§ Mr. Rowlands
I beg to move amendment No. 1, in page 5, line 13 at end insert—'(4) Before granting an authorisation, the Secretary of State shall require any public gas supplier, following consultations with the Director and the Council, to prepare codes of practice specifying
- (a) the nature of service available to tariff customers in relation to gas supplied by the supplier;
- (b) the conditions attached to the payment of gas bills including guidance to domestic customers if they have difficulty in paying; and
- (c) the provision of special services for elderly and disabled persons and any public gas supplier shall arrange for the publication of such codes of practice, in such form and such manner as the Director may consider appropriate.(5) The Director and the Council shall collect information on, and keep under review, all matters relating to such codes of practice under sub-section (4) above with respect to which the functions of the Director or the Council are exercisable.'.
§ Mr. Deputy Speaker (Sir Paul Dean)
With this it will be convenient to discuss the following amendments:
No. 5, in page 7, line 7 leave out subsection (13).
No. 7, in clause 9, page 8, line 33 at end insert—
'(2A) It shall also be the duty of a public gas supplier to employ a sufficient number of qualified staff trained to an appropriate standard to fulfill the obligations placed upon the supplier by Schedule 5 of this Act'.No. 14 in clause 23, page 26, line 16 leave out subsection (1) and insert—
`The Director may modify, with the consent of the Secretary of State, conditions of a public gas supplier's authorisation in respect of conditions relating to prices and charges made by the supplier; and in respect of conditions relating to the level of service provided to customers.'.No. 15, in page 26, line 38 leave out `the consent of' and insert 'consulting'.
No. 42. in schedule 5, page 73, leave out lines 20 to 23 and insert—
- '(a) seek an order from the court to cut off the supply to the premises by disconnecting the service pipe at the meter (whether the pipe belongs to the supplier or not) or by such other means as he thinks fit; and
- (b) if such an order is granted recover any expenses incurred in so doing from the customer.In deciding whether to make an order for the purpose of subparagraph 5(a) above the court shall have regard to provisions of the Code of Practice for payment of bills.'.No. 43, page 73, line 24, leave out subsection (6) and insert`(6) In this paragraph "the court" means the High Court or a county court and a county court shall have jurisdiction in the proceedings if the charges due do not exceed the county court limit.(7) Where a public gas supplies has cut off the supply of gas to any premises as a result of an order made in accordance with subsection (5), the supplier shall not be under any obligation to resume the supply of gas to the customer until he has made good the default and paid the reasonable expenses of re-connecting the supply.'.
§ Mr. Rowlands
One of the most constant and widespread criticisms, not only of the Bill, but of the Government's whole approach to privatisation, which has 90 been reflected in our debates and in journals and newspapers, ranging from the Financial Times to the Morning Star, is that by privatising British Gas the Government will create a new monster private monopoly, while at the same time failing to provide any meaningful or effective regulation of it. That is the fundamental charge made against the Bill and the whole process of privatisation adopted by the Government.
In their turn, the Government have claimed that this private monopoly monster will be controlled by a combination of competition and regulation. However, for the vast majority of gas consumers competition will be non-existent. In Committee we investigated the Bill in detail, together with the draft conditions attached to the 25-year monopoly licence to be granted to the new BG plc. We found that the system of regulation, and the functions and powers given to the director general, would not provide any meaningful regulation or protection for consumers in key areas of consumer interest.
These amendments together with the next two sets of amendments, which I understand will be moved by the Chairman of the all-party Select Committee, go some way towards remedying the defects and towards giving some substance to the concept of regulation and the power of the director general.
Amendment No.1 has been promoted by the Gas Consumers Council and is fully supported by it. It seeks to ensure that the gas supplier has to prepare a series of codes of practice specifying the nature of the service available to tariff customers and, in particular, the conditions attached to the payment of gas bills, including guidance to domestic customers if they have any difficulty in paying. The gas supplier is to provide a code that covers the provision of special services to the elderly and disabled. Such a code must be prepared following consultation with both the director general and the Gas Consumers Council. We believe that that is vital to the needs and interests of many consumers.
We fear, not that British Gas will not initially maintain a variety of voluntary codes, but that a future British Gas may decide to cut corners, to reduce services or to cut the number of meter reading staff, while not passing on those reduced costs of the consumer. We wish to ensure that the Bill gives statutory support to the idea of codes relating to the payment of gas bills car to the disconnection of supply for failure to pay them.
A voluntary code has been agreed. Some 35,000 gas consumers were disconnected in 1985 because of failure to pay their bills. Thus, we are not talking about something modest. It is necessary that codes of practice as outlined in the amendment should be in force and should be the subject of consultation. We strongly believe that the provisions laid down by the Government, in the conditions attached to the 25-year monopoly licence granted to British Gas, do not provide the full range of statutory support that is necessary for standards of customer service. Thus, we believe that the gas supplier should be compelled to prepare codes of practice specifying various things, and that they should be the subject of consultation with the director general and the council.
We also believe that the director general and the council should have the power to collect the information and to keep under review all matters relating to such codes of practice as are suggested in the proposed subsection (4). We place great emphasis on the ability to obtain and collect information, because of the experience of 91 telephone user groups in relation to British Telecom. Before privatisation BT issued a lot of information about problems, breakdowns and failures. However, after privatisation it used the cloak of commercial secrecy as an excuse for not providing such information.
We do not want those mistakes to be repeated. Consequently, it is vital that the director general and the council should have the power to collect information. British Gas should not feel, after privatisation, that it can wrap some of its information in a cloak of commercial secrecy, as BT has done. Therefore, there is a strong case for proposals such as those the Gas Consumers Council has suggested, which are incorporated in amendment No.1.
In amendment No. 5 we go further in giving some power and meaning to the director general's role. We give the director general the power to modify, with the Secretary of State's consent, certain conditions that are attached to the licence in relation to prices, charges and the level of services. In Committee we debated some aspects of that. At present, the Bill allows the director general to do only two things: he can modify the licence if he obtains agreement from British Gas under clause 23, or, if he does not get agreement, he can modify it if he makes a recommendation to the Monopolies and Mergers Commission, which in turn takes the necessary decision.
We believe that saying that modification should occur only by agreement or through the elaborate procedure of reference to the Monopolies and Mergers Commission makes the Director General of Gas Supply a pathetic creature, without any meaningful power in the key areas. Apart from enforcing the existing arrangements or authorisations, all that he can do is to recommend changes, which have then to be submitted to the Monopolies and Mergers Commission. The director general's power is reduced to that of postman. Any of his recommendations to British Gas to modify a 25-year-old licence will have to be passed to the Monopolies and Mergers Commission.
Anyone who has followed the activities of that commission in the last few months will wonder whether such a cumbersome outfit, already overstretched and coping with the merger mania which has struck us, is an appropriate body to deal with the range of probably modest modifications which cannot be achieved by agreement with British Gas. Is that not an incredibly cumbersome process?
We debated the matter in general in Committee, but we have returned with a modification of our own proposals. We suggest that the director general should have limited powers to modify a licence. We provide the safeguard that the director general must have the consent of the Secretary of State, but we believe that if Ofgas is to be set up, the only function of which is to consider complaints about gas supply, the director general should have the right to decide on modifications to a licence in relation to services, charges and prices— with the Secretary of State's consent. The director general should not be expected to pass his recommendations on to the Monopolies and Mergers Commission, which might know very little about the nature, background and reasons why such modifications of the licence are proposed.
The Government's plan will insert another tier of obstruction into the flexible arrangements which the Government desrcibe as necessary. It will undermine the potential authority of a regulatory body. We plead with the 92 Minister to reconsider this "either or nothing" arrangement. The director general has either to get agreement or pass on his recommendation to the Monopolies and Mergers Commission. If we are to create the director general, we must give him a proper job to do. We should give him limited power to modify a licence and the conditions attached to it.
In Committee I explained how nonsensical it would be if, when the director general wanted to recommend a modification to the conditional connection charges, or to the codes for payments of bills or services, he had to refer this to the Monopolies and Mergers Commission. That commission deals with other matters, such as competition. It does not normally consider the moderate and sensible modifications that might be proposed by the director general on charges, pricing and standards of service.
I hope that the Government will respond to our plea to make the director general and the Department more meaningful, with a reasonable set of functions. I hope that our plea will not fall on deaf ears as it did in Committee. We have a strong case for giving the director general more powers than are offered in the Bill.
Another amendment refers to safety, which we debated at length in Committee. We believed then, as we believe now, that the Government have made an exaggerated case, to the point of being bogus, in their claim to improve safety by reducing the statutory time given to British Gas to deal with gas escapes from 24 hours to 12 hours under schedule 5. The majority of regions respond within two hours to a gas escape report.
As important as the speed with which a gas escape is dealt is who deals with it. Will the person be equipped, trained and qualified to deal with it? Our amendment suggests that a duty be placed on the public gas supplier to ensure that such people are qualified and trained to a certain standard. We debated those standards at length in Committee when we discussed the training of staff.
Even before privatisation the problems and arguments are with us. The problems exist now, before the privatised company, which will be more interested in profit than service and might cut corners, is established.
I shall quote an extract from a letter from employees in Plymouth. It says:The Plymouth area of British Gas has not taken on an apprentice gas fitter for at least four years, and even if it were to do so it now would mean a gap of eight years before a qualified and certificated fitter became available. Within that eight-year period there has, and will be a reduction in the direct labour force due to retirement, ill health etc. Already contractors are being used to deal with peak work loads and if those employers are not inclined to set up their own apprenticeship schemes which should adhere to British Gas standards, where are the qualified persons to come from? We fear there is a great danger of cowboy operators, with limited knowledge, moving into the industry, perhaps producing sub-standard work which eventually could cause damage to life and limb, and of course property.The letter suggests that I bring these fears to the attention of the appropriate committee. I bring it to the attention of the House. The letter concludes:a fully certified operator should be the only person allowed to fit and maintain any gas appliances. This should also apply to contractors engaged on mains and service work whose training programme leaves a lot to be desired.
§ Mr. Robert C. Brown
It is appalling that some gas depots have not employed an apprentice for four years. Is my hon. Friend aware that this is typical of area boards 93 throughout the country, and that in many instances many more years than four have passed since an apprentice was employed?
§ Mr. Rowlands
I am grateful to my hon. Friend for intervening. As we know, he has great knowledge of these matters.
I hope the Minister will not contend that we are engaging in scaremongering. I did not prompt the letter from which I have quoted. I have not been to Plymouth to arrange for such a letter to be written, and I have not sought to arouse the feeling which is expressed within it. I assure the House that the letter was written spontaneously. I hope that the Minister will heed the authentic words and views that have been set out on behalf of those who work in the industry.
Worries and concerns are being expressed before British Gas is privatised, and amendment No. 7 will impose a duty on public gas suppliersto employ a sufficient number of qualified staff trained to an appropriate standard to fulfil the obligations placed upon the supplier by Schedule 5 of this Act.This is not a marginal issue, and it cannot be desrcibed as an academic consideration. We are discussing a factor which is central to safety issues.
British Gas has tried to maintain high standards and it has a tremendous record of training apprentices. My hon. Friend the Member for Newcastle upon Tyne, North (Mr. Brown) and many of his contemporaries are examples of the training that has been provided. We are worried about the deterioration in training standards. If the Government decide to embark upon a further privatisation measure and to create a new public company, we feel that the duty should be placed upon the company to ensure that training takes place and that a sufficient number of qualified and trained staff are available to meet the challenge of ensuring safety in future.
We are worried about an increase in the number of cowboys in the industry. There is great concern about some of the gas applicances, including gas cookers, which are being supplied. There is increased competition in the selling of gas cookers and a significant percentage of the 110,000 cookers that have been imported from the continent and elsewhere are not reaching the safety standards that have been set by British Gas. We know that strong statements have been issued by Ministers in the Department of Trade and Industry to the effect that unsafe goods constitute unsafe competition. We have not yet seen the draft regulations on the safety of appliances that have been promised, although we have pressed harder and harder for them to be produced and introduced.
There is a huge gulf between the Government's rhetoric, the words in the Bill, the conditions in the licence, the system of regulation and the powers that have been given to the Director General of Gas Supply. We do not believe that the draft licence that will be granted for 25 years will meet the needs as we see them. They will not meet the needs of the consumer. The Gas Consumers Council will be able only to advise on the presentation of some of the codes, as laid down in condition 14. That demonstrates how derisory and modest is the role of the council in preparing and drafting codes that will be of great concern to domestic gas consumers.
We believe in strengthening the statutory backing of the codes, in strengthening the role of the Gas Consumers 94 Council and the director general in the preparation of the codes, and in giving the director general important and useful functions by being able to modify the licence without embarking on the enormously cumbersome procedure of making recommendations to yet another quango, the Monopolies and Mergers Commission. For all these reasons, I hope that the Minister, even at this late stage, will accept some of the arguments that we have been advancing.
§ Mr. Bruce
I shall speak briefly on amendments Nos. 42 and 43, which I tabled and to which the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) has been addressing himself. Although this may not be apparent at first sight, the amendments are designed to provide protection for those who have difficulties in meeting the payment of their bills and are faced with disconnection. Even under the present system, consumers can be disconnected in circumstances which would be regarded as unjust and unfair and which aggravate the difficulties being experienced. We need a service that is designed to try to help consumers cope with their difficulties. In most instances there is not a refusal or a show of unwillingness to pay. Instead, there is more often than not genuine financial hardship that leads to difficulty or inability to pay.
It is argued— in my view quite rightly— that consumers who are in difficulties should be faced with court action. I am not encouraging British Gas or any gas authority to take court action. Instead, I am trying to avoid the circumstances which arise now and which could become worse under a private company that will face, perhaps, more commercial pressures. I am trying to avoid arbitrary disconnections which do not relate to a code of practice. I do not want consumers who face difficulties enough being confronted with what would seem to them to be abrupt disconnection.
The basis of the amendments is not abstract. They are based on considerable evidence and experience over the years, which I am sure is shared by many hon. Members, of people who have suffered considerably as a result of arbitrary disconnection in circumstances in which it should not have happened. As I do not wish to detain the House unduly, I will give just one example.
Last year, a London consumer who had been away for six months received an estimated bill. He queried the estimate, but while he was awaiting a reply he received a second bill— not an unfamiliar experience— and the supply was then disconnected although there was a two-month old baby in the house and the consumer had offered to pay the £59 that he owed. He was then asked to pay not just the amount that he owed, but a reconnection fee, although I am sure that hon. Members would agree that the supply should never have been disconnected. Apart from anything else, it seems extremely dangerous to disconnect a house in which there is such a young baby, and I do not believe that that would have been done even by the electricity industry. The consumer had said that he had been away, he had queried the bill, and he had offered to pay the amount that he owed. To disconnect the supply in those circumstances seems arbitrary and heartless in the extreme.
