader community in a wholesome way, that there are possibly other solutions? I appreciate what you are saying. There are some communities that it would be very difficult to provide for but there are many opportunities there. How do you get that message across?

Lord Carter of Barnes: There is no limit to how much engagement you can do on this question. There are some countries around the world, of which probably the most notable on the question you ask is Holland, where there have been towns and areas that have literally set up local crusades on this question in order to bring differing interest groups together constructively to co-fund, part-fund, match-fund solutions. That is what I mean when I say I think one of the achievements of the universal service commitment rather than an obligation will be to bring as many parties to the table as possible because there will be individual locations where the solution and the approach require real, deep local understanding and a tolerance of differences and different approaches and different forms of partnership for the technology solutions. In some instances you will be able to do it all with fixed; in others you will need to do it with fixed and wireless; in others you might need to do it with fixed, wireless and satellite. That might require people in some instances to have slightly more visible equipment in their own houses and therefore you need to work with them to make sure that does not offend any local planning regulations. There are real details you need to get into and so that does require you, as you rightly say, to turn this into a national endeavour in order that you get the sort of engagement that throws up that knowledge to do it in as effective a way as possible.

Q430 Mark Williams: I just feel, with no disrespect to our BT colleagues, that there is still a BT route that has not proved successful in many instances and I think there is still, and you alluded to it earlier, a void of knowledge of those alternatives that we need to be pushing forward. The National Assembly's designation and identification of "not-spots" has certainly galvanised a lot of local thought on pursuing that but we have got a long way to go.

Lord Carter of Barnes: We have, and I think all that designation and definition of "not-spots" is fantastically useful because it shines a spotlight on the problem. It makes people sit up and take notice. I think having independent sources of data is a great way of forcing people to justify their position. It is not my job to defend BT; they can do it more ably than I, but, to be fair to BT, we have to recognise that they are not the Royal Mail, they are not owned by the Government; it is a private company, and there is a point beyond which, particularly in today's market, it is very difficult for them to go. It slightly goes back to your colleague's question, Mr Jones, from earlier, about will we absolutely be able to guarantee it for everyone. There are some people where the connectivity costs are just disproportionate, and simply railing against BT does not provide the answer because they could not justify it.

Mark Williams: We look forward to the tendering arrangements as they come out. Thank you.

Q431 Nia Griffith: If we could return to this issue of universal (98.5%) accessibility, and bearing in mind, obviously, that the rural areas in the scattered regions of the UK have an even greater vested interest because other firms and industry have been difficult to attract and obviously there is huge financial potential here, what ways have you got of ensuring that we do not end up with a divide? You have talked about trying to incentivise private companies to provide certain things, franchises where they have to provide a certain amount for the more lucrative and a certain amount for the less lucrative. What happens then if you move on to, say, a second generation of franchises which will be essentially maintenance? Is there flexibility within that type of franchise, again, to look at ways of ensuring that, if you like, they get some good and some less lucrative bits they have to look after?

Lord Carter of Barnes: One of the reassuring things we have found about the "not-spots" more generally and the "not-a-lot-spots", as we call them - and I do not know what the views of this Committee would be but I have to confess that I have some knowledge about this subject from different lives - is that I went into this process assuming that pretty much all the "not-spots" and the "not-a-lot-spots" would be in very rural areas, but you would be surprised at in how many that is not the case. There are quite a number of clustered groupings in relatively dense urban areas that for particular reasons are also "not-spots" or "not-a-lot-spots", so, to answer your distribution of the benefits question, we are not talking solely about very-difficult-to-physically-reach locations.

Q432 Nia Griffith: I fully accept that. Camarthen town is well known for it problem with TV; Tumble in my constituency is well known for its problem with mobile phones, -----

Lord Carter of Barnes: You have got pockets.

Q433 Nia Griffith: ----- and you have quite large populations, so it is even more important, particularly where it is difficult to attract industry, to -----

Lord Carter of Barnes: That is where I think public funding comes into the mix. We have talked a lot about the supply side and the funding side and those are really important questions but, as you again rightly allude to, you have got to look at the other side, which is the demand side and what we can do as a Government and indeed as a devolved Assembly or as a local community in order to derive the demand side. One of the questions that we will be posing in the final report is how ambitious do we want to be about what I describe as the analogue switch-off of public services. In other words, are there some public services that we could consider putting wholly on line? I have always taken the view that you cannot go wholly on line until you have got universal provision because you cannot say to people, "You can only get this on-line but you cannot get on-line". It is not a sustainable position, but if you know you can get to universal provision can you begin to identify certain services which have the effect of driving more people on-line? The more people that go on-line the more commercially attractive it becomes to the other providers and that is the way in which I think you build the sort of momentum that you were talking about whereby it becomes a virtuous circle. We need to look, I think, slightly more purposefully at how we make the on-line experience more of a "must have" rather than an optionality, because, as we all know around this table today, whilst there are big issues on service delivery, there are more people who can get it than do get it and that is a question we also have to answer as well as answering those people who cannot get it who want to get it.

Nia Griffith: Absolutely.

Q434 Mr Jones: Sticking with "not-spots" but slightly different ones, to what extent do you anticipate the mobile 3G network will be expanded in Wales?

Lord Carter of Barnes: I cannot answer the Welsh-only question, for which apologies, because I just do not carry in my head the degree of coverage in Wales. What I do know is that at the moment we have five 3G networks, all of which have licence obligations to exceed 80% coverage by population of the country, so therefore we do not have a licence obligation on any of the operators to get to universal coverage on 3G. My understanding is that all five of those operators are now at a point of being in excess of 80% of the population. I do not know how that distribution falls. I can find that out for you and let you have it by writing. We have said very clearly, and it was one of the areas I was referring to in my opening remarks in answer to the Chairman's question on the spectrum liberalisation part of our project, that in return for liberalising the current spectrum allocations we will be looking for enhanced universal coverage obligations for the mobile operators. We have not yet got to the point of being able to say specifically, "That means this from the following operators in the following locations", but our ambition, to be clear, is that we get as close to universal coverage on 3G as we are on 2G.

