Commons Sitting of 19 April 2000

Preamble
The House met at half-past Two o'clock

PRAYERS
[MADAM SPEAKER in the Chair]
CITY OF LONDON (WARD ELECTIONS) BILL (By ORDER)
Order for further consideration, as amended, read.
To be further considered on Wednesday 3 May.

Oral Answers to Questions
  WALES
  The Secretary of State was asked—
  WALES

    Care Standards Bill
    Mr. Win Griffiths: What representations he has received about the Care Standards Bill [Lords] in the last month. [118432]
    Ms Julie Morgan: What representations he has received about the Care Standards Bill [Lords] [118437]
    The Secretary of State for Wales (Mr. Paul Murphy): In the context of the Care Standards Bill, I have received a number of representations relating to proposals for a children's commissioner for Wales. I am pleased to be able to confirm to the House today that the remit of the children's commissioner for Wales will extend to children coming within all the services to be regulated under the terms of the Care Standards Bill.
    Mr. Griffiths: I thank my right hon. Friend for that reply. Will he list exactly those services that will be covered by the children's commissioner, and reassure us that the amendment will be drafted so as to give the National Assembly for Wales some powers to extend the role of the commissioner beyond that envisaged in the Bill?
    Mr. Murphy: As well as all children's homes, the commissioner will deal with services in private and voluntary hospitals, the welfare of children living away from home in boarding schools, fostering agencies, voluntary adoption agencies, local authority fostering and adoption services, welfare aspects of day care and child minding provision for the under-eights, residential family centres and children who receive special care in their own homes. I am delighted to be able to tell the House that my officials and Assembly officials are working together
    962
    to prepare the amendment to the Care Standards Bill. We are in close contact with the Assembly about any future remit.
    Ms Morgan: I thank my right hon. Friend for his reply. Will he reassure me that he will work closely with the Health and Social Services Secretary, Jane Hutt, and the Secretary for Education and Children, Rosemary Butler, to ensure that the final legislative powers of the children's commissioner apply to all children in Wales and have as their foundation the United Nations convention on the rights of the child, so that the powers extend beyond the powers provided in the Care Standards Bill?
    Mr. Murphy: Yes. The Assembly is still considering a wider role and remit. The Government will urgently and sympathetically consider proposals when they are ready, but I believe that the office of children's commissioner for Wales, set up as it will be under the Care Standards Bill and together with the additions and the work that the Assembly is doing, will mean that we are leading the United Kingdom and Europe in terms of such a role.
    Mr. Dafydd Wigley: I welcome the answer from the Secretary of State, as far as it goes. Can he clarify what will be the position of children who live in their own homes and are on the at-risk register, but who may not be getting special provision? Will the legislation be broad enough to give the commissioner powers to deal with those children? If the Bill is not wide enough, what mechanism could be used to fast-track those additional powers, on which all parties agree?
    Mr. Murphy: I understand the point that the right hon. Gentleman has made, and I know that he is interested in these matters. The Care Standards Bill will not cover the category of children that he mentioned, but the matter is under consideration by the Assembly, working together with my Department and others in London. We will try as fast as we can to ensure that we cover all the aspects of the role of the children's commissioner. I agree with the right hon. Gentleman that it is important for us to look carefully at the protocol that governs arrangements between the Assembly and the House of Commons as far as legislation is concerned, and I hope to return to those issues after the recess.
    Mr. John Bercow: Will the regulations that flow from the Bill be subject to the negative or the affirmative procedure?
    Mr. Murphy: That matter will be dealt with in Committee when the Care Standards Bill goes through its stages here.
    Mr. Alun Michael: In the light of the north Wales child abuse inquiry report and other matters, I welcome the statement by my right hon. Friend the Secretary of State that he will use the widest possible powers in the Care Standards Bill to develop the role of the commissioner. In the longer term, will he look to use other legislative opportunities, so that that role can develop to cover all matters that affect children and to ensure that the role is as comprehensive as possible?
    Mr. Murphy: Yes, I can give that assurance to my right hon. Friend, and it is good to see him in the

    963
    Chamber. As I have said to other hon. Members today, these matters are being considered carefully by the Assembly, by my Department and by the Department of Health. I believe that the points made by my right hon. Friend are relevant and will be considered in detail as the Care Standards Bill goes through the House.

    Farmers (Exchange Rate Compensation)
    Miss Anne McIntosh: When he last met the Minister of Agriculture to discuss compensation for farmers in Wales in relation to the high value of the pound. [118433]
    The Secretary of State for Wales (Mr. Paul Murphy): I am in regular and close contact with colleagues in the Cabinet and we discuss a wide range of issues, including the agriculture situation. Compensation for farmers and the high value of sterling were among the matters addressed at the recent agriculture summit chaired by the Prime Minister on 30 March.
    Miss McIntosh: Does the Secretary of State agree that the single most important factor in the crisis in farming is the high value of the pound? When will he get the agreement of the Treasury to apply for monetary compensatory amounts to compensate British farmers, given that the pound is overvalued against the currencies of competitor countries in the European Union?
    Mr. Murphy: I agree that the value of the pound is vital, and that is why the agriculture summit chaired by the Prime Minister addressed the issue. Of the £25 million of aid that has been given to Welsh farmers, £6 million is to go to sheep farmers, £2 million to beef farmers, and more than £2 million to dairy farmers. All that is to deal with the problems caused by the strength of the pound and will directly help farmers in Wales.
    Mrs. Jackie Lawrence: The National Farmers Union in Wales has greatly welcomed the package for farmers and the Government's commitment to agriculture. However, is my right hon. Friend aware that only 2 per cent. of the lamb consumed by British armed forces abroad is sourced from Wales? Will he endeavour to persuade his ministerial colleagues to adopt the same policy that has been adopted for beef, and source all lamb thus consumed from the United Kingdom?
    Mr. Murphy: I shall certainly take up the matter with my right hon. Friend the Secretary of State for Defence. I can tell my hon. Friend that our armed forces are keen to support British products wherever possible, and that all the beef and pork that they use is provided by UK producers. However, I shall ensure that I raise the question of lamb with my Cabinet colleague.
    Mr. Lembit Öpik: My hon. Friend the Member for Brecon and Radnorshire (Mr. Livsey) is this afternoon attending the installation of the high sheriff of Powys, but he and I would both like to know the answer to this question: when and how will the exchange rate compensation be paid to dairy farmers in Wales?
    Mr. Murphy: Obviously, the details of that are a matter for the National Assembly, but I will write to the hon. Gentleman as soon as they are known.

    Housing Green Paper
    Mr. Jon Owen Jones: What discussions he has had with Assembly Secretaries concerning the implications of the housing Green Paper in Wales. [118434]
    The Parliamentary Under-Secretary of State for Wales (Mr. David Hanson): I discussed the housing Green Paper with the Assembly Secretary for Local Government and Housing, Mr. Peter Law, in our liaison meeting on 10 April.
    Mr. Jones: My hon. Friend will be aware that, in many parts of Wales, such as the wards of Cathays, Plasnewydd and Roath in my constituency, and the constituency of the Minister for Competition and Consumer Affairs, there are extremely high densities of houses in multiple occupation. Tenants stay for only a short time, and landlords often do not maintain the houses properly. I welcome the Green Paper's conclusion that it may be possible to introduce a discretionary licensing scheme for local authorities. However, when my hon. Friend holds talks with his colleagues in the Department of the Environment, Transport and the Regions, will he stress that, unless the licensing schemes cover HMOs used as student lets and areas of high demand as well as areas of low demand, they will be of little or no use to my constituency, or to other similar ones elsewhere in the United Kingdom?
    Mr. Hanson: I thank my hon. Friend for his comments. He often raises with me and with colleagues in the National Assembly issue of student accommodation. I know that he takes a great interest in the matter. The Government are committed to introducing a mandatory licensing scheme for houses in multiple occupation as soon as there is an opportunity to do so. In the meantime, we are encouraging local authorities to develop local registration schemes.
    I take on board the points raised by my hon. Friend, and I will discuss them with my hon. Friend the Minister for Housing and Planning at the Department of the Environment, Transport and the Regions.
    Mr. James Gray: The Labour Government came to power making extravagant boasts about what they would do about housing in Wales and elsewhere. Given that background, why have they spent less in their first three years in power than the previous Conservative Government spent in their final three years?
    Mr. Hanson: I shall defend the Government's record on housing against that of the hon. Gentleman's Government any time that he wants. There has been more investment in Wales and elsewhere as a result of the Government's achievements. The Green Paper outlines further steps for tackling neglect of the housing stock during the Conservatives' 18 years.
    Mr. John Smith: The Green Paper has been warmly welcomed by every agency in Wales involved in the provision of housing, whether private, public or voluntary. Is my hon. Friend aware that elderly people, of whom there are many in my constituency, have difficulties in looking after their properties once they retire? We welcome the near £30,000

    965
    allocated for care and repair, but more resources are required, and I ask my hon. Friend to bring that point to the attention of his colleagues.
    Mr. Hanson: I thank my hon. Friend for making those points. The National Assembly recognises the need to improve and maintain housing stock in Wales. The Assembly has announced provision of £48 million to support strategic housing schemes and is undertaking a range of measures to support housing in Wales. The partnership between the Government and the National Assembly is tackling housing issues, and we accept that difficulties remain in many places. That work is a stark contrast with what the Conservative party did while it was in office.
    Mr. Paul Burstow: In his discussions with the First Secretary, has the Minister raised the implications of the single-room rent restriction? It results in those under 25 getting into debt and often finding it difficult to get decent accommodation and becoming homeless. Will the restriction be repealed, and if so when?
    Mr. Hanson: I am grateful to the hon. Gentleman for raising that point. Those areas do not fall within my direct responsibilities, but I shall draw his remarks to the attention of my relevant colleague at DETR, and I shall consider those issues in relation to Wales.
    Mrs. Betty Williams: Does my hon. Friend recall that, when the right hon. Member for Richmond, Yorks (Mr. Hague) was Secretary of State for Wales the number of houses built in Wales fell by more than 3,000 compared with 1994? What are the prospects for housing in Wales in 2000–01?
    Mr. Hanson: As a constituency Member of Parliament, I recall that the number of life chance opportunities to receive housing in Wales diminished under the Conservative Administration. As I said to my hon. Friend the Member for Vale of Glamorgan (Mr. Smith), the Assembly has announced provision of an additional £48 million to support strategic housing schemes. In partnership with the British Government, the National Assembly will seek to ensure that more properties are available for rent, and for affordable rents. The Government and the Assembly are committed to tackling the housing backlog that the previous Government allowed to build up.

    Office Costs
    Mr. Eric Pickles: By how much, in real terms, the cost of running his office, or its predecessor, in (a) London and (b) Cardiff has changed since May 1997. [118436]
    The Secretary of State for Wales (Mr. Paul Murphy): The cost of running the Welsh Office in 1997–98 was £70 million. For 1999–2000, the cost of running the Wales Office is estimated to be around £2 million. Costs in London and Cardiff are not held separately.
    Mr. Pickles: That is a most interesting answer, and one difficult to comprehend against a virtual doubling of
    966
    Welsh Office staffing. People want the answers to two questions: how were those accounting figures arrived at, and how can the right hon. Gentleman justify costing more and delivering less?
    Mr. Murphy: Most people in Wales want to know whether their interests are properly represented in Westminster and Whitehall. On the hon. Gentleman's specific points, the figure of 26 staff for my office, which was suggested before devolution, was an early rough estimate. When I became Secretary of State, the staff complement was 37, and I expect it to be around 45 by the summer. The figure of 58, which is in the annual report, is a notional one. That number is allowed for in the budget, but I shall ensure that every post is subject to the closest scrutiny before any appointment is made. It is vital that Wales is properly represented at Westminster, and that can be done only if my office is adequately staffed. It is the smallest Department in Westminster, and is smaller than some district council chief executive's departments in Wales.
    Mr. Martyn Jones: Will my right hon. Friend confirm that Conservative central office costs the taxpayer £3 million in Short money? Does he agree that the Wales Office offers the taxpayers of Britain a much better bargain?
    Mr. Murphy: Anything is a better bargain than Conservative central office.
    Mr. Ieuan Wyn Jones: The Secretary of State is of course aware that the House is considering several important Bills, including the Local Government Bill, the Care Standards Bill and the Countryside and Rights of Way Bill, that will affect Wales. How many of his staff have been allocated to ensure that, during the passage of such Bills, sufficient care is taken that they are properly drafted to take into account the needs of the Assembly and that proper amendments are made in Committee?
    Mr. Murphy: About 13 of the staff to whom I have referred give advice on the whole range of Government and Assembly policy, and about a dozen are included in the Parliamentary branch and as special advisers. In addition, a part-time legal adviser deals with such matters. Furthermore, officials are seconded from the Assembly to deal with legislation.
    Mr. Nigel Evans: The Secretary of State will have to give the House a better explanation of his staffing levels than he has done to date. Page 11 of the annual report states that the number of his staff is going up from 34 to 61. Even if that is a notional figure and the number rises only to 58, that is one heck of an increase.
    Page 9 of the White Paper "A Voice for Wales" states:
    The Secretary of State will retain a small team of civil servants to support his work.

    967
    That was the White Paper on which the people of Wales voted in the referendum. Will the right hon. Gentleman fully explain to the House why there has been such a U-turn?
    Mr. Murphy: I have already explained to the House the importance of maintaining a staff that is adequate and satisfactory, both to protect the devolution settlement and to liaise with Cardiff. By no stretch of the imagination could the number of people employed in my Department—they include messengers, paper handlers, receptionists and drivers—be regarded as big. What is important are the big issues with which we are dealing at present—including the question of the children's commissioner, on which I note that the hon. Gentleman did not want to comment. Such issues are hugely important—that is what matters to the people of Wales.
    Mr. Evans: The Government must have known all that before the devolution referendum. We accept that the Secretary of State now has one fewer Minister in his Department, but the number of special advisers has doubled, and the number of his staff will double. Furthermore, the Welsh Assembly grows like Topsy, with four special advisers for its First Secretary. The cost of the Welsh Assembly building—thank goodness, that is on hold—was initially estimated at between £12 million and £17 million; it is now between £26 million and £30 million. Will the right hon. Gentleman reconsider the additional costs for staff in his office? That money could supply 30 extra police or 70 extra nurses. Is it not far better to invest money in front-line services to help the people of Wales, rather than pampering the Secretary of State's virility by boosting the Murphy empire in London?
    Mr. Murphy: Empire! I am not much of an emperor. If the hon. Gentleman is talking about helping front-line services in Wales, perhaps he should refer, for example, to the £112 billion extra for the health service that came from my right hon. Friend the Chancellor's recent Budget. However, a more important point in the context of his remarks is that either he wants Wales to be represented at the Cabinet table and on 22 Cabinet Committees and wants the House to take Welsh legislation seriously, or he does not. Obviously, he does not.

    Rural Communities
    Mr. Nicholas Winterton: When he last met the First Secretary to discuss the Government's legislative programme and its impact on rural communities in Wales. [118439]
    The Secretary of State for Wales (Mr. Paul Murphy): I meet the First Secretary regularly and we discuss a range of issues. In addition, my hon. Friend the Under-Secretary of State for Wales and I presented the Government's legislative programme during two plenary sessions of the National Assembly for Wales in November and December last year.
    Mr. Winterton: Does the Secretary of State accept that the hard-pressed rural areas of Wales rely mainly on agriculture for their existence? Although he has announced some additional help, which is very welcome and wholly justified, does he accept that further assistance
    968
    is required for those areas? Does he also accept that the caning of the motorist through Government policies does not help those areas where farmers rely entirely on their own transport and where most of their equipment is petrol or diesel-driven?
    Mr. Murphy: I accept the hon. Gentleman's point about the importance of agriculture to our rural areas. My right hon. Friend the Chancellor of the Exchequer addressed transport matters in the Budget in terms of the fuel duty escalator. The Government have also given help to hill farmers, beef farmers and dairy farmers. The Assembly is helping Wales through the rural development plan. The combination of the Government's policies and those of the Labour-led administration in Cardiff are suiting the rural areas of Wales well, and they could not have obtained a better deal.
    Mr. Alan W. Williams: I welcome the addition last night of new clause 1 to the Postal Services Bill, which will provide possible financial support for post offices when they move to automated credit transfer. It will provide an important safety net, especially for rural post offices. Will my right hon. Friend ensure that, in his discussions with the First Secretary, the Welsh Assembly is fully involved in drafting the detail of how the financial support will operate?
    Mr. Murphy: I give my hon. Friend that assurance. I shall raise the matter with the First Secretary when we next meet. I agree with my hon. Friend that rural post offices in Wales play a vital role in our communities. As he knows, we are updating our post office network through a major investment in automation. It is untrue to maintain that people in Wales will not be able to receive cash benefits in post offices after 2003. The Cabinet Office is soon to report on rural post offices, including those in Wales. I am pleased to say that, yesterday, the House approved what was then new clause 1, which will allow subsidies to be paid to post offices in Wales.
    Mr. Robert Walter: Legislation for Wales is enacted in the House. The First Secretary and his predecessor, the right hon. Member for Cardiff, South and Penarth (Mr. Michael), whom I am pleased to see in his place, are both Members of this place. Will the Secretary of State tell the House when those Labour Members who sit both in the House and in the Welsh Assembly will participate in the Government's legislative programme? The latest figures show that the hon. Member for Wrexham (Dr. Marek) and the right hon. Member for Caerphilly (Mr. Davies) have attended half time in Cardiff and have not voted once in the House since the summer. The First Secretary and his predecessor have voted only seven or eight times. Will the right hon. Gentleman tell the House when the by-elections will be held and when the people of Wales will be properly represented in the Government's legislative programme?
    Mr. Murphy: I am not quite sure what that has to do with rural areas and the original question. What right hon. and hon. Members do in this context is their own business. The hon. Gentleman will be aware that, when the general election comes, those Members who hold a dual mandate will lose it. They will then concentrate on the National

    969
    Assembly for Wales. Before the hon. Gentleman bandies his figures, he should take account of some of the figures that appeared in the list in The Western Mail.The Conservative Member who represented Clwyd, North-West, who is now an Assembly Member, came bottom of that list.

    Transport Bill
    Mr. Elfyn Llwyd: What representations he made to his Cabinet colleagues on the second report of the Welsh Affairs Committee Session 1999–2000 on "The Transport Bill and its Impact on Wales" (HC 287); and if he will make a statement. [118440]
    The Parliamentary Under-Secretary of State for Wales (Mr. David Hanson): 1 have discussed this matter with ministerial colleagues. My right hon. Friend the Minister for Transport, whose Department has responsibility for the Bill, is replying to the Committee on behalf of Government. The Wales Office has been consulted on the content of this reply.
    Mr. Llwyd: I thank the Minister for that reply. He will know that the Select Committee on Welsh Affairs canvassed the views of the National Assembly for Wales on the Transport Bill. It said that it wanted at least two Welsh members on the Strategic Rail Authority pro tem. We understood that the protocol was that the Minister would take the matter forward with Cabinet Ministers. Why is nothing happening?
    Mr. Hanson: The Wales Office has taken forward a number of issues that the Select Committee on Welsh Affairs has raised. We have taken on board the duty to consult the Assembly on the SRA member and on policies. We have also taken on board other issues. Wales has one member out of 15, which is on a par with Scotland. Anne Hemingway, who has been appointed, has been welcomed by the Assembly's Secretary with responsibilities for transport. I hope that the hon. Gentleman recognises that it is important now that the SRA gets on with the business of managing and supporting our railways, and that he is happy with, and supportive of, the member who has been appointed in consultation with the Assembly.

    Dairy Farming
    Mr. Michael Fabricant: When he will next meet the Agriculture Secretary to discuss Welsh dairy fanning. [118441]
    The Secretary of State for Wales (Mr. Paul Murphy): As I have said to the House, the agricultural summit that my right hon. Friend the Prime Minister chaired earlier this month agreed on agrimonetary compensation worth about £2.3 million to Welsh dairy farmers. Other measures have also been introduced.
    Mr. Fabricant: That sounds like a very big deal, but does it not cost 2p a pint more to produce milk in Wales than the money actually received at the farm gate? Is the Secretary of State aware that, when translated into real money, the announcement that he has just made is the
    970
    equivalent to a subsidy of only 0.2 per cent. of 1p per pint? Is that not another example of a big Labour announcement and a small and ineffectual delivery?
    Mr. Murphy: What is a big deal in Wales for dairy farmers is not only the £2.3 million to which I have just referred. It is also the removal of dairy hygiene charges, which is worth £180,000; it is the Assembly helping with marketing, processing and productivity for supermarkets; it is meetings in Cardiff with the Agriculture Secretary and it is the establishment of a dairy helpline that was recently set up to give advice to farmers. In addition to that, £15 million extra has been given to Welsh farmers to sustain them in these difficult times. That is why the farming unions in Wales have warmly welcomed the package, which is more than the hon. Gentleman has done.

  The Prime Minister was asked—
  PRIME MINISTER

    Engagements
    Mr. Nick St. Aubyn: If he will list his official engagements for Wednesday 19 April.
    The Prime Minister (Mr. Tony Blair): This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I will have further such meetings later today.
    Mr. St. Aubyn: The brutal deaths in Zimbabwe bring home to us all the fragility of basic human rights around the world. Is the Prime Minister still "comfortable" with the Russian President, Mr. Putin, whose actions in Chechnya to win votes dwarf anything yet tried by the Mugabe regime? Is the Prime Minister still comfortable with Mr. Putin, whose attack in London on Muslims was couched in such fascist terms? If the Prime Minister is still comfortable with Mr. Putin, why should any of us still feel comfortable with this Prime Minister?
    The Prime Minister: First, I was pleased that President Putin came to this country; I think that it is an important relationship. We made clear our concerns over human rights in Chechnya and those concerns were expressed very forcefully to him. However, I also said—and I believe it—that it is better that we remain engaged with Russia rather than isolate it. I believe that that is the view of the overwhelming majority of the international community. I find it curious that members of today's Conservative party do not want us to welcome President Putin here from Russia; they do not want us to welcome the President of China here; they no doubt do not make any European leaders very welcome, and when we have closer relations with the Americans we are the Americans' poodle. I do not think that Conservative foreign policy is a very good basis upon which to conduct the foreign policy of this country.
    Mr. John Grogan: Does my right hon. Friend agree that Monday's announcement of £100 million of state aid to the British coal industry, following hard on the heels of an extra £200 million of assistance to

    971
    British farmers, demonstrates clearly to the people of a constituency such as Selby—which happens to have 3,000 farmers and 3,000 miners—that this Government, unlike some in the 1980s and 1990s, will not pass idly by on the other side of the road when communities are in trouble, but will provide assistance to manage economic change?
    The Prime Minister: It is important—particularly if there is a relaxation of the stricter gas consents policy—that we provide finance for the coal industry to go through the period of restructuring in which it is engaged. That helps people with their jobs, and it also helps with a more balanced energy policy for this country. It is right that this Government—in circumstances where industrial restructuring is taking place—stand behind people, help them and work hard for their future.
    Mr. William Hague: The whole House will have been horrified to hear of the brutal murders that have taken place in Zimbabwe in recent days. Given the daily deepening crisis, is it not now clear that the right vehicle for a firm response is the Commonwealth? Is the Prime Minister aware that the Government would have the support of the Opposition for initiating in the Commonwealth decisions on at least the possibility of suspending Zimbabwe and for investigating the possibility of freezing the international assets of Mugabe and his associates?
    The Prime Minister: Of course the situation in Zimbabwe is disgraceful and we condemn utterly the barbaric attacks on farmers, which are totally unacceptable. The question is what should be the right response of this country. As the right hon. Gentleman knows, we are in touch not only with other African leaders in the area, but with people who represent the Opposition and the farmers union in Zimbabwe. It is important to consult those people and take their advice, and we are acting in accordance with that advice.
    Of course we are pursuing every avenue open to us at Commonwealth level. A meeting will take place in about 10 days to discuss the action that the Commonwealth will take. It is important that we make sure that the action that Britain takes as a country helps those people in Zimbabwe, and does not make the situation worse for them.
    Mr. Hague: Of course I am grateful for the Prime Minister's reply, although many people might think that 10 days is a long time to wait for a Commonwealth meeting when events are moving on by the hour and it must be possible to have an earlier meeting. It is also important to listen to Opposition figures and others in Zimbabwe. However, Mr. Chavanduka, the editor of the Zimbabwe Standard, asks:
    How much worse must the situation in Zimbabwe get before action is taken? Words will not affect Mugabe, but pressure from Britain might.
    Is not the clear lesson of history that tyranny must always be dealt with firmly? Is it not at such moments that the Commonwealth family of nations comes into its own? Will the Prime Minister try at that meeting, whenever it is held, to initiate a high-level Commonwealth delegation, backed by the threat of a firm response, to try to persuade
    972
    Mugabe to uphold the rule of law, to end the illegal occupation of farms and to put a stop to intimidation and murder?
    The Prime Minister: The meeting is, as I said, taking place in about 10days, but we have already been in touch with Commonwealth partners, as well as with the United Nations; indeed, the Foreign Secretary spoke to Kofi Annan, the United Nations Secretary-General, last night. We have also been in detailed touch with Opposition leaders. The leader of the opposition Movement for Democratic Change rejected a call from the British Conservative Opposition to suspend Zimbabwe from the Commonwealth. I point out also that Mr. Tim Henwood, the president of the Commercial Farmers Union in Zimbabwe, has said:
    I call on everyone involved internally and externally to refrain from emotional reaction and interference. Zimbabweans will solve this problem.
    There is a difficult balance to strike. I have utterly condemned the situation. Of course I condemn it, and we want to take any action that is helpful to those people in Zimbabwe. Contrary to some reports in the press in the past few days, we are taking action not only at the European Union level—although of course that is important—but at a Commonwealth level and in the United Nations, but it is best that we are guided by those with most to lose, and not by those who are commenting on the situation from a safe distance.
    Mr. Stuart Bell: The House will welcome the Prime Minister's measured response to this delicate, difficult situation. The Leader of the Opposition has referred to the rule of law. The Prime Minister has referred to the United Nations, the European Union and Commonwealth countries. Will he give the House an assurance that he and his Government will take a positive lead to ensure that the rule of law is restored in Zimbabwe?
    The Prime Minister: Of course we will do so. However, as I pointed out a moment ago, we will do so in the way that is most helpful to the people in Zimbabwe.
    Mr. Charles Kennedy: The whole House will share the sense of revulsion about the murderous events in Zimbabwe. Does the Prime Minister concur that talk of sanctions at this time could only help to solidify President Mugabe's position and allow him to return to his rhetoric about colonialism and external threat, and to make a dangerous situation worse? Will the Prime Minister confirm that the real priority for the Foreign Office and the Government is to get President Mugabe to return to his senses on this issue and agree to a restoration of the rule of law, stop the incitement to violence from the top and, most important, sign up internationally, in front of the global community, to a firm date for full and free democratic elections?
    The Prime Minister: Those are sensible propositions. That is precisely what we should be doing and it is what we shall do.
    Mr. Kennedy: I thank the Prime Minister for that reply. There might yet prove to be a need for an asylum option for some of those who are under threat, either opposition politicians or farmers. As this country

    973
    historically and internationally has a proud and noble tradition of offering asylum, will the Prime Minister assure the House that, if any opposition politicians or farmers from Zimbabwe come to this country, they will not be greeted by a detention camp, as the Conservatives have proposed?
    The Prime Minister: There are abuses of the asylum system, and we are dealing with those abuses. However,
    I agree that it is important that we all deal with that issue in a responsible manner.
    Mr. Tom Clarke: Does my right hon. Friend agree that today is an historic day for millions of disabled people in Britain, with the introduction of the Disability Rights Commission? Will he join me in congratulating the commission and its chair, Bert Massie, who today made it clear that, either by force of argument or by force of law, the commission will ensure that never again will disabled people in Britain be regarded as second-class citizens?
    The Prime Minister: It would not be right to welcome the establishment of the Disability Rights Commission without also paying tribute to my right hon. Friend and all the work that he has done over many years for disabled people. The essence of the proposal, which we as a Government were proud to introduce, is to ensure that disabled members of our society are full and equal participating members of that society. We are proud that that is so.
    Rev. Martin Smyth: Does the Prime Minister agree that people's confidence in politics is often undermined by politicians' deceptive use of language and their economy with the facts?
    The Prime Minister: Of course I do.
    Mr. Gerald Kaufman: Consequent to the reference made by the hon. Member for Belfast, South (Rev. Martin Smyth) to politicians' use of language, will my right hon. Friend the Prime Minister join me in commending the Home Secretary who, last week, gave indefinite right of entry to a Kurdish boy in my constituency who, last year, at the age of 13, escaped from Iraqi murderers and torturers to arrive in this country? Which does my right hon. Friend regard as preferable: that the boy should have been allowed to await the decision of my right hon. Friend the Home Secretary in my constituency with his elder brother, who already has refugee status; or that he should have been put in a prison camp, as the leader of the Conservative party proposes?
    The Prime Minister: I think that my right hon. Friend's point is that it is important to make a distinction. As I said, there are real abuses of the asylum system and we have to deal with those abuses. That was the purpose of the legislation introduced last year and it is the purpose of the measures that we are taking now. However, this country should always be willing to take in those who are genuinely fleeing persecution. That is a noble tradition of ours and I, for one, would not like to see it disappear.
    Sir Robert Smith: Given that three sub-post offices have
    974
    recently closed in my constituency and that last night the Postal Services Bill was amended so that the Secretary of State may take powers to devise a scheme to maintain the sub-post office network, will the Prime Minister say when those powers will be taken and what the detailed contents of the scheme will be, so that those who have to invest in such a vital service to my community know when they can do so?
    The Prime Minister: That is precisely the reason why we have a process in place that allows us to discuss with sub-postmasters and sub-postmistresses the need to ensure that post offices have a viable future. The powers taken under the legislation add a further dimension, by allowing us to ensure that they have a future. As I said last week, of course there has to be change and of course post offices will do new things in future. Inevitably, larger numbers of people will want to receive their benefits—whether child benefit or their pension—through their bank account. We are sitting down with the parties now and working out a programme for the future. That is the right way to proceed.
    Mr. Barry Gardiner: While I do not doubt that the Prime Minister is as pleased as any Member of Parliament by the drop in the unemployment figures announced today and by yesterday's announcement that long-term interest rates are at their lowest for 35 years, does he accept that his Government will be judged not by those things but by the way in which they improve the standard of living of poor and middle-income families, who suffered so much under the Conservatives?
    The Prime Minister: I am delighted that employment is up to a new record level of 27.8 million. Well over 800,000 more people are in work today than when we came to office; 420,000 young people have joined the new deal, with more than 190,000 of them in jobs; and long-term and youth unemployment are down by 70 per cent. since the election. That is a Labour Government delivering for the British people.
    Mr. Desmond Swayne: Why has the Prime Minister refused to take any action over a clear breach of the ministerial code by the Deputy Prime Minister? Is it not absurd to have delegated that matter to be resolved by the Deputy Prime Minister himself?
    The Prime Minister: I do not accept what the hon. Gentleman says at all.
    Mr. Kevin Barron: Does my right hon. Friend agree that people and political parties who go around stirring up issues relating to the plight of asylum seekers in Britain breed only intolerance and disharmony in our society, and that we, along with everyone in this nation, should seek a society that is more tolerant to the plight of those individuals?
    The Prime Minister: As I have said, the problem with the asylum system is being sorted out by the measures that the Government have taken, but it is important to remember that the problem is not exclusive to Britain—it occurs throughout Europe. Although one would not know it to read

    975
    some of the information in the media on the subject, Britain is around ninth out of 15 in terms of the number of asylum applications per head; Germany has more asylum seekers than us; in Switzerland the numbers have doubled; in Belgium and Austria they have tripled; and, as I discovered last night in the course of other conversations in Ireland, asylum seekers are a problem there too. It is important to recognise that it is a problem that we need to deal with. We are dealing with it, but—this is the point that my hon. Friend rightly makes—it should be dealt with in a reasonable, responsible and tolerant manner.
    Mr. William Hague: Will the Prime Minister confirm that, in the financial year just ended, the Government spent £633 million more on the cost of administration in Whitehall than even they had planned, and that the cost of running No. 10 Downing street rose by 23 per cent. in a single year?
    The Prime Minister: I notice that the right hon. Gentleman did not want to raise the issue of asylum.
    On the cost of central Government, the right hon. Gentleman is wrong. In real terms, the costs of Government are falling and are less than they were in the last year of the previous Government.
    Mr. Hague: The Prime Minister says that I am wrong, but these are the Government's figures published by the Government last week. The right hon. Gentleman is spending £10 million on his own office. These figures are available for £15.30. He says that the costs of Government are falling in real terms, but when inflation is 2 per cent. and his costs in No. 10 Downing street go up by 23 per cent., how can they be falling in real terms?
    The truth is that this is a Government who spend more money each year on spin doctors, political advisers and bureaucracy, and nowhere more so than in No. 10 Downing street. Will he now confirm that, for the first time in a quarter of a century, the Government plan more civil servants this year than last year, and that the costs of running the Lord Chancellor's Department have increased by £106 million?
    The Prime Minister: I do not accept that. Again, in real terms, the cost of Government is falling. The percentage costs of Government are lower than when the right hon. Gentleman was in office. The right hon. Gentleman is simply dealing with cash money, not real-terms figures, as he knows perfectly well. If we take the real-terms figures, we are spending less. As for the money in No. 10 Downing street—[Interruption.]I am just informed by my right hon. Friend the Home Secretary that there has been a threefold increase in the Opposition's Short pot, so when the right hon. Gentleman gets to his feet for the third time, he can offer us our first spending cut.
    Mr. Hague: The Prime Minister will not answer the question. He says that he does not accept the figures, but they are the Chancellor of the Exchequer's figures. How has the Lord Chancellor spent £100 million? He cannot have spent it all on wallpaper. [Interruption.]Instead of conferring with the Home Secretary, will the Prime Minister confirm that the Government plan the first increase in the number of civil servants in a quarter of a
    976
    century, and that the cost of running the Department of Trade and Industry has risen by £114 million in three years?
    The Prime Minister: No, I will not confirm that. Why does the right hon. Gentleman raise the matter? I shall explain: he has a big hole in his tax and spending plans, so he runs around the country claiming that if he gets rid of a few special advisers he can rebuild the health service and cut everyone's taxes. He has said that he will cut everyone's taxes, spend the same amount of money, and spend even more on defence, farmers, local government—and asylum to judge from yesterday's reports. He makes his pathetic attempt at the Dispatch Box because Haguenomics is beginning to be found out. By the time we get through with the Conservative party in the next general election, the right hon. Gentleman's economic policy will be in ruins along with his party.
    Mr. Hague: So, the right hon. Gentleman will not confirm the figures; he does not like the figures—[Interruption.]
    Madam Speaker: Order.
    Mr. Hague: So now we know—[Interruption.]
    Madam Speaker: Order. That does not mean the noise can start again.
    Mr. Hague: Now we know that the Lord Chancellor spends an extra £100 million, and the Prime Minister does not know why; the Department of Trade and Industry spends £114 million more, and he does not know why; the Home Office spends £440 million more, and he does not know why. According to the Government's own figures, they spend £2,000 million more on pen pushers, not police; on bureaucrats, not teachers; on spin doctors, not real doctors. The Government tax so much more, but deliver so much less.
    The Prime Minister: All I can say on value for money is that if the right hon. Gentleman gets three times the amount of Short money, he should get better advice.
    Under this Government, the number of nurses is up; the number of doctors is up; the number of teachers is up. The only thing that is going down is the Tory party.
    Hon. Members: More!
    Madam Speaker: Not today.
    Kali Mountford: I agree with my right hon. Friend that the number of nurses is up. I went to my local pathology department in Huddersfield royal infirmary last week—I hope that my right hon. Friend will find time to visit it. It was clear from my visit that the Labour Government arrived not a day too soon to provide much-needed investment. The 8.75 per cent. in cash terms—more than 7 per cent. in real terms—is a genuine investment, and the modernisation fund is also important to departments such as pathology departments. What

