HC Deb 24 June 1982 vol 26 cc480-7

Lords amendment: No. 18, in page 12, line 6, at end insert— (1A) The matters to which the Secretary of State shall have regard in exercising his powers under subsection (1) above shall include, in particular, the need to secure that the public is so far as practicable protected from any personal injury, fire, explosion or other dangers arising from the transmission or distribution of gas through pipes, or from the use of gas supplied through pipes.

Read a Second time.

Mr. Merlyn Rees

I beg to move, as an amendment to the Lords amendment, at end add and that satisfactory standards of service and supply to consumers are maintained". We have been over part of the ground many times in the past year in relation to the sale of the gas showrooms. That was a major element in the debate in another place. I advise my right hon. and hon. Friends not to vote, because I believe that we shall obtain more information out of the Government this year or next year. That weakens my argument, but there is to be no vote. We shall save our ammunition until we find out what the Government are going to do rather than allow them to say that it has been put to the House and the House has decided on it. We shall not decide until we know more about it.

A little recent history puts the discussion in perspective. Within the last two years we have had the report of the Monopolies and Mergers Commission, which made certain recommendations. As a result, the Government, through the Department of Trade, announced that the gas showrooms were to be sold off. There seemed to be disagreement between the Department of Energy and the Department of Trade, at least from a distance, but one of the protagonists has disappeared from the Front Bench and the whole thing has been put on the long finger. The Government should not move on the sale of the showrooms until safety arrangements have been brought before the House.

There is more to it than the sale of the showrooms, as I have learned to my surprise during the last two years. The amount of service provided by the showrooms is remarkable. A showroom is not just a place where one buys appliances. Only 50 per cent. of the work in showrooms involves the sale of appliances. Advice is given on a variety of matters, including gas supply. Apart from the sale of appliances, 50 million customer service jobs are dealt with in the showrooms.

Can the Minister give us a time scale for the sale of the showrooms and the safety legislation, if that is what it is to be? The Government were defeated in another place on an amendment which would rule out the sale of any part of the transmission and distribution system. We are told that the Government intend to sell only the oil assets, but many people feel that they might sell the lot before the day is out. Therefore, the amendment which was passed in another place called in question the disposal of the showrooms. The amendment was concerned not just with the sale of the showrooms in the widest sense of the term, but with the wider consumer interest. We are right to question this because of the powers that the Government have taken in the Bill.

Given the all-embracing powers taken now, there must be some provision in the Bill for proper protection for consumers. The Government have taken powers in the Bill to sell anything they like. This may be an easy way of dealing with the showrooms and then the oil assets, but, whatever happens about disposal, there will still be a strong and inevitable monopoly element in the provision of supplies. A vast majority of consumers will get supplies from one source. Therefore, in our view, as in the view of another place, protection by statute is needed.

The House should note that clause 9, not the Secretary of State, sets out the powers of the corporation. The Secretary of State can direct the corporation to exercise its powers under clauses 9 and 10. If the powers are constrained, as proposed by our amendment, he could not in his direction disregard that constraint.

In another place, a wide cross-section of speakers praised the British Gas Corporation and its concern for the interests of consumers. We are concerned with the British Gas Corporation of the future. During the past few days we have heard how board members in the Health Service are removed when their views do not accord with those of the Government. That could happen with the British Gas Corporation. Even though it has been praised for its interest in consumer affairs, that may not be so for all time.

Amendment No. 18 deals only with safety. We suggest the addition of service and supply, as in the original amendment in another place. If the Minister does the same as was done in another place, he will claim that the words "service and supply" are too vague, but they are often used without definition in the Gas Act 1972. Already, the Minister is operating, apparently happily, on those vague words. It is only because of their inclusion in the 1972 Act that we put them in the amendment.

The Government may not understand, but consumers do. Throughout the country the safety arrangements apply on a 24 hours a day basis. As I found out for myself not long ago, there is swift action.

On the supply side, we have heard about the problems of a little village in Leicestershire which has no gas. Apparently before the general election a private supply of gas is to be rushed up the M1. My heart bleeds for the people in that village. It bleeds for them even more, because they will not get the supply.

