GENERAL DUTIES UNDER 1986 ACT (Hansard, 1 November 1995)

§ Madam Speaker
We now come to Lords amendment No. 2. By leave of the House, I will put Lords amendments Nos. 2 and 3 together.

§ Mr. John Battle (Leeds, West)
On a point of order, Madam Speaker. I thought that Lords amendments Nos. 1, 2 and 4 had been moved as a group and I was waiting for Lords amendment No. 3, to be taken with amendments Nos. 13 and 22, to be called before opening my comments. I did not hear it called.

§ Madam Speaker
I put it, but it is confusing to deal with Lords amendments, as the whole House agrees. If it is in order with the Minister, I am quite happy to go back to amendment No. 3 if the hon. Member for Leeds, West (Mr. Battle) wishes to speak on that. I would have to have Lords amendment No. 3 properly moved by the Minister and we will debate also with it amendments Nos 13 and 22.

§ The Minister for Industry and Energy (Mr. Tim Eggar)
I beg to move, That this House doth agree with the Lords in the said amendment.
If it would help, Madam Speaker, I shall comment on this group of amendments, which was made in response to a point made by my right hon. and noble Friend Lord Boyd-Carpenter in Committee in a debate on an amendment that had been moved by Baroness David. My noble Friend suggested that we needed to look again at whether the Bill's definition of those who are disabled or of pensionable age as requiring special consideration or services need to be expanded to encompass those who had suffered very severe and prolonged illness. Having considered the point, we accept the broad thrust of that argument and, through this group of amendments, we are trying to answer the point made by my noble Friend.

§ Mr. Battle
I am grateful to you, Madam Speaker, for allowing us to open the debate on this group of amendments.
We welcome the return of the Bill at this late and perhaps non-controversial stage. It launches British Gas into the brave new world of domestic competition. Labour does not oppose the principle of opening up the domestic market to competition since British Gas has been privatised. It would have been better if the changes that 313 we proposed in Committee and on Report had been accepted, but it would be churlish not to accept and acknowledge that crucial progress has been made in the other place. We welcome the fact that the Minister is prepared to accept the amendment.
Our concerns are still focused on the Bill's effect on consumers. The amendments introduce protection for the chronically sick as well as for those who are elderly and disabled. That is welcome. It is a broader definition. We would have preferred what I would call a fairer distribution mechanism to ensure, for example, that there is no regional discrimination. As the biggest and, perhaps, more attractive markets will be in London and the south-east, we need to be assured that less attractive markets will not be starved of what the Minister considers to be the benefits of opening the market.
Even the Minister would not want a regime in which gas costs more for people in Newport than for those in Norwich simply because Newport is further away from the gas's landing point. I think that it is important that the Bill does not have a regressive effect, in that the more affluent customers are considered to be profitable to suppliers and therefore enjoy the benefits of choice and competition, while prices end up much higher for the elderly, the disabled and the chronically sick, who are more likely to suffer from fuel poverty.
It would be churlish not to acknowledge that there has been some progress and that some common-sense amendments dealing with consumer protection have been moved in the other place. However, we do not think that they go far enough. We must ensure that those on lower incomes experience the benefits of competition rather than suffer its adverse effects.

§ Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)
Amendment No. 13 adds the word "disabled" to section 7A—the anti-cherry-picking provision. Does the Minister envisage that licences granted under the provision may discriminate on the grounds of social disability or sickness? I find it difficult to understand how a licensee could ensure that that does not occur. Will the licensee base his or her calculations on the number of people in a street?
As my hon. Friend the Member for Leeds, West (Mr. Battle) said, there is a danger of a strong regional element. Licensees could look at the valley communities, for example, and try to avoid having to compete for gas in that area. How will we get around the issue of competition and discrimination on a regional basis, especially as one consequence of the Bill will be discriminatory pricing on a regional basis?

§ Mr. Eggar
I shall pick up the rather wide point that the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) has raised. There will be a transportation charge differential. That flows not from the Bill but from decisions made by the Director General of Gas Supply before the Bill's introduction. We have never made any secret of that fact. That differential will not be more than plus or minus 2 per cent. of current consumer prices
The Bill's structure—this point was raised in Committee—has potential benefits for the more remote communities that are perhaps not connected to gas. It will make it easier for local communities and individuals to take the initiative and many competitors of British Gas 314 believe that they will be able to connect consumers to gas at a lower cost than British Gas. The Bill also contains powers that will allow the connection costs to be spread over a number of years, rather than having one upfront charge, as applies under the Gas Act 1986.
As to the hon. Gentleman's other point about what is loosely described as "cherry picking", the appropriateness of precise licence area is a matter for the director general. The various issues may be encapsulated by saying that the Bill's structure and the licences are designed to make it as difficult as possible to engage in cherry picking, however the cherries may be defined and however much people may want to pick them.