§ 3.6 p.m.
§ The Earl of MansfieldMy Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
§ Moved, That the House do now again resolve itself into Committee.—(The Earl of Mansfield.)
§ On Question, Motion agreed to.
§ House in Committee accordingly.
§ [The LORD ABERDARE in the Chair.]
§ Clause 15 [Construction of pipe-lines by Gas Corporation.]:
§
Lord Skelmersdale moved Amendment No. 32BA:
Page 20, line 42, leave out from beginning to end of line 2 on page 21 and insert ("then, subject to subsection (5) and section 17(4) below, the Secretary of State may give directions to the Corporation in accordance with subsection (4A) below.
(4A) Directions under subsection (4) above may—
§ The noble Lord said: I beg to move Amendment No. 32BA. We on this Bench have come to the Committee this afternoon recognising that there is very real concern in the Committee over the provisions in Part II of this Bill. While seeking to allay the fears which have already been expressed, and which are no doubt still to be put forward on the proposed gas provisions, we are prepared to spend more time listening to proposals from noble Lords than some noble Lords have heretofore given us credit for. That is not to say that we do not have our bottom line—of course, we do. It may be that we shall end up disagreeing fundamentally on various points, but I for one hope not. However, I accept that the purpose of the Committee stage in your Lordships' House is to probe the Government's intention and, if necessary, to effect changes either at this, or perhaps more appropriately, at a later stage in the Bill. I hope that the Committee is prepared to accept this introduction in the spirit in which it is given.
§ Turning to the amendment itself, I suggest to the Committee that it would be for your Lordships' convenience to consider Amendment No. 32BA with its two consequentials, namely, the amendment to the word "requirements", Amendment No. 32C, and the Government amendment to Clause 17, Amendment No. 37A. Due to our timing last week, the Committee will have had time to study these amendments and will have realised that the purpose of the amendments is to respond constructively to the suggestion embodied in Opposition Amendment No. 33.
§ I think that there is a large measure of consensus between myself and noble Lords opposite on this particular point, while any differences are relatively minor. Therefore, I shall concentrate first on the consensus. At present, Clause 15 makes no mention of reimbursement to BGC of the costs of increasing the capacity of a proposed pipe-line to comply with a direction. That means that the costs of increased capacity would initially at least fall on BGC. The gas corporation would get a return when someone came forward to use the additional capacity, but that might be some years later. Conceivably it might never occur, in which case the only return that the gas corporation would obtain on the additional costs would be from such use as the corporation itself could make of the increased capacity, including, for example, as a means of storing gas ready for peaks of demand.
604§ The Opposition Amendment No. 33 suggests that Clause 15 should mention reimbursement for the gas corporation of the costs of increased capacity, and that broad proposition is accepted in the long Government amendment to Clause 15—namely, Amendment No. 32BA. It is a point which the Government have considered seriously, in the light of discussion in another place, with the gas corporation and with some potential private suppliers of gas.
§ In preparing this amendment, we have been able to specify that the source of reimbursement would be the persons whose representations provide the basis for a direction in the first place. We have sought a provision which would permit equitable treatment both for the gas corporation and for potential private suppliers whose plans may not be entirely finalised at the points in time when an opportunity for an increase in capacity under Clause 15 arises. That is why the amendment provides an opportunity for a private supplier who would be required to contribute to the costs to drop out within a specified period if he considers that his plans are not sufficiently definite to justify such expenditure, leaving the gas corporation to proceed with the pipe-line without incorporating additional capacity on behalf of that supplier.
§ Turning very briefly to the two consequential Government amendments, that affecting the word "requirements"—Amendment No. 32C—is purely a drafting consequential amendment. The amendment to Clause 17 ensures that a person who reimburses the gas corporation for the cost of increased capacity will have the opportunity to apply under Clause 17 for the right to use that capacity—Clause 17(4) already provides such a link between Clauses 16 and 17. I hope that noble Lords will agree that the Government amendments move in the same broad direction as their amendments, and in the light of that will be prepared not to move Amendment No. 33. I beg to move.