Q435 Mr Jones: Turning to digital radio, specifically DAB digital, which, by the way, seems to be a peculiarly British technology; we have got more take-up in this country than anywhere else, do you see a future for DAB in promoting digital inclusion in Wales and anywhere else in the UK?

Lord Carter of Barnes: I do, and I hope you do too. I would not describe it as a peculiarly British technology. It is also a peculiarly Australian technology now. The French Government have decided that it is going to be a peculiarly French technology, albeit with a Gallic twist, and so we are not entirely alone in this field.

Q436 Mr Jones: I think it is fair to say that we have led the way with DAB.

Lord Carter of Barnes: It is fair to say that we have led the way. I think it is also fair to say that we have led the way rather less purposefully than we could have done and therefore it has, to answer the sub-text of your question, slightly been overtaken by some other technologies in some countries. One of the questions for us to address in the final report is what do we do with DAB. We mooted in the interim report that we felt there was a need for clarity and commitment from policy makers, the Government and the industry on either driving behind that technology or in a sense putting it to one side. The overwhelming response to the consultation, and this has been a part of the consultation where we have had literally hundreds of responses, both institutionally and individually, is that we need to make a firm commitment to that technology and that we need to lay out very clearly what that means in terms of building coverage and making DAB as capable a technology for sound radio as FM is, and to that end, if we do do that in the final report, then I think it could be a very important part of the digital inclusion agenda.

Q437 Mr Jones: DAB has had some setbacks. Some of the commercial operators have actually pulled out of the market. I wonder also to what extent will internet radio eat into the commercial viability goal for DAB.

Lord Carter of Barnes: I think it will be a co-existence; that is my own view. If you draw an analogy with television, I do not know how you receive your television, either at home or in other places, most people are, I think, comfortable with having a digital satellite distribution network for television. We have a digital cable distribution network for television. We have a universal digital terrestrial television distribution service for television, and indeed there are some operators who are increasingly delivering television via IP and I think the same will be true with radio. IP distribution of radio, and indeed DTT distribution of radio will also continue. The question is, do we believe we also need to have, like we do for free-to-air television, a free-to-air platform just for radio? If we do, we need to make sure that has universal reach.

Q438 Mr Jones: In that respect what steps have been taken to ensure universal access to BBC Radio Wales and BBC Radio Cymru? Have you had any discussion with the BBC about that?

Lord Carter of Barnes: We have had extensive discussions with the BBC about access to their services on both the FM and the DAB platforms, and those will definitely be questions we will have to address clearly before we made any commitment to any form of move from one platform to the other.

Q439 Nia Griffith: I am going to return to the question of vulnerable people and their access to internet, and obviously that raises a lot of questions about misuse of the internet or being more exposed to certain risks. Some of these risks might be legal things, like gambling; some of them, of course, might be illegal, such as scams. I would just like to know what plans you have to try to make sure that training and help and so forth is given so that people are not ripped off.

Lord Carter of Barnes: This is a very big subject and your colleague to your right is more of an expert on it than I. It depends how big an answer you want. If you take the view that the internet is going to become a universal medium, and whether it is 2Mb or 4Mb or 5Mb or 3G or 4G I always take the view that if you fast-forward five years the internet is going to be everywhere at high speeds to everybody, it is not a bad starting point. If the internet is going to be everywhere at high speeds to everyone and it is going to be interoperable between TV delivery, on-line delivery, mobile delivery, fixed delivery, that means the ability of fraudsters to access vulnerable people is going to go up, not down; that seems to me to be a logical conclusion. That leads me to the view that over the next four or five years we are going to have to have an intelligent and measured debate about the rules and the structures and the obligations that exist around that medium. As you all know, I am sure, as well as I do, one of the problems with the internet, which is by and large, I think, a fantastically progressive force for good - I think it is marvellous in the access it delivers and the freedom it gives people, the control it gives people - is that it has been characterised as a medium that is untouchable. It is either idealised or demonised, depending on who you are talking to, and that has mitigated against sensible, measured discussions about the right balance between statutory frameworks, co-regulatory rules, obligations on individual operators and providers, where do traditional media meet new media, what responsibilities do you put on service providers and the content owners. We need to work all this through over the next four or five years. I think it is eminently doable. At the same time we need a rapid and purposeful focus on digital competencies, digital skills, digital participation, embedding digital competences in the curriculum as a horizontal activity rather than as an IT vertical stream, so that it is an eating and breathing experience for people generationally through their educational experience because it is going to be the network reality of all of our lives at increasing levels of capability over the next five or ten years, but it is such a big question that it is very difficult to answer it simply.

Q440 Nia Griffith: Obviously, it is much more labour intensive and difficult to get every single individual as au fait as they might be. Do you see a place for further regulation, for example, against advertising of equity release schemes and that type of thing in a very aggressive manner? Do you see the need for some form of regulation of that type of thing?

Lord Carter of Barnes: Of that specific medium or generally of that subject?

Q441 Nia Griffith: No, I am just thinking about it invading people's homes in the way that it does in the sense that you have got a captive audience in the privacy of their home in a way that you would not be selling that product in a face-to-face context, and do you see any role for greater regulation of what is put on the net by companies as opposed to also trying to get people to be as media-savvy as they can be?

Lord Carter of Barnes: I know this is an unfashionable thing to say, but I am, by instinct, more of a co and self-regulator than a statutory regulator of those sorts of things, for the simple reason that when you codify those things in statute they end up being inflexible and these markets are changing at such a pace that you need to have structures that are inherently fluid; but that does not mean it should be a licence for people to do what they like. There has been good work done, some of it, I have to say, under the auspices of the European Commission, with many of these service providers and network operators who are selling inventory to people offering these services to draw up good codes of practice and good guidelines and good frameworks. The ASA - to your specific advertising point - is increasingly looking at the way in which it is catered for by different media. My sense is that there is a genuine willingness amongst all parties to get the balance right and avoid discrediting the media, which would be bad for everybody. I go back to my other point: I think you have to simultaneously do work on increasing people's knowledge and skills because ultimately that is the best protection. The smarter and more informed the user, the better everybody is.