    977
    advice would my right hon. Friend give the Huddersfield royal infirmary and other trusts when they apply to the modernisation fund this month?
    The Prime Minister: The modernisation fund is an important part not only of getting more nurses into the health service but of ensuring that we modernise facilities. That is why all the accident and emergency departments in the country are being modernised if they wish. The Opposition, through their medical insurance plans and their refusal to support the increases in tobacco duty, have a £1.5 billion hole in their accounts. If they were re-elected, there would be fewer nurses and less modernisation in the national health service. That is one very good reason why it is not safe in their hands and never has been.
    Mr. Peter Viggers: Is the Prime Minister able to reassure disillusioned pensioners that Blairism has succeeded, or are the press reports true which say that his party has effectively written off pensioners as a group worth cultivating?
    The Prime Minister: No, they are not true at all. Let me tell the hon. Gentleman what we have done for pensioners: there is an extra £6.5 billion of spending; 1 million pensioners are benefiting from the minimum income guarantee; pensioner households have the £150 winter fuel allowance, and there are free eye tests for those pensioners as well; value added tax on fuel has been cut; and the over-75s in his constituency will have free television licences. Of course pensioners want us to do even more, but the one thing they should know is that if they ever got a Conservative Government back, those changes would be reversed and that money taken off them.
    Mr. Jim Murphy: My right hon. Friend is aware that I have the honour to represent a number of survivors of the Nazi holocaust. Does he agree that many of those who find safety in this country contribute to the well-being and richness of our nation? Does he share my view that there is nothing at all patriotic about threatening to incarcerate every asylum seeker while campaigning for the freedom of dictators such as Pinochet?
    The Prime Minister: Again, let me emphasise what we are doing to tackle abuses. We are speeding up the process and 11,000 decisions are being taken in a month. We are hiring extra immigration officials—another 700. The new changes such as the withdrawal of cash benefit and the introduction of fines for hauliers who take part in illegal immigration will enable us to tighten up the system and make sure that those who abuse it are not allowed to do so; but I say to my hon. Friend, as I said to the House a moment or two ago, there is a duty on us all to treat this issue responsibly and not inflame or exploit it. We need to tackle the abuses of the system. We are doing that, but we should never turn our backs on those fleeing persecution and we should never put at risk our reputation as a tolerant, multiracial society. We should be proud of it.
    Mr. Richard Spring: On top of the highest petrol prices in Europe and a collapse in farm incomes, is the Prime Minister aware of the impact in a rural area such as Suffolk of council tax increases of four times the rate of inflation? The county
    978
    council has put the tax up by 28 per cent. over the three years since he took office. To whom does he ascribe that huge increase—central Government or the county council, which is Labour led but propped up by his friends, the Liberal Democrats?
    The Prime Minister: First, I should point out to the hon. Gentleman that the average council tax is less in Labour areas than in Conservative areas. Secondly, under the previous Government there was a 19 per cent. council tax increase in the few years before we took office. In relation to the countryside and farmers, we announced a package that included both short-term aid and long-term help for the farming industry, but demands for extra spending made in the House do not sit well in the mouths of Conservative Members who tell their constituents that they will cut everybody's taxes. At some point, as we discovered with the Leader of the Opposition earlier, they will have to make a choice.
    Mr. James Plaskitt: Health service funding in Warwickshire has increased by £60 million since the general election—a 30 per cent. increase in cash terms. Does my right hon. Friend agree that any party that claimed that it could sustain such increased investment in health care while cutting taxes, regardless of the economy's performance, would be all mouth and no credibility?
    The Prime Minister: It is the Conservative party's position that it would reintroduce private medical insurance measures, which would be an immediate £500 million cost just for those who already have it. [Interruption.] Conservative Members shake their heads, but that is their policy. At some point, if they want to be taken seriously, they should start defending it openly. They would spend less money on health, and their tax and spending plans do not add up, but the important thing is that, having sorted out the public finances and laid the foundations of a stable economy, we are able to make an extra investment in the health service—not only this year, but in succeeding years as well. That is why I can tell the House the latest figures on nurses: 5,500 more nurses have come back to nursing and the number of student nurses has risen from 11,200 to 16,000. We are laying the foundations for a better-staffed health service for the future.
    Mr. John Burnett: Rural fire services have vast areas to cover and they are under constant financial pressure. They are essential services that we all value. Does the Prime Minister agree that it would be in the interests of council tax payers if fire authorities, like the police, were separate precepting authorities for the purposes of that tax?
    The Prime Minister: I know that in the hon. Gentleman' s constituency and in many others people want additional spending, but the Liberal Democrats cannot carry on asking for more and more spending without saying where that money would come from. If they say that there should be more spending, it is important that they are honest about their tax plans. The hon. Gentleman talks about a separate precept as if that meant nothing. He presumably wants a separate precept so as to raise the amount of money taken from it.

    979
    In the past few weeks, the Liberal Democrats have called for more spending on pensioners and health, more spending on post offices, more spending on farming, more spending on incapacity benefit, more spending on buses, railways, the environment and housing, more spending for
    980
    nurseries, schools and universities, more spending on the countryside, the regions and inner cities, more spending on benefits and more spending on police. At some point in time, the word "credibility" should enter the Liberal Democrat dictionary.

Points of Order
3.31 pm
Miss Anne McIntosh: On a point of order, Madam Speaker. In March this year, the Department of the Environment, Transport and the Regions issued to outside organisations guidelines on full local transport plans. That document has been made widely available to outside organisations, including motoring organisations, but it is not available in the Vote Office. I serve on the Select Committee on the Environment, Transport and Regional Affairs, and it is valid to make the point that this document should have been circulated to all members of that Committee, and should be available at least in the Vote Office.
Madam Speaker: I am grateful to the hon. Lady for giving me notice of her point of order. As the House knows only too well, I am most vigilant in seeking to ensure that Ministers meet their obligations to Parliament. On this occasion, I have no criticism to make of the Department's activities. The issuance of guidance on full local transport plans, to which she referred, was announced in a written answer on 27 March, and a copy of the document was placed in the Library. It is a matter of ministerial discretion whether copies of documents of this nature are also placed in the Vote Office, taking account of a document's significance, the likely interest in it and resource constraints.
In this case, Ministers decided not to place copies in the Vote Office, and I happen to think that that was a reasonable decision. Any Member who has a particular interest in a document is, of course, able to consult it in the Library, to obtain a personal copy through the Vote Office in the usual way, or to call the Department and ask for it.
Mr. David Heath: On a point of order, Madam Speaker. I have given you notice of it.
Madam Speaker: No, I do not have it.
Mr. Heath: I beg your pardon, Madam Speaker. I sent it to your office, and I apologise if it has not reached you.
982
As you know, Madam Speaker, the Government have announced their intention to add a variety of genetically modified maize to the national seed list. I raised this matter in business questions last week, and I seek your guidance. Representations against that addition are governed by regulation 21 of the Seeds (National Lists of Varieties) Regulations 1982, which require people wishing to make a representation to pay a sum of £30 to the Ministry of Agriculture, Fisheries and Food, and pay an additional £60 if they want to make a direct representation.
I seek your guidance, Madam Speaker, on whether matters of privilege are raised if right hon. or hon. Members of the House want to represent their constituencies and feel strongly about this matter, but have no way of raising it, because it is not part of any business before the House—except by providing a £30 cheque, which 1 have done.
Madam Speaker: I did not receive notice of the hon. Gentleman's point of order, but that does not matter; I shall try to deal with it in any case.
The hon. Gentleman raised the question of privilege, which means that I must consider his point of order immediately and give him a written answer. I shall do so now that I have heard what he had to say.

BILL PRESENTED
  SCHOOL ADMISSIONS (AMENDMENT)
  Mr. Paul Burstow, supported by Mr. Tom Brake, Mr. Edward Davey, Dr. Jenny Tonge, Mr. Simon Hughes and Dr. Vincent Cable, presented a Bill to amend the law relating to school admission arrangements for maintained schools to allow admission authorities to give precedence to pupils seeking admission who live within the area of the local education authority; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on 5 May, and to be printed [Bill 116].

Concessionary Parking Scheme (Extension)
3.35 pm
Mr. Christopher Fraser: I beg to move,
That leave be given to bring in a Bill to require local authorities to extend concessionary parking arrangements available to disabled people to health and social services professionals on duty.
The Bill would also include carers when they are on duty.
Carers provide disadvantaged members of society, whether they are elderly, infirm or disabled, with the dignity of living at home. They also fill the gap left by cash-strapped social services departments, which have such strict criteria that ill, handicapped or frail people needing less than seven days care a week are rarely given any help. That is where organisations such as Pramacare in my constituency come in. That charity gives help and care to more than 500 clients a week, allowing them to stay independent in their own homes.
Those involved in the care sector have received precious little help and support from the present Government, who in the last Session failed to back a private Member's Bill tabled by my hon. Friend the Member for West Derbyshire (Mr. McLoughlin) which would have given community bus schemes a rebate on the fuel that they use. That would have drastically cut costs for those who operate bus services for elderly and disabled people, providing them with a means of getting out of the house.
The problem of parking, on which I shall focus, has been highlighted by the Royal College of Nursing, which has said:
Community nurses, health visitors and midwives find parking a particularly vexing issue.
One of our members (who is a midwife) recently reported that when she was attending an unanticipated and sudden home delivery, she received a parking ticket which the council refused to retract despite her explanation. She was not alone in her complaints about this problem.
This is where my Bill comes in. It would require local authorities to extend the concessionary parking arrangements available to disabled people to include registered health and social service professionals and carers when on duty. That would aid all carers, but especially those dealing with people living on busy roads or with little parking provision. The problem is extremely widespread: the RCN has given me numerous examples of the parking difficulties experienced by its members and others.
Under the Chronically Sick and Disabled Persons Act 1970, a badge may be issued to a disabled person in the area of the issuing authority for any vehicle that he or she drives. Displaying the badge allows that person to park in areas that are usually restricted—for example, on double yellow lines. Under the Act, a badge may also be issued to an institution concerned with care of the disabled for any motor vehicle used by or on behalf of the institution to carry disabled persons of any prescribed description.
The problem arises when a carer or a health professional, such as a health visitor, district nurse or midwife, is called out and has to find and pay for a valid
984
parking space, thus wasting valuable time. A spokesman for the Community Practitioners and Health Visitors Association said:
I can't tell you how strongly our members feel about this. Some are having to park illegally or a long way away from their home visit.
She continued:
there are three problems: having to search for a space can reduce client contact time; there may also be health and safety issues with nurses staggering around with heavy bags…it's very common for community nurses to have to fork out for parking, which often isn't reimbursed.
My Bill would allow members of accredited agencies while on duty to park directly outside the house or block of flats in which their patients live, whether or not there are parking restrictions such as double yellow lines or residents permit requirements. In my constituency, Poole councillor Mrs. Ann Stribley has persuaded the borough's social services of the merits of the scheme, and Pramacare's helpers are now permitted to park on yellow lines when visiting the homes of people in their care if no other suitable slot is available.
As Pramacare' s appeals chairman, a position that I duly registered when I was elected to the House and that is unremunerated—I do the job voluntarily—I know how well the scheme has worked. Its merits should be available in every other constituency.
Of course, I do not expect local authorities to issue individual permits to each and every carer operating within their boundary. My Bill proposes that concessionary parking disks be issued to accredited agencies, with a local authority overseeing the process. The number of disks and the precise conditions attached to their use should be for those authorities to decide in the light of local needs and circumstances. I make it clear at this early stage that any sustained abuse of the concession by an individual or organisation could lead to permits being withdrawn.
As an advocate of legislation to address delays caused by street works, the last thing that I want is to cause more congestion because vehicles have been thoughtlessly parked, or left on yellow lines for an unnecessarily prolonged period. Nevertheless, I believe that there is a genuine need to help community-based health visitors and carers to do their jobs without the pressure of seeking somewhere to leave their cars. The scheme must be seen to benefit those who are doing their jobs in the community and whose time is too precious to be wasted.
May I briefly mention the technicalities of the Bill? Local authorities are already obliged under the Chronically Sick and Disabled Persons Act to maintain a register showing the holders of badges issued. Grouping carers' permits under the umbrella of the organisation for which they work, will ensure that the administrative cost of extending the register to those included within the Bill will be nominal.
That approach will address the fact that neither a local authority nor the umbrella organisation may be able to plan for specific numbers of employees in advance. We need to build in some flexibility of approach so that the scheme does not become tedious or costly to administer, or create problems for those whom its seeks to help. The good cause must be seen in the light of the cost that the Government were willing to impose for replacing the orange badge with a new European model blue badge, which came into effect on 1 April.

985
As I have said, use of the badges must be properly restricted to those who genuinely qualify under my proposals and they must be allowed to use them only for their intended purpose. The permits would remain the property of the local authority so that they could be withdrawn if used improperly.
I hope that Members who are present and the Government will agree that the Bill is vital to a sector of the community on whose dedication and care we may all one day have cause to call. I urge the House to support it.
Question put and agreed to.
Bill ordered to be brought in by Mr. Christopher Fraser, Mr. John Bercow, Miss Julie Kirkbride, Dr. Julian Lewis, Mr. David Prior, Mr. Andrew Robathan, Mr. Anthony Steen, Mr. Desmond Swayne, Mr. Ian Taylor and Mr. Andrew Tyrie.

Concessionary Parking Scheme (Extension)
  CONCESSIONARY PARKING SCHEME (EXTENSION)
  Mr. Christopher Fraser accordingly presented a Bill to require local authorities to extend concessionary parking arrangements available to disabled people to health and social services professionals on duty: And the same was read the First time; and ordered to be read a Second time on Friday 12 May, and to be printed [Bill 117].
Orders of the Day

  Utilities Bill
  As amended in the Standing Committee, considered.
  3.43 pm
  Mr. Ian Bruce: On a point of order, Madam Speaker. I do not want to delay matters, but I wonder whether I could seek your guidance on a matter of record and on how the House is supposed to follow proceedings when the Government keep chopping and changing a particular Bill.
  At column 730 of the 11 April report of the Standing Committee, a new clause that I drafted to consolidate the Bill is clearly marked as having been agreed to by a vote of nine to three. However, I am reliably informed by colleagues who were there that it was withdrawn. The problem is not that, after great running around, I have been able to get to the bottom of that; it is simply that people outside this place have the greatest difficulty following the Bill.
  The matter is particularly relevant to today's recommittal motion, which I hope the Government will accept. The Bill has been a mess from start to finish, and the poor people outside the House who will be affected by its provisions have not had a chance to keep us informed of what they want us to do.
  Madam Speaker: I shall not comment on the Bill's contents, as that is, of course, not my role. However, if it helps the hon. Gentleman, and particularly those of whom he speaks, I can make it clear that, as he said, there was—I can put it no higher or lower—a considerable printing muddle in parts of the Hansard to which he referred. I make it clear to him and to those whom he mentioned that that does not affect today's passage of the Bill.
  3.45 pm
  Mrs. Angela Browning: I beg to move,
  That the Bill be re committed to the former Committee.
  The Utilities Bill has been unprecedented in Department of Trade and Industry Ministers' failure to know what is going on in other Departments, and it is unprecedented in the way in which the Government have handled its passage through Parliament. From the very beginning, it was clear that the Bill was poorly and hastily drafted—consultation was still taking place on the policy underlying the Bill. The press reported that 900 Government amendments were still required to the 134-clause Bill. The explanatory notes admitted that
  the Government intends to bring forward amendments later in the passage of the Bill
  to give effect to a long list of measures that the Government still intended to include in the Bill, the clauses for which had not been drafted.
  The Utilities Bill is not an insignificant Bill. Initially, it was intended to provide a new regulatory framework for all four main utilities—gas, electricity, water and telecommunications. The new framework would impose new duties and liabilities on the utilities sectors that would increase the regulatory risk to those capital-intensive companies. It would provide for a new £0.75 billion

  987
  electricity trading arrangement and for separation of the licences for electricity distribution and supply. It is a framework that would provide for limitless fines. This is no insignificant Bill.
  The Bill was heralded as a flagship Bill of this Session, and it will provide the regulatory framework for many years to come. However, despite its importance, from the very start it has been handled with amateurish incompetence. The Bill that we are considering today bears very little resemblance to the Bill that left the Chamber after Second Reading at the end of January.
  In Committee, the Government tabled 359 amendments to the Bill. Many of them were tabled on a just-in-time basis, with the ink barely dry. The Government have tabled an additional 22 amendments for today's debate. We understand that they plan to table yet more amendments when the Bill is considered in another place. Despite that, the Government have still not sought to legislate on categories mentioned in the explanatory notes. We had the Committee's notorious ninth sitting on 2 March, when the Government announced that they were removing from the Bill all clauses dealing with the water and telecommunications sectors.
  Water was removed from the Bill because of a turf war between the Department of Trade and Industry and the Department of the Environment, Transport and the Regions over policy, and the fact that DETR would be introducing its own water Bill later in the year. Telecommunications was removed because of the industry's outcry that a change in the regulatory structure would be imposed on it within two years of a further major upheaval after the telecommunications White Paper is published in the autumn. It beggars belief that a Government who claim to be up to speed with dot.com should have treated telecommunications like a sitcom. Nothing more clearly demonstrates the shambles at the heart of Government policy than their handling of utilities regulation.
  As a result of the removal of those clauses, the so-called Utilities Bill was confined to dealing with gas and electricity. However, by the ninth sitting, clauses relating to telecommunications had already been passed. Those clauses—now clauses 101 to 105—remain in the Bill, despite the fact that telecommunications are no longer part of the legislation. The Government are seeking to delete those clauses today.
  The Bill had half of its major provisions removed and some 359 Government amendments were tabled—of which some 260 were accepted—yet it still requires further amendment by the Government today and at later stages. It bears no resemblance to the measure that was originally drafted. To make matters worse, a number of the more substantial clauses were tabled by the Government in a way that prevented members of the Standing Committee from scrutinising them properly and from tabling amendments to them.
  For example, 56 Government amendments were tabled late on Friday 31 March. The first that Committee members knew of those amendments was on Monday 3 April, by which time it was too late to table further amendments as the clauses were being debated on the following day, Tuesday 4 April. Even more seriously, that
  988
  gave the interested public no time to examine the amendments and feed in their views to right hon. and hon. Members serving on the Standing Committee.
  The Bill is a travesty in terms of democratic representation. Even if the 56 amendments had been tabled on the Thursday, which would have given hon. Members enough time to table amendments, it still would not have been a satisfactory way in which to scrutinise such important legislation. Our procedures have not evolved to deal with substantial re-writes of legislation in Committee without significant notice being given. By convention, there is always a week or more between the Second Reading of a Bill and its consideration in Committee. That enables the public to make representations to Members of Parliament. That convention should also apply to major Government amendments to Bills in Committee, but in this case that convention has been flouted.
  Despite an apology from the Government Whip, the same thing happened again with 14 Government new clauses being tabled late on Thursday 6 April for debate on Tuesday 11 April. Once again, they were not available to Committee members until the Friday. Therefore, although it was technically possible to table amendments, in practice there was far too little time for effective consultation or to receive representations. The Electricity Association said:
  We do not have any comments on the new clauses and schedules at this stage other than to say that it is completely unsatisfactory to have significant amendments with far-reaching implications being laid at this stage in the Parliamentary process. We will be working up our position on these amendments during the coming week.
  British Gas plc said of the new clauses:
  They have been brought forward in a piecemeal way and have not been the subject of any industry consultation.
  Yet the Government claim that they listen to business.
  During the 22nd sitting of the Standing Committee, the Minister for Energy and Competitiveness in Europe, in response to a question from my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) about how many more Government amendments the Minister intended to table, said:
  I will undertake during the Committee's deliberations to have a check made on the number of amendments that are likely to be tabled and on what issues.—[Official Report, Standing Committee A, Tuesday 4 April 2000; c. 667.]
  In other words, it was a matter not for the Minister, but for her civil servants. It was been clear throughout the Standing Committee that Ministers were not properly engaged in the detail of the Bill and that it was very much a case of reading from prepared briefs.
  It is clear that the Government have handled the Bill poorly. It is riddled with errors, poor drafting and policy confusion. The Government's handling of the Bill has resulted in many of its amendments being subject to minimal scrutiny by the Standing Committee. Today we are considering a completely different Bill from that which went into Committee. It is our view that the Bill needs to be scrutinised again in Committee before it comes back to the House on Report and Third Reading.
  We would add that we are keen to ensure that what is now clause 66 is put on the statute book at the earliest opportunity, to enable the new electricity trading arrangements to start in October this year. Therefore, if the recommittal motion is passed today, we will support the Government if they wish to fast track clause 66 on to the statute book through a separate Bill.

  989
  Parliamentary scrutiny is vital in protecting people's freedom from the ever-growing power of the state. That scrutiny has been undermined by the Government during the passage of this important Bill to re-regulate the gas and electricity industries. I urge the House to support the motion to give the Bill the extra scrutiny it requires and to recommit it to Committee.
  The Minister for Energy and Competitiveness in Europe (Mrs. Helen Liddell): I will ask the House to vote against the Opposition's motion to recommit the Bill to Committee for further consideration. I contend that this attempt by the Opposition is a last-ditch effort to deprive consumers of the benefits of this Bill. They are showing yet again that they are the fat cats' friend.
  The attack on the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) for his amateurish handling of the Bill was grossly over-exaggerated. He may not have been terribly good, but he spent much of his time in solitary confinement in Committee because his Back Benchers failed to come and support him, and that is an indication of how important this Bill really is to the Opposition.
  Furthermore, the hon. Gentleman, who has never knowingly understated anything in his life, repeatedly claimed that there would be 900 amendments to the Bill. More than 700 amendments were tabled in total, of which 303 were Government amendments. Indeed, on the first day in Committee I drew his attention to the activities of the previous Administration who, during the passage of the Companies Act 1989, tabled 400 amendments in the other place and 110 to one part of the Bill on Report. I do not know why the hon. Member for Tiverton and Honiton (Mrs. Browning) is getting so worked up, given that she was a member of that Administration. Indeed, they tabled 60 amendments on the very first day in Committee.
  The Opposition have been inconsistent in their handling of this Bill. The hon. Lady attacks the Government for the withdrawal of the telecommunications clauses, despite the fact that on 29 February the hon. Gentleman said that he would help the Government to remove them. It is time that the Opposition started talking to each other.
  On Second Reading, the Opposition confirmed their support for the reform of the electricity pool, the merging of the gas and electricity regulators and the establishment of the consumer council. When I asked the hon. Gentleman on 7 March whether he was going back on those commitments to helping to get the Bill on the statute book, he said, "No, of course not." He also said at the last sitting of the Committee that he looked forward to further consideration on Report. Obviously, someone higher in the pecking order has told him that he should not have done so, because of the failure of the Opposition to organise themselves properly in Committee.
  It is important that we get this legislation on the statute book as quickly as possible because it will lead to a reduction in wholesale electricity prices of around 10 per cent. Already, in the futures market, we are seeing a 30 per cent. reduction in forward prices for electricity. It is also important that we reverse the set-up under the previous Administration whereby shareholders have priority over consumers. It is important also to take into account the provisions for fuel poverty in this Bill, as well as the provisions for renewables.
  990
  4 pm
  I contend that the Opposition have tabled this motion in an attempt to keep the Bill off the statute book for as long as possible. They are wasting the valuable time of the House and of those hon. Members who considered the Bill in Standing Committee A. I believe that the Bill is ready to be considered on Report and on Third Reading. I invite the House to vote against the motion for recommittal.
  Question put:—
  The House divided:Ayes 137, Noes 282.

  Division No. 171]

  [4 pm

  AYES

  Ainsworth, Peter (E Surrey)

  Heald, Oliver

  Allan, Richard

  Heath, David (Somerton & Frome)

  Amess, David

  Heathcoat-Amory, Rt Hon David

  Ancram, Rt Hon Michael

  Hood, Jimmy

  Arbuthnot, Rt Hon James

  Horam, John

  Ballard, Jackie

  Howarth, Gerald (Aldershot)

  Beggs, Roy

  Hughes, Simon (Southwark N)

  Bercow, John

  Jack, Rt Hon Michael

  Beresford, Sir Paul

  Jackson, Robert (Wantage)

  Body, Sir Richard

  Jenkin, Bernard

  Boswell, Tim

  Kennedy, Rt Hon Charles (Ross Skye & Inverness W)

  Bottomley, Peter (Worthing W)

  Bottomley, Rt Hon Mrs Virginia

  Key, Robert

  Brady, Graham

  King, Rt Hon Tom (Bridgwater)

  Brake, Tom

  Kirkbride, Miss Julie

  Brazier, Julian

  Lait. Mrs Jacqui

  Breed, Colin

  Lansley, Andrew

  Brooke, Rt Hon Peter

  Letwin, Oliver

  Browning, Mrs Angela

  Lewis, Dr Julian (New Forest E)

  Bruce, Ian (S Dorset)

  Lidington, David

  Bruce, Malcolm (Gordon)

  Lloyd, Rt Hon Sir Peter (Fareham)

  Burnett, John

  Loughton, Tim

  Burns, Simon

  MacGregor, Rt Hon John

  Burstow, Paul

  McIntosh, Miss Anne

  Cable, Dr Vincent

  MacKay, Rt Hon Andrew

  Campbell, Rt Hon Menzies (NE Fife)

  Maclennan, Rt Hon Robert

  McLoughlin, Patrick

  Cash, William

  Madel, Sir David

  Chapman, Sir Sydney (Chipping Barnet)

  Maples, John

  Maude, Rt Hon Francis

  Clappison, James

  Mawhinney, Rt Hon Sir Brian

  Clark, Dr Michael (Rayleigh)

  May, Mrs Theresa

  Cormack, Sir Patrick

  Michie, Mrs Ray (Argyll & Bute)

  Davis, Rt Hon David (Haltemprice)

  Moore, Michael

  Donaldson, Jeffrey

  Nicholls, Patrick

  Dorrell, Rt Hon Stephen

  Oaten, Mark

  Duncan Smith, Iain

  Öpik, Lembit

  Evans, Nigel

  Ottaway, Richard

  Fabricant, Michael

  Paice, James

  Fallon, Michael

  Prior, David

  Fearn, Ronnie

  Redwood, Rt Hon John

  Flight, Howard

  Robathan, Andrew

  Forsythe, Clifford

  Robertson, Laurence

  Forth, Rt Hon Eric

  Ross, William (E Lond'y)

  Fowler, Rt Hon Sir Norman

  Ruffley, David

  Fox, Dr Liam

  Russell, Bob (Colchester)

  Fraser, Christopher

  St Aubyn, Nick

  Garnier, Edward

  Sanders, Adrian

  Gibb, Nick

  Sayeed, Jonathan

  Gill, Christopher

  Shepherd, Richard

  Gillan, Mrs Cheryl

  Smith, Sir Robert (W Ab'd'ns)

  Gray, James

  Soames, Nicholas

  Green, Damian

  Spelman, Mrs Caroline

  Hague, Rt Hon William

  Spring, Richard

  Hamilton, Rt Hon Sir Archie

  Stanley, Rt Hon Sir John

  Hancock, Mike

  Steen, Anthony

  Harvey, Nick

  Streeter, Gary

  Hawkins, Nick

  Stunell, Andrew

  Swayne, Desmond

  Wells, Bowen

  Syms, Robert

  Whitney, Sir Raymond

  Tapsell, Sir Peter

  Whittingdale, John

  Taylor, Matthew (Truro)

  Widdecombe, Rt Hon Miss Ann

  Taylor, Sir Teddy

  Willetts, David

  Thompson, William

  Willis, Phil

  Tonge, Dr Jenny

  Winterton, Mrs Ann (Congleton)

  Tredinnick, David

  Winterton, Nicholas (Macclesfield)

  Trend, Michael

  Yeo, Tim

  Trimble, Rt Hon David

  Young, Rt Hon Sir George

  Tyler, Paul

  Viggers, Peter

  Tellers for the Ayes:

  Walter, Robert

  Mrs. Eleanor Laing and

  Waterson, Nigel

  Mr. Keith Simpson.

  NOES

  Adams, Mrs Irene (Paisley N)

  Cox, Tom

  Ainger, Nick

  Crausby, David

  Alexander, Douglas

  Cryer, John (Hornchurch)

  Allen, Graham

  Cunningham, Jim (Cov'try S)

  Anderson, Donald (Swansea E)

  Darvill, Keith

  Ashton, Joe

  Davey, Valerie (Bristol W)

  Atkins, Charlotte

  Davidson, Ian

  Austin, John

  Davies, Rt Hon Denzil (Llanelli)

  Banks, Tony

  Davies, Geraint (Croydon C)

  Barnes, Harry

  Davis, Rt Hon Terry (B'ham Hodge H)

  Barron, Kevin

  Battle, John

  Dawson, Hilton

  Bayley, Hugh

  Dean, Mrs Janet

  Beard, Nigel

  Dismore, Andrew

  Beckett, Rt Hon Mrs Margaret

  Dobbin, Jim

  Begg, Miss Anne

  Doran, Frank

  Bell, Stuart (Middlesbrough)

  Dowd, Jim

  Benn, Hilary (Leeds C)

  Drew, David

  Benn, Rt Hon Tony (Chesterfield)

  Dunwoody, Mrs Gwyneth

  Benton, Joe

  Eagle, Angela (Wallasey)

  Bermingham, Gerald

  Eagle, Maria (L'pool Garston)

  Best, Harold

  Edwards, Huw

  Betts, Clive

  Ennis, Jeff

  Blair, Rt Hon Tony

  Etherington, Bill

  Blears, Ms Hazel

  Field, Rt Hon Frank

  Blizzard, Bob

  Fitzpatrick, Jim

  Borrow, David

  Flynn, Paul

  Bradley, Keith (Withington)

  Foster, Rt Hon Derek

  Bradley, Peter (The Wrekin)

  Foster, Michael Jabez (Hastings)

  Bradshaw, Ben

  Foster, Michael J (Worcester)

  Brinton, Mrs Helen

  Fyfe, Maria

  Brown, Rt Hon Gordon (Dunfermline E)

  Gapes, Mike

  Gardiner, Barry

  Brown, Rt Hon Nick (Newcastle E)

  George, Bruce (Walsall S)

  Brown, Russell (Dumfries)

  Gerrard, Neil

  Buck, Ms Karen

  Gibson, Dr Ian

  Burgon, Colin

  Gilroy, Mrs Linda

  Butler, Mrs Christine

  Goggins, Paul

  Byers, Rt Hon Stephen

  Golding, Mrs Llin

  Campbell, Mrs Anne (C'bridge)

  Gordon, Mrs Eileen

  Campbell, Ronnie (Blyth V)

  Griffiths, Jane (Reading E)

  Campbell-Savours, Dale

  Griffiths, Nigel (Edinburgh S)

  Cann, Jamie

  Griffiths, Win (Bridgend)

  Casale, Roger

  Grocott, Bruce

  Caton, Martin

  Grogan, John

  Chapman, Ben (Wirral S)

  Hain, Peter

  Chisholm, Malcolm

  Hall, Mike (Weaver Vale)

  Clapham, Michael

  Hamilton, Fabian (Leeds NE)

  Clark, Rt Hon Dr David (S Shields)

  Hanson, David

  Clark, Dr Lynda (Edinburgh Pentlands)

  Harman, Rt Hon Ms Harriet

  Heal, Mrs Sylvia

  Clarke, Charles (Norwich S)

  Healey, John

  Clarke, Eric (Midlothian)

  Henderson, Ivan (Harwich)

  Clarke, Rt Hon Tom (Coatbridge)

  Hepburn, Stephen

  Clarke, Tony (Northampton S)

  Heppell, John

  Clwyd, Ann

  Hill, Keith

  Coaker, Vernon

  Hodge, Ms Margaret

  Cohen, Harry

  Hood, Jimmy

  Cook, Frank (Stockton N)

  Hoon, Rt Hon Geoffrey

  Cousins, Jim

  Hope, Phil

  Howarth, George (Knowsley N)

  Morgan, Ms Julie (Cardiff N)

  Howells, Dr Kim

  Morris, Rt Hon Ms Estelle (B'ham Yardley)

  Hughes, Ms Beverley (Stretford)

  Mountford, Kali

  Hughes, Kevin (Doncaster N)

  Mudie, George

  Humble, Mrs Joan

  Mullin, Chris

  Hutton, John

  Murphy, Jim (Eastwood)

  Iddon, Dr Brian

  Murphy, Rt Hon Paul (Torfaen)

  Jackson, Ms Glenda (Hampstead)

  Norris, Dan

  Jackson, Helen (Hillsborough)

  O'Brien, Bill (Normanton)

  Olner, Bill

  Jamieson, David

  Organ, Mrs Diana

  Jenkins, Brian

  Palmer, Dr Nick

  Jones, Helen (Warrington N)

  Pearson, Ian

  Jones, leuan Wyn (Ynys Môn)

  Pendry, Tom

  Perham, Ms Linda

  Jones, Ms Jenny (Wolverh'ton SW)

  Pickthall, Colin

  Pike, Peter L

  Jones, Jon Owen (Cardiff C)

  Plaskitt, James

  Jones, Dr Lynne (Selly Oak)

  Pollard, Kerry

  Jones, Martyn (Clwyd S)

  Pond, Chris

  Keeble, Ms Sally

  Pope, Greg

  Keen, Alan (Feltham & Heston)

  Pound, Stephen

  Kelly, Ms Ruth

  Powell, Sir Raymond

  Prentice, Ms Bridget (Lewisham E)

  Kemp, Fraser

  Prentice, Gordon (Pendle)

  Kennedy, Jane (Wavertree)

  Prescott, Rt Hon John

  Khabra, Piara S

  Primarolo, Dawn

  Prosser, Gwyn

  Kidney, David

  Purchase, Ken

  King, Andy (Rugby & Kenilworth)

  Quin, Rt Hon Ms Joyce

  King, Ms Oona (Bethnal Green)

  Quinn, Lawrie

  Kumar, Dr Ashok

  Rammell, Bill

  Ladyman, Dr Stephen

  Rapson, Syd

  Raynsford, Nick

  Lawrence, Mrs Jackie

  Reed, Andrew (Loughborough)

  Lepper, David

  Reid, Rt Hon Dr John (Hamilton N)

  Leslie, Christopher

  Roche, Mrs Barbara

  Levitt, Tom

  Rooker, Rt Hon Jeff

  Liddell, Rt Hon Mrs Helen

  Rooney, Terry

  Linton, Martin

  Ross, Ernie (Dundee W)

  Rowlands, Ted

  Lloyd, Tony (Manchester C)

  Roy, Frank

  Llwyd, Elfyn

  Ruddock, Joan

  Lock, David

  Russell, Ms Christine (Chester)

  McAllion, John

  Salter, Martin

  McAvoy, Thomas

  Savidge, Malcolm

  Sawford, Phil

  McCabe, Steve

  Sedgemore, Brian

  McCafferty, Ms Chris

  Sheerman, Barry

  Macdonald, Calum

  Sheldon, Rt Hon Robert

  McDonnell, John

  Simpson, Alan (Nottingham S)

  McGrady, Eddie

  Singh, Marsha

  Skinner, Dennis

  McGuire, Mrs Anne

  Smith, Rt Hon Andrew (Oxford E)

  McIsaac, Shona

  Smith, Miss Geraldine (Morecambe & Lunesdale)

  Mackinlay, Andrew

  McNamara, Kevin

  Smith, Jacqui (Redditch)

  Mactaggart, Fiona

  Smith, John (Glamorgan)

  Smith, Llew (Blaenau Gwent)

  Mahon, Mrs Alice

  Soley, Clive

  Marsden, Gordon (Blackpool S)

  Southworth, Ms Helen

  Marsden, Paul (Shrewsbury)

  Squire, Ms Rachel

  Marshall, David (Shettleston)

  Starkey, Dr Phyllis

  Marshall, Jim (Leicester S)

  Steinberg, Gerry

  Marshall-Andrews, Robert

  Stevenson, George

  Stinchcombe, Paul

  Martlew, Eric

  Stoate, Dr Howard

  Maxton, John

  Strang, Rt Hon Dr Gavin

  Meale, Alan

  Straw, Rt Hon Jack

  Michie, Bill (Shefld Heeley)

  Stuart, Ms Gisela

  Miller, Andrew

  Sutcliffe, Gerry

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Mitchell, Austin

  Moonie, Dr Lewis

  Taylor, Ms Dari (Stockton S)

  Morgan, Alasdair (Galloway)

  Taylor, David (NW Leics)

  Temple-Morris, Peter

  Whitehead, Dr Alan

  Thomas, Gareth (Clwyd W)

  Wicks, Malcolm

  Thomas, Gareth R (Harrow W)

  Wigley, Rt Hon Dafydd

  Thomas, Simon (Ceredigion)

  Williams, Alan W (E Carmarthen)

  Tipping, Paddy

  Williams, Mrs Betty (Conwy)

  Todd, Mark

  Wills, Michael

  Touhig, Don

  Winnick, David

  Wood, Mike

  Turner, Dennis (Wolverh'ton SE)

  Woodward, Shaun

  Turner, Dr Desmond (Kemptown)

  Worthington, Tony

  Turner, Dr George (NW Norfolk)

  Wright, Anthony D (Gt Yarmouth)

  Twigg, Derek (Halton)

  Wright, Dr Tony (Cannock)

  Twigg, Stephen (Enfield)

  Wyatt, Derek

  Tynan, Bill

  Ward, Ms Claire

  Tellers for the Noes:

  Wareing, Robert N

  Mr. Tony McNulty and

  White, Brian

  Mr. Robert Ainsworth.