The amendments would require the gas board to take court action, so the circumstances that I have desrcibed could not have arisen. The time needed to take court action would have ensured that the circumstances were brought 95 to light and would have given the advice and aid agencies time to provide a legal defence if necessary or to ensure that the case did not proceed in view of the circumstances. In fact, the details of the case that I have desrcibed were provided by the National Association of Citizens Advice Bureaux. At present, because there is no legal requirement to the contrary, the supplier can disconnect the supply without recourse to law, resulting in the injustices and uncertainties to which I have referred. In the case that I have cited, the disconnection was unfair and unjust, but no harm was done. It is not difficult, however, to imagine circumstances in which disconnection could have serious consequences, for example, for an old person or a household with very young children and without any alternative form of heating in very cold weather.
I believe that the requirement that disconnection should be undertaken only after court action would be welcomed by many people. It is quite wrong for people who have no direct dealings with cases of this kind to assume that people do not pay their bills because they are unwilling recidivists and wish to defraud the gas board. The evidence shows that in 99 per cent. of cases it is because people are experiencing genuine hardship and real financial difficulty. Those people need help. They certainly do not need an abrupt and arbitrary withdrawal of essential supplies.
I can understand why some hon. Members would rather the courts were not involved, but the purpose of the amendments is to protect the individual by making it clear that the gas authority cannot disconnect any consumer, even if bills have not been paid, without taking the matter to court where all the facts and arguments can be considered and it can be clearly determined whether the person is simply refusing to pay or has genuine difficulties which can be much better resolved by the various aid and support agencies. I commend these as fair, balanced and reasonable amendments.
Amendment 43 makes it quite clear that, where it is proved that the person has not paid the bill because of unwillingness or refusal to pay or where there are no circumstances which justify extra aid or help, the consumer will not get his supply reconnected until the bill has been settled. That seems to be reasonable because it puts an onus on both sides. In my view, the amendments would ensure that those facing real difficulites or hardship would be removed from the threat of arbitrary disconnection and would have the protection of the courts to ensure that they could not have their gas supply terminated unless it was conclusively proved that they were guilty of an offence. I think that that would very much improve the present position. I commend the amendments to the House.
§ Mr. Simon Coombs (Swindon)
My justification for speaking briefly in this debate is my former membership of a consumer council, albeit, I admit, not in the gas industry but in the electricity industry. However, I think that there are some important similarities between the two and I hope that on that basis I shall be allowed to say a few words.
The Opposition have tonight demonstrated more than anything else their fundamental disagreement with the principle of privatisation. That can be no surprise to any of us. They seek, therefore, to surround a Bill such as this 96 with the kind of controls which a new private company does not need in order to be successful. It is interesting that the Opposition spokesman, the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), sought information on faults and instanced the example of British Telecom. I am hopeful that there will be a general improvement in the performance of British Gas when it becomes a private company. I do not look for information on the bad things but an improvement which will be demonstrable to all consumers. I think that that says something about the attitude of the Opposition.
It is unfortunate that the Opposition regard the British Gas of the future as a monster. I think that that was the word used by the hon. Member for Merthyr Tydfil and Rhymney. Why should it be a monster? Why is there this deep-rooted suspicion that the new private company will want to cut back on services? I should be interested to know why that should be. To take the example of the disconnection code of practice which the hon. Member for Gordon (Mr. Bruce) mentioned, it seems to me that it is in the interest of a private company to maintain the best possible relationship with its customers in order to maintain good public relations. In the long term, those customers will pay for the success and profitability of the company. It seems extremely unlikely that the company would want to cut people off until all other methods of achieving payment had been tried. Certainly, it may go to the courts but I would have thought that the last thing the company would want would be to disconnect a consumer, because the gas industry is not such a monopoly as some hon. Members have suggested. It always has the competition of the electricity industry. A person who cooks by gas can transfer to electricity if he does not like the service which is being provided by the gas industry.
The fears which the attitude of the Opposition have raised deserve some form of answer from the Government. I take it as natural that in the future the industry will want to provide, for example, special services for the elderly and disabled. Services currently provided include free safety checks and special appliance adaptors. Research should continue into new facilities such as special meters for the blind. I hope that we are all of one mind in seeing that as the right way to go in the future. Is my right hon. Friend the Minister of State satisfied with the assurance that he has been given by the British Gas Corporation that it intends to continue along those lines in future?
Despite my right hon. Friend's confidence about the industry's future behaviour, confidence that I share, what would happen if there were changes, and if the fears that have been expressed tonight turned out to be justified? Is my right hon. Friend satisfied that the protection for the elderly and disabled would be maintained? Who would the consumer go to first with his complaint? Does my right hon. Friend expect to see the same dedicated band of men and women who currently serve the consumer councils at local level continuing in the future through the flexible arrangements that are being introduced in the Bill? It would bring considerable comfort to many of those who have been frightened by the Opposition's campaign against the Bill to be given an assurance tonight. I invite my right hon. Friend to say how the Government would react if some of those fears turned out to be justified.
§ Mr. Pike
I agreed with the hon. Member for Swindon (Mr. Coombs) when he said that the Opposition have made 97 it clear from the start that they are totally opposed to privatisation. That is exactly our position. I regret that I did not agree with most of the other conclusions that he reached.
In spite of our total opposition to privatisation, throughout the debate, as an Opposition, we have tried to pursue three aims— to protect our national energy, to protect the consumer interest and to protect the industry's employees. This group of amendments is aimed at protecting the interests of consumers.
The hon. Member for Swindon referred to the monopoly. British Gas will have a monopoly for the average gas consumer. Throughout the Committee, it was made clear that in most gas appliance sales, British Gas has a near monopoly at present and will continue to have one after privatisation. The hon. Member for Swindon said that a person with a gas cooker could easily go out and buy an electric cooker. He failed to recognise what sort of people we are trying to protect with the amendments that we are debating. Even those on a reasonably good wage cannot afford to suddenly go out and buy a new gas or electric cooker without difficulty—it is an expensive item. Therefore, it is unrealistic to say that there is competition.
§ Mr. Pike
I was going to mention that. Once someone has installed gas central heating, he is bound to that system for some time. Even if the boiler needs to be changed, the average person cannot suddenly say, "I have had enough of British Gas. I want to transfer to oil or coal." Therefore, in many respects, British Gas will continue to have a monopoly. It is right that we should put into the Bill and into primary legislation consumer protection.
We have now reached a stage where we can predict Ministers' replies to our debates. They say that we do not need to put provisions into primary legislation because what Opposition Members are seeking would be in the interests of British Gas, and would be done anyway. We disagree with the Government. We believe that the Bill's provisions must be strengthened to give consumers the safeguards we seek.
Amendment No. 7 states that a public gas supplier mustemploy a sufficient number of qualified staff trained to an approporiate standard".There is no reason for the Government not to accept that, but the Minister is almost certain to state that the public gas suppliers will employ a sufficient number of such staff. If he believes that, he should accept the amendment because it will not change the position. However, we believe that this provision should be written into the Bill to ensure that a sufficient number of trained staff are employed. It is important in dealing with such a highly volatile material as gas to have properly trained staff to ensure that work is properly carried out and that consumers are fully safeguarded. I see no reason why the Government should refuse to accept amendment No. 7.
Subsection (4)(b) in amendment No. 1 refers tothe payment of gas bills including guidance to domestic customers if they have difficulty in paying".That is an extremely important provision. No doubt the Minister will say that British Gas plc will continue to publicise details of the codes of practice. We believe that this provision will ensure that the public gas suppliers will do that properly.
The Labour party has never pretended that, because British Gas is publicly owned, everything is perfect and 98 there is no need for improvements. We have tried on a number of times to make improvements. The hon. Member for Gordon (Mr. Bruce) pointed out that in 99 per cent. of cases it was a matter not of people deliberately refusing to pay their bills but of people not being able to afford to pay them and thereby having to make the difficult choice of whether to provide heating or food at the weekends. Often they are the people who are at least able to defend themselves and to understand what protection and facilities are available to assist them.
As we know, many people do not understand how to claim payments under the exceptionally severe weather regulations. Many people operated their heating systems at low levels during the very cold weather in February but they suddenly found that assistance was available if their heating bills were higher than they were a year ago. In many cases heating bills will not be higher because people deliberately turned down or turned off the heating because they were afraid that they could not meet their bills Some people have paid the penalty and died from hypothermia. That is why protection must be clearly written into the Bill.
Subsection (4)(c) refers tothe provision of special services for elderly and disabled persons".We should ensure that privatised British Gas assists the elderly and disabled people. There should be no doubt about their position. The Minister may say that British Gas plc will undertake all these measures anyway and that, therefore, these provisions are not necessary. That is not satisfactory. If the Minister believes that, he should accept some of the Labour party's amendments. I believe that these are sensible, moderate amendments which only strengthen the position and try to give the public the protection to which the Labour party believes they are entitled.
§ Mr. Michael Cocks
The speech of the hon Member for Swindon (Mr Coombs) was a parliamentary gem. He said that we were raising a bogy man, and he huffed and puffed and blew the matter up so large that in the end he frightened himself to death. He ended by pleading with the Minister to give him some assurances that he could take back to his constituency to satisfy the disadvantaged and the disabled so that they would not be frightened.
These amendments reveal the difference in philosophy between the two sides of the Chamber. My hon. Friend the Member for Burnley (Mr. Pike) said that we do not argue that the existing gas structure is beyond criticism. However, some flexibility exists. We know that if we get in touch with the gas authorities, we shall get some satisfaction in respect of the complaints that we raise.
Only this morning, like my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), I received a letter from a lady who said that she was being asked to pay £11 to have her meter emptied. It has not been emptied for 15 weeks and contained between £150 and £200. She was afraid of a burglary, because she was going on holiday and had already been burgled once. She is a 66-year-old pensioner and fosters a child for Mencap. I am quite sure that when I telephone the office of the chairman of the south-west gas board tomorrow disrcetion will be used and that something will be done about this case. Can we really believe that the use of such disrcetion will be extrapolated into the new situation that the Government are creating?
The Minister should think hard before rejecting these amendments, because they go to the heart of the matter.
99 It is not that the present gas structure is a large bureaucratic organisation, because it contains people who are not entirely wedded to the profit motive. We said in Committee that there was an inherent tension between the maximisation of profit and the rendering of a public service, and we are afraid that that will be eroded. I therefore hope that the Minister will give us some reassurance, and even set at rest the mind of the hon. Member for Swindon. This is an extremely important detailed human point.
§ Mr. Hardy
My right hon. Friend the Member for Bristol, South (Mr. Cocks) has made an important point. We are seeking to maintain the civilised and caring approach that exists in the gas industry. We want to see it continue, even though the pressure to maintain or enhance profit may become very strong.
My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) advanced a powerful case. He appeared in the most reasonable manner to be appealing to the Government just this once to drop their hitherto hard approach and to recognise that, although they are maintaining a pretence that they wish to stand aside from the economy, they are still sitting in the directors' box. Unfortunately, the referee, in the person of the director of Ofgas, has been given neither rules to follow nor an effective whistle to blow. We want his position to be important, if only to protect the people to whom my right hon. Friend the Member for Bristol, South referred.
The last debate was sadly curtailed because of the guillotine. We did not even get a complete response from the Under-Secretary. I know that he would have replied very fully to that brief debate, but he was prevented by the guillotine— a form of political suicide that I find deplorable.
That debate was relevant to this one, because it was an expression of our concern for the hundreds of thousands of people who are in need. They are the sort of people whom the hon. Member for Swindon (Mr. Coombs) may not have been thinking of when he said that they could easily switch from a gas cooker to an electric one. Such people cannot afford to buy another very expensive appliance simply because they are currently dissatisfied with one supplier. The hon. Gentleman may not think that it is particularly expansive, but thousands of the constituents of Opposition Members cannot afford to buy a different appliance. Thousands of people, indeed probably millions, are like that. They will not reap any benefit from privatisation. They cannot join the rush to make a great deal of money because they do not have money to accumulate or to buy shares, or capital to invest. They have problems of considerable intensity, which is why we have considerable sympathy with the arguments of the hon. Member for Gordon (Mr. Bruce).
I accept that the hon. Gentleman is a trifle more mechanistic in his approach to the needy, in seeking to establish the structures by which disconnections can be achieved. Our concern is to ensure that a proper code of practice exists, and that a caring element is engendered in the gas industry to prevent disconnections as often as possible. We are grateful that the hon. Gentlemn has taken part in the debate, unlike the other half of the alliance. The debate has continued for nearly six hours, yet no SDP 100 Member has been present. This shows how greatly the SDP is concerned about the millions of people for whom we speak.
My hon. Friend the Member for Burnley (Mr. Pike) expressed our concern for the needy. Their numbers are growing. The number of unemployed is substantial, and the figures that the Government produce are only a small part of the whole story. The number of elderly people is also substantial. The Government are well aware from our arguments in Committee during this particularly bitter winter how serious the problem is. Because the problem is serious and extensive, it is absolutely necessary to have a code of practice and for the director general to have a meaningful position. Unless the groundwork for rules and practices is laid down, the director general's position is nebulous.
If the Government do not go some way along the road which my hon. Friend advocated, no responsible person will wish to accept that important job. However, it can be important only if it is meaningful, and in the present circumstances without the proper code of practice the job may have the characteristics of cotton wool. Society has serious needs and we should not restrict ourselves simply to making money. The maintenance of a proper service is also essential.
§ Mr. Buchanan-Smith
We have had a useful debate on a wide range of topics, some of which we considered in Committee. The Opposition do not have a monopoly of compassion and caring. I wholly understand, as do all hon. Members, the problem that our constituents occasionally face in relation to some of the matters that we have discussed. Therefore, the motivation to ensure the provision of care for the less well-off and those who are less well able to defend themselves is an objective that is certainly shared on both sides of the House.
We begin to part company on the best ways of achieving that. The amendment tabled by the hon. Member for Merthyr Tydfil and Rhynmey (Mr. Rowlands) adopts a more structured approach, as does the amendment tabled by the hon. Member for Gordon (Mr. Bruce), than exists at present. The hon. Member for Merthyr Tydfil and Rhymney asked about the codes of practice. It is important to be clear precisely what they are, how they can be applied and how changes can take place. Indeed, my hon. Friend the Member for Swindon (Mr. Coombs) raised that point.
Clause 7 enables the Secretary of State to include conditions in the authorisation granted to a public gas supplier covering a wide range of matters. Condition 12 of the draft authorisation requires British Gas to publish codes of practice on the nature of the gas supply service available to tariff customers and on the matter which dominated the debate—the payment of bills. I accept that the codes of practice do not come into effect immediately on the authorisation, and that there is a gap after the passage of the Bill, but there will be plenty of time for them to be in place before British Gas plc comes into operation.
Condition 12 requires British Gas to consult the director general and the council in the event of a substantive revision to the codes of practice. I emphasise that it is a draft authorisation, and we have debated fully some of its provisions. We shall reflect on some of the points that have been raised about the final draft authorisation.
