HC Deb 15 May 1995 vol 260 cc101-9
Mr. O'Neill

I beg to move amendment No. 49, in page 8, line 29, at end insert— '(2A) In the period before the relevant date the Director shall: (a) monitor the effect of the granting of a licence under subsections (3) to (5) below on such persons as in his opinion are appropriate; and (b) consult such persons and organisations as appear to him to represent the interests of persons affected by the granting of a licence under those subsections, and such other persons as he considers appropriate, on the effects of granting such a licence. (2B) No licence shall be granted under section 7A(1)(a) of the 1986 Act (other than by virtue of subsections (3) to (5) below) until the Secretary of State has laid a report before both Houses of Parliament indicating—

  1. (i) the results of the monitoring and responses to the consultation referred to in subsection (2A) above;
  2. (ii) the effect, in his opinion and in the opinion of the Director, of the granting of licences under subsections (3) to (5) below and Schedule 5 to this Act in the period before the relevant date; and
  3. (iii) the reasons why, in his opinion, it is in the interests of all persons affected that licences under section 7A(1)(a) of the 1986 Act should be granted.'.

In some respects, the amendment is one of the most pertinent with which we shall deal because it relates to what has become known as the pilot areas—those areas in which the competitive gas market will be tested. The amendment is an attempt to require the director general to monitor the effect of granting a licence and to consult organisations and people who appear to represent the interests of the persons affected by the granting of the licence. The amendment also states that no licence shall be granted until a report has been laid before both Houses of Parliament indicating the result of the monitoring and the responses to the consultation.

The only other example of a deregulated gas market comes from Canada and it must be said that the Canadian experience was not wholly successful. As a consequence, many people are anxious about the exercise, and that is evidenced by the Government's testing the water. We welcome the attempt to choose areas in the south-west of England that are among the most controversial. If the exercise is to have any worth, it is vital not only that the pilot areas are studied properly but that the House has the right to pass judgment on whether the scheme should proceed once the pilot has been completed.

Some of my hon. Friends may take the view that it does not really matter because, by the time the reports are completed, there will be another Government and we will take the decisions about those matters. That is as may be, but we must ensure that proper monitoring techniques are put in place and that the director general is able to take full account of them. As I have said, the experience in other countries has not been wholly satisfactory. The Canadian experience caused great difficulty, but perhaps that will not be replicated here with such ferocity in view of the differing climatic conditions in that country.

Nevertheless, the experience could create anxiety among communities who, even now, are extremely vulnerable. Therefore, we believe it is important to ensure that proper monitoring takes place and that the monitoring is reported correctly. At the end of the day, the House should be able to pass judgment on the findings of the report and decide whether we wish to proceed to grant the rest of the licences across the United Kingdom. That approach has wide support. A number of consumer groups—containing people who are in touch with gas consumers—have heard of and are conscious of the problems that could arise; therefore, it is essential that a proper assessment is made of the monitoring process.

I can do no more than quote paragraph 60 of the Select Committee on Trade and Industry report, which states: It would be pointless to have a transitional period unless there is a full assessment of its consequences and wide consultation, including parliamentary scrutiny, before further steps are taken. That is what the amendment would achieve. We want that in relation to the designated pilot areas. That is why the House should have the right to stop and take stock before it takes this big step for the whole British energy market. For those reasons, we are happy to table amendment No. 49.

9.45 pm
Mr. Harvey

I support the amendment. I moved one along similar lines in Committee. The amendment is a welcome, if overdue, innovation in Government practice that the .Government have chosen to run a pilot scheme. If they had done so in relation to many other areas of legislation, it would have saved them and the public a great deal of pain.

It would serve the Government's purpose far more comprehensively if, having taken the decision to run a pilot scheme, their assessment criteria went far wider than simply technical aspects, which seem to be the scope of their intention to date. The amendment's proposal of giving both Houses a chance to scrutinise the pilot scheme and to assess it is much to be applauded.