Q442 Nia Griffith: You might want a system whereby you could lock computers so that they could not pay huge sums of money out to somebody, some sort of technology to do that sort of thing.

Lord Carter of Barnes: That is not an area I am knowledgeable about.

Q443 Mark Williams: Who should be responsible for achieving and then maintaining the high levels of media literacy that we aspire to? Is there a role for Ofcom? Are there limitations of resources for Ofcom? What is your take on that?

Lord Carter of Barnes: Currently there is a statutory role for Ofcom, as you probably know, because it was enshrined in the Communications Act. It would be fair to characterise that responsibility as more of an intellectual than executional responsibility; in other words that they do good work on analysing the issues and giving us a level of knowledge independently of the problems. We asked Ofcom to chair a group in the Interim Report, to come back to us with a view as to how they could - again, in my rather colloquial language - supercharge this rather than just observe it. Actually, again we have been very - I think it would be fair to say, somewhere between reassured and excited by the volume of the response, the degree to which Ofcom has been able to put together a consortium of the willing and the interested, with I think quite an ambitious agenda on upgrading media literacy skills. We will lay out their recommendations and then our response to those in the final report.

Q444 Mark Williams: Certainly the evidence from Mr Robin Blake, Head of Media Literacy - that is why I hesitated because when I talked to Ofcom there were resource issues there and I think he would advance this view - he said: "If we had the resources to provide a one-stop shop, a telephone line and website that was promoted nationally and everyone was aware of it, that would be a better tool than the tools we have available at the moment." You drew a distinction between the intellectual dimension and the practical side. There is a long way to go, is there not?

Lord Carter of Barnes: There is, but here is an analogy that I use, because I find it easy to understand, and also I think they are increasingly comparable: I think digital literacy sits alongside financial literacy. I do not know how you can be an adult in this world and get by without having some degree of financial literacy. You do not need to be a derivative bond trader, but you need to know how to open a bank account and add up, and you need to be able to understand how to run your own domestic household finances; otherwise it is very difficult to live in this world. I think digital literacy is of a comparable level and essential; that is the world we are going to be in. We would never dream of giving financial literacy as the sole responsibility of the FSA. Do you see what I mean? We would embed it through the system - that is what I am getting at. Similarly, we need to embed digital literacy through the system. I think that Ofcom can do a very good job, certainly on consumer protection measures, in the way the FSA is equally obliged to do, and perhaps as a holder of the ring, as a way of bringing parties together. If digital literacy is going to be a sine qua non of the sort of society we are going to live in, it is going to have to be something that multiple parties will be responsible for.

Chairman: Lord Carter, can we now move on to English language broadcasting in Wales. We are having a short inquiry into this.

Q445 Alun Michael: In the comments in Digital Britain and from the evidence we have received, there are clearly serious problems for ITV at the present time, and that threatens the plurality of news provision in the English-speaking audience. There is a particular problem in Wales in one sense because the majority of the population is not Welsh-speaking but there is specific Welsh-speaking provision, and provision for those who either do not speak Welsh or whose main language of communication is English. Will any other broadcasters be in a position to supply a news service for English-speaking viewers as early as next year? This does seem to have reached a point of urgency even with things like the signing on to news being removed in a sort of bonfire by ITV Wales at the present time.

Lord Carter of Barnes: I entirely agree with you that we have reached a point where there is a clarity and transparency over the scale and the nature of this problem. The way I would characterise it is that essentially for many years there has been enough money in the market, combined with regulatory obligations, to allow people to be able to do things that are uneconomic but which they do because they are making enough money elsewhere. We are way past that point. I think it is very visible to people that we are way past that point. I do not know whether it is a good thing or a bad thing, but there is no doubt that part of what has enhanced that visibility is because we are facing particularly challenging economic times. That of course makes it more difficult because essentially the question we have to ask ourselves is not, is there a gap - because I think everyone accepts there is a gap - it is how we close it. If it requires money, where does the money come from? The reason why we never used to notice it was because the money came from ITV's advertising revenues, because the licence to broadcast and advertising broadcast in Wales was worth a lot of money. It is now worth less money. This is a very real issue, I think, the plurality of news provision. It is particularly acute in the nations. I am not making an intra point between the nations and the English regions - I am not English, as it happens, I am Scottish, but I believe it is a truth that is identifiable, that the role of independent competitive media alongside the BBC in the nations, particularly where there are devolved governments, is particularly important because it does fuel democratic debate and discussion, and it gives a competition of voices on very important issues. Therefore, I am not surprised that this question is being posed more sharply in Scotland and Wales, and, I have to tell you, in Northern Ireland, than it is in all parts of the English regions. Interestingly, it is posed more sharply in some parts of the English regions, which is perhaps to do with English regional identities. We are consulting at the moment on what alternative mechanisms there might be. Ofcom, as I am sure you know, put out a proposal to create contestable consortium in different areas. It all boils down to the same question: if you believe you want to do it, you have got to find a source of funds. That is a question we are very engaged in.

Q446 Alun Michael: I suppose it is inevitable that each of the broadcasters will come at it with a solution that is best for them, and the other side of the coin, the least damaging for them. S4C has proposed a news pilot for Wales. In view of the changes in the market for commercial broadcasters, which you have described very accurately, do you think that the contestable funding model is the only option for a second news service in English for Wales?