§ Mr. Rowlands
The Minister says that he will reflect upon the matter. We have raised this issue almost from Second Reading. Our fundamental complaint about condition 12 is that paragraph 2 confines the process of consultation to the presentation of each code. Will the Minister give a firm commitment that that will be revised to include a provision about the substance of each code, not just its presentation? That has caused great offence.
§ Mr. Buchanan-Smith
The hon. Gentleman forgets that British Gas has made it clear that it will continue its present codes of practice. Those codes are clear, and I have heard no criticism in the House of how they operate. I have not been satisfied of the Opposition's case by the debate, but I shall continue to reflect on the authorisation. If the existing codes are continued, there may be a question of how the codes should operate. If there is a change in their operation, we must know what procedures will be used to deal with that.
§ Mr. Robert C. Brown
Throughout the debate, Ministers have quoted assurances given by British Gas. British Gas will have no more power than Her Majesty's Government to dictate to British Gas plc after privatisation unless the power is written into the statute.
§ Mr. Buchanan-Smith
I was about to respond to the points made by my hon. Friend the Member for Swindon. The director general and the consumers council will play a role in the operation of the codes. The Opposition have overlooked that point. The council will wish to investigate any representations about standards of service, and if it seems to the director general that British Gas is falling short, he can modify the authorisation. I assure my hon. Friend that, in the event that the codes are not operated properly, the director general has the power to modify the authorisation. The new Gas Consumers Council will monitor the operation of the code of practice on the payment of bills, just as the existing council does.
That shows the fundamental difference between the two sides of the House. As my hon. Friend the Member for Swindon said, the Labour party wishes to overstructure the position and make the codes of practice over-rigid. It cannot be in the interests of British Gas, if it is to be successful, not to fulfil the undertakings that it has given.
We are concerned about the special needs of the elderly and disabled, as we said in Committee, and the BGC has said that it will continue free safety checks for the elderly. On the needs of the disabled, it is our intention that at least one member of the Gas Consumers Council should have experience of this sector. The code on this has worked successfully, although we can all give examples of where individual cases may have gone awry, and I have not heard any criticism from either side of the House that the code of practice has not worked satisfactorily.
We have an undertaking from the BGC that it will continue the codes, and there is an assurance that if it does not continue to operate those codes satisfactorily, the matter can be taken up by the Gas Consumers Council and by the director general, and modification of the code can be required. It is better to achieve proper standards in this way than by the overstructuring suggested by the amendments.
§ Mr. Rogers
Does not the Minister understand that in Committee we were attempting to tell him that what exists now is not necessarily what will exist after vesting day? 102 He is still telling us that he has had assurances today from British Gas, but that is British Gas as a public company, responsible, through the Secretary of State, to Parliament. It is not British Gas plc, which will be a private company and responsible only to its shareholders— that is the critical difference. By introducing the amendments, we are not attempting to overstructure. We are anxious only to ensure that there will be a statutory basis for the protection of consumers after vesting day. The Minister must accept that any assurances given now are not binding on British Gas plc.
§ Mr. Buchanan-Smith
The hon. Gentleman cannot have been listening to what I was saying. We are privatising British Gas, but with the same management. The hon. Gentleman is saying that that management's assurances are worthless.
§ Mr. Buchanan-Smith
I happen to disagree. It is a responsible management, and I believe that it will honour the undertakings that it has given. However, I have made it clear that if it fails to do so, and it falls short on other practices, it is open to the Gas Consumers Council to take up the matter in the event of complaints from consumers, and to report to the director general, who can initiate the modification procedure.
Amendments Nos. 14 and 15 are about procedure for modification. Again, we come to a fairly fundamental difference between the two sides of the House. Clause 23 deals with modification in circumstances where the public gas supplier consents to modifications being made. There have been criticisms of our procedures of reference, when there is not consent, to the Monopolies and Mergers Commission, saying that it is too cumbersome and top-heavy. I do not think it is because it is the protector in cases of monopoly abuse. If modifications need to be made, this body, much more than the director general, can review the position not only of British Gas, but of monopoly measures more generally. The MMC has much more experience than the director general. This is, therefore, a reasonable way to approach the matter. First, there should be consultation. In the case of supplies to tariff customers the Monopolies and Mergers Commission route should be used, where agreement is not possible, or if the director general decides that an investigation is desirable. The director general may feel that it is best to use that body because it has the qualifications and the experience to investigate the matter. I accept that our approach is fundamentally different from that of the right hon. Member for Salford, East (Mr. Orme), but I hope that my hon. Friends will not support this amendment.
The hon. Member for Merthyr Tydfil and Rhymney also referred to safety and asked two questions specifically in the context of training. The first was whether the number of staff available will be adequate to deal with the responsibilities of British Gas in connection with emergencies, repairs and other safety matters. His second question related to staff qualifications. British Gas has always said that its level of recruitment will vary from year to year, according to the demands that are placed upon it. It cannot guarantee necessarily to employ the same number of staff each year to deal with the specific questions that were referred to by the hon. Gentleman. However, any changes that are made are introduced after consultation 103 with the employees and their trade unions. I referred in Committee to the fact that in its privatisation report No. 6 British Gas made it clear that consultation will continue.
Failure by a public gas supplier to comply with the obligations placed upon it by paragraphs 1 to 4 of schedule 5 are enforceable by the director general under the clause 28 powers. Failure to prevent escapes of gas within 12 hours is a criminal offence under paragraph 13 of schedule 5. It will be necessary, therefore, for British Gas to maintain its level of recruitment and training in order to fulfil its obligations. An explicit duty of the kind proposed in the amendment is unnecessary.
The hon. Member for Merthyr Tydfil and Rhymney may believe that it will be worth while for him to pursue with the chairman of British Gas the particular instance that he quoted this evening, but I think that British Gas has a good training record. It has an annual recruitment policy and it provides formal training and practical experience for all of its recruits. This ensures that tasks that must be performed under schedule 5 to ensure safety are always performed by competent and experienced staff. British Gas has developed its training programmes on an entirely voluntary basis. There is no reason to suppose that after privatisation there will be any diminution in the British Gas Corporation's commitment to recrutiment and to training adequate members of staff to fulfil its obligations.
The hon. Member for Gordon dealt with disconnections in amendments Nos. 42 and 43. Disconnections are serious. I am grateful to the hon. Gentleman for giving the House another opportunity to discuss the problem. He knows that public gas suppliers, like the British Gas Corporation, will be under a statutory obligation to supply the vast majority of their domestic consumers. Customers already have 35 days in which to pay their bills before action to disconnect the supply is taken. It would be unfair, and could be economically damaging to the industry, to remove the ultimate sanction— I know that the hon. Gentleman is not going that far, but this is worth saying—of disconnection where statutory supply obligations arise. It is against that background that we must view disconnections.
The involvement of the courts could have two consequences. First, the customer's debt could be increasing during the time that the court action would take because obviously there will be an interval between the time of the reference to the courts and the time when the court examines and decides the case. Secondly, one could run the risk of a significant new burden being placed on the courts. Courts are already involved in a number of disconnection cases where entry for that purpose is refused. In those circumstances, a magistrate's warrant has to be obtained and before granting such a warrant he has to be satisfied that a right exists and that the requirements of the relevant enactment have been complied with. Therefore, that provides consumers with a valuable protection against wrongful disconnection. That element of protection does not go as far as the hon. Gentleman would seek, but he is going further than is necessary.
In condition 12 of the code of practice to which I have already referred British Gas is under an obligation to publish a code of practice on the payment of bills, including guidance to domestic consumers if they have difficulty in paying. We envisage that the new Gas Consumers Council will monitor the operation of that code 104 in the same way that the National Gas Consumers Council does now. In the disconnection cases that I have had to handle in my constituency the role of the National Gas Consumers Council, which will continue, is a useful and helpful one. British Gas has publicly stated its commitment to the continuation of the code and it will follow its provisions and draw it to the attention of customers in difficulty before taking any decision to disconnect.
Therefore, the framework that we have provided in schedule 5 for the recovery of gas charges is reasonable and I hope that the hon. Gentleman will think about it in the light of what I have said and perhaps withdraw the amendment.
The House will realise that I share the views of my hon. Friend the Member for Swindon. I have sympathy with the motivation behind almost all the amendments in making sure that the less well-off consumer and the consumer less well able to stand up for his own interests is properly protected. In the light of the commitments from British Gas that there will be codes of practice and that any abuse of them can be monitored and investigated by the new Gas Consumers Council, and ultimately that the director can introduce a modification if the codes of practice are not seen to work, our approach is the better one and does not need to be structured in the way that the amendments have suggested.
§ Question put, That the amendment be made:—
§ The House divided: Ayes 187, Noes 224.108
|Division No. 106]||[9.55 pm|
|Abse, Leo||Cook, Robin F. (Livingston)|
|Adams, Allen (Paisley N)||Corbett, Robin|
|Anderson, Donald||Corbyn, Jeremy|
|Archer, Rt Hon Peter||Cox, Thomas (Tooting)|
|Ashdown, Paddy||Craigen, J. M.|
|Ashley, Rt Hon Jack||Crowther, Stan|
|Ashton, Joe||Cunliffe, Lawrence|
|Atkinson, N. (Tottenham)||Cunningham, Dr John|
|Bagier, Gordon A. T.||Davies, Ronald (Caerphilly)|
|Banks, Tony (Newham NW)||Davis, Terry (B'ham, H'ge H'l)|
|Barnett, Guy||Deakins, Eric|
|Barron, Kevin||Dormand, Jack|
|Beckett, Mrs Margaret||Douglas, Dick|
|Beith, A. J.||Dubs, Alfred|
|Benn, Rt Hon Tony||Duffy, A. E. P.|
|Bennett, A. (Dent'n & Red'sh)||Dunwoody, Hon Mrs G.|
|Bermingham, Gerald||Eadie, Alex|
|Bidwell, Sydney||Eastham, Ken|
|Blair, Anthony||Edwards, Bob (W'h'mpt'n SE)|
|Bray, Dr Jeremy||Evans, John (St. Helens N)|
|Brown, Gordon (D'f'mline E)||Ewing, Harry|
|Brown, Hugh D. (Provan)||Fatchett, Derek|
|Brown, N. (N'c'tle-u-Tyne E)||Field, Frank (Birkenhead)|
|Brown, R. (N'c'tle-u-Tyne N)||Fields, T. (L'pool Broad Gn)|
|Bruce, Malcolm||Fisher, Mark|
|Buchan, Norman||Flannery, Martin|
|Callaghan, Rt Hon J.||Foot, Rt Hon Michael|
|Callaghan, Jim (Heyw'd & M)||Forrester, John|
|Campbell, Ian||Foster, Derek|
|Campbell-Savours, Dale||Foulkes, George|
|Canavan, Dennis||Freeson, Rt Hon Reginald|
|Carter-Jones, Lewis||Freud, Clement|
|Cartwright, John||Garrett, W. E.|
|Clark, Dr David (S Shields)||George, Bruce|
|Clarke, Thomas||Gilbert, Rt Hon Dr John|
|Clay, Robert||Godman, Dr Norman|
|Clelland, David Gordon||Golding, John|
|Clwyd, Mrs Ann||Gould, Bryan|
|Cocks, Rt Hon M. (Bristol S)||Gourlay, Harry|
|Cohen, Harry||Hamilton, James (M'well N)|
|Conlan, Bernard||Hamilton, W. W. (Fife Central)|
|Hancock, Michael||Park, George|
|Hardy, Peter||Parry, Robert|
|Harman, Ms Harriet||Patchett, Terry|
|Harrison, Rt Hon Walter||Pavitt, Laurie|
|Hart, Rt Hon Dame Judith||Pendry, Tom|
|Heffer, Eric S.||Pike, Peter|
|Hogg, N. (C'nauld & Kilsyth)||Powell, Raymond (Ogmore)|
|Holland, Stuart (Vauxhall)||Prescott, John|
|Howells, Geraint||Redmond, Martin|
|Hoyle, Douglas||Richardson, Ms Jo|
|Hughes, Robert (Aberdeen N)||Roberts, Allan (Bootle)|
|Hughes, Roy (Newport East)||Robinson, G. (Coventry NW)|
|Hughes, Sean (Knowsley S)||Rogers, Allan|
|Janner, Hon Greville||Rooker, J. W.|
|Jones, Barry (Alyn & Deeside)||Ross, Ernest (Dundee W)|
|Kaufman, Rt Hon Gerald||Rowlands, Ted|
|Kilroy-Silk, Robert||Sedgemore, Brian|
|Kirkwood, Archy||Sheerman, Barry|
|Lambie, David||Sheldon, Rt Hon R.|
|Lamond, James||Shore, Rt Hon Peter|
|Leadbitter, Ted||Short, Mrs R. (W'hampt'n NE)|
|Leighton, Ronald||Silkin, Rt Hon J.|
|Lewis, Terence (Worsley)||Skinner, Dennis|
|Litherland, Robert||Smith, C.(Isl'ton S & F'bury)|
|Livsey, Richard||Smith, Rt Hon J. (M'ds E)|
|Lloyd, Tony (Stretford)||Snape, Peter|
|Lofthouse, Geoffrey||Soley, Clive|
|Loyden, Edward||Spearing, Nigel|
|McCartney, Hugh||Steel, Rt Hon David|
|McDonald, Dr Oonagh||Stott, Roger|
|McKay, Allen (Penistone)||Strang, Gavin|
|McKelvey, William||Straw, Jack|
|MacKenzie, Rt Hon Gregor||Thomas, Dafydd (Merioneth)|
|McNamara, Kevin||Thomas, Dr R. (Carmarthen)|
|McTaggart, Robert||Thompson, J. (Wansbeck)|
|McWilliam, John||Thorne, Stan (Preston)|
|Madden, Max||Tinn, James|
|Marek, Dr John||Torney, Tom|
|Marshall, David (Shettleston)||Wallace, James|
|Martin, Michael||Wardell, Gareth (Gower)|
|Mason, Rt Hon Roy||Wareing, Robert|
|Maxton, John||Weetch, Ken|
|Maynard, Miss Joan||Welsh, Michael|
|Meadowcroft, Michael||White, James|
|Michie, William||Wigley, Dafydd|