Mr. Eggar

The Government have previously made it clear that the phased transition to a nationwide competitive system will provide an opportunity to test the necessary technical and administrative systems for the balancing of gas and the transfer of customers. That is essentially a technical operation. That is why we are starting with an area of 500,000 customers in the south-west and moving up to one of 2 million. We want to find out whether additional problems exist as we expand and go nationwide.

The purpose of the pilot scheme and then of the expanded pilot is to allow British Gas TransCo and competing gas suppliers to iron out any problems with their systems while they are still operating on a relatively small scale. That relates particularly to computer and other such systems.

We must be clear, however, that the pilot is not an attempt to test the principle of whether competition will go ahead. That decision has already been made, on Second Reading. An approach that left the question of principle in doubt would cast a shadow of uncertainty over the industry, both onshore and in the North sea. That would be in no one's interests because it might mean that suppliers would not make the investment needed for competition to be a success. The scheme must be planned with a degree of certainty.

In particular, such an approach would make the necessary adjustment of North sea supply positions and contracts impossibly unpredictable. It would be wrong to try to reopen the principle of competition through what I would call the back door, as it would bring in considerable uncertainty, which is the last thing that we need in terms of planning large investments.

Of course, the director general will clearly wish to monitor the progress of competition and expect to seek feedback from consumers and suppliers of their experience of competition during the transitional phase. That was one of the criteria that we asked the areas to comment on when they applied to be pilots. If that monitoring showed that licence conditions were not having the desired effect, the director general could make proposals to change them. The on-going monitoring process will enable Ministers and the director general to report appropriately to the House and to the other place about progress. It is certainly my intention to do just that.

Mr. O'Neill

That answer was wholly unsatisfactory. The Minister said that ultimately it is all down to computers and a few pipes, and that if the report is disastrous only a little fine tuning will be required and everything can be changed. We are discussing the big step of reconstructing the energy market and a potentially dangerous fuel, using a number of companies untested in the UK, and many untested worldwide, in the selling of gas.

We are told that if the House had the right to veto further developments until it was satisfied that necessary changes and improvements had been made, that would create such a shadow of uncertainty that there would be fear of investing and an adjustment to North sea contracts. I imagine that we will be debating amendments Nos. 40 and 41 to schedule 5 tomorrow, relating to the consequences of changes to North sea contracts. The Minister will be playing a different tune then.

If monitoring is not undertaken effectively, reports are not presented in the appropriate way and the House is not given the opportunity to pass judgment, the deregulation of the gas market could founder. If the proposal is to survive and is to command the respect and support of both sides of the House and, more important, command consumer confidence, it is essential that monitoring in pilot areas assumes greater significance than simply suggesting that the tweaking of a computer or changing a piping system will resolve all problems.

This matter is of the utmost importance and I am not prepared to withdraw the amendment. We will press the amendment to a Division because, in essence, the House has the right to be able to say, in a matter which is in many respects a leap in the dark, that if we get it wrong with the pilot projects, the proposal should not proceed. The amendment is of sufficient significance for the House to have the opportunity to vote on it. I urge my hon. Friends to join me in the Lobby to support it.

Question put, That the amendment be made:—

The House divided: Ayes 229, Noes 269.