Lord Carter of Barnes: It is not the only option. I think credit goes to S4C for coming up with that proposal. To be fair to them, they approached us before they published it, so it has been done, I think, in a very constructive way. I think the anatomy of their idea, which is to create contestability around the slot on the HTV broadcast or the ITV broadcast, is an interesting idea, but there are other ways in which you could do it.

Q447 Alun Michael: What about the option of top-slicing the licence fee?

Lord Carter of Barnes: Again, we said in the Interim Report that that remained an option under consideration, and we would continue to look at it in the context of other available ideas or solutions, and we can continue to do that.

Q448 Mark Williams: One of the more immediate solutions that has been suggested for the short term is a partnership between the BBC and ITV and sharing of resources. In terms of the evidence we took, it would be a short-term solution. Do you want to say anything more about some of the options that are available for a second sustainable news service in Wales?

Lord Carter of Barnes: Partnership is definitely a solution. I am not a news broadcaster, so you would have to defer to those people who know the economics of that better than I, but if someone is willing to give you wholesale access to their physical assets, their news-gathering assets, their distribution assets, their trucks, their news-gathering costs, at a marginal cost, then that is cheaper than having to pay for it themselves, so there must be a benefit to be had there. What you have seen play out between the BBC and ITV is somewhere between an understandable but occasionally irritable debate about "one man's benefit is another man's slightly less big benefit"; but the fundamental principle I do not think anyone is arguing about, that it makes good sense. Again, I think that the BBC has come to this pretty constructively with a recognition that we are in a different place now, and that their role has to be more than just provision of their own services. Where the question gets crunchy is, if you want to have rival editorial news content to the BBC there is a limit to how much the BBC can help produce that, because by definition it is therefore not independent of the rival. There is a point whereby partnership only goes so far, but that does not mean the partnership is not valuable - it can be highly valuable.

Mark Williams: That is a crunchy issue. In earlier evidence we were trying to get assurances from ITV and BBC, and that was clearly the case.

Q449 Mr Jones: In Digital Britain you say, "For cultural reasons, social reasons and, as citizens in a democracy, we want at least some of that rich array of choice to be British content, including impartial British news." I take it that in Wales you acknowledge that it is as important as Welsh content.

Lord Carter of Barnes: We absolutely would.

Q450 Alun Michael: Returning to the question of the S4C position, particularly in relation to non-news programmes, I think there is a lot of value placed on the children's programmes because of the importance of children learning and using Welsh at an early age. The question arises, however, about provision of an equivalent service for the English-speaking audience in Wales. Is that something you have given thought to?

Lord Carter of Barnes: I am not sure I fully understand.

Q451 Alun Michael: It is back to the issue that, as you said earlier, while the income of ITV or the commercial stations was quite big, then a lot of work would be done but as it tightens up can that be continued? Is that value service, like the children's programmes, something you can see us not losing in the tightening of the commercial sector?

Lord Carter of Barnes: My answer to that is that there is a first order question that has to be asked and then answered by Government, which we are hopefully in the process of doing in the process of this final report, as to whether or not we believe there is either a mechanism or a source of funds that gives you contestable provision of news and local news, Welsh news. There is general recognition that if you were drawing up a shopping list of priorities - and prioritisation is always a challenging process - you would put that at the top of your priority list. There is then a range of other content offering genres and types that many different voices would tell you should be second, and children's would be a good example of that. I understand the piquancy of the language point particularly because it compounds the educational commitment and the cultural value of the different language. Ultimately, if you assume the answer to the first question is "yes", then the answer to the second question would be determined by how much money there is.

Q452 Alun Michael: Is the situation, particularly in relation to English language broadcasting and those sorts of specialist genres, fully understood, do you think, at the UK level and within both of your departments?

Lord Carter of Barnes: "Fully understood" is a leading question your honour! S4C and the Welsh Assembly do a very good job, I observe, of putting their case on the importance of the Welsh language, and its contribution and what that means in terms of genre provision. I have no doubt that that is fully understood in Jon's department in the Department of Culture, Media and Sport. Would I contend that it is front of mind in the Department of Business? I am not sure it necessarily is, but I am not sure it necessarily needs to be because it is not their policy area.

Q453 Alun Michael: Finally, the concern is that sometimes the focus on the Welsh language has been enormously important. Most of us are Welsh speakers around this table, and have seen the way that S4C's contribution has made an enormous difference; but there is always the fact that resources then are tight in relation to the English coverage broadcasting. The question is meant to underline the difficulty of getting that balance.

Lord Carter of Barnes: These are balances.

Q454 Chairman: Thank you very much. You have been very patient and very helpful today. I apologise for taking so long, but it has been most productive and we look forward to your final report.

Lord Carter of Barnes: Thank you very much, Chairman. I appreciate the time.

Witnesses: Mr Paul Murphy, MP, Secretary of State for Wales and Minister for Digital Inclusion, Mr Bert Provan, Senior Civil Servant, Cross-Government Digital Inclusion Team, Department of Communities and Local Government, and Mr Andy Carter, Head of Broadband Policy, Department for Business, Enterprise and Regulatory Reform, gave evidence.

Q455 Chairman: Good afternoon. Welcome to the Welsh Affairs Committee's inquiry on digital inclusion. For the record, Secretary of State, could you introduce yourself formally, and your colleagues?

Mr Murphy: Yes indeed, Mr Chairman. You know me, Paul Murphy, Secretary of State for Wales, but I am here also in my capacity as Minister for Digital Inclusion. On my right is Mr Provan who is from DCLG, who leads the team of officials in the cross-departmental team dealing with digital inclusion; and Andy Carter, no relation I suspect to the previous witness, from DBERR, who deals with very important aspects of digital inclusion as well.

Q456 Chairman: Can you give us an update on the progress you have made since the consultation on the Digital Inclusion Action Plan closed in January this year?