|Mikardo, Ian||Williams, Rt Hon A.|
|Millan, Rt Hon Bruce||Wilson, Gordon|
|Miller, Dr M. S. (E Kilbride)||Winnick, David|
|Mitchell, Austin (G't Grimsby)||Wrigglesworth, Ian|
|Morris, Rt Hon A. (W'shawe)||Young, David (Bolton SE)|
|Morris, Rt Hon J. (Aberavon)|
|Nellist, David||Tellers for the Ayes:|
|Oakes, Rt Hon Gordon||Mr. Frank Haynes and|
|O'Brien, William||Mr. Don Dixon.|
|Adley, Robert||Bowden, Gerald (Dulwich)|
|Aitken, Jonathan||Boyson, Dr Rhodes|
|Alison, Rt Hon Michael||Brandon-Bravo, Martin|
|Amess, David||Bright, Graham|
|Ancram, Michael||Brittan, Rt Hon Leon|
|Arnold, Tom||Brooke, Hon Peter|
|Aspinwall, Jack||Brown, M. (Brigg & Cl'thpes)|
|Atkins, Robert (South Ribble)||Browne, John|
|Baker, Nicholas (Dorset N)||Bruinvels, Peter|
|Baldry, Tony||Bryan, Sir Paul|
|Banks, Robert (Harrogate)||Buchanan-Smith, Rt Hon A.|
|Batiste, Spencer||Butler, Rt Hon Sir Adam|
|Beaumont-Dark, Anthony||Butterfill, John|
|Bellingham, Henry||Carlisle, Kenneth (Lincoln)|
|Benyon, William||Carttiss, Michael|
|Best, Keith||Cash, William|
|Bevan, David Gilroy||Chapman, Sydney|
|Biffen, Rt Hon John||Chope, Christopher|
|Blaker, Rt Hon Sir Peter||Churchill, W. S.|
|Body, Sir Richard||Clark, Dr Michael (Rochford)|
|Boscawen, Hon Robert||Clark, Sir W. (Croydon S)|
|Bottomley, Peter||Clarke, Rt Hon K. (Rushcliffe)|
|Bowden, A. (Brighton K'to'n)||Cockeram, Eric|
|Colvin, Michael||Moate, Roger|
|Conway, Derek||Monro, Sir Hector|
|Coombs, Simon||Morrison, Hon C. (Devizes)|
|Cope, John||Moynihan, Hon C.|
|Cormack, Patrick||Mudd, David|
|Corrie, John||Needham, Richard|
|Cranborne, Viscount||Nelson, Anthony|
|Critchley, Julian||Newton, Tony|
|Currie, Mrs Edwina||Nicholls, Patrick|
|Dickens, Geoffrey||Normanton, Tom|
|Dicks, Terry||Norris, Steven|
|Dorrell, Stephen||Ottaway, Richard|
|Douglas-Hamilton, Lord J.||Page, Sir John (Harrow W)|
|Dover, Den||Page, Richard (Herts SW)|
|du Cann, Rt Hon Sir Edward||Patten, J. (Oxf W & Abgdn)|
|Durant, Tony||Pawsey, James|
|Eggar, Tim||Peacock, Mrs Elizabeth|
|Evennett, David||Percival, Rt Hon Sir Ian|
|Eyre, Sir Reginald||Pollock, Alexander|
|Fletcher, Alexander||Porter, Barry|
|Fookes, Miss Janet||Powell, William (Corby)|
|Forman, Nigel||Powley, John|
|Forth, Eric||Prentice, Rt Hon Reg|
|Fox, Marcus||Price, Sir David|
|Fry, Peter||Raffan, Keith|
|Garel-Jones, Tristan||Raison, Rt Hon Timothy|
|Glyn, Dr Alan||Rathbone, Tim|
|Gorst, John||Rhodes James, Robert|
|Gower, Sir Raymond||Rhys Williams, Sir Brandon|
|Greenway, Harry||Ridley, Rt Hon Nicholas|
|Gregory, Conal||Ridsdale, Sir Julian|
|Griffiths, Sir Eldon||Rifkind, Rt Hon Malcolm|
|Grist, Ian||Roberts, Wyn (Conwy)|
|Gummer, Rt Hon John S||Robinson, Mark (N'port W)|
|Hamilton, Hon A. (Epsom)||Roe, Mrs Marion|
|Hamilton, Neil (Tatton)||Rossi, Sir Hugh|
|Hampson, Dr Keith||Rost, Peter|
|Hayhoe, Rt Hon Barney||Rumbold, Mrs Angela|
|Heddle, John||Ryder, Richard|
|Henderson, Barry||Sackville, Hon Thomas|
|Heseltine, Rt Hon Michael||Sainsbury, Hon Timothy|
|Higgins, Rt Hon Terence L.||Sayeed, Jonathan|
|Hirst, Michael||Shaw, Sir Michael (Scarb')|
|Holland, Sir Philip (Gedling)||Shepherd, Colin (Hereford)|
|Howarth, Gerald (Cannock)||Shepherd, Richard (Aldridge)|
|Howell, Rt Hon D. (G'Idford)||Silvester, Fred|
|Howell, Ralph (Norfolk, N)||Sims, Roger|
|Hunt, David (Wirral W)||Skeet, Sir Trevor|
|Irving, Charles||Smith, Sir Dudley (Warwick)|
|Key, Robert||Smith, Tim (Beaconsfield)|
|Latham, Michael||Speller, Tony|
|Lee, John (Pendle)||Spencer, Derek|
|Leigh, Edward (Gainsbor'gh)||Spicer, Jim (Dorset W)|
|Lennox-Boyd, Hon Mark||Spicer, Michael (S Worcs)|
|Lewis, Sir Kenneth (Stamf'd)||Stanbrook, Ivor|
|Lightbown, David||Stanley, Rt Hon John|
|Lilley, Peter||Steen, Anthony|
|Lloyd, Ian (Havant)||Stern, Michael|
|Lord, Michael||Stevens, Lewis (Nuneaton)|
|Luce, Rt Hon Richard||Stewart, Allan (Eastwood)|
|Lyell, Nicholas||Stewart, Andrew (Sherwood)|
|McCrindle, Robert||Stewart, Ian (Hertf'dshire N)|
|McCurley, Mrs Anna||Stokes, John|
|Macfarlane, Neil||Sumberg, David|
|MacGregor, Rt Hon John||Taylor, John (Solihull)|
|MacKay, Andrew (Berkshire)||Taylor, Teddy (S'end E)|
|Maclean, David John||Temple-Morris, Peter|
|McNair-Wilson, P. (New F'st)||Thatcher, Rt Hon Mrs M.|
|Madel, David||Thomas, Rt Hon Peter|
|Malins, Humfrey||Thompson, Donald (Calder V)|
|Malone, Gerald||Thompson, Patrick (N'tch N)|
|Maples, John||Thorne, Neil (Ilford S)|
|Marshall, Michael (Arundel)||Thornton, Malcolm|
|Mather, Carol||Townend, John (Bridlington)|
|Maude, Hon Francis||Tracey, Richard|
|Mayhew, Sir Patrick||Trippier, David|
|Merchant, Piers||Twinn, Dr Ian|
|Miller, Hal (B'grove)||van Straubenzee, Sir W.|
|Mills, Iain (Meriden)||Vaughan, Sir Gerard|
|Miscampbell, Norman||Waddington, David|
|Waldegrave, Hon William||Watson, John|
|Walden, George||Watts, John|
|Walker, Bill (T'side N)||Whitney, Raymond|
|Walker, Rt Hon P. (W'cester)||Wiggin, Jerry|
|Waller, Gary||Winterton, Mrs Ann|
|Ward, John||Winterton, Nicholas|
|Wardle, C. (Bexhill)||Wolfson, Mark|
|Woodcock, Michael||Tellers for the Noes:|
|Yeo, Tim||Mr. Michael Neubert and|
|Young, Sir George (Acton)||Mr. Peter Lloyd.|
§ Question accordingly negatived.109
§ Mr. Ian Lloyd (Havant)
I beg to move, amendment No. 2, in page 6, line 12, at end insert—'(d) conditions requiring the public gas supplier to encourage the efficient use by consumers of gas supplied through pipes, by means of advocacy, advice, and, where economic, the provision of loans for energy efficiency investments;'.
§ Mr. Speaker
With this we shall take amendment No. 6, in page 8, line 27, Clause 9 at end insert—'(aa) to promote the efficient use by consumers of gas supplied through pipes;'.
§ Mr. Lloyd
I begin by thanking all those who served on the Select Committee on Energy which produced the first report for 1985–86 on the regulation of the gas industry. I thank those hon. Members who helped to conduct the Select Committee inquiry and who served as members of the Standing Committee. I think that energy knows no greater devotion than that.
So anxious were the Government to make progress that the sittings of the Standing Committee began before the Select Comitee had completed its inquiry and reported to the House. That complicated, but did not exactly thwart, our proceedings. It would have been tidier and more logical—always desirable criteria—if our deliberations in Committee had followed the publication of the Select Committee's report and, perhaps even more importantly, the publication of the government's reply. None the less, my hon, Friends the Members for Rochford (Dr. Clark) and for Enfield, Southgate (Mr. Portillo), who were well supported by the hon. Member for Pontefract and Castleford (Mr. Lofthouse), who referred to my report at one stage as his bible and was desrcibed as the Select Committee's shop steward in Committee, ensured that the Select Committee's views were heard regularly.
As always, if I judge correctly from the 1,338 columns of Hansard in Committee, though those views were heard with attention and courtesy—we always expect no less from my right hon. and hon. Friends who sit on the Treasury Bench—for the most part the trumpets were sounded in vain, which is not an unusual state of affairs. I say "for the most part" because the Committee welcomed the evidence that the Government were prepared to accept a number of the Select Committee's principal recommendations, even though it was not until 1,164 columns of debate had been printed in Hansard that my right hon. Friend the Minister of State, Department of Energy announced, whether with pride or with shame—it is difficult to discern which—that a few pieces of plaster had been knocked off the walls of Jericho.
The purpose of the amendments is to knock off a few more pieces of plaster. We have no unreasonable ambitions to cause the walls to collapse. Indeed, we consider—at least, some of us do—that the walls are rather good, or perhaps that the city inside is worth defending. If the city of privatisation is to be defended, it might as well be defended properly. The amendments are concerned primarily with the concept of the efficient use of energy. That was desrcibed as a common aim of the Select Committee and of the Department of Energy. We are all against sin and all for energy efficiency. We are aware that energy efficiency features in many of our reports and many of the reports that are produced by the Department, and are the subject of favourable comment in the press. We have endeavoured to obtain by the amendments a somewhat clearer and more formal recognition of the subjective.
110 The Select Committee recommendations are highly relevant. Paragraph 65 concluded that thenational case for promoting energy efficiency must … be one of the determining principles in setting the statutory framework for the regulatory authority which will control the new private-sector corporation.and that it was
'Quite inconceivable.' that the energy efficiency would not be 'built into' the consideration of the regulatory authority.The purpose of the amendments is to achieve just that little bit more building in. My right hon. Friend the Secretary of State stated in Committee that when regulation is appropriate it should be clear, strong and firm. The Select Committee certainly believes that this is such a case and that the Government's declared policy could therefore be reinforced without creating the unnecessary bureaucracy and constraint so properly feared in all parts of the House.
The Government's response, however, in Cmnd. 9759, was thatthe imposition on the energy supply industries of a statutory duty … would add little to the industries' already extensive energy efficiency activities.It continued:In returning British Gas to the private sector, the Government would not want to impose upon it unnecessary statutory obligations which go beyond those that apply to normal Companies Act companies. The Gas Bill places upon the Director a duty to carry out his functions in such a way as to promote the efficient use of gas.The comments of the Select Committee, which I certainly share, are that it is rather strange to desrcibe the new company as a normal Companies Act company. Whatever else it may be—and doubtless it will be many things—it is certainly not that.
Secondly, the statement that the director general needs clear, relevant and appropriate powers certainly applies in this case. We wish to stress that. And when regulation is appropriate it should be clear, strong and firm, as my right hon. Friend the Secretary of State suggested.
Where there are strong reasons for stating and achieving such an objective, the duty of the Director General of Gas Supply should, in our judgment, be matched by clear-cut, relevant and appropriate powers defined in the statute. In our view, the director general cannot achieve that objective unless the corporation has a complementary statutory obligation. The prize is large, the stakes are modest and the risk of failure is small. If the nettle of indifference is firmly grasped, the objective can certainly be achieved.
One more question—is it impractical? We do not think so. The Association for the Conservation of Energy probably provides the most relevant remarks in this context. Commenting in its memorandum to the Select Committee on the situation in California, which is similar in area and population to the United Kingdom with perhaps an even larger gross national product, the association said thatthe utilities are the best vehicle available to organise and implement policies promoting energy efficiency, particularly in the domestic market. Elsewhere in the United States, Public Utility Commissions have insisted upon the adoption and publication by the utilities of annual programmes of conversation investment, and equally regular reports of their associated achievements.That seemed to me to be a very clear and decisive comment on the whole area of regulation and what can and cannot be done.
If energy wastage in the United Kingdom is, as we are informed and as the Government admit—I do not think 111 that there is any dispute about the amount—about £7 billion, and if the proportion wasted in houses is about £2 billion, there is plenty of room for what might be desrcibed as a little policy overkill. That, I think, is all that can be said of these two amendments.
§ Mr. Ted Leadbitter (Hartlepool)
One of the outstanding features of the work of the Select Committee on Energy has been the recognition of the Secretary of State's enthusiasm for energy efficiency. We have accorded to the present Secretary of State not only our fullest support, but, out of step with the normal practice of criticism, we have underlined our enthusiasm for his influence in this area through the work of the Energy Efficiency Office. It is in that spirit that we should be seeking to gain the support of the Secretary of State in what is an interesting amendment but, nevertheless, an essential one.
Of course, British Gas plc may well say that these matters are self-evident. It may say that it can give advice about energy efficiency and that it will be the best advocate in the United Kingdom for the proper use of what it supplies. It may say, "Of course we will provide the right investment programme to meet the objectives that the amendment appears to have". That is not the point. We do not yet know what the animal will be like.
The present management will certainly, for a short time, project the standards and the purposes of British Gas. We are proud of British Gas, but some years will pass, new management will take over, and it is not without experience in the House that we are able to say that often new policies provide different economies which are sometimes harmful to essential parts of an industry.
We have seen that happen in the private sector on many occasions, often in research and development. The programme of investment diminishes if there are serious strictures on the economy in a particular financial year. Therefore, we are saying that the Secretary of State is not taking on board more than he advocates himself in accepting this set of amendments. Certainly we would like to see the provision of loans for energy efficiency investment.
It is clear that in the domestic and commercial sector, especially the latter, we have some reluctance to deal with energy efficiency. The hon. Member for Havant (Mr. Lloyd) referred to the enormous losses involved in the use of gas in spite of the advocacy of British Gas and its present chairman. Therefore, there is much to be done.
For the sake of brevity I shall underline what the Chairman of the Select Committee has said. The proposals that have been put before the Secretary of State in our recent report make it abundantly clear that we are keen to have the Government take on board what is good common sense and certainly good national housekeeping. We have to do much to conserve our energy resources and the response from the Government hitherto has not been encouraging. We are puzzled that the Secretary of State has an abundance of enthusiasm for his Energy Efficiency Office, yet somehow there is less response to our report. We have spent many hours and considered the submissions of many witnesses over a long period of time. Therefore, I suggest that it would be helpful to the House if the Secretary of State responded with more enthusiasm.