Division No. 147] [9.53 pm
AYES
Abbott, Ms Diane Carlile, Alexander (Montgomery)
Ainsworth, Robert (Cov'try NE) Chisholm, Malcolm
Allen, Graham Clapham, Michael
Alton, David Clark, Dr David (South Shields)
Anderson, Donald (Swansea E) Clarke, Eric (Midlothian)
Anderson, Ms Janet (Ros'dale) Clarke, Tom (Monklands W)
Armstrong, Hilary Clelland, David
Austin-Walker, John Clwyd, Mrs Ann
Banks, Tony (Newham NW) Coffey, Ann
Barnes, Harry Cohen, Harry
Barron, Kevin Connarty, Michael
Battle, John Cook, Frank (Stockton N)
Beckett, Rt Hon Margaret Cook, Robin (Livingston)
Bell, Stuart Corbett, Robin
Benn, Rt Hon Tony Cousins, Jim
Bennett, Andrew F Cummings, John
Benton, Joe Cunliffe, Lawrence
Bermingham, Gerald Cunningham, Jim (Covy SE)
Berry, Roger Cunningham, Rt Hon Dr John
Betts, Clive Dafis, Cynog
Blunkett, David Dalyell, Tam
Boateng, Paul Davidson, Ian
Bradley, Keith Davies, Bryan (Oldham C'tral)
Bray, Dr Jeremy Davies, Ron (Caerphilly)
Brown, Gordon (Dunfermline E) Denham, John
Brown, N (N'c'tle upon Tyne E) Dewar, Donald
Burden, Richard Dixon, Don
Byers, Stephen Dobson, Frank
Caborn, Richard Donohoe, Brian H
Callaghan, Jim Dowd, Jim
Campbell, Mrs Anne (C'bridge) Dunnachie, Jimmy
Campbell, Menzies (Fife NE) Dunwoody, Mrs Gwyneth
Cann, Jamie Eagle, Ms Angela
Eastham, Ken McNamara, Kevin
Enright, Derek MacShane, Denis
Etherington, Bill Madden, Max
Fatchett Derek Mahon, Alice
Faulds, Andrew Mandelson, Peter
Field, Frank (Birkenhead) Marek, Dr John
Fisher, Mark Martlew, Eric
Flynn, Paul Meacher, Michael
Foster, Rt Hon Derek Meale, Alan
Foster, Don (Bath) Michael, Alun
Fraser, John Michie, Bill (Sheffield Heeley)
Fyfe, Maria Milburn, Alan
Galbraith, Sam Miller, Andrew
Galloway, George Mitchell, Austin (Gt Grimsby)
Gapes, Mike Moonie, Dr Lewis
Garrett, John Morgan, Rhodri
Gerrard, Neil Morley, Elliot
Gilbert, Rt Hon Dr John Morris, Rt Hon Alfred
Godman, Dr Norman A Morris, Estelle (B'ham Yardley)
Godsiff, Roger Mowlam, Marjorie
Gdding, Mrs Llin Mudie, George
Gordon, Mildred Mullin, Chris
Graham, Thomas Murphy, Paul
Grant, Bernie (Tottenham) Oakes, Rt Hon Gordon
Griffiths, Nigel (Edinburgh S) O'Brien, Mike (N W'kshire)
Griffiths, Win (Bridgend) O'Brien, William (Normanton)
Grocott, Bruce O'Hara, Edward
Gunnell, John Olner, Bill
Hain, Peter O'Neill, Martin
Hall, Mike Orme, Rt Hon Stanley
Harman, Ms Harriet Paisley, The Reverend Ian
Harvey, Nick Patchett, Terry
Heppell, John Pearson, Ian
Hill, Keith (Streatham) Pendry, Tom
Hinchliffe, David Pike, Peter L
Hodge, Margaret Pope, Greg
Hoey, Kate Powell, Ray (Ogmore)
Hogg, Norman (Cumbernauld) Prentice, Bridget (Lew'm E)
Hood, Jimmy Prentice, Gordon (Pendle)
Hoon, Geoffrey Primarolo, Dawn
Howarth, George (Knowsley North) Purchase, Ken
Howells, Dr. Kim (Pontypridd) Quin, Ms Joyce
Hoyle, Doug Radice, Giles
Hughes, Kevin (Doncaster N) Randall, Stuart
Hughes, Robert (Aberdeen N) Raynsford, Nick
Hughes, Roy (Newport E) Reid, Dr John
Hutton, John Rendel, David
Illsley, Eric Robertson, George (Hamilton)
Ingram, Adam Robinson, Geoffrey (Co'try NW)
Jackson, Glenda (H'stead) Robinson, Peter (Belfast E)
Jackson, Helen (Shef'ld, H) Rooker, Jeff
Jamieson, David Rooney, Terry
Janner, Greville Ross, Ernie (Dundee W)
Jones, Barry (Alyn and D'side) Rowlands, Ted
Jones, Lynne (B'ham S O) Ruddock, Joan
Jones, Martyn (Clwyd, SW) Sedgemore, Brian
