§ The Parliamentary Secretary, Office of Public Service and Science (Mr. David Davis)
Public regulatory authorities, like all areas of the public sector, are covered by the citizens charter.
§ Mr. Hain
Is the Minister aware that there is increasing concern about the fact that the regulators of the privatised utilities are acting like tin gods, whose decisions are not accountable to Parliament or challengeable by ordinary citizens except by cumbersome legal proceedings? The Ofgas decision to break up British Gas will mean higher transportation costs to areas such as Wales compared with the north-east of England near the North sea gas shelf. In other decisions, competitive access has been given a higher priority than the interests of consumers and indeed the strategic national interest. Surely a review of the role of regulators is needed. Should not they be covered by the citizens charter and be answerable to Parliament?
§ Mr. Davis
Before I address the nub of the hon. Gentleman's question, may I say that opening up industries to competition is in the interests of the consumer and has been the best guarantee of those interests. First, the regulators must operate within the regulatory framework laid down by Parliament. Secondly, the director-generals' performance of their statutory duties is subject to judicial review—I think the hon. Gentleman referred to that. Thirdly, the legislation requires utilities to have a licence and authorisation from the Secretary of State or a director before they can operate as utilities. Fourthly. directors are appointed by and are answerable, in broad terms, to the Secretary of State. If a director does not carry out his duties satisfactorily he can be replaced. Finally, those director-generals can also be called before a Select Committee of the House.
§ Mr. Congdon
Does my hon. Friend agree that the regulators have done an excellent job in applying charter principles to the privatised utilities? Furthermore, does he recall that those industries have performed much better since they have been privatised and that the Labour party opposed privatisation, which has brought so many benefits to the people of this country?
§ Mr. Davis
My hon. Friend is entirely right and I shall give a couple of examples. British Telecom's prices have fallen by one third since 1984 and 96 per cent. of call boxes work, compared with 75 per cent. previously. British Gas prices for domestic users have fallen 13 per cent.—[HON. MEMBERS: "Water!"] There are calls of "Water" from Opposition Members—the same people who would complain if the pollution levels of our beaches and rivers were not dealt with. The money for dealing with those problems must come from somewhere and it comes from the profits and capital of the water companies.
§ Mr. Matthew Taylor
The Minister must be aware that the real issue involves accountability for the former public utilities and the watchdogs of the utilities. Some parts of the country have been severely disadvantaged by the differential impact of the clean-up programmes, but it is not possible to request an Adjournment debate in the House on the issue because it is no longer deemed to be the responsibility of any Minister. As citizens charter Minister, will he try to find a way around that problem?
§ Mr. Davis
It is a matter for Madam Speaker rather than me, but I imagine that it would be perfectly possible 16 to have an Adjournment debate about the regulators' behaviour, which is precisely the hon. Gentleman's point. Ofwat comments in the past few days on the effect of the clean-up on costs are an example of Ofwat exercising its powers and responsibilities properly.
§ Mr. Fisher
Does not the Minister understand that the problem with Ofwat and other regulatory organisations is that they have no teeth? I and hon. Members from both sides of the House have taken cases to Ofwat, which has eventually found in favour of our constituents, and then the board—in my case Severn Trent—has said, "So what, Ofwat—nothing will happen and nothing will change." The problem is that the regulators have no teeth.
§ Mr. Davis
I recommend that the hon. Gentleman speak to the hon. Member for Neath (Mr. Hain), who said that the regulators had too many teeth and too much power. The regulators can change the rules under which the licence works. If they cannot come to an agreement with the utilities, the matter can be referred to the Monopolies and Mergers Commission to provide back-up support.
§ Mr. Riddick
Have not the regulators been just a component part of what has proved to be one of the Government's greatest successes: the privatisation of state-owned industries? Have not new private sector management and entrepreneurial skills been introduced to old, monolithic industries? Is not the flotation of further British Telecom shares on the stock market the most recent example of one of the Government's greatest successes, privatisation?