112 This is not an addition to the structure of the Bill, to which the Minister referred earlier, but a few words supportive of the objective which is that it is in the national interest to support the resources that we have in such a way that the demand for energy and the supply of it is harmonised with conservation, efficiency and the proper use of British Gas when it is privatised. That objective was one of the aims of the Standing Committee, because that matter was brought to its attention. It is one of the objectives of the Select Committee on Energy, conforming with the majority opinion in the country.
§ Mr. Rost
It gives me great pleasure to support the amendment so ably moved by my hon. Friend the Member for Havant (Mr. Lloyd), and spoken to by the hon. Member for Hartlepool (Mr. Leadbitter).
The House may not be aware that this appears to be the first occasion, at least in my short lifetime in the House, when a Select Committee has gone to great lengths to have an input in legislation as it proceeds through the House, first, by producing a report, which appeared just as the legislation was going into Committee, and, secondly, by adopting the rather unusual procedure of tabling amendments across party lines on behalf of the Committee to support certain points which we as a Select Committee felt strongly should be in the legislation. We recommended in our report that they should be included.
My main concern, in supporting the amendments promoting energy efficiency, is the consumer, because in the end it is the consumer who suffers if he is not given the best advice, guidance and support. British Gas is in a unique position to help to promote greater energy efficiency, because it has direct access to the consumer through regular billing, meter reading and correspondence. It also has the management and staff infrastructure to provide that advice and service.
Secondly, the utility is in a unique position to promote energy efficiency because it has exceptional marketing skills. British Gas can promote energy efficiency far more aggressively and effectively, in the interests of its consumers, because of that marketing ability. Like other members of the Select Committee, I have had opportunities to study the utilities in other parts of the world, particularly North America, where the gas utilities are private enterprise utilities. Despite that, or perhaps because of that, they have a statutory obligation to demonstrate that least cost resource acquisition of gas is applied. They also have an obligation to promote energy efficiency in the interests of their customers, as well as to apply demand management. Where it is more cost-effective to invest in greater energy efficiency rather than to persuade customers to consume more wastefully, they have an obligation to invest on the demand management side rather than expand on the supply side.
We believed, in our Select Committee investigation, that there should be a similar obligation on British Gas and that it would not be unnecessarily cumbersome or involve bureaucratic red tape to build into the legislation a general directive, an obligation that British Gas should promote energy efficiency. Although we acknowledge, as I certainly do, that British Gas already does a great deal—no doubt my right hon. Friend the Minister of State will reply along those lines, saying that it makes great efforts—I believe that no harm would be done in writing that obligation into legislation to ensure that that effort is maintained and, indeed, increased.
113 When my hon. Friend the Member for Havant ably moved the amendment, he referred to evidence that we received in the Select Committee during our inquiry into the Energy Efficiency Office. We asked the Director-General of the Energy Efficiency Office whether more could be done to promote energy efficiency by the energy utilities—gas and electricity. He said that in his view it was inconceivable that energy efficiency would not be built in to the consideration of the regulatory authority for British Gas. However, it seems that it is conceivable, because the Government have not done that. The vague references in clause 4 are not an adequate substitute for a more formal commitment in legislation.
I believe that there should be a general obligation on British Gas to promote the efficient use of gas. My right hon. Friend the Secretary of State should set British Gas annual guideline targets, and British Gas should report annually to the Director-General of Gas Supplies on its achievements in increasing energy efficiency with respect to tariffs and the contract market.
My right hon. Friend the Minister may suggest that it would be wrong and unfair to impose that obligation on British Gas because no such obligation has been imposed on the electricity industry. I would reply that, in that case, such an obligation should be imposed on the electricity industry as well. Two wrongs do not necessarily make a right. We have an opportunity to make at least a start, and I hope that we shall do so.
§ Mr. Lofthouse
As the hon. Member for Erewash (Mr. Rost) has said, this is an unique occasion. I believe that it is the only time amendments to major legislation have been made through a Select Committee. I was delighted to hear the Select Committee's Chairman, the hon. Member for Havant (Mr. Lloyd), the hon. Member for Erewash and my hon. Friend the Member for Hartlepool (Mr. Leadbitter). I feel like a striker on a football field who has been running up and down a football field by himself for a few weeks waiting for the support players behind him to give him the ball to feed into the net. I regret the absence of many of the hon. Members who put their names to the amendments. I had hoped that they would be here to give support. I hope that they will vote later.
Much hard work within a short period went into producing the Select Committee's report with a view to assisting the deliberations of the Standing Committee. Unfortunately, the Government have not taken much notice of the Select Committee'a report. There may have been a hiccough here and a sneeze there but generally they have taken little notice of the recommendations. Ministers must show that they have taken some notice of them.
The weekend press told us—I do not know whether it was right or wrong—of the contempt of the Secretary of State for the Back Benchers on the Committees. The right hon. Gentleman does not want to hear that, because he is not listening. My colleagues on the Select Committee have probably, therefore, been wasting their time. The Bill was presented in indecent haste, without a White Paper. Hon. Members were given no time to digest it, and that arrogance is still with us.
I shall not go over the ground I covered in Standing Committee except to refer to the debate on Amendment No. 158, which I had the privilege of moving, which was similar to the amendments tabled by the hon. Member for Havant in Select Committee. There is hardly any difference at all. I draw the attention of the House to cols. 114 471–2, 741–3, 790–2 and 873–5 of the Official Report of Standing Committee F. I do not wish to take too long, so it is better if I leave it there.
For very small amounts of money we could have further conservation. In fact, many local authorities throughout the country, particularly in London, carry out the improvement and insulation of properties at an average cost of £600 per job. As a result, the amount of electricity burnt has been decreased, from about 8,900 kW/hours to about 4,500—a saving of nearly 50 per cent. One can appreciate the financial savings that means to the lower paid and the unemployed. If the private sector had a statutory obligation to provide assistance for such insulation, the saving to the country in terms of gas supply and the saving for those who can ill afford to pay would be great.
No hon. Member, least of all the Secretary of State or his Ministers, can have any real confidence that under a newly privatised British Gas the motive will be anything other than pure and simple profit. I doubt whether the consumer will be foremost in the minds of those who hope to buy parts of British Gas. It will simply be profit. I even doubt whether the motivation that now exists within the BGC will continue. These private companies should have a statutory obligation to provide finance to enable gas to be saved and prices to be cut.
I hope that the Government will listen to the Select Committee. At present there are many wasted hours. By that I mean that on many occasions people are kept on their toes because they know that they may have to face the Select Committee, but I can recall few occasions on which the recommendations of a Select Committee have been taken on board by the Government.
§ Mr. Leadbitter
My hon. Friend referred to columns 471–2 and others of the Official Report of the Standing Committee, and also said that a similar amendment was considered by the Committee. Am I correct in thinking that some Conservative Members, who have appended their names to this amendment, did not vote for that similar amendment in Committee?
§ Mr. Lofthouse
It is worse that that, because they failed to vote for the amendment when I, as their shop steward, appealed to them to do so.
§ Mr. Bruce
I support the amendment tabled by the Select Committee. It is weaker than I would have wished, but I presume that that is to maximise the breadth of support for it, and to enable the Government to accept it, as I hope that they will.
I should point out that the phrase "all-party Select Committee" is used rather freely as only two of the nine parties in the House are represented on it. However, I do not wish to detract from the good job that it did on the report, which we had before us at the start of the Standing Committee and on which most hon. Members who were trying to work effectively drew heavily. Regrettably, Ministers did not, and although they paid tribute to the Select Committee's work, so far they have accepted few of its recommendations. I hope that in this last gasp they will put the record straight on that.
The hon. Member for Erewash (Mr. Rost) who was not a member of the Standing Committee, used the expression "least cost resource". Those who were members of it will 115 recall that I proposed an amendment to persuade the Government that least cost resource should apply when determining the acquisition of new supplies. Regrettably, they were unwilling to take that point on board. I, too, quoted from the useful documents produced by the Association for the Conservation of Energy called "Lessons from America", especially from number five. I commend the document to hon. Members who are interested in the matter because it draws heavily on the American example, and seeks to highlight some of the points against which the Government have argued.
§ Mr. Rost
I would hate the House or my right hon. Friend the Secretary of State to get the impression that my remarks were based on second-hand material from the Association for the Conservation of Energy, however much I respect its research. In recent years, some hon. Members have had the opportunity of visiting utilities in America, and of seeing them at first hand. That was the basis of my argument.
§ Mr. Bruce
I thought that the hon. Gentleman had made that plain. I hope to do the same this summer. My only regret is that I must do so after, rather than before, the Standing Committee. I accept his point, but take it that he is not contradicting the evidence, and that he has come to the same conclusion as the Association for the Conservation of Energy.
Conservation is rightly described by the ACE as the fifth fuel, and it should be treated in that vein. In other words when one considers the ways of supplying energy in future, we should not simply look at how to acquire new supplies, but should compare the cost of acquiring new supplies with the cost of investing in conservation, which is the point about least cost resource. If it is demonstrated that the investment in conservation would release more for less investment, that is the right avenue to follow and is better than investing in new sources of supply in advance of need. In the long run we shall always need those supplies, but we do not need always to address ourselves to acquiring those supplies.
The North of Scotland hydro-electric board, for example, is laying a cable across Skye to the Western Isles to provide electricity there. It would make sense to see whether that is the best investment, or whether it is better both for consumers and the board to invest in energy efficiency measures to ensure that the people there get the same level of comfort at a similar cost, simply by using the energy from existing supplies more efficiently.
That is a simple example of the sort of thing that should be considered. There is a whole range of such examples, on which any hon. Member could draw. I urge the Government to recognise that a modest amendment, such as this, which simply exorts British Gas to put energy efficiency as a specific requirement on its list of priorities, is the least that they could accept. Given the all-party basis on which the amendment has been endorsed, I hope that the Minister will accept it.
§ Mr. William O'Brien (Normanton)
As a member of the Select Committee on Energy, may I add my comments to those of the Committee's Chairman and other members. I join in requesting the Secretary of State to accept the amendments in the spirit in which they were tabled—that it would be in the best interests of all consumers, 116 industrial and domestic, to encourage efficiency in the use of gas supplies. Everyone knows the Labour party's opposition to the Bill, but if we must have privatisation, we believe that the Bill must contain provisions for efficiency, to ensure that the gas supplied is used to the best advantage. Gas is used in glass making and other large industries, so it is important that it is used as efficiently as possible.
We must ensure that advice is given to domestic consumers on the best use of gas. The amendments also suggest that where efficiency requires investment, loans should be made available to consumers. That would be in the interests of British Gas, the consumers and the country. Against that background, I hope that the Secretary of State will accept the amendments.
One hon. Member called the amendments modest. Perhaps they are modest, inasmuch as they have been tempered to ensure that they do not breach the spirit of the Bill. I plead with the Secretary of State to accept the amendments and include those provisions in the Bill, because they will benefit the efficient use of the gas supplied to consumers.
§ Mr. Rowlands
The Opposition Front-Bench spokesmen support wholeheartedly the amendments that were moved by the hon. Member for Havant (Mr. Lloyd). I do not reveal any secrets when I say that during 156 hours of debate in Committee one approaches amendments with varying degrees of commitment and belief. However, as we considered this issue, I became more convinced of the special role that the public utilities could play in energy efficiency and conservation.
Take the example of British Gas plc. It will purchase every cubic foot of gas that comes from the North sea. British Gas plc will control the entire national gas system which delivers that gas to the homes of more than 16 million customers. It will control between 60 per cent. and 70 per cent. of the sales of gas appliances. Therefore, British Gas plc will be part of the commanding heights of the nation's energy resources and their use. Given that incredible position—this is not a normal company, as the hon. Gentleman said—and the huge and specific responsibilities, as well as privileges, that will be placed upon British Gas, it is reasonable for us to expect British Gas to accept the duties that the amendments seek to place upon it.
It is complacent now, as it was in Committee, to make the observation that BGC already does much in a voluntary capacity. By adopting, a little more than it does now, the arguments about conservation, efficiency and a balance between conservation and energy efficiency versus investment in new development, it could have a tremendous impact on depletion policy in the North sea and on the cost of gas to the customer.
This is not a fanciful argument to make, as members of the Select Committee and others who speak from experience have shown. Reports by the Association for the Conservation of Energy have shown that in America, from Texas to California, major public utilities in that essentially private enterprise economy, under regulation from the Public Utilities Commission, have been the leaders in promoting energy efficiency to individual householders, industry and commerce. The amendment does not cut across private enterprise, commercial practice 117 and capitalism. In the most private enterprise society, a combination of regulation and duties is placed upon the public utilities to develop energy conservation.
The argument applies to all parties, as the support given to it by all members of the Select Committee on Energy shows. Therefore, the Minister will have to produce much better justification than he did in Committee. Among other things, he has to justify why, of the 14 conditions enforced on the 25-year private monopoly licence that the Government want to give British Gas plc, not one deals with energy conservation and efficiency. That shows the contempt and lack of interest that Ministers have shown towards conservation and the role that public utilities should play in it.
I see the Secretary of State shake his head. I point out to the hon. Member for Havant (Mr. Lloyd), the Chairman of the Select Committee on Energy, that his Committee has been treated with the contempt that the Secretary of State showed to the Standing Committee. He spoke for about four or five minutes in 156 hours, and spent the rest of his time in perpetual motion talking as he is again this evening.
§ Mr. Rowlands
It is a shame. The right hon. Gentleman has shown unbelievable behaviour. He was not even listening when my right hon. Friend the Member for Salford, East (Mr. Orme) made a number of basic points. It is time to tell the Secretary of State that his behaviour has not been up to the standard that one expects of a Secretary of State. The issues raised by the hon. Member for Havant, and all members of the Select Committee, show that the Government should heed such widespread requests and support the principle of these amendments.
§ Mr. David Hunt
It is sad that the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), having made a pretence of welcoming cross-party support for the amendments, should then make a disgraceful attack on my right hon. Friend the Secretary of State, who has taken every possible trouble to produce careful legislation to ensure that when privatisation takes place it is a major success story both for the Government and for the nation. It is inappropriate for the hon.Gentleman to make such comments.Throughout most of the Report debates today the hon. Gentleman has had behind him no more hon. Members than he had behind him in Committee. One would have thought that on such a major and important Bill the Labour party would have produced more than 10 Back Benchers for most of today's proceedings.
The hon. Gentleman should not have started this argument. He has lowered the standard of this debate by making such a disgraceful attack upon my right hon. Friend the Secretary of State for Energy. I ask him to turn away from partisan arguments and return to the position from which he started.
The hon. Gentleman began reasonably well, by paying tribute to the all-party support for energy efficiency. These amendments deal with matters which the Government believe to be of great importance. My right hon. Friend has designated 1986 as Energy Efficiency Year. He and my right hon. and hon. Friends are making unprecedented efforts to spread the word about energy efficiency and about the benefits that can be reaped by all sectors of the community.