Jowell, Tessa Sheerman, Barry
Kaufman, Rt Hon Gerald Sheldon, Rt Hon Robert
Kennedy, Charles (Ross.C&S) Shore, Rt Hon Peter
Kennedy, Jane (Lpool Brdgn) Short, Clare
Khabra, Piara S Simpson, Alan
Kilfoyle, Peter Skinner, Dennis
Lestor, Joan (Eccles) Smith, Chris (Isl'ton S & F'sbury)
Lewis, Terry Smith, Llew (Blaenau Gwent)
Litherland, Robert Snape, Peter
Livingstone, Ken Soley, Clive
Lloyd, Tony (Stretford) Spearing, Nigel
Lynne, Ms Liz Squire, Rachel (Dunfermline W)
McAvoy, Thomas Steinberg, Gerry
McCartney, Ian Stevenson, George
McCrea, The Reverend William Sutcliffe, Gerry
Macdonald, Calum Taylor, Mrs Ann (Dewsbury)
McFall, John Taylor, Matthew (Truro)
Mackinlay, Andrew Timms, Stephen
McLeish, Henry Tipping, Paddy
McMaster, Gordon Touhig, Don
Vaz, Keith Worthington, Tony
Walker, Rt Hon Sir Harold Wray, Jimmy
Watson, Mike Wright, Dr Tony
Wigley, Dafydd Young, David (Bolton SE)
Williams, Rt Hon Alan (SW'n W)
Williams, Alan W (Carmarthen) Tellers for the Ayes:
Winnick, David Mr. Dennis Turner and
Wise, Audrey Mr. Jon Owen Jones.
NOES
Ainsworth, Peter (East Surrey) Dunn, Bob
Aitken, Rt Hon Jonathan Durant, Sir Anthony
Alison, Rt Hon Michael (Selby) Dykes, Hugh
Allason, Rupert (Torbay) Eggar, Rt Hon Tim
Amess, David Emery, Rt Hon Sir Peter
Arbuthnot, James Evans, David (Welwyn Hatfield)
Arnold, Jacques (Gravesham) Evans, Jonathan (Brecon)
Arnold, Sir Thomas (Hazel Grv) Evans, Nigel (Ribble Valley)
Ashby, David Evans, Roger (Monmouth)
Atkins, Robert Evennett, David
Atkinson, David (Bour'mouth E) Faber, David
Atkinson, Peter (Hexham) Fabricant, Michael
Baker, Rt Hon Kenneth (Mole V) Fenner, Dame Peggy
Baker, Nicholas (North Dorset) Field, Barry (Isle of Wight)
Baldry, Tony Fishburn, Dudley
Banks, Matthew (Southport) Forman, Nigel
Banks, Robert (Harrogate) Forsyth, Rt Hon Michael (Stirling)
Bates, Michael Forth, Eric
Batiste, Spencer Fowler, Rt Hon Sir Norman
Bellingham, Henry Fox, Sir Marcus (Shipley)
Bendall, Vivian Freeman, Rt Hon Roger
Beresford, Sir Paul French, Douglas
Biffen, Rt Hon John Gale, Roger
Booth, Hartley Gardiner, Sir George
Boswell, Tim Garel-Jones, Rt Hon Tristan
Bottomley, Peter (Eltham) Garnier, Edward
Bottomley, Rt Hon Virginia Gill, Christopher
Bowis, John Gillan, Cheryl
Boyson, Rt Hon Sir Rhodes Goodlad, Rt Hon Alastair
Brandreth, Gyles Gorman, Mrs Teresa
Brazier, Julian Gorst, Sir John
Bright Sir Graham Grant,Sir A (SW Cambs)
Brooke, Rt Hon Peter Greenway, Harry (Ealing N)
Brown, M (Brigg & Cl'thorpes) Greenway, John (Ryedale)
Browning, Mrs Angela Griffiths, Peter (Portsmouth, N)
Bruce, Ian (Dorset) Grylls, Sir Michael
Budgen, Nicholas Gummer, Rt Hon John Selwyn
Burns, Simon Hague, William
Burt, Alistair Hamilton, Neil (Tatton)
Butcher, John Hampson, Dr Keith
Butler, Peter Hannam, Sir John
Butterfill, John Hargreaves, Andrew
Carlisle, Sir Kenneth (Lincoln) Harris, David
Carrington, Matthew Haselhurst, Alan
Carttiss, Michael Hawkins, Nick
Cash, William Hayes, Jerry
Channon, Rt Hon Paul Heald, Oliver
Clappison, James Heath, Rt Hon Sir Edward
Clark, Dr Michael (Rochford) Heathcoat-Amory, David
Clifton-Brown, Geoffrey Hendry, Charles
Coe, Sebastian Hicks, Robert
Conway, Derek Hill, James (Southampton Test)
Coombs, Simon (Swindon) Hogg, Rt Hon Douglas (G'tham)
Cope, Rt Hon Sir John Horam, John
Cormack, Sir Patrick Hordern, Rt Hon Sir Peter