§ 3.12 p.m.
§
Lord Beswick moved, as an amendment to Amendment No. 32BA, Amendment No. 32BB:
Line 11, at end insert ("and where such a requirement is imposed shall—").
§ The noble Lord said: I beg to move Amendment No. 32BB. In introducing his amendment, the noble Lord, Lord Skelmersdale, referred to the value of parliamentary discussion. Certainly the history of the point embodied in this amendment is an interesting one and in some ways, as the noble Lord said, it reflects credit on our parliamentary proceedings. But others would say that it reflects less credit on the thinking of those people in the present Government who are in control of our affairs and who were responsible for the original draft.
§ In the very first place the Government presented a Bill which gave powers to the Secretary of State to alter the route or size of a pipe-line which the corporation, after careful and professional planning, had decided was the most efficient and the most cost-effective for their own purpose. As I say, it was to the credit of Parliament that they prevailed upon the Government to have second thoughts on this point.
§ But such was the reluctance of the Government to change their attitude that the amendment which they 605 brought forward simply provided that they would exercise those powers to change the planning of the corporation only if some third person or persons asked them to intervene. I readily agree that there were advantages in having this power exercised only in the case of a specific application of some company or person who apparently wished to have common carrier rights. But that left us with a situation in which the corporation would be compelled by the Secretary of State to change their plans—to invest more money, either in order to provide a pipe-line greater than they would otherwise have constructed, or possibly, indeed, to change the route of the pipeline in order to serve the convenience of the person or persons who had made the request to the Secretary of State.
§ If the Secretary of State, after considering these recommendations, then directed the corporation to change their plans, there was no guarantee that the corporation would ever recover the capital costs of changing the route or size. There was, indeed, no guarantee at all that the third person or persons would ever use the increased capacity. But at that time the Secretary of State was suggesting that the recovery of costs would be by increased use of the pipe-line and the terms of that use would enable the corporation, over a period of years, to recover their costs.
§ But, clearly, this too was unfair on the corporation. Now the Government have been prevailed upon to have third thoughts. I suggest to the noble Lord that the wording which they have now brought forward—the amendment which we now have before us—after this third attempt bears evidence of the same grudging and reluctant attitude that they displayed on earlier occasions. It happens to be the case that this present amendment amends the earlier draft of this amendment by virtue of the fact that the payment is now to be made by the third person or persons to the corporation, rather than the other way round. I am sure that the noble Lord will say that that is only a printer's error, but some will think that it is probably a Freudian slip.
§ It had been my intention to speak in support of Amendment No. 33, which seems to me to be a much more straightforward and understandable way of achieving a given purpose. Therefore, apart from the obvious difference between the mandatory and the permissive provisions of Amendment No. 33 as against Amendment No. 32BA, which he has moved, or the latest version of Amendment No. 32B, can the noble Lord say what is the difference? The original Amendment No. 33, which I had hoped the Committee would accept, certainly seems to me to be much more economical in the use of words, but maybe the extra words have some value. But the general line of thought in the amendment which the noble Lord has moved is, I think, one which should be encouraged. However, I think that the Committee should now encourage him to take that line of thought to its final conclusion and make the provision of payment mandatory, or the power to enforce payment mandatory, and not simply a permissive power. I suggest that the Committee ought to ensure that justice shall be done and not simply may be done, which would be the case if we accepted Amendment No. 32BB, as moved. Therefore, I invite the Committee to agree to the 606 amendment in my name and that of my noble friends. I beg to move.
§ Lord SomersBefore the noble Lord replies, can he tell me whether there is anything in the Bill—I confess that I have not read it through very thoroughly—to control the kind of gas that is supplied by an independent concern? For instance, it would be impossible to mix within the same main coal gas and North Sea gas. Perhaps the noble Lord will tell me about that.
