214. May I start by asking a question about the money? You said the £1.47 billion was the net present cost of the stream of forecast payments. Could you say what is the actual annual payment?
(Mr Gieve) It is £180 million.
215. Each year?
(Mr Gieve) The payment builds up as the service builds up. The full payment is £180 million. (Mr Webb) Yes, of that sort of order.
216. What do you anticipate to be the total cash you would pay out over the 19 years?
(Mr Webb) Total cash over 19 years is of the order of £2.9 billion.
217. Which is why your website says £2.9 billion. (Mr Webb) That is right.
218. Is that including an inflation assumption? (Mr Webb) Yes.
219. Of what?
(Mr Webb) Six% return on capital. (Mr Gieve) Six% is the discount rate.
220. Yes, six% would be the discount rate but what is the inflation assumption.
(Mr Webb) Two and a half%.
(Mr Gieve) May I just pause there and check? I have a feeling the £2.9 billion may be a real price. May I allow a consultation behind me to confirm we have the right answer there?
221. May I suggest that you send us a note on the exact amount? I am always interested in cash out of the door because I have this very simple, Mrs- Thatcher-corner-shop approach to economics. The net present cost of Treasury building for example is £169 million but the actual cash out of the door is £838 million. I am interested in how much cash you are going to have tied up. The answer appears to be about £3 billion, but if you can give us a note on that I should be very grateful and if you could confirm the discount rate and inflation assumptions as well, that would be great.10 Did the Home Office take legal advice on requiring the Fire Service to partake of Airwave?
(Mr Gieve) I do not know the answer to that. The Home Office was responsible for the Fire Service when this decision was taken. It was probably more a negotiated decision.
222. You do not think you took legal advice.
(Mr Gieve) On whether we could force the fire authorities to buy Airwave?
223. Yes.
(Mr Gieve) Did we? (Mr Webb) Yes.
224. You did. And what was the answer? (Mr Gieve) No.
225. The answer was that you could not. Is that correct? The answer is that you took advice on whether you could require them to and the answer was that you could not, at least you could not without further competition.
(Mr Gieve) At that point competition was not the issue.
(Mr Parris) As I understand it, relatively lately the advice you have received is that it would require an additional competition. I believe that is the situation.
(Mr Gieve) May I just clarify this? We have taken some legal advice on whether now we could require the Fire Service and Ambulance Service to buy into the contract we have. Your question was on whether we did that in 1996.
226. No, I was asking in general.
(Mr Gieve) In that case, we have taken advice.
227. Could you say whether your procurement was lawful or unlawful?
(Mr Gieve) I hope it was lawful.
228. You think it was lawful. (Mr Gieve) Yes.
229. Are you sure about that?
(Mr Gieve) Yes. No-one is suggesting it was not.
230. Did Matra not take it to the European Court of Justice?
(Mr Webb) Matra took it because at that stage they did not believe we had specified a technology which -
231. Who won the case? Did Matra win?
(Mr Webb) Matra did not win the case in so far as they were not allowed subsequently to bid.
232. No, I did not ask that. My question was whether your procurement was lawful or unlawful. If it were unlawful, it would be very obvious that you could do what you did again. Could you do what you did again in the way that you did it?
(Mr Webb) Following the court case with Matra, for future procurements we shall have to say "or alternative technology", but they did not find that we had contravened any issues at that time. The Government decided to include those words so they did not get any future actions of that sort. As far as we were concerned we were within the guidelines.
233. If you were to try to do now what you did then in terms of the way you did the procurement, it would be unlawful.
(Mr Webb) No.
234. So you could do it.
(Mr Webb) The only aspect at that time was that we specified a technology which at that time was an emerging European standard of TETRA. Now we would have to specify TETRA for compatibility or any other system which could be made compatible.
235. And the OGC changed its guidelines, did it not?
(Mr Webb) Yes, it did.
236. May I ask you about the safety aspects? Paragraph 1.14 of the report refers to a review of operational effectiveness. It says, "The review could identify no potentially relevant mobile phone or dedicated mobile communications system available at the time or in the near future, that could provide an operationally acceptable service as cost effective as Airwave". Did that review include health and safety aspects?
(Mr Asque) That review included the health and safety aspects which were relevant at the time.
237. Or were known about at the time.
(Mr Asque) Yes, that is right. Since, things have changed slightly, but yes, certainly at the time.
238. Paragraph 3.25 says you have done another review in July 2001, is that correct?
(Mr Asque) Yes.
239. This has "concluded that the current evidence suggests that it is unlikely that the special features of signals from TETRA mobile terminals and repeaters pose a hazard to health".
(Mr Asque) That is correct.
240. How many policemen have complained that their radios are making them ill?
(Mr Asque) A number of people have expressed concerns on the health issues.
241. How many?
(Mr Asque) The numbers are not fed directly to us. We get representations from the Police Federation, which we have been in contact with, answering the concerns on behalf of their members. We have not dealt directly with policemen.
242. I am looking at a letter in the police magazine from March 2002 from a Mr Nigel Wood from Lancashire who writes that he knows personally of new cases of skin problems, sleeplessness, migraines, depression, difficulty in concentrating and headaches. In the December 2001 issue there is d Mr Jeff Parris reference to TETRA causing a variety of things including potentially heart and blood disorders, affecting the brain electro-chemistry, increasing the risk of leukaemia and so on. What is the current state of play on the health research?
(Mr Asque) The current state is that we are addressing all of the recommendations which were made in the report you referred to. A list of recommendations was drawn up and we have research projects going on all of those recommendations, addressing them in great detail.
