Electricity Bill

HC Deb 20 July 1989 vol 157 cc553-622

Lords amendments considered.

5.15 pm

Ordered, That the Lords Amendments to the Electricity Bill be considered in the following order, namely, Nos. 4, 5, 9, 10, 95, 14, 101 to 108, 22, 25, 26, 51, 52, 55, 56, 129, 140, 27, 108A to 114, 118, 3, 2, 100, 62 to 65, 6, 90, 7, 119 to 128, 130 to 139, 141 to 143, 11 to 13, 15, 16 to 20, 115 to 117, 53, 54, 57, 58, 59 to 61, 66, 67, 68, 69 to 74, 75 to 77, 144 to 153, 174, 154 to 157, 80, 163 to 167, 91, 92, 168, 93, 94, 169, 170 to 173, 175 to 178, 179 to 181, 96 to 99, 158 to 162, 21, 81 to 89, 28 to 50, 78, 79, 1, 8, 23 and 24—[Mr. Michael Spicer.]

Mr. Deputy Speaker (Sir Paul Dean)

I have to advise the House that Lords amendment No. 10 involves privilege.

(1) The Director may, after consultation with public electricity suppliers and with persons or bodies appearing to him to be representative of persons likely to be affected, from time to time—

1. (a) determine such standards of performance in connection with the promotion of the efficient use of electricity by consumers as, in his opinion, ought to be achieved by such suppliers; and
2. (b) arrange for the publication, in such form and in such manner as he considers appropriate, of the standards so determined.

(2) Different standards may be determined under this section for different public electricity suppliers.'.

The following amendments to amendment (a): (i) in line 1, leave out 'may' and insert 'shall'.

(ii) in line 5, leave out 'as in his opinion ought to' and insert 'which shall'.

(iii) in line 11, at end insert 'and (c) shall set a date by which these standards must be achieved and shall apply such sanctions as appears necessary should these standards not be met.'. Government amendments (b) to (e).

Mr. Parkinson

At present, the only duty that rests on anyone to promote energy efficiency is the duty on the Secretary of State. As a result of the Bill, the range of responsibilities for promoting energy efficiency will be widened and strengthened considerably. The statutory duty will still remain on the Secretary of State, but, in addition, the new Office of Electricity Supply, which will be a very powerful body, and its regulator will also have a statutory duty to promote energy efficiency and for the first time the area boards will have a duty to publish information about energy efficiency and to make it available to their customers. These duties all deal with the consumption of electricity, and with the saving of electricity and energy by users.

However, there is a fourth important pressure built into the Bill and into the structure created as a result of the Bill. It is a major pressure to produce electricity more efficiently. At present, we have a Central Electricity Generating Board which has monopoly powers and operates on a strictly cost-plus basis. Whatever its costs are, it simply passes them through to the customer.

Under the new structure there will be substantial competition from day one for the business of the area boards in both England and Scotland. The Scots are only

Lords amendments Nos. 4, 5, 9, 10, 95, 14, 101 to 108, 22,25, 26,51,52,55, 56, 129, 140, 27, 108A, 109, 109A, 110 to 114 and 118 agreed to.

Lords amendment: No. 3, before clause 3, insert the following new clause—Promotion of efficient use of electricity— . The Secretary of State and the Director shall require each of the public electricity suppliers to make and produce evidence to the Director showing that he has made such arrangements as will promote the efficient use of electricity and may direct any public electricity supplier to take specific action in this area and, if appropriate, may refuse or amend any application for tariff increases or major capital projects.

The Secretary of State for Energy (Mr. Cecil Parkinson)

I beg to move, That this House doth disagree with the Lords in the said amendment.

Mr. Deputy Speaker

With this it will be convenient to discuss Government amendment (a), a new clause— 'Promotion of efficient use of electricity—

just finding out that that is a serious possibility. [Interruption.] If the hon. Member for Glasgow, Cathcart (Mr. Maxton) will listen, he may get a surprise.

PowerGen has just written to every major company in Scotland offering to supply them with electricity. National Power is following suit. For the first time major companies and boards in Scotland are being pursued by generators seeking their business. Therefore, there is competition in generation. As fuel represents 60 per cent. of the cost of all electricity generation, the pressure is on generators to compete by using fuel efficiently.

Mr. John Maxton (Glasgow, Cathcart)

Will the Secretary of State give way?

Mr. Parkinson

I shall not give way because we have agreed to make short speeches as the hon. Member for Sedgefield (Mr. Blair) is under the weather.

People used to say, "Where there's muck there's money", but pollution in electricity production is extremely expensive because the less efficiently fuel is used and the worse the technology, the greater the pollution and expense. Therefore, competition and efficient use of fuel run hand in hand with conserving fuel and reducing pollution. That is an important aspect of the new structure that the Bill creates. The company that uses fuel efficiently will have an advantage over its competitors and there will be real pressure for efficient production of electricity.

Their Lordships felt that more should be done and they amended the Bill. I ask the House to reject their amendments and replace them with our new clause. It is not disputed that their Lordships' proposals are defective. The person who proposed them has accepted that. The subsequent amendments only made matters worse. The Select Committee has confirmed that the amendments are unworkable and unsatisfactory, and nobody in the House will be tempted to dispute that.

The amendments are ineffective because they were based on American experience and were designed to discipline a system that we do not have here. They are an attempt to import into this country a set of rules and regulations designed for an over-regulated, vertically integrated industry. Their Lordships' failure to understand that has led them to produce this dog's breakfast of amendments. Everyone accepts that they are ineffective and unworkable.

I wish to give the House some of the reasons why the amendments are ineffective. First, they are built round the concept that the Secretary of State or the director general has the power to approve tariff increases and major capital projects. Nowhere in the Bill do we have that power. Moreover, because it is assumed that it is a vertically integrated monopoly the amendments assume that generation is part of distribution. In fact, they are separate. The generators will build the new capacity. The amendments do not include any arrangements to deal with that, but deal exclusively with public electricity suppliers, who will not produce new capacity.

We recognise their Lordships' desire to see the commitment to energy efficiency in the Bill strengthened and we recognise that my hon. Friend the Member for Exeter (Mr. Hannam) and others agree with that. Although they think that least-cost planning would be a mistake, they want the Bill to be more specific about how the new duties will be carried out.

In the new clause and in the two revised conditions to the licence we spell out exactly how the director general will carry out his new duties to promote energy efficiency. Each public electricity supplier will have a duty to set performance standards for the promotion of energy efficiency. He will monitor performance and ensure that the standards are met.

Condition 17 supports the new clause and binds the company in the licence to meet the standards set by the director general. Condition 18 spells out clearly how the public electricity supplier will have to carry out his duty to make information available to the customer. In a code of practice which will be part of condition 18 we shall spell out how the public electricity supplier must meet his obligation to provide information. It will be specific and will include the need to maintain a telephone answering service and an office or bureau to supply information. It will give flesh to the commitment that the Bill imposes on the public electricity supplier to provide information.

The new clause spells out clearly the two new specific duties imposed on both the regulator and the public elecricity supplier. Specific action will be taken to set standards, collect information and enforce the standards.

The hon. Member for Sedgefield has conducted a campaign inspired by Mr. Mandelson. He used Mr. Mandelson's Monday morning spot on the "Today" programme to push out his half-thought-out ideas. He made great play of the fact that gas regulators have duties but have not carried them out. We have had discussions with the Director General of Ofgas, who finds his powers too vague and general. He believes that the powers spelt out in our amendments and in the Bill would enable him effectively to promote energy efficiency and he intends to seek such powers. He recognises that his present powers are inadequate and need to be strengthened and that the powers set out in this Bill would enormously improve his position.

The hon. Gentleman and some of his hon. Friends have suddenly discovered least-cost planning. They see it as the answer to their predicament of having no energy policy and are suddenly rushing madly towards it. Yesterday the hon. Gentleman gave a series of quotations, all garnered from regulators in America. In America the people who have this overweaning power claim that they use it extremely well. The hon. Gentleman said that that proved conclusively that least-cost planning is widely accepted and admired in America, but it has far more critics than supporters. Its supporters are mainly people who enjoy using the powers and its critics are mainly those who suffer under them. I could give many more quotations than the hon. Gentleman gave yesterday.

I shall read some evidence given by Professor Joskow, who is a highly respected professor of economics at the Massachusetts institute of technology to the House of Representatives sub-committee on energy and power in March 1988. He said: My analysis leads me to conclude that the broad implications of this proposal is likely to lead to several undesirable outcomes. In particular, it could result in higher energy prices, inequitable … electricity rates and incentives for inefficient conservation investments. My testimony does not argue that there is no role for utilities in encouraging conservation. The main point is that this proposal is the wrong way to identify and implement fair and efficient energy conservation programmes. Let us hear no more nonsense about that system being universally admired throughout the United States. It has been adopted by only three states that have competition in generation. It has been ignored by more than 40 states and is widely regarded by many people as a disaster and a further strengthening of a deeply over-regulated regime.

5.30 pm

Mr. Tony Blair (Sedgefield)

rose——

Mr. Parkinson

The hon. Member for Sedgefield (Mr. Blair) can make his speech in a couple of minutes. This is not the Old Bailey. The hon. Gentleman is not Rumpole and I am not in the dock. He will have an opportunity to make his speech in a moment.

Mr. Alexander Eadie (Midlothian)

On a point of order, Mr. Deputy Speaker. Lords amendment No. 3 is important. The arrogance of the Secretary of State in refusing to give way is almost unknown. The Secretary of State should be informed that he is a servant of the House, not the master of it.

Mr. Parkinson

The hon. Member for Midlothian (Mr. Eadie), not for the first time, is misinformed. I was asked, on behalf of the hon. Member for Sedgefield, to keep my speech short because he was feeling under the weather. He therefore wanted me to make a short speech, which is why I am not giving way. Perhaps the hon. Member for Midlothian should break the habit of a lifetime by thinking before he speaks.

Mr. Blair

I am happy for the debate to continue. It is absurd for the Secretary of State to say that he will not give way in a debate on a Lords amendment. I ask him to give way on the point that he is making.

Mr. Parkinson

I thought that I was helping the hon. Member for Sedgefield. I hope that the hon. Gentleman will not forget that I shall be replying to the debate and shall therefore be able to answer his questions. I am happy to give way to the hon. Gentleman; I thought that I was being helpful.

Mr. Blair

The Secretary of State said that the view in the United States is that least-cost planning does not work. Regulators in 29 different states apply least-cost planning, including California, which is the largest state. The only effect of Lords amendment No. 3 is to allow the regulator, if he wishes, to introduce such a concept. It does not oblige him to introduce such a concept; therefore, the regulator can act accordingly.

Mr. Parkinson

Lords amendment No. 3 assumes a power that the regulator and I do not have. If the regulator decided to intervene in tariffs and stop capital development he would be exercising a power that does not exist in the Bill. Therefore, the amendment is fundamentally misconceived. The hon. Member for Sedgefield will recognise that Ministers only have the powers that Parliament gives them.

I am saying not that least-cost planning does not have supporters but that it has many critics and is designed for vertically integrated monopolies, which we are determined to avoid. It is a by-product of the over-regulated and vertically integrated American system. Ironically, because the American system is so strong and based mainly on the rate of return, an incentive is built into it to create over-capacity. Least-cost planning was introduced to correct a distortion that was built into its over-regulated system. Our competitive system of generation and the Government's powerful amendments and new clauses offer a better opportunity of providing worthwhile energy conservation.

Throughout our debates, security of supply has been taken for granted. Conservationists ignore the need to maintain security of supply. The Government do not deny that conservation has a role to play, but we believe that the Bill creates more powers for more people to promote energy efficiency than have existed hitherto. We are not prepared to put the security of the system at risk. Conservation must be balanced with the need to maintain security of supply, which is what the Bill aims to do. Evidence from America shows that one of the by-products of least-cost planning is an increase in the danger of blackouts. We believe that our policy offers a much more balanced and sensible approach.

I ask my right hon. and hon. Friends to reject Lords amendment No. 3 and accept the Government amendments, which recognise the vital importance of energy efficiency and provide the people who can do something about it with the specific powers to do so.

Mr. Blair

I shall begin by setting out the matters on which, apart from the Government, we all agree. We agree that the greenhouse effect and global warming is a serious environmental problem—perhaps the most serious that we face. We agree that energy efficiency is the best method of combating it. The question is whether Lords amendment No. 3 or the Government's amendment is the most effective to promote energy efficiency.