§ Lord Ross of MarnockI think that the noble Lord who has asked that question raises a matter of very considerable importance. Indeed, if he casts his eye down the Marshalled List, he will discover that there is an amendment in the name of the Opposition and the noble Lord, Lord Tanlaw, in respect of the compatibility of the gas that may be used. However, here we are dealing mainly with the pipe-line aspect of it.
We are dealing not with an existing pipe-line but with where the British Gas Corporation decide that, because of demands for gas, replacement or something or other, a new pipe-line is required. At the present time, as I understand it, the British Gas Corporation get capital approval and within that capital approval they can go ahead with whatever developments they want. But here now under this clause we have this specific order to them that they cannot proceed with any new high pressure pipe-line development unless they give notice to the Minister. With that notice they must provide all the information to show from which point to which point, a detailed map, sizes, and everything else. Then the department goes into operation inviting representations from somebody unknown who might want to use that pipeline for private gas, presumably to private customers.
Preparing a pipe-line is very complicated. Here we have bureaucratic interference in a very technical matter. As to the degree to which there is interference, I would ask noble Lords to read the amendment. There are directions. The directions,
require the Gas Corporationin respect of,the pipe-line, or any length of it specified in the directions".The quantity of the gas is to be specified, and the kind specified. This is relevant to the point made by the noble Lord from the Cross-Benches. Then we go on to "specify the sums", and the people who made representations have to be specified. They then have to specify the arrangements in respect of the payment of those sums. Eventually they deal with,such modifications as are so specified".This is bureaucratic interference of the worst and most dangerous kind. I have the highest respect for civil servants. They worked nobly for me for eight years when I was Secretary of State for Scotland. But, from my own parliamentary experience, this is not the kind of thing in which civil servants should have the last word. It is the kind of thing in which the gas board, who eventually carry the responsibility for the safety of the whole operation, should carry the last word. There are one or two amendments coming forward in respect of this to which I hope your Lordships will pay considerable attention.607 This is the background to this particular clause. My noble friend sitting close to me is quite right. The Secretary of State has a discretionary power in relation to the directions he is giving. He can either give directions or not give directions. He has to be satisfied about certain things. But if he gives a direction and tells the gas board to do various things in detail, which they probably did not want to do in the first instance, then surely the responsibility for payment should not be theirs. Belatedly the Government have accepted that. To their credit they have done that. But instead of it being discretionary as to whether he does this, it really ought to be mandatory. If he decides that the pipe-line originally proposed by the gas corporation is not big enough and that they should make changes of all sorts and kinds, then surely the person on whose behalf these changes are made should pay. There should not be any doubts about it. It should not be a case of "may"; it should be a case of "shall".
This is a complicated matter. This is Mark 2 of Amendment No. 32B. Now, is Mark 2 right? I like to see a Minister nodding his head in the confidence that it is absolutely right. Will he then explain to me the meaning of paragraph (d)?
provide that the Corporation may, if such arrangements are not made by any of those persons within the period aforesaid, elect in the manner specified in the directions that the requirement shall have effect with such modifications as are so specified with a view to eliminating the consequences of the representations made by that person".What on earth does that mean?If we go to the next clauses we find the word "modifications". The word "modifications" there applies to the directions that are given by the Minister to the gas corporation. They have "to modify", and "subject to modification". What is the purpose of this? This is the original direction telling them to go on with it. He has to include this as well. In fact, it would read better if it was without the "modifications". The purpose is to eliminate the modifications, I gather, put into the direction to suit somebody who had at one time proposed to pay for an additional supply, or changes in the pipe-line for the gas, but then did not pay. So the Government say, "If you are not paying, there is no reason why the gas corporation should make the modifications". May I have an explanation of that? I am only a simple-minded Scot, but I should like to know whether "modifications" means modifications which are entirely different from those mentioned elsewhere in the pipe-line section of the Bill.
§ 3.26 p.m.
