MPs want spending from £20bn windfall

Senior Labour backbenchers pressed the Government yesterday over an unexpected £10bn windfall from the auction of next-generation mobile-phone licences.

Robert Sheldon, the chairman of the Standards and Privileges Committee, challenged Andrew Smith, the Chief Secretary to the Treasury, over how the money would be spent.

Mr Sheldon said that the third-generation mobile-phone licences had been expected to raise £10bn, but it was now likely that their auction would top £20bn.

"That's a large increase in revenue," he said. "Not all of it will come in this financial year. But it should have some impact either on the expenditure or possibly on the revenue side."

But Mr Smith made clear that the windfall would be used to pay off the national debt rather than go on a spending spree. "The prudent thing to do with such a large income is to use it to reduce debt, and that is what our plans are."

International phone operators have been vying for one of the five money-spinning licences, which will use a new technical standard - the universal mobile telecommunications system - to offer faster internet access and downloading of emails, video conferences on the move and high-quality video images.