243. Do the research projects have people wearing these things and making them operate and then checking out whether they get migraine or depression or whether they lose concentration?
(Mr Asque) Projects are being developed which will have that sort of aspect. At the moment we do not have a user base. We are in negotiation with one of the police forces which has offered to participate in a trial of that order, but it has not started yet.
244. That was July 2001. It is now April 2002 and you have just said that at the moment you do not have a user base. Do you not have people you can test this on?
(Mr Asque) The issue is that there is no proof that there are any of these effects.
245. I did not say there was. Nine months after that July 2001 report and a more recent report you say you do not have a user base, you do not have a bunch of people on whom you can test it specifically not relating to operability or interoperability but specifically relating to health. Is that correct? You do not have a user base of such people?
(Mr Asque) The Airwave service is only now being rolled out. We have done work in the laboratory, we have done a lot of experimental work in the laboratory prior to the final trial which we are doing as part of a health programme which is not directly led by the Home Office. It is part of the mobile phone research.
246. Are you responsible for the Home Office's input into health and safety on these issues?
(Mr Asque) Yes, we are and we are feeding into the wider programmes because we have more users involved and a wider base of information.
247. But you do not have a user base at the moment.
(Mr Asque) We have had discussions with one police force who are going to collaborate with us.
248. You have had discussions. I am just amazed. It was 1998 when you had the first review on effectiveness. Three years later you had a review on health safety specifically because of these concerns. Not quite a year later, but nearly a year later, you still do not have people to testify. Why not?
(Mr Asque) There are two issues here. We have to have people using the system. At the moment we have a trial system and now we are starting operational use. We also have to have a research programme in which we have to agree how we measure this. This is very subjective. People will have concerns about this; it is a very emotive topic -
249. These policemen are complaining about headaches and so on. You are in charge of health and safety. Have you thought of going along, getting on a train, going up to Manchester, participating, using it yourself and seeing whether you get headaches? It would be a quick way to move the thing forward, would it not?
(Mr Asque) It would, but I suffer from headaches for all sorts of reasons and I cannot say whether it is due to using that handset or not. We need proper scientific trials to analyse these things because a lot of these things are so subjective.
250. I am just amazed you have not started yet.
(Mr Gieve) Vaughan is referring to a particular monitoring programme we are setting up with the forces which are starting to use Airwave. We actually have a whole programme of research, most of which has started, on the effects on rat brains and lots of biological stuff to try to find out whether, as has been alleged, features of this technology do have effects on animals and on biology. So far there is no reason to think they do.
(Mr Parris) We take health and safety very, very seriously. The Airwave service operates within national and international guidelines which are laid down after years of research. Sure, more research is going on and it is absolutely right and proper that it should go on.
251. If you want to send us a note on safety, I should be very pleased to see it.11 Are TETRA and TETRAPOL interoperable?
(Mr Webb) No, they are not fully interoperable.
252. Are they interoperable to a degree? Presumably the answer to that is yes.
(Mr Webb) If you provided an adequate interface, there is a degree of functionality which would be possible.
253. But you do not have an interface at the moment.
(Mr Webb) Right.
254. Mr Alistair Philips was giving advice to PITO, is that right?
(Mr Webb) No, he is not giving advice.
255. Was he not giving advice to PITO? (Mr Webb) No.
256. Perhaps he was giving you advice in the sense that any person is entitled to give you advice rather than that you were paying for it.
(Mr Webb) I am sure he could have sent us an unsolicited letter.
257. Do you think he was giving you free advice?
Mr Philips' free advice says that he advised PITO to reconsider its backing for TETRA. He argues that TETRA carries proven health risks while the rival TETRAPOL technology is close to harmless. He also said that the proprietary nature of TETRA could have a detrimental effect on competition: suppliers do not like an open system, so this way the TETRA clique can set prices. Would you like to comment on that?
(Mr Webb) The TETRAPOL technology operates in the same sort of frequency band as TETRA does, therefore one would suspect it would have very similar health effects. In terms of the ability to interoperate with it, we have had no requirement to do so as at the moment. We have looked at the technology. It is not as functionally rich as TETRA and therefore there are large amounts of functionality which would not interoperate. There are also problems in the way it handles signals to enable it to operate at all. The level of functionality which we could actually share would be very low.
258. Are calls still dropping off?
(Mr Parris) No, the call dropping which was referred to in an earlier question has been cleared.
259. Call dropping is not happening any more. (Mr Parris) Correct.
260. May I ask about responsibility for this within government? The Home Office are responsible for the police. The Department for Transport, Local Government and the Regions are responsible for the Fire Service. Health are responsible for ambulances. The Cabinet Office are responsible for emergency planning and for joined-up government. The OGC is responsible for competition and procurement at the DTI. The Radio Agency with yourselves are responsible for the emergency spectrum. Who do you see as the main champion in all of this for your main project?
(Mr Webb) For our project it is the Home Office.
261. Not the Cabinet Office?
(Mr Webb) No, not the Cabinet Office. We are delivering a service solely to the Police Service.
262. You are not looking for help or sponsorship or support from the Cabinet Office.
(Mr Webb) We have had discussion through the Home Office with the Cabinet Office, the same as we have had discussions with other enterprises. As far as we are concerned we are as keen as everyone else to provide a far more joined up environment.
263. Do you think this project represents a good example of joined-up government?
(Mr Webb) Not at this present time, but it is a good step on the way to that in the sense that for the first time we have provided a joined-up service for the Police Service which is a major step forward.
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10 Ev 25.
11 Ev , Appendix 1.