There can be no more stark contrast than between the two amendments. Lords amendment No. 3 would impose energy efficiency duties on suppliers and regulators. It would give the regulator freedom to direct suppliers to do whatever is necessary to carry out their duties, and it backs that up with tough new penalties. By contrast, the Government's amendment does not even impose an obligation on the director general; it merely leaves it to his discretion. That power must be exercised from time to time, but no specific penalties are attached to the Government's amendment. The difference in the protection that the two amendments offer is the difference between wrought iron and writing paper. The argument that the Government's amendment is going half or quarter way to meeting the arguments advanced in the other place is absurd. It would surely require powerful arguments for rejecting Lords amendment No. 3 in favour of the weak Government amendment.

The Secretary of State said that everyone concedes that Lords amendment No. 3 is technically unworkable. I do not concede that it is unworkable. It has been changed slightly, and I believe that it could work. If the Secretary of State's only objection to it is that it gives him a power to increase tariffs—the Secretary of State does not have such power under the Bill—it could simply be amended. The idea that the Lords amendment can be entirely ruled out on that basis is absurd. It probably has broader support than any amendment that has come from the other place in recent times. It has the support of almost all the environmental groups, such as the Council for the Protection of Rural England, Friends of the Earth and the World Wildlife Fund. It was supported by the House of Lords Select Committee on Energy, which moved it in the other place. The House of Commons Select Committee, in paragraph 5 of its short but valuable report on the Lords amendment, said: There are a number of basic principles in the Lords Amendment which we believe that the Government should now ensure are inserted into the Electricity Bill. These are:

1. (a) Public Electricity Suppliers must be under a statutory obligation to promote more efficient electricity use.
2. (b) That statutory obligation must be reinforced by penalties to ensure that it is met.
3. (c) The most effective penalty is for tariff increases to be refused, especially where such increases, caused by additional supply investment, could have been avoided by investment in energy efficiency."

At that infamous No. 10 seminar on global wanning, energy efficiency was given as the most effective way to combat the greenhouse effect. If the test for the amendment were either public support or scientific support, it would be carried overwhelmingly.

The Government's position has been characterised by a malign reluctance to have anything to do with the notion of energy conservation. When this was first raised months ago, the Government's response was to rubbish it. We were told that conservation was all about turning the lights off and that, in so far as it was relevant, it would be left to market forces, leavened with a little persuasion. The Government were then hoist with their own petard. Having made a big issue of the greenhouse effect, as concern about it grew and it became clear that energy efficiency was the best way to deal with it, and as the inadequacy of mere persuasion of the market forces became self-evident, the Government were forced more and more into having to concede something to salvage their credibility.

In other words, this long tale of Committee stage, Report stage and passage through the other place with amendments from it is not a tale of a Government who are desperate to carry out the common will and anxious to get first in the field with energy efficiency. They have had to be dragged, kicking and screaming into this position. Driven to it, disbelieving and reluctant, acting from expediency rather than commitment, they have come up with their amendment today.

The Government's amendment imposes no obligation on the regulator—it simply gives him a power. He may use it if he wishes, but he need not if he does not. If the regulator were so minded, he need never use the power. The idea that this amendment matches the seriousness of the problem is absurd. The regulator can do much if he is so minded. He can determine standards of performance in connection with the promotion of the efficient use of electricity by consumers. In other words, he can intervene, but only to set standards by which suppliers must promote the efficient use of electricity by consumers. There is no direct power to make the suppliers do anything.

Would the regulator, under the Government's amendment, be able to set targets for the reduction in energy demand? Would he be able to direct suppliers to use more energy efficient power generation? Would he even be able to order suppliers to provide incentives for customers to purchase more energy efficient equipment? If, as I believe, it is doubtful that he can do any of these things, then we do not have a brand new amendment and new clause designed to put energy conservation and energy efficiency on the energy map; we have simply a round-about way of saying that more and better information should be disseminated, with bigger and better leaflets and more of them. In other words, we shall not have the teeth that the Lords amendment assumes is necessary to promote energy conservation and efficiency. We shall simply have a publicity campaign that may be better than the publicity campaigns that we have had before, but still one that falls woefully short of what is required to do the job.

Many Conservative Members have signed the early-day motion supporting the Lords amendment. They should be aware that the idea that the Government amendment embodies the spirit of the Lords amendment and is almost a redrafting of it—the same spirit but in different words—is fatuous. If we compare it with the Lords amendment, we see immediately that the latter carries an obligation. That is the first difference. It allows interference with tariff increases and hard and harsh penalties. That is the second difference. It allows interference with new capacity, which is the building of new power stations. The Secretary of State may say that least-cost planning does not work in the United States, but many think that it works extremely well. However, the question is whether we should allow the regulator, if he believes that it is right, to interfere with the planning of new capacity if energy conservation would yield better results.

It cannot seriously be said that the Government do not mind taking powers where they are necessary. For example, clause 36 gives the Secretary of State wide powers to manage power stocks at power stations. Clause 38 obliges him to give consent to the new power stations. Clause 41 sets out standards of performance generally. The nuclear levy is the most direct interference with the market that could be imagined. Whatever other reason the Government have for saying that the Lords amendment should not be accepted, it cannot be because they are opposed to intervention.

5.45 pm

The Chairman of the Select Committee said that he believed that we were hanging on by our fingertips in relation to the problems of global warming. If the problem is that serious, should we be afraid of taking powers such as those in the Lords amendment? If it is that serious, can those powers be said to be of a lower order of significance than fuel stocks or the need that the Government see to protect nuclear power, with which they agree although we may not? It is absurd to say that these things are of tremendous importance whereas global warming, which is acknowledged to be the most serious environmental problem that we face, is not.

I do not know whether the director general quite understands the effect of the Government amendments. However, the record of British Gas is an appalling indictment of the power that the Government have given that company. The regulator has not made a single directive concerning British Gas over the years since privatisation. Only four people, although they are good people, work in the marketing division of British Gas, which has a turnover of £7.5 billion, but spends only £4 million on energy conservation.

Mr. David Clelland (Tyne Bridge)

Is not privatisation of energy industries incompatible with energy conservation and efficiency, as we are now seeing with British Gas? The simple fact is that people will not be interested in investing in a private company that has a statutory duty to encourage its customers not to use the product that it is trying to sell. That is why the Secretary of State will not introduce such statutory duties and the amendment that he has tabled will not work.

Mr. Blair

My hon. Friend is right. The Secretary of State seems to believe that the commercial impetus of a privatised electricity system will be to promote energy efficiency and conservation. That is a curious idea. I should have thought that the commercial impetus would be to sell as much electricity as it could. What has happened with British Gas over the past few years makes it difficult to sustain the notion that it sees such a policy as being to its commercial advantage.

The issue of the environment and the central role of energy efficiency in its conservation will not disappear. People will ask why the Government are opposing the Lords amendment when there is so much support for it. The answer is simple. The Government's agenda is privatisation, but the agenda of the British people is the environment. Faced with a choice between the environment and privatisation, the Government have chosen to put privatisation first. There is no more important environmental test of this Parliament than the acceptance of the Lords amendment.

Many of the Conservative Members who have put their names to the early-day motion support the concept of privatisation, whereas Opposition Members believe that the privatisation proposals are one great unedifying shambles. They have already caused higher prices and chaos within the industry, and the provisions on nuclear power have met with condemnation from every quarter. But even if one accepts the principle of privatisation, what possible rational argument can there be for adding to the litany of failure to which the Bill has already given rise by refusing the most coherent and effective method of fighting our common single greatest environmental problem?

I therefore call upon all Conservative Members who acknowledge the seriousness of the problem to support the Lords amendment in the Lobby. It is one thing to sign early-day motions, but they will not bring home to the Government the credibility and seriousness of the threat unless they are prepared to put their votes where their mouths are. The Government may win the vote tonight, but if they do it will be on the basis of arguments that have been universally discredited. They have been given the single most significant environmental test of this Parliament. They have sat that test and they have failed.

Sir Ian Lloyd (Havant)

I felt that it would probably be less than principled of me if I did not take part in this debate because of the strong position that the Committee of which I am Chairman has taken on the amendment and the views expressed in the report that we published to which the hon. Member for Sedgefield (Mr. Blair) referred.

Before I get down to the nuts and bolts of the argument, let me put one thing straight. The hon. Member for Sedgefield referred very generously to the simile that I had used about global warming—that we were clinging by our fingernails to the cliff. As I explained at the press conference, the simile, though a great one, was not mine. It was the fine British historian Arnold Toynbee who said that all civilisations cling to the cliff for one reason or another, and ours is clinging to the cliff because of the complex and dangerous technological fix in which we find ourselves.

The Secretary of State said that the Select Committee had confirmed in its report that the amendment was defective. I must point out that, having accepted that, we said that the objectives that the amendment sought to achieve were most powerful and deserved careful consideration by the Secretary of State and his Department. I adhere to that view, although, broadly speaking, I welcome much that the Secretary of State has done during the passage of the Bill to reflect the Government's concern for energy efficiency and conservation. In the letter that the Secretary of State sent to us this morning, he spelt out several respects in which the Government have developed a very effective approach to the question.

We endorse and accept, for example, the idea of having an independent regulator with a duty to promote the efficient use of energy. We also endorse and accept the fact that the Secretary of State will be required to promote the efficient use of energy. The Secretary of State said in his letter: The licences for electricity distribution companies will require them to advise their customers on the efficient use of energy. But what happens if they neglect that advice? That is a question to which I shall return.

The Secretary of State continues: The Bill introduces competition in electricity generation". I share his faith that under the new structure competition will be rigorous and effective, but we do not yet know quite how effective it will be. In the context of the greenhouse effect, unless it is completely effective many other things will have to be done to secure the overall objective.

The Secretary of State said in his letter that the Government have made special provision to encourage the development of renewable sources of energy. I welcome that, but I would argue, as I did the other day, that the scope of renewables is limited. Even with almost zero interest capital investment on the largest scale, we can expect the contribution from that quarter to be comparatively small. I welcome what the Government have done about combined heat and power.

Let us now consider the four specific arguments that my right hon. Friend the Secretary of State advanced in his case for rejecting the amendment. The Secretary of State said in his letter that the amendment gives a duty to both the Secretary of State and the Director General of Electricity Supply to promote energy efficiency but does not indicate what should happen in the event of disagreement between them, how they should consult, or what should be the basis of evidence necessary to satisfy their duties". Surely those are not insuperable problems. A formal quarterly report from the director general to my right hon. Friend would certainly cover the question of how they should consult and of what should be the basis of evidence. The degree of observance of standards could also be incorporated in such a report. Conspicuous failures could also be incorporated, as could applications for new and existing generators in areas where, in the director general's opinion, there is massive scope for increased efficiency in energy use or conservation. I am not terribly convinced by my right hon. Friend's first argument, therefore.

My right hon. Friend then argues that the Bill removes from the Secretary of State the power to fix prices or decide"— that is the key word— on new capital investment … it would be quite wrong for electricity prices to be subject to political interference once the industry is in the private sector. I do not really believe that we are talking about a decision, though. As I understand it, under the new system, the decision to invest in new generating capacity will be made by existing major companies, by new companies moving in to the industry or by the area boards. The decision to invest will be theirs. What we ask—perhaps we are seeking to transfer American experience here—is that the Secretary of State should retain the power to examine and, if necessary, to reject that decision to invest. As far as I have been able to judge the American experience, the fact that that power has been retained by the public utility commissions has occasionally resulted in a restriction of investment, but it has certainly not resulted in the disappearance of investment in electricity generating capacity in the United States, so I am not altogether impressed by that argument either.

My right hon. Friend then refers to the need to balance energy efficiency against the need for security of supply. That judgment is made repeatedly in arguments between public utility commissions—in the various states of the United States where the structure remains—and those seeking to invest. My right hon. Friend referred to the danger of brownouts, but I do not believe the United States has experienced persistent and threatening brownouts during the past two or three decades. That is not the record in the United States, and it would not necessarily happen here.

Finally, my right hon. Friend argues: the Amendment is illogical since it inhibits the construction of new capacity by the distribution companies". I found myself unable to understand what my right hon. Friend was driving at there; perhaps he will explain later.

I come now to what I believe to be the key statement underlining the Government's position—the statement made by my noble Friend Baroness Hooper in the other place: It is in the consumer's own interest to use electricity efficiently."—[Official Report, House of Lords, 16 May 1989; Vol. 507, c. 1053.] Of course it is in the consumer's interest to use energy efficiently. Against that fact, however, we must consider the evidence given to the Committee in the other place, which I found extraordinarily impressive, that, whereas in 1976 the Commission decided that by 1985 we should have endeavoured to achieve a 20 per cent. improvement in energy efficiency, the perceptible improvement eight years later was a mere 3 per cent.