  Question accordingly negatived.

  Utilities Bill
    New Clause 3

      INTERPRETATION
      '.—(l) In this Act—

      "Authority" means the Gas and Electricity Markets Authority;

      "Council" means the Gas and Electricity Consumer Council;

      "electricity licence" means a licence under section 6 of the 1989 Act;

      "gas licence" means a licence under section 7 or 7A of the 1986 Act;

      "the 1986 Act" means the Gas Act 1986;

      "the 1989 Act" means the Electricity Act 1989.

      (2) Expressions used in this Act, as regards matters relating to gas, and in Part I of the 1986 Act have, unless the context otherwise requires, the same meaning as in that Part of that Act.
      (3) Expressions used in this Act, as regards matters relating to electricity, and in Part I of the 1989 Act have, unless the context otherwise requires, the same meaning as in that Part of that Act.'.—[Mrs. Liddell.]
      Brought up, and read the First time.
      Mrs. Liddell: I beg to move, That the clause be read a Second time.
      Madam Speaker: With this it will be convenient to discuss the following: Government amendments Nos. 1, 2 and 4.

      Motion to transfer clause 107.

      Government amendment No. 6.

      Motion to transfer clause 108.

      Government amendments Nos. 8 to 21.

      Mrs. Liddell: As I have already made clear, the Bill is an important one for the Government; it provides the basis for pushing ahead with further and more effective competition in energy markets, while ensuring that all consumers, including the disadvantaged, enjoy the benefits of competition in gas and electricity. The Bill also modernises the regulatory framework to accommodate converging gas and electricity markets. It underlines the importance that we attach to improving the transparency, consistency and predictability of regulation as the foundation for better decisions and greater regulatory stability.
      994
      Thanks to the efforts of the Committee, nearly all the substantive work is complete. That is why the Government are tabling only two groups of amendments. In each case, we informed the Committee well in advance of our intention to table these amendments on Report.
      The first group is technical in nature. As the House is aware, the Government said on 2 March that we were removing from the Bill the provisions relating to water and telecommunications. Soon afterwards, the Committee amended the Bill to remove most of those provisions. We now seek to remove the remaining provisions relating to telecommunications, which were considered by the Committee.
      4.15 pm
      Mr. Ian Bruce: A fairly limited number of amendments have been tabled on Report. We noticed in Committee that amendments were appearing more slowly than usual because the officials appeared not to be able to keep up. When we have considered the Bill on Report, does the Minister intend to introduce another raft of amendments in the other place? Will she indicate which areas of the Bill the Government still intend to amend before it returns for final consideration in this place?
      Mrs. Liddell: It is not the Government's intention to introduce substantive issues in another place. Inevitably there will be other amendments, but we do not intend to table a substantial number on substantive issues. I cannot be more precise than that. The hon. Gentleman is an experienced Member, and he knows that the Bill will be examined and that some technical and drafting amendments may have to be tabled in the other place.
      Mr. John Bercow: What proportion of the new clauses and Government amendments will require the introduction of additional and previously unforeseen regulations? Will the right hon. Lady tell the House whether those regulations, in whole or in part, will be subject to the negative or to the affirmative procedure?
      Mrs. Liddell: I am not in a position to tell the hon. Gentleman. I wish to make some progress in the areas covered by the amendments that we have tabled for discussion today. The hon. Gentleman was not a member of the Committee, so I am being more generous to him than I would be to those who attended the Committee's sittings. I shall now move on to the amendments, which are very important.
      Amendments Nos. 4, 9 and 11 to 21 remove the remaining provisions relating to telecommunications. Amendment No. 4 deletes clauses 101 to 104, which among other things would have established the Telecommunications Authority and the Telecommunications Consumer Council. Amendments Nos. 9 and 11 to 21 delete consequential references to the authority and the council. The remaining Government amendments all follow from the removal of telecoms provisions and serve to improve the coherence of the Bill after those provisions are removed.
      Amendment No. 4, new clause 3 and amendments Nos. 8 and 10 bring together the separate extent and interpretation provisions in clauses 100 and 109.
      Mr. Nick Gibb: In response to the intervention of my hon. Friend the

      995
      Member for South Dorset (Mr. Bruce), the right hon. Lady said that there were no substantive new clauses to be tabled in another place. Will she say when she intends to table the amendments referred to in the explanatory notes, which refer to
      measures consequential on the separation of electricity distribution and supply, including provision for transfer schemes for public electricity supplies?
      When will those amendments be tabled?
      Mrs. Liddell: Consequential amendments will be tabled in another place under the normal arrangements and through the usual channels.
      Amendment No. 10 inserts a single provision stating the extent of the Bill in the final clause. New clause 3 gathers together provisions relating to interpretation, which will be inserted in the final part of the Bill.
      Removing telecommunications clauses removes the rationale for separating provisions amending the Gas Act 1986 and the Electricity Act 1989 to give the Competition Commission a veto power following licence modification references in other clauses amending those Acts.
      Amendments Nos. 1, 2 and 6, which are linked to the two Government motions, reinsert these provisions unchanged in the appropriate places in chapter IV, which provides for amendment of the Electricity Act 1989, and in chapter V, which provides for amendment of the Gas Act 1986.
      Mr. Gibb: I am astonished by the Minister. Is she not embarrassed to introduce this group of amendments when the vast majority of them will remove the remaining telecommunications clauses from the Bill? The question that Conservative Members are asking is why the Government did not know when the Bill was published that the telecommunications industry would be unhappy about being regulated. A White Paper to be published in the autumn will deal with the possibility of regulating the telecommunications industry, and communications and broadcasting in general. Why did Ministers not know about the White Paper before the Bill was published?
      Mrs. Liddell: I take it that the hon. Gentleman has a defective memory. He perhaps forgets his offer to assist the Government to remove the telecommunications clauses. He did that specifically because, following changes in the industry, a second White Paper was likely to consider overall telecommunications issues. Can he confirm whether he remembers his offer to help?
      Mr. Gibb: The Minister is very tetchy today. She fails to realise that there is a difference between supporting the Government in their attempt to remove the clauses on telecommunications and asking questions about their policy and approach. She should not be so sensitive to criticisms from Members of Parliament. We supported the Government in removing those clauses in Committee.
      Mr. Ian Bruce: My hon. Friend will know that my first speech in Committee, and others that I made before the Government removed the telecommunications clauses, urged them to do just that. Before they removed the clauses, Ministers explained why they were necessary—
      996
      but the House and the telecommunications and water industries have not had a proper answer to the questions that my hon. Friend asks. Our memories are certainly not defective.
      Mr. Gibb: I am grateful to my hon. Friend. Those are important questions, because Ministers must have known that a White Paper on telecommunications and broadcasting would be published this autumn. Why, then, did they include in the Bill all the measures about regulating the telecommunications industry, when the regulatory framework will have to be revamped in a couple of years' time? If they say that they did not know about the White Paper, it is disgraceful that Ministers do not know what is going on in other parts of the Government.
      When the clauses were removed, the Minister said that the Government did not think that the telecommunications industry was concerned, but the industry did not know that a White Paper was forthcoming. That was announced in a press release on 4 February. The Government could not have known that the industry was concerned, because the industry did not know about the White Paper. That argument is nonsense. It was incumbent on the Government to inform the industry about the White Paper. Apart from that, the representations made before 4 February made it clear that the Government envisaged re-regulation of broadcasting in due course.
      In response to my intervention, the Minister said that the proposals for the transfer scheme for public electricity suppliers were mere consequential amendments. That is a new definition of the term "consequential amendment". I thought that it meant changing references to sections and to the repeals set out in schedules. However, a substantive set of clauses will be required to cover the tax consequences of having to split up the companies that supply and distribute electricity, and we would have liked the opportunity to amend them in Committee. All the subsidiaries involved in the distribution of electricity will have to be separate from those involved in its supply. That means that there will be substantial changes to the ownership of contracts. Taxation consequences will also flow from the split, so the provisions are important. If the Minister claims that they will involve mere consequential amendments, will she spell out in more detail what she means by the other so-called consequential amendments that will be tabled in the other place?
      Dr. Vincent Cable: I appreciate the fact that the Government intend Report to be a tidying-up exercise to follow on from the work of the Standing Committee, of which I was not a member. However, we have an opportunity to revisit some of the basic issues about whether it was wise to decapitate the Bill and remove some of its key elements.
      I take a view opposite to that of Conservative Members. I believe that the original structure had much to commend it. There was a good reason for treating the telecommunications, water and energy sectors together. The underlying economic principles for all those industries are the same. In each case, there was an understandable wish to move from monopoly regulation to competition, which is encroaching on all those industries. It is being encouraged, and rightly so. However, in each sector, there was a natural monopoly deriving from the electricity and gas grid, the water

      997
      mains system—the backbone system—and the telecommunications system. It seemed eminently sensible to apply a common set of regulatory principles to them all.
      The integrated Bill was welcome at the time because it made two significant advances, one of which was to introduce a higher level of social and environmental protection. Consumer groups and those concerned about the environment widely welcomed that. The second advance provided more statutory consumer protection. In the integrated Bill as originally conceived, all those sectors enjoyed additional levels of regulatory protection.
      We do not know what will happen now, especially to telecommunications. A White Paper and a Green Paper will be issued, and there will be a new regulatory structure dealing with communications as a whole—probably in two years, although that is not certain. Will the Minister reassure us that the genuine advances in social and environmental obligations and consumer protection in the original Bill will remain in any new communications and water Bills? It is important not to go backwards as a result of the withdrawal of those key elements of the Bill.
      I am sure that the answer to my question is yes. However, I am slightly sceptical because I have dealt with other areas of regulation, especially in connection with the Financial Services and Markets Bill, and another Department strongly resisted incorporating social obligations such as those in the Utilities Bill. As an advance has been made, it is important to consolidate it.
      I wish to raise a further point about the method of reaching such a decision. Consumer groups have bruised feelings—as Ministers, I am sure, are aware—because when the Bill was originally introduced, they were assured that telecommunications would henceforth enjoy a much stronger system of consumer protection. Many of them were delighted to hear that. Indeed, they issued enthusiastic press releases saying how much they welcomed it—having been encouraged to do so, I believe, by the Department of Trade and Industry. They were then told, without being consulted, that telecommunications were being withdrawn from the Bill. No reason was given for that, but of course the consumer groups were well aware of the pressures from the mobile telephone operators that led to the withdrawal.
      Consumer groups are extremely anxious about the way in which the decision was made over their heads. I hope that the Government will give an assurance that the next stage in dealing with telecommunications and water will bring those groups back into the fold, and that they will consult them properly, as they have been overridden and treated rather shoddily.
      Mr. Ian Bruce: I shall begin with a declaration of interest. During the passage of the Bill, I have had to give fewer and fewer such declarations as the Government remove more and more from the measure. However, the Bill still makes provision for telecommunications, in which I have some major interests. I am a professional adviser to the Telecommunication Managers Association and my family and I have shares in the gas, water, electricity and telecommunications industries.
      In debating this group of amendments, we have an opportunity to probe the Government on the direction in which telecommunications and water are going. My hon. Friend the Member for Bognor Regis and Littlehampton
      998
      (Mr. Gibb) and the hon. Member for Twickenham (Dr. Cable) discussed telecommunications, as did the Minister to a certain extent.
      However, little has been said about water. I do not quite share the view of Conservative Front Benchers on the necessity or desirability of having a lot of consumer bodies included in a measure that concerns the electricity and gas industries, as I believe that the market is working extremely well. There have been dramatic examples of companies that do not respond to their customers and, in such cases, consumers can go elsewhere. Certainly, the consumer is starting to become king in telecommunications.
      By the time that the Bill is enacted, that market will be working even better. The fixed line—the thing that allowed BT to have a virtual monopoly—is increasingly being replaced by mobile telecommunications equipment. Increasingly, in the gas, electricity and telecommunications markets, consumers have a real ability to exercise the ultimate sanction against a supplier—telling the company that they will not use it any more, because they can go to another and get a better deal.
      4.30 pm
      We have never received a proper explanation of why water was removed from the Bill. The Government were, from the start, reticent about discussing the relevant clauses and they are now having to remove all record of water from the Bill. We understand that there was a turf war with the Department of the Environment, Transport and the Regions, but the House is entitled to know what the Government intend to do. We understand that Government do not intend to introduce new legislation during the lifetime of the current Government, but intend only to produce a draft proposal at some point in the future, and a Conservative Government will have to decide whether or not to proceed with it. The water industry and water consumers want to know what the Government have in mind. Ministers must share with the House the reasons why it was so difficult to manage those matters and give consumers proper protection.
      The Minister for Energy and Competitiveness in Europe says that the Conservatives are the friends of the fat cats. Currently, the water industry has a regulator who decides prices after negotiations in which the water companies all say that the new prices will be impossible. Afterwards, they come back and say that, even though the pricing structure was impossible, they have made massively increased profits. Having promised the electorate that they would do something about it, the Government have failed to tackle that problem.
      It is strange that the right hon. Lady says that the Opposition are trying to delay matters; in fact, two days were originally set aside for Report, but we are having only a half-day debate on the subject. At no time during proceedings on the Bill have the Opposition attempted to filibuster or delay matters. We want only to get on to the real issues, but the real issues have at no time been addressed.
      Mr. Gibb: My hon. Friend will be aware that any delays in Committee occurred because the Committee had to wait for amendments to be drafted by the Government draftsmen.
      Mr. Bruce: Yes, indeed—I am grateful to my hon. Friend for that intervention. I see the Government Whip,

      999
      the hon. Member for Hyndburn (Mr. Pope), who was assiduous in his duties throughout the passage of the Bill through Committee. Perhaps I should put on record how pleased I was by the number of early afternoons I was given. Often, when I expected to be in Committee from 4.30 to 7 pm and to return after dinner, we were told after an hour or so that we would be sent home early because yet another set of Government amendments was not ready.
      We did a workmanlike job. I rarely bestow praise on the Liberal Democrats, but I have to say that, occasionally, they turned up. A whole group of amendments was lost because no Liberal Democrat Member was there to move it, however. Perhaps more spectacular was the fact that, when only one Liberal Democrat was there to call "Aye" on a certain group of amendments, the Government allowed the amendments to go through, which shows that they had lost control. Of course, tonight, when we consider a later group of amendments, we will be asked to overturn the Liberal Democrats' victory, and I hope that they intend to protest loudly when that happens.
      I digress, however, and I must not. We are in a strange position. The telecommunications industry, the provisions relating to which are about to be deleted from the Bill, has just experienced the highest stealth taxation endured by any industry or body anywhere. In the current round, bidding has reached £25 billion, and that money will come from telecommunication consumers and industry. We can all delight that the Treasury will be stuffed with such money, but the clauses that we are about to delete might have enabled that money to be used to encourage telecommunications and to ensure that the United Kingdom is the best place in which to do e-business. That issue should have been addressed.
      Sir Robert Smith: I rise to speak briefly, on the back of the remarks made by the hon. Member for South Dorset (Mr. Bruce), about the future for telecommunications users in the event that the new clause and the amendments are agreed to, and particularly on the £25 billion going out of the telecommunications sector. That affects not only consumers, but the future development of the infrastructure and technology, as well as how quickly and universally the industry develops.
      That brings me to an earlier point that the hon. Gentleman made about relying on competition to protect consumers of telecommunications. As a lay consumer of telecommunications, I do not find the market that clear in terms of providing effective protection and an easy choice of suppliers. Competition has not yet reached rural areas. The cellular communications network is quite well developed in urban areas, but areas such as mine have only the land line. The worry is that the free flow of unregulated competition in the early days of mobile communications may have undermined the infrastructure throughout the network. If the Bill is amended, how will the telecommunications consumer be protected in future?
      Mrs. Liddell: It is interesting that the official Opposition are much more interested in procedural matters than in the Bill. I suspect that that is because the Bill concentrates on the protection of the consumer, and, in certain parts, on the most disadvantaged consumers.
      1000
      We have debated on a number of occasions the Government's reasons for dropping telecommunications and water from the Bill. I shall not rehearse in their entirety today because that would take up the time of the House unnecessarily. On Second Reading and in Committee we discussed how the telecommunications industry is one of rapid change.
      A few weeks ago, I was told that there are three speeds in modern life. There is political speed, which is slow; commercial speed, which we always used to think of as fast; and there is internet speed, where a year can be reduced to a few weeks. In this House we do not operate at internet speed, but the telecommunications industry does.
      On Second Reading and in Committee we also debated the changes in the industry, and the fact that it would be necessary to revisit telecom regulations to ensure that changes in the industry, some of which we cannot foretell at the moment, are taken into account.
      After the Bill's publication, the industry, no doubt having reflected on the issues raised in the debate, came to the Department to express its concern about the prospect of two separate sets of regulations over a short period, and one can understand that. There would have been one set of changes now and another set when further communications legislation was implemented. Removing telecommunications from the Bill was perceived as a common-sense move, especially as a communications White Paper was on the stocks. That White Paper involves not only the Department of Trade and Industry but the Department for Culture, Media and Sport.
      Mr. Gibb: What is the Government's intention for the regulation of the telecommunications sector, which will be outlined in the White Paper to be published in the autumn? Will the Minister take the same approach to telecommunications as she took to electricity, or will she bring a lighter touch to bear on the regulation of a fast-moving sector?
      Mrs. Liddell: I shall deal with that later, because it relates to points that the hon. Member for Twickenham (Dr. Cable) made. I shall wait until I tackle those points rather than giving a disjointed response.
      The water industry expressed anxieties about the possibility of further regulatory changes in the Water Bill. The Queen's Speech stated that a Water Bill would be introduced, and that its changes would be additional to those in the Utilities Bill. It is common sense to make sure that the industry does not have to change the regulatory structure twice.
      Hon. Members have asked about our commitment to the future shape of telecommunications. The Government remain committed to the proposals in the Bill. In all the utility sectors, we want to secure a more transparent regulatory framework, an independent voice for consumers and a stronger focus on protecting their interests. Those principles will apply in the separate water and telecommunications measures. Some modification is possible. That is logical—I am sure that hon. Members would not wish us to ignore the views of consumers and the industry in the consultation process. However, we intend the principles of the Utilities Bill to apply to future legislation.

      1001
      We intend to publish a communications White Paper later this year. It is too early to say when legislation will follow, not least because of the pressures on the House. It is not for me or anybody in the Chamber to dictate the contents of the forward programme for the next Session.
      Mr. Gibb: Far be it for me to make a suggestion—but I shall do so anyway. Perhaps the Government could present a slightly less burdensome legislative programme. They might then discover that their Bills did not require 300 or 400 Government amendments.
      Mrs. Liddell: When a Government take over after 18 years of incompetence, a heavy legislative programme is inevitable. We went to the country with specific commitments; the country responded, and we have to undo the mistakes of 18 years of Conservative rule. We therefore have a heavy legislative programme.
      The prize for removing telecommunications and water from the Bill is that the industries will be subject to only one set of legislative changes. We all acknowledge that that is important. The hon. Member for South Dorset (Mr. Bruce) referred to the auction in mobile telecommunications. That is a matter for other Departments, and I would therefore prefer to leave it to them to respond. However, it emphasises the significance of the changes in mobile telephony. It is vital that we respond in legislation to the changes in the marketplace.
      Mr. Ian Bruce: I am a little confused, because I served on the Committee that considered the Bill, which provided for the Government to auction their radio spectrum. The Bill was a Department of Trade and Industry measure. Although the Treasury collects the money, surely we are considering a Department of Trade and Industry matter. We would therefore expect a senior DTI Minister to have an opinion about what should happen to the money.
      4.45 pm
      Mrs. Liddell: Given that those matters are being discussed, I am surprised that someone as experienced as the hon. Gentleman suggests that we might care to discuss them in detail this afternoon.
      The hon. Member for Twickenham asked about a statutory consumer council for telecoms. The Government's view is that a statutory consumer council would be the most appropriate mechanism to meet the central aim of giving consumers an effective voice in the telecoms sector. The White Paper, which will be published in the autumn, will have a much wider ambit and will consider issues such as broadcasting. It will introduce different matters such as the interface with content regulation. Although the central aim remains the same, its manifestation may be different, as I am sure he recognises.
      The hon. Gentleman said that the consumer groups feel aggrieved that the first remarks that they heard about telecoms and water being removed were made in the Chamber, but I am sure that, on reflection, he will appreciate that that is the appropriate way in which to deal with such matters. Given that the Bill had already been committed to a Standing Committee, it would not have been appropriate for any announcement to be made outside the House or for any consultation on those matters to take place. We acted as expeditiously as possible to inform the House after the decision had be taken.
      1002
      The new clause is important. To an extent, it will tidy the Bill and enhance it because people, especially the public, will find it easier to use. At the beginning of the debate, it was suggested that more substantial changes might be proposed in another place. The Government do not intend to introduce further substantial changes. Amendments will be tabled in the other place, but they will all be based on issues that have been raised already.
      Mr. Gibb: Will the Minister confirm that provision will be made for transfer schemes for public electricity suppliers?
      Mrs. Liddell: Yes.
      These measures represent the remaining stages of the Government's preparation of the Bill. My anxiety—I hope that it is shared by Members across the House—is to ensure that consumers gain the benefits of the Bill as quickly as possible.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 2

      SOURCES OF ELECTRICITY GENERATION
      '. The Secretary of State shall, at least once per year, publish an analysis of the proportion of electricity produced from each type of generation over the previous 12 months, together with a statement by him of the Government's policy in relation to each of those types of generation.'.—[Mr. Gibb.]

      Brought up, and read the First time.
      Mr. Gibb: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Sir Alan Haselhurst): With this it will be convenient to discuss the following: Amendment No. 28, in clause 48, page 48, line 36, at end insert—
      ';—

      (c) to facilitate the development of embedded generation;

      (d) to support the achievement of the Government's national renewable energy targets by facilitating small—scale renewable generation through net metering.'.

      Government amendment No. 3.
      Mr. Gibb: The purpose of the new clause is to ensure that the Government have a coherent energy policy. It would require the Secretary of State to publish each year an analysis of the proportion of electricity generated from each source. About 30 per cent. of our electricity comes from gas; about 30 per cent. from nuclear power; and another 30 per cent. from coal. The remaining 10 per cent. is made up of electricity imported through the interconnector with France and renewables.
      On Monday, it became obvious—if is was not already—that the Government do not have a clear energy policy or long-term strategy. If I am wrong, perhaps the Minister will set that strategy out, for the benefit of the House and the public. The Government's last known pronouncement on energy policy generally was their energy White Paper, published in October 1998, but, as everyone knows, it was simply an exercise in ex post facto rationalisation of a politically driven decision to impose a moratorium on building new gas-fired power stations.

      1003
      The justification for that decision was based on the bogus notion that companies would invest hundreds of millions of pounds in new gas-fired plant simply in response to temporarily high electricity prices, resulting from the fact that the electricity pool was not the right mechanism for the electricity market as it had developed since privatisation.
      Given that the industry has known for many years that revised electricity trading arrangements were being developed, it was clear that prices would fall in the medium term. Investors will not invest on the basis of the price of a product in the short term, so the suggestion that there needed to be a moratorium to prevent investors from responding to this short-term price hike is absolute nonsense, and everyone in the industry knows that. No doubt that is why the Secretary of State took the earliest opportunity to lift the moratorium.
      It would be interesting to hear from the Minister whether she has received legal advice about the legality of the moratorium—the stricter consents policy. I should be grateful for a confirmation of that.
      The notion that all the problems highlighted in the White Paper will be solved when the new electricity trading arrangements come into effect in October is bogus. The White Paper implied that the Government want to see the new electricity trading arrangements working to ensure that they deliver lower prices before lifting the stricter consents policy. However, the Secretary of State has now announced that the moratorium will be lifted as soon as NETA become law this summer, if the Bill gets Royal Assent. This legislation will be in place by October.
      Even the Labour-dominated Select Committee on Trade and Industry says:
      We do not believe that this moratorium on section 36…consents…will assist the coal industry in the short run…we look to the Government to ensure that…the moratorium is lifted as soon as practicable.
      The moratorium was introduced by the Secretary of State's predecessors to pacify Labour constituencies and Members with mining interests. It is a policy based on the internal politics of the Labour party rather than on what is in the best interests of Britain's energy needs. It is a piecemeal, ad hoc policy, rather than part of an overall energy strategy.
      The new clause is designed to help the Government to focus on developing a proper long-term energy policy for Britain. We need a statement from the Minister about how the Government believe Britain's energy needs can be met, by what sources and how that ties in with the Government's Kyoto commitments and their domestic commitment of reducing carbon dioxide emissions to 20 per cent. below 1990 levels by 2010.
      That brings me to the great deceit in the Government's energy policy as enunciated in their White Paper, which states that the Government would expect to see a decline in CO2 emissions from the power generation sector over the period covered by the Kyoto protocol, even on scenarios that retain the gas moratorium in 2008–12. Carbon dioxide levels have already fallen considerably below the 1990 levels.
      The key issue about the 2008–12 Kyoto protocol target date is that from 2010 onwards—and even earlier—the United Kingdom will have significantly reduced its nuclear
      1004
      capacity as Britain continues to decommission Magnox nuclear power stations. Of course the Government will meet the 2008–12 target date for reducing CO2 emissions to 12.5 per cent. below 1990 levels, but the key issue is what happens from 2012 onwards. The whole of the Government's strategy is aimed at that date. They have given little thought to what should happen beyond 2012.
      On the basis of the Government's energy policy, it looks as though CO2 emissions will begin to rise from 2012. They need to set out their policy on nuclear power as more and more of the older stations are decommissioned. Will they authorise the building of new nuclear plant? If not, how do they intend to ensure that CO2 targets are met without the nuclear component? What is their policy on this matter? No doubt the right hon. Lady will say that she has received no requests from the nuclear industry to build new nuclear plant, because at the moment it does not regard doing so as economically worth while. The Kyoto commitments, however, impose on the market an artificial constraint to which Governments must respond. That is why there are provisions, in the Bill and elsewhere, that artificially nudge and encourage the free market to produce power by methods that it would not otherwise use, in order to help the Government and the country as a whole to meet the carbon dioxide emissions targets.
      Nuclear energy plays a key role in fulfilling our carbon dioxide commitments, and in keeping our commitments at low levels. It is essential for the Government to respond to what happens when the nuclear power stations begin to be decommissioned. What is their long-term policy on nuclear energy?
      What is the Government's policy on the granting of section 36 consents after October 2000? Will everyone who applies to the Department of Trade and Industry to build a gas-fired power station be given permission, now that the stricter consents policy is to be lifted in October, or will the Government apply different criteria—the same criteria that enabled them to support the building of the station at Baglan bay? Will those criteria now obtain across the country, or will the Government simply bring back the stricter consents policy in another guise? We need a statement from them.
      In preparing an application to the DTI, industry incurs considerable costs. It must know what it is up against—what hurdles it needs to convince the Government about. Indeed, it needs to know that there is no point in applying for a section 36 consent in certain circumstances, and it needs to know precisely what those circumstances are.
      What proportion of Britain's energy needs do the Government expect to be met by gas, coal and nuclear energy in 2020? What proportion do they expect to come from renewables? We need to know what they have in mind for each of those sources of electricity. If the target percentage for renewables is met, will that be sufficient for Britain to continue to show a decline in carbon dioxide emissions from electricity generation?
      Those are the questions that the Government have so far refused to answer—or, more likely, are unable to answer. However, they need to be answered if industry is to be able to plan ahead. The Minister now has a chance to set out her energy policy: if she is on top of her brief, she should not find that very difficult. Will she give us, for example, her Department's estimate of the likely proportions of electricity generation by gas, coal and

      1005
      nuclear energy in 2005, 2010 and 2020? What is her estimate of the reserves of discovered and undiscovered gas in the North sea?
      Mrs. Liddell: How can we know about undiscovered reserves?
      Mr. Gibb: That is a revelation. There are estimates of undiscovered gas reserves in the North sea. An appendix to the Minister's own energy White Paper gives figures for the likely number of years of undiscovered gas reserves in the North sea. Companies will not investigate and prove that gas reserves exist until they are needed; they start to "firm up" on where reserves are only once the figure falls to a certain number of years.
      Those are important questions about a vital area of industrial and environmental policy. We await the Minister's response with great interest.
      Mr. Andrew Stunell: New clause 2, amendment No. 28—which stands in my name and those of two of my hon. Friends—and Government amendment No. 3 are closely related.
      Almost for the first time during the debates that we have had in and around the House, I find myself in substantial agreement with what was said by the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb). The United Kingdom lacks a national energy policy. That lack has not cropped up suddenly; it is long-standing. For a long time, decisions have been either deferred or made on a short-term basis, and the long-term investment strategy that is so clearly needed has not materialised—not least because industry has been given no clear signals or pointers towards the direction in which it should go.
      5 pm
      At the lowest level, new clause 2 introduces a sensible monitoring procedure, so that the Government's intentions can be clarified and the energy industry's performance in relation to the Government's intentions can be determined.
      Mr. Ian Bruce: The hon. Gentleman will probably recall that, in Committee, I tabled an amendment on the diversity of supply. We have all been accused of having short memories. I wonder whether he remembers that Ministers resisted giving special treatment to fuels, particularly coal, yet the Secretary of State for Trade and Industry on Monday and the Prime Minister today at Prime Minister's Question Time specifically said that they wanted to help coal to have such a position in the marketplace. Now that it is Wednesday, does the hon. Gentleman agree that we would like to hear from Ministers exactly what their policy is on fuel supplies, given that they have changed policy on that issue so many times in the past few weeks?
      Mr. Stunell: I thank the hon. Gentleman for his comment. I have received no advice on what the Government's energy policy for Wednesday is. As far as I know, it has not been issued, but, as he says, it would be interesting to hear that. The point is well illustrated by the Government's announcements this week. I am sorry that my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith), who was with us a few
      1006
      minutes ago, is not here at the moment because he clearly has a strong constituency interest in the future protection of the coal industry and I know that he welcomed the announcement.
      On overall energy policy for the UK, may I pick up some of the issues that the hon. Member for Bognor Regis and Littlehampton outlined about the share that different fuels will have in the electricity market? It is clear that there will be substantial changes not just in the next 10 years, but in the next 20 and 30 years. No one would have predicted 30 or even 10 years ago that gas would be the fuel of choice for generating electricity. It is difficult to be sure what the fuel of choice will be in 10 years' time. Energy policy needs to set some markers, which are hinted at in the Bill, particularly through its support in one form or another for the renewable energy generation industry, but the policy is not set out strongly enough.
      I accept that one could not insert a new clause that included an energy policy, but the hon. Gentleman has usefully introduced a mechanism for that policy to become more transparent and self-evident. Should he press the matter to a vote, we will be happy to support him.
      Amendment No. 28, in the name of the Liberal Democrats, amends clause 48, whereas Government amendment No. 3 amends clause 60. Amendment No. 28 places two additional duties on electricity distributors: first, to facilitate the provision of embedded generation within the transmission and distribution network; and, secondly, to facilitate small-scale renewable generation through the implementation of net metering.
      Government amendment No. 3 is to reverse the amendment that was accepted in Committee: amendment No. 745. Were we to accept the Government amendment, we would delete Labour's manifesto commitment to renewables. My hon. Friend the Member for Lewes (Mr. Baker) may seek to catch your eye, Mr. Deputy Speaker, to comment on that.
      The two amendments pull in diametrically opposite directions. I shall confine my remarks primarily to amendment No. 28, which relates to the additional duties that we seek to impose on distributors within the electricity market.
      The Bill has some laudable aims. It certainly seeks to liberate the forces of competition and to bring benefits to consumers. Liberal Democrat Members have, when appropriate, supported those objectives. The Government claim that the Bill will produce lower prices, and there is some evidence to underpin that claim. It could also produce better service for consumers, as competition hots up and competitors are forced to provide better prices and service, which consumers will increasingly value.
      Mr. Gibb: I understand the hon. Gentleman's point about the evidence showing that the long-term price of electricity is decreasing—it does seem to have decreased because of the proposed new electricity trading arrangements—but I am surprised that he believes that the Bill will increase competition. The Bill specifically demotes the promotion of competition to a second-order objective, whereas it is currently a prime, first-order objective.
      Mr. Stunell: I shall have something to say in a moment about the difficulties that new entrants may face under the new arrangements. Nevertheless, the hon. Gentleman has made a useful point.