Mr Murphy: Yes, indeed. As you rightly say, the consultation closed then. We received about a hundred written responses. We held two events for stakeholders, in Birmingham and in London. I have met, as the Parliamentary Under Secretary for Wales has also met, the Member for Caerphilly with stakeholders from the public, private and third sectors. Then the plan was published, alongside the National Digital Inclusion Conference, a few weeks ago on April 27. There was very strong support for our key proposal to have an independent digital inclusion champion, supported by an expert task force to work across all sectors and to challenge all of us to drive towards this important goal of digital inclusion. You have, Mr Chairman, members of the Committee, very recently talked to Lord Carter about Digital Britain generally. I will be making an announcement about the digital champion in the very near future, and at the same time about the task force that will support him or her. Quite a lot has happened.

Q457 Chairman: Are there any particular themes or factors of importance for Wales with regard to digital inclusion?

Mr Murphy: For Wales, yes. You have already had a session with Leighton Andrews, my equivalent in the Welsh Assembly Government. The issues are broadly the same for Wales as for the rest of the United Kingdom, although there are some differences, which I think Leighton described, and on which I provided information in my written evidence, derived from research by the Office for National Statistics, Ofcom and the Oxford Internet Institute, which I had the great privilege of visiting some time ago. Most digital inclusion, so far as it affects socially excluded people, is in areas that are devolved to the Welsh Assembly, and I believe that the Welsh Assembly Government with its Community First Programme, similar to UK Online, where they deal with socially as well as digitally excluded people, is very successful. In terms of the people that one needs to reach in Wales, bearing in mind, as it were, our social composition, particularly in the areas like you and I represent, it is absolutely vital that Welsh people are linked to the new technologies and to the Internet. It is as vital, if not more vital than in some parts of England.

Q458 Alun Michael: We asked Lord Carter how the work of the Digital Inclusion Plan would connect with the Digital Action Plan that Lord Carter is bringing forward, and he shared with us that you had not co-ordinated your responses, and he would be very interested to see what your reply to the question was! Seriously, digital inclusion and the question of the Digital Action Plan and its ambitions, especially as your report and plan came out first, are interrelated. How do you see that relationship working?

Mr Murphy: In terms of the remit of this Committee, of course, also how does that work in the Welsh context? I am sure that the things that Lord Carter outlined in the previous part of this evidence session you would have found very interesting in so far as it applies to Wales. For example, I am sure you talked to him about the famous "not spots" with broadband where you cannot get it in various parts of Wales and about which I have been carefully questioned, but also of course the digital switch-over and other issues in so far as they affect broadcasting in Wales - all mixed up of course in a very important issue that will be dealt with initially when the Digital Britain Plan is brought forward in June. He and I, of course, have talked about how the digital inclusion programme of the government fits into Digital Britain. I suppose the best way we can describe the difference is that he tends to look after the technical side of things, and the digital inclusion side of it is very much about people. I suspect one of the reasons why the Prime Minister decided to give me this job was because I was not particularly technically orientated; but I hope that I am people orientated. As a silver surfer myself, in a category that needs to be addressed in terms of digital inclusion, older people, it struck me that there was a distinction between how we involve government at all levels, councils, the Assembly Government and ourselves, the third sector, industry and business, and how together you can achieve a better record of digital inclusion amongst the 17 million people in the UK and a fair number of them also in Wales who need to be addressed. Out of that 17 million are the 6 million who are socially excluded and whose lives would be enriched and made be better by being able to link up to the new technology. In a way, they go alongside, in the same way that the Parliamentary Secretary of the Cabinet Office, Tom Watson, deals with the e-government aspects, Lord Carter deals with the overall Digital Britain agenda, and I co-ordinate ministers right across government, need to look at how we can include people who are currently excluded from this digital revolution. We are working together, certainly. We have meetings, obviously, together, bringing people together at ministerial level. For example, there is a cabinet committee that I chair on digital inclusion, and at the last meeting we held Lord Carter gave a presentation to us on the Digital Britain plan and how that could fit in to the digital inclusion agenda. So there is co-ordinated activity so to speak between ourselves on this side of the question, and Lord Carter's team as well. I do not know whether my colleagues want to add anything to that.

Q459 Alun Michael: In order to achieve that inclusion you have referred to, the acquisition of the right skills in the ability to use the technology is absolutely crucial.

Mr Murphy: Yes.

Q460 Alun Michael: You have rightly referred to the question of access and "not spots" and so on, but even if you get those people online, if they do not have the skills that will not get us anywhere.

Mr Murphy: No.

Q461 Mr Jones: How are you carrying that forward, and how will you make sure that that is neither duplicated by the work of the Digital Britain team, nor marginalised in both approaches, if you see what I mean?

Mr Murphy: I think you have to be very careful in co-ordinating that you do not lose some of the work that falls in the middle and can be forgotten about. That is a danger, and that is why I mentioned the Cabinet Committee. We are also working together at official level. There is an excellent digital inclusion officials team whose job is to ensure that things do not get lost like that, and media literacy and the importance of teaching keyboard skills and the other skills that are associated with using the Internet are very high on the agenda. In the Welsh sense, of course, that means that there has to be a close working relationship with the Welsh Assembly Government, not just with Leighton Andrews but with Jane Hutt, as well as the Minister for Education, and other ministers as well, I suppose - but obviously it is for the Welsh Assembly Government to work out who is responsible for what. Nevertheless, there should be good co‑ordination between the Governments on that. In addition to that, Ofcom has a statutory duty to promote media literacy - they provided this report on Digital Britain, which comes out in June. In addition, there is the interest of all United Kingdom citizens who are socially excluded, but also those who are not socially excluded. You could have people not necessarily socially excluded - perhaps pensioners who are relatively well off in comparison with others, who still need the tuition in the necessary skills. A lot of departments are involved in that, both in Wales and in the United Kingdom; and it is the co‑ordination of it that is so important. In addition, the Digital Action Plan makes reference to how you improve those skills. I have myself gone out to a UK Online centre on a couple of occasions and watched older people, for example, being taught the skills from scratch. That is what is absolutely necessary, and we are very conscious of the questions, Mr Michael, that you have posed me.