We have now reached a stage at which the difference between the 3 per cent. that has been attained and is demonstrable and the 20 per cent. or more that the Commission thought desirable—the Toronto conference looked at that figure and even bigger figures—has become much more crucial in the light of our enlarged understanding of the fact that our civilisation relies on massive burning of hydrocarbon fuels and that that contributes to global warming and the greenhouse effect.

We must now go further. However important and significant voluntary contributions may be, and however important market forces may be—I do not for one moment underestimate their importance; as I have said elsewhere, I regard them as a necessary condition of our salvation—we must go further than we have gone so far if we are even to begin to achieve the massive shifts in the patterns of energy consumption that we may be asked to undergo in the next five or 10 years.

If such massive shifts are required, the whole ethos of energy conservation and efficiency will have to be looked at, in my humble judgment, in a much more fundamental sense. That is the priority that has dominated my thinking on the matter for some considerable time.

6 pm

I am sure that my right hon. Friend's amendment recognises the problem, as I know that he does from our many formal and informal discussions on the matter. However, I do not believe in my heart of hearts—if I did I would not be standing here—that it contributes significantly to the solution. If I use the word "significantly", that is where I would like the emphasis to lie. I believe it to be anodyne and exhortatory, but I do not believe it to be effective. When hon. Members suggest that this kind of measure produces very little in the way of significant results, I call to mind the experience of California, where we know that the California commission, as a result of measures taken some time ago, managed to achieve savings of $350 million in energy conservation and efficiency. That was the agreed measurement of the Utility Commission.

Bearing in mind the roughly similar scale of the Californian and United Kingdom economies, can my right hon. Friend tell us that we can look forward in the next one, two or three years to energy efficiency savings of the order of $350 million? If we cannot so look forward, why can we not? If we can, why do we not adopt similar measures?

That summarises my position. I shall end with an analogy which this time is completely mine, but is none the less valid. It concerns global warning. We know that some time ago a small capsule known as Challenger exploded on its way into space because of the failure of an O ring. We know that our civilisation is on a somewhat larger capsule in space. We know that the O ring round it is the atmosphere and the ozone layer. When the Challenger exploded, the President of the United States set up an investigatory commission which produced a fine report saying why the O ring had failed and its consequences. If the O ring round this planet fails, there will be no presidential commission; there will be no follow up; there will be no civilisation.

Mr. Malcolm Bruce (Gordon)

I congratulate the Chairman of the Select Committee on Energy for his two forthright and timely reports on the subject. They have given unequivocal guidance which the Government would be foolish not to accept. After all, that guidance was based not just on the opinion of the Committee, but on universal testimony from a wide variety of sources. It was testimony that I would regard as overwhelming and I find it depressing that the Government seek to dismiss it.

I have a special interest in the clause. Like all hon. Members who recognise the importance, especially, of tackling the greenhouse effect, I believe that the clause is our last chance to convert the Bill from what is effectively a commercial interest measure to an environmental Bill. Although the Government have insisted all the way through that that is not what the Bill is about, they should accept even now that that is what the Bill should be about.

The wording of the Lords amendment, which the Secretary of State criticised so fulsomely, does not fail the test that he suggests. I am a little biased because I had a substantial hand in drafting the amendment. It is based partly on an amendment that I moved in Committee, especially the enforcement element of the clause. For the Government to say that there is a technical deficiency in the amendment and, therefore, reject the whole concept is not very convincing, because the Government could modify the amendment to make it work if they wanted to and were prepared to put the political will behind it.

I and my colleagues have tabled an amendment to the Government's own pathetically weak pusillanimous amendment, which seeks to ensure that enforcement is built into the requirement to promote energy efficiency. Pious declarations of good intent are not good enough. As the hon. Member for Havant (Sir I. Lloyd) said, we have had consistent statements from the Department of Energy, through the Energy Efficiency Office, about the objective of achieving 20 per cent. savings per year. That has been recommended for years, but we have not come anywhere near it. Clearly, publicising the benefits of energy efficiency and advertising the fact that it is in the commercial interest of consumers to take account of energy efficiency are not enough. We are dealing, after all, not just with economics, but with the environment of our planet and ecosystem.

I admit, as have other hon. Members, that the amendment is based on American experience, but I do not accept the Secretary of State's rejection of that experience. I have had discussions with people involved in utilities on both sides of the fence in many states in America, and I do not believe that his statistical rebuttal stands up to examination.

I must stress that the amendment is essential to tackling effectively the greenhouse effect. Untrammelled industrial expansion, which is what we have been experiencing throughout the world in the past 20 years, is now bringing our planet to the boil. The Prime Minister's conversion to concern about the greenhouse effect, heralded in her Royal Society speech, is genuine, but I find it incredible that she does not seem able to grasp the fact that it requires a fundamentally different approach to policy.

Independent assessment suggests that, within existing technology, we can achieve a reduction of more than 20 per cent. in carbon dioxide output by the year 2005 while still sustaining a 2.5 per cent. per annum growth. If that information, which comes from a variety of sources, is anything like true, how can any responsible Government fail to take action to ensure that we secure that benefit? If the Government are really pretending that this pathetic amendment, which is their alternative to the Lords amendment, will go anywhere near achieving that, they are treating us with contempt and as fools. I am not prepared to be treated as a fool by the Government or the Secretary of State.

I do not believe that we will achieve anything like progress towards that essential reduction unless we have a much stronger measure. A Bill about the regulatory framework of the electricity industry is the most appropriate one to contain such a measure.

We in the United Kingdom are major contributors to the greenhouse effect. We cannot hide behind the need to secure international action and use that as an excuse for not taking action on our own behalf—yet that, essentially, is what the Government are doing.

As I understand it, in simple terms, carbon dioxide accounts for about 50 per cent. of the greenhouse effect and 80 per cent. of that carbon dioxide comes from burning fossil fuels. Here in the United Kingdom, with 1 per cent. of the world's population, we are contributing 3 per cent. of the carbon dioxide output. We must, therefore, take action to put our own house in order if we are to make any contribution to solving the global problem.

The problem touched on by the Secretary of State is not confined to the United States industry, which has a tendency, as he put it, to go for overcapacity. I represent a constituency in Scotland and I have never been convinced that we need 105 per cent. extra capacity. If that is not excess capacity, I do not know what is. But even taking the United Kingdom position as a whole, the problem with the electricity industry, as it is presently constituted and as it will be constituted post-privatisation, is that its response to increasing electricity demand is to want to build more power stations, when its response should be to use the capacity that we have substantially more efficiently. That makes economic sense, but, more importantly, it makes environmental sense. The economic arguments have not delivered the goods. We need more action to ensure that we achieve more substantial results.

Our commitment to energy conservation goes back a long way. I was involved in writing a pamphlet in the mid-1970s on the important role of conservation and what it can contribute. I find it depressing to look back over the period of that first oil crisis to see the way in which we were then approaching the issue of energy conservation, and to find out how little progress has been made 15 years on, when we now know that the environmental consequences are far greater than we realised then.

We have tabled amendments which are only fall-back amendments. I believe that the House should agree with the Lords amendment and reject the Government's proposed motion to disagree. The Lords amendment sets the framework which ensures that energy efficiency is not only something that we seek to promote or that we express as being desirable, but something by which we can put teeth behind the Director General of Electricity Supply to ensure that energy efficiency is achieved. So far, we have conspicuously failed in that.

The benefits are not just environmental. The benefits of seeking greater efficiency in energy use are that it will help to alleviate fuel poverty and to improve the competitiveness of our industry. In a sense, we get three benefits in one—a benefit to the consumer, a benefit to industry and a benefit to the civilisation of the earth in ensuring the protection of the environment.

When the Secretary of State replies to the debate, it would be helpful if he could say exactly how the Government will confront the crisis of the greenhouse effect if he does not believe that enforcement of energy conservation has a part to play.

I draw attention to two passages in the report of the Select Committee on Energy, entitled "Energy Policy Implications of the Greenhouse Effect". Paragraph 102 states: the most striking feature of our Enquiry has been the extent to which improvements in energy efficiency—across all sectors of the economy—are almost universally seen as the most obvious and most effective response to the problem of global warming". That is the Committee's view and it is the view of experts. What is the Government's view? Do the Government agree? If so, what will they do about it? If they do not agree, how do they justify their splendid isolation on that argument? We need to hear answers to those questions.

In paragraph 146 the Committee states: It would be inexcusable if pusillanimity and the inability of the governments of the world to plan long-term allowed irreversible and disastrous global warming to occur for want of the means or political will to take effective action to curb it. We and the Lords are proposing a way in which the Government could take effective action. The Government amendment is a way of taking no effective action and of ensuring that the problem will continue and get worse and that the civilisation to which we contribute will continue to be damaged. The Government must accept that their amendment is unacceptable and that it will have to be reversed. If this Government will not do that, a future Government must.

The Secretary of State does not have the time that he thinks. Every scientific report suggests that the problem of global warming is becoming more and more urgent. Having just heard the Secretary of State's remarks, I advise him that it is a grave tragedy if he thinks that he and his party can continue to sit on the Government's green Benches and fail to grasp the nettle that the people of this country expect them to grasp. The sooner that he and his party are removed from office, the better. He has shown a total failure to recognise that representing commercial interests in this place is not what he is here for. As Secretary of State for Energy, he has a wider responsibility. His decision to move the motion to reverse the Lords amendment proves that he has failed in that responsibility. People will not forgive him for doing so.

Mr. Peter Rost (Erewash)

Increasing concern about the threat of global warming is rapidly rising to the top of the world's political agenda. I have attempted to assess the merits of the Government's new clause in that context. I have listened carefully to my right hon. Friend the Secretary of State, but in my view his approach does not offer an adequate response to what may well be the greatest environmental challenge that has so far threatened mankind.

All the best scientific advice tells us that it may be another five years or more before international research studies can guide world politicians about the causes and effects of global warming. So far, all that we are certain about is that global warming is happening and that it is measurable. What we do not know yet is how much of the global warming is caused by mankind's distortion of the natural balance of global ecological systems.

We do not yet know the likely effect on sea levels, world climate, agriculture or anything else. We do not yet know how much global warming can be expected if we succeed internationally in stabilising carbon dioxide releases. We do not even know how much global warming is in the pipeline, resulting from increased CO₂ and other gas emissions over recent decades. We do not know how long the lead time will be. We do not know how serious the threat may be if we succeed and begin to implement the Toronto conference proposal of a 20 per cent. world reduction in greenhouse gases by 2005.

6.15 pm

However, what we do know and what we ignore at our peril is the fact that there is global warming. We also know the overwhelming consensus of scientific advice to us here and now. Until we can predict with more precision what may need to be done to save life on earth, all the authoritative voices are saying that in the meantime, as an insurance policy—even if it is a third-party insurance policy, rather than a comprehensive insurance policy—we need vigorously to promote energy efficiency.

Therefore, I urge my right hon. and hon. Friends to study the report of the Select Committee on Energy. It is all there. I believe that it is the most important report that the Committee has produced to the House in its 10 years' existence. It is by no means the first report in which we have recommended a policy of energy efficiency, but it is the most important report. We have gathered the most wide-ranging expert evidence, including from those scientists and energy experts who participated in the No. 10 Downing street seminar. They all came to the same conclusion—that the priority now should be greater energy efficiency because that is the quickest, least costly and least painful option and the one with the most potential.

Judged against that overriding priority, I am afraid that I must advise my right hon. Friend the Secretary of State that the Government's proposal is inadequate. It does not have sanctions and it does not address itself to the priorities. I accept that the Lords amendment has technical flaws and that it might well discourage more efficient investment in power plants, such as combined heat and power even though such new investment would double thermal efficiency and thus make a greater contribution to reducing fuel consumption and pollution than would investing at the consumer end of energy efficiency.

However, I also accept that much of what needs doing cannot be included in this Electricity Bill. The distribution companies can do a great deal and my right hon. Friend's amendment will direct that beginning. However, until the Government provide much stronger market signals for consumers, it will not happen.

What we need is an energy efficiency Bill to meet the real challenge of global warming just as we are promised a green Bill next year. We need an energy efficiency Bill to build on what my right hon. Friend has done. I welcome his announcement this week about stronger building regulations. Such a Bill would at long last deal with a system of energy labelling—the labelling of buildings and energy appliances—which, through incentives and the fiscal system, would send the right signals to consumers. It would be a programme of incentives with some regulation and with a fiscal carrot and stick.