      1007
      The market can be used to reduce prices and to improve service, and it is a sensible mechanism for achieving those objectives. However, there are problems—which the Bill recognises, at least partly—with unrestrained and unregulated competition. One of the problems is that social and environmental obligations are not easily fulfilled in a completely open-market, competitive economy.
      There are some specific situations in which competition is a poor driver in achieving the Government's desired results, the first of which is when profit is increased by selling more product at a higher price. As competition can keep prices down, the argument against competition on the basis of higher price is defeated. However, competition will increase sales volumes. In a fiercely competitive environment, more profit is made by increased sales, not decreased sales.
      The electricity market has a hierarchy comprising the levels of generation, transmission, distribution and supply. At every level, profit is increased by selling more product to the next level down in the hierarchy. Each level certainly gains value from selling more product to consumers. They all want more, not fewer sales. Their market-driven imperative is wholly hostile to the idea of decreasing the amount of energy that they produce and supply and to the idea of ensuring that their consumers use energy efficiently.
      Amendment No. 28 recognises the fact that competition is entirely hostile to diversification in the sources of energy used to generate the electricity used by consumers. The market mechanism will not deliver diversification of supply. Therefore, if the intention of public policy is to achieve better conservation, greater efficiency in consumers' energy use and more renewable products in the market, the regulatory framework has explicitly to state those objectives. If the framework is not explicit, it will not achieve those objectives.
      Interestingly, one of the companies that responded to the DTI's own consultation on licensing changes stated:
      The obligation to maintain an efficient distribution system potentially conflicts with the proposed obligation to facilitate competition in generation and supply…distribution networks have been laid down in a co-ordinated fashion over many years…each proposal for embedded generation must be considered individually and on an economic basis, rather than under any kind of blanket obligation.
      In other words, those whom the market—and, currently, the Bill—requires to facilitate embedded generation are precisely those who have no interest in facilitating such generation and for whom the market is not a valid implement in achieving the objective.
      Therefore, embedded generation—that is, generation that is at the lower end of the transmission and distribution hierarchy, at a lower voltage and nearer to the consumer—is in no way facilitated. Nor is net metering, whereby a small generator can supply electricity to and receive it from the distribution system, and pay a net price for it.
      Amendment No.28 and the additional duties that it would impose on the distribution industry would lead to cost reductions rather than increases. However, it would not result in increased profits for the distributing companies, so they would have no incentive. The cost reductions would result from lower transmission losses on the electricity generated and, in the longer term, a reduced
      1008
      requirement for major investment in trunk electricity transmission. It would also result in fewer sales by those who are already in the market.
      Our amendment could have been written by the DTI, because the DTI's consultation document on "Electricity Network Management Issues" states:
      In the medium and longer term
      the aim is to
      encourage distribution companies to design networks so as to facilitate the accommodation of future embedded generation.
      The amendment would reduce costs to the consumer in the short and the long term. It would also conform to the Department's intention in respect of the promotion of renewable energy. The losers would be the existing generation, transmission, distribution and supply players. That is why the provision needs to be within the regulatory system and not left to the market.
      I have a number of questions which I hope that the Minister will address.
      Mr. Gareth R. Thomas: I share the hon. Gentleman's aspiration in respect of the promotion of embedded generation, but his amendment appears to be in advance of Government policy. In Committee, the Minister stated that
      a working group of representatives from the Government, Ofgem and the industry is examining the issues that surround embedded generation.—[Official Report, Standing Committee A,14 March 2000; c. 486.]
      Should we not wait for that report instead of trying to amend the Bill today?
      Mr. Stunell: I have no problem with being in advance of the Government in respect of energy policy. In fact, it would be a major gymnastic feat to be behind them. Nor do I have any difficulty with proposing an amendment that conforms with the DTI's thinking, if not with its willingness to proceed, that goes some way towards providing a mechanism for the Department to develop its energy policy and, perhaps most importantly, that brings clearly into focus the fact that the market has value, but not in delivering those particular objectives.
      I hope that the Minister accepts that embedded generators have serious problems in gaining fair access to the grid and to the market. I have heard a number of anecdotes from those who seek to be embedded generators about the difficulties that they face in dealing with the existing players in the market.
      If the Government feel that the amendment is premature and that they do not wish to proceed with it, will they say specifically how, through legislation, they plan to open the door for embedded generation? If now is not the time, as the hon. Member for Harrow, West (Mr. Thomas) suggested, when should it happen? How can we ensure that the incentive for existing players in the electricity market to make more money by sending more electricity through their wires to suppliers is counteracted by a regulatory system that promotes conservation, efficiency and the introduction of renewable players at the most appropriate level?
      5.15 pm
      The Minister has an obligation to answer those questions, in terms of this debate, but I hope that in

      1009
      default of doing so she will feel—as the Government felt in Committee with amendment No. 745—that she can accept that amendment No. 28 conforms with the Labour party's intention and the Government's declared policy. I shall not comment on Government amendment No. 3, because I hope that my hon. Friend the Member for Lewes will catch your eye, Mr. Deputy Speaker. From a personal point of view, I might say that the debate on that subject was one of the high spots of the Committee and it would be a great pity if it were lost at this time.
      Mr. Brian White: My right hon. Friend the Minister will know that I raised several issues connected with embedded generation and CHP throughout the Committee stage. I was concerned that the Government did not have enough weapons in their armoury to deal with renewables and embedded generation. I am still worried that the Government's armoury is deficient and I have a few questions for my right hon. Friend, the answers to which will—I hope—allay my fears.
      In some areas, embedded generation faces problems with access to the grid. I understand that the working party mentioned by my hon. Friend the Member for Harrow, West (Mr. Thomas) will address those network management problems. Will my right hon. Friend confirm that the working party will consider the issues of embedded generation and ensure that distributors will have the proper incentives to facilitate its development?
      Net metering is well established in the United States of America and elsewhere. If the Government will not accept net metering, will they outline their reasons for that? As the hon. Member for Hazel Grove (Mr. Stunell) said, the current market is about volume distribution, and several of the embedded generations are by small-scale operators. They face a barrier to entering the market because of the difference in volume. How will the regulators remove that barrier if net metering is not made compulsory?
      The CHP and renewables industry has strongly welcomed the Government's approach, so when it makes criticisms they are usually valid, unlike some of the spurious criticism we heard earlier, especially from the hon. Member for South Dorset (Mr. Bruce) who repudiates his own manifesto when he condemns the telecommunications auction.
      Mr. Ian Bruce: Will the hon. Gentleman give way?
      Mr. White: No. Will the Minister ensure that the recommendations by the working group will be made in time for amendments to be tabled in the other place?
      Mr. Andrew Robathan: The hon. Member for Milton Keynes, North-East (Mr. White) made some sensible points, but he let himself down by attacking the Opposition. I realise that one has to show loyalty to one's own side and the Whips, but my hon. Friend the Member for South Dorset (Mr. Bruce) speaks, as I do, in disappointment with the Bill. We expected rather more on renewables from the Government.
      I should say that I am a vice-president of the Combined Heat and Power Association, which is not a paid task nor very onerous. I am also vice-chairman of the Parliamentary renewable and sustainable energy group, and I see that the chairman is in his place. Perhaps he will
      1010
      also speak about how the Bill is a missed opportunity for renewables, because the Government could have done so much more. Are the Government really serious about meeting the Rio and Kyoto targets and about reducing carbon emissions and tackling global warming, which is—as I am sure we all agree—an enormous problem?
      The Government are putting lots of money into coal, which will never be a clean fuel, but they could have done much more for renewables and I hope that when the Minister winds up this debate she will tackle that issue. Many people want to know what the Government will do to encourage renewables apart from talking about how much they would like to see 5 per cent. of energy coming from renewables by 2003 and 10 per cent. by a later date.
      The particular question that many people have raised with me is that of net metering and it beggars belief that the Government have not been willing to take that issue on in this major Bill. Net metering should surely have been included. We heard from the hon. Member for Milton Keynes, North-East that net metering is much in demand in the US. Why cannot we start introducing it in this country? It might bring down the price of photovoltaics and make them more attractive for installation on roofs that cover a small area.
      What exactly is the Government's problem with net metering? I see no problem at all with it.
      Mr. Ian Bruce: Is it not amazing that the Government constantly want to bring in new legislation that has no purpose? The Bill is a case in point. A small group of people says that the current system is not working properly. The Government have set their face against all the sensible amendments tabled in favour of net metering.
      Mr. Robathan: I agree. I had hoped that I might agree with the Government about renewable energy, but I am disappointed because they have not done more. The previous Conservative Government introduced the non-fossil fuel obligation, but this Government could do more to support renewable energy. The Secretary of State for Trade and Industry talked a couple of days ago about combined power and heat. The fact that he got the phrase wrong was a little sad.
      Mr. Gibb: My hon. Friend was not a member of the Standing Committee considering the Bill, so he may not have known that the Opposition tabled an amendment to what is now clause 60, which deals with renewables. We wanted to add combined heat and power to the definition of renewable sources, as we believed that it made sense to add that to the percentage of renewables that the Government are requiring suppliers to purchase. That would have been a real boost to the combined heat and power industry. My hon. Friend will be disappointed to know that the Government resisted that amendment.
      Mr. Robathan: I am grateful to my hon. Friend for that information. I wanted to be a member of the Committee but, given that it sat 22 times, I might have regretted it.

      1011
      In this world of joined-up government, the Government have excluded combined heat and power from the climate change levy. Why do they not believe that CHP is a remarkably good way of generating energy more efficiently?
      Mrs. Liddell: The hon. Gentleman is known for his interest in renewables and in combined heat and power. Will he explain how those elements of CHP that derive from fossil fuels are renewable?
      Mr. Robathan: That is a good point, but it rests on semantics. Combined heat and power is a much more efficient way of generating energy—
      Mrs. Liddell: It uses coal too.
      Mr. Robathan: I understand how the power of CHP is generated, but it contributes to the carbon emission targets from power generation set at Rio and Kyoto. That is why CHP seems a sensible way forward. The Minister shakes her head, but it would be helpful if she could explain by what other means the Government's targets for combined heat and power generation will be met.
      We should encourage the development of renewable energies now. An enormous industrial potential exists that we might be able to meet. For instance, a representative of a firm called Solar Century has been in touch with me on several occasions with some really good ideas on photovoltaics. I am not plugging that company, but some encouragement in that sector might allow Britain to have its own industry. We used to be rather good at producing wind generators, but it has all gone to the continent because the industry was not given sufficient support in this country—apart from on the Floor of the House of Commons. The story is the same with fuel cells.
      The Minister said that CHP was not renewable. Of course it is not necessarily generated by renewables, but micro-CHP could be of enormous benefit in this country, where it could be suitable for 4 to 6 million homes. However, the Bill does not deal with it, and so does not encourage it. We should encourage such methods of electricity generation, as they would benefit the environment. That is what I would think of as joined-up government.
      I understand that the net metering debate was lost in Committee, and I shall not dwell on it. However, it would surely be sensible if I were to install in my house what amounted to a small power station, for me to be able to sell electricity for the same sum for which I bought it from the grid. That would not cost the Government, or anyone else, anything, but would reduce the amount of energy that we need to generate from fossil fuels. Why will the Government not open their ears? I see Labour Members nodding at that, but I shall not name them. What we propose is a sensible method to encourage renewable energy and small-scale schemes in a way that the Bill does not.
      The Bill is a missed opportunity on renewables. It has been a bit of a mess all round. It once covered four utilities; it now covers only two. I appeal to the Government to consider, even at the 11 th hour and in the other place, the inclusion of some encouragement towards
      1012
      renewable energy, which might result in better take-up of renewable energy schemes and help the Government to meet their stated targets.
      Sir Robert Smith: I have a constituency interest in the amendments, and I am also vice-chairman of the all-party offshore oil and gas industry group, which is committed to renewables and their potential to provide a future for the industry. Constituents have told me that if we encourage renewables, the industry has the skills to develop offshore wind technology to which our country is well suited. The industry has the infrastructure and experience that come from working offshore, and, being out of sight, it gets over many environmental and local concerns about the positioning of wind farms. It is also easier to farm the wind offshore, because air currents are more stable and generation is more reliable and less directionally dependent.
      The construction industry and others in the doldrums as a result of the downturn in the oil industry could also face a better future. The oil industry is used to tying platforms and cables back to the shore and would be well placed to develop offshore wind technology. It would be an added benefit for the United Kingdom if we led the way in generation, because we could develop it as an export industry. As with the oil industry, if we have a home base, an export market can be exploited.
      Given the structure of our energy markets, it would be sad if that never happened. There are entry costs because of the barriers to entering the technology, but when it is up and running, the costs of production will start to fall. My analysis of where profits come from may differ slightly from that of my hon. Friend the Member for Hazel Grove (Mr. Stunell), because profits can be made even if the price stays the same and supply does not increase, but production costs are reduced.
      Entering the market for offshore wind generation could be both attractive and commercially viable, but the Government need an incentive, which is why they should resist their own amendment No. 3. They should keep pressure on themselves to ensure that the environment encourages development so that we can cross the entry barriers and see generation as a growing industry that can build on its experience in the North sea.
      Mr. Ian Bruce: Three quite different provisions are before us, although it is clearly for the convenience of the House that they can be discussed together. I shall make a short speech on each of them because the critical issues that we wish to revisit are important.
      New clause 2, tabled by my hon. Friends and me, is intended to tease out where the Government are going on diversity of supply and what their energy policy is. The Government constantly say that they have an energy policy and that they intend to do all sorts of things in line both with Kyoto and with planning the economy as Labour Governments love to do.
      I have been genuinely confused during the period of our discussions in Committee about the announcement made on Monday, and backed up by the Prime Minister, about the coal industry.
      5.30 pm
      Labour Members were surprised that a free-marketeer, right-wing Conservative such as myself should table

      1013
      amendments that would ensure that industries such as coal could be protected under the Bill. We now find that an authority will decide how electricity is generated. If the Government are sincere about the Utilities Bill and really want to take decisions as to how electricity should be produced for the good of the consumer, the climate and so on—although they are concentrating only on gas and electricity—and if they want to intervene in markets to decide that a particular fuel or technology should be used in order to reduce carbon dioxide, then the means to manipulate the market should be included in the measure.
      In Committee, I was pleased that the Government rejected that approach. The Minister for Competition and Consumer Affairs, who represents a south Wales constituency, referred to the harmful effects of coal. He suggested that to continue to try to support the coal industry was a terribly old Labour policy, because of the harm caused to the environment and to people's health by burning coal. That was surprising. By "Yes, Minister" criteria, it was a brave statement. He was fortunate that the general press did not report the Committee proceedings on that occasion, although there were some good exchanges in which we were able to tease out the issues.
      However, lo and behold, a leak was made in the usual way—on Radio 4, where we hear Parliamentary announcements—that the Government would make a statement to the House that up to £100 million would be allocated, by some mechanism outside the Bill, to support coal mining and the continued use of coal. The price of coal would be kept down, so that it could be used for generating.
      We need to know whether the Government really want to establish such mechanisms. The Government should not be leaking announcements about their support for the coal industry with an electoral bribe of £100 million, just because the industry is in Labour areas and they know that they will lose hundreds of seats in the local elections. We should be determining what the Government's policy is, based on the amendments before the House and those tabled in Committee.
      Most of us would accept that, as the Labour Government have constituency interests in the coal-mining industry and as they have criticised previous Governments for allowing that industry to decline—as did many Back-Bench Conservative Members—they would include in the Bill provisions to protect the interests of their constituents in mining areas. However, those provisions are not in the Bill.
      Although the Government will not tell us what they want, our new clause would offer a simple mechanism whereby, at least every year, a report would be produced of what they had done, with details of their possible interventions in the market.
      If I had decided to sell gas to an electricity generator and was undermined by the Government's offering the generator £100 million to use coal, under an improved pricing structure, I should be most annoyed. Having made that announcement, the Government should put their money where their mouth is—the policies should be up front. If they believe they have an energy policy, they should accept the new clause; they should produce yearly reports on what has happened in the past and on their proposals for the future. When we made these points in Committee, Ministers said, "No, that would mean that we
      1014
      were picking winners," in that they would be deciding which fuels should be available, and that diversity of supply and having many different suppliers would no longer be part of the Government's policy. However, they have contradicted themselves.
      The Government suggest that they had a change of heart in respect of the moratorium on gas-fired power stations. I understand that they have been told by lawyers that they are subject to judicial review, and that if they had not changed their mind, they would be before the courts. They may even now find themselves before the courts, and lose a lot of money.
      The Bill could have provided mechanisms to allow the Government to intervene. I am not selling that point and I do not want them to intervene. Instead, I am saying that if they take certain actions they should do so by using legislation and be up front.
      Sir Robert Smith: One would hope that the Government had learned the lesson and understood that their policy was leading to the importing of cheap coal at the expense of British coal.
      Mr. Bruce: That may be the situation.
      I do not want to go too wide of the new clause and the amendments, but the Government might report to the House under the clause the action that had been taken to ensure that the unfair subsidy of coal in Germany and France was being acted upon. I had a short meeting with a former Conservative Minister who had been doing the sort of jobs that are now being undertaken by the Minister for Energy and Competitiveness in Europe and the Minister for Competition and Consumer Affairs. He told me that towards the end of the Conservative Administration he had instituted proceedings to ask the Commission to inquire into the misuse of the subsidies, which were being used to restructure the German and French industries. They allowed those countries to lay off miners, for example. As I understand it, the inquiry has not taken place. We need to know regularly from the Government precisely what they are doing.
      The Government have come forward with a non-sensical climate change levy. It does not address the issues of reducing the amount of CO2 It seems that it is intended to make manufacturing expensive in this country, and perhaps we shall not burn so much fuel overall, or we might not use so much nuclear electricity, for example. However, that does not reduce the CO2 load in the atmosphere throughout the world. It merely sends jobs elsewhere.
      The clause would provide an auditing mechanism to ascertain how the climate change levy was working. I contend that it will not work, but a report would make the reason clear. That would have been an excellent way of bringing things forward.
      Amendment No. 28 was tabled by the Liberal Democrats. I found myself in the strange situation of being a friend of the Friends of the Earth. I have always made it clear to that organisation that I am not its friend. However, I continue to receive very pleasant faxes from it. I am telephoned by a charming young lady. Perhaps it is because she is so charming that I tell her that I will do my little best to help the Liberal Democrats in what they are trying to do.

      1015
      An increasing number of Conservatives are saying that there are market mechanisms and sensible ways of going forward. I am attracted by the amendment because, in effect, it is saying to every individual, "You can be your own generator." We have to pay a generator if he sends us electricity, and the amendment is saying that there should be a mechanism to allow electricity to be sent the other way. I am not saying that whenever amps are sent in the other direction the same prices should prevail, and the clause does not specifically ask for that. I am happy to take advice, but I believe that it would ensure that a mechanism is put in place that enables amps to be sent in the opposite direction.
      Mr. Stunell: The hon. Gentleman's interpretation of our amendment is entirely correct. There is no direct requirement on the pricing or tariff structure in such a net metering arrangement.
      Mr. Bruce: I am most grateful for that explanation; it is appropriate to make that point clear.
      The number of Conservative Members on the Committee was limited. It is interesting that the Minister suggested that there were not many Conservatives on the Committee, and she is absolutely right. There were only five Conservative members on the Committee and, for the majority of the time, all five were present. Usually, 50 per cent. of the Liberal Democrats turned up, but occasionally none of them did. [Interruption.] The sedentary intervention is surprising, because—believe it or not—the same Ministers and their silent Back Benchers regularly seemed to think that I spoke too much about these issues and that I spent too long moving amendments that they did not want to discuss. I have some difficulty with that suggestion.
      Mrs. Liddell: Perhaps, the hon. Gentleman can explain to the House where the invisible men on the Committee were on 21 and 28 March? The hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) was left completely isolated.
      Mr. Bruce: The Minister has the advantage of having the record with her. I just wonder whether—
      Mr. Deputy Speaker: Order. I just wonder whether the hon. Gentleman will return to discussion of the amendments.
      Mr. Bruce: I always follow to the letter your advice, Mr. Deputy Speaker. I should not have been drawn by the Minister's intervention.
      When we discussed net metering in Committee, there was a great flurry among the Labour ranks. The Trappist tendency in the Labour party started to make some comments. We thought that some of the soft words that we heard from Ministers were a sign that they would go away—
      Mrs. Liddell: I never say soft words.
      Mr. Bruce: The Minister says that she never gives us any soft words, but she did on occasions act out of
      1016
      character and say soft words to the Committee. The Minister for Competition and Consumer Affairs says nothing but soft words. I do not wish to destroy his career, because I look on him as a friend. He was always in good mood in Committee and always good value.
      Members are trying to distract me, but I return to the point that Labour Members suddenly became impassioned when the term "net metering" appeared on the amendment paper. In fact, some amendments were tabled in their names. I am sorry that the hon. Member for Milton Keynes, North-East (Mr. White) is not here now. He made a short speech, and perhaps he had a deal with the Whip so that he could speak for a minute or two as long as he absented himself—
      Mr. Deputy Speaker: Order. The hon. Gentleman is wool gathering again. Let us get back to the substance of the amendment.
      Mr. Bruce: I am sure that wool and insulation are not appropriate subjects for debate.
      On net metering, Ministers first appeared to misunderstand what we were trying to do. I remember them saying that net metering would create a cross- subsidy from electricity consumers in general to electricity consumers with some generational capacity for their own purposes. That was a complete misunderstanding of what we intended. I do not know whether it was deliberate, or whether they had not done their homework. Earlier, we heard that they tended to speak from prepared briefs, so they may not have been listening to the arguments.
      Ministers then said that, on reflection, their Green Papers and discussion documents contained exactly the same type of suggestions as we had made. It is amazing how the Labour party was converted by the last general election. It had all sorts of interesting ideas that it said that it would introduce, but it came to government and took three years to introduce the Bill. Its scope was then halved and all the so-called good ideas that it said that the nasty Tories would never think about were wiped off the map. That is a waste of a Government with enthusiasm whom Members on both sides of the House were willing to support in trying out new ideas. We were even willing to consider making Friends of the Earth happy, which is seldom possible because the organisation likes to campaign only in a negative way. For once, it might have thought that we had a good idea.
      5.45 pm
      I do not want to steal the thunder of the Minister for Competition and Consumer Affairs, who has yet to speak to the new clause, but I want to comment on Government amendment No. 3. That seeks to remove from the Bill the target, which has been Government policy since the previous Administration adopted it, of meeting 5 per cent. of our electricity requirements from renewables by 2003 and 10 per cent. by 2010. Friends of the Earth has made the interesting point that a future European Union directive will impose targets that will be legally binding on the Government.
      Mrs. Liddell: The hon. Gentleman might recall, if he was back from Puerto Rico at the time, that we had a discussion about the failure of the European Union to introduce a renewables directive. An Energy Council will

      1017
      be held within the next few weeks, but we still have no directive. If anyone has managed to magic such a directive into existence for Friends of the Earth, I must say that it is a dubious and fraudulent document.
      Mr. Bruce: I am grateful for that advice, and I am sure that Friends of the Earth will listen to it carefully. Perhaps we will not have such a European directive, but the Minister who responds might want to deal with the point made by Friends of the Earth.
      When one is in opposition, one tables amendments, forcing the Government to do one thing or another, and there is a standard reply from Ministers. In this case, Ministers might say that if the Government amendment were not made, it would mean that in 2003 a policeman could say to the Secretary of State, "I have noticed that you have not generated enough electricity from renewables. You are under arrest and will be prosecuted." There is no mechanism for prosecuting the Government because they have not fulfilled a target in a Bill but, if that were possible, it would explain why the Government are so determined to make amendment No. 3.
      If an EU directive is agreed, how will it be enforced? Will the Government of the day simply implement it because they have agreed to its terms, or will it be legally enforceable?
      Mrs. Liddell: Why is the hon. Gentleman talking about hypothetical issues? The directive does not exist.
      Mr. Bruce: I am sure, Mr. Deputy Speaker, that you could tell the Minister, even if I could not, that these are the issues on the amendment paper. Amendment No. 3 would remove the 5 and 10 per cent. targets.
      Mrs. Liddell: The hon. Gentleman seems completely to have missed the point. Perhaps that is the effect of his having been away from the Committee for a while. One of our criticisms of the European Union is that it has not introduced a renewables directive. If renewables are to have a proper impact on international climate change, it is important that we have international agreement. Perhaps the hon. Gentleman would care to reflect on that fact.
      Mr. Bruce: I am grateful to the right hon. Lady because she replied as I wanted her to reply. If we have a directive that is, supposedly, enforceable on the Government, which would be the effect of the new clause, how will we ensure that other nations are keeping to its terms? Clearly, we want to reduce CO2 throughout the world and not just in our skies, which of course move across to other countries, and that is the important issue.
      Liberal Democrats are usually embarrassed to blow their own trumpet, so I shall have to do it for them. I remember the look of surprise on the face of the hon. Member for Lewes (Mr. Baker) when the Labour Front Benchers in Committee were not up to shouting "No" to his amendment. I was surprised by his surprise, because it had been clear throughout our proceedings that the entire Bill was a shambles. Earlier today, I raised a point of order relating to the fact that my amendment relating to the consolidation of the Bill had, unnoticed, been recorded in Hansard as having been agreed; the Minister for Energy and Competitiveness in Europe, who must read
      1018
      Hansard every night, and thousands of Department of Trade and Industry staff had not noticed the mistake. Even in Committee, after the hon. Member for Lewes had got the amendment made that we are now being asked to remove, we had to nudge the Government before they realised that they had made a mistake. It is rare that I congratulate the Liberal Democrats, but I congratulate them on showing what a total shambles the Labour Government really are.
      Mr. Norman Baker: I apologise to the House and to the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) for having been slightly late in arriving for the debate. I plead paternity leave in my defence, and add that my presence here today is not entirely understood or even supported at home.
      Mr. Gibb: Like my hon. Friend the Member for South Dorset (Mr. Bruce), I offer the Liberal Democrats my congratulations. I also congratulate the hon. Member for Lewes (Mr. Baker) on the birth of his daughter. May I suggest a name for her: RETA—as in the revised electricity trading arrangements?
      Mr. Baker: That is an ingenious suggestion, but one that I shall probably ignore when the time—fast approaching—comes to sort out a name.
      I could not miss the opportunity to return for the debate on Government amendment No. 3. I am at a loss to know what to make of it. The Government's policy is set out in "New and Renewable Energy: Prospects for the 21st Century: Conclusions in response to the public consultation", which states:
      5 per cent. of UK electricity requirements should be met from renewables by the end of the year 2003 and 10 per cent. by 2010.
      That relates closely to the amendment that was tabled in Committee by my hon. Friend the Member for Hazel Grove (Mr. Stunell) and me. We were trying to be helpful to the Government by inserting in the Bill a Labour party policy that had obviously been omitted by mistake during the process of getting the Bill up and running.
      I thought that our help had been acknowledged because, when it came to the vote in Committee, the Government Whip, the hon. Member for Hyndburn (Mr. Pope), was so keen to support the amendment that he added his voice to mine. Such was the force of the argument and the fact that the amendment indisputably represented Labour party policy, that not a murmur of opposition was heard—the amendment was passed nem con. Both Ministers now present acceded to the amendment, and I was pleased to see that they accepted the policy of their own party.
      Therefore, I am at a loss to know why the Government are attempting to reverse my amendment—I can think of no explanation other than that it must be a mistake. It is certainly a slap in the face for the Labour Whip—a free-thinking, sensible person and a paid-up member of the human race who is much too good for the Whips Office—and for the Ministers who were present in Committee and implicitly acknowledged that my arguments had force and that my amendment should be accepted. It is extremely odd that it required a Liberal Democrat to introduce a Labour party policy whose removal requires Labour party action now.
      I wonder whether anything occurred between Committee and Report to justify such action. Nothing has changed, so the only explanation that I can offer is that

      1019
      Ministers have been leaned on by forces higher up in the Government than they are. I cannot believe that the Labour Whip in Committee made a mistake and all the Labour members of the Committee were asleep when my amendment was voted on.
      Mr. Ian Bruce: Does the hon. Gentleman remember that he congratulated Government Front Benchers on their actions in Committee and that they did nothing to disavow his congratulations—in fact, they appeared pleased?
      Mr. Baker: I remember that well. Ministers and Government Back Benchers present on that occasion appeared happy with the amendment when it was made, so I cannot understand why it is now to be reversed.
      If the Government intend to pursue that action, it calls into question their commitment to renewable energy. This week, £100 million was plucked out of nowhere for the coal industry, despite the fact that, as the hon. Member for South Dorset (Mr. Bruce) says, that is hardly picking a winner. A Parliamentary answer I received on 24 March tells me that £9.6 million was spent by the Government on research, development, dissemination and demonstration for the renewable energy programme in 1998–99, which is the most recent year for which figures are available. That is less than the sums spent by the Conservative Government, who regularly spent between £20 million and £25 million each year. The Labour Government have drastically cut the amount of money put into renewable energy. In fact, spending for 1998–99 was the lowest in the 10-year period covered by my question, and it was the first time that spending dropped below £10 million a year. A question mark hangs over the Government's commitment to renewable energy.
      Mr. Bruce: The hon. Gentleman might be surprised to learn the contents of a message that I have just received about the European Commission's renewables directive. Our friends in Friends of the Earth tell me that it was released on 10 April and widely reported. Therefore, there must be an EU directive. Does the Minister for Energy and Competitiveness in Europe recognise that Friends of the Earth was right and the Government were wrong?
      Mr. Baker: I draw two conclusions from that intervention. First, that the hon. Gentleman is closer to Friends of the Earth than he sometimes appears to be, which is a good thing, and secondly, that the Minister appears to have been briefed badly, which has not been unusual during proceedings on the Bill.
      Let me return to the question of the right hon. Lady's commitment to renewable energy. In Committee, she told me that if I read "New and Renewable Energy: Prospects for the 21st Century: Conclusions in response to the public consultation", I would see
      the extent to which we are moving towards fulfilling our manifesto commitments, and our commitment to ensuring a proper foundation and strong future for the renewable energy industry.
      Who can complain about that? Later, she told me:
      The Government have every intention of using the new powers to meet the declared target of 10 per cent. of renewables by 2010—
      but if the Government have every intention of following their own policy and doing that, what can be the objection to writing that into the Bill? That is all that we did in
      1020
      Committee. Is it not the truth that the Government are not really committed to that target? I ask that because the right hon. Lady added the proviso,
      provided that the cost to consumers—
      no doubt, widely drawn—
      "is acceptable."—[Official Report, Standing Committee A,30 March 2000; c. 580.]
      I suggest that the Government are only superficially committed to renewables. They are committed to sending the right message to environmental groups, to saying the right things, and to writing nice words that can be trailed out when they meet representatives of Friends of the Earth or Greenpeace, but they are not committed to delivering on the policy—quite the reverse. If they were committed to that, they would be happy for it to be written into the Bill, but they are not. The Government want to tell the green groups that they are committed to wonderful renewable energy, but they also want to be able to tell industry not to worry because there is no real target, and to give some sort of reason for reducing their commitment even further. That is a slightly dishonest position for the Government to have adopted.
      The other relevant point about renewables is that, in Committee, the Government refused to accept the EU definition of renewable energy as excluding the incineration of waste. In response to a question from me, the Minister declared that a substantial amount of the renewable energy generation target—loosely defined—would be met from incineration capacity. That is the basis not for an argument for or against incineration, but for the argument that waste which is incinerated is not a renewable energy source. That is clear.
      It was all very well for the Minister to criticise the hon. Member for Blaby (Mr. Robathan), saying that combined heat and power was not renewable energy, but the Government are perfectly happy to describe incineration capacity and waste burned in that way as renewable energy, which it patently is not—not least because it encourages the production of waste in the first place, which is not environmental, and because it leaves a huge toxic deposit to be disposed of. Bottom ash and fly ash are highly toxic. How can something be declared renewable when it produces such toxic waste? The Minister is all at sixes and sevens on the issue.
      The reality is that the Government got it wrong and there was a mix-up in Committee. Such things happen, but the measure introduced by my amendment was directly in line with Labour party policy and with the Government's stated intentions in their own documents. We must now ask why they are removing it. I have had no proper explanation for that. Unless they can give one today, the only conclusion that any fair-minded Member can reach is that they are not really committed to that renewable target.
      6 pm
      Mrs. Liddell: I, too, congratulate the hon. Member for Lewes (Mr. Baker) on the birth of his daughter. May I suggest the name Anita, after NETA—new electricity trading arrangements? Having gone through the experience that the hon. Gentleman and his wife are now going through, and knowing that they will probably have many sleepless nights, I commend to the hon. Gentleman

      1021
      the speeches of the hon. Member for South Dorset (Mr. Bruce). I am sure that they will be a superb antidote to insomnia.
      Mr. Ian Bruce: I thought that the right hon. Lady was about to say that I sounded so sweet that the child would not cry when listening to one of my speeches.
      Mrs. Liddell: Perhaps it is the obsession with marble pillars. That is an in-joke for Committee members.
      It is not often that the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) gets something right, and he has got it wrong again. New clause 2 concerns the publication of information. My Department already has annual and monthly energy publications that contain the information that the new clause seeks to have published, and a great deal more beside. I commend those publications to the House. The Government will continue to communicate their energy policy through clear and timely announcements.
      Is it not a measure of the bitterness among Opposition Members about the coal industry that we heard such bile about the Secretary of State's statement on Monday? It is the Government's duty, and my specific duty as the Minister with responsibility for energy, to ensure security and diversity of supply. That was something to which the previous Government paid little attention in their vendetta against the coal industry. The move that my right hon. Friend made on Monday to ensure that the management of change in the coal industry—which has gone to great lengths to improve its effectiveness and efficiency—will allow a future for an industry that the Opposition sought to destroy.
      Mr. Baker: In the interests of diversity of supply, will the right hon. Lady explain why this week the Government announced £100 million for the coal industry, but, on the most recent figures, have spent less than £10 million on renewable energy research?
      Mrs. Liddell: I am surprised that Liberal Democrats should attack the coal industry, particularly as the hon. Member for West Aberdeenshire and Kincardine (Sir R. Smith) represents a constituency that will directly benefit from the steps taken by my right hon. Friend the Secretary of State. I am sure that Liberal Democrats' remarks will be much reported in the communities that have suffered as a consequence of the previous Government's policy on the coal industry.
      There is no reason to accede to new clause 2. The publications of the Department for Trade and Industry contain detailed and comprehensive data and statistics which underpin the analysis of UK energy within government and beyond. The sixth annual edition of the DTI's energy report was published in December, and I commend it to the hon. Member for Bognor Regis and Littlehampton—[Interruption.] He says that he has it on his desk. It would be quite useful to open it. I have many things on my desk that would occasionally come in handy if they were opened. I also have quite a few things under my desk, which I guarantee will never be opened. Copies of that publication are in the Libraries of both Houses. That gives not just a national view of energy issues, but an international view, which is particularly important in a modern and complex world.
      1022
      Chapter 3 of that report addresses energy policy and answers all the questions that the hon. Gentleman put; chapter 8 contains full facts and figures about electricity generation; and I suspect that the rest contains any additional information that any hon. Member might reasonably want to know about energy policy. It is available on the DTI website, or from the Stationery Office and reputable bookshops for £39.50.
      Mr. Gibb: I am grateful to the right hon. Lady for referring me to those learned texts, but what is the Government's nuclear policy given that the Magnox power stations are already being decommissioned?
      Mrs. Liddell: The hon. Gentleman may or may not—one can never be certain—be aware of the announcement that was made by British Nuclear Fuels plc yesterday in relation to the closing date for the Magnox stations. That will be a determining factor in the future proportion of electricity generation from nuclear energy. I cannot second guess the outcome, but the Government's policy on new nuclear build is that it is for the market to come forward with its proposals. Companies may come forward with proposals for nuclear generation and they will be looked at in the usual way. At the moment, there is no suggestion that any companies are coming forward with new nuclear build, here or internationally.
      Mr. Stunell: Does the Minister accept that, if the market comes forward with a solution that adds to the carbon dioxide burden on the atmosphere, the Government have a problem?
      Mrs. Liddell: The Government do not have a problem, because it is for the Government to decide whether any application should go ahead. In taking a decision about the future of a specific energy proposal, we have to take into account all sorts of factors, not least our commitment to the Kyoto targets. That explanation also serves in relation to gas-fired power stations. Each proposal will be looked at on its merits. The hon. Member for Lewes referred to the Baglan bay proposal. That involves a high-tech specification, and that is one reason why the Government acceded to it. Hon. Members on both sides of the House argue effectively for gas-fired power stations. Regardless of from where the case comes, it will be looked at by the Government in some detail.
      New clause 2 is unnecessary. Quite apart from the energy document to which I referred, which was published in December, there is also the Digest of United Kingdom Energy Statistics.That is not a new publication; it has been published by the Government every year for the past 50 years and it includes further information on electricity generation. All of that is supplemented by a monthly publication "Energy Trends", which is available on subscription from my Department. Any hon. Member who wished to receive it could contact the Department; perhaps we could even waive the cost.
      Several points have been made about amendment No. 28, which would establish duties in relation to embedded generation and net metering. Those points have been debated in depth in Committee. Again, I must ask the House not to accept the amendment. Much embedded generation is from renewables; the Bill already acknowledges the importance of renewables. However,