Q462 Alun Michael: The access to information of local information as well as national information is important. Do you see Startio(?) as offering significant opportunities as far as we are concerned generally and in Wales?

Mr Murphy: Yes, I do. As you know, I met Startio(?) on two occasions. I look forward to going with yourself to a visit in some weeks' time to see how they operate. I think the simplicity of the teaching of the technology but also the importance of how that can be linked in to people's lives, in the health service in particular but others as well, is deeply impressive. A lot of this activity in the digital inclusion field is learning from best practice, and being able in Wales, for example - for Startio(?) I believe they might well have done by now - gone to Cardiff and talk about what they do in Wales too, so that there is a sharing of best practice, and across the border.

Q463 Nia Griffith: As you say, we have touched on the issue of broadband "not spots", and I wonder if you could elaborate on your responsibility in the sense of ensuring that we do get the most universal provision possible and do not end up with people being excluded on the technical side of things.

Mr Murphy: The technical side, as I mentioned earlier on, is really a matter for Lord Carter and others. Nevertheless, I have an interest in it because if in parts of Wales, and indeed in parts of the rest of the United Kingdom, mainly but not exclusively rural areas, people there cannot have access to broadband, where in some respects they are in most need of it in terms of employment and access to things like telemedicine and NHS Direct and ways in which their lives can be improved, it is a big issue for us. We are fortunate in Wales in that the Welsh Assembly Government has this policy of working with BT and other providers to ensure that where it might be unprofitable for the provider to make the service available in areas that are rather remote, there can be partnerships in resources particularly - I think 35 at the moment telephone exchanges in Wales - which can remedy that particular issue. From my perspective, as Minister for Digital Inclusion, some of those areas too have a large percentage of socially excluded people, so it is an important issue for me. My job would be to press my colleagues in government and to work with our colleagues in Cardiff to address the issues of the "not spots".

Q464 Alun Michael: We touched a moment ago on the question of access and simplicity. The other thing, which was acknowledged by Lord Carter in his responses earlier, is that the more omnipresent that services become, the more likely it is that people will be unable to access some services. Do you think improving access to government services is going to progress to many of them being only available online?

Mr Murphy: Perhaps eventually that would happen. In one part of South Wales, which I will not mention by name, a post office was kept open because the community there was very, very, very low in terms of activity on the Internet, and so the accessibility of government services and other services was virtually impossible because of the low take-up of new technology, and, oddly enough, the post office was kept there because of it. That is something that is probably quite common in Wales. There are large areas, certainly in the more deprived parts of Wales, where there is not access and therefore their lives are not as good as they could be because of it, so what happens in that respect? It is very much a joint working at the most local level in the first instance; but I think everything is local in this.

Q465 Alun Michael: Some of it will be about facilitation.

Mr Murphy: That is right. Local authorities have played their part in it, and various voluntary groups can as well, whether it is older people or whatever they might be, and the Welsh Assembly Government too and industry itself. For example, BT is another instance where they can give grants to local organisations in order to facilitate access to the Internet, particularly to those areas that are not so well off. I have seen excellent examples of that in Wales and in England. It is tackling it at the most basic level and then attracting people who we might not think would be interested in so doing. For example, in my own constituency an old-age pensioners' warden scheme decided that they would apply for a grant for the communal room there in order to have computers put in and access to the Internet. The pensioners were helped for their skills to use the Internet, but it was interesting that the initiative itself came from the older people; they wanted to get there. Sometimes the initiative might come through entertainment; they go to the Internet - and also talking about younger people now who are not using it - and having done all that they move on to other things like the access to government services, to the fact that they can save money if they can shop online, or if they can book their holidays, through Saga and elsewhere online, because it is cheaper and better for them. It can open up horizons they never had before; they can talk to their relatives in California, or Australia, or wherever it might be. We used to call it "word of mouth" but that is a bit old-fashioned; but you know what I mean. It gets around the community.

Q466 Alun Michael: Word of finger, perhaps!

Mr Murphy: The message gets around locally at ward level in local government terms, if you like, that this is a good thing for the community. You can get them in church halls or village halls or libraries and so on. The more that happens, the more people will be attracted to it.

Q467 Alun Michael: One final point on vulnerability: obviously, the more omnipresent the Internet becomes, the more there will be vulnerability because the crooks will make use of it as well. Do you share my view that the Wales e-Crime Forum is an excellent exemplar of which we have some reason to be very proud in Wales?

Mr Murphy: Yes, I do share that view, and I share your enthusiasm and commitment personally, as you have, in the UK Internet Governance Forum, which you lead, where every member is very conscious that you have to protect people and give them reassurance, particularly more vulnerable people like older people. For example, they might think that if they put their credit card details and banking details online, within seconds it will be stolen; and there are other reasons obviously in terms of pornography; people are frightened of going on in case they pick that up and so on. All of these issues, most of which can be overcome, need to be addressed, and vulnerable people are the people that we are aiming for in terms of digital inclusion and so we do have to put in safeguards. I am conscious that there are various groups in our country which have looked at this, but in general terms Get Safe Online; there is the Byron Review, the UK Council for Child Internet Safety, the Police e-Crime Unit, which you have referred to, the Serious Organised Crime Agency and of course your own work on Internet crime and disorder. All those things need to be brought together to give those assurances. It is very important indeed.

Q468 Mr Jones: Secretary of State, there have been a large number of interventions of different types to promote digital inclusion. Is it possible for you to say which are the most successful types, or does it depend on whom you are addressing?

Mr Murphy: Do you mean in Wales and/or in England?

Q469 Mr Jones: Generally because I guess this is something that is pretty much the same wherever you go.