We know that the potential for energy efficiency could replace the equivalent of 12 new large power stations, so reversing the annual increase in global greenhouse gases, and perhaps meeting the Toronto target of a 20 per cent. reduction. We also know that that would be cost effective because it would have a short pay-back period. It would be less costly than meeting the increasing demand with new capacity.

I understand the Government's reluctance to tie the electricity industry with unreasonable regulations. I accept that argument. On the other hand, the Bill provides tough regulations to promote competition so that we can put downward pressure on electricity prices. That will be done through a tough regulatory system. Should we not also accept equally tough regulations to promote greater energy efficiency in order to put downward pressure on global warming?

If the existing consumer signals—the market forces—are enough to provide greater energy efficiency, why has that not happened, particularly in the public sector where the Government's responsibility lies? An energy bill carrying a cost of nearly £2 billion could achieve a saving of 20 per cent. of taxpayers' money with a pay-back period of two to three years. That has not happened.

We need a wider, all-embracing range of measures, putting energy efficiency higher in the Government's overall priorities. We use the tax system to promote high priority objectives in other sectors of the economy. That is why we provide tax incentives to people to buy their homes. It is not suggested that people would not buy homes if we did not provide them with a tax incentive. But we still provide that encouragement. We use the tax system to provide money for grants for urban renewal, industrial training and regional aids. We use the tax system—the carrot and the stick—to promote lead-free petrol, and I congratulate the Government on having done that. We use the tax system in all sorts of ways to intervene in the market place to provide stronger signals to consumers to do certain things. The time has now come—indeed it is long overdue—for us to do the same with a major programme of energy efficiency incentives.

I hope that my right hon. Friend will have the opportunity to stay on at the Department of Energy and that the Department will stay on for just long enough for him to put such a Bill on the statute book next year. Meanwhile, the Lords amendment has technical defects, so I cannot vote for it. But without a satisfactory Government alternative that meets the spirit of that amendment, I cannot go into the Lobby to vote it out of the Bill either.

I am not brave enough to predict how much time we have to tackle the probable threat of global warming. In due course, we shall know. I just hope that by then it will not be too late.

Mr. Peter Hardy (Wentworth)

I hope that the hon. Member for Erewash (Mr. Rost) will not come to regret that he had not the confidence to carry his argument to a more logical conclusion. However, I congratulate him on having argued the case for energy conservation for 10 years.

Mr. Rost

Fifteen.

Mr. Hardy

It has been 10 years since the Government took office and for 10 years he and I and a few other hon. Members have been arguing for energy conservation and energy efficiency and we have become increasingly frustrated that the Government have given priority to the service of greed and the exercise of frivolity.

The Government's exercise of frivolity leads me to my next point, which is that my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) would have spoken today as an active member of the Select Committee with the hon. Members for Erewash and for Havant (Sir I. Lloyd), but he is chairing the Standing Committee on the Football Spectators Bill. He would have made a useful contribution to the debate because the Select Committee offered the House useful advice which I regret that the Government have not taken.

The same applies to the House of Lords Select Committee. Unfortunately, the Government maintain the line that the noble Baroness Hooper, their confident and ebullient spokesman in the other place, adopted in selling the Bill in the other place on Second Reading. The House should pay attention to the words that the noble Baroness Hooper used. In an important presentation of the Government approach she said: The Bill and public electricity supply licence also provide for the promotion of efficiency in electricity use. These are important provisions which wil be of particular interest to your Lordships. They impose a specific duty on the director and the Secretary of State, and public electricity suppliers will be required to provide guidance to their customers on the efficient use of electricity. The public electricity supply licences require each licensee to provide, within three months of his licence coming into force, information on the efficient use of electricity. Licensees will be required to revise this information as necessary; and also to send information on energy efficiency prepared by the director to every customer, if so asked."—[Official Report, House of Lords, 25 April 1989; Vol. 506, c. 1155.] The Government will do all those wonderful things so long as the customer knows that he has the right to ask for the information. We have the hon. Member for Havant who recognised the fragility of our planetary system, and the hon. Member for Erewash who has for 10 years or more served the cause of conservation, but we have a Government who are more interested in a Football Spectators Bill and in serving dogma than in contributing to the survival of the planet.

A few moments ago the hon. Member for Erewash expressed anxiety about whether the Department of Energy would survive. The Secretary of State appeared to be complaining that the Opposition did not have an energy policy. But we would have a Department of Energy because we recognise that an energy policy is vital if we are to manage the affairs of our planet in the hope of creating the prospect of survival within the next few decades.

On Monday 17 July, the House debated the Antarctic Minerals Bill. During that debate I made the point that some of the Antarctic pack ice is scores of thousands of years old. In that ancient pack ice, pockets of air have been trapped since its formation. That air has been measured and the proportion of carbon dioxide in the air in that trapped air is half what it is at present in our planet. In the face of that change, a change which is almost certainly accelerating rapidly, the Government have an obligation to seek to contribute to survival. Therefore, it is a pity that we have seen an utterly counter-productive exercise.

In the next few weeks, I understand that hundreds of cups and saucers bearing the mark of the CEGB, or E, representing the publicly-owned electricity company, will go out of use because the private sector cannot possibly allow publicly-owned and publicly-purchased cups and saucers to bear the brand of the publicly-owned industry. It will go out and buy more.

The Minister knows, and the Select Committee recognised, that enough money was spent last year to employ 222 people and this year 749 people, not to contribute to the survival of the planet, but simply to promote the organisation of electricity privatisation. There has been clear evidence of fecklessness and frivolity. It is regrettable that the Secretary of State, rather than seeking a way to make the minor flaws in the amendment acceptable, should prefer to return to the present grossly unsatisfactory position.

6.30 pm

Mr. Michael Stern (Bristol, North-West)

As I am conscious of the need for brevity, I shall concentrate my remarks on two of the points made by the hon. Member for Sedgefield (Mr. Blair). He began—I believe that it is a frequent trick of members of his profession—by making a statement with which he said everyone would agree. I certainly do not agree. It was that energy efficiency is the best way to combat global warming. Perhaps the hon. Gentleman believes that, but it is rather like the White Queen asking Alice to believe six impossible things before breakfast.

I remind the hon. Gentleman of my comments on Second Reading, when I said that in more than one third of the world the energy intake available to each person was less than one tenth of the energy intake available in the developed world. In those circumstances, I do not understand how anyone could suggest that energy efficiency is a solution to the problems of the world. A reduction in energy production would inevitably mean condemning one third of the world to continuing grinding poverty. Quite frankly, that would be an expression of inhumanity that I had thought that even the Labour party had abandoned. A policy of energy efficiency to solve the problem of global warming would be at such a cost to humanity that most of us would consider it unacceptable.

The second point in the hon. Gentleman's speech which struck me with some horror was when he criticised the Government's amendment because it did not set targets for energy demand. I hate to have to tell the hon. Gentleman this, but it is not a function of the Bill to set targets for energy demand. Indeed, it is not a function of Government to set such targets. We have, thank goodness, moved beyond the days of rationing when a Government could say to ordinary people and to industry, "You may have so much and no more."

The hon. Gentleman might suggest that the amendment should set targets for energy demands, but not have the power to enforce those targets. I would not trust any Government with having that power and never using it. The hon. Gentleman's criticism of the Government's amendment is, therefore, a criticism of the Bill because it does not take us back down the road, which he clearly would prefer, of a controlled economy. The hon. Gentleman's complaint is that it is not a paving stone on the road to state control. As such, not only do I reject the Opposition's criticism but I earnestly commend the Government's amendment to the House.

Mr. Alex Salmond (Banff and Buchan)

I wish briefly to support my two colleagues on the Select Committee who have already contributed to the debate. The Select Committee strongly supported the principles of the Lords amendment. We wanted an obligation placed on the electricity suppliers to promote energy efficiency, with penalties if that obligation was not met. The Select Committee identified tariff control as the most effective means of imposing penalties. In no way could it be said that the Government's amendment is strong enough to meet those requirements. The Select Committee accepted that the Lords amendment was technically deficient, but it asked that the Government's response to it should reflect its intentions as fully as possible. The Government's amendment certainly does not do that.

I wish to deal specifically with the Scottish position, and I hope that the Secretary of State will pay particular attention because most of his opening remarks were irrelevant to Scotland. Of course, in any electricity industry there must be a balance between security of supply and conservation. However, Scotland has a technical over-capacity of 100 per cent., a duopoly and an integrated structure. I do not think that there will be any competition in the privatised electricity industry in Scotland. Even the Secretary of State will admit that Scotland will have even less competition than England and Wales. In the circumstances of over-capacity and low or no competition, the privatised companies will have the strongest possible motivation for selling as much electricity as possible. Therefore, the regulator will have to have the strongest possible enforcement powers to ensure that the companies meet their energy efficiency obligations.

The Secretary of State did not deal with the circumstances in Scotland and his silent partner, the Minister with responsibility for electricity in Scotland, is not even speaking in the debate. Who, then, could deny the Select Committee's original advice that the distinctive nature of Scotland's electricity system demanded distinctive regulation if the interests of the Scottish people were properly to be protected? Would the Secretary of State like to intervene on this point?

Mr. Parkinson

No.

Mr. Salmond

I wish that the right hon. Gentleman would intervene. He made no remarks relevant to Scotland in his opening speech, so I hope that he will do so when he replies.

I wish to make a few remarks about the process followed by the Select Committee. There was a difference in emphasis on a number of factors relating to the greenhouse effect, but eventually all members of the Committee agreed on two points. The first was that action had to be taken to deal with the problem of global warming, which we thought to be a serious environmental challenge. The second was that, from the evidence presented to the Select Committee, it was clear that energy efficiency provided the best, quickest and most substantial means of making an impact on the problem.

The Lords amendment has had at least some success because it has persuaded the Government to think about the matter. I hope that the Select Committee's report on the greenhouse effect will make them think rather further than their glib initial response. Given the strength of evidence put before the Select Committee, and given the strength of opinion voiced in the Committee's two reports, we would be selling ourselves short if we accepted the Government's extremely modest amendment as being in any way adequate to deal with the problems.

Mrs. Teresa Gorman (Billericay)

There is concern that our climate is being substantially altered by an increase in the volume of gases, particularly carbon dioxide, in the atmosphere. However, it should be remembered that at least 99 per cent. of climatic effects are caused not by changes in the atmosphere but by the earth's proximity to the sun and to the effect of sun spots. The contribution made by the atmosphere to climatic changes is relatively minor.

It is also important to remember that the carbon cycle—the release of carbon dioxide into the atmosphere—is not a one-way traffic. Carbon dioxide is reabsorbed by the soil and oceans, and particularly by plants. Plants usually photosynthesise—and I speak as a biologist—at less than 50 per cent. of their capacity, but the earth's capacity to balance the effects of carbon dioxide is rarely discussed.

Whenever the greenhouse effect is debated, one often has to deal with a cascade of uncertain criteria. We should remember that when we start worrying people about melting ice caps submerging in water not only Southend but London and half of the British Isles. Although it is true that more fossil fuel is used today, the rate at which that use is increasing is dropping substantially. It is said by those who warn of a cataclysm that fossil fuel usage increases by about 4 per cent. annually, whereas the figure is now down to only about 2.75 per cent. There is awareness of the problem, and something is being done about it.

When my right hon. Friend the Secretary of State is pressed to make important policy judgments, I urge him to bear in mind the lack of scientific evidence on the true effect of the release of carbon dioxide into the atmosphere. I am not arguing that man's activities have no effect, because they have. If a forest is turned into agricultural land, if a swamp is drained, or if more fossil fuel is burnt, heat and gases are released into the atmosphere. However, I reiterate that the effect is largely self-correcting.

The heat effect is micro-related. Urban areas are heat islands, and their temperatures may vary one or two degrees from that of the surrounding countryside. Nevertheless, that extra heat is quickly dispersed and does not make a significant contribution overall. I urge my right hon. Friend to maintain a balanced view in deciding on future policies until such times that more scientific evidence emerges as to the true nature of the carbon dioxide problem and whether it is already being corrected through our awareness of the potential problem. Even so, that problem is puny by comparison with the massive effect over the millennia of the earth's proximity to the sun and of the way in which the earth relates to the sun and moves around it.