In general, the supply side is satisfactory. The Government could easily accept the amendment. The wording is impeccable. It has been taken from the 1972 Act. One day we will amend the Government's privatisation measures. The Government went half way in another place. They could show sweetness and reasonableness by accepting the amendment, which would be a change.

Mr. Skeet

May I have your guidance, Mr. Deputy Speaker? Are we dealing with amendment No. 18, plus the amendment which has been moved by the right hon. Gentleman? It would be convenient to deal with both together. Or is my right hon. Friend the Secretary of State going to move Lords amendment No. 18?

Mr. Lawson

On a point of order, Mr. Deputy Speaker. I believe it is customary, after the amendment to the amendment has been moved, for the amendment to be moved.

Mr. Deputy Speaker (Mr. Paul Dean)

The amendment to the amendment has to be disposed of in due course, but it is for the convenience of the House that we discuss the two together.

Mr. Skeet

Would it not be convenient, therefore, Mr. Deputy Speaker, for my right hon. Friend to move the amendment now so that we can deal with the amendment moved by the right hon. Member for Leeds, South (Mr. Rees) and the Government's case?

Mr. Deputy Speaker

The procedure may be a little confusing. The right hon. Member for Leeds, South (Mr. Rees) has moved the amendment to the Lords amendment. That has to be decided first. I am saying that the House can discuss at the same time the amendment to the amendment and the Lords amendment.

Mr. Skeet

I looked at the amendment with interest.

Mr. Merlyn Rees

Or the amendment to the amendment.

Mr. Skeet

And the amendment to the amendment. I came to the conclusion that safety is paramount in everyone's mind. When I examined the Bill, I noticed that safety was dealt with not merely in the subsection which is to he inserted in clause 11, but in clause 14. The wording of the Lords amendment is roughly on the same lines as clause 14. It seems that we are putting too much stress on this matter. In the case of disposals, we have the amendment before us, and in the case of safety regulations to protect the public against explosions, and so on, we have clause 14. We have standards that come under clause 13 being authoritatively established.

Reference was made to an interesting Monopolies and Mergers Commission report on domestic gas appliances—Parliamentary Paper 703. In its early pages it talks about the Confederation for the Registration of Gas Installers being established. That came into being after a number of accidents in the United Kingdom. Its object was to provide for the safe installation and use of gas pipelines, fittings and appliances.

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I accept that the gas showrooms cannot go straight over to the private sector until regulations are formulated, which is probably the Government's intention. However, the Government face the additional problem that there is a monopoly here that has to be dealt with. This question is dealt with in paragraph 13.7 on page 86 of the report. It states that the corporation's share of appliances so supplied was 97 per cent. of the total number of cookers, 92 per cent. of the number of space heaters and 97 per cent. of the … water heaters. The report made the point even more broadly when it said: we are left in no doubt that these monopoly situations have largely contributed to the manufacturers' lack of investment, inadequate commitment to technical or market research and development and failure to promote exports. The manufacturers accepted a position of subservience to their chief customer save to the extent that they combined in ways which were restrictive of competition". I mention that to explain one important point in the report dealing with monopolies. The right hon. Member for Leeds, South said that he was concerned about the safety arrangements that could be made under the safety regulations or, as he said, by the amendment that he has tabled. For a different reason, it is necessary that gas appliances and the gas showrooms should be transferred to the private sector over a number of years so that adequate standards may be maintained. That naturally assumes that the British Gas Corporation had high standards in the past years and that it is the only body that has maintained those standards, but that is not the case.

In appendix E to the report of the inquiry into serious gas explosions in June 1977, known as the King report, there is an interesting table on page 19 about the cause of deaths. The figures for deaths caused by gas distribution by pipeline were 55 in the United Kingdom, 77 in France, 72 in West Germany, 16 in Holland and 27 in Belgium.

That only goes to show that wherever one is in Western Europe, whether in the United Kingdom where there is a national corporation doing this sort of thing or elsewhere where there is a strong private sector, safety standards are always of the highest consideration. Those standards must be maintained. My general conclusion is that both the private and public sectors have high standards where the safety of the public is involved. Therefore, it is no prerogative of the State that only it can do this sort of thing.