118 At breakfast specials., more than 16,000 top executives have listened to the energy efficiency message. This morning I addressed 400 top executives in Nottingham. That followed my right hon. Friend's addresses to more than 2,000 top executives in Solihull and London in the new round of Monergy breakfast specials.
My hon. Friend the Member for Havant (Mr. Lloyd) paid tribute to the work of his Select Committee. I join him in congratulating the members of his Select Committee, and I congratulate him on his leadership of the Committee and on the extent and depth of the investigations that were conducted by the Select Committee. It has been of enormous help to many hon. Members on both sides of the House to have the Select Committee's report on the regulation of the gas industry, and its report on energy efficiency policy.
My hon. Friend the Member for Havant referred to the £7 billion of energy that is being wasted. It is a national scandal. As a conservative estimate, that is 20 per cent. of our total energy bill of £35 billion. His Committee was right to highlight the appalling waste of £2 billion by the domestic sector and to report that it is the most deserving of immediate attention. However, I hope my hon. Friend realises that this Government have done more than any other Government have clone since the war to promote the cause of energy efficiency.
I ask my hon. Friend to recognise that the Government's commitment in the Bill to energy efficiency has been followed through by placing upon the Secretary of State and the director general a duty to exercise their functions in a manner that is best calculated to promote the efficient use of gas by consumers who are supplied with gas through pipes. This duty will stand alongside the others in clause 4. It will give to the director general and the Secretary of State general guidelines about the way in which they should exercise their functions.
The director general will have to bear this duty in mind when exercising all his functions. However, we imagine that he will want to lay emphasis on this duty in relation to his other functions under the Bill, under which he is obliged to give assistance and advice to consumers. He will also wish to give his support to the tremendous activities that are undertaken by British Gas to ensure that its customers use gas efficiently, both in their own interests and in the interests of the British Gas in order to secure the long-term future of its markets?
I do not think that the hon. Member for Pontefract and Castleford (Mr. Lofthouse) did justice to his hon. Friends on both the Select Committee and the Standing Committee. He made some deprecatory comments about their contribution to the 'work of the Standing Committee. He said that he often felt that he was standing by himself. However, my hon. Friends the Members for Rochford (Dr. Clark) and for Enfield, Southgate (Mr. Portillo) made a considerable contribution to the work of the Standing Committee. My hon. Friend the Member for Southgate moved a very important amendment relating to competition. He ensured that the Government were made aware of the important and decisive views of the Select Committee on that subject. It was the hon. Member for Pontefract and Castleford who said that the BGC had nothing much to brag about on energy efficiency. That rather runs contrary to the belief of other members of the Select Committee that British Gas did make a great 119 contribution. My hon. Friend the Member for Erewash (Mr. Rost) made a point about that just a few moments ago.
British Gas told the Select Committee in clear terms exactly what its contribution was to energy efficiency and it gave examples of how it was helping domestic consumers to use their energy efficiently. It promotes energy efficiency through a number of services and schemes—the BGC school of fuel management; the BGC technical consultancy services; the gas energy management awards for industry and commerce; the designs for energy management; the energy management competition; support for energy managers generally; support for the Energy Efficiency Office showroom advice experiment and the building centre energy advice centre. It has also done much to promote energy education in schools, and it explained to the Select Committee that its proper role was to develop and promote energy efficient practice and to educate customers about it.
§ Mr. Lofthouse
The hon. Gentleman has been telling the House of the Government's record on energy efficiency and conservation. Does he agree that the Government have cut the money available for insulation? Indeed, in real terms the money available now is only 58 per cent. of that available in 1979–80.
§ Mr. Hunt
That is not correct. If the hon. Gentleman looks carefully at the figures he will see that there is a history of underspend on that scheme. He will also recognise that we have debated that many times in the House, and my right hon. Friend the Secretary of State for the Environment has not just allocated what he believes is sufficient money to meet the need this year, but has said that when it comes to additional bids he will bear in mind that we are in Energy Efficiency Year.
§ Mr. Leadbitter
The hon. Gentleman referred to clause 4 in an attempt to persuade the House of Commons that that supports energy efficiency. I am afraid that the hon. Gentleman has not read the amendment. Clause 4 addresses itself specifically to those authorised to supply gas. The amendments are concerned with the consumers of gas. That is an important point for him to bear in mind. Why are we chewing over four lines tonight when they could be put into the Bill and forgotten about?
§ Mr. Hunt
I know that the hon. Gentleman feels strongly about the issue, but it is not as simple as he has sought to suggest. The hon. Member for Merthyr Tydfil and Rhymney said that he could not find it in the authorisation. It is in the primary legislation.
Clause 4 is an important clause. It imposes the clear dutyto promote efficiency and economy … and the efficient use of gas supplied through pipes".We are talking about duties on the public gas supplier. In seeking to challenge me on that the hon. Gentleman is talking about the customer or consumer, and that is the relevance of the amendment. But he should recognise the clear obligation that is on the director general, and if he looks elsewhere in the Bill he will see that the director general has obligations, as I have already said, to the consumers, and that is an easy way to explain what I believe is an effective duty already there.
120 In that context let me examine the wording of the amendment. I appreciate the way in which the hon. Gentleman paid tribute to my right hon. Friend and his tremendous enthusiasm to promote the cause of energy efficiency, which receives considerable all-party support. I recognise that my hon. Friend the Member for Erewash has also paid tribute to my right hon. Friend on many occasions. I equally recognise that my hon. Friend has carried out considerable research into this question.
I must tell the hon. Member for Gordon (Mr. Bruce) that the Select Committee recognised that initiatives taken by energy utilities in the United States to reduce energy consumption were not necessarily appropriate in the United Kingdom. Had the hon. Gentleman explored further he would have reached that conclusion. He now has to make his decision before he sees at first hand the relevance of that.
The Association for the Conservation of Energy has a good record in urging Governments to take up the cause of fuel efficiency. I pay tribute to that association, but in this context—I shall explain why—the amendment will not assist.
I have examined the BGC's record. The amendment seeks to single out British Gas for this obligation. I do not know whether my hon. Friends and Opposition Members want to place a similar obligation on the National Coal Board, the electricity industry or the oil companies. If they do not, why? If they do, they must recognise that even if I do not accept their arguments they have an unfair approach to the problem. It would be far better to deal with the problem under primary legislation and by imposing that duty on all utilities and energy corporations. I do not accept that such a duty should be placed on them, but surely it is more logical to impose a duty generally than to single out British Gas, which has a tremendous record.
As the Minister responsible for energy efficiency, I have had tremendous support from British Gas in the energy efficiency campaign. I hope the hon. Member for Hartlepool (Mr. Leadbitter) recognises that one has to be careful about putting duties in legislation, if by doing that one complicates the situation.
My hon. Friend the Member for Havant made it clear that he would not support the amendment if he thought it would do other than present firm and strong words in the right direction. He has said that forcefully. The amendment would impose a bureaucratic nightmare on the industry, which deserves clear, simple wording in legislation. By singling out British Gas, and by imposing this obligation on British Gas, the amendment would create a legislative minefield. It would be an invitation to all potential litigators to single out a corporation which had done a tremendous amount for energy efficiency to complicate matters and to stop the legitimate move towards energy efficiency which is gathering pace.
The British Gas Corporation is extremely enthusiastic about energy efficiency. Why do my hon. Friends think of supporting an amendment which would make ours a land more fit for lawyers than for people who believe in energy efficiency? I ask my hon. Friends to recognise that my right hon. Friend's massive monetary campaign, already successful, represents a better path to achieve our common objective—energy efficiency.
When hon. Members come to consider the need to promote energy efficiency, they will recognise that it is not 121 easily accomplished by an amendment which is so complicated. If they wish to press ahead with the objective which we all share, I hope that it will not be by creating an unnecessarily bureaucratic system of control, as proposed in the amendment.
§ Question put, That the amendment be made:—
§ The House divided: Ayes 184, Noes 220.123
|Division No.107]||[11.05 pm|
|Adams, Allen (Paisley N)||Freeson, Rt Hon Reginald|
|Anderson, Donald||Freud, Clement|
|Archer, Rt Hon Peter||Garrett, W. E.|
|Ashdown, Paddy||George, Bruce|
|Ashley, Rt Hon Jack||Gilbert, Rt Hon Dr John|
|Ashton, Joe||Godman, Dr Norman|
|Atkinson, N. (Tottenham)||Golding, John|
|Banks, Tony (Newham NW)||Gould, Bryan|
|Barnett, Guy||Gourlay, Harry|
|Barron, Kevin||Hamilton, James (M'well N)|
|Beckett, Mrs Margaret||Hamilton, W. W. (Fife Central)|
|Beith, A. J.||Hardy, Peter|
|Benn, Rt Hon Tony||Harman, Ms Harriet|
|Bennett, A. (Dent'n & Red'sh)||Harrison, Rt Hon Walter|
|Bermingham, Gerald||Hart, Rt Hon Dame Judith|
|Bidwell, Sydney||Healey, Rt Hon Denis|
|Blair, Anthony||Heffer, Eric S.|
|Bray, Dr Jeremy||Hogg, N. (C'nauld & Kilsyth)|
|Brown, Gordon (D'f'mline E)||Holland, Stuart (Vauxhall)|
|Brown, Hugh D. (Provan)||Howells, Geraint|
|Brown, N. (N'c'tle-u-Tyne E)||Hoyle, Douglas|
|Brown, R. (N'c'tle-u-Tyne N)||Hughes, Robert (Aberdeen N)|
|Bruce, Malcolm||Hughes, Roy (Newport East)|
|Buchan, Norman||Hughes, Sean (Knowsley S)|
|Callaghan, Rt Hon J.||Janner, Hon Greville|
|Callaghan, Jim (Heyw'd & M)||Jones, Barry (Alyn & Deeside)|
|Campbell-Savours, Dale||Kaufman, Rt Hon Gerald|
|Canavan, Dennis||Kilroy-Silk, Robert|
|Carter-Jones, Lewis||Kirkwood, Archy|
|Clark, Dr David (S Shields)||Lambie, David|
|Clarke, Thomas||Lamond, James|
|Clay, Robert||Leadbitter, Ted|
|Clelland, David Gordon||Leighton, Ronald|
|Clwyd, Mrs Ann||Lewis, Terence (Worsley)|
|Cocks, Rt Hon M. (Bristol S)||Litherland, Robert|
|Cohen, Harry||Livsey, Richard|
|Conlan, Bernard||Lloyd, Tony (Stretford)|
|Cook, Robin F. (Livingston)||Lofthouse, Geoffrey|
|Corbett, Robin||Loyden, Edward|
|Corbyn, Jeremy||McCartney, Hugh|
|Cox, Thomas (Tooting)||McDonald, Dr Oonagh|
|Craigen, J. M.||McKay, Allen (Penistone)|
|Crowther, Stan||McKelvey, William|
|Cunliffe, Lawrence||MacKenzie, Rt Hon Gregor|
|Cunningham, Dr John||McTaggart, Robert|
|Davies, Ronald (Caerphilly)||McWilliam, John|
|Davis, Terry (B'ham, H'ge H'l)||Madden, Max|
|Deakins, Eric||Marek, Dr John|
|Dewar, Donald||Marshall, David (Shettleston)|
|Dormand, Jack||Martin, Michael|
|Douglas, Dick||Mason, Rt Hon Roy|
|Dubs, Alfred||Maxton, John|
|Duffy, A. E. P.||Maynard, Miss Joan|
|Dunwoody, Hon Mrs G.||Meadowcroft, Michael|
|Eadie, Alex||Michie, William|
|Eastham, Ken||Mikardo, Ian|
|Evans, John (St. Helens N)||Millan, Rt Hon Bruce|
|Ewing, Harry||Miller, Dr M. S. (E Kilbride)|
|Fatchett, Derek||Mitchell, Austin (G't Grimsby)|
|Field, Frank (Birkenhead)||Morris, Rt Hon A. (W'shawe)|
|Fields, T. (L'pool Broad Gn)||Morris, Rt Hon J. (Aberavon)|
|Fisher, Mark||Nellist, David|
|Flannery, Martin||Oakes, Rt Hon Gordon|
|Foot, Rt Hon Michael||O'Brien, William|
|Forrester, John||O'Neill, Martin|
|Foster, Derek||Orme, Rt Hon Stanley|
|Foulkes, George||Park, George|
|Fraser, J. (Norwood)||Parry, Robert|
|Patchett, Terry||Soley, Clive|
|Pavitt, Laurie||Spearing, Nigel|
|Pendry, Tom||Steel, Rt Hon David|
|Pike, Peter||Stott, Roger|
|Powell, Raymond (Ogmore)||Strang, Gavin|
|Prescott, John||Straw, Jack|
|Radice, Giles||Thomas, Dr R. (Carmarthen)|
|Redmond, Martin||Thompson, J. (Wansbeck)|
|Richardson, Ms Jo||Thorne, Stan (Preston)|
|Roberts, Allan (Bootle)||Tinn, James|
|Robinson, G. (Coventry NW)||Torney, Tom|
|Rogers, Allan||Wallace, James|
|Rooker, J. W.||Wardell, Gareth (Gower)|
|Ross, Ernest (Dundee W)||Wareing, Robert|
|Rost, Peter||Weetch, Ken|
|Rowlands, Ted||Welsh, Michael|
|Sedgemore, Brian||Wigley, Dafydd|
|Sheerman, Barry||Williams, Rt Hon A.|
|Sheldon, Rt Hon R.||Wilson, Gordon|
|Shore, Rt Hon Peter||Winnick, David|
|Short, Mrs R.(W'hampt'n NE)||Wrigglesworth, Ian|
|Silkin, Rt Hon J.||Young, David (Bolton SE)|
|Smith, C. (Isl'ton S & F'bury)||Tellers for the Ayes:|
|Smith, Rt Hon J. (M'ds E)||Mr. Frank Haynes and|
|Snape, Peter||Mr. Don Dixon.|
|Alison, Rt Hon Michael||Currie, Mrs Edwina|
|Amess, David||Dicks, Terry|
|Ancram, Michael||Dorrell, Stephen|
|Arnold, Tom||Douglas-Hamilton, Lord J.|
|Aspinwall, Jack||Dover, Den|
|Atkins, Robert (South Ribble)||du Cann, Rt Hon Sir Edward|
|Baker, Nicholas (Dorset N)||Durant, Tony|
|Baldry, Tony||Eggar, Tim|
|Banks, Robert (Harrogate)||Evennett, David|
|Batiste, Spencer||Eyre, Sir Reginald|
|Beaumont-Dark, Anthony||Fletcher, Alexander|
|Bellingham, Henry||Fookes, Miss Janet|
|Benyon, William||Forman, Nigel|
|Best, Keith||Forth, Eric|
|Bevan, David Gilroy||Freeman, Roger|
|Biffen, Rt Hon John||Garel-Jones, Tristan|
|Blaker, Rt Hon Sir Peter||Glyn, Dr Alan|
|Body, Sir Richard||Goodhart, Sir Philip|
|Boscawen, Hon Robert||Gower, Sir Raymond|
|Bottomley, Peter||Greenway, Harry|