Mr. David Steel (Tweeddale, Ettrick and Lauderdale)

Having listened to the hon. Member for Billericay (Mrs. Gorman), I am tempted to inquire of the Secretary of State what he intends doing about the proximity of the earth to the sun. I suspect that the Government have no more policy on that than they have on various other matters.

The debate should confine itself to the serious issue raised by their Lordships. While I am quite prepared to bow to the superior scientific knowledge of the hon. Member for Billericay, I believe that most people in this country assent to the simple proposition that we should use no more energy than we need for our normal daily and commercial lives. If we agree on that simple proposition, we must accept also that we are nowhere near to achieving that desirable objective. The debate in the other place, and public reaction to it, demonstrated widespread anxiety that far higher priority should be given to environmental matters.

The Select Committee chaired by the hon. Member for Havant (Sir I. Lloyd) produced a very cogent report, which received far more public attention than most Select Committee reports for the very reason that it struck an intelligent chord on the same theme. Now that the subject of energy efficiency is before us again tonight, we are obliged to ask ourselves what we can do, as mere legislators, to allay public anxiety and to make sure that in restructuring the electricity industry and the sale and distribution of its product we do not ignore the issues that have been raised. The feeble amendment that the Government invite the House to accept pays lip service to energy conservation but does nothing to promote it.

6.45 pm

The purpose of the Bill is to privatise the manufacture and sale of electricity. I do not claim to be an expert economist, but I understand that those engaged in that process are primarily interested in making a profit. That is the purpose of the Bill, which is one of a whole series of Government measures dedicated to the pursuit of making money. One way of making more money is to expand the market in which one is manufacturing and selling. The legislation has an inbuilt impetus to increase energy consumption, so we must ensure that effective control is written into the Bill.

I agree with the hon. Member for Banff and Buchan (Mr. Salmond) that, thanks to the wrong forecasts made by the industry in the 1970s—the hon. Member for Midlothian (Mr. Eadie) will also recall this—on Scotland's future electricity needs, we were sold a pup in having to accept the construction of the Torness power station. The figures were completely bogus. As a consequence, Scotland is littered with mothballed power stations of every conceivable variety. It is not just a question of the Bill encouraging companies to manufacture more electricity but, as was said by the hon. Member for Banff and Buchan, in the case of Scotland, of selling what they are already capable of manufacturing in greater and greater quantities. If nothing is done, that is what will happen. Fortunately, their Lordships have given us a way of doing something by suggesting built-in controls.

The Select Committee commented: Only part of this considerable potential for energy efficiency will be realised if present circumstances and Government policies in particular remain unchanged. The wording proposed by the Secretary of State means that Government policies will remain unchanged. The Committee's report added: Market mechanisms alone will not produce an adequate response. I do not see the hon. Member for Havant in the vanguard of those wanting a state-controlled economy, as was suggested by the hon. Member for Bristol, North-West (Mr. Stern). Indeed, the hon. Member for Havant is well known in this House for being a market freebooter. Nevertheless, he chaired a Select Committee that undertook a serious investigation of the issues and produced a sensible report. It concluded: A mixture of regulations, penalties and incentives is required to promote energy efficiency, and the Government should bring these forward. Suddenly a solution lands on the Government's plate in the form of the amendment from another place. The Government did not even have to invent an answer because one was generously and kindly produced for them by the combined might of the minds in the other place, yet they spurn that proposal.

We must honestly admit that our country has not been very successful at, or interested in, energy conservation. Even if the hon. Member for Billericay is right—which I beg leave to doubt—about the minimal effect on the ozone layer of increased energy consumption, and although I am privileged to live in a part of the country that is relatively pollution-free, I noticed when I visited Northampton last weekend, which has beautiful countryside even if it cannot compare with the Scottish borders, that a brown haze of pollution was visible to the naked eye which came from the industrial towns in that part of the country. One does not need to be a scientist to know that that kind of pollution cannot be healthy.

In earlier years, the Government did a great deal through home insulation grants to help energy conservation. In 1987, however, they were stopped for all but those on supplementary benefit. We are no longer providing people with incentives to ensure that private dwellings are as energy-efficient as they should be; nor do we make much effort in the public sector—we need not go far from this place to see that.

I am a new tenant in the parliamentary annexe of the Norman Shaw North building. As my fellow tenants will know, in the dead of winter the place is boiling hot, and there is no control over the temperature. If anyone complains, a member of our efficient staff will come along and put lagging on the pipes, so that the excessive amount of heat that has been generated can in some way be suppressed and prevented from entering our rooms. If we cannot even get the temperature of this place right, what hope have we of sending a call for energy efficiency across the country?

The Government's replacement for their Lordships' proposals simply gives the regulator a possible responsibility—no more than that—to set standards of energy efficiency. Our amendment seeks to rectify that, and we shall divide on it later this evening. As was mentioned earlier, we have a precedent in British Gas. All that British Gas has done, however, is to produce a rather badly printed leaflet—available in some gas showrooms—giving advice on how to promote energy efficiency. The electricity industry is desperately in need of more than mere leaflets and advice: its need is much greater than that of the gas industry.

The main failing of the Government's alternative proposal is that, in practice, it would have no teeth. If a supplier fails to comply with the provisions of the Lords amendment, on the other hand, the regulator has two real sanctions, over tariff increases and over permission to construct new plant. I think that those sanctions are essential in the public interest. I know that phrases such as "public interest" and "public service" have rather gone out of fashion in recent years, but I feel that in this context it is time that they became fashionable again.

Mr. Malcolm Moss (Cambridgeshire,. North-East)

As a signatory of the early-day motion to which I am delighted to see that my right hon. Friend the Secretary of State has responded in the amendment, I—along with others—have sought to express my concern about energy efficiency. We expressed that concern for three reasons: we recognised its contribution to mitigating the greenhouse effect, we saw that it kept a downward pressure on electricity prices and, of course, we knew that it prevented unnecessary generating plant from being built and used.

Let us examine the history of the Central Electricity Generating Board, much beloved by Opposition Members—an example of an American vertically integrated monopoly utility. It built new capacity in the past without too much regard to the ultimate cost, and without any regard—as far as I can determine—to energy efficiency. Yet over the years we have heard nothing from Opposition Members about any of those deficiencies in the present system. To listen to them, one would think that the Government had done nothing.

It is time to put the record straight. Britain's rate of improvement in energy efficiency is now twice that of any other EEC country. We were once the seventh largest energy consumer out of 10 countries, and we are now the fourth largest out of 12, although our gross national product has increased by 25 per cent. in the past 15 years. The carbon dioxide generated from each unit of electricity has been cut by 33 per cent. in the past 30 years. In the past 15 years, energy efficiency measures have saved the country 122 million tonnes of coal equivalent. There is no room for complacency, but that is certainly not the record of a Government who are showing a lack of interest or involvement.

The Electricity Bill contains a large number of measures that seek to develop and promote energy efficiency, including the imposition of a duty of promotion on the director general and the Secretary of State, and licences issued to distribution companies will require them to promote energy efficiency. This could mean a whole new range of activities, as the privatised PLCs will be able to become involved in efficiency, manufacture and sale. The companies will want to keep customers' bills down, and will buy from the cheapest generators—those that employ the most energy-efficient measures in their plant. Competition will mean that new technologies—for example, combined-cycle gas—will come on to the market for the first time. At a meeting yesterday, the new chairman of British Gas told us that he was involved in 20 sets of discussions on that new technology, including discussions with National Power and PowerGen. It is important to remember that gas produces 55 per cent. less carbon dioxide than coal.

The Bill makes special provisions for renewable energy, which produces no carbon dioxide and no pollution. It has been given a market share of some 600 MW. Methane gas contributes 30 times more global heating than carbon dioxide: about 46 land-fill projects produce 41 MW.

Much has been said today about the American model—vertically integrated monopolies whose price increases are strongly regulated. The problem is that we have moved away from vertical integration: we now have a privatised industry on the stocks, and have separated generation and supply. In America, because prices are built into a formula based on the return on assets, there is always pressure on the utility to build new plant and increase the asset base—hence the need to introduce the corrective regulatory system called least-cost planning.

Least-cost planning, as set out in the Lords amendment, would drive a coach and horses through the negotiations in the free market between suppliers and generators. That is unworkable, as the proposers have admitted. The Government's amendment is much more sensible.

Mr. Rhodri Morgan (Cardiff, West)

We have all had to apply the principles of energy conservation to the length of our speeches. That is particularly difficult for politicians from my part of the world, but I shall do my best to limit my remarks so that we can complete the debate on the original timetable.

That does not mean that this is not an important issue; it is among the most important issues of the current Parliament, and was recognised as such by the Prime Minister when she signed a declaration last Sunday, along with the other six leaders of the Group of Seven advanced industrialised nations. She said that from now on environmental matters would rank equally with economic matters, even at so-called economic summits of the Group of Seven. That illustrates the importance of putting the environment on the agenda: those, at any rate, were the Prime Minister's words.

We do not want to pass any legislation that does not accord with the spirit of that declaration—which the Prime Minister signed in all sincerity, as did her fellow signatories. This is the first opportunity that hon. Members on both sides of the House have had to try to put it into effect, and we should all be conscious of that when we decide how to vote.

As I intend to pass up the opportunity of commenting on hon. Members' speeches in the traditional way, I shall not deal with the rate of improvement in energy efficiency mentioned by the hon. Member for Cambridgeshire, North-East (Mr. Moss) or with the interesting idea of the hon. Member for Billericay (Mrs. Gorman) about carbon replacement therapy for the globe. I shall, however, refer to the statesmanlike speech of the hon. Member for Havant (Sir I. Lloyd), the Chairman of the Select Committee. I hope as many of the uncommitted as possible will give it serious thought, and will recognise that if a statesmanlike, experienced Chairman of the Energy Select Committee can regard the issue as important enough for him to criticise the Government's attitude, it bears thinking about on the Back Benches. What the hon. Gentleman was really saying was that when we have all left this place our descendants will ask us, "What did you do in the great war against energy, waste and inefficiency, Daddy?". The hon. Gentleman gave a strong signal that we should all follow.

It is not just a matter of reading early-day motions. That is just the graffiti of the Houses of Parliament. What really counts is which Lobby we choose. When one compares the Government amendment, which is long on bumf and short on statute, with the Lords amendment, which tries to do something about a problem and which is generally recognised as capable of offering a major contribution to the solution of global warming, making better use of financial resources and entering into the spirit of the G7 summit declaration last Sunday, the way in which we should bend our thoughts is clear.

7 pm

Sometimes we reject Lords amendments because we feel that the Lords are talking for the landed interest, but in Lords amendment No. 3 they are talking for the whole country and for what people outside want. With the full authority of my right hon. Friend the Leader of the Opposition, I offer an electoral pact to all Conservative Members who signed that early-day motion. If they join us in the Lobby tonight, we will write a letter to the Green party asking its members not to stand against them at the next election. I cannot do better than that. Do we want it said of us, when we consider energy efficiency and conservation, that we accepted the Government's pathetic attempt to replace the Lords amendment, when the Government's sole contribution to energy conservation is to cut down more forests to produce more junk mail, more leaflets, more bumf, more switch-off-something campaigns and more full-page advertisements?

We should remember the Prime Minister's words to the Royal Society when she said that we only have a lease on this planet and we must hand it on to our children in at least as good a state as it was when we took it over. All Conservative Members who are thinking seriously about these issues and about their place in history and not about their relations with their Whips' Office will follow us into the Lobby tonight.

Mr. Parkinson

With the leave of the House, I thank my hon. Friend the Member for Cambridgeshire, North-East (Mr. Moss) for pointing out that, although a number of hon. Members making speeches tonight gave the impression that they had suddently discovered energy efficiency for the first time, over a period of years, as a result of persistent campaigns, Britain has achieved a first-class record of improved performance in the use of energy. My hon. Friend quoted a mass of statistics which I shall not repeat, but they demonstrated that, although Opposition Members have discovered energy efficiency for the first time, British people have been saving energy consistently and well for a long time.

America has been quoted to us as an example, presumably because of its amazing policies, as a country which we should aspire to emulate. Let me point out a few facts. In energy consumption per head, Americans use almost twice as much as we do; in electricity consumption per head they use considerably more than twice the amount we do; in energy consumption per unit of GDP they use nearly twice as much as we do and their emissions of carbon dioxide per head are almost twice as much as ours. The country which we are all being urged to emulate and which, presumably, is on to a lot of secrets to which we have denied ourselves access performs about half as well by any criteria of energy efficiency one cares to name. We had a look at the state of Maine in which the hon. Member for Sedgefield (Mr. Blair) has suddenly developed an enormous interest. It has had least-cost planning. so presumably we should see the benefit, but its consumption of electricity is growing faster than ours. I can say only that by their work shall ye know them, and the results of access to the amazing policies which have gripped the imagination of Opposition Members, and some members of the Select Committee, appear not to be showing good results and to be leaving America very near the bottom of any energy efficiency league table that one would care to mention, in stark contrast with Britain.