It is right that the sale of the showrooms should eventually go ahead when safety standards are prescribed by regulation. In the interests of moderation, will my right hon. Friend ensure that the showrooms are handed over to the private sector gradually over the years, and that British Gas maintains a presence?

The CORGI standards could be extended to all those who carry out work in private homes to ensure that the highest standards are maintained. If we go by stages in this way, the public will be secure and the ideas that the Government intend to carry out will be amply fortified.

Dr. Mabon

I agree with the hon. Member for Bedford (Mr. Skeet) that if there is to be any disposition it should be gradual and handled with great caution and reason. The Scots would use the phrase "ca' canny" with regard to this, and it has been the essence of the argument in the other place and in Standing Committee for the disposition of the showrooms.

I hope that the Secretary of State will think seriously about the amendment of the right hon. Member for Leeds, South (Mr. Rees) and will incorporate it in the Bill. I am glad that, if he denies the amendment, we shall not vote on it because we shall have other opportunities for debating this matter to see whether the Government have exercised caution, in this regard if in no other.

Through all the stages of the Bill there has been genuine concern that the Government may be in error in disposing of the gas showrooms promptly and without due consideration to what the Minister has called the "paramount interest" of the consumer. He may reaffirm all that tonight, but many of us hope that there will be great thought and deliberation before the Government even contemplate moving in this direction. Perhaps they will never do so.

Mr. Lawson

I shall deal later with the amendment tabled by the right hon. Member for Leeds, South (Mr. Rees), but I begin by discussing amendment No. 18 which is a constructive addition to the Bill that arose out of the discussion in the other place to which the right hon. Gentleman alluded.

Amendment No. 18 places a specific obligation on me as Secretary of State to have particular regard to the safety of the public in giving any direction to the British Gas Corporation requiring it to exercise its powers of disposal under clauses 9 and 10. It might help the House if I were to give a brief history of the amendment.

In Committee in the other place, an amendment was inserted in clause 9 prohibiting the corporation from exercising its disposal powers if such a disposal would impair essential services or supplies to or the safety of consumers. The Government were opposed to these words, and made their reasons clear. First, they believed that such concerns were better addressed in the context of clause 11, which deals with the Secretary of State's powers of direction over the corporation, and, secondly, the words as they stood were too vague in their drafting. It would, for example, have been impossible to say where the dividing line between essential and other services should be drawn. This would have introduced considerable uncertainties into the British Gas Corporation's powers of disposal, even in areas which on a common sense basis would not appear to have any link with the matters mentioned in the amendment, or of concern to hon. Members. This uncertainty was clearly unacceptable in legislation that has been designed to clarify both BGC's and the Secretary of State's powers of disposal and indeed might have been a hindrance to the corporation itself in carrying out its business.

At all stages of the Bill, I personally and the Government in general have taken the question of safety seriously and we therefore gave careful consideration to the concern that had been expressed and to representations received on the matter from my noble Friend Baroness Macleod. As a result of that consideration, while remaining opposed to the original amendment in clause 9, the Government agreed to accept in its place this amendment which was tabled by Lady Macleod on Report. The Government also recognised, bearing in mind the concerns expressed about consumers, that there was a feeling that it would at least be premature at this stage to contemplate a reduction in the remit of the gas consumers councils, and agreed to another amendment moved by Lady Macleod which deleted the powers to restrict the remit of the councils that was contained in paragraphs 11 to 13 of schedule 3. The House will have an opportunity to discuss this amendment in due course. The amendment to clause 11 avoids the earlier problems of vagueness of drafting and inappropriate positioning within the Bill while giving proper recognition to the particular concern that has been expressed in each House about safety in relation to disposals under clauses 9 to 11. I commend it to the House.