§ Lord Davies of LeekUnless the Minister is going to answer that contribution immediately, I should like to make a point. I am sure the Minister will bear in mind what has been said. I have looked carefully at this and I agree that the clause put forward still does not provide for the payment to the corporation of the costs that they will incur. There are hidden costs if you extend pipe-lines anywhere in the country. While the gas corporation would be quite willing to take normal commercial risks when the corporation itself is assessing those risks, why should the corporation be asked to take risks for the extension of its pipes 608 by assessors who have nothing to do with the corporation but are privately going to put gas through that area?
I am glad of the interpretation. I have read and re-read this introduction to Clause 15. Nothing has been said about maintenance. These will be dangerous substances running through all sorts of areas. We are asking for sophisticated contour maps in all kinds of areas throughout the British Isles, many of them suffering from mining subsidence. For two and a half years I was on the Mining Subsidence Committee dealing with the problem of mining subsidence throughout England, Scotland and Wales. Pipe-lines, like churches or buildings, can suffer in remote areas from mining subsidence. It could in this case involving gases, especially through wear and tear and time and their effect on pipe-lines, create all kinds of disaster.
Nothing has been said about maintenance. Who is going to take the responsibility for all these hundreds of miles of new pipe-line? These provisions have been put together too quickly. The matter has not been thought through in depth. The Government are trying to do too much privatisation, running things madly. I am not denigrating private enterprise—of course it has a paramount place in society—but the pace at which the Government are now putting through their changes in legislation is over-hasty. More time should be taken. I hope that this Bill is not rushed through this House before it again goes to another place.
§ Lord TanlawI wonder whether the Minister could answer one question? How many extra staff, if any, are going to be required in the department to write these directions? This is one of the questions we have asked before on other occasions. Is the Minister going to say that no further staff will be required in order to implement this amendment? If extra staff are required, can he estimate how many? Are these included in those numbers stated in the introductory memorandum to the Bill?
§ Lord SkelmersdaleI seem to have got quite a battering. Perhaps I should start by reminding the Committee that what we are talking about is the gas in a pipe-line belonging to the British Gas Corporation. The BGC already have gas in their own pipe-line, and the maintenance of and statutory requirements applying to that gas will not change in any way. We are talking about the same pipe-line operated by the same people. The fact that it might also have private sector gas in it does not affect the position in any way, and of that I assure the Committee.
§ Lord Davies of LeekI accept that, but let me explain the point using some elementary arithmetic. Let us say that my pipe-line is running at one point and the Minister says to me, "I am pushing some of my gas through". Is the noble Lord prepared to bear some of the cost of maintenance over the years, because some of his property is now running through my pipeline, or am I, when something goes wrong, going to have to protect him, myself and my customers? Is he not prepared to take a share of the responsibility from his customers to pay for the maintenance of that pipe, through which his gas is running? It is as elementary as that.
§ Lord SkelmersdaleThe noble Lord has put it in personal terms, and I make no complaint about that. If it is my gas he is talking about, and I am a private supplier of gas, then in order to come to a fair arrangement on the maintenance of my share of the pipe, I would expect to pay in my rent an allowance for that eventuality.
§ Lord Davies of LeekThat is on the record now.
§ Lord SkelmersdaleI hope I may be excused for answering the noble Lord, Lord Beswick, a little later; I am answering noble Lords in reverse order and, with a bit of luck, I should get the right answers to the right questions. The noble Lord, Lord Somers, asked about the kind of gas and the noble Lord, Lord Ross, said we would come to amendments on that very subject later, and that is right. However, I would point out at this stage that, to me anyway, it is fairly evident that if there are two sorts of gas in the same pipeline they must be of similar calorific value, of the same compatible type, for which the pipe-line was originally designed, otherwise it would be unsafe, and under the Bill the Secretary of State is given reserve powers to ensure that that is so; he will do nothing under the Bill to make the transmission of gas by pipe-line unsafe.
§ Lord Ross of MarnockMay I ask the Minister to enlighten us by saying exactly where in the Bill that is stated?