The hon. Member for Sedgefield talked about 29 states in America. Even the arch-fanatic, Mr. Andrew Warren, has been able to identify only 10 out of 52 states., and admitted that only three of them are states with any remote competition built into their systems. The hon. Member for Sedgefield and the right hon. Member for Tweedale, Ettrick and Lauderdale (Mr. Steel) mentioned the fact that the word "may" was used. That is a statutory drafting practice where one does not specify in the statute itself exactly the terms which the person has to follow. "May" will be "will". The director general takes this duty extremely seriously, but he has to consult in drawing up the code of practice and performance. He will do that, he will implement it and he will have sanctions.

My hon. Friend the Member for Havant (Sir I. Lloyd) quoted with admiration California, pointed out that it has roughly similar energy consumption to ours, and said that it had saved $350 million a year. Our estimate so far is that our Energy Efficiency Office has helped to produce a saving of £500 million. He also quoted the fourth argument I used in my letter: The Amendment is illogical since it inhibits the construction of new capacity by the distribution companies. He said that he did not understand what that meant. Perhaps had he read the second half of the sentence: yet it is the generating companies who will be building the lion's share of the new capacity it would have become clear to him that to impose a duty on the electricity suppliers—as the Lords amendment does—to inhibit their ability to build new capacity, when the new capacity will be built by the generators not covered by the Lords amendment, makes an enormous hole in the argument which he put forward.

My hon. Friend the Member for Havant was kind enough to say that the Bill contained a considerable number of powers, but he forgot to mention the effect of the new clause and the new licence conditions, which were also ignored by the hon. Member for Sedgefield. The new licence conditions combined with the new clause will give the director general the power to set standards for promoting energy efficiency, and to enforce them; and of course he has available to him the sanctions that anyone in his position would have. If the licence conditions are ignored, he has economic sanctions, he can go to court and get an injunction and he can force the supply companies to honour the code which he sets for them. That is an important sanction. The idea that the public electricity suppliers will behave with ill faith and ignore their legal obligations and that the director general will have no power to do anything about them is quite wrong.

Mr. Blair

The Secretary of State well knows that I asked what the standards would consist of. I asked him a specific question and perhaps he will now answer it. Will the regulator be able to require public electricity suppliers to provide incentives for consumers to use energy more efficiently?

Mr. Parkinson

The reason for the "may" is that the director general, after consultation, will draw up codes of practice which will set performance standards. After consultation, bearing in mind the duty that Parliament has placed on him, the prime duty to promote energy efficiency——

Mr. Jimmy Dunnachie (Glasgow, Pollok)

Answer the question.

Mr. Parkinson

I am answering the question, but the hon. Gentleman has not listened to any of the debate and would not recognise a correct answer if I gave one, as I am.

The Bill contains a power and a duty and the revised licence condition defines how that duty will be carried out. The director general will set performance standards and enforce them and he can penalise companies that do not implement them.

The new clause considerably strengthens the energy provisions in the Bill, and I hope that my hon. Friends will remember that, although we have had a wonderful day of bad-mouthing our country, we have a very good record of energy efficiency. Although Opposition Members have come late to it, we have been pursuing it in a very determined way for a long time, and the new clause will continue that good work effectively.

Mr. James Wallace (Orkney and Shetland)

rose——

Madam Deputy Speaker (Miss Betty Boothroyd)

Mr. Wallace.

Mr. Frank Haynes (Ashfield)

On a point of order, Madam Deputy Speaker. The hon. Member for Orkney and Shetland (Mr. Wallace) has not been present for the whole of the debate. May I put it to you that it is not fair that at this stage he should be called to make a speech? We have had a contribution from the Liberal Bench.

Madam Deputy Speaker

The hon. Member for Orkney and Shetland (Mr. Wallace) is a Member of the House and I called him to speak.

Mr. Wallace

What I have to say will probably not occupy much more than the time it took the hon. Member for Ashfield (Mr. Haynes) to make that point of order.

The Secretary of State said that his proposed new clause would strengthen the Bill. That is nonsense. It may represent a strengthening of the measure as it went to the other place, but it has returned from there as an adequate piece of legislation which will have teeth. Our amendment No. (iii) is designed to give teeth to the toothless proposal that the Government have made.

Mr. Salmond

rose——

Mr. Wallace

I give way to the hon. Gentleman.

Mr. Stern

On a point of order, Madam Deputy Speaker. If the hon. Member for Orkney and Shetland (Mr. Wallace) had been here to listen to the debate, he would know that the comments that he is now making have been made at least five times. Does he really have to waste the time of the House?

Madam Deputy Speaker

Order. I repeat, the hon. Member for Orkney and Shetland is a Member of the House. When he rises, he is entitled to be called.

Mr. Salmond

Did the hon. Member for Orkney and Shetland (Mr. Wallace) notice that the Secretary of State's reply was as silent on the Scottish issues which he was specifically asked to address as the Minister of State, Scottish Office has been silent virtually throughout the debates on this legislation?

Mr. Wallace

Although I may not have been present for the whole of the debate, I had the misfortune to hear the speech of the hon. Member for Bristol, North-West (Mr. Stern). I also heard the valid questions that the hon. Member for Banff and Buchan (Mr. Salmond) addressed to the Secretary of State but to which he did not get a reply. That is why we shall divide the House on our amendment No. (iii).

Question put, That this House doth disagree with the Lords in the said amendment:—

The House divided: Ayes 310, Noes 216.

Division No. 312]	[7.09 pm
AYES
Adley, Robert	Butterfill, John
Alexander, Richard	Carlisle, John, (Luton N)
Alison, Rt Hon Michael	Carlisle, Kenneth (Lincoln)
Allason, Rupert	Carrington, Matthew
Amess, David	Carttiss, Michael
Amos, Alan	Cash, William
Arbuthnot, James	Chalker, Rt Hon Mrs Lynda
Arnold, Jacques (Gravesham)	Chapman, Sydney
Arnold, Tom (Hazel Grove)	Chope, Christopher
Ashby, David	Churchill, Mr
Aspinwall, Jack	Clark, Dr Michael (Rochford)
Atkins, Robert	Clark, Sir W. (Croydon S)
Atkinson, David	Clarke, Rt Hon K. (Rushcliffe)
Baker, Rt Hon K. (Mole Valley)	Colvin, Michael
Baker, Nicholas (Dorset N)	Conway, Derek
Baldry, Tony	Coombs, Simon (Swindon)
Banks, Robert (Harrogate)	Cope, Rt Hon John
Batiste, Spencer	Cormack, Patrick
Bellingham, Henry	Couchman, James
Bendall, Vivian	Cran, James
Bennett, Nicholas (Pembroke)	Currie, Mrs Edwina
Bevan, David Gilroy	Curry, David
Blackburn, Dr John G.	Davies, Q. (Stamf'd & Spald'g)
Blaker, Rt Hon Sir Peter	Davis, David (Boothferry)
Body, Sir Richard	Devlin, Tim
Bonsor, Sir Nicholas	Dorrell, Stephen
Boscawen, Hon Robert	Douglas-Hamilton, Lord James
Boswell, Tim	Dover, Den
Bottomley, Mrs Virginia	Dunn, Bob
Bowden, A (Brighton K'pto'n)	Durant, Tony
Bowden, Gerald (Dulwich)	Dykes, Hugh
Bowis, John	Eggar, Tim
Boyson, Rt Hon Dr Sir Rhodes	Evans, David (Welwyn Hatf'd)
Braine, Rt Hon Sir Bernard	Evennett, David
Brandon-Bravo, Martin	Fairbairn, Sir Nicholas
Brazier, Julian	Fallon, Michael
Bright, Graham	Farr, Sir John
Brooke, Rt Hon Peter	Favell, Tony
Brown, Michael (Brigg & Cl't's)	Field, Barry (Isle of Wight)
Browne, John (Winchester)	Finsberg, Sir Geoffrey
Bruce, Ian (Dorset South)	Fishburn, John Dudley
Buchanan-Smith, Rt Hon Alick	Fookes, Dame Janet
Buck, Sir Antony	Forman, Nigel
Budgen, Nicholas	Forsyth, Michael (Stirling)
Burns, Simon	Forth, Eric
Burt, Alistair	Fowler, Rt Hon Norman
Butcher, John	Fox, Sir Marcus

Franks, Cecil	McLoughlin, Patrick
Freeman, Roger	McNair-Wilson, Sir Michael
French, Douglas	McNair-Wilson, Sir Patrick
Galbraith, Sam	Major, Rt Hon John
Gardiner, George	Malins, Humfrey
Garel-Jones, Tristan	Mans, Keith
Gill, Christopher	Maples, John
Glyn, Dr Alan	Marland, Paul
Goodhart, Sir Philip	Marlow, Tony
Goodlad, Alastair	Marshall, John (Hendon S)
Goodson-Wickes, Dr Charles	Marshall, Michael (Arundel)
Gorman, Mrs Teresa	Martin, David (Portsmouth S)
Gorst, John	Mates, Michael
Gow, Ian	Maude, Hon Francis
Greenway, Harry (Ealing N)	Mawhinney, Dr Brian
Greenway, John (Ryedale)	Maxwell-Hyslop, Robin
Gregory, Conal	Mayhew, Rt Hon Sir Patrick
Griffiths, Sir Eldon (Bury St E')	Meyer, Sir Anthony
Griffiths, Peter (Portsmouth N)	Miller, Sir Hal
Ground, Patrick	Miscampbell, Norman
Gummer, Rt Hon John Selwyn	Mitchell, Andrew (Gedling)
Hague, William	Mitchell, Sir David
Hamilton, Neil (Tatton)	Monro, Sir Hector
Hampson, Dr Keith	Montgomery, Sir Fergus
Hanley, Jeremy	Moore, Rt Hon John
Hannam, John	Morrison, Sir Charles
Hargreaves, A. (B'ham H'll Gr')	Morrison, Rt Hon P (Chester)
Hargreaves, Ken (Hyndburn)	Moss, Malcolm
Harris, David	Moynihan, Hon Colin
Hawkins, Christopher	Mudd, David
Hayes, Jerry	Needham, Richard
Hayward, Robert	Nelson, Anthony
Heathcoat-Amory, David	Neubert, Michael
Hicks, Mrs Maureen (Wolv' NE)	Newton, Rt Hon Tony
Higgins, Rt Hon Terence L.	Nicholls, Patrick
Hill, James	Nicholson, Emma (Devon West)
Hind, Kenneth	Norris, Steve
Hogg, Hon Douglas (Gr'th'm)	Onslow, Rt Hon Cranley
Holt, Richard	Oppenheim, Phillip
Howard, Michael	Page, Richard
Howarth, Alan (Strat'd-on-A)	Parkinson, Rt Hon Cecil
Howarth, G. (Cannock & B'wd)	Patnick, Irvine
Howe, Rt Hon Sir Geoffrey	Patten, Rt Hon Chris (Bath)
Howell, Rt Hon David (G'dford)	Patten, John (Oxford W)
Howell, Ralph (North Norfolk)	Pattie, Rt Hon Sir Geoffrey
Hughes, Robert G. (Harrow W)	Pawsey, James
Hunt, David (Wirral W)	Peacock, Mrs Elizabeth
Hunt, Sir John (Ravensbourne)	Porter, Barry (Wirral S)
Hunter, Andrew	Porter, David (Waveney)
Irvine, Michael	Portillo, Michael
Irving, Charles	Powell, William (Corby)
Jack, Michael	Price, Sir David
Jackson, Robert	Raffan, Keith
Jessel, Toby	Raison, Rt Hon Timothy
Johnson Smith, Sir Geoffrey	Rathbone, Tim
Jones, Gwilym (Cardiff N)	Redwood, John
Jones, Robert B (Herts W)	Renton, Tim
Jopling, Rt Hon Michael	Rhodes James, Robert
Kellett-Bowman, Dame Elaine	Riddick, Graham
Key, Robert	Ridley, Rt Hon Nicholas
King, Roger (B'ham N'thfield)	Ridsdale, Sir Julian
Kirkhope, Timothy	Roe, Mrs Marion
Knapman, Roger	Rossi, Sir Hugh
Knight, Greg (Derby North)	Rowe, Andrew
Knowles, Michael	Rumbold, Mrs Angela
Lamont, Rt Hon Norman	Ryder, Richard
Lang, Ian	Sainsbury, Hon Tim
Latham, Michael	Sayeed, Jonathan
Lawrence, Ivan	Scott, Rt Hon Nicholas
Lawson, Rt Hon Nigel	Shaw, David (Dover)
Leigh, Edward (Gainsbor'gh)	Shaw, Sir Giles (Pudsey)
Lennox-Boyd, Hon Mark	Shaw, Sir Michael (Scarb')
Lester, Jim (Broxtowe)	Shephard, Mrs G. (Norfolk SW)
Lightbown, David	Shepherd, Colin (Hereford)
Lilley, Peter	Skeet, Sir Trevor
Lloyd, Peter (Fareham)	Smith, Sir Dudley (Warwick)
Lord, Michael	Smith, Tim (Beaconsfield)
Lyell, Sir Nicholas	Speed, Keith
McCrindle, Robert	Spicer, Sir Jim (Dorset W)
MacKay, Andrew (E Berkshire)	Spicer, Michael (S Worcs)