|Bowden, A. (Brighton K'to'n)||Gregory, Conal|
|Bowden, Gerald (Dulwich)||Griffiths, Sir Eldon|
|Boyson, Dr Rhodes||Grylls, Michael|
|Braine, Rt Hon Sir Bernard||Gummer, Rt Hon John S|
|Brandon-Bravo, Martin||Hamilton, Hon A. (Epsom)|
|Bright, Graham||Hamilton, Neil (Tatton)|
|Brittan, Rt Hon Leon||Hampson, Dr Keith|
|Brooke, Hon Peter||Heddle, John|
|Brown, M. (Brigg & Cl'thpes)||Henderson, Barry|
|Browne, John||Heseltine, Rt Hon Michael|
|Bruinvels, Peter||Higgins, Rt Hon Terence L.|
|Buchanan-Smith, Rt Hon A.||Hirst, Michael|
|Butler, Rt Hon Sir Adam||Holland, Sir Philip (Gedling)|
|Butterfill, John||Holt, Richard|
|Carlisle, Kenneth (Lincoln)||Howarth, Alan (Stratf'd-on-A)|
|Carttiss, Michael||Howarth, Gerald (Cannock)|
|Cash, William||Howell, Rt Hon D. (G'ldford)|
|Chapman, Sydney||Howell, Ralph (Norfolk, N)|
|Chope, Christopher||Hunt, David (Wirral W)|
|Churchill, W. S.||Jopling, Rt Hon Michael|
|Clark, Dr Michael (Rochford)||Key, Robert|
|Clark, Sir W. (Croydon S)||Latham, Michael|
|Clarke, Rt Hon K. (Rushcliffe)||Leigh, Edward (Gainsbor'gh)|
|Cockeram, Eric||Lennox-Boyd, Hon Mark|
|Colvin, Michael||Lester, Jim|
|Conway, Derek||Lewis, Sir Kenneth (Stamf'd)|
|Coombs, Simon||Lightbown, David|
|Cope, John||Lilley, Peter|
|Cormack, Patrick||Lord, Michael|
|Corrie, John||Luce, Rt Hon Richard|
|Cranborne, Viscount||Lyell, Nicholas|
|Critchley, Julian||McCrindle, Robert|
|McCurley, Mrs Anna||Shepherd, Colin (Hereford)|
|Macfarlane, Neil||Shepherd, Richard (Aldridge)|
|MacGregor, Rt Hon John||Silvester, Fred|
|MacKay, Andrew (Berkshire)||Sims, Roger|
|Maclean, David John||Skeet, Sir Trevor|
|McNair-Wilson, P. (New F'st)||Smith, Sir Dudley (Warwick)|
|Madel, David||Smith, Tim (Beaconsfield)|
|Malins, Humfrey||Soames, Hon Nicholas|
|Maples, John||Speller, Tony|
|Marshall, Michael (Arundel)||Spencer, Derek|
|Mather, Carol||Spicer, Jim (Dorset W)|
|Maude, Hon Francis||Spicer, Michael (S Worcs)|
|Mayhew, Sir Patrick||Stanbrook, Ivor|
|Merchant, Piers||Stanley, Rt Hon John|
|Miller, Hal (B'grove)||Steen, Anthony|
|Mills, Iain (Meriden)||Stern, Michael|
|Miscampbell, Norman||Stevens, Lewis (Nuneaton)|
|Moate, Roger||Stewart, Allan (Eastwood)|
|Morrison, Hon C. (Devizes)||Stewart, Andrew (Sherwood)|
|Moynihan, Hon C.||Stewart, Ian (Hertf'dshire N)|
|Mudd, David||Stokes, John|
|Needham, Richard||Sumberg, David|
|Nelson, Anthony||Taylor, John (Solihull)|
|Neubert, Michael||Taylor, Teddy (S'end E)|
|Nicholls, Patrick||Temple-Morris, Peter|
|Normanton, Tom||Thomas, Rt Hon Peter|
|Norris, Steven||Thompson, Donald (Calder V)|
|Ottaway, Richard||Thompson, Patrick (N'ich N)|
|Page, Sir John (Harrow W)||Thorne, Neil (Ilford S)|
|Page, Richard (Herts SW)||Thornton, Malcolm|
|Parkinson, Rt Hon Cecil||Townend, John (Bridlington)|
|Parris, Matthew||Tracey, Richard|
|Patten, J. (Oxf W & Abgdn)||Trippier, David|
|Pawsey, James||Twinn, Dr Ian|
|Peacock, Mrs Elizabeth||van Straubenzee, Sir W.|
|Percival, Rt Hon Sir Ian||Vaughan, Sir Gerard|
|Pollock, Alexander||Waddington, David|
|Porter, Barry||Waldegrave, Hon William|
|Powell, William (Corby)||Walden, George|
|Powley, John||Walker, Bill (T'side N)|
|Prentice, Rt Hon Reg||Walker, Rt Hon P. (W'cester)|
|Price, Sir David||Waller, Gary|
|Raffan, Keith||Ward, John|
|Raison, Rt Hon Timothy||Wardle, C. (Bexhill)|
|Rathbone, Tim||Watson, John|
|Rhodes James, Robert||Watts, John|
|Rhys Williams, Sir Brandon||Whitfield, John|
|Ridley, Rt Hon Nicholas||Whitney, Raymond|
|Ridsdale, Sir Julian||Wiggin, Jerry|
|Rifkind, Rt Hon Malcolm||Winterton, Mrs Ann|
|Roberts, Wyn (Conwy)||Winterton, Nicholas|
|Robinson, P. (Belfast E)||Wolfson, Mark|
|Roe, Mrs Marion||Wood, Timothy|
|Rossi, Sir Hugh||Woodcock, Michael|
|Rumbold, Mrs Angela||Yeo, Tim|
|Ryder, Richard||Young, Sir George (Acton)|
|Sackville, Hon Thomas|
|Sainsbury, Hon Timothy||Tellers for the Noes:|
|Sayeed, Jonathan||Mr. Gerald Malone and|
|Shaw, Sir Michael (Scarb')||Mr. Peter Lloyd.|
§ Question accordingly negatived.11.15 pm
§ Mr. Ian Lloyd
I beg to move Amendment No. 3, in page 6, line 12, at end insert'(e) conditions requiring the public gas supplier to publish, annually, audited accounts showing separately the profits arising from sales of gas subject to maximum price regulation, which accounts shall be certified by the Director as showing the real costs and revenues ascribable to those activities of the supplier.'.
§ Mr. Deputy Speaker (Mr. Ernest Armstrong)
With this it will be convenient to take amendment No. 4, in page 6, line 28, at end insert—`(c) to comply with any direction given by the Director as to the manner in which the accounts of the public gas 124 supplier are to be prepared and published; and as to the formulation of indicators of standards of service to be published with such accounts.'.
§ Mr. Lloyd
Before I come to the two amendments I should like to say how much I appreciate the tribute by my hon. Friend the Parliamentary Under-Secretary to me and my Committee. I would do very little without my Committee. There is an inescapable tension between any Select Committee and Government at any time if both are doing their jobs properly. In my judgment that tension is part of the value of the system, and if it were to disappear we would lose something. Governments must govern and they must get it right, one hopes, 95 per cent. of the time. Select Committees must give second opinions and, if they are doing their work properly, perhaps one time in 20 they will be right. Perhaps, if it is a very good Committee, that ratio may well improve.
I should like to refer to a phrase used by the right hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), who, I am sorry to see, is not in his place. He said that the Select Committee was treated with contempt. I must say that I have never, at any time, experienced any contempt from my right hon. Friend the Secretary of State or any of his hon. Friends and other Ministers from the Department of Energy. Indeed, if ever I thought my Committee was treated with contempt the speech I would make in this House would be very different from the one that I made earlier and that I propose to make now. Indeed, the compulsion and immediacy of Government, as experienced by any Government from time to time, could give rise to what Shelley referred to in "Ozymandias", king of kings, as the "sneer of cold command". Those at the other end of Government policy sometimes misinterpret what is an unavoidable and necessary act of policy as the "sneer of cold command".
My right hon. Friend the Secretary of State and all his predecessors have always gone to considerable lengths to ensure that the Committee, at least occasionally, feels that its points and arguments contribute to the formation of energy policy in this country. Naturally, we hope, as all Select Committees hope, that that ratio will be improved and that we shall make a more valuable input into the formation of policy; but contempt, no.
§ Mr. Orme
I am interested in what the hon. Gentleman, as the distinguished Chairman of the Select Committee on Energy, is saying. As Chairman, he is lucky in view of the way in which the Secretary of State for Energy dealt with the Select Committee on Environment over the weekend. That is a different matter. He talked about Back-Bench Members who happened to be members of the Committee not knowing what they were talking about. I notice that the response to the hon. Gentleman's Committee was not the same. However, we have a right to refer to the Secretary of State's response to the Select Committee on Environment, which is not directly related to his Department, but was dealing with Sellafield. The response in that case was entirely different.
§ Mr. Lloyd
I note the right hon. Gentleman's comment. It is not for me to comment on other Select Committees or their fate over the weekend. That Committee has also entered into an area of great controversy, and inevitably, in some measure, the same problems arise. I think that it is true to say that while our system provides that the Executive is drawn from the 125 House, I do not see that there will ever be a completely satisfactory solution to the problem. We must try to get the best out of both systems, recognising that there is an inherent and unavoidable conflict simply because of our constitutional practice and procedure.
No preamble to the amendments is necessary. We move here into the arcane area of mystery known as accounting. The question that the amendments imply is: how accurate, relevant and informative can the accounts of the new company be? How completely can they be made to disclose what is happening without in any way damaging the operating efficiency of the concern? I regard that as the common objective of the House.
Our arguments are set out in our report under the heading "The 'X' factor", in paragraphs 30 to 35. I shall not bore the House by reading them all, as I am sure that every hon. Member who is here will have had the chance to look at them. We recommendthat Condition 2 of the draft Authorisation be amended to require that British Gas should publish, annually, the profits that arise from sales in the regulated tariff market".That proposal lies at the heart of our amendment. In the Government's reply, the arguments against that are, essentially, first, that the director general already has the information, and, secondly, that he has the discretion to publish it. However, the key objection that the Government have put forward to our proposal is in paragraph 54 of their reply, where they conclude:
Any requirement to publish detailed profit figures must be compatible with the nature of the business.I think that everyone will accept that.The nature of the integrated gas supply business means that it is not possible to associate in a rigorous way specific costs to individual sectors of the market.I am in slightly less than total agreement with that conclusion. The Government continue:
The objective accuracy of separate profit figures for tariff and contract sectors is not sufficient for regulation to require audited published accounts.In that context, it seems to me that whatever difficulty one may experience in allocating costs, there is seldom any real difficulty in allocating revenues. Even if one has a partial allocation—less than satisfactory, but certainly better than a global aggregation or agglomeration of figures—that will reveal some information that will be valuable.
In our judgment, it is essential that the public should have great confidence in the integrity of the accounts of the new corporation. The amendment is significant, but not unduly ambitious. It merely calls for an honest effort by all parties to produce fair, reasonable and informative figures. I do not think that anyone can object to that. The objective, especially of amendment No. 4, is that, in the accounts of British Gas, there should not only be no possibility of concealing what might be described as energy accounting skulduggery— we are all familiar with what that can mean—but it should be seen by the public at large, and indeed by the experts who study those figures with great assiduity, and burn the midnight oil in so doing, that no such concealment has been attempted, taken place or indeed, in a near ideal world, was ever likely.
§ Mr. Leadbitter
I hope that, before the guillotine falls and we all leave this place, harmed and hurt, the Minister will resolve not to create an international crisis, as his colleague the Under-Secretary of State tried to do with the last group of amendments. I thought, on listening to the 126 hon. Gentleman, that the Organisation of Petroleum Exporting Countries was going to call my emergency meeting and that the lawyers were sharpening their knives for another feast. Frightening questions of litigation were raised and the great shadow of a new bureaucracy loomed— all over four lines of a simple common-sense amendment.
At this time of night, hon. Members sitting here, or, in my case, standing— I do not know for how long because I am beginning to enjoy myself— want the Minister of State to make a response that differs from the theatricals of the Under-Secretary of State. Interesting though the hon. Gentleman's speech was, it was irrelevant. The Labour amendments Provided for nothing less than what the hon. Gentleman said would be expected of good private enterprise. However, in this and in the previous group of amendments, we are not dealing with privatisation. There is no such thing as "privatisation" here. That is cannibalisation and prostitution of the word. We have here private monopoly.
As a state monopoly, British Gas is accountable to Parliament. It prepares accounts. All those people interested in its affairs who send letters to the board receive not only letters of courtesy and explanation but an expensively drawn-up annual report. We have learnt a great deal from that close working relationship, which has been valued in the House.
We are creating a new animal. For a moment, there will be a honeymoon. The chairman will be there, unlike Lord King, who does not care who owns the shop so long as he manages it. The present chairman of British Gas has fought hard for the company, because he believes in it. The Government wanted to fragment British Gas. They wanted to get rid of the shop window dressing which told all the consumers how wonderful British Gas was. The chairman won his battle, but the outright obduracy of the Government prevailed. They said, "We cannot get our way on fragmentation, so we shall get rid of the lot." Once "the lot" is gone and parliamentary accountability is diminished, no hon. Member, no Secretary of State and no Prime Minister can give an undertaking that the new private monopoly will do what the Government want. The new company will be accountable to its shareholders. The priorities in energy use may be put at risk if there are any economic strictures in a particular year.
I recall how, under another Administration, a valuable piece of investment which was of paramount importance to the United Kingdom in the world of transport was brought to an end in one weekend because of the plea that economies had to be made.
These amendments call for accountability. We want accounts to be made available and annual reports to be made public. We want to know what the profits are and how they have come about. We want to know how much profit is associated with the maximum prices that are prevailing at the time. Such accountability helps the House of Commons to analyse, scrutinise and monitor in such a way that the Mother of Parliaments can say, "Halt, private monopoly gas! Your are going too far. Some of the priorities that we feel essential are being diminished—in this instance, these priorities concern the users of gas."
It is important that the Minister considers these amendments with great care. He should remember that on balance it is sometimes much better to accept the good sense of the House of Commons than the advice that he receives from the Ministry.