Mr Murphy: Yes, the issues are the same everywhere, and how important it is that you get people to intervene directly so as to ensure that people are digitally included. From a UK Government point of view, the Communities and Local Government Department has been supporting a number of authorities as exemplars of good practice. The City of Sunderland stands out amongst many others as one which does, and Barnsley does too. A number of local authorities are working through DCLG that directly want to ensure that their local communities are linked up in the way that we have all been talking about. There are research reports published regularly, solutions for inclusion. There is about a thousand examples of local good practice projects that people can search on health and older people - UK Online Centres, but ironically not applying in Wales, which I have always found odd as a title, but there you are. There is Community First in Wales, but UK Online Centres run 20 social impact demonstrator projects, and particularly in wards in England that are identified as especially disadvantaged - and you can find that detail in UK Online Centre's report; Citizens Online has something called Everybody Online Project right across the UK, and that does apply to us Wales as well jointly with British Telecom, and 8,000 people benefit. In Wales there are RNIB Cymru Accessible Technology in Communities; Communities At One, which Leighton referred to, and the People's Network Programme in Wales, which upgrades every public library in our country to provide free Internet access. That is a fair number of interventions.

Q470 Mr Jones: Which would you say was the most successful types, because presumably not all are equally successful in achieving -----

Mr Murphy: I think the ones that are most successful are those that are most local, as I said to Mr Michael earlier, and which are driven through their own communities. I would not like to put an order of priority on the ones I have just outlined, but those which go deep into the community and take the message there are most successful.

Q471 Mark Williams: You have highlighted 200 grass-roots projects supported through the Assembly's Communities at One initiative. Have you detected concern about the sustainability of those projects when the fixed term funding from Europe - some are not but, but when the funding under the Communities 2 programme runs out in 2015? They are working very well and are very good but they do need to be sustainable in the medium and long term.

Mr Murphy: I will make a general comment, and then Mr Provan will add a bit to that. The issue of sustainability in Wales from the old Objective 1 and now convergent project is not obviously one just about these issues but others as well. The trick, it seems to me, having dealt for quite a long time in Northern Ireland when Objective 1 was running out when I became Secretary of State there, was to make sure that you first acknowledge the fact that sooner it is going to happen the money is not going to be there from Europe so you have to find something to plug that gap. It is not easy of course in these days of difficult economic pressures; but nevertheless it is hard work to be able to do that and to do it to ensure that you involve - and this is the key to the whole digital inclusion project, but it is not just about government; you have to ensure that you have good partnerships with business and local business if necessary, because much of this is local, and with the voluntary sectors as well, such as those bodies dealing with older people, for example. It is recognising the fact that sustainability is an issue and is a very important thing in the first place, not just closing your eyes and hoping it is going to go away, because it ain't. It is going to happen and you need to prepare for it.

Mr Provan: To supplement that, from the Department of Communities' point of view our concern is to ensure that digital technology is embedded in the everyday programme for health, education, worklessness, crime; so that local authorities understand the real benefits in terms of social outcomes and economic benefits from using technology, which is why we keep focusing on things like digital inclusion to spread the understanding of what is going on. I think sustainability is not trying to get extra money to provide more money for these projects; it is building the lessons of the project into the day-to-day activities of the authority. Equally, in the work on visible strategy we have been trying to put together the different departmental activities around technology within health and DCFF to get a greater integration and a more efficient deployment of technology and more focus on using systems in the home which are for a health purpose or an education purpose as well or housing purposes. It is about making the efficiency and the social outcomes more visible, which is the way to produce this capability.

Q472 Mark Williams: I appreciate that, and that integrated approach is a valid one, particularly in education. However, there is still that need, and some of the Assembly Government's projects have identified that, for a very targeted approach, which still needs to be recognised. I shall take the trick back to Ceredigion because it is an important message there, but there are concerns about the long-term sustainability that needs to be recognised. It would be tragic if some of these projects were to disappear, albeit in six years' time.

Mr Murphy: Yes.

Q473 Mark Williams: Turning to Welsh language provision, some representations have been made which have suggested the Digital Inclusion Action Plan has made no assessment of the needs of Welsh language speakers. What is your reaction to that? Do you share their concern and how can we remedy that?

Mr Murphy: Of course the responsibility for the Welsh language in so far as it affects devolved services, clearly, is one which Leighton Andrews would have made reference to and which needs attention from the Welsh Assembly Government perspective, but of course there are UK services that are applicable obviously to Welsh people. DirectGov is available in both English and Welsh. That is the official Government website. I think a good example of how Welsh is used is in NHS Direct Wales, where obviously services are available in both English and Welsh online. I visited NHS Direct in Cwmbran the other day, which deals with a very large area, and it is interesting to see it. I asked the very same question to them - and there are an awful lot of people in my area who would be using the service in Welsh, but of course throughout Wales they would be, and they do have a very good system for that, including people answering in Welsh on the telephone. The Welsh Assembly has been involved with the media literacy strand of the Digital Britain Programme, and the establishment of a Welsh media commission has been put forward by the Welsh Assembly Government, by Ofcom's Advisory Council for Wales, and the Institute for Welsh Affairs, whom I met yesterday in fact, about this very interesting area which would cover the sorts of issues we are talking about this morning.

Q474 Mark Williams: Do you feel that adequate consideration has been given to developing services online and do you feel satisfied that the needs of Welsh language speakers are fully taken into consideration?

Mr Murphy: I think people are now conscious that it is an important aspect of the Digital Inclusion Programme in Wales, especially, I suppose, if you are looking at people who are socially excluded again, whose natural language - older people, for example - would be in Welsh, and obviously services which can be provided in Welsh for those people are very important, although the digital inclusion brief is not simply about the provision of government and local government services; it goes well beyond that. Incidentally, as an aside, the British Irish Council, which came out of the Good Friday Agreement and which shares good practice between the Republic of Ireland, all of the countries in the United Kingdom and the Channel Islands and Isle of Man, has now embarked upon a study of digital inclusion, led by the Isle of Man, which would involve Ireland and Scotland. It was of interest to see how those other countries deal with the language issue, although of course we have the biggest percentage of Welsh language speakers than they have Scottish and Irish speakers - but nevertheless it is an interesting way of comparing notes on how languages are dealt with.