Stanbrook, Ivor	Waddington, Rt Hon David
Stanley, Rt Hon Sir John	Wakeham, Rt Hon John
Steen, Anthony	Walden, George
Stern, Michael	Walker, Bill (T'side North)
Stevens, Lewis	Walker, Rt Hon P. (W'cester)
Stewart, Allan (Eastwood)	Waller, Gary
Stewart, Andy (Sherwood)	Walters, Sir Dennis
Stokes, Sir John	Ward, John
Stradling Thomas, Sir John	Wardle, Charles (Bexhill)
Sumberg, David	Warren, Kenneth
Summerson, Hugo	Watts, John
Tapsell, Sir Peter	Wells, Bowen
Taylor, Ian (Esher)	Wheeler, John
Taylor, John M (Solihull)	Whitney, Ray
Taylor, Teddy (S'end E)	Widdecombe, Ann
Tebbit, Rt Hon Norman	Wiggin, Jerry
Temple-Morris, Peter	Wilkinson, John
Thatcher, Rt Hon Margaret	Wilshire, David
Thompson, D. (Calder Valley)	Winterton, Mrs Ann
Thompson, Patrick (Norwich N)	Winterton, Nicholas
Thorne, Neil	Wolfson, Mark
Thurnham, Peter	Wood, Timothy
Townend, John (Bridlington)	Woodcock, Dr. Mike
Townsend, Cyril D. (B'heath)	Yeo, Tim
Tracey, Richard	Young, Sir George (Acton)
Trippier, David
Trotter, Neville	Tellers for the Ayes:
Twinn, Dr Ian	Mr. Tom Sackville and Mr. David Maclean.
Vaughan, Sir Gerard
Viggers, Peter

NOES
Abbott, Ms Diane	Cousins, Jim
Adams, Allen (Paisley N)	Cox, Tom
Allen, Graham	Crowther, Stan
Alton, David	Cryer, Bob
Anderson, Donald	Cummings, John
Archer, Rt Hon Peter	Cunliffe, Lawrence
Armstrong, Hilary	Cunningham, Dr John
Ashdown, Rt Hon Paddy	Dalyell, Tam
Ashley, Rt Hon Jack	Darling, Alistair
Ashton, Joe	Davies, Rt Hon Denzil (Llanelli)
Banks, Tony (Newham NW)	Davies, Ron (Caerphilly)
Barnes, Harry (Derbyshire NE)	Davis, Terry (B'ham Hodge H'l)
Barnes, Mrs Rosie (Greenwich)	Dewar, Donald
Barron, Kevin	Dixon, Don
Beckett, Margaret	Dobson, Frank
Beith, A. J.	Doran, Frank
Bell, Stuart	Duffy, A. E. P.
Benn, Rt Hon Tony	Dunnachie, Jimmy
Bennett, A. F. (D'nt'n & R'dish)	Dunwoody, Hon Mrs Gwyneth
Bermingham, Gerald	Eadie, Alexander
Bidwell, Sydney	Fatchett, Derek
Blair, Tony	Field, Frank (Birkenhead)
Blunkett, David	Fields, Terry (L'pool B G'n)
Boateng, Paul	Fisher, Mark
Boyes, Roland	Flannery, Martin
Bray, Dr Jeremy	Flynn, Paul
Brown, Gordon (D'mline E)	Foot, Rt Hon Michael
Brown, Nicholas (Newcastle E)	Foster, Derek
Bruce, Malcolm (Gordon)	Fraser, John
Buckley, George J.	Fyfe, Maria
Caborn, Richard	Galbraith, Sam
Callaghan, Jim	Galloway, George
Campbell, Menzies (Fife NE)	Garrett, John (Norwich South)
Campbell, Ron (Blyth Valley)	Garrett, Ted (Wallsend)
Campbell-Savours, D. N.	George, Bruce
Canavan, Dennis	Gilbert, Rt Hon Dr John
Carlile, Alex (Mont'g)	Godman, Dr Norman A.
Cartwright, John	Golding, Mrs Llin
Clark, Dr David (S Shields)	Gorman, Mrs Teresa
Clarke, Tom (Monklands W)	Gould, Bryan
Clelland, David	Graham, Thomas
Clwyd, Mrs Ann	Grant, Bernie (Tottenham)
Cohen, Harry	Griffiths, Win (Bridgend)
Coleman, Donald	Grocott, Bruce
Cook, Frank (Stockton N)	Hardy, Peter
Cook, Robin (Livingston)	Harman, Ms Harriet
Corbett, Robin	Hattersley, Rt Hon Roy
Corbyn, Jeremy	Healey, Rt Hon Denis

Heffer, Eric S.	McKay, Allen (Barnsley West)
Hinchliffe, David	McKelvey, William
Hoey, Ms Kate (Vauxhall)	Maclennan, Robert
Hogg, N. (C'nauld & Kilsyth)	McNamara, Kevin
Home Robertson, John	McWilliam, John
Hood, Jimmy	Madden, Max
Howarth, George (Knowsley N)	Mahon, Mrs Alice
Howell, Rt Hon D. (S'heath)	Marek, Dr John
Howells, Geraint	Marshall, David (Shettleston)
Hoyle, Doug	Marshall, Jim (Leicester S)
Hughes, John (Coventry NE)	Martin, Michael J. (Springburn)
Hughes, Robert (Aberdeen N)	Martlew, Eric
Hughes, Roy (Newport E)	Maxton, John
Hughes, Simon (Southwark)	Meacher, Michael
Illsley, Eric	Meale, Alan
Ingram, Adam	Michael, Alun
Janner, Greville	Michie, Bill (Sheffield Heeley)
Johnston, Sir Russell	Michie, Mrs Ray (Arg'l & Bute)
Jones, Martyn (Clwyd S W)	Moonie, Dr Lewis
Kennedy, Charles	Morgan, Rhodri
Kinnock, Rt Hon Neil	Morley, Elliot
Kirkwood, Archy	Morris, Rt Hon A. (W'shawe)
Lambie, David	Morris, Rt Hon J. (Aberavon)
Lamond, James	Mowlam, Marjorie
Lewis, Terry	Mullin, Chris
Litherland, Robert	Nellist, Dave
Livingstone, Ken	Oakes, Rt Hon Gordon
Livsey, Richard	O'Brien, William
Lloyd, Tony (Stretford)	O'Neill, Martin
Lofthouse, Geoffrey	Orme, Rt Hon Stanley
McAllion, John	Parry, Robert
McAvoy, Thomas	Patchett, Terry
Macdonald, Calum A.	Pendry, Tom

`( 1) The Director may, after consultation with public electricity suppliers and with persons or bodies appearing to him to be representative of persons likely to be affected, from time to time—

1. (a) determine such standards of performance in connection with the promotion of the efficient use of electricity by consumers as, in his opinion, ought to be achieved by such suppliers; and
2. (b) arrange for the publication, in such form and in such manner as he considers appropriate, of the standards so determined.

(2) Different standards may be determined under this section for different public electricity suppliers.'

Read a Second time.

Amendment (iii) proposed to the amendment proposed in lieu of the Lords amendment disagreed to, in line 11, at end insert 'and (c) shall set a date by which these standards must be achieved and shall apply such sanctions as appears necessary should these standards not be met.'.—[Mr. Wallace.]

Question put, That the proposed amendment be made to the amendment proposed in lieu:—

The House divided: Ayes 135, Noes 298.

Division No. 313]	[7.26 pm
AYES
Abbott, Ms Diane	Bray, Dr Jeremy
Allen, Graham	Brown, Gordon (D'mline E)
Alton, David	Brown, Nicholas (Newcastle E)
Anderson, Donald	Bruce, Malcolm (Gordon)
Armstrong, Hilary	Caborn, Richard
Ashdown, Rt Hon Paddy	Callaghan, Jim
Ashton, Joe	Campbell, Menzies (Fife NE)
Banks, Tony (Newham NW)	Campbell, Ron (Blyth Valley)
Barnes, Harry (Derbyshire NE)	Campbell-Savours, D. N.
Barnes, Mrs Rosie (Greenwich)	Carlile, Alex (Mont'g)
Barron, Kevin	Cartwright, John
Beckett, Margaret	Clark, Dr David (S Shields)
Beith, A. J.	Clelland, David
Bermingham, Gerald	Clwyd, Mrs Ann
Blair, Tony	Cohen, Harry
Blunkett, David	Coleman, Donald
Boateng, Paul	Cook, Frank (Stockton N)
Boyes, Roland	Cook, Robin (Livingston)

Pike, Peter L.	Spearing, Nigel
Powell, Ray (Ogmore)	Steel, Rt Hon David
Prescott, John	Steinberg, Gerry
Primarolo, Dawn	Stott, Roger
Quin, Ms Joyce	Straw, Jack
Radice, Giles	Taylor, Mrs Ann (Dewsbury)
Randall, Stuart	Thompson, Jack (Wansbeck)
Redmond, Martin	Turner, Dennis
Rees, Rt Hon Merlyn	Vaz, Keith
Richardson, Jo	Wall, Pat
Roberts, Allan (Bootle)	Wallace, James
Robertson, George	Walley, Joan
Robinson, Geoffrey	Warden, Gareth (Gower)
Rogers, Allan	Wareing, Robert N.
Rooker, Jeff	Watson, Mike (Glasgow, C)
Rowlands, Ted	Welsh, Andrew (Angus E)
Ruddock, Joan	Welsh, Michael (Doncaster N)
Salmond, Alex	Williams, Rt Hon Alan
Sedgemore, Brian	Williams, Alan W. (Carm'then)
Sheldon, Rt Hon Robert	Wilson, Brian
Shore, Rt Hon Peter	Winnick, David
Short, Clare	Wise, Mrs Audrey
Skinner, Dennis	Worthington, Tony
Smith, Andrew (Oxford E)	Wray, Jimmy
Smith, C. (Isl'ton & F'bury)	Young, David (Bolton SE)
Smith, Rt Hon J. (Monk'ds E)
Smith, J. P. (Vale of Glam)	Tellers for the Noes:
Snape, Peter	Mr. Nigel Griffiths and Mr. Frank Haynes.
Soley, Clive
Corbett, Robin	Hughes, Simon (Southwark)
Corbyn, Jeremy	Illsley, Eric
Cousins, Jim	Johnston, Sir Russell
Cryer, Bob	Jones, Barry (Alyn & Deeside)
Cummings, John	Jones, Martyn (Clwyd S W)
Cunliffe, Lawrence	Kennedy, Charles
Davies, Ron (Caerphilly)	Lamond, James
Davis, Terry (B'ham Hodge H'l)	Livingstone, Ken
Dewar, Donald	Livsey, Richard
Dixon, Don	Lloyd, Tony (Stretford)
Dobson, Frank	McAvoy, Thomas
Doran, Frank	Macdonald, Calum A.
Eadie, Alexander	Maclennan, Robert
Fatchett, Derek	McNamara, Kevin
Field, Frank (Birkenhead)	McWilliam, John
Fisher, Mark	Madden, Max
Foot, Rt Hon Michael	Mahon, Mrs Alice
Foster, Derek	Marshall, David (Shettleston)
Garrett, Ted (Wallsend)	Martin, Michael J. (Springburn)
George, Bruce	Maxton, John
Godman, Dr Norman A.	Meale, Alan
Golding, Mrs Llin	Michael, Alun
Gordon, Mildred	Michie, Bill (Sheffield Heeley)
Griffiths, Nigel (Edinburgh S)	Michie, Mrs Ray (Arg'l & Bute)
Griffiths, Win (Bridgend)	Moonie, Dr Lewis
Hardy, Peter	Morgan, Rhodri
Hattersley, Rt Hon Roy	Morley, Elliot
Haynes, Frank	Morris, Rt Hon A. (W'shawe)
Hoey, Ms Kate (Vauxhall)	Mowlam, Marjorie
Hogg, N. (C'nauld & Kilsyth)	Mullin, Chris
Home Robertson, John	Nellist, Dave
Hood, Jimmy	Patchett, Terry
Howells, Geraint	Pike, Peter L.
Hoyle, Doug	Quin, Ms Joyce
Hughes, Robert (Aberdeen N)	Randall, Stuart