      1023
      the measure separates supply and distribution. It places a duty on distributors to facilitate competition in generation and to develop and maintain an efficient, co-ordinated and economical system of distribution. It places a duty on the authority to promote consumer interests by encouraging effective competition.
      I expect the duty to be effected through regulatory action, which will give all forms of generation, including embedded generation, a fair crack of the whip. Embedded generation should not be disadvantaged. If that means that the distributors have to provide readier access to their systems—that is the point of difficulty—and their databases, I expect regulation to ensure that that happens. However, it would not be right for consumer or environmental protection to give special advantages to embedded generation.
      We have had several discussions about net metering. The hon. Member for Blaby (Mr. Robathan) takes a considerable interest in that, and I believe that he genuinely misunderstands the position. The Bill is neutral on net metering, which is one method of supporting embedded generation. I do not believe that it is necessarily the right method because it implies a cross-subsidy. It would require suppliers to pay more for electricity supplied through embedded generation than it was worth to them. It would relieve embedded generators of the cost of maintaining the transmission and distribution networks. Prices for other customers would have to reflect that.
      Our policy is—to use a horrible phrase—to try to provide a level playing field, not to favour one system of generation over another. The hon. Member for Bognor Regis and Littlehampton challenged us about that when we considered gas-fired generation.
      Mr. Robathan: I did not serve on the Committee that considered the Bill and held lengthy discussions on the subject. However, the Secretary of State's announcement of £100 million for the coal industry does not constitute providing a level playing field. If we genuinely want to encourage renewables, they need a boost. I am all for level playing fields in commerce, but sometimes a sector needs particular encouragement. For good reasons, renewables need a boost, and I am genuinely disappointed that the Government are not using the Bill to do that.
      Mrs. Liddell: I am sorry that the hon. Gentleman is disappointed. He misunderstands the Bill—I hope not deliberately. Through the 10 per cent. obligation, the Bill will take renewables from the margins and make them mainstream. However, I shall consider that when we discuss the next amendment.
      Our targets for renewables are clear, and clauses 60 to 65 cater for them well. The Government and the regulator acknowledge that further regulatory action may be required to ensure that embedded generation can thrive. That is why the working group to which my hon. Friend the Member for Milton Keynes, North-East (Mr. White) referred, which comprises representatives of the Office of Gas and Electricity Markets, the Government and the industry, is examining all the issues that surround embedded generation. It will report before the end of the year, and the Government will address any specific problems that it identifies.
      1024
      The hon. Member for Bognor Regis and Littlehampton wanted the working group to report before the other place considered the Bill. That shows that the Conservative party is not committed to achieving a way forward for embedded generation. It is important to get things right. The Bill allows the regulator to take action when necessary to assist embedded generation.
      6.15 pm
      Through the working group and other initiatives, the Department is taking steps to remove some confusion about the connection of small-scale photovoltaic generators to the electricity distribution system. That has resulted in a draft engineering recommendation—G77—which provides technical guidelines to the industry on the connection of small PV systems. On 2 May, I shall address the photovoltaics conference in Glasgow, where I shall make that point. There are difficulties with photovoltaics; they are expensive. If we followed the route that some pressure groups propose, they would become so expensive that their price would run the risk of turning the public against renewables. We must take the public with us on renewables.
      The hon. Member for West Aberdeenshire and Kincardine mentioned offshore wind. One of the problems of onshore wind is the difficulty of convincing people to have generators in their gardens. I accept the hon. Gentleman's point that offshore wind offers a new opportunity to the offshore industry. However, I am intrigued by his view that the oil industry is in the doldrums. I fail to understand how that can be true when oil costs $23 a barrel. I support greater activity from the oil and gas industries, not least because of the increase in the oil price, but also because of the Secretary of State's proposal to lift the restricted consents policy.
      Sir Robert Smith: I am disappointed that a Minister who should know more about the industry believes that a decision on Monday will affect all investment decisions in the industry by Wednesday. The industry requires long-term confidence in price and in the tax regime. The Chancellor created instability in the tax regime. Fortunately, the Government have put that behind them. The Minister could therefore have been more understanding about the difficulties in the industry and taken the constructive approach that the amendments propose rather than leading us off at a tangent.
      Mrs. Liddell: Earlier, the hon. Gentleman asked about offshore wind. If he did not want an answer, he could have saved the time of the House.
      As chairman of Pilot, the second generation of the oil and gas industry task force, I can state that we have been consulting the industry for some time about future developments in the North sea, especially in relation to gas. The industry has been vociferous in asking for the lifting of the restricted gas consents policy. We hope that that will lead to developments. The hon. Member for West Aberdeenshire and Kincardine should be aware of the Government's interest in progress in the Clair field, which could help onshore fabrication.
      The hon. Member for Lewes has had his fun at the expense of Government amendment No. 3. I do not blame him; I would have probably done the same in his position. Given that the hon. Member for Epping Forest

      1025
      (Mrs. Laing) has excellent taste in Charles Rennie Mackintosh jewellery, she will recognise the sentiment that there is hope in honest error; there is none in the icy perfection of the mere stylist. Honest error can occur.
      I concede that perhaps honest error led the hon. Member for Lewes to table amendments Nos. 235 and 236 and to omit to turn up in Committee to move them. Everybody makes mistakes. The hon. Gentleman made some valid points in Committee, and I replied to them—but amendment No. 28 was ill thought out and would not achieve his intention.
      The Bill gives the Secretary of State the power to place obligations on electricity suppliers. It sets the framework for those obligations. Indeed, it takes renewables from the margins to the mainstream. However, I continue to believe that it should not prescribe the obligations. In asking the House to accept our amendment, I make one thing perfectly clear for the sake of the record and for those listening to the debate: there is no question of the Government going back on our commitment to produce 5 per cent. of electricity from renewable sources by 2005 and 10 per cent. by 2010, but all of us who are interested in promoting generation from renewables must take the cost to consumers into account. The only issue before us is whether it is right to include those figures in the Bill.
      Mr. Gibb: The right hon. Lady is renewing her commitment to achieving 5 per cent. by 2005. Does she mean by 2003?
      Mrs. Liddell: No, I said 5 per cent. by 2005 and 10 per cent. by 2010.
      We have made it plain that we intend to consult further on how those powers will be exercised. They represent a big move forward and it is important that we get it right. That requires consultation.
      Mr. Baker: I am trying to pin down the Government's position. If they remain committed to those targets, although one already seems to have slipped from 2003—[Interruption.] The Government's paper refers to 2003, but the target is now 2005. If they remain committed to those targets, why are they not prepared to put them in the Bill?
      Mrs. Liddell: I hate to repeat myself, but it is not appropriate to include the targets because we need to consult. We have to ensure that we take the industry and consumers with us, and the provision that the hon. Gentleman sought to insert in Committee would have pre-empted that consultation. I do not know Liberal Democrat policy on listening to people, but Labour Members believe in listening. We need to consult both on the profile of the obligation that we will impose so as to reach our buy-out mechanism target, and on the cost to consumers of achieving that obligation. The buy-out mechanism will considerably assist the renewables industry, and I contend that not allowing consultation on it would be contrary to the hon. Gentleman's aims.
      Mr. Baker: May I try a different tack? Can the Minister give the House a categoric assurance that 10 per cent. of our energy will be generated from renewable sources by 2010?
      Mrs. Liddell: As far as any human being can, yes. The Government are committed to ensuring that 10 per cent.
      1026
      of electricity should be generated from renewables by 2010 and, to ensure that that is not a short-term blip, we intend that to continue to 2025. I hope that by that time, renewables that are far from the market will be closer to it. The proportion of renewables going into electricity generation could increase, but we can ensure that it does by getting the mechanisms right. However, that is not straightforward. We can be sure of achieving it only if we listen closely to the responses from the wide body of expertise out there in the electricity industry, including the renewables industry, and the views of consumers, who will pay for that electricity through their bills. The provision that the Government amendment will remove is wrong in principle. It is beside the point that the drafting also happens to be flawed; it has no place in the Bill.
      Now I shall respond to the points on research and development expenditure made by the hon. Member for Lewes. The estimated outturn in 1999–2000 was £10.5 million. We have budgeted for £14 million in 2000–01 and for £18 million next year. That is a considerable increase on the figures that he suggested.
      Conservative Members referred to our ability to meet our emissions targets. The Government are well on course to meet the Rio target to keep CO2 emissions within their 1990 levels, and the Kyoto target of reducing greenhouse gases by 12.5 per cent. by 2012. Power station emissions decreased by more than a quarter between 1990 and 1999. On a temperature-corrected basis, emissions fell by 7 per cent. between 1990 and 1999. Overall emissions from electricity generation have decreased by 28.5 per cent. The hon. Member for Bognor Regis and Littlehampton shadows the energy brief and it is important for him to take into account the fact that energy is not the only cause of emissions problems. Transport emissions must be kept under control, for example, and that is taken fully into account in the climate change—
      Mr. Gibb: The right hon. Lady will be aware that the CO2 advantages of the nuclear component of our electricity industry are equivalent to taking half all cars and vehicles off the roads. If she intended to meet the CO2 emission target by dealing with cars and lorries, we would be talking about considerable remedies on the transport side.
      Mrs. Liddell: I think that the hon. Gentleman does not deliberately misunderstand, but I cannot always be sure. Emissions cover energy and transport. He should read the climate change document published a month ago by my Department and the Department of the Environment, Transport and the Regions. This country's draft climate change strategy takes into account not only transport and energy, but energy efficiency, which is another key area covered in the Bill.
      In an exchange with the hon. Member for Hazel Grove (Mr. Stunell), the hon. Gentleman asked about the status of the duty to promote competition. It is simply not the case that the authority's duty has been demoted. Indeed, the Bill makes it clear that the consumer benefits are to be achieved through effective competition, wherever appropriate. Competition is difficult to achieve in some examples, but we are trying to generate much more in respect of the fuel-poor and those who have pre-payment meters.
      The hon. Member for Blaby asked about the photovoltaics issues raised by Dr. Jeremy Leggett, Greenpeace and Forum for the Future. I have answered his

      1027
      points broadly, but he may be interested in my Department' s more general work on photovoltaics. There are three major new initiatives, and the Department of Trade and Industry is contributing some £5 million towards a total estimated investment of £15 million. There is a call for PV systems proposals and components, a domestic PV systems field trial for a minimum of 100 homes, and a demo scheme for large-scale building-integrated photovoltaics. The 50,000 roof programme, which is always used in relation to photovoltaics, would cost the taxpayer £250 million and generate less than half of one tenth of 1 per cent. of the UK's current electricity demand.
      The House should resist new clause 2 and support Government amendment No. 3, as we must ensure that we have a coherent energy policy that takes into account the needs of not only existing electricity generation but forthcoming electricity generation. Some mischief has been made concerning the Government's commitment to renewables, but that does the renewables industry no service at all, and also ignores its views. We want to put in place a framework that will move it from the margins to the mainstream.
      Mr. Gibb: That was a disappointing debate. We tabled new clause 2 to elicit from the Minister's own mouth a description of the Government's overall energy strategy. It would have taken her no more than a few minutes to precis their energy policy—if, indeed, there is a long-term strategic objective—but it is clear that there is no long-term energy strategy. As my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning), the shadow Secretary of State, said on Monday, a piecemeal policy responds to day-to-day crises and events.
      6.30 pm
      The Minister was wrong to say that there is a clear energy policy for the nuclear industry. Her predictable response to my question was to refer it back to the industry. Nuclear power represents 30 per cent. of energy output. It is no good saying that reducing CO2 is not just about energy output, but about transportation. If the 30 per cent. nuclear component produced vehicle-type emissions, half the cars in this country would have to be taken off the road. If she is saying that when nuclear power stations are decommissioned she can make up for their lack of CO2 emissions through transport policies, she will have to have a hugely draconian policy on transportation.
      Mrs. Liddell: I sometimes wonder whether the hon. Gentleman listens to what I say. I pointed out that a wide range of issues relate to emissions and affect our CO2 targets. I get the impression that the hon. Gentleman, who is a committed, right-wing, free marketeer, is now backing off from the use of market mechanisms to determine future generation. Perhaps he should make it clear whether that is Conservative policy.
      Mr. Gibb: I should be delighted to make that clear. The market mechanism is fine, except that the previous Conservative Government and this Government have signed up to international agreements to reduce CO2 emissions. They are an interference in the market mechanism. To enable those targets to be met, the
      1028
      Government must inevitably interfere in the market to encourage or nudge it to deliver what they have signed up to. If there is no nudging, there is no certainty that the targets will be met. They could be met, but there is no certainty that the market will deliver them, because this is an artificial constraint on the market mechanism.
      The Government are not fulfilling their duty to explain what will happen in 2012 and beyond as Magnox stations are decommissioned. This is an important point, because there is a genuine concern about what will happen. The Minister has not done herself any favours by failing to set out in straightforward terms what the Government intend to replace nuclear power with. If they are saying that energy efficiency will fill the gap and will make up for 30 per cent. of energy production, and that nuclear power stations will be replaced by gas-fired power stations, there will be a colossal increase in CO2 emissions. It is not good enough for the Minister to say that that can be dealt with by reducing transportation a little and by energy efficiency measures, because they will not be adequate to deal with the increase in CO2 caused by the decommissioning of nuclear power stations.
      My hon. Friend the Member for Blaby (Mr. Robathan) expressed his disappointment at the lack of Government commitment to combined heat and power, which is important because its operation is equivalent to reducing CO2 emissions by 86 per cent. It not only produces electricity from gas, which is 50 per cent. more efficient than coal or oil as regards CO2 emissions, but it avoids the need to use other electricity sources to heat greenhouses, factories or homes.
      The Minister for Competition and Consumer Affairs (Dr. Kim Howells): I have a great deal of sympathy with some of the points that the hon. Gentleman makes, but I am intrigued to know whether, if a future Government decided to build more nuclear power stations, Bognor and Littlehampton would be a suitable spot to construct one. If not, why not?
      Mr. Gibb: The Minister is going into planning issues. Places around the country already have nuclear power stations, and sites are available there, especially where plants are being decommissioned. That is an issue for the Government. They must address these concerns, and it is no good throwing them back at the Opposition.
      Mr. Ian Bruce: I have had a long interest in nuclear power stations, and I can assure my hon. Friend that I have seen all the plans of the sites where people want to put additional nuclear power stations, and his constituency does not feature among them.
      Mr. Gibb: I am grateful to my hon. Friend for that intervention.
      My hon. Friend the Member for Blaby said that it would be wrong not to require electricity companies to purchase surplus electricity from households or small businesses that has been generated by photovoltaic energy, combined heat and power, or wind. The headquarters of The Body Shop in Littlehampton has a wind-turbine generator, which generates much of the power for the company's operations. What is wrong with that? The Minister for Competition and Consumer Affairs said in Committee that forcing the electricity industry to

      1029
      buy back surplus electricity would be like requiring Tesco to purchase the lettuces that he grows on his allotment. There is a difference between his lettuces and electricity, because his lettuces wilt over time but electricity is an homogenous product which lasts. It is a fungible asset, which can be sent back down the wires with no deterioration in quality.
      Mr. Robathan: The point about the wind-turbine generator at The Body Shop is that people should be encouraged to install small-scale renewable plants—wind-generated or whatever—through net metering, because it will remove the costs. The Government seem to have ignored that. They say that we do not understand, but they seem to have missed the point.
      Mr. Gibb: My hon. Friend makes a valid point. I believe that small generation plants will be the future of renewable energy in this country. Anything that can be done to encourage them, such as net metering, is to be welcomed.
      Mr. Bruce: I suspect that the Minister will not speak again. My hon. Friend referred to different forms of fuel. Despite the Minister's challenges about the Government's decision to subsidise coal, she has not said how that affects the CO2 load and what their long-term policy on coal is.
      Mr. Gibb: My hon. Friend makes a valid point, which I suspect that I can answer. The Government do not have an overall, long-term, strategic energy policy. They merely respond to day-to-day crises and to internal Labour party politics. That was the whole basis of the energy White Paper published in October 1998.
      My hon. Friend the Member for Blaby also made the important point, which had not occurred to me, that the new clause would enable the public to assess the workability of the climate change levy, and to see how much damage it is doing to British industry and to the aims and objects of the levy. He also suggested that the Government were resisting the Liberal Democrat amendment because they were concerned that they could face court action if they failed to deliver on their manifesto promise. Perhaps we should propose that all Labour manifesto promises be put in amendments to Bills. I should like to suggest an amendment to the Finance Bill about the Government not raising taxes, as the Labour party promised time after time before the election.
      I was concerned about the right hon. Lady's statement that the Government's target was that 5 per cent. of Britain's electricity requirements would be met from renewables by 2005, not 2003. My memory of the renewable energy consultation document is that the target was 2003, not 2005. [Interruption.] I am grateful for sedentary confirmation of that by the hon. Member for Lewes (Mr. Baker).
      Mrs. Liddell: We are on course to meet the target by 2003.
      Mr. Gibb: How does that differ from the Government's target of 2005?
      Mrs. Liddell: If it helps the hon. Gentleman, I am prepared to say 2003.
      Mr. Gibb: It does help me, because it is consistent with the target that the Government have published in their consultation documents. I am grateful to the right hon. Lady for that confirmation.
      The hon. Member for Lewes made the obvious point, but made it very well, that the phrase in the Liberal Democrat amendment was lifted from the renewable energy consultation document. It goes to show how meaningless are the Government's promises if they are not prepared to put them into the legislation when it is proposed and passed by the Standing Committee.
      This has been a disappointing debate. It was an opportunity for the Government to set out in five or 10 minutes the broad, general thrust of their energy policy. It is a lost opportunity, and it goes to show how important the new clause is, because it would have required the Government to publish details of their energy policy. I am disappointed that the Government will not accept the new clause. However, given that we have had a debate, albeit disappointing, I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    Clause 9

      OBJECTIVES AND DUTIES UNDER 1986 ACT
      Mr. Gibb: I beg to move amendment No. 22, in page 6, line 15, leave out "wherever appropriate".
      Mr. Deputy Speaker (Mr. Michael Lord): With this it will be convenient to discuss the following amendments: No. 29, in page 7, line 6, leave out "Subject to subsection (2)," and insert "In performing that duty".
      No. 23, in clause 13, page 9, line 25, leave out "wherever appropriate".
      No. 30, in page 10, line 16, leave out "Subject to subsection (2)," and insert "In performing that duty".
      Mr. Gibb: Amendments Nos. 22 and 23 amend clause 9 in the case of gas, and clause 13 in the case of electricity. Those clauses are fundamental to the Bill, in that they set out the objectives for the Secretary of State and the regulator.
      Under the previous legislation, the primary objectives for the Secretary of State and the regulator consisted of three equal duties:
      to ensure that all reasonable demands for electricity are satisfied …
      to ensure that licence holders are able to finance…activities …
      to promote competition in the generation and supply of electricity.
      Under the Bill, the sole primary objective is to promote or protect consumer interests. The promotion of competition comes into play only when it is directly appropriate to the protection of the interests of the consumer.
      In other words, the promotion of competition has been downgraded to a second priority, despite what the Minister said in an intervention on our debate on new clause 2 and the amendments grouped with it. The phrase "wherever appropriate" inserted before the word "competition" downgrades the promotion of competition, making such promotion possible only when it is appropriate in order to protect the consumer. That is despite the fact that privatisation and competition have produced cuts of 30 per cent. in real terms in electricity prices, and 30 per cent. cuts in gas prices.

      1031
      Privatisation and competition have delivered the best protection for the consumer in terms of better service, lower prices and increased choice. Demoting competition to a second priority reveals the Government's complete lack of understanding of the way in which business and the industry operate. Clause 9 states:
      The principal objective of the Secretary of State and the Gas and Electricity Markets Authority…is to protect the interests of consumers…wherever appropriate by promoting effective competition.
      The insertion of the words "wherever appropriate" downgrades the objective.
      Professor Littlechild, who developed the brilliant methodology of rpi minus x as a basis for regulating prices in the electricity industry after privatisation, wrote in a pamphlet published recently by the Institute of Economic Affairs:
      The proposed wording of the change here may be positively unhelpful as it puts an additional obstacle in the way of regulators promoting competition. The duty to promote competition will no longer be unqualified. This will have to be demonstrated to be the most appropriate way to protect customers.
      In other words, the regulator must face an additional hurdle before he can promote competition. He will have to show that promoting competition will help the consumer.
      Such things are always difficult to demonstrate. I have no doubt that promoting competition will help the consumer, but that is sometimes difficult to demonstrate in advance. No doubt all the utility companies will go to considerable lengths to show that greater competition with them will hinder the interests of the consumer, and the regulator will have to try to surmount their arguments. The fear is that that will take place in a court of law, no thanks to the Bill. Amendment No. 22 simply removes the words "wherever appropriate", thus ensuring that the objective of the Secretary of State and the regulator is
      to protect the interests of consumers by promoting effective competition.
      We are convinced that the interests of the consumer are best served by the promotion of competition.
      The "objective" clauses go to the heart of what the Bill purports to do. It was clear in Committee that there is considerable confusion about what those clauses do, and we hope to establish what they do through our amendments. We are told by the Government that the Bill represents an important change to the regulator's framework for the utilities sector. According to the Minister, the Bill delivers on the promise that the Government made during the general election campaign to achieve open and predictable regulation that is fair to customers and shareholders. She added that it will allow people to benefit from utilities regulation reform in a changing marketplace that will provide many opportunities for better service.
      The same triumphalist language was used by the Secretary of State on Second Reading. He said:
      As hon. Members will know, the Government are committed to modernisation and reform in a whole range of important areas of public life. The Utilities Bill is part of that agenda of modernisation and reform. It will deliver efficiency and fairness, bringing together social justice and fairness, two sides of the same coin…It puts consumers first and provides a basis for effective competition and a stable framework for regulation.—[Official Report, 31 January 2000; Vol. 343, c. 782.]
      1032
      6.45 pm
      That is high-blown language from both the Minister and the Secretary of State, and it contrasts sharply with the words of the Minister for Competition and Consumer Affairs, who says that the clauses are not revolutionary:
      we do not expect that there will be a dramatic upheaval—a revolution indeed—in utility regulations…The regulatory and economic environment in which utility companies operate will not be turned upside down.—[Official Report, Standing Committee A,29 February 2000; c. 234.]
      On the one hand, the Government are claiming that the "objectives" clauses and the Bill will change the whole basis of utility regulation, and will make the protection of the consumer the primary duty. On the other hand, the Minister has said that even after the Bill the promotion of competition will be as paramount as before, and that the Bill does nothing very radical.
      The Government cannot have it both ways. Either the Bill is radical or it is not; either it changes the framework or it does not. If it does not change the framework, or the objectives of the regulator, what is the point of the clauses?
      What matters is the actual wording. As drafted, clauses 9 and 13 introduce a whole new set of priorities for the Secretary of State and the regulator. The objectives that they identify will impose extra costs on the utilities, which will then be passed on to consumers. They will increase regulatory risks, and will therefore add to the capital costs of the utilities. Again, those extra costs will inevitably be passed on to consumers.
      If the House accepts clauses 9 and 13 unamended, the promotion of competition will occur only when it can be shown to protect consumers. If the regulator and the Secretary of State have the same philosophical disposition as my hon. Friends and me, and believe that competition will nearly always benefit the consumer and that greater competition will never damage the interests of consumers, I do not doubt that the new regulatory regime will function well, and will continue to deliver greater competition and lower prices. On the other hand, we may have a regulator who shares the Prime Minister's philosophy—if, indeed, the Prime Minister has a philosophy other than that of political manoeuvring and analysis. Back in 1988, during the Committee stage of the Electricity Bill, the Prime Minister said:
      outside the Conservative party…it is barely in issue that prices will rise because of privatisation.—[Official Report, 12 December 1988; Vol. 143, c. 681.]
      I do not know whether the regulator will share those views, or the Prime Minister's other view of privatisation. He has said that the idea that we would have an influx of power stations all competing on the grid was nonsense.
      Of course, we did have an influx of new power stations, and they are all competing on the grid. We did see, and continue to see, falling electricity and, indeed, gas prices. If the Labour party still believes that privatisation and competition will not promote lower prices and more choice, I am concerned.
      Given the Government's proclivity to promote their cronies, or people with the same political outlook, to positions of power, I would be concerned if a future regulator holding views similar to those of the Prime Minister sought to fulfil the obligations in clauses 9 and 13, because he or she would never hold the view that the promotion of competition would protect the interests

      1033
      of consumers. The amendments would removed the words "wherever appropriate", thus removing the element of subjectivity. The amended clause would require the regulator to protect consumers by promoting competition, which is the position in the current regulatory regime. The Minister says that that is all the clause does anyway, so he should have no problem with the amendment.
      Mr. Hilary Benn: I want to make a brief contribution to argue that the words "wherever appropriate" are necessary. The hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) presented a theoretical concern about the impact of the clause. I want to address a practical issue, which is the disparity in charges faced by customers in the supply of gas.
      In Britain today, people who are poor pay 20 per cent. more for their supply of gas. That is the difference between the charge paid by people who pay by direct debit and that paid by those who pay by pre-payment meter.
      The figures are startling. For 650 therms of gas, a customer pays £281 by direct debit, £320 by standard quarterly credit and £336 by pre-payment meter—for the same amount of gas.
      Mr. Gibb: Is the hon. Gentleman aware that, during the Committee stage, his Government proposed amendments that gave the gas and electricity industries the right to access property to install a pre-payment meter against the wishes of the customer? At the moment, they cannot enter to install such a meter because it is the choice of the customer: he or she decides whether to have the meter. That person can be cut off, but having such a meter is the choice of the customer. As a result of the Bill as amended, it will no longer be the choice of the customer. I agree with him. Pre-payment meters are extortionate and they are wrong. Now his Government have given the right of entry to install those things against the wishes of consumers.
      Mr. Benn: I am aware that that is the case. My point is about the charge that the gas companies levy.
      I realise that not all pre-payment meter users are on low incomes, but the Government themselves estimate that 24 per cent. of households receiving income support pay for their gas by pre-payment meter. A recent MORI poll clearly shows that the use of pre-payment meters increases the lower down the socio-economic groups we go. Over half the users of pre-payment meters are people in households who are not working and a quarter are one-parent families.
      I wanted to make the point in relation to the gas companies; that is the object of my contribution. It is extraordinary that the highest charges are levied on those with the lowest incomes.
      The issue has been the subject of debate for quite some time. The Public Accounts Committee has commented on it. The recent report of the Gas Consumers Council says:
      It is time pre-payment meter consumers benefited from the liberalised gas market.
      I welcome the clause and other clauses. I welcome the reference to "wherever appropriate" because it can be used to hasten the day when the practice of charging the poor more can be brought to an end and consigned to history, where it belongs.
      Mr. Stunell: I want to speak in support of amendments Nos. 29 and 30, and against the Conservative amendment, which the Liberal Democrats think is mistaken. It is clear that there are occasions on which the guiding force cannot be the straight issue of competition—the form that would be left if the words were deleted. The two amendments tabled by the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) relating to gas and electricity are mistaken. I associate myself with the words of the hon. Member for Leeds, Central (Mr. Benn) in that regard.
      Through our amendments, we are trying to reintroduce into the debate some of the issues that were discussed in Committee, but not dealt with sufficiently. The amendments would ensure that a broader duty was placed on the regulator—a duty not confined solely to issues of competition.
      We have sought to delete the words "Subject to subsection (2)" in subsection (5). Subsection (2) places on the regulator the requirement to put competition first and foremost—before all other considerations, if subsection (2) is removed, issues relating to environmental and social and welfare activities can be given the significance that they deserve.
      I return to the point that I made earlier. We are talking not simply of regulating competition but of regulating to achieve the overall policy objectives of this Government and, I believe, any Government: the protection of consumers on low incomes—a matter referred to by the hon. Member for Leeds, Central—and the protection of the environment, an issue over which the Minister was disturbingly glib in winding up the previous debate. It is absolutely clear that, as the decades go forward, the implementation of sound environmental policies will be highly dependent on the regulator having the power, the ability and, in some cases, the duty to act not solely on price and competition matters.
      These two simple amendments are designed to swing the balance of the Bill back towards the environmental agenda. They have wide support among nongovernmental organisations and groups outside the House that have been supplying information and support to Members and to Ministers. I will leave it at that, and simply urge the Government to have yet another look at the key issue of balancing their declared environmental policy objectives with the powers and duties that they are prepared to give those who have to implement their policies under the Bill.
      Dr. Howells: There are some activities connected with the supply of gas and electricity in which competition simply cannot protect the interests of consumers. It is that practicality that Opposition Members have forgotten in tabling amendments Nos. 22 and 23.
      There are natural monopolies—gas pipeline and electricity distribution networks, for example—in which it will never be cost-effective to develop competition. To facilitate competition in such activities would require the construction of duplicate networks, at colossal expense and with devastating consequences for the environment. Such action would rarely be in the interests of consumers.
      Where natural monopolies exist, it is right that the interests of consumers should be protected by some means other than competition. That is why the regulator is given discretion to determine whether the promotion of competition is the most appropriate means of protecting

      1035
      the interests of consumers—although competition should be the regulator's first choice in the absence of a good reason to the contrary.
      Where there are natural monopolies in which competition is powerless to protect consumers, what is a regulator to do? The amendments are silent on that point, so presumably the intention is that the regulator should do nothing at all. Certainly, the obligation to protect the interests of consumers would no longer apply. The amendments risk leaving the consumer exposed to exploitation by companies operating in monopoly markets, which is precisely what regulation is intended to prevent. I ask the House to reject amendments Nos. 22 and 23.
      I do not fault the motives of the hon. Member for Hazel Grove (Mr. Stunell) in tabling amendments Nos. 29 and 30, but they shoot at the wrong target. The regulator's principal objective is cast in terms of protecting the interests of consumers, wherever appropriate by promoting effective competition. That objective reflects the basic rationale for the existence of gas and electricity regulation.
      Although we recognise the necessity of ensuring that the environmental dimension of utility regulation is properly managed, we do not believe that environmental considerations should be part of the duty to further the principal objective. In the final analysis, the Bill is about economic rather than environmental regulation. The current status of duties ensures that, when making a choice between alternatives of equal benefit to the consumer, the regulator should lean towards the one that is most favourable from an environmental perspective. We think that that is the right outcome. I ask the House to resist amendments Nos. 29 and 30.
      Mr. Gibb: That was a rapid and disappointing reply. I thought that the debate required something a little more substantial than that.
      The hon. Member for Leeds, Central (Mr. Benn) raised his concern about the use of pre-payment meters, which will result in significantly higher gas bills for the poorest consumers. He makes a valid point. The same point applies to customers of electricity suppliers. It has long been my view—and, indeed, the view of many Conservative Members—that pre-payment meters hark back to a bygone era when gas and electricity suppliers were monopoly industries owned by the state. Monopoly state companies were able to treat their customers in that way. Rather than trying to sort out a person's slight payment problem, as many private sector companies now try to do, monopoly companies can simply install pre-payment meters and use their monopoly power to charge customers 10 to 25 per cent. more than they charge other customers—
      7 pm
      Mr. Deputy Speaker: Order. We come now to the Private Bill set down for this hour.
      As there is no one in the Chamber to move it, we will continue with the Utilities Bill.
      Mr. Gibb: The hon. Member for Leeds, Central made some valid points on pre-payment meters.
      I strongly believe that pre-payment meters would not be used if we had increased competition in the utilities industries. As competition has increased, companies such as PowerGen have done deals with organisations such as Age Concern to provide a package of services to various groups which have not previously been the suppliers' prime targets. The more competition that we have, the more fierce companies will be in trying to target all groups in society as valuable customers. Without competition, companies may believe that it is too expensive to provide services to those groups.
      The Minister said that if the phrase "wherever appropriate" were removed from clause 9, on natural monopolies, the regulator would be forced to require increased competition in sectors in which, because of a natural monopoly, competition cannot possibly operate. The gas and electricity distribution networks, for example, are natural monopolies, as they will be the foreseeable future.
      The Minister's warnings are not justified by the operation of the previous regulatory regime, under which companies were not required to create new gas or electricity distribution networks. Such requirements have not been imposed under the current regulatory regime, and they would not be imposed under the proposed regime if the words "wherever appropriate" were removed from clause 9.
      The issue reveals that the Government still do not understand the efficacy of increased competition in delivering benefits for consumers. It is disappointing that they have not been able to accept this group of amendments, but, in view of the debate, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 10

      GUIDANCE ON SOCIAL AND ENVIRONMENTAL MATTERS IN RELATION TO GAS
      Mr. Gibb: I beg to move amendment No. 24, in page 8, line 2, after "Parliament", insert—
      'together with an impact assessment of the extent to which any additional costs incurred by the Authority, Council or licence holders consequent on implementing the guidance will be passed on to consumers.'.
      Mr. Deputy Speaker: With this it will be convenient to discuss amendment No. 25, in clause 14, page 11, line 11, after "Parliament", insert—
      'together with an impact assessment of the extent to which any additional costs incurred by the Authority, Council or licence holders consequent on implementing the guidance will be passed on to consumers.'.
      Mr. Gibb: Clause 10, on gas, and clause 14, on electricity, give the Secretary of State the power to issue guidance to the regulator, to impose on utilities a range of new social and environmental objectives. As hon. Members will be aware, the regulatory framework, which was introduced by the previous Government, already contains a requirement that the regulator should have