§ Lord SkelmersdaleThat was a rather fast ball because, as the noble Lord, Lord Ross, reminded us, we shall be dealing with that later. The meaning of all this is contained in Clause 17(1). Lord Ross asked among other things about modifications. The answer is that in Clause 34, the definition clause, "modifications" is defined as including additions, omissions and alterations. The amendment provides that,
the Corporation may, if such arrangements are not made by any of those persons within the period aforesaid, elect in the manner specified in the directions that the requirement shall have effect with such modifications as are so specified…".I do not think bureaucratic interference—the noble Lord's phrase—comes into it. If the situation changes, surely the Secretary of State's advice from his bureaucracy, as the noble Lord put it, will change to take account of the new situation. Why, therefore, should there not be modifications in the way I have outlined? It seems perfectly reasonable. For example, a private company—heaven forbid!—might not pay. Would that not cause modifications to his directions? I think it would be bound to.The noble Lord, Lord Beswick, asked, very fairly, about the differences between Amendment No. 33 and the Government amendments, and there are a number of reasons for preferring the text of ours to the Opposition amendment. I have already mentioned that the Government amendments specify who would reimburse the corporation and that they provide for a period in which, in the light of what the Secretary of State has in mind to direct, the private supplier can take a final decision on whether he judges his plans to be sufficiently certain to warrant his incurring expenditure in increased capacity for the BGC's pipe-lines. Referring to that, the noble Lord, Lord Ross, asked about the situation regarding new pipelines.
§ Lord Ross of MarnockThese are new pipe-lines.
§ Lord SkelmersdaleYes, and the noble Lord referred to that. I should have thought that if what I hope will become the will of Parliament, expressed by approval of the Bill, the Royal Assent to it, and the true competition in the gas supply industry which the Bill outlines comes to pass, it must be sensible to build a pipe-line of the right capacity in the first place. In other words, the Secretary of State must be able to know what is going on, as indeed must anybody else, so that the pipe-line does not have to be modified later on. Without the common carrier provisions I cannot see that there would be any competition in the gas supply industry.
The noble Lord, Lord Beswick, also asked about the use of "may" rather than "shall". The Government amendments permit the Secretary of State to make provision as to reimbursement, whereas Amendment No. 33 requires it. In fact, the customary formulation in these provisions is to permit the Secretary of State to make such a provision. It is the formulation adopted in Clause 16 and in the corresponding provision concerned with offshore pipe-lines which the then Labour Government introduced in Section 21(5) of the Petroleum and Submarine Pipe-lines Act 1975. The Government do not rule out the use of these powers to issue a direction requiring the capacity of a planned BGC pipe-line to be increased and making no provision for the corporation's costs to be reimbursed, but such occasions, we consider, are likely to be rare. I have tried to answer all the points put to me in this short debate and I hope I have satisfied noble Lords oppsite.
§ Lord Ross of MarnockWill the Minister read again paragraph (d)?—because, quite frankly, I do not think that it exactly makes sense. I fear that the directions might be even more complicated than the Bill. He tells me to look at the definition of "modifications" —I understand it. But, remember, what we are dealing with is a requirement and a direction given on the supposition that somebody is going to go ahead with a project. So the original specifications laid down by the gas corporation are modified by the Minister to suit that particular purpose. Then someone refuses to pay up within the period, and so that is wiped out. One would surely think that the project would then go ahead without the modifications that were put in to suit the person in question, rather than with the modifications.
We must remember that the provision refers to the modifications specified in the order. So I wonder whether the order is to presuppose the eventuality of a person not going ahead; and is there to be included another arrangement in order to get round that? I ask the Committee to remember that the purpose is,
with a view to eliminating the consequences of the representations made by that person".I should have thought that if the consequences of the representations made by the person are to be removed, the modifications that were made to suit him should also be removed. That would be the position without the modifications, but the provision refers to the position with the modifications.I see that the Lord Advocate is now taking a very keen interest in this point. He probably knows 611 my concern that these matters should be absolutely clear to everyone in Scotland. I know that it might well be that the people of England can understand these things very well, but, as I have said, we are simple people, though we like to be confident of the rightness of all these projects. So I hope that the Lord Advocate will have a go at trying to enlighten me about this point.