Richardson, Jo	Straw, Jack
Roberts, Allan (Bootle)	Thompson, Jack (Wansbeck)
Robertson, George	Vaz, Keith
Robinson, Geoffrey	Wall, Pat
Rogers, Allan	Walley, Joan
Rowlands, Ted	Wardell, Gareth (Gower)
Salmond, Alex	Wareing, Robert N.
Sedgemore, Brian	Welsh, Andrew (Angus E)
Shore, Rt Hon Peter	Williams, Rt Hon Alan
Skinner, Dennis	Williams, Alan W. (Carm'then)
Smith, Andrew (Oxford E)	Winnick, David
Smith, C. (Isl'ton & F'bury]	Wise, Mrs Audrey
Smith, Rt Hon J. (Monk'ds E)
Smith, J. P. (Vale of Glam)	Tellers for the Ayes:
Soley, Clive	Mr. Archy Kirkwood and Mr. James Wallace.
Spearing, Nigel
Steel, Rt Hon David
NOES
Adley, Robert	Cran, James
Alexander, Richard	Currie, Mrs Edwina
Alison, Rt Hon Michael	Curry, David
Allason, Rupert	Davies, Q. (Stamf'd & Spald'g)
Amess, David	Davis, David (Boothferry)
Amos, Alan	Day, Stephen
Arbuthnot, James	Devlin, Tim
Arnold, Jacques (Gravesham)	Dorrell, Stephen
Arnold, Tom (Hazel Grove)	Douglas-Hamilton, Lord James
Ashby, David	Dover, Den
Atkinson, David	Dunn, Bob
Baker, Rt Hon K. (Mole Valley)	Dykes, Hugh
Baker, Nicholas (Dorset N)	Eggar, Tim
Baldry, Tony	Evans, David (Welwyn Hatf'd)
Banks, Robert (Harrogate)	Evennett, David
Batiste, Spencer	Fairbairn, Sir Nicholas
Bellingham, Henry	Fallon, Michael
Bendall, Vivian	Farr, Sir John
Bennett, Nicholas (Pembroke)	Favell, Tony
Bevan, David Gilroy	Field, Barry (Isle of Wight)
Blackburn, Dr John G.	Finsberg, Sir Geoffrey
Blaker, Rt Hon Sir Peter	Fishburn, John Dudley
Bonsor, Sir Nicholas	Fookes, Dame Janet
Boscawen, Hon Robert	Forman, Nigel
Boswell, Tim	Forsyth, Michael (Stirling)
Bottomley, Mrs Virginia	Forth, Eric
Bowden, A (Brighton K'pto'n)	Fowler, Rt Hon Norman
Bowden, Gerald (Dulwich)	Fox, Sir Marcus
Bowis, John	Franks, Cecil
Boyson, Rt Hon Dr Sir Rhodes	Freeman, Roger
Braine, Rt Hon Sir Bernard	French, Douglas
Brandon-Bravo, Martin	Gale, Roger
Brazier, Julian	Garel-Jones, Tristan
Bright, Graham	Gill, Christopher
Brown, Michael (Brigg & Cl't's)	Glyn, Dr Alan
Browne, John (Winchester)	Goodhart, Sir Philip
Bruce, Ian (Dorset South)	Goodlad, Alastair
Buck, Sir Antony	Goodson-Wickes, Dr Charles
Budgen, Nicholas	Gorman, Mrs Teresa
Burns, Simon	Gorst, John
Burt, Alistair	Gow, Ian
Butcher, John	Green way, Harry (Ealing N)
Butterfill, John	Greenway, John (Ryedale)
Carlisle, John, (Luton N)	Gregory, Conal
Carlisle, Kenneth (Lincoln)	Griffiths. Sir Eldon (Bury St E')
Carrington, Matthew	Griffiths, Peter (Portsmouth N)
Carttiss, Michael	Ground, Patrick
Cash, William	Gummer, Rt Hon John Selwyn
Chalker, Rt Hon Mrs Lynda	Hague, William
Chapman, Sydney	Hamilton, Neil (Tatton)
Chope, Christopher	Hampson, Dr Keith
Churchill, Mr	Hanley, Jeremy
Clark, Dr Michael (Rochford)	Hannam, John
Clark, Sir W. (Croydon S)	Hargreaves, A. (B'ham H'll Gr')
Clarke, Rt Hon K. (Rushcliffe)	Hargreaves, Ken (Hyndburn)
Colvin, Michael	Harris, David
Conway, Derek	Hawkins, Christopher
Coombs, Simon (Swindon)	Hayes, Jerry
Cope, Rt Hon John	Hayhoe, Rt Hon Sir Barney
Cormack, Patrick	Hayward, Robert
Couchman, James	Heathcoat-Amory, David

Hicks, Mrs Maureen (Wolv' NE)	Nicholson, Emma (Devon West)
Higgins, Rt Hon Terence L.	Norris, Steve
Hill, James	Onslow, Rt Hon Cranley
Hind, Kenneth	Oppenheim, Phillip
Hogg, Hon Douglas (Gr'th'm)	Page, Richard
Holt, Richard	Parkinson, Rt Hon Cecil
Howard, Michael	Patnick, Irvine
Howarth, Alan (Strat'd-on-A)	Patten, Rt Hon Chris (Bath)
Howarth, G. (Cannock & B'wd)	Patten, John (Oxford W)
Howell, Rt Hon David (G'dford)	Pattie, Rt Hon Sir Geoffrey
Howell, Ralph (North Norfolk)	Pawsey, James
Hughes, Robert G. (Harrow W)	Peacock, Mrs Elizabeth
Hunt, David (Wirral W)	Porter, David (Waveney)
Hunt, Sir John (Ravensbourne)	Portillo, Michael
Hunter, Andrew	Powell, William (Corby)
Irvine, Michael	Price, Sir David
Irving, Charles	Raffan, Keith
Jack, Michael	Raison, Rt Hon Timothy
Jackson, Robert	Rathbone, Tim
Jessel, Toby	Redwood, John
Johnson Smith, Sir Geoffrey	Renton, Tim
Jones, Gwilym (Cardiff N)	Rhodes James, Robert
Jones, Robert B (Herts W)	Riddick, Graham
Jopling, Rt Hon Michael	Ridsdale, Sir Julian
Kellett-Bowman, Dame Elaine	Roe, Mrs Marion
Key, Robert	Rossi, Sir Hugh
King, Roger (B'ham N'thfield)	Rowe, Andrew
Kirkhope, Timothy	Rumbold, Mrs Angela
Knapman, Roger	Ryder, Richard
Knight, Greg (Derby North)	Sackville, Hon Tom
Knowles, Michael	Sayeed, Jonathan
Lamont, Rt Hon Norman	Scott, Rt Hon Nicholas
Lang, Ian	Shaw, David (Dover)
Latham, Michael	Shaw, Sir Giles (Pudsey)
Lawrence, Ivan	Shaw, Sir Michael (Scarb')
Lawson, Rt Hon Nigel	Shephard, Mrs G. (Norfolk SW)
Lee, John (Pendle)	Shepherd, Colin (Hereford)
Leigh, Edward (Gainsbor'gh)	Skeet, Sir Trevor
Lennox-Boyd, Hon Mark	Smith, Sir Dudley (Warwick)
Lester, Jim (Broxtowe)	Smith, Tim (Beaconsfield)
Lightbown, David	Speed, Keith
Lilley, Peter	Spicer, Sir Jim (Dorset W)
Lloyd, Peter (Fareham)	Spicer, Michael (S Worcs)
Lord, Michael	Squire, Robin
Lyell, Sir Nicholas	Stanbrook, Ivor
Macfarlane, Sir Neil	Stanley, Rt Hon Sir John
MacKay, Andrew (E Berkshire)	Steen, Anthony
McLoughlin, Patrick	Stern, Michael
McNair-Wilson, Sir Michael	Stevens, Lewis
McNair-Wilson, Sir Patrick	Stewart, Allan (Eastwood)
Major, Rt Hon John	Stewart, Andy (Sherwood)
Malins, Humfrey	Stokes, Sir John
Mans, Keith	Stradling Thomas, Sir John
Maples, John	Sumberg, David
Marland, Paul	Summerson, Hugo
Marlow, Tony	Tapsell, Sir Peter
Marshall, John (Hendon S)	Taylor, Ian (Esher)
Marshall, Michael (Arundel)	Taylor, John M (Solihull)
Martin, David (Portsmouth S)	Taylor, Teddy (S'end E)
Mates, Michael	Tebbit, Rt Hon Norman
Maude, Hon Francis	Temple-Morris, Peter
Mawhinney, Dr Brian	Thompson, D. (Calder Valley)
Maxwell-Hyslop, Robin	Thompson, Patrick (Norwich N)
Mayhew, Rt Hon Sir Patrick	Thorne, Neil
Meyer, Sir Anthony	Thurnham, Peter
Miscampbell, Norman	Townsend, Cyril D. (B'heath)
Mitchell, Andrew (Gedling)	Tracey, Richard
Mitchell, Sir David	Trippier, David
Monro, Sir Hector	Trotter, Neville
Montgomery, Sir Fergus	Twinn, Dr Ian
Moore, Rt Hon John	Vaughan, Sir Gerard
Morrison, Sir Charles	Viggers, Peter
Morrison, Rt Hon P (Chester)	Waddington, Rt Hon David
Moss, Malcolm	Wakeham, Rt Hon John
Moynihan, Hon Colin	Walden, George
Mudd, David	Walker, Bill (T'side North)
Needham, Richard	Waller, Gary
Neubert, Michael	Walters, Sir Dennis
Newton, Rt Hon Tony	Ward, John
Nicholls, Patrick	Wardle, Charles (Bexhill)

Warren, Kenneth	Winterton, Nicholas
Watts, John	Wolfson, Mark
Wells, Bowen	Wood, Timothy
Wheeler, John	Woodcock, Dr. Mike
Whitney, Ray	Yeo, Tim
Widdecombe, Ann	Young, Sir George (Acton)
Wiggin, Jerry
Wilkinson, John	Tellers for the Noes:
Wilshire, David	Mr. Tony Durant and Mr. David Maclean.
Winterton, Mrs Ann

Amendment proposed to the Bill in lieu of Lords amendment No. 3 disagreed to, amendment (a), to insert new clause—Promotion of efficient use of electricity—

Amendment accordingly negatived.

Amendment proposed in lieu of the Lords amendment agreed to.

Amendments made to the Bill in lieu of Lords amendment No. 3 disagreed to: (b), in page 32, line 4, leave out 'and'.

(c), in page 32, line 6, at end insert `and (c) the levels of performance achieved by such suppliers in connection with the promotion of the efficient use of electricity by consumers.'.

(d), in page 32, line 14, after '39', insert `or (Promotion of efficient use of electricity)'.

(e), in page 32, line 15, leave out `overall'.—[Mr. Michael Spicer.]

1. Clause 2
cc587-92
1. CONSUMERS' COMMITTEES 3,047 words
2. Clause 3
cc592-3
1. GENERAL DUTIES OF SECRETARY OF STATE AND DIRECTOR 82 words
cc593-612
2. PROMOTION OF NEW TECHNIQUES IN NATIONAL INTEREST 10,691 words
3. Clause 45
cc612-7
1. GENERAL FUNCTIONS 3,148 words
4. Schedule 11
cc617-22
1. TAXATION PROVISIONS 53 words
cc617-22
1. Transactions effected in pursuance of section (Transfer Schemes under sections 63 and 64) ( 2 ) ( c) 2,407 words