Q475 Mr Jones: I would like to turn to the issue of media literacy, which appears to me to be an evolving concept. What was maybe media literacy a few years ago is no longer, as technology has advanced. Would you be able to give a definition of media literacy at this particular moment?

Mr Murphy: I am advised there is no agreed definition of it. I would not like to try to think that there might be, but I think all of us know, in our hearts so to speak, what it means. It is building up the skills and the awareness of the benefits of digital technology, and it is obviously keyboard skills and the way in which you can use the Internet in all its different forms. It is also about making people aware of the need to have the skills in order to improve their lives. Although different organisations may vary in how they define it, the principle is the same, behind everything else. I have touched on Ofcom, and they define it as the ability to access, understand and create communications in a variety of contexts. The Ofcom working group, which includes representatives from Wales of course, the BBC, education and the third sector, has a social marketing programme to encourage people to become more digitally engaged; and in Wales the Welsh Assembly Government's report of 2008 described how it was developing an ICT strategy for schools. Their own Assembly Government's e‑learning strategy Online for a Better Wales, I think, is very good. I think that our colleagues in Cardiff are very conscious of the importance of the media literacy agenda in so far as it affects all people in society, including those in school and those studying in further education, and of course people like myself at the other end of the age scale.

Q476 Mr Jones: It occurs to me that information technology is evolving constantly at a very rapid pace indeed, so to that extent is it necessary for the concept of media literacy to be kept under constant review to keep pace with the new technology?

Mr Murphy: Yes, I think it is important to train the trainers to be up to date in all of that. As you might have discussed with Lord Carter, some people need more help than others - the proxy users that you referred to. It may be a grandson or a grand-daughter - often is in fact - teaching the grandparents how to use the Internet, but maybe a next-door neighbour or a friend, who themselves might be only one or two steps ahead of the person they are teaching, which is nevertheless sufficient for them both to engage in it. There is an obligation, I suppose, on local education authorities in Wales to ensure that this is part of their education agenda. In my example, in Torfaen, there is a huge push to make my valley a digital valley, both in schools and beyond that. I think that is working, in their case, with private industry and voluntary groups. That could be replicated through all the local authority areas in Wales. It is acknowledging the fact that it has been done. You cannot become a user of the Internet unless you are trained to do it with the basic skills; and again it is a co-ordinated affair really where you bring people together, from voluntary, from business and from government, to ensure that you deal with training of people and how to use it.

Q477 Nia Griffith: We touched earlier on the issue of vulnerable people but very much in the context of them being very timid about accessing services. I would like to ask you whether the Digital Inclusion Plan really does take sufficient account of the risks that new and vulnerable users might encounter. As examples of those risks, perhaps I could cite the more predatory uses of the Internet, for example marketing equity release products or gambling. Is there sufficient understanding? Perhaps there is a Highway Code or traffic light idea that is put into training packages to help vulnerable people when they are faced with this type of aggressive use of the Internet.

Mr Murphy: It is a similar question to the one Alun Michael raised. He has done a lot of work on the crime side of it, but you are quite right that it goes beyond that as well.

Q478 Nia Griffith: There is the legal side.

Mr Murphy: In my written evidence, to summarise it, I stated that the Government recognises that the application of technologies will bring associated risks; there is no question about that. We need to take action not just at a local level in this case but at a European and international level as well, in order to ensure that those risks are minimised. The important thing about the Digital Inclusion Programme is that if you are trying to tempt, encourage and persuade people to go online, then you have to take away the obstacles that you quite rightly describe. If they are frightened to do it - and you can quite understand why - it is not just about money because there are other issues too - but that is probably the biggest.

Q479 Nia Griffith: I am more worried, not about them being frightened but about them getting inveigled into things involuntarily because they do not respond with a defence mechanism to that aggressive marketing.

Mr Murphy: That, again, is a role for Communities at One, UK Online, Citizens Online, local authorities, and those who are trying to persuade people that it is in their best interests to become engaged in new technology, and at the same time to be able to warn them how to deal with these risks without frightening them off, but is quite a difficult line really. If they think they are going to have all sorts of problems, then you have lost. In other words, it has to be made clear how safe it can be, whilst the Government itself has to ensure that it keeps up the pressure so they can ensure that it is a safe thing to do to go on the Internet. Again, Safe Online is very good, and the other issues that I mentioned.

Q480 Nia Griffith: You mentioned a number of providers. Who do you ultimately feel has responsibility for ongoing levels of media literacy, in other words keeping up media literacy amongst the population?

Mr Provan: It is a cross-government issue. The issue about the digital revolution, as Lord Carter mentioned, is that it pervades everywhere and consequently it is not a specific thing that one department deals with or one organisation. Every type of service is now becoming digital - medicine, being engaged in telemedicine and the form of understanding how to take advantage of remote monitoring blood pressure or remote education and crime understanding and the benefits, in other words for communities the use of technology to make the place safer. These are all elements of it which display the universalities, as Lord Carter said. It is about being online but it is also about social outcomes in every aspect of life, which makes it everybody's responsibility to understand how technology can improve their position.

Q481 Nia Griffith: Do you therefore see that things which are not devolved are the UK responsibility, and things that are devolved are the Welsh Assembly's responsibility in that context?

Mr Murphy: Yes, they would do, but I think it is also important that Cardiff and London work very closely together. You mentioned earlier about the importance of best practice. I know that Leighton Andrews is very anxious to work with the UK Government on these issues, and vice versa, because we can only get better if we learn from each other.

Q482 Chairman: Secretary of State, thank you very much for your evidence this morning, and also for your earlier written evidence, which was very helpful in preparing for this session.

Mr Murphy: Thank you indeed.