127 11.30 pm
I have paid tribute to the Secretary of State. As the Chairman of the Select Committee on Energy knows, I am an ardent Labour supporter and am the longest-serving member of that Select Committee. For many years before that I was a member of the Select Committee on Science and Technology. I have been adamant in supporting the objectives and purposes of the Select Committee, and have always been generous in conveying my appreciation to Ministers, particularly to the present Secretary of State.
Having said that, I remind the House that the reputation of the Department of Energy as having a monopoly of initiative has not been too high. Anyone reading the Select Committee's report on conservation will understand our battle to persuade the Department of Energy to get out of its sleepy posture. We are proud that at last we have had some influence.
It is often better for Ministers to take account of what the House of Commons is saying. This is the best university in the world. There is a great deal of experience and learning in this House. It does not follow that because a man becomes a Minister, he is overnight given a wisdom that he never had before. When Ministers listen to their advisers, they should remember that there is nothing to suggest that they are any better or worse than the advisers who attend the Select Committee. We are privileged to have a great deal of knowledge. It is therefore important that the Government should reciprocate more generously in their response to the work of the Select Committee.
As has been pointed out, this is the first Select Committee to have tabled amendments to the outcome of a Standing Committee's deliberations. There may well have been good reason to have done so previously, but we are now at the moment when the Government should understand why we have tabled these amendments. The hesitancy of Select Committees over the years to table amendments in the House is an indication of the care that we take not to abuse the House or stretch its tolerance too far. Therefore, the Minister should bear in mind that after all the years of agony of persuasion, the Select Committee has established with the Department a relationship that calls for a more generous response. The amendments are important because they will enable the House to see what the new private monopoly does. In the short term, we are not so worried, but with a change of board and chairman, and with the monopoly taking hold and becoming more predominant than the interests of the House, we must take great care to establish in the Bill the statutory requirements so that the responsibilities will emerge in the interests of gas consumers.
Amendment No. 4 suggests that this form of accountability should take into account the formulation of indicators and standards of service to be published with the accounts. Those indicators are important because the standards are different from the efficiency of the service. There can be efficiency without the highest standards. Again, we want to establish the harmonisation of efficiency and standards in such a way as to maintain the high reputation that British Gas has established over the past few years.
The amendments are contained in a matter of three or four lines. That is not a great deal to include in the Bill. It will not add to the structure or create a great bureaucracy. Lawyers will not be affected. After all, they get a good share of what goes on in the House. They are overloaded with case work and litigation. Anyone who 128 knows much about lawyers knows that they know full well how to look after themselves, without the Minister doing so. It is harder to get the truth or information out of the mouth of a lawyer without a fee than it is to open an oyster without a knife. Ministers do not need to make pleas on behalf of lawyers or to produce a frightening theatrical exercise about litigation. We are asking for accountability, and that is enough for this time of the night.
§ Mr. Rost
In supporting the amendments I shall not attempt to emulate the eloquence of my hon. Friend the Member for Havant (Mr. Lloyd) or the hon. Member for Hartlepool (Mr. Leadbitter). I remind my right hon. Friend the Secretary of State that on Second Reading many hon. Members on both sides of the House raised anxieties about whether the legislation would impose on British Gas the obligation to publish adequate financial information, and some of us continue to have doubts. In Committee we have not written in sufficient safeguards to ensure proper accountability.
It is unsatisfactory that British Gas should not be obligated to disaggregate its costs and profits between different functions and activities. That is important to ensure there is no question of unfair cross-subsidisation concealed by not providing adequate information.
British Gas should be obliged to publish adequate financial information on the separate components of its business. That is not an unreasonable obligation to write into the legislation. Indeed, it occurs in all good corporate practice in the private sector. Many major companies voluntarily publish a detailed breakdown of their turnover and profit centres, as opposed to one side of their business and the other. They do so to inform their shareholders. If that applies to private sector enterprise, it must apply even more rigorously to an effective monopoly. It should have an even greater obligation to specify that the director general can obtain all the information that he might require to exercise his duties. In demanding that in the amendments, we are not asking for any more than is enshrined in the legislation on British Telecom, where the Director-General of Oftel can order any information which he requires to exercise his duties.
The director general should have the power to specify what information is included in the accounts over and above the minimum legal requirements of the Companies Act, and to request that that should be included in the legislation is not unreasonable. Hon. Members on both sides of the House, especially Conservative Members, should be sympathetic towards that aim. I hope that my right hon. Friend will reconsider whether there are adequate safeguards and will table amendments in another place to ensure complete safeguards.
I am not satisfied that the legislation as drafted will provide for the publication of minimum contract prices. That is important to put beyond doubt that there shall be no predatory pricing. Unless we insist that minimum as well as maximum contract prices are published, the legislation will remain weak. I hope that my right hon. Friend will take that point on board.
§ Mr. Hardy
I join the hon. Member for Erewash (Mr. Rost) in his plea to the Minister. The hon. Gentleman is entitled to make the request, because his conduct during the past hour had been a demonstration of consistency and logic. He was the only Conservative Member to join us in voting for the Select Committee's amendment, and he was 129 entirely justified in doing so. This amendment has almost become a consideration of the position of the Select Committee, from which it originated. As my hon. Friend the Member for Hartlepool (Mr. Leadbitter) reminded us, this is the first occasion on which a Select Committee has tabled amendments to a Government Bill. Therefore, it is regrettable that the amendments should have been so badly supported by the majority of the members of the Select Committee, some of whom have not even bothered to attend the debate.
The hon. Member for Havant (Mr. Lloyd) said that the public should be aware that there is no concealment. Every hon. Member should support that view. There is already enough concealment built into the Bill. No hon. Member has reminded the House that there will be substantial concealment of shareholdings. In Committee, we pressed for proper protection for the public and for those who hold shares on the privatised company, and we argued that there should be no anonymous holdings. The Minister assured us of the protection of the Companies Act, under which anyone who holds more than 5 per cent. of the equity would have to be known by British Gas. Five percent. of a tiny business may not be significant, but in the largest gas undertaking in the world, a 5 per cent. holding will allow people to hold about £400 million worth of equity without being identified to British Gas plc.
We have had passing reference today, and detailed consideration in Committee, of foreign ownership. As the hon. Member for Havant said, there is cause for concern about concealment. The possibility of massive secret holdings, and of foreign holdings, of which individual holdings could amount to £1,200 million or more, depending on the size of the flotation, suggest that the Government need to be particularly careful to ensure that the call of the hon. Member for Havant on behalf of the Select Committee receives a proper response. There would be cause for great concern on the Committee if its report receives the same treatment as the last one.
It would be sad, if on this significant, perhaps even historic occasion, the Select Committee, which already has grounds for ample complaint about the way that it has been treated by Her Majesty's Government, found this amendment dismissed as well. It would give even the most docile Conservative Member cause for concern that the Government seem prepared to see yet more concealment built into the privatised structure.
My hon. Friend the Member for Hartlepool was justified to call on the Minister to resolve the difficulties caused by the Government's rejection of the previous amendment. I trust that the excessive docility shown by the colleagues of the hon. Member for Erewash will not encourage the Government to act with the insolent approach that has dominated their proceedings today. They seem to have mistaken verbosity for elegance and co-operativeness.
The Secretary of State has done a great deal of damage, although the Under-Secretary was quick to spring to his defence when a mild rebuke was offered earlier. The Secretary of State has had a field day in the past 48 hours, attacking one Select Committee with viturperative arrogance, and now dismissing the Select Committee on Energy because the Conservative majority, apart from the hon. Member for Erewash, is guilty of the most appalling docility. The Government have done a great deal of damage to Select Committees. It was not wise for this Committee to have adopted the stance of the Grand Old 130 Duke of York. It may not have assisted the historic development of Select Committees in their present form, which is most important. I trust that the hon. Members for Havant, for Rochford (Dr. Clark), for Littleborough and Saddleworth (Mr. Dickens)—who has not graced us with his presence—
§ Mr. Hardy
He may have, and it may have been better for him if he had been present in the debate, as he is a member of the Select Committee.
The hon. Members for Enfield, Southgate (Mr. Portillo) and for Rugby and Kenilworth (Mr. Pawsey), all of whom had their names to these amendments, should be here, and should have considered voting for the amendments more seriously than they appear to have done. They will no doubt receive another tribute from the Minister.
Paragraph 71 of the Select Committee report refers to the British Gas view that, it should be free to operate within the private sector. The Select Committee found two reasons for the rejection of that view. The first was that British Gas would not be operating and competing within the private sector, but within the public sector too, thus being involved in the economically schizophrenic position normally reserved for politicians on the Right.
The second reason that the Select Committee identified was that British Gas would be operating in what is effectively a monopoly position. I am glad that the hon. Member for Havant (Mr. Lloyd) has returned to the Chamber. I made a critical reference to his absence a few minutes ago from the Division Lobby. The hon. Member for Havant and his colleagues were right to identify those two reasons, but there is a third. In addition to the two valid arguments that were perceived by the Select Committee there is also the factor of scale. British Gas will be enormous when it is privatised. It will be enormous not only in British terms but in international terms. Its market operations could have a distorting effect. That is another reason for the Select Committee's attitude, which I hope it will sustain if the Government are not prepared to adopt a responsible attitude towards these amendments.
Earlier this evening my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) was criticised for referring to British Gas as a monster monopoly. That was a perfectly accurate description of it. I accept that the hon. Member for Swindon (Mr. Coombs) assumed that my hon. Friend was using the word "monstrous" as a noun rather than as an adjective. But it is enormous. So long as it remains under its present management it could be described almost as an elephant. An elephant is herbivorous. Problems begin if the elephant becomes a carnivore. If the elephant, because of its size, becomes a marauding carnivore, it could wreak enormous damage upon the environment. For that reason, if I may be excused the zoological metaphor, it would be entirely appropriate if the safeguards that are embodied in the very modest amendments for which the Select Committee asks could be achieved. I recognise that Sir Denis Rooke might not welcome being described as a herbivore, but he has conducted himself in a responsible manner and we shall not be so anxious while Sir Denis Rooke or the existing members of the higher levels of management are in charge, but there is no guarantee—
§ Mr. Wilson
The hon. Gentleman is expressing a degree of disrespect to Sir Denis Rooke. I am not sure that he would be very pleased about being described as a herbivore or as a pachyderm. However, should this ferocious, marauding, carnivorous elephant come into existence, does the hon. Gentleman think that if the elephant grew too big the danger is that it might stand on a lot of people rather than goring them with its tusks, or eating them, or doing whatever other strange affectation might come to the hon. Gentleman's mind?
§ Mr. Hardy
If the hon. Gentleman will forgive me, I shall not pursue the matter because the Minister of State may wish to reply to the debate. Ministers have complained about our descriptions of them since the second week in December. I shall not add insult to injury on this occasion. However, I do not apologise for leaving the Minister of State with only a short time in which to reply because the contributions of Ministers on the previous two amendments were of inordinate length. It serves them right if they are caught out by their guillotine.
I trust that on this occasion the Select Committee will not be treated with the arrogance—[Interruption.] It is no use the Minister of State complaining. First he wanted me to sit down so that he could reply. Now he seeks to interject from a sedentary position. The fact remains that sooner or later people may be in charge of the new, privatised organisation who will have the marauding or carnivorous disposition to which I have already referred. It is in order to supply society with the kind of protection that the Select Committee perceived as being necessary that we support these amendments and trust that the Minister of State will accept them.
§ Mr. Buchanan-Smith
I am glad that the hon. Member for Wentworth (Mr. Hardy) has given me at least a few minutes in which to reply to this group of amendments.
I begin by acknowledging the contribution that the Select Committee has made to the discussions on the Bill, particularly in relation to accounting. My hon. Friend the Member for Havant (Mr. Lloyd) referred to this as an arcane area of accounting. He is not doing himself justice. I do not think that it is arcane. It is a very important area of accounting. I agree with what he is trying to achieve. To use his words, he wants the Government to produce real information figures. I accept that it is important that we have real information figures, otherwise one could get cross-subsidisation between one area of activity and another, and that could cause problems in relation to fairness and everything else.
We have looked carefully at the accounting requirement that should be imposed on British Gas in the authorisation. I know that the Select Committee was critical in paragraph 33 that condition two regarding separate accounts for the gas supply business did not entirely fulfil the purposes which it felt were necessary. But there is a clear requirement in condition two on British Gas to draw up accounts for the gas supply business, and it gives the director general the role of scrutinising the allocation of costs between the gas supply business and any other business that British Gas undertakes. The authorisation will ensure that proper accounts are drawn up which represent a true and fair view of the gas supply business.
The hon. Member for Wentworth referred to the response of my right hon. Friend the Secretary of State to the Select Committee's report and questioned whether we 132 were right in saying that the nature of the gas supply business means that it is not possible to associate in a "rigorous way" specific costs of individual sectors of the market. I hope that the hon. Gentleman and other Committee members will reflect on that further, because not only do tariff and non-tariff sales share the same pipes, but they share the same emergency, purchasing and general services.
Therefore, given the way in which the provisions of long-term gas purchasers' contracts have developed over the past 20 years, there is a particular difficulty in the apportionment and proper identification of the costs which relate on the one hand to maintaining peak supply needs and on the other those which relate to meeting the base load. Therefore, there is not necessarily the kind of simple connection, which the Select Committee is recommending in paragraph 33 and the amendment, between, for example, the load factor and the costs. Costs could be allocated in any one of a considerable variety of ways, and the choice that is made materially affects the accounts. To take the test which the Select Committee has used of the objective accuracy of separate profit figures is not a proper reflection of the realities of the gas supply business and for the authorisation to require audited published accounts.
We have achieved the same purposes in the authorisation because the director general will be able to exercise his judgment in that area. That area will not always be the same. I prefer the flexibility given to the director general to scrutinise the accounts and to achieve proper allocation to the slightly greater rigidity of writing that into the primary legislation, although I understand the purpose of that. From the start the director general will be able to use his powers to call for all the necessary information covering the tariff market. He will therefore have access to information about the possible bases on which costs and revenues can be related and to the price regulatory section of the market. Those powers are clearly in clause 7.
My hon. Friend the Member for Havant also raised the matter of transparency. Clause 34 gives the director general a discretion to publish information that he considers appropriate, and procedures are set out in the Bill which enable the authorisation to be modified. If the director general found that he was being inhibited in carrying out the purpose of the amendment, which I support, he would be able to introduce those modifications.
On that basis, the regulatory arrangements set out in the Bill and the draft authorisation must be looked at together. They deal with the important need to ensure that proper accounts are drawn up and published. I ask my hon. Friend the Member for Havant to withdraw his amendment, not because I disagree with its purpose, but because I believe that by what we have already done about authorisation we meet the purposes which he and the Select Committee wish. I hope that my hon. Friend will not press the amendment to a Division.
§ Amendment, by leave, withdrawn.
§ It being Twelve o'clock, MR. DEPUTY SPEAKER proceeded, pursuant to the Order (17th February) and the Resolution this day, to put forthwith the Questions on amendments moved by a member of the Government.