§ 3.42 p.m.
§ The Lord Advocate (Lord Mackay of Clashfern)I am not sure that the qualification of being a simple Scot is one which necessarily all of us would accept as applying to the noble Lord, but I think that perhaps he is not sufficiently taking account of the possibility that more than one person might make a requirement. Let us assume that the gas corporation has in mind constructing a pipe capable of carrying, say, two units—it could be millions of therms—and two other people, knowing that the pipe has been proposed, say that they have a requirement for a unit each. The Secretary of State therefore thinks that it would be a good idea to have a pipe that would carry four units over the stretch, but he says to each of the two private people, "It will be necessary for you to pay a certain sum by a certain date before the unit which is your representation will be put in".
If one of the people pays and one does not pay, we would want a pipe capable of carrying three units. So paragraph (d) is intended to deal with that situation and to provide,
that the Corporation may, if such arrangements are not made by any of those persons" —that is, if one of the two who have made representations does not pay his share in the period which has been selected—elect that" —and this will have to be specified in the direction—the requirementwhich was to put on two extra units, to make the pipe capable of carrying four units, w ill be modified to the extent of eliminating the need put forward by the person who has not paid. In other words, instead of having four units, the pipe will be required to carry only three units because one of the persons who wanted the extra unit is not prepared to hack his representation with his money. That is the language which gives effect to that rather simple idea.
§ Lord BeswickI think that we are all indeed grateful to the noble and learned Lord the Lord Advocate. What a remarkable demonstration he has given us of legal skill, but what a terrible example he has given us of how to run a business!
§ Lord BeswickIt really is impossible, efficiently or economically, to gather energy from our resources if you have to go through that kind of rigmarole. I appreciate that in the end the wording might have the result that the Lord Advocate stated, but the fact remains that going through all those procedures 612 would take time and money, and would mean extra people in the Government department and in the corporation. Eventually it would mean extra charges to the consumer. I am prepared to take small bets that if the Bill is put on to the statute book, it will never be implemented. It is badly conceived, and as we as a country get into further trouble the evil of this kind of Bill will be more clearly seen.
However, I shall not go into the wider and deeper aspects of the matter, but rather come back to my simple amendment. All that I was proposing in my amendment concerned the situation where the gas corporation, having been required to put before the Secretary of State the specific proposal for a new pipe-line, is then told that there is a person or persons who may want to have the opportunity to put gas into the pipe-line, and therefore a larger pipe-line, or a pipe-line in a slightly different direction, is required. I suggest that if all of that results in changes to the corporation's plans and extra expenditure, there should be recompense. It is a question not of "may", but of "shall". Amendment No. 32BA at present reads:
Directions under subsection (4)…may—specify the sums or the method of determining the sums which the Secretary of State considers should be paid to!the Corporation—".I am glad that the Government have gone that far. I am now asking them to go a little farther, and instead of the word "may", use the word "shall".
§ 3.47 p.m.
§ On Question, Whether the said amendment to the amendment shall be agreed to?
§ Their Lordships divided: Contents, 78; Not-Contents, 111.