It is interesting to note that the National Gas Consumers Council takes a similar view. That independent body wrote a letter dated 4 June which was circulated to a number of peers in which, after referring to its earlier letter of 25 May which sought support for the original amendment passed in Committee in another place, it said: Uppermost in our minds when recommending this amendment was the need to ensure that the safety of gas consumers be taken fully into account when disposal of parts of the British Gas Corporation is being considered. Although we feel that amendment 18 (a)"— the number it then had— was a step in the right direction, we were concerned that it placed the responsibility for assessing the safety implications of such disposals entirely on British Gas itself. Could I therefore draw your attention to an amendment tabled by Baroness Macleod to section 2(1) page 12 of the Bill which will be considered by the House on 8 June. This new amendment"— the amendment now before us— places responsibility for the assurance of safety more properly, in our opinion, on the Secretary of State". I now turn to the Government's views on the Opposition amendment to amendment No. 18. It is clear—I hope that the right hon. Gentleman will, on reflection, see this—that for reasons similar to those I have already outlined this will result in many of the same difficulties of interpretation that would have followed from the original Lords amendments to clause 9. The vagueness of concepts such as the maintenance of satisfactory services would make it impossible to say whether the necessary standards had been met. The hon. Gentleman may say that "services" and "supply" are vague and that they are in the 1972 Act, but what is not in the 1972 Act is any such phrase as "satisfactory standards". That is where the vagueness is imported.

The problem is that all parties would be uncertain as to the powers of direction of the Secretary of State. Even after a direction had been issued, it would be open to challenge in the courts on all sorts of relatively minor technical matters that the corporation might claim would lead to a lowering of standards for the consumer. Even the disposal of the corporation's offshore oil interests, which the Government have made clear is the initial reason for taking these powers, might be put at risk if these words were accepted, since the Government's proposals could become bogged down in interminable legal dispute. That is no way to legislate.

While I do not wish at any time to suggest that the corporation would seek to mount a challenge in this way, it is essential that legislation should be worded in a clear and precise manner. For these reasons, I cannot agree to the amendment to amendment No. 18 and I hope that the right hon. Gentleman will seek leave to withdraw it.

I make one further point about safety because it is a matter of first importance. My right hon. Friend the Member for Gloucester (Mrs. Oppenheim), who was then Minister for Consumer Affairs, made it clear as far back as July 1981, when announcing the Government's decision on the Monopolies and Mergers Commission report, that the Government would not take any action on appliance retailing which would not allow safety standards to be maintained at least at present levels. I can tell the right hon. Member for Greenock and Port Glasgow (Dr. Mabon) that the Government intend seriously and carefully to examine any constructive proposals that are offered provided they meet the Government's objective, which is to break the corporation's monopoly in gas appliance retailing and to ensure effective competition.

However that is achieved, the ending of the corporation's dominance in appliance retailing will inevitably bring about a reduction in the corporation's share of the appliance servicing market. The consumers will, therefore, have a greater degree of choice on whether to deal with the corporation or private installers.

It is important to realise—my hon. Friend the Member for Bedford (Mr. Skeet) rightly referred to this—that the safety record of the reputable private sector is fully on a par with that of the corporation. However, in order to ensure satisfactory safety standards on work undertaken by anyone, whether in the reputable private sector or not, the Government intend to introduce, by statute, a rigorous system of licensing for gas installers aimed at ensuring that the undertakings, and the people they employ, are required to meet safety standards comparable to those currently being met by the corporation and the reputable private sector. I do not intend to weary the House with the details now, but we shall also ensure that appliance standards—not just the installation—are properly safeguarded.

Dr. Mabon

That is an important announcement. Does it mean that the Minister will not do anything about these matters until the Bill is on the statute book?

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Mr. Lawson

I have already given that undertaking. The various measures that the Government will be bringing forward cover not merely the licensing of the installers—the companies and the individuals they employ—but the standards of the appliances.

I hope that with those assurances the Opposition will seek leave to withdraw the amendment to the amendment and accept that amendment No. 18 is a proper way of meeting the anxiety about safety that all of us properly have.

Mr. Merlyn Rees

Without accepting the Minister's arguments, the day to dispute this is when we see the Government's money. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lords amendment No. 18 agreed to.

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