      1037
      regard to the interests of vulnerable consumers such as the chronically sick and disabled, people in rural communities and the elderly.
      It is quite right that there should be such a requirement, as a monopolistic supplier may well decide not to supply those groups, who sometimes may be less profitable than other groups. However, in a fiercely competitive environment, those groups become important customers whom all the companies in that environment want to target and win over. The regulator essentially mimics the force of competition in monopoly or near-monopoly environments, in which protecting those groups becomes an important objective.
      Clauses 10 and 14 go beyond that position and are more about using the regulatory framework and machinery to deliver the Government's social objectives—which, more properly, should be delivered in other Government programmes and by Departments such as the Department of Social Security and the Department of Health.
      The guidance issued by the Secretary of State could add significantly to utilities companies' costs. Subsequently—according to the Government's own regulatory impact assessment—those costs will be passed on to consumers. That is why the Opposition are concerned both about the specific provisions and about the Bill. We are concerned that legislation trumpeted by the Government as being beneficial for consumers will add to the electricity and gas prices that consumers pay.
      The guidance to be issued by the Secretary of State is not a minor matter or small beer. In Committee, it was made all too clear thanks to the diligent probing of my hon. Friend the Member for South Dorset (Mr. Bruce) that Ofgem is incurring escalating property costs. It is moving its offices from Birmingham to London, where it will occupy nice offices in Millbank designed to house 450 staff, when having combined Ofgas and Offer staffs, it employs only 400 staff. That number could increase to 430 once the offices are fully merged, but only 350 staff will move into the plush and expensively refurbished new offices in Millbank, leaving room for another 100 staff. Another 80 staff members will occupy offices in Leicester and Glasgow.
      In a Select Committee investigation, my hon. Friend the Member for Christchurch (Mr. Chope) discovered that Ofgem's forecast expenditure is set to rise from £29.8 million annually three years ago, to £64.5 million in 2000–01. In Committee, the Minister said that the colossal increase was a consequence of meeting the redundancy costs associated with the move from Birmingham to London and of making the one-off expenditure of £13.2 million on the new electricity trading arrangements project. However, even taking those factors into account, the increase in regulatory costs is significant. All those costs will be recouped from utilities companies. Ultimately, according to the Government's regulatory impact assessment, the costs will be passed on to consumers.
      The direct regulatory costs are only part of the story. Utilities companies will also incur significant costs in responding to the plethora of new information requests that will arise from the Bill's provisions. Those costs, too, will be passed on to consumers.
      1038
      Utilities will incur costs in implementing the Secretary of State's guidance to the regulator, and those costs will be passed on to consumers. Those costs—which will be the largest extra costs faced by consumers—will be a direct result of the guidance. Although the word "guidance" is used, the guidance will in fact be orders, and the regulator will have to obey them—both because the Bill states that the authority should have regard to them, and because the regulator will probably wish eventually to be reappointed by the Secretary of State. Therefore, the guidances issued by the Secretary of State will almost certainly be directives.
      Draft guidances have already been published by the Secretary of State. One draft guidance states that the authority should have regard to the Government's objective of improving the "health of everyone". Such guidance is incredibly broad and potentially extremely burdensome. It also generally reflects the Government's social and political agenda. The Government clearly envisage that policy objectives will be delivered by the regulatory framework and mechanism, and implemented by private sector electricity and gas companies. Nevertheless, such an objective—on improving the "health of everyone"—is far too wide for the regulator to deliver.
      Other guidances provide Ofgem with the objectives of tackling poverty and social exclusion and reducing the proportion of unfit housing stock. It surprises me that the Secretary of State has not issued guidances on ending world hunger and creating world peace. The guidances are drafted incredibly widely, leaving the regulator with enormous discretion as to how to interpret them, in new licence conditions for the utilities or new performance standards.
      Mr. Michael Fabricant: I apologise to the House for not being in the Chamber earlier, although I have been following the debate. Does my hon. Friend agree that the fact that the provisions are drafted so broadly will be a disincentive to companies to invest in the industry for fear that there will be Government regulation on such a scale that they will be unable to make future projections of income?
      Mr. Gibb: My hon. Friend makes an extremely good point. The wide drafting of the guidance will increase regulatory risk, and that will have two severe consequences for the consumer. First, it will raise the cost of capital, as investors will require compensation for the extra risk. That will mean higher interest charges and expenses. The companies involved are capital intensive and have large borrowings, so the cost will be passed on to the consumer in higher prices or prices that would otherwise have been lower.
      Secondly, as my hon. Friend said, the guidances will deter some companies from entering the industry and will therefore reduce competition. As we all know, competition drives down prices and forces companies to be more efficient. There will be a tad less pressure from increased competition.
      It may surprise some hon. Members to hear that, despite the fact that the Utilities Bill is still going through Parliament, Ofgem has widely consulted consumer groups, industry and Government on how it intends to implement the Government's draft guidance, although that

      1039
      guidance has still to be approved by an affirmative resolution of the House. Not only has the Bill not yet received Royal Assent—although Ofgem is busy consulting on it—but the draft guidance issued by the Secretary of State has not yet been considered by the House. That cannot happen until the Bill has received Royal Assent. The guidance will then be subject to the affirmative resolution procedure. If it gets through both Houses of Parliament, it will then become law. Despite all that, Ofgem is already consulting.
      Mr. Ian Bruce: I am sure that my hon. Friend will have noticed during our discussion of the Bill that the civil servants seem to be running the Ministers. Has he noticed that organisations such as the authority and the council have been putting their own spin on the provisions, rather than waiting for Parliament? Did he see the letter from the Gas and Electricity Consumer Council of 31 March, saying that it plans to table amendments to the Bill when it reaches another place as it does not like what the Government have done so far? Who is running this? It is certainly not the Government.
      Mr. Gibb: Yes, I read that comment. I am concerned that unelected bodies such as Ofgem take it upon themselves to decide policy and to consult on it. It is a general concern about the political situation in Britain that people are beginning to hold politicians in less esteem, and that decisions are being made by those who are not elected. That gives rise to concern in the longer run about the future of our democratic institutions.
      Despite everything, Ofgem has undertaken wide consultation with the Government, industry and consumer groups and has produced a social action plan. I note that it is not a draft social action plan, although it is based on various drafts, but a final version. It sets out in more detail how it intends to implement the guidances issued by the Secretary of State. In addition, an Ofgem press release said in early March:
      Ofgem has also appointed a 10 member review panel bringing together consumer groups, Government and representatives of the energy and banking industries. Regular reports on progress against the plan will also be published.
      Callum McCarthy, the chairman of the new authority, stated:
      There are many customers who either because of low income or poor housing find it difficult to afford heat and light for their homes. This is a big and complex problem which requires many parts of Government and the industry to contribute to solutions. Through the social action plan Ofgem will concentrate on taking effective action to tackle this problem to make a difference for low income and disadvantaged customers.
      7.15 pm
      It is abundantly clear that Ofgem will impose on the gas and electricity industries considerable financial costs in respect of implementing the Government's social agenda. Few can object to the elected Government of the day implementing a social agenda. It is almost par for the course that a Labour Government will want to spend public money on such imperatives and to raise the funds for the projects through taxation. However, we find it objectionable that the Government are implementing such programmes by imposing significant extra costs on the
      1040
      electricity and gas companies. As the Government have acknowledged, those costs will be passed on to consumers in their gas and electricity bills. Instead of paying for their programmes through the tax system, which has been designed to raise money according to people's ability to pay, the Government are funding them through electricity and gas bills that depend on how much electricity and gas people use—so large families and pensioners will pay more because they use more fuel energy than other groups in society.
      Mr. Robert Syms: Would it not be more honest if companies were allowed to state on the bills that they send to consumers what effect the Government's measures were having?
      Mr. Gibb: My hon. Friend makes a valid point. Of course the customers would all be up in arms, so I do not expect that the Government will do that, although it would increase honesty in politics, which is important, and enable people to know how much extra they were having to spend as a result of the Government's programmes.
      Mr. Fabricant: I am grateful to my hon. Friend for giving way to me a second time. Does he agree that the on-costs to which he is referring will suffer a time delay? I rather suspect that the Government are being cynical. While hon. Members on both sides of the House would welcome anything that will help poorer families, the Government are ensuring that increases in gas and electricity prices probably will not take effect for one or two years hence—after the next general election. Is that not a cynical move?
      Mr. Gibb: The Bill will receive Royal Assent later this year and the measures will be implemented in the next few years, so my hon. Friend is right. What he says backs up the point that, if the Government were honest, they would raise the funds through taxation and spend it through Government spending programmes. Where is the logic or the equity in what they propose? It is no honest way to run a Government programme or to develop a social agenda. How does it help the consumer to be saddled with potentially huge extra costs?
      The Green Paper that heralded the Bill recognised the risk inherent in such reforms to the regulatory regime when it said:
      If the Government concludes that its social and environmental policy objectives require action which would have significant financial implications for consumers or for the regulated companies, such action should be taken forward by means of new specific provisions in primary or secondary legislation rather than through guidance to the regulators.
      The indication so far is that the Government's promise in that Green Paper is not being adhered to by Ofgem or, indeed, by the Secretary of State. The guidances clearly impose burdensome costs on industry. Those costs will be passed on to the consumer so, in the words of the Green Paper, there will be
      significant financial implications for consumers.
      Amendments Nos. 24 and 25 would add to clauses 10 and 14 a requirement that the Secretary of State prepares an impact assessment of the extent to which any additional costs incurred by the authority, the consumer council or licence holders as a result of implementing the guidance will be passed on to consumers. It is important

      1041
      that the Government fully understand the financial implications of their proposed measures and, in particular, how those costs will be met and by whom. If the Minister really is on the side of the consumer, he should have no problem with accepting the amendments.
      Dr. Howells: I am sure that the hon. Member for Bognor Regis (Mr. Gibb) will not be surprised to learn that I have problems with the amendments. [Interruption.] I forgot that his constituency includes Littlehampton, which will probably be the site of the next nuclear reactor.
      As the hon. Gentleman told us, amendments Nos. 24 and 25 seek to oblige the Secretary of State to provide Parliament with an assessment of how actions taken by the authority, the council and licence-holders in pursuit of policies and objectives in the guidance are likely to impact on consumers in terms of costs. That assessment is to be laid before Parliament together with the draft guidance. However, amendments of this type, which attempt to define or limit the potential costs resulting from the guidance, are misguided and unnecessary.
      Such amendments are unnecessary because the Government will not use the guidance as a means of giving effect to measures that would have significant financial implications for consumers or companies. We have made that clear throughout the utilities review. The amendments are misguided because the Opposition fail to grasp the fact that this clause provides for the Secretary of State to issue guidance, not direction, to the authority. As can be seen from the draft guidance to the Gas and Electricity Markets Authority published in February, the guidance will not be highly detailed or prescriptive. It will simply set out the social and environmental policies and objectives to which the authority should make an appropriate contribution.
      Mr. Fabricant: Will the Minister give way?
      Dr. Howells: No, I wish to make some progress. Moreover, the hon. Gentleman has hardly been in the Chamber this evening.
      Such guidance will give the authority a necessary degree of latitude to act as it deems appropriate in the context of its framework of statutory duties and the regulatory circumstances at the time.
      As it is the authority that must decide how to act on the policies and objectives in the guidance, it will not be possible for the Secretary of State to provide Parliament with any kind of realistic assessment as to the costs that might result. The only way that the Secretary of State could provide such an assessment would be to issue directions to the authority on the contribution that it should make towards the Government's social and environmental objectives. The Government have rejected that option, as it would contravene the principle of arm's length economic regulation. For all those reasons, we shall resist amendments Nos. 24 and 25.
      Mr. Ian Bruce: I am surprised that the Minister treated the amendments so peremptorily. The Government will impose on consumers a whole raft of new stealth taxes—[HON. MEMBERS: "Oh!"] It is interesting that Labour Members groan, because they freely admitted in Committee, where perhaps people do not listen so carefully, how much will be added to consumers' bills.
      1042
      Although they gave some assurances in Committee about how much money would be added, they admitted that there would be no restraints on the amount that could be added to people's bills on the wide basis of social and environmental interference in the electricity and gas markets. Ministers will be able to fiddle about with all sorts of regulations. The Bill will also give enormous power and influence to Ofgem and to the Gas and Electricity Consumer Council.
      Mr. Fabricant: I thank my hon. Friend for being kind enough to give way to me, unlike the Minister who churlishly chose not to do so.
      Does my hon. Friend agree that the Government will achieve the worst of both worlds? On the one hand, they say that they will not give clear direction, and on the other, they say that they will give guidance that will be so broad that the regulator will not know how to act. Would it not be better either to remain at arm's length and give no guidance or to give clear direction? At the moment, nobody knows what will happen and investors will be deterred from investing in the industry, which will put prices up.
      Mr. Bruce: My hon. Friend makes some valuable points. The problem is that the Government are tinkering at the margins. Government thinking is, "Well, the Conservative Government put £1 on people's bills doing good environmental things, and we will put six times as much—or perhaps 12 or 14 times as much—on bills to start with." The amendments are necessary because no limit has been put on the amount. We are relying on the Government's reasonableness. We saw that so-called reasonableness when they decided to put additional taxes on motorists. Those taxes became so unreasonable that even this Government had to U-turn, because the escalator increased fuel duty way beyond the point of achieving anything good. The Conservative Government achieved what they set out to achieve by putting the escalator on fuel, which was to ensure that cars were more efficient than before.
      The amendments would require the Government to include an assessment of the costs involved in the advice that they give. I hope also that the Government will include an assessment of the benefits that are intended to flow from that expenditure. People constantly claim that this or that regulation is good news without assessing the cost or the advantages. However, whenever the Government are questioned on such issues, they treat the House as we have just been treated by the Minister. He can be eloquent and he knows his subject, but when he has something to hide he can be brief. He thinks that he has answered the debate, but he has not. He has made an opening statement on behalf of the Government and I hope that you will allow him to catch your eye again, Mr. Deputy Speaker.
      Mr. Fabricant: I wonder whether my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) overheard the Minister say that he planned to put a nuclear power station in Littlehampton. That announcement, which was made before—
      Mr. Deputy Speaker: Order. That is not a sensible intervention.
      Mr. Bruce: My hon. Friend was simply repeating what the Minister said earlier, when he threatened my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) with having the next nuclear power station—
      Mr. Deputy Speaker: Order. I think that the hon. Gentleman should now get back to the amendments before the House.
      Mr. Bruce: I am grateful for your guidance, Mr. Deputy Speaker.
      It is important to consider the effect of clause 10. What additional costs will be incurred by the authority, the council and licence-holders consequent on implementing the guidance, and how will that be passed on to consumers? The Government have introduced a clever mechanism that will not show up in public expenditure or taxation. The authority will be given authorisation by the Government to undertake certain measures and can tax the electricity and gas companies to pay for those measures, the cost of which will have to be passed on to consumers as a stealth tax. The consumer will get a bill without knowing that it has been increased by the same amount as every other gas bill, from whichever company supplies the gas or electricity. That is why it is a stealth tax. With the amendment, my hon. Friend the Member for Bognor Regis and Littlehampton has offered the Government a helpful way to be honest.
      7.30 pm
      Mr. Fabricant: Does my hon. Friend think that the idea put forward by my hon. Friend the Member for Poole (Mr. Syms) is a good one? He proposed that a statement should be included in electricity and gas bills to show what proportion of the total results from Government policies. Was he present for the presentation of an excellent ten-minute rule Bill by my hon. Friend the Member for Banbury (Mr. Baldry), which proposed disclosure, in petrol prices, of the amount of tax levied in those prices?
      Mr. Bruce: I am sorry that I was not present for that because I was busy preparing this long and detailed speech, but I am sure that it is precisely analogous to what we are looking for.
      In Standing Committee, we discovered that the Gas and Electricity Markets Authority had bought a big City office block, with lots of glass and marble. Such costs are passed on to consumers, effectively by means of a stealth tax on the electricity and gas companies. A letter from the Gas and Electricity Consumer Council talks about the amendments that it will table in the House of Lords. I suppose that cronies will be appointed for that purpose, or else someone in the system will do it. One imagines that that council will be the consumer's friend, but that is not the case. It has costs and, under the Bill, they will be passed on in the same way.
      Will the new council tell consumers about the cost of the new authority? I suspect that it will not, and that the authority will claim to be really good value for money compared with the Gas and Electricity Consumer Council.
      1044
      I hope that I have encouraged the Minister to give a good response on those points to the House and to the country.
      Mr. Syms: This is the first time that I have contributed to the debate on this important Bill. I support amendments Nos. 24 and 25, which have been tabled in an honest and straightforward manner by my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb).
      My hon. Friend has done Parliament a great service. Clause 10 provides that any guidance has to be laid before Parliament, but the House always has a problem with measurement. To do our job properly, we must assess the effect of any measure introduced by the Government.
      Amendment No. 24 centres around the impact assessment. It is not always possible for hon. Members to weigh up a cost. In Standing Committee, we have to debate topics very quickly. The impact assessment would enable us to reach better decisions with full information. As my hon. Friend the Member for Bognor Regis and Littlehampton pointed out, a measure's consequences on bills are not always clear in the short term, but they can be substantial over a period of time.
      In my earlier intervention, I said that it would be more honest if bills contained information about the economic impact of Government policies. That would be more honest and transparent, but I can understand why the Government oppose that proposal, as it would show their intentions for the authority.
      My hon. Friend the Member for South Dorset (Mr. Bruce) said that costs imposed on a private business amount to a stealth tax that will be passed on to consumers. Many people, such as pensioners, have difficulty paying their gas and electricity bills, and hon. Members hear many complaints about the cost of those services. The Bill will have an indirect and hidden impact on heating costs.
      The House often debates ways to help elderly and vulnerable people in the winter. Governments of all complexions like to make much of the sums that they make available to help people pay their heating bills. However, the costs incurred under clause 10 will have an impact on real people in real homes in real winters.
      I support amendment No. 24, which I think would make the Bill more honest and would lead to better measurement.
      Mr. Fabricant: Does my hon. Friend agree that the Government would accept the amendment if they had nothing to hide? By resisting the amendment, they are implicitly admitting that there will be significant on-charges to gas and electricity bills in the years to come.
      Mr. Syms: All hon. Members—including Conservative Members—are always tempted to interfere. It is our natural instinct. It is easy to sign up to international agreements, such as the Rio accord, that impact on domestic policy, and to frame a policy for next week or next month, without thinking through the implications.
      Amendment No. 24 would mean that the Government would have to justify the impact assessment findings in Standing Committee. That would be good for the Government, as they too would have to reconsider the measure, with the result that they might realise that

      1045
      the cost was greater than predicted and that they should rethink the proposal. That would concentrate the Government's mind and lead to more transparent and better government.
      These days, we believe in inclusive government, modernisation and freedom of information. I think that an impact assessment would be as helpful to the Government as it would be to the Opposition, whose role is to question the Government and ensure that they have thought their policies through.
      Mr. Gibb: I am disappointed that the Minister does not want to respond. He jumped up immediately at the start of the debate, without waiting to hear the comments of other hon. Members. However, we can continue the debate without his involvement, if that is how it has to be.
      The Minister is wrong not to accept the amendments. As my hon. Friend the Member for Lichfield (Mr. Fabricant) said, if the Government have nothing to hide they should accept the amendments and prepare the impact assessment. The Government seem convinced that the consumer will not suffer from extra costs being imposed on them as a result of the Bill. I am convinced otherwise, as are other Conservative Members.
      The guidance that has been issued is broadly drafted. Even in the more narrowly drafted interpretation of that guidance prepared in the Ofgem consultation document from which I quoted, it is clear that the social action plan will cause significant costs to be incurred by the utility companies. Those costs will have to be passed on to the consumer. That is the point that Labour Members fail to understand. They view business as a bottomless pit full of vast amounts of cash for Rolls-Royce cars and luxury yachts for the directors of companies and shareholders. They think it best to grab that money and use it for social programmes, but that is not how business works. In fact, businesses must maximise profits to satisfy investors and shareholders. If they do not do that, business people will find themselves out of a job.
      As a result, even if the regulator regulates the price mechanism on the basis of the retail prices index minus x, all the costs will be passed on to the consumer. In addition, consumers will face a tripling of the energy efficiency levy as a result of the Bill. Conservatives fully support energy efficiency. It clearly will not yield the result for which the Minister for Energy and Competitiveness in Europe hopes—the replacement of nuclear power—but we can seek to reduce CO, emissions by ensuring that we do not waste electricity in homes and businesses.
      Mr. Ian Bruce: My hon. Friend has moved on rather quickly from the fat cats. Does he appreciate—as would most people who can do simple mathematics—that when a gas or electricity company is forced to raise its prices by 10 or 20 per cent. because of the Government's measures, the regulator will increase the profit that it is allowed to make? The regulator calculates profit according to total costs, and if the costs rise by 10 or 20 per cent., so do the profits. The Minister for Competition and Consumer Affairs is trying to improve the situation for the fat cats, who will doubtless turn up as Labour party supporters and donors before they end up in the House of Lords where they can approve the Government's amendments.
      Mr. Gibb: My hon. Friend makes a valid point. The costs legitimately incurred by companies can be used as
      1046
      a basis for future price increases. If the regulator regards the costs as legitimate, those costs will form the basis of future price reviews. The costs will simply be passed on to the consumer.
      The Bill is particularly irritating in that the general increase in competition that is occurring in the industry thanks to privatisation and the opening up of markets by the Conservative Government is continually bringing down prices, even under the meddlesome stewardship of the Labour Government. Many extra costs will be lost, because prices will not necessarily rise. Neither, however, will they fall by as much as they otherwise would have.
      Consumers are losing out. They are not benefiting by as much as they should from falling prices, and are suffering from hidden measures, such as the tripling of the energy efficiency levy from £1.20 to £3.60 on the average bill. That increase applies to each utility, as my hon. Friend the Member for South Dorset (Mr. Bruce) often points out. In fact, it will mean an average £7.20 levy on bills, which is a form of stealth taxation. It is not an honest way in which to govern in a mature democracy.
      The use of stealth taxes has arisen as a direct consequence of Lady Thatcher's having made it impossible for any Government to increase the rate of income tax since the time when she was Prime Minister. It is now politically unacceptable to raise the basic rate or the upper rate. Governments have therefore found other methods of raising taxes, and the Government are past masters at doing so by stealth. It is time that we exposed stealth taxes so that our mature democracy can assess how much tax we are paying and how much public expenditure we are prepared to pay for.
      I pay tribute to my hon. Friend the Member for Poole (Mr. Syms) for his point about indirect and hidden ways in which the Government are raising funds to implement their social programmes. I am disappointed—[Interruption.] I am sorry to repeat that phrase, and sorry that the Minister for Energy and Competitiveness in Europe objects to it, but I am disappointed by the hurried response of the Minister for Competition and Consumer Affairs to a serious debate during the Report stage of what is supposed to be a flagship Bill. Despite my disappointment, and in view of the fact that we have had a debate, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 19

      PROVISION OF ADVICE AND INFORMATION TO PUBLIC AUTHORITIES AND OTHER PERSONS
      7.45 pm
      Dr. Cable: I beg to move amendment No. 35, in page 14, line 17, leave out "or body".
      Mr. Deputy Speaker: With this it will be convenient to discuss the following amendments: No. 36, in page 14, line 18, leave out from beginning to "or" in line 19.
      No. 38, in page 14, line 25, leave out from "body" to end of line 28.
      Dr. Cable: May I first seek your advice, Mr. Deputy Speaker, on a point of information? My colleagues and I tabled four amendments that were logically connected, but

      1047
      the Chair, in its wisdom, has chosen three of them, but not the fourth, on which, in fact, the three were contingent. The effect of that is the amendments that we are debating would have exactly the opposite effect to that which we intended.
      May I ask whether the Speaker's provisional selection list is sufficiently provisional to allow for the readmission of amendment No. 33, or could you give me further advice on how I should proceed?
      Mr. Deputy Speaker: I am afraid that Madam Speaker's decision on the selection of amendments is final.
      Dr. Cable: Naturally, I accept your judgment, Mr. Deputy Speaker. I shall therefore speak briefly on the three amendments, but shall not waste the House's time by entering into prolonged debate on amendments that we acknowledge to be defective as they stand.
      The Bill uses commercial confidentiality as a broad brush exemption from information that can be made available through the National Consumer Council. We regard that as a serious defect, which undermines the openness and transparency that we would wish from the consumer protection regime. We recognise that commercial confidentiality must sometimes be honoured and accepted, but a balance has to be struck between confidentiality and the right to know and to freedom of information.
      Our amendments were intended to try to ensure that a balance would be struck and that the council would have an obligation to balance commercial confidentiality against the value of open information. In the event of a dispute between those two objectives, the matter would have been referred to the Information Commission. I regret that because of the way in which the amendments have emerged, their effect would be to narrow freedom of information rather than broaden it. I do not want to achieve that, so I shall not trouble the Government to produce a reply. I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 35

      ELECTRICITY LICENCE MODIFICATION REFERENCES
      Amendment made: No. 1, in page 34, line 34, at end insert—
      '( ) In subsection (6), after "this section" there is inserted "or in carrying out functions under section 14A", after "the investigation" there is inserted "or the carrying out of those functions" and after "such investigation" there is inserted "or such functions".'.—[Mrs. Liddell.]

    Clause 37

      MODIFICATION FOLLOWING REPORT
      Amendment made: No. 2, in page 35, line 42, at end insert—
      ' "(5) After considering any representations or objections made in response to proposals set out in a notice under subsection (3), the Authority shall give notice to the Competition Commission—

      (a) setting out the modifications it proposes to make to remedy or prevent the adverse effects specified in the report; and

      (b) stating the reasons for making the modifications.

      (6) The Authority shall include with the notice under subsection (5) a copy of any representations or objections received in relation to the notice under subsection (3).
      (7) If the period of four weeks from the date on which the notice under subsection (5) is given elapses without a direction under section 14A(l)(a) having been given to it, the Authority shall—

      (a) make the modifications set out in the notice; or

      (b) if a direction under section 14A(l)(b) has been given, make the modifications which are not specified in the direction.'.—[Mrs. Liddell]

    Clause 48

      GENERAL DUTIES OF ELECTRICITY DISTRIBUTORS
      Amendment proposed: No. 28, in page 48, line 36, at end insert—
      ';—

      (c) to facilitate the development of embedded generation;

      (d) to support the achievement of the Government's national renewable energy targets by facilitating small-scale renewable generation through net metering.'.—[Mr. Stunell]

      Question put, That the amendment be made:—
      The House divided: Ayes 31, Noes 261.

      Division No. 172]

      [7.47 pm

      AYES

      Baker, Norman

      Michie, Mrs Ray (Argyll & Bute)

      Ballard, Jackie

      Moore, Michael

      Beggs, Roy

      Morgan, Alasdair (Galloway)

      Beith, Rt Hon A J

      Oaten, Mark

      Brake, Tom

      Öpik, Lembit

      Breed, Colin

      Russell, Bob (Colchester)

      Bruce, Malcolm (Gordon)

      Sanders, Adrian

      Burnett, John

      Smith, Sir Robert (W Ab'd'ns)

      Cable, Dr Vincent

      Smyth, Rev Martin (Belfast S)

      Campbell, Rt Hon Menzies (NE Fife)

      Stunell, Andrew

      Taylor, Matthew (Truro)

      Davey, Edward (Kingston)

      Thomas, Simon (Ceredigion)

      Fearn, Ronnie

      Tyler, Paul

      Foster, Don (Bath)

      Willis, Phil

      Hancock, Mike

      Harvey, Nick

      Tellers for the Ayes:

      Kirkwood, Archy

      Mr. David Heath and

      Maclennan, Rt Hon Robert

      Dr. Jenny Tonge.

      NOES

      Adams, Mrs Irene (Paisley N)

      Barnes, Harry

      Ainger, Nick

      Barron, Kevin

      Ainsworth, Robert (Cov'try NE)

      Battle, John

      Alexander, Douglas

      Bayley, Hugh

      Anderson, Janet (Rossendale)

      Beard, Nigel

      Atkins, Charlotte

      Beckett, Rt Hon Mrs Margaret

      Austin, John

      Bell, Stuart (Middlesbrough)

      Banks, Tony

      Benn, Hilary (Leeds C)

      Benn, Rt Hon Tony (Chesterfield)

      Golding, Mrs Llin

      Benton, Joe

      Gordon, Mrs Eileen

      Best, Harold

      Griffiths, Jane (Reading E)

      Betts, Clive

      Griffiths, Nigel (Edinburgh S)

      Blears, Ms Hazel

      Griffiths, Win (Bridgend)

      Blizzard, Bob

      Grocott, Bruce

      Borrow, David

      Grogan, John

      Bradley, Keith (Withington)

      Hain, Peter

      Bradley, Peter (The Wrekin)

      Hall, Mike (Weaver Vale)

      Bradshaw, Ben

      Hamilton, Fabian (Leeds NE)

      Brinton, Mrs Helen

      Hanson, David

      Brown, Russell (Dumfries)

      Harman, Rt Hon Ms Harriet

      Browne, Desmond

      Heal, Mrs Sylvia

      Buck, Ms Karen

      Healey, John

      Burgon, Colin

      Henderson, Ivan (Harwich)

      Butler, Mrs Christine

      Hepburn, Stephen

      Byers, Rt Hon Stephen

      Heppell, John

      Caborn, Rt Hon Richard

      Hesford, Stephen

      Campbell, Ronnie (Blyth V)

      Hill, Keith

      Campbell-Savours, Dale

      Hoey, Kate

      Cann, Jamie

      Hoon, Rt Hon Geoffrey

      Casale, Roger

      Hope, Phil

      Caton, Martin

      Howells, Dr Kim

      Cawsey, Ian

      Hughes, Ms Beverley (Stretford)

      Chapman, Ben (Wirral S)

      Hughes, Kevin (Doncaster N)

      Chisholm, Malcolm

      Humble, Mrs Joan

      Clapham, Michael

      Hurst, Alan

      Clark, Rt Hon Dr David (S Shields)

      Iddon, Dr Brian

      Clark, Dr Lynda (Edinburgh Pentlands)

      Jackson, Ms Glenda (Hampstead)

      Jackson, Helen (Hillsborough)

      Clarke, Charles (Norwich S)

      Jamieson, David

      Clarke, Rt Hon Tom (Coatbridge)

      Jenkins, Brian

      Clarke, Tony (Northampton S)

      Jones, Helen (Warrington N)

      Clwyd, Ann

      Jones, Ms Jenny (Wolverh'ton SW)

      Coaker, Vernon

      Coffey, Ms Ann

      Jones, Dr Lynne (Selly Oak)

      Cohen, Harry

      Jones, Martyn (Clwyd S)

      Connarty, Michael

      Kaufman, Rt Hon Gerald

      Cook, Frank (Stockton N)

      Keeble, Ms Sally

      Cousins, Jim

      Keen, Alan (Feltham & Heston)

      Crausby, David

      Keen, Ann (Brentford & Isleworth)

      Cryer, John (Hornchurch)

      Kemp, Fraser

      Cunningham, Jim (Cov'try S)

      Kennedy, Jane (Wavertree)

      Darvill, Keith

      Khabra, Piara S

      Davey, Valerie (Bristol W)

      Kidney, David

      Davies, Rt Hon Denzil (Llanelli)

      King, Andy (Rugby & Kenilworth)

      Davies, Geraint (Croydon C)

      Kumar, Dr Ashok

      Davis, Rt Hon Terry (B'ham Hodge H)

      Ladyman, Dr Stephen

      Lawrence, Mrs Jackie

      Dawson, Hilton

      Lepper, David

      Dean, Mrs Janet

      Leslie, Christopher

      Dismore, Andrew

      Levitt, Tom

      Dobbin, Jim

      Liddell, Rt Hon Mrs Helen

      Dobson, Rt Hon Frank

      Linton, Martin

      Doran, Frank

      Lloyd, Tony (Manchester C)

      Dowd, Jim

      Lock, David

      Drew, David

      McAllion, John

      Eagle, Angela (Wallasey)

      McAvoy, Thomas

      Eagle, Maria (L 'pool Garston)

      McCabe, Steve

      Efford, Clive

      McCafferty, Ms Chris

      Ennis, Jeff

      Macdonald, Calum

      Etherington, Bill

      McGuire, Mrs Anne

      Field, Rt Hon Frank

      McIsaac, Shona

      Fitzpatrick, Jim

      McKenna, Mrs Rosemary

      Flint, Caroline

      Mackinlay, Andrew

      Flynn, Paul

      Mahon, Mrs Alice

      Foster, Michael Jabez (Hastings)

      Marsden, Gordon (Blackpool S)

      Foster, Michael J (Worcester)

      Marsden, Paul (Shrewsbury)

      Fyfe, Maria

      Marshall, David (Shettleston)

      Gapes, Mike

      Marshall, Jim (Leicester S)

      Gardiner, Barry

      Marshall-Andrews, Robert

      George, Bruce (Walsall S)

      Martlew, Eric

      Gibson, Dr Ian

      Maxton, John

      Gilroy, Mrs Linda

      Meacher, Rt Hon Michael

      Godsiff, Roger

      Meale, Alan

      Goggins, Paul

      Michael, Rt Hon Alun

      Michie, Bill (Shef'ld Heeley)

      Sheerman, Barry

      Miller, Andrew

      Simpson, Alan (Nottingham S)

      Moffatt, Laura

      Skinner, Dennis

      Moonie, Dr Lewis

      Smith, Rt Hon Andrew (Oxford E)

      Morgan, Ms Julie (Cardiff N)

      Smith, Angela (Basildon)

      Morris, Rt Hon Ms Estelle (B'ham Yardley)

      Smith, Jacqui (Redditch)

      Smith, John (Glamorgan)

      Mountford, Kali

      Smith, Llew (Blaenau Gwent)

      Mudie, George

      Snape, Peter

      Mullin, Chris

      Soley, Clive

      Murphy, Jim (Eastwood)

      Spellar, John

      Murphy, Rt Hon Paul (Torfaen)

      Starkey, Dr Phyllis

      Naysmith, Dr Doug

      Steinberg, Gerry

      Norris, Dan

      Stevenson, George

      O'Brien, Bill (Normanton)

      Stewart, David (Inverness E)

      Olner, Bill

      Stinchcombe, Paul

      Organ, Mrs Diana

      Strang, Rt Hon Dr Gavin

      Palmer, Dr Nick

      Straw, Rt Hon Jack

      Pearson, Ian

      Stuart, Ms Gisela

      Pendry, Tom

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      Pickthall, Colin

      Pike, Peter L

      Taylor, Ms Dari (Stockton S)

      Plaskitt, James

      Taylor, David (NW Leics)

      Pollard, Kerry

      Temple-Morris, Peter

      Pond, Chris

      Thomas, Gareth (Clwyd W)

      Pope, Greg

      Timms, Stephen

      Pound, Stephen

      Tipping, Paddy

      Powell, Sir Raymond

      Todd, Mark

      Prentice, Ms Bridget (Lewisham E)

      Touhig, Don

      Prentice, Gordon (Pendle)

      Turner, Dennis (Wolverh'ton SE)

      Prescott, Rt Hon John

      Turner, Dr Desmond (Kemptown)

      Prosser, Gwyn

      Turner, Dr George (NW Norfolk)

      Purchase, Ken

      Twigg, Derek (Halton)

      Quin, Rt Hon Ms Joyce

      Tynan, Bill

      Quinn, Lawrie

      Ward, Ms Claire

      Rammell, Bill

      Wareing, Robert N

      Rapson, Syd

      Whitehead, Dr Alan

      Raynsford, Nick

      Williams, Rt Hon Alan (Swansea W)

      Reed, Andrew (Loughborough)

      Reid, Rt Hon Dr John (Hamilton N)

      Williams, Alan W (E Carmarthen)

      Roche, Mrs Barbara

      Williams, Mrs Betty (Conwy)

      Rooker, Rt Hon Jeff

      Wills, Michael

      Rooney, Terry

      Winnick, David

      Ross, Ernie (Dundee W)

      Wood, Mike

      Roy, Frank

      Woodward, Shaun

      Ruddock, Joan

      Wright, Anthony D (Gt Yarmouth)

      Russell, Ms Christine (Chester)

      Wright, Dr Tony (Cannock)

      Salter, Martin

      Savidge, Malcolm

      Tellers for the Noes:

      Sawford, Phil

      Mr. Gerry Sutcliffe and

      Sedgemore, Brian

      Mr. Tony McNulty.