613| DIVISION NO. 1 | |
| CONTENTS | |
| Amherst, E. | Hunt, L. |
| Amulree, L. | Irving of Dartford, L. |
| Ardwick, L. | Jenkins of Putney, L. |
| Aylestone, L. | Kilmarnock, L. |
| Banks, L. | Leatherland, L. |
| Beaumont of Whitley, L. | Lee of Newton, L. |
| Beswick, L. | Listowel, E. |
| Birk, B. | Llewelyn-Davies of Hastoe, B. |
| Bishopston, L. | |
| Blease, L. | Lloyd of Kilgerran, L. |
| Blyton, L. | Longford, E. |
| Briginshaw, L. | Lovell-Davis, L. |
| Brockway, L. | Mackie of Benshie, L. |
| Brooks of Tremorfa, L. | Mais, L. |
| Bruce of Donington, L. | Mayhew, L. |
| Burton of Coventry, B. | Milford, L. |
| Cledwyn of Penrhos, L. | Oram, L. |
| Cooper of Stockton Heath, L. | Paget of Northampton, L. |
| Cudlipp, L. | Phillips, B. |
| Darling of Hillsborough, L. | Pitt of Hampstead, L. |
| David, B.—[Teller.] | Porritt, L. |
| Davies of Leek, L. | Robbins, L. |
| Donaldson of Kingsbridge, L. | Rochester, L. |
| Elwyn-Jones, L. | Ross of Marnock, L. |
| Fisher of Rednal, B. | Rugby, L. |
| Flowers, L. | Sainsbury, L. |
| Gardiner, L. | Scanlon, L. |
| George-Brown, L. | Somers, L. |
| Gladwyn, L. | Soper, L. |
| Glenamara, L. | Stedman, B. |
| Granville of Eye, L. | Stewart of Alvechurch, B. |
| Hampton, L. | Stewart of Fulham, L. |
| Hayter, L. | Stone, L. |
| Strabolgi, L. | Walston, L. |
| Strauss, L. | Wells-Pestell, L. |
| Tanlaw, L. | Whaddon, L. |
| Underhill, L. | White, B. |
| Vernon, L. | Willis, L. |
| Wallace of Coslany, L.—[Teller.] | Wilson of Langside, L. |
| Wootton of Abinger, B. |
| NOT-CONTENTS | |
| Ailesbury, M. | Kilmany, L. |
| Airey of Abingdon, B. | Kinloss, Ly. |
| Alexander of Tunis, E. | Kinnoull, E. |
| Ampthill, L. | Lane-Fox, B. |
| Avon, E. | Lauderdale, E. |
| Balfour of Inchrye, L. | Long, V. |
| Belhaven and Stenton, L. | Loudoun, C. |
| Beloff, L. | Lucas of Chilworth, L. |
| Belstead, L. | Lyell, L. |
| Berkeley, B. | McFadzean, L. |
| Bessborough, E. | Mackay of Clashfern, L |
| Bolton, L. | Macleod of Borve, B. |
| Buckinghamshire, E. | Mancroft, L. |
| Cairns, E. | Mansfield, E. |
| Camoys, L. | Margadale, L. |
| Campbell of Croy, L. | Marley, L. |
| Cathcart, E. | Massereene and Ferrard, V. |
| Clwyd, L. | |
| Cockfield, L. | Melville, V. |
| Colwyn, L. | Merrivale, L. |
| Constantine of Stanmore, L. | Milverton, L. |
| Morris, L. | |
| Cork and Orrery, E. | Mottistone, L. |
| Cromartie, E. | Moyola, L. |
| Cullen of Ashbourne, L. | Newall, L. |
| Dacre of Glanton, L. | Norfolk, D. |
| Davidson, V. | O'Neill of the Maine, L. |
| De Freyne, L. | Orkney, E. |
| De La Warr, E. | Orr-Ewing, L. |
| Denham, L.—[Teller.] | Platt of Writtle, B. |
| Dilhorne, V. | Portland, D. |
| Drumalbyn, L. | Rankeillour, L. |
| Dudley, B. | Renton, L. |
| Ebbisham, L. | Romney, E. |
| Eccles, V. | St. Davids, V. |
| Ellenborough, L. | St. Germans, E. |
| Elles, B. | St. Just, L. |
| Elton, L. | Saint Oswald, L. |
| Enniskillen, E. | Sandford, L. |
| Faithfull, B. | Sandys, L. — [Teller.] |
| Ferrers, E. | Selkirk, E. |
| Forbes, L. | Sharples, B. |
| Forester, L. | Shuttleworth, L. |
| Fraser of Kilmorack, L. | Skelmersdale, L. |
| Gainford, L. | Spens, L. |
| Glenkinglas, L. | Stodart of Leaston, L. |
| Gormanston, V. | Strathspey, L. |
| Greenway, L. | Sudeley, L. |
| Gridley, L. | Swinfen, L. |
| Grimston of Westbury, L. | Trumpington, B. |
| Hailsham of Saint Marylebone, L. | Vaux of Harrowden, L. |
| Vivian, L. | |
| Halsbury, E. | Wakefield of Kendal, L. |
| Harvey of Prestbury, L. | Westbury, L. |
| Henley, L. | Willoughby de Broke, L. |
| Home of the Hirsel, L. | Windlesham, L. |
| Killearn, L. | Young, B. |
§ Resolved in the negative, and amendment to the amendment disagreed to accordingly.
