Financial Penalties

HC Deb 19 April 2000 vol 348 cc1050-61

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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 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 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 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.

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 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 Timesreports 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. 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.

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?

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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 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.

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 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.