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Labour minister 'conspired' with mobile companies to keep phone costs high. Did they also influence court cases?
United Kingdom Created: 26 Oct 2007
Labour conspired with phone companies to keep overseas call charges high, it was claimed yesterday.
Margaret Hodge, the former Industry Minister, publicly appeared to welcome an EU cap on the amount holiday makers could be charged for making and receiving calls abroad.
But in private she told the big firms she was fighting their corner, official documents have revealed.
The minutes of one meeting, between Mrs Hodge and phone company Orange, stated: 'MH thought that the industry could have moved faster and earlier but said that she was two-thirds on their side!'
Until this year, UK customers could be billed up to 94p a minute in 'roaming charges' to use their phones abroad.
But in May the European Union decided to cap the charges at 34p a minute for making calls and 17p for receiving them.
Although the price cuts were drastic, they were not as swingeing as MEPs had wanted.
At the time, Mrs Hodge praised the deal, saying: 'This will be great news for holidaymakers using UK mobiles abroad.'
However, documents obtained by The Times under the Freedom of Information Act undermine her public statements.
They show the Government actually led a campaign to prevent Europe from imposing huge cuts which would damage the big networks' profits.
Industry insiders believe Labour was keen to help phone companies because it 'owed them a favour' after Gordon Brown raised £22 billion from an auction of 3G mobile phone licences in 2000.
The paperwork reveals that Britain's lead negotiator, DTI official Nigel Hickson, regularly emailed major phone companies.
When it seemed the MEPs would get their way, Mr Hickson assured his contact at BT: 'Fight goes on.'
And when an inaccurate report was circulated indicating a deal had been reached, one official reassured Vodafone that it was 'nonsense'.
Consumer experts yesterday expressed astonishment at the disclosures.
Policy consultant Ewan Sutherland said: 'I hadn't fully appreciated that [Labour] had gone over to the Dark Side to that extent.
'They clearly are trying to defend the position of the operators and the revenue of the operators.'
Alyn Smith, a Scottish Nationalist MEP who fought for cuts to roaming charges, added: 'There was no question that the UK line was favouring the multinational businesses and not the European consumer.'
But Competitiveness Minister Stephen Timms yesterday defended the department's actions.
He said: 'The aim of the UK Government was to strike a balance, introducing changes that would benefit mobile phone users without stifling competition and innovation in the mobile phone industry.
'We worked closely with business and our European partners to find a good solution.'

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Source: Agnes

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