Couchman, James Howard, Rt Hon Michael
Cran, James Howarth, Alan (Strat'rd-on-A)
Currie, Mrs Edwina (S D'by'ire) Howell, Rt Hon David (G'dford)
Curry, David (Skipton & Ripon) Howell, Sir Ralph (N Norfolk)
Day, Stephen Hughes, Robert G (Harrow W)
Deva, Nirj Joseph Hunt, Sir John (Ravensbourne)
Dorrell, Rt Hon Stephen Hunter, Andrew
Douglas-Hamilton, Lord James Hurd, Rt Hon Douglas
Dover, Den Jack, Michael
Duncan, Alan Jackson, Robert (Wantage)
Duncan-Smith, Iain Jenkin, Bernard
Jessel, Toby Robinson, Mark (Somerton)
Johnson Smith, Sir Geoffrey Roe, Mrs Marion (Broxbourne)
Jones, Gwilym (Cardiff N) Rowe, Andrew (Mid Kent)
Jones, Robert B (W Hertfdshr) Rumbold, Rt Hon Dame Angela
Jopling, Rt Hon Michael Ryder, Rt Hon Richard
Kellett-Bowman, Dame Elaine Sackville, Tom
Kirkhope, Timothy Sainsbury, Rt Hon Sir Timothy
Knapman, Roger Scott, Rt Hon Sir Nicholas
Knight, Mrs Angela (Erewash) Shaw, David (Dover)
Knight, Greg (Derby N) Shephard, Rt Hon Gillian
Kynoch, George (Kincardine) Shepherd, Colin (Hereford)
Lait, Mrs Jacqui Shepherd, Richard (Aldridge)
Lamont, Rt Hon Norman Shersby, Michael
Lang, Rt Hon Ian Sims, Roger
Lawrence, Sir Ivan Skeet, Sir Trevor
Legg, Barry Smith, Tim (Beaconsfield)
Leigh, Edward Soames, Nicholas
Lennox-Boyd, Sir Mark Speed, Sir Keith
Lester, Jim (Broxtowe) Spencer, Sir Derek
Lidington, David Spicer, Michael (S Worcs)
Lightbown, David Spink, Dr Robert
Lilley, Rt Hon Peter Spring, Richard
Lloyd, Rt Hon Sir Peter (Fareham) Sproat, Iain
Lord, Michael Squire, Robin (Hornchurch)
Lyell, Rt Hon Sir Nicholas Stanley, Rt Hon Sir John
MacGregor, Rt Hon John Steen, Anthony
MacKay, Andrew Stephen, Michael
Maclean, David Stern, Michael
McLoughlin, Patrick Stewart, Allan
McNair-Wilson, Sir Patrick Streeter, Gary
Madel, Sir David Sumberg, David
Maitland, Lady Olga Sykes, John
Major, Rt Hon John Tapsell, Sir Peter
Malone, Gerald Taylor, Ian (Esher)
Mans, Keith Taylor, John M (Solihull)
Marlow, Tony Taylor, Sir Teddy (Southend, E)
Marshall, Sir Michael (Arundel) Temple-Morris, Peter
Martin, David (Portsmouth S) Thomason, Roy
Mates, Michael Thompson, Sir Donald (C'er V)
Mawhinney, Rt Hon Dr Brian Thompson, Patrick (Norwich N)
Mellor, Rt Hon David Thornton, Sir Malcolm
Merchant, Piers Thurnham, Peter
Mills, Iain Townend, John (Bridlington)
Mitchell, Andrew (Gedling) Townsend, Cyril D (Bexl'yh'th)
Mitchell, Sir David (NW Hants) Tracey, Richard
Moate, Sir Roger Trend, Michael
Monro, Sir Hector Twinn, Dr Ian
Montgomery, Sir Fergus Vaughan, Sir Gerard
Moss, Malcolm Viggers, Peter
Needham, Rt Hon Richard Waldegrave, Rt Hon William
Nelson, Anthony Walden, George
Newton, Rt Hon Tony Walker, Bill
Nicholls, Patrick Waller, Gary
Nicholson, David (Taunton) Ward, John
Nicholson, Emma (Devon West) Wardle, Charles (Bexhill)
Norris, Steve Waterson, Nigel
Onslow, Rt Hon Sir Cranley Watts, John
Ottaway, Richard Wells, Bowen
Patnick, Sir Irvine Whitney, Ray
Pattie, Rt Hon Sir Geoffrey Whittingdale, John
Pawsey, James Widdecombe, Ann
Peacock, Mrs Elizabeth Willetts, David
Pickles, Eric Winterton, Nicholas (Macc'fld)
Porter, Barry (Wirral S) Wolfson, Mark
Porter, David (Waveney) Wood, Timothy
Portillo, Rt Hon Michael Yeo, Tim
Powell, William (Corby) Young, Rt Hon Sir George
Redwood, Rt Hon John Tellers for the Noes:
Renton, Rt Hon Tim Mr. Sydney Chapman and
Robathan, Andrew Dr. Liam Fox.