      Questions accordingly negatived.

    Clause 57

      Financial Penalties
      8 pm
      Mr. Gibb: I beg to move amendment No. 26, in page 54, line 46, at end insert—
      '(9) No penalty fixed by the Authority under this section may exceed 5 per cent, of the turnover of the licence holder (determined in accordance with such provisions as may be specified in an order made by the Secretary of State).'.
      Mr. Deputy Speaker (Mr. Michael Lord): With this it will be convenient to discuss amendment No. 27, in clause 92, page 92, line 10, at end insert—
      '(9) No penalty fixed by the Authority under this section may exceed 5 per cent, of the turnover of the licence holder (determined in accordance with such provisions as may be specified in an order made by the Secretary of State).'.
      Mr. Gibb: The element of the Bill that is most universally criticised—there are many contender elements within it for that prize—is the penalty provisions in clauses 57 and 92. The provisions are criticised for imposing strict liability on utilities. The Gas and Electricity Markets Authority can impose a fine regardless of culpability. The Bill is criticised because it applies to past transgressions regardless of the fact that a contravention was remedied as soon as it was made known. The current system works well, but the approach set out in the Bill is far more heavy handed. Companies can be fined for transgressions even when they have been put right after they have been notified of them.
      Under the current regime, once a transgression occurs, the regulator will inform the utility that it has contravened a licence condition or has failed to perform to the correct standards as set out in its performance requirements. It will then have a chance to put things right. After that, an order will be issued to make the utility do so. Only after that does the regulator issue an order that results in the utility being punished. That seems a far better approach to penalty provisions than what we have in the Bill.
      The clauses are criticised generally for their extremely limited appeal provisions, which amount to less than the appeal possibilities that are available under the judicial review rules. The element of the clauses that is most criticised is the fine itself, which has no upper limit. Clause 57 for electricity and clause 92 for gas provide only that the authority may impose on the licence holder a penalty of such amount as is reasonable in all the circumstances of the case. There is no mention of an upper limit. The fine could be £100, £1 million, £100 million or £100 billion. That is why the Electricity Association has said:
      The Bill does not set an upper limit for the financial penalty. It is the policy intention that any penalty imposed will be reasonable and proportionate to the contravention or failure. However, in the absence of firm legal provision, the Authority has considerable discretion, the very element that the Bill aims to eradicate. The electricity industry finds the Bill to be lacking in this respect and would wish to see a cap on the penalty that the Authority is able to impose included in the Bill.
      The entire electricity industry finds the provision unacceptable. It creates discretion and uncertainty in a Bill that, as we have been told time and again by the Secretary of State and other Ministers, has been drafted to eradicate uncertainty and to introduce a more certain regulatory framework. It does not have that effect in respect of its financial penalty provisions.
      PowerGen's view of the provisions is as follows:
      Companies are already subject to a variety of financial sanctions under the Companies Act 2000—
      I think that it means the Companies Act 1998—
      under price controls imposed by the regulator, and the compensation requirements to customers where service standards are not met … companies should not be exposed to the multiple risk of incurring financial penalties from a number of different sources, each determined in isolation. The level of any fine should take into account other financial sanctions on companies and the Bill should impose an upper limit on the level of fines that can be imposed.
      The concerns of the electricity and gas industries are that the Competition and Service (Utilities) Act 1992, which sets a limit on fines, can impose—
      Mr. Syms: Is there not also concern that if markets appreciate that the company may be fined and they cannot
      1052
      quantify what that fine will be, that may lead to unreasonable gyrations of the share price, with an impact on investment?
      Mr. Gibb: My hon. Friend makes a valid point. It reveals the Government's lack of understanding of capital markets and how they work.
      The 1992 Act, which sets a limit, can impose fines of up to 10 per cent. of annual turnover. Under secondary legislation, that fine can be imposed, while the Bill is going through the House, for three years' worth of annual turnover. That results effectively in a fine equal to 30 per cent. of annual turnover. It is a real possibility that fines under the Bill could exceed these enormous sums, as the Government have not seen fit to impose any limit.
      In Committee, the Minister consistently refused to accept any maximum fine. She merely asserted that the fine had to be reasonable. It was alarming when the right hon. Lady responded to the debate on these matters in Committee. She said:
      I suppose that a serious contravention could attract a penalty of more than 10 per cent.
      She gave some examples of when there might be a fine in excess of 10 per cent. of a company's annual turnover. She said that one example might be
      if there were instances of widespread, repeated and serious malpractice—doorstep selling tactics, perhaps.
      Another example that she gave was
      the persistent failure to restore supplies after predictable power outages in winter.—[Official Report, Standing Committee A, 28 March 2000; c. 555–56.1
      The fact that the Bill does not have an upper limit to the fines that can be imposed is not an inadvertent omission. The Minister has made it clear that such an outcome is intended, and that there may be circumstances where fines in excess of those that can be imposed under the provisions of the 1992 Act can be imposed under the Bill when it is enacted. That creates huge concern because the threat of fines of that magnitude hanging over the industry will cause particular problems. It creates an enormous regulatory risk. It creates also a fluctuating share price as attempts are made to try to assess the level of fine, as my hon. Friend the Member for Poole (Mr. Syms) so rightly said.
      It is the regulatory risk that is the problem. Fines can be imposed regardless of whether the contravention of the licence conditions was deliberate or inadvertent. A fine can be imposed on a contravention that has already occurred but of which the utility company was unaware. Many of the licence conditions are subjective and widely framed. It is possible that a utility company could innocently be contravening a licence condition or a standards of performance requirement because it took a different interpretation of the wording from the regulatory authority.
      Mr. Syms: Does my hon. Friend think that fines should be time limited? It is possible that contravention in the past may lead to multiple fines in future.
      Mr. Gibb: My hon. Friend makes another valid point. The Bill is not retrospective in the sense that any contravention that took place before it becomes law will not be considered. After that, and way into the future, any past transgression can he subject to a fine. The possibility

      1053
      of a fine of the imposition that could bankrupt the company will cause investors to demand a higher rate of return. They will want to be compensated for taking a higher regulatory risk. That is not a theoretical consideration that has been dreamed up by Opposition Members. It is a genuine concern of which the Government must be aware, given all the briefings and representations that they have had from the companies. We are talking of severe fines that could bankrupt a company overnight. It is necessary to assess whether a fine is to be imposed if the risk is to be assessed. Given that that cannot be assessed, investors will require a higher rate of return to compensate them for the ever-present risk of a bankrupting fine being imposed.
      That in turn will increase the companies' borrowing costs. They will face a higher interest charge. We are talking of companies that are highly capital intensive in terms of pipe works, pylons and wires. Even the supply companies have large capital investments in computer programmes and networks, which are all financed by borrowing. That results in high interest charges, which are passed on to the consumer. The CBI has said that
      over-stringent methods may increase regulatory risk, costing industry more in borrowing, and ultimately increasing the burden on the end consumer.
      That is the key point. Extra costs will be passed on to the consumer, either in higher electricity and gas prices or in prices that will not fall by as much as they would have done otherwise. The limitless fining provisions are therefore a disaster for the consumer. They underline how deeply Ministers fail to understand how business works, free enterprise operates and the capital markets function.
      The Government cannot keep hitting business with more and more regulation and more and heavier fines while using more anti-business language. Phrases such as "rip-off Britain" and "naming and shaming" have all been used by Ministers. Business cannot withstand such pressures for long without there being consequences. Those consequences always fall on the poor consumer; they do not fall on the big fat international capitalist that Ministers have in mind. Consumers suffer either because a company disappears, which reduces competition, or because the investors in the companies require higher returns.
      Dr. Howells: Will the hon. Gentleman tell us why—perhaps he has given us the reason—after 18 years of Tory rule, the car companies used to refer to Britain as treasure island?
      Mr. Gibb: I think that we should leave the issue of car pricing for another day.
      Of course, the businesses that I have described are run by people who, like the rest of us, have human failings. They make mistakes and they will contravene licence conditions and standards of performance from time to time.
      Mr. Ian Bruce: My hon. Friend has just been given an exact example of how the Government consider the electricity and gas companies to be a milch cow from which they can extract money. The point about the motor
      1054
      industry that the Minister was so keen to throw at my hon. Friend does not reflect the experience of the people in Ford or Rover who are about to lose their jobs.
      Mr. Deputy Speaker (Mr. Michael Lord): Order. The amendment is quite tightly drawn and I would be grateful if the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) were not drawn away from it.
      Mr. Gibb: I am grateful to you, Mr. Deputy Speaker. However, the Minister's comment reveals the Government's misunderstanding of how business functions. They throw out phrases and cast out words and their remarks matter more than if they were uttered by other politicians or members of the public. When Ministers say such things, they cause severe damage.
      The people who run businesses are human and they will fail from time to time. They will contravene licence conditions and standards of performance from time to time. Of course, regulations are needed to ensure that such transgressions are deterred in the utility sector and that they are kept to a minimum. However, the Government seek to extract the extra pound of flesh. The anti-business attitudes from the recesses of their old Labour heritage and instincts keep on re-emerging and they cause real damage to some of this country's most precious business assets.
      Ministers fail to understand that the people who pay for those attitudes are not a mythical group of fat capitalists; the consumer always pays, just as it is always middle Britain that pays the Government's new stealth taxes. The average electricity and gas consumer will pay the cost of the extra-regulatory risk that the Bill and its penalty provisions will cause.
      Amendments No. 26 and 27 would cap the level of the fine that the regulatory authority can impose. They suggest a cap of 5 per cent. of the annual turnover of the businesses concerned, but if the Government think that another figure is more appropriate, we may be able to support them. It is important that there is a cap of some sort. Without it, we shall damage the interests of the very consumers whom the Bill is meant to protect. I hope that the Government will, this time, respond to the debate far more constructively, so that the House can hear the arguments that were put in Committee about why the Government think that limitless fines on the utility companies are so vital. Such fines will undo all the potential good for the protection of the consumer that the Government purport to be doing. Those extra costs, arising from the higher regulatory risk, will have to be paid for by someone. That someone will be the consumer.
      Mr. Syms: I know that we all want to make progress, so I shall be brief.
      I support amendments Nos. 26 and 27. My hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) made compelling arguments that I hope that those on the Treasury Bench have listened to and concentrated on. The key point is that, in the capitalist system with limited companies and a corporate regime, it is important to be able to assess risk. If, as under clause 57, it is not possible to assess risk, there will be problems for companies, particularly those that are publicly quoted.

      1055
      8.15 pm
      Under the corporate regime, such businesses have to abide by certain rules and have to produce their accounts in a certain way. However, an arbitrary decision of the regulatory authority could lead to a devastating impact on a business. That business may have shareholders, among whom many may be pensioners, or it may be owned by pension funds. Employers in the business may have share options or they may look forward to bonuses. Therefore, amendment No. 26 would quantify the maximum penalty that an authority could levy against a business, so that risk could be quantified by those who make judgments in the market.
      As the clause is drafted, there could be a regime of fines that are not time limited and a company could be caught for what it had done several years ago, and the fines could be multiple.
      Dr. Howells: There is a time limit. The penalty must be imposed within 12 minutes—[Interruption.] It would be all right if it was within 12 minutes. The penalty must be imposed within 12 months of the offence taking place.
      Mr. Syms: I thank the Minister for that explanation and for correcting me on that point.
      However, there is a problem in that there could be multiple fines. As my hon. Friend the Member for Bognor Regis and Littlehampton pointed out, a limit of 10 per cent. applies to fines made under the Competition Act 1998, but there is no limit to the fines made under the Bill. It is important to set limits, so that people know how to react. It is perfectly possible for us in the Chamber to frame legislation on the basis that everyone is reasonable. However, unreasonable people sometimes operate reasonable legislation in an unreasonable way. That could disrupt the market and have a dire effect on a business, with consequences for those who invest in it and those who work for it.
      The amendments are well worth considering. I hope that the Government will listen to the force of our arguments and accept them.
      Mr. Ian Bruce: This is a crucial element in the Bill.
      Mrs. Liddell: Sit down.
      Mr. Bruce: The Minister picks me up immediately, but I think that this is a crucial part of the Bill, and that is the reason for the amendments.
      Conservative Members have been concerned by the interventionist aspects of the Bill that will enable the Secretary of State to issue reams of regulations directing the regulator to have regard to a whole host of political imperatives and social policy aims that are more properly the role of government. We are concerned that the detail of these measures is not contained in the Bill and we have learned from past experience of this Government to be cautious of the detail that appears in secondary legislation. [Interruption.] The Minister for Competition and Consumer Affairs wants to know where my remarks come from. I have a speech writer; I use them occasionally to keep them in work. He will be pleased to know that there are many pages of this.
      The Bill will give the Government a raft of new powers, such as those that will enable fuel poverty to be tackled and there to promote energy efficiency and the
      1056
      use of electricity from renewable resources. The regulators will have the power to impose tough fines on companies guilty of bad practice or poor performance, such as mis-selling, interruption to supplies and the time it takes to reconnect customers. There will be no upper limit on the fines that the regulators can impose.
      On behalf of Her Majesty's Opposition, my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) tabled amendments Nos. 26 and 27, which would limit fines to 5 per cent. of the turnover of the licence holder. That is crucial because of the provisions of the Competition Act 1998, in which the Government argued there should be a limit. We believe that not only should the fines levied under this Bill be reasonable, but there should be certainty about the maximum amount.
      Utility groups are wary about the extent to which the new powers allow public bodies to interfere in the affairs of the privatised utilities. The Electricity Association, to which I know the Minister for Competition and Consumer Affairs listens carefully, states:
      The Government is giving itself considerable new powers to direct regulation. We want to see these used judiciously and transparently, with proper consultation, avoiding regulatory shocks which have the effect of increasing uncertainty, which in turn leads to increased costs. However, ministers have acknowledged this, and we take heart from their declared commitment to regulatory stability.
      The association said that before it had been consulted by Ministers. Having given that public warning, it believed privately that it would get from the Government the assurances that it wanted. Clearly, those assurances have not been made, and the association is concerned about that, as are Opposition Members.
      The Times reports that competition experts have been shocked by the proposal for unlimited fines, stating:
      Competition experts were astounded the Bill imposes no limit on the fines the regulator could impose on companies. The regulator has carte blanche to determine a tariff of fines which he must publish and companies will have a right of appeal. But the failure to impose a limit means fines could exceed the maximum level under the Competition Act of 10 per cent. of turnover.
      Although the water industry is no longer included in the Bill, it is significant that the outgoing Director General of Ofwat, Ian Wyatt, has criticised the Bill for its over-regulatory approach, saying:
      I find the bill over-complicated because it is over-prescriptive. Nothing is left to good sense.
      Those words of condemnation come from a man who has been a regulator.
      Dr. Howells: I have a great deal of time for Mr. Ian Byatt—his name is not Wyatt—because he has been a good regulator. Is the hon. Gentleman aware that we removed the water clauses from the Bill some time ago?
      Mr. Bruce: The Minister knows very well that I am fully aware that the Government removed those clauses, but, despite all their powers, the Government and their spin doctors were incapable of silencing Ian Byatt. I am sure that the Minister would have been pleased if I had not read out the quotation of a long-standing regulator for whom the Minister has just expressed great respect. I hope that he will mark those words, and to make sure that he does so, I shall read them again. Mr. Byatt said:
      I find the bill over-complicated because it is over-prescriptive. Nothing is left to good sense.

      1057
      That is as great a condemnation as we have heard of the Bill from any source. Ian Byatt is not playing a party political card; he is simply expressing his experience of being a regulator.
      The powers to enable fuel poverty to be tackled and to promote energy efficiency and electricity from renewable sources and other such powers—
      Mr. Deputy Speaker: Order. The amendments refer specifically to fixed penalties.
      Mr. Bruce: This sentence will, when I have finished it, directly relate to that matter. All those powers are enforceable by virtue of the fines. The Minister for the Environment stated:
      The Secretary of State for Trade and Industry will be able to require electricity supply companies to generate a proportion of electricity from renewable sources. This will be enforceable by the regulator using his general enforcement powers, including the power to impose monetary penalties.
      As a person well versed in how legislation is introduced, Mr. Deputy Speaker, you would be surprised to learn that such regulatory powers are backed by unlimited fines.
      When trying to persuade companies to fulfil certain criteria by giving them incentives, we have never before backed that policy by having unlimited fines for companies that fail to meet those criteria. That is unreasonable. I understand why, Mr. Deputy Speaker, you jumped to your feet, believing that the powers that I was describing could not be related to fines. That shows how ridiculous it is for the Government to enforce those powers by imposing fines.
      Although the Government may sincerely believe that prescription achieves what might be described as socially desirable ends, the evidence would suggest that those ends can be achieved, and have been achieved, without prescription, through the very fact of competition in the utilities.
      The amendments are sensible and simply seek to ensure that the Government will be reasonable in imposing the fines, as they have said they will be, and that the fines will be capped. The Minister may want to impose the 10 per cent. cap used in the Competition Act. We tabled several amendments about that in Committee, but when the Bill is on Report, we have to table a different amendment that has not been discussed in Committee. The exact level of the cap can be negotiated, perhaps in the other place.
      We need certainty from the Government. Certainty is almost more important than the capping level itself because it will enable people to calculate the additional cost of regulation in working out financing. As my hon. Friend the Member for Poole (Mr. Syms) pointed out, financing is an important issue. The Government might like to give way to the Opposition on this issue. We have all worked hard on the Bill, and we deserve to achieve the certainty for which the industry is asking.
      Dr. Howells: I thank hon. Members for their contributions. We have heard interesting statements, but I do not include in that the rather patronising comments of the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb), who believes that he is the only person with insight into how business works. He was a tax adviser at one time, and tax advisers no doubt have their part to play in making the wheels of business turn.
      1058
      The hon. Member for South Dorset (Mr. Bruce) made a thoughtful contribution, as ever. Unlike the hon. Member for Bognor Regis and Littlehampton, he recognises that companies that try to enter the gas and electricity markets understand very well that they must try to comply with licence requirements. If companies do not comply, they will face penalties; if they do comply, penalties will not apply. If they commit a breach, the penalty is limited to that which is reasonable in all the circumstances of the case. Companies can make a challenge through the courts if they believe that the penalty is not reasonable; the courts can quash unreasonable penalties, or substitute lesser penalties.
      The picture painted by the hon. Member for Bognor Regis and Littlehampton is one of companies quaking in terror at the thought of what might happen—that is how he sees the relationship between the industry and the Government, but it is not the picture that we see. As he said in Committee, he sometimes acts as the conduit for the views of the more paranoid sections of the Confederation of British Industry and the Institute of Directors—and he revels in that role.
      The Government do not believe that the amendment will improve the Bill. As I pointed out in Committee, the most important protection for licensed utilities is that any penalty imposed must be reasonable in all the circumstances of the case. The hon. Gentleman was kind enough to quote me saying that.
      Mr. Bruce: Will the Minister give way?
      Dr. Howells: Yes—it is always a pleasure to give way to the hon. Gentleman.
      Mr. Bruce: The Minister is trying the soft-soap, soft-words approach. Our question is a simple one. In the recently passed Competition Act, the Government decided to set a limit on penalties of 10 per cent. of turnover. Why is it appropriate to have such a limit in that legislation, but not in this Bill?
      8.30 pm
      Dr. Howells: The simple answer is that the two were entirely different Bills and they will, I hope, be entirely different Acts. As the hon. Gentleman well knows, because he follows these matters attentively, the Competition Act was closely modelled on the European model, which sets a cap of 10 per cent. of turnover on the penalty that can be imposed. However, the Utilities Bill has different requirements.
      The authority will have to produce and consult on a statement of policy on the imposition of penalties and it must have regard to that statement when imposing a penalty. The authority will have to take certain steps, including holding public consultation, before finalising the imposition of a penalty. The company concerned will be able to challenge in the courts both the imposition and the amount of any penalty, as well as the payment schedule determined by the authority. The amendment would introduce a further limitation on those powers, by specifically limiting to 5 per cent. of turnover any penalty imposed. As the hon. Member for South Dorset says, that would not even align the maximum penalty with the limit

      1059
      under the Competition Act, which is set at 10 per cent. of turnover—the figure that appeared in the Opposition's amendment tabled in Committee.
      In some cases, a penalty of 5 per cent. of turnover or less might be reasonable, when all of the circumstances of the case have been taken into account. However, in cases involving more serious contraventions, such a penalty might not be appropriate. In proposing a maximum penalty of 5 per cent. of turnover, do the Opposition intend to prevent the authority from imposing a penalty that is reasonable in all the circumstances of a case in which a penalty of more than 5 per cent. of turnover would be reasonable? Are they saying that, in no circumstances—even if price fixing and other serious market distortions have resulted in millions of consumers being ripped off—should companies be fined more than 5 per cent. of turnover?
      Why do the Conservatives do such things? I know that they loathe the very idea of a regulator having the power to do anything other than slap a company's wrists. Indeed, that was all that regulators could do until we passed the Competition Act. If the hon. Member for Bognor Regis and Littlehampton believes that serious market distortions occur from time to time—cartels are formed, price-fixing arrangements made, complex monopolies operated—surely he accepts that the regulators should have more power to step in. Regulators should be able to warn companies at first, if necessary; then, in cases of serious breach, they should be able to hit the companies extremely hard with a fine that will ensure that such a breach never occurs again.
      Mr. Gibb: The Minister has raised two points. First, there is no warning: that is what happened under the regulatory regime that is being replaced. Now, fines can be imposed for past transgressions, with no warning—the fact of their having happened will be sufficient justification, regardless of whether they were deliberate, inadvertent or the result of negligence. Secondly, I should be happy to listen to any proposal for a limit other than 5 per cent. Our amendment in Committee proposed a 10 per cent. limit; we proposed 5 per cent. so that the issue could be debated again on Report. If the Minister has some other figure, we shall listen. The point is, we need a limit—it is the lack of a limit that creates a regulatory risk.
      Dr. Howells: The proposed limit was 10 per cent. in Committee, it is 5 per cent. on Report, and it could be 2.5 per cent. tomorrow. The point is that, for the reasons that I have given, the Government will not set a limit. We believe that a limit could impose serious constraint on the effectiveness of the powers of regulators, and that would be at odds with the Government's objective of protecting the interests of consumers. Furthermore, the Government believe that a limit is unnecessary.
      The Government consider that the financial penalty provisions give a real measure of protection to consumers and the companies concerned, and that they will provide genuine benefits for consumers and for companies that strive to adhere to their obligations rather than taking short cuts. The amendments would undermine that.
      1060
      I urge the hon. Member for Bognor Regis and Littlehampton to withdraw the amendment and not to press the other amendment. Should he seek to divide the House, I urge hon. Members to vote against the amendment.
      Mr. Gibb rose—
      Dr. Howells: Disappointing.
      Mr. Gibb: It was an outrageous rather than a disappointing response.
      Industry and others wish to see many of the Bill's provisions on the statute book as soon as possible—for example, NETA and the separation of distribution and electricity supply—but the penalties to be imposed on industry for contravening licence conditions and for failing to perform to the standards required in the Bill alarm industry.
      The Minister says that companies have to understand that they must comply with the licence conditions, but they do understand that. Those companies are run by people who want to obey the conditions to which they have signed up. They want to meet the conditions relating to standards of performance and to provide a good service to their customers, but there will be inadvertent transgressions. The Bill, in contrast to the current regulatory regime, makes no allowance for inadvertent transgressions. Any transgression—inadvertent, deliberate or otherwise—will be covered and will give rise to a penalty. That is the difference between this regulatory regime and the current one. There is no chance of companies being able to put matters right. Having tried to put things right, they will still be subject to a fine, which could be sufficient to wipe out the company because there is no limit in the Bill.
      The Minister says that the amendments are at odds with the objective of protecting the consumer, but I am afraid that the limitless fine provisions are at odds with the objective of protecting the consumer. If a fine is imposed, it will ultimately be borne by the consumer. All moneys paid out by companies will ultimately be paid by the consumer.
      The increased regulatory risk caused by the limitless fine will increase the cost of capital to companies, which again will be passed on to the consumer. [Interruption.] I am sorry that the Minister finds some of my responses patronising. They are not meant to be. I know that the Minister is having a go at me today, but the fact remains that both Ministers demonstrate a lack of understanding of how business works. I say that not because I know anything about their education, experience or background, but because of what they are saying about the Bill and the way in which they are trying to justify the provisions. They fail to understand the consequences of the measures that they propose. Describing elements of the CBI and the IOD as paranoid will not go down well with them.
      Dr. Howells: The hon. Gentleman distorts my words. I said that he likes to paint himself as a conduit for the most paranoid sections of the CBI.
      Mr. Gibb: As I said in Committee, I would be a conduit for anybody with whose representations I agree, whether they be consumer groups, business groups or

      1061
      individual constituents. I shall continue to do that despite the Minister's criticism, because that is what we are here to do. Our task is to deliver the views of all sections of society in the House, particularly those that are affected by the Bill. British consumers will be enormously damaged by the Bill, which will add enormously to the costs that industry will have to pick up and then pass on to the consumer.
      It is staggering how many times Opposition Members have to repeat that measures that add to industry's costs—whether in higher regulatory risk, higher interest charges or costs incurred in having to comply with guidance issued by the Secretary of State—will ultimately be paid for by the consumer. That reveals a lack of understanding about how industry works. It is a pity that, as a consequence of the Bill, customers will not benefit from the falls in electricity and gas prices to which they would otherwise be entitled.
      We have debated the amendment sufficiently. I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 60

      OBLIGATION IN CONNECTION WITH ELECTRICITY FROM RENEWABLE SOURCES
      Amendment proposed: No. 3, in page 60, leave out lines 37 to 40.—[Mr. Pope.]
      Question put,That the amendment be made:—
      The House divided:Ayes 260, Noes 30.

      Division No. 173]

      [8.40 pm

      AYES

      Adams, Mrs Irene (Paisley N)

      Campbell, Ronnie (Blyth V)

      Ainger, Nick

      Campbell-Savours, Dale

      Ainsworth, Robert (Cov'try NE)

      Cann, Jamie

      Alexander, Douglas

      Casale, Roger

      Allen, Graham

      Caton, Martin

      Anderson, Janet (Rossendale)

      Cawsey, Ian

      Atkins, Charlotte

      Chapman, Ben (Wirral S)

      Austin, John

      Chisholm, Malcolm

      Banks, Tony

      Clapham, Michael

      Barnes, Harry

      Clark, Rt Hon Dr David (S Shields)

      Barron, Kevin

      Clark, Dr Lynda (Edinburgh Pentlands)

      Battle, John

      Bayley, Hugh

      Clarke, Charles (Norwich S)

      Beard, Nigel

      Clarke, Rt Hon Tom (Coatbridge)

      Beckett, Rt Hon Mrs Margaret

      Clarke, Tony (Northampton S)

      Begg, Miss Anne

      Clwyd, Ann

      Bell, Stuart (Middlesbrough)

      Coaker, Vernon

      Benn, Hilary (Leeds C)

      Coffey, Ms Ann

      Benn, Rt Hon Tony (Chesterfield)

      Cohen, Harry

      Benton, Joe

      Connarty, Michael

      Best, Harold

      Cook, Frank (Stockton N)

      Betts, Clive

      Cousins, Jim

      Blears, Ms Hazel

      Crausby, David

      Blizzard, Bob

      Cryer, John (Hornchurch)

      Borrow, David

      Cunningham, Jim (Cov'try S)

      Bradley, Keith (Withington)

      Darvill, Keith

      Bradley, Peter (The Wrekin)

      Davey, Valerie (Bristol W)

      Bradshaw, Ben

      Davies, Rt Hon Denzil (Llanelli)

      Brinton, Mrs Helen

      Davies, Geraint (Croydon C)

      Brown, Russell (Dumfries)

      Davis, Rt Hon Terry (B'ham Hodge H)

      Browne, Desmond

      Buck, Ms Karen

      Dawson, Hilton

      Burgon, Colin

      Dean, Mrs Janet

      Butler, Mrs Christine

      Dismore, Andrew

      Byers, Rt Hon Stephen

      Dobbin, Jim

      Caborn, Rt Hon Richard

      Doran, Frank

      NOES

      Allan, Richard

      Maclennan, Rt Hon Robert

      Baker, Norman

      Michie, Mrs Ray (Argyll & Bute)

      Ballard, Jackie

      Moore, Michael

      Beggs, Roy

      Morgan, Alasdair (Galloway)

      Beith, Rt Hon A J

      Oaten, Mark

      Brake, Tom

      Öpik, Lembit

      Breed, Colin

      Russell, Bob (Colchester)

      Burnett, John

      Sanders, Adrian

      Cable, Dr Vincent

      Smith, Sir Robert (W Ab'd'ns)

      Taylor, Matthew (Truro)

      Campbell, Rt Hon Menzies (NE Fife)

      Thomas, Simon (Ceredigion)

      Tonge, Dr Jenny

      Davey, Edward (Kingston)

      Tyler, Paul

      Fearn, Ronnie

      Willis, Phil

      Foster, Don (Bath)

      Hancock, Mike

      Tellers for the Noes:

      Harvey, Nick

      Mr. Andrew Stunell and

      Kirkwood, Archy

      Mr. David Heath.

      Dowd, Jim

      McCabe, Steve

      Eagle, Angela (Wallasey)

      McCafferty, Ms Chris

      Eagle, Maria (L'pool Garston)

      McDonagh, Siobhain

      Efford, Clive

      Macdonald, Calum

      Ennis, Jeff

      McIsaac, Shona

      Etherington, Bill

      McKenna, Mrs Rosemary

      Field, Rt Hon Frank

      Mackinlay, Andrew

      Fitzpatrick, Jim

      McNulty, Tony

      Flint, Caroline

      Mahon, Mrs Alice

      Flynn, Paul

      Marsden, Gordon (Blackpool S)

      Foster, Michael Jabez (Hastings)

      Marsden, Paul (Shrewsbury)

      Foster, Michael J (Worcester)

      Marshall, David (Shettleston)

      Fyfe, Maria

      Marshall, Jim (Leicester S)

      Gapes, Mike

      Marshall-Andrews, Robert

      Gardiner, Barry

      Martlew, Eric

      George, Bruce (Walsall S)

      Maxton, John

      Gibson, Dr Ian

      Meacher, Rt Hon Michael

      Gilroy, Mrs Linda

      Meale, Alan

      Godsiff, Roger

      Michael, Rt Hon Alun

      Goggins, Paul

      Michie, Bill (Shef'ld Heeley)

      Golding, Mrs Llin

      Miller, Andrew

      Gordon, Mrs Eileen

      Mitchell, Austin

      Griffiths, Jane (Reading E)

      Moffatt, Laura

      Griffiths, Nigel (Edinburgh S)

      Moonie, Dr Lewis

      Griffiths, Win (Bridgend)

      Morgan, Ms Julie (Cardiff N)

      Grocott, Bruce

      Morris, Rt Hon Ms Estelle (B'ham Yardley)

      Grogan, John

      Hain, Peter

      Mountford, Kali

      Hall, Mike (Weaver Vale)

      Mowlam, Rt Hon Marjorie

      Hamilton, Fabian (Leeds NE)

      Mudie, George

      Hanson, David

      Mullin, Chris

      Harman, Rt Hon Ms Harriet

      Murphy, Jim (Eastwood)

      Heal, Mrs Sylvia

      Murphy, Rt Hon Paul (Torfaen)

      Healey, John

      Naysmith, Dr Doug

      Hepburn, Stephen

      Norris, Dan

      Heppell, John

      O'Brien, Bill (Normanton)

      Hesford, Stephen

      O'Brien, Mike (N Warks)

      Hill, Keith

      Olner, Bill

      Hoey, Kate

      Organ, Mrs Diana

      Hoon, Rt Hon Geoffrey

      Palmer, Dr Nick

      Hope, Phil

      Pearson, Ian

      Howells, Dr Kim

      Pendry, Tom

      Hughes, Ms Beverley (Stretford)

      Pickthall, Colin

      Hughes, Kevin (Doncaster N)

      Pike, Peter L

      Humble, Mrs Joan

      Plaskitt, James

      Hurst, Alan

      Pollard, Kerry

      Hutton, John

      Pond, Chris

      Iddon, Dr Brian

      Pope, Greg

      Jackson, Helen (Hillsborough)

      Pound, Stephen

      Jamieson, David

      Powell, Sir Raymond

      Jenkins, Brian

      Prentice, Ms Bridget (Lewisham E)

      Jones, Helen (Warrington N)

      Prentice, Gordon (Pendle)

      Jones, Ms Jenny (Wolverh'ton SW)

      Prescott, Rt Hon John

      Prosser, Gwyn

      Jones, Dr Lynne (Selly Oak)

      Purchase, Ken

      Jones, Martyn (Clwyd S)

      Quin, Rt Hon Ms Joyce

      Kaufman, Rt Hon Gerald

      Quinn, Lawrie

      Keeble, Ms Sally

      Rammell, Bill

      Keen, Alan (Feltham & Heston)

      Rapson, Syd

      Kemp, Fraser

      Raynsford, Nick

      Kennedy, Jane (Wavertree)

      Reed, Andrew (Loughborough)

      Khabra, Piara S

      Reid, Rt Hon Dr John (Hamilton N)

      Kidney, David

      Roche, Mrs Barbara

      King, Andy (Rugby & Kenilworth)

      Rooker, Rt Hon Jeff

      Kumar, Dr Ashok

      Rooney, Terry

      Ladyman, Dr Stephen

      Ross, Ernie (Dundee W)

      Lawrence, Mrs Jackie

      Roy, Frank

      Lepper, David

      Ruddock, Joan

      Leslie, Christopher

      Russell, Ms Christine (Chester)

      Levitt, Tom

      Salter, Martin

      Liddell, Rt Hon Mrs Helen

      Savidge, Malcolm

      Linton, Martin

      Sawford, Phil

      Lloyd, Tony (Manchester C)

      Sedgemore, Brian

      Lock, David

      Skinner, Dennis

      McAllion, John

      Smith, Rt Hon Andrew (Oxford E)

      McAvoy, Thomas

      Smith, Angela (Basildon)

      Smith, Jacqui (Redditch)

      Touhig, Don

      Smith, John (Glamorgan)

      Turner, Dennis (Wolverh'ton SE)

      Smith, Llew (Blaenau Gwent)

      Turner, Dr Desmond (Kemptown)

      Snape, Peter

      Turner, Dr George (NW Norfolk)

      Soley, Clive

      Twigg, Derek (Halton)

      Spellar, John

      Tynan, Bill

      Starkey, Dr Phyllis

      Ward, Ms Claire

      Steinberg, Gerry

      Wareing, Robert N

      Stevenson, George

      Whitehead, Dr Alan

      Stewart, David (Inverness E)

      Williams, Rt Hon Alan (Swansea W)

      Stinchcombe, Paul

      Stoate, Dr Howard

      Williams, Alan W (E Carmarthen)

      Strang, Rt Hon Dr Gavin

      Williams, Mrs Betty (Conwy)

      Straw, Rt Hon Jack

      Wills, Michael

      Stuart, Ms Gisela

      Winnick, David

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      Wood, Mike

      Woodward, Shaun

      Taylor, Ms Dari (Stockton S)

      Wright, Anthony D (Gt Yarmouth)

      Taylor, David (NW Leics)

      Wright, Dr Tony (Cannock)

      Temple-Morris, Peter

      Thomas, Gareth (Clwyd W)

      Tellers for the Ayes:

      Tipping, Paddy

      Mr. Gerry Sutcliffe and

      Todd, Mark

      Mrs. Anne McGuire.

      Question accordingly agreed to.
      Amendment made: No. 4, in page 104, line 1, leave out Clauses 100 to 105.—[Mr. Pope.]
      Motion to transfer clause 107, agreed to.

    Clause 108

      ELECTRICITY LICENCE CONDITIONS
      Amendment made: No. 6, in page 111, line 33, leave out from beginning of line to end of line 10 on page 112 and insert—
      'After section 14 of the 1989 Act (modification following report) there is inserted—'.—[Mr. Pope.]

      Motion to transfer clause 108, agreed to.

    Clause 109
      EXTENT OF PART III
      Amendment made: No. 8, in page 114, line 7, leave out Clause 109.—[Mr. Pope.]
    Clause 110
      FINANCIAL PROVISIONS
      Amendment made: No. 9, in page 114, line 14, leave out from "the" to "by" in line 15 and insert "Authority".—[Mr. Pope.]
    Clause 113

      SHORT TITLE AND COMMENCEMENT
      Amendment made: No. 10, in page 114, line 39, at end insert—
      '(3) Any amendment or repeal made by this Act has the same extent as the enactment being amended or repealed.
      (4) Subject to subsection (3), this Act does not extend to Northern Ireland.'.—[Mr. Pope.]

    Schedule 2

      THE GAS AND ELECTRICITY CONSUMER COUNCIL
      Mr. Jim Cousins: I beg to move amendment No. 39, in page 117, line 28, at end insert—
      '(2A) The Council shall maintain staff in each region for which there is a Government Office for the Regions.'.
      Schedule 2 provides for the establishment of the Gas and Electricity Consumer Council. The amendment would ensure that staff of the council would be available in each region. The proposals on which consultation is taking place through the shadow Gas and Electricity Consumer Council are causing considerable concern in the north-east of England. I guess that they will cause similar concern elsewhere when the details become clear.
      The proposals provide two alternatives: the physical presence of staff of the new Gas and Electricity Consumer Council in either three or five places in mainland United Kingdom. That availability of professional staff is not sufficient to deal with the problems and complaints of consumers. It will give rise to considerable difficulty, and will not provide the service that the Government intend the new council to offer.
      A particular feature of both proposals on the table for consultation gives rise to concern in the north-east. Either all the north-east, in one case, or part of it, in the other, would be served from Scotland. Given your presence, Mr. Deputy Speaker, and that of my right hon. Friend the Minister, 1 hesitate to quibble about that, but the experiment has already been tried, and has failed. During the 1990s, British Gas attempted to operate both its customer accounts services and its technical repair servicing in the north-east of England from Scotland. The system did not work, and had to be reversed. That is why there is concern about this proposal.
      There is also concern because the consumer councils in the north-east are dealing with a staggeringly large percentage of the total volume of complaints. In 1999, half the complaints to the Gas Consumers Council went to the council in the north-east of England. That is not surprising, because the north-east of England contains the greatest concentration of people with pre-payment meters and budget payment plans. Those are the two factors that most often give rise to consumer complaints. Moreover, it was the north-east that experienced the first "hit" of consumer problems with the dual fuel provisions, which were piloted there by Northern Electric. Those provisions gave rise to a huge volume of consumer complaints.
      The lack of professional staff with expertise to help consumers with their problems will cause considerable difficulty in the north-east. The age of welfare dependency is coming to an end: consumers want a voice for themselves, although they frequently require

      1065
      professional assistance and back-up. They do not passively accept the failures in service, difficulties with charging and problems with service delivery that were accepted without complaint in the past. I hope that the Government will take seriously the need for professional staff to be available to deal with consumer complaints in every region of England.
      Mrs. Liddell: I well understand the reasons for the amendment. It is important for consumers' views to be taken into account, wherever those consumers may be. The amendment would insert in the Bill a requirement for the Gas and Electricity Consumer Council to maintain staff in each region for which there is a Government office. That would not necessarily comply with the structure of the energy industries, and might result in a disjointed arrangement in terms of the location of companies. I urge my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins), who is anxious to ensure that the voice of consumers is heard, to pause and consider whether the degree of prescription that he suggests is necessary or appropriate.
      Our general approach on organisational issues is to give the council a clear set of functions, but also to give it the flexibility that will allow it to organise itself in the way that it considers best suited to the fulfilling of those functions. Ours is an arm's-length approach, and it strikes us as the right one. If an organisation is given a job for which it will be accountable, it makes sense to enable it to organise itself cost-effectively.
      The idea of a staff presence in each region might be attractive in the short term, but it would not necessarily be attractive in the longer term as the nature of the industry changed. Increasingly—especially now that gas and electricity can be offered by the same company—companies are centred in different regional capitals, serving industry and consumers from those regional bases.
      9 pm
      Consumers' needs and requirements may change, just as the industry changes; the structure of the gas and electricity industry may change further. The Bill ensures that there is the necessary flexibility to allow those changes to be taken into account.
      It is more important for the Bill to get the functions of the council—the outputs, if you like—right than to prescribe in detail how they should be delivered, but I recognise how important it is to ensure that regional issues are taken into account. For example, the chairman of the Gas Consumers Council, who will become the chairman of the Gas and Electricity Consumer Council, has recently consulted on that organisational structure. She will come back with a final set of proposals following the consultation. I have said to her that it is important that she considers the outputs.
      My hon. Friend may care to reflect on whether regional needs could be met by the establishment of regional panels, as distinct from regional offices. Many issues will be raised, including that of pre-payment meters, which is of considerable importance in my constituency because of the socio-economic mix of the people there. We may not need the office to have a specific regional focus, provided that a regional perspective is used in dealing with complaints.
      1066
      I am anxious to ensure that when the chairman makes her proposals, she includes mechanisms to ensure that the views of consumers throughout the country are taken into account. However, I have grave doubts about whether an extensive office network based on the Government office areas is the most cost-effective way to do that. There is no such overlap between Government office boundaries and the gas and electricity companies. Many consumer issues will have a national perspective. For instance, one of the issues that we have discussed a lot during consideration of the Bill is doorstep mis-selling. That is happening throughout the country and we are all anxious about it, so I ask my hon. Friend to consider the case that I have made.
      Mr. Cousins: I do not want to detain us for long, but I seek an assurance from my right hon. Friend that she intends consumers in each region to have ready access—at no cost, or minimal cost—to the sort of professional back-up that the Gas and Electricity Consumer Council is being set up to deliver for people with complaints and anxiety about quality of service.
      Mrs. Liddell: I am happy to give my hon. Friend that assurance. I hope that, having been given it, he will be prepared to consider withdrawing his amendment.
      Mr. Cousins: I am happy to beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Schedule 3

      FURTHER PROVISION ABOUT TRANSFERS OF FUNCTIONS, PROPERTY ETC..
      Amendments made: No. 11, in page 120, leave out lines 1 to 3.
      No. 12, in page 120, line 4, leave out from "liabilities" to "and" in line 5 and insert "under section 3"
      No. 13, in page 120, line 6, leave out "or 103(3)".
      No. 14, in page 120, line 44, leave out from first "the" to "under" in line 45 and insert "Council".—[Mr. Pope.]

    Schedule 6
      MINOR AND CONSEQUENTIAL AMENDMENTS
      Amendment made: No. 15, in page 125, leave out lines 29 to 38.—[Mr. Pope.]
    Schedule 8

      REPEALS
      Amendments made:No. 16, in page 133, line 21, column 3, leave out—
      'the Director General of Telecommunications'.
      No. 17, in page 133, line 36, column 3, leave out—
      'the Director General of Telecommunications'.
      No. 18, in page 133, line 44, column 3, leave out—
      'the Director General of Telecommunications'.
      No. 19, in page 134, leave out lines 5 to 18.—[Mr. Pope.]

    Title

      UTILITIES
      Amendments made: No. 20, in title, line 2, leave out from " Authority" to "to" in line 4 and insert—
      'and the Gas and Electricity Consumer Council'.
      No. 21, in title, line 5, leave out "telecommunications,".—[Mr. Pope.]
      Order for Third Reading read.
      9.4 pm
      The Secretary of State for Trade and Industry (Mr. Stephen Byers): I beg to move, That the Bill be now read the Third time.
      I am sure that all Members would like to thank those who served so ably on the Standing Committee of the Bill, giving detailed scrutiny to the various measures—providing the House with the opportunity on Report to consider a Bill to which the Standing Committee had given due consideration. Special thanks must go to the hon. Member for Broxbourne (Mrs. Roe) and my hon. Friend the Member for Clydesdale (Mr. Hood), who chaired the proceedings of the Standing Committee. On behalf of all Members, we would like to thank them for doing so.
      The Utilities Bill forms part of the Government's agenda of modernisation and reform. It makes important reforms to the regulation of the gas and electricity industries.
      Mr. Bob Blizzard: There is no doubt that this is a good Bill. It does, however, for the first time, extend some of the regulator's powers to the offshore sector of the oil and gas industry. There is some concern in the industry that there should be a requirement on the regulator to consult the industry, particularly on proposals that may affect competitiveness and, ultimately, consumers. Clause 4(4) imposes a general requirement on the regulator to consult. Will my right hon. Friend confirm that that provision includes consultation on matters relating to the offshore oil and gas industry?
      Mr. Byers: My hon. Friend has been a doughty campaigner for the interests of the offshore oil and gas industry, and I understand his concerns that the Bill's consultation provision does not refer explicitly to the offshore oil and gas industry. However, I reassure him that the consultation that will have to occur extends to the offshore oil and gas industry. I hope that that goes some way towards meeting his concerns.
      The Utilities Bill puts consumers at the heart of regulation. The Bill's aim is to deliver a modern, efficient and fair framework, reflecting the growing convergence of the two sectors. It provides a consistent, accountable and transparent regime that will help to reduce costs for both gas and electricity. Consequently, it will deliver real lower prices for both domestic or business consumers.
      The Bill will provide more effective competition in the gas and electricity market. Conservative Members' approach to utilities was to privatise them quickly, selling national assets—as has been found in various reports by the National Audit Office—at a knock-down price and without any real concern for the structure of the industry that was left behind. No real consideration was given to
      1068
      the needs of consumers or to whether they received a good and fair deal because of the changes. A regulation system was introduced that created a climate of uncertainty and failed to deliver effective competition. The system was inherently unstable. The Government felt that it was important to introduce a Utilities Bill to remedy all the wrongs caused by the Conservatives' approach to the utilities sector.
      The Bill introduces new electricity trading arrangements, which we are confident will produce reductions in wholesale electricity prices of at least 10 per cent. and form an important part of the energy statement that I made earlier this week. It will merge the gas and electricity regulators, to reflect the rapid convergence of those two markets. It will establish a single and stronger consumer council, which is better able to advocate consumers' interests, and it will put consumers first. For the first time, the regulator will have a principal objective of protecting the consumer interest.
      We want the regulator to examine particularly the needs of those who are on a low income, of pensioners and of consumers in rural areas. I hope that that approach will be supported by hon. Members on both sides of the House.
      The Bill introduces a power for the authority to impose financial penalties for past and continuing breaches of licence conditions and other obligations. It contains reserve powers to protect and assist disadvantaged consumers. It sets targets for energy efficiency.
      The Utilities Bill provides many changes that will be of real and lasting benefit to consumers, both domestic and business. It reflects a new approach to the utilities sector. Real improvements will be delivered. It is a Bill that meets our objectives of modernisation and reform, and I commend it to the House.
      9.9 pm
      Mrs. Browning: The Utilities Bill has been a shambles. It is rare indeed for the debate on a Bill's remaining stages to begin with a motion to recommit it to Committee, but it is unprecedented for half the major provisions of a Government Bill to be removed, nine sittings into its Committee stage, because of issues that were quite clearly foreseeable before the Bill was published.
      Telecoms were removed because of the communication White Paper to be published in the autumn. DTI Ministers must have known about that—or perhaps they did not. One begins to wonder what is going on at the DTI and whether Ministers are focused on policy development.
      Water was also removed—in this case because later this year DETR is to publish its own water Bill. We still have not discovered whether DTI Ministers knew about that when they included water in the Utilities Bill.
      On Second Reading it was clear that the Bill required several hundred drafting amendments. One reason given for that was that the parliamentary draftsman responsible had been ill in the weeks before Second Reading. The Utilities Bill was supposed to be one of the Government's flagship Bills, but they introduced it regardless of whether or not the preparation had been completed. If that was the case, why is it that, even as late as mid-April, the Government are still tabling amendments and new clauses, some of which came to the Committee directly from the draftsman's pen?

      1069
      The Bill has been unprecedented in its incompetence in respect of policy, drafting and delivery, but it is hugely important in what it will ultimately achieve.
      Mr. Ian Bruce: I am sure that my hon. Friend will have heard the Secretary of State say that the Bill cures the utilities of all the problems that were left by the Conservative Government—when he has already taken two of the utilities out of the Bill. Clearly, he has produced a dog's dinner rather than a cure.
      Mrs. Browning: My hon. Friend, who served on the Committee, is absolutely right. Perhaps this is the appropriate moment for me to pay tribute to the work that my hon. Friends did in Committee, particularly my hon. Friends the Members for Bognor Regis and Littlehampton (Mr. Gibb) and for South Dorset (Mr. Bruce).
      On the plus side, in clause 66 the Bill paves the way for new electricity trading arrangements, which we and industry welcome. Nearly £750 million is being spent on developing the new electricity market that the Government expect and that we all hope will deliver lower electricity prices.
      The Bill merges the electricity and gas regulators into a new combined Ofgem. That is also welcome as it makes sense for those industries to be jointly regulated since they have started to supply each others' products. However, large bureaucracies tend to grow even larger, so it is a pity that the Government failed in Committee to accept our amendments that would have restricted the spending of Ofgem to rises of no more than the rate of inflation.
      We welcome the new combined Gas and Electricity Consumer Council. The Bill also separates the licensing of the distribution and supply of electricity. We welcome that too, as it further defines and confines the area that remains a natural monopoly. That should mean that there is scope to reduce regulatory involvement in due course in those areas that are fully open to competition, but it is clear from the Bill that regulation is to have new and expanded objectives that will make it increasingly difficult for regulation to recede as competition increases.
      I now turn to the minuses in the Bill. It creates a new range of objectives for the Secretary of State and for the new regulatory authority to impose on the gas and electricity utilities. No longer is the regulator's role simply to mimic competition where natural monopoly prevails. Now its role is to deliver the Government's social and environmental objectives. However worth while those objectives may be, it is for the Government to implement them through Government programmes and not to burden business with their delivery. As a result of the imposition of new and ever more costly demands on gas and electricity suppliers, the costs will inevitably be passed on to the consumer in their gas and electricity bills—something that the Secretary of State should bear in mind when he so readily proclaims this to be a Bill for consumers. The Government's social program, rather than being financed through taxation, which is levied according to income, will now be funded through household bills, which are paid according to usage. So large families and the elderly will pay for the Government's social and environmental programmes.
      Also on the minus side are the limitless fines that the Bill will enable the regulatory authority to impose on the utilities, as we discussed again this evening. Not even
      1070
      the Competition Act 1998, with its draconian fines of up to 10 per cent. of turnover, can match the Utilities Bill in its scope for high fines. The Secretary of State should remember that corporate fines often find their way back into the pricing mechanism for consumers. The consequence will be a huge increase in the level of regulatory risk being faced by the industry. Higher regulatory risk means higher rewards for the provider of capital to the industry to compensate for the increased risk. That in turn translates into higher interest costs, which inevitably end up being passed on to the consumer.
      The Bill has been trumpeted as shifting the balance in the utilities away from the shareholder to the consumer. The reality is that the consumer will pick up the tab. Privatisation of electricity and gas, opposed by Labour and predicted by the Prime Minister as leading to higher prices, has delivered huge cuts in the cost of electricity and gas to the consumer: they are now 30 per cent. cheaper in real terms. Competition has delivered the savings and the Bill demotes the promotion of competition to a second order objective.
      The Bill will replace the promotion of competition with the promotion of yet more regulation. It reflects the Government's attitude that business is generally up to no good and that only the benign hand of increased intervention and regulation can remedy that. Reference has been made again tonight to fat cats, which reminds us that it was the Secretary of State who ran the so-called fat cat unit at Millbank towers.
      We are seeing a new form of government intervention. It is quintessentially the third way—it invites a more powerful, more expensive and more interventionist regulator to second-guess management decisions and impose on industry new burdens to deliver the Government's social programme, while distancing Ministers from any controversy over the issues concerned. How familiar we are with this Secretary of State seeking to distance himself from any controversy emanating from his Department! The Bill will hamper competition, add to costs and, most deplorably of all, damage, not protect, the interests of consumers.
      9.18 pm
      Mr. Stunell: First, I wish to thank the ministerial team for the work that they have put into the Bill. It has had the most remarkably chequered history and I am well aware that—as well as causing us stress—it has caused the ministerial team some stress. Occasionally, that has been visible, despite their smiling attempts to deny it. When I saw the list of amendments for Report, I derived some wry amusement from realising that, despite the 50-odd clauses we had successfully deleted in Committee, a few had escaped Ministers' eagle eyes and had to be deleted today. I recognise what a difficult and hard job they have had.
      The overall shape of the Bill is now right and it should proceed, but it still has significant faults. We have tried to demonstrate those faults, in Committee and on Report, and to indicate how they might have been rectified. I hope that there will be opportunities to do that in the other place.
      I would highlight the fact that, despite the many good intentions and smooth words and the emollient approach of the Minister for Competition and Consumer Affairs in Committee, there are no firm targets for delivery on

      1071
      renewables. That is a worry, and it raises fears in the industry that one of the fundamental tasks of the Department of Trade and Industry will not be achieved. That task is to make sure that the potential for employment, export and growth in the renewables sector is fully developed.
      We believe that an opportunity that could have allowed the renewables sector to blossom and grow, as has happened in some neighbouring countries has been missed. As a result, the United Kingdom will miss out on some growth and export opportunities, as well as on the opportunity to reach the Kyoto targets that the Government have pledged to achieve.
      We are worried about some of the matters relating to the consumer council in its new combined form. The council is the way to go, but we think that it may turn out to be too centralised and bureaucratic, and we are worried about the availability of information to it. It would be only too easy for the regulator and the industry to shut up shop and keep information away from the council.
      Ministers have given reassurances on the record that I hope can be prayed in aid when information is denied. However, we would have preferred the requirements to protect the consumer and to make information available to be specified on the face of the Bill.
      Our underlying belief is that, although it is right and proper for the Bill to do all that it can to open up competition in the gas and electricity industries, at every level from generator to supplier, making the market the determining force for the introduction of renewables and the achievement of environmental targets will not work. We also doubt that the market will be the right force to achieve the Government's social objectives. The Bill has some weak links that the Government will have to address, either in Parliament or in some other way, in the very near future.
      The Bill has some very positive features, however. We have welcomed the new electricity trading arrangements and the increased competition that will be introduced to the gas and electricity markets. We also welcome the integrated regulatory framework that will be provided in the future. In the past, there has been inconsistency between regulators and, on some occasions, the regulatory framework has fostered a jobsworth attitude. I hope that the Bill will put an end to that.
      We are happy with the environmental obligations in the Bill. They are a positive step forward and we are pleased to support them.
      Overall, the Bill takes a number of significant steps forward, but it falters in some key areas. We regret that, and hope that opportunities for further improvements will be taken.
      We shall support the Bill tonight.
      Question put and agreed to.
      Bill accordingly read the Third time, and passed.

PETITION

  Fertility Treatment
  9.23 pm
  Mr. Paul Marsden: I am pleased to present a petition signed by 1,176 local people on the sensitive and sometimes heartbreaking issue of gaining equal access to fertility treatment.
  The petition states:
  To the House of Commons, this petition of Shropshire and mid-Wales residents declares
  That with one in six couples seeking help for infertility at some time, there is an overwhelming need for better funding for this treatment on the NHS, the current provision of which is patchwork across Britain and very minimal in Shropshire and mid-Wales.
  The petitioners therefore request that the House of Commons urge the Secretary of State to ensure that adequate resources are available for infertility treatment and that access to this treatment should be on a fair and equitable basis across the country.
  And your Petitioners, as in duty bound, will ever pray.
  To lie upon the Table.

Macular Eye Disease
Motion made, and Question proposed,That this House do now adjourn.—[Mr. Pope.]
9.24 pm
Mr. David Crausby: I am grateful for the opportunity to raise the subject of macular eye disease and so, I hope, to increase awareness of a debilitating disease that is the most common form of registrable visual impairment among the elderly in the western world. Age-related macular degeneration affects 40 per cent. of people aged over 75, despite which it is relatively unheard of.
I first became aware of the problems associated with the disease when I was invited to attend a newly formed macular eye disease group in my constituency. Bolton macular disease group is a self-help organisation comprising people with a common aim of providing support for each other and discussing problems and exchanging ideas on how to cope with their difficulties. The group was formed with the help of the Bolton social services department's visual impairment team, which had done good work for those who suffer from impaired vision.
It is all too fashionable these days to criticise social services departments, and it is a pleasure to highlight the essential work that they do and to congratulate them on it. I pay tribute to the macular group in Bolton and similar groups around the country. They do a tremendous voluntary job in helping sufferers and their partners with advice and support. Most importantly, they reassure people who have the disease that they are not alone. The Bolton group is part of the national Macular Disease Society, which has many branches across the country.
To assist those who are unaware of the problems of macular degeneration, I shall briefly describe the disease. The human eye operates like a camera, the main difference being that a camera has a layer of film in the back while the eye has a layer of tissue—the retina. The image focused on the retina is converted to a digital image that is transmitted through the optic nerve to the brain, where it is perceived as sharply focused vision. The macula is found at the centre of the retina, where incoming rays of light are focused. The macula is responsible for what we see immediately in front of us—the vision that we need for detailed reading or writing. It controls our ability to appreciate colour.
The macula receives most of its nourishment from blood vessels in a deeper layer, which is separated from the macula by a membrane. If the membrane is damaged, the macula does not function properly. If the membrane breaks, new and abnormal blood vessels form to try to repair the damage, but they may bleed and displace the macula. The delicate cells of the macula can sometimes become damaged and stop working. No one seems to know why, but it tends to happen as we get older, although children and young people may also suffer from inherited macular degeneration: indeed, sometimes, several members of a family will suffer.
Macular degeneration impairs your ability to look straight ahead, Mr. Deputy Speaker. There is a blind spot in the centre of your vision. It is always there; it never goes away. It is as if someone were holding a coin six
1074
inches in front of your face. You cannot see around the spot, and it will not move away from the centre of vision, regardless of where you look.
Because macular degeneration is normally age-related, it usually involves both eyes, although not necessarily at the same time. For many people, the visual cells simply cease to function, just as the colours fade in an old photograph: that is known as dry degeneration. Fortunately, it is not a painful disease and it never leads to complete blindness, even though it is the most common cause of poor sight in people aged over-60. It never leads to complete loss of sight because only the central vision is affected, so those with macular degeneration will have enough side vision to get about and to maintain their independence. Dry degeneration accounts for the majority of cases; in effect, it is untreatable.
A significant minority of cases are of wet macular degeneration, which is much more severe. However, it is treatable if diagnosed early enough. AMD Alliance International estimates that more than 500,000 people in the UK suffer from various forms of the disease. Between 10 and 15 per cent. of those patients have wet AMD, but they can be treated if the disease is caught early enough.
Every year, throughout the world, 500,000 new patients develop wet AMD; between 40 and 60 per cent. of sufferers will develop the lesions that are the predominant sign of the disease. Patients with that condition lose their ability to read, drive and recognise faces in as little as two months or as long as two years.
Because wet AMD can cause profound and rapid loss of vision, it has been the subject of many years of research by scientists and clinicians throughout the world, and various new treatments have been promoted. New developments are upon us. Only last week, the United States Food and Drug Administration approved an exciting new treatment, and the European Union recommended approval of a treatment involving a combination of laser beams and the drug Visudyne.
Two centres in the UK—Liverpool and Aberdeen—have been taking part in international studies to evaluate photodynamic therapy, which is a new treatment for wet AMD. Last month, the brief results of the second year of the study were released. They demonstrated that the beneficial effects of photodynamic therapy had continued into the second year.
The therapy works by preventing the leaking blood vessels from causing further damage. The procedure takes place in an out-patient clinic and takes about 30 minutes. It starts with a 10-minute intravenous infusion of Visudyne—a light-sensitive dye that sticks to the inner lining of the new vessels. Five minutes after the infusion, the dye is activated by a light shone on to the surface of the eye. The activated dye then damages the vessels, causing them to close.
I should warn hon. Members that photodynamic therapy is beneficial only for certain categories of the disease and that treatment needs to be commenced within six months of the onset of visual deterioration. That is why it is so important to highlight the disease and to encourage awareness and early diagnosis. Of course, Visudyne offers a solution for only a small minority of those with AMD; a much larger majority of sufferers will continue to depend on visual aids, equipment and conventional treatment.

1075
The normal first port of call for those who are experiencing problems with their vision is their optician. The introduction of free eye tests for the elderly from the beginning of this month is of immense importance in the early diagnosis of AMD. Regrettably, far too many elderly people simply could not afford to attend their optician regularly and they could have missed out on early treatment and support.
I am optimistic that regular eye testing will be most helpful in ensuring that people aged over 60 who are at risk of AMD will be able to receive regular eye examinations. The Royal National Institute for the Blind recommends that elderly people should have an eye test every two years. More frequent examinations will obviously result in patients with signs of eye disease being referred for the specialist treatment that they require.
I am concerned, however, that the standard of service from opticians is irregular. I am advised that they do not always effectively test for the disease. A standard optical test involves external examination and internal examination of the eye to detect signs of injury, abnormality or disease, and examination of the retina. The use of an ophthalmoscope would be expected to uncover macular degeneration when it is well established. There is, however, a test known as the Amsler grid, which is designed to map the field of vision and uncover any problems, but there is no requirement for an optician to use this test routinely. I would appreciate it if my hon. Friend the Minister were to investigate the situation.
The second port of call for those experiencing a visual difficulty is usually their general practitioner. They, like opticians, have to decide whether a referral to a consultant is appropriate. This can cause problems with people missing out if the GP is insufficiently trained in recognising when it is necessary to refer a patient to an eye consultant.
It is only when patients see an eye consultant that treatment becomes available, and it is by this time often too late effectively to treat the disease. There is still much that can be done, however, even when vision has deteriorated either through wet or dry degeneration. For example, the patient may be registered as blind or partially sighted, and only the consultant has the authority to make the registration decision. Registration automatically leads to referral to the local social services department, which will instigate action from its visual impairment team or its local equivalent.
If the consultant feels that the patient would benefit from the use of magnifiers or aids of any sort, a referral would be made to the low-vision aid clinic, which is usually part of the same hospital. That clinic will recognise that one of the main difficulties for a patient with AMD will be reading and examining small detail. The clinics are able to measure close as well as distance vision, and can prescribe magnifiers to assist with close work. The optometrist will also advise on the importance of correct lighting levels to enhance the patient's remaining vision.
In addition, virtually all social services departments will have a provision for visually impaired people. Their role is to assist these people in retaining their independence and quality of life. Social services will conduct an initial assessment of the individual's needs.
1076
These days there are numerous aids and pieces of equipment for reading, writing, mobility and general daily life. They include closed circuit television, talking books, magazines and newspapers, big-button telephones, talking watches and clocks, tactile oven controls and even talking microwaves. There are clubs and societies such as the Macular Disease Society, which do such good work in Bolton and which first made me aware of this disabling disease.
My aim in initiating this debate on macular eye disease was to raise awareness of a disability that is so little known and yet affects so many people. I am eager to enlist the Government's support in highlighting and improving the services that are available to sufferers.
As I have said, there are some exciting treatments on the horizon, but the harsh reality is that for the vast majority it is too late to cure the disease. It is not too late, however, to provide modern visual aids. With such rapid strides being made in new technology, there will no doubt be many more exciting prospects available on the horizon.
9.39 pm
The Parliamentary Under-Secretary of State for Health (Ms Gisela Stuart): I congratulate my hon. Friend the Member for Bolton, North-East (Mr. Crausby) on securing the time for this debate. I hardly need say that sight, and the risk of losing it, is an important subject. Age-related macular degeneration—or AMD—affects about 500,000 people in the United Kingdom, mainly, but not exclusively, the elderly.
Before I enlarge a little on what my hon. Friend has told us about the origins and effects of AMD, I join him in paying tribute to the voluntary organisation that he mentioned in his constituency. The national health service owes much to support given by interest groups that are often formed by the sufferers of particular diseases. Therefore, I extend my appreciation to the work of the Bolton Macular Disease Society.
I shall say a little about the Government's position on possible advances in the treatment of AMD. We have already demonstrated the priority that the Government attach to the eye care of the elderly by the reintroduction of free sight tests for everyone aged 60 or over, but we need to make sure that the national health service stays sensitive to new advances in the treatment of eye disease and can quickly identify the people who might benefit from them.
AMD is the most common cause of sight loss in people over 60. Although it is severely disabling—my hon. Friend described the condition graphically—it seldom leads to complete sight loss because only the central vision is affected. That means that most people with macular degeneration should have enough side vision to maintain a degree of mobility and independence.
I know that some concerns have been expressed that AMD is becoming more common among younger or middle-aged people. In fact, we have always known that people in their 40s contract this condition—congenital sight defects, glaucoma, diabetic retinopathy and AMD each account for about 10 per cent. of people registered blind under the age of 64. However, we are not aware of those figures changing significantly. AMD in particular, and loss of sight more generally, remain in most cases diseases of old age. Out of 300,000 people registered blind or partially sighted, two thirds are over the age of 75.

1077
As macular degeneration is an age-related process, it often involves both eyes, although they may not be affected at the same time. Some people find that their visual cells simply stop working, with an effect—as my hon. Friend described it—a bit like the colours fading in an old photograph. That is known as "dry" degeneration. The dry type is the more common form—we estimate that it affects almost 90 per cent. of those with AMD. The onset of this condition tends to be slow and both eyes are usually affected symmetrically.
Vision tends to deteriorate gradually and the loss is not always severe. Unfortunately, there is not yet a proven treatment for the condition, but the worst effects can be alleviated with low vision aids such as magnifiers, telescopes and, increasingly, closed circuit television cameras that project an enlarged image on a display in front of the patient's eyes. Better lighting and large-print books can also be helpful.
The other type of macular degeneration is known as wet degeneration. It is less common—we estimate that it affects about 10 per cent. of patients with AMD—but it tends to have a more severe and rapid effect on the central area of vision. Blood vessels from one layer at the back of the eye grow in an abnormal fashion into the macular area. These blood vessels may leak or bleed causing a rapid and significant reduction in central vision. That tends to affect one eye at a time, but there is a risk of the same thing occurring in the other eye over the following months.
About 10 per cent. of people with wet AMD—in other words only a very small proportion of all AMD sufferers—might be suitable candidates for laser treatment. It is normally successful only if the condition is picked up early, and even then not all patients are suitable. Unfortunately, with laser treatment there is also the risk that lesions may continue to progress and that vision may become even worse after the treatment.
I am happy to say that, as my hon. Friend suggested, research is under way into a process that offers exciting prospects of increasing the accuracy and effectiveness of laser treatment. The treatment is known as photodynamic therapy and involves the use of a photosensitive dye, which, when activated in the back of the eye by a light source, closes abnormal retina blood vessels. The underlying abnormal blood vessels should then be easily identified and selectively destroyed without damaging the overlying sensory retina.
That research project, which is being conducted at the St. Paul's eye unit in Liverpool, is due to take two years and is now in its second year. As my hon. Friend said, the results so far are promising, but the key test will be whether the treatment offers real and, above all, lasting improvements to the patient's sight.
If, as we all hope, the outcome of the research is positive, we will, as my hon. Friend has emphasised, need to consider carefully whether that means that laser treatment could be provided more widely than it is now. How that consideration should best be done depends in part on the exact outcome of the research. The Government have established a new process for evaluating developments in medical science, and one option would be to ask the National Institute for Clinical Excellence to evaluate the new treatment. Whatever the process for evaluating the research, I can assure my hon.
1078
Friend that it will be as quick and as thorough as it needs to be for the welfare of AMD patients and the NHS as a whole.
I would not want to leave my hon. Friend or the House with the impression that the photodynamic project is the only research into AMD. There are no fewer than 19 projects looking at AMD and another 47 which have considered promising options such as sub-macular surgery have recently been completed. I sincerely hope that some of that research leads to more effective treatments for what is a very distressing condition.
If the treatment were endorsed, the next step would be to ensure that the people who might benefit from it were identified and referred as promptly as possible. The measures that we took last year to extend the eligibility for free NHS sight tests to people aged over 60 will be an excellent start.
Ophthalmic opticians, whom I know prefer to be known as optometrists, have practices on almost every high street. When testing someone's sight they are also required to conduct an examination of the health of the eyes. Opticians can already identify the signs of AMD and, with additional advice and training, could single out the cases of wet AMD that might be susceptible to the new treatment. I also envisage a system of local protocols with hospital ophthalmology departments to make sure that patients are referred promptly for treatment.
My hon. Friend mentioned the Amsler grid, which may be used in some cases to highlight visual distortions that may be symptomatic of AMD. That test is not a substitute for regular eye tests, which, if carried out at least every two years, should ensure that any signs or symptoms may be picked up in the early stages when treatment can be effective in preventing sight loss.
People under 60 are also eligible for NHS sight tests if they are on low incomes or predisposed to eye disease. Even for those on higher incomes the cost of a private sight test is seldom more than £18. In the past, we have collaborated with the Royal National Institute for the Blind on publicity campaigns encouraging people to have their sight tested regularly, and if it would help we would not hesitate to mount another effective campaign highlighting the risks to sight from AMD and the benefits of early diagnosis and prompt treatment.
We have also recently announced new measures to tackle the wide variations in service experienced by patients with cataracts. We have asked local services to put forward proposals for a slice of the £20 million that has been allocated for the next two years, which will help to modernise eye surgery. We believe that, with the elderly population increasing, improving the standard of eye care will represent a step towards improving the quality of their lives.
I hope that I have allayed my hon. Friend's fears that we may not be sufficiently responsive to advances in the treatment of this sight-threatening disease. Although we all hope very much that the research will fulfil its potential, I say as a note of caution that we cannot prejudge its outcome. If it is positively evaluated, we have the facilities to ensure that those people who might benefit are promptly identified and treated.
Question put and agreed to.
Adjourned accordingly at eleven minutes to Ten o'clock.