Question accordingly negatived.

Further consideration adjourned.—[Mr. Conway]

Bill, as amended (in the Standing Committee), to be further considered tomorrow.

Mr. Gerald Bermingham (St. Helens, South)

On a point of order, Mr. Deputy Speaker. Some days ago, I tabled a series of questions to the Home Secretary about a contract issued in respect of a computer for the probation service. Those questions were duly accepted, and are listed as Nos. 186, 198, 209 and 231 on the Order Paper today.

It is now after 10 o'clock and, in accordance with the normal conventions, those questions which were due for answer today should have been notified to me either by way of a written answer or by being tabled for the press. Neither has happened. It is clear that the answers to those questions will be in Hansard tomorrow, and it is also clear that the Home Office—officials of which I have been trying to contact all night—has deliberately avoided answering the questions on the named day. The reason it has done so is undoubtedly suspicious. We are talking here about a £20 million computer contract which may well be—

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

Order. I think that I can help the hon. Gentleman. He must take the matter up with the Minister concerned, as it is not a matter for the Chair at this stage.

Mr. Bermingham

Further to that point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker

Order. I have ruled on the hon. Gentleman's point of order.

Mr. Bermingham

rose

Mr. Deputy Speaker

Order. I have ruled on it, and there can be no further points of order on that matter.

Mr. Bermingham

On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker

Is it the same point of order?

Mr. Bermingham

No. Several times in the past, the Chair has ruled that it is the convention that Members—

Mr. Deputy Speaker

Order. The Chair has just ruled, and there can be no further points of order on that subject.

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