§ On Question, amendment agreed to.
§ 3.55 p.m.
§
Lord Skelmersdale moved Amendment No. 32C:
Page 21, line 5, leave out ("requirements") and insert ("requirement").
§ The noble Lord said: I have already spoken to this amendment. I beg to move.
614§ On Question, amendment agreed to.
§ [Amendments Nos. 33 and 33A not moved.]
§ On Question, Whether Clause 15, as amended, shall stand part of the Bill?
§ Baroness Fisher of RednalI thought it was quite interesting that when we started this afternoon the noble Lord the Minister said that the idea was to probe the Government's intentions. I must say that the questions which have already been raised by my noble friends and by noble Lords on the Liberal Benches have been very probing, but the intentions of the Government are not coming out very fast. While I admire the Lord Advocate's simple legal interpretation, he spoke as though it was almost like picking up a pipe and dropping it down in a field, and away we go.
I think noble Lords must understand that the building and the laying of a main gas pipeline is a formidable task. It takes a lot of planning, as one can well understand. In many instances the pipe-line will have to go through urban areas, and we all know what that means when one has to consider going under traffic routes and going through housing developments. We also know that in many parts of the country pipe-lines go through rural areas, and members of the farming community themselves get very concerned when such pipes are laid under their ground.
But what has been almost forgotten in the debate today is that any new pipe-line will be part of an integrated system. It is not just one pipe-line that goes from London to the East Coast; it is all part of a system, and then the gas system operates for the benefit of all the consumers. If there is a lesser demand in one part of the pipe-line then that gas can be used in other parts of the country to meet any additional need when it arises. Therefore, I think it is important for us to recognise quite clearly that the planning stage of a pipe-line is an important stage, and it will take approximately 12 months for the gas board even just to consider the planning of it and the necessity for it for their own use or for the use of the private developer.
What I think we must understand is that in this flexible, co-ordinated and pooled system we have got to take into consideration the interests of all the gas consumers. I want this to be clearly understood by all noble Lords—and this is where I should like the noble Lord the Minister to let us know what are the Government's real intentions. Does this mean that under the proposed system certain supplies will be dedicated to certain customers regardless of the interests of all the others, in which case flexibility will be lost and the BGC will not be able to use the flexibility that they already have?
I want to say that that might cause tremendous problems, problems perhaps of the kind we found in this year's bad winter when commercial interests had to be satisfied and some domestic gas consumers, particularly the elderly, did not get sufficient gas because the pipe-line was being used to supply others who had been given priority. We have to consider also those people that are the experts in the field, men and women that have devoted a lifetime to the manufacture of gas and the servicing of gas. We have to consider the skills they have built up over long periods. With all due respect to them, to have civil servants having to 615 duplicate that work which is being done by gas board officials is, as my noble friend Lord Ross has said, bureaucracy gone mad—especially when required by a Government who tell us so often that they need to get rid of more and more civil servants. Therefore, the Government ought to consider this aspect quite seriously.
How demoralising it is for conscientious staff that have worked in the gas industry over many years to have to come to the conclusion when they read this part of the Bill that, in the eyes of Whitehall and in the Minister's eyes, they will never get it right; they will never get it right because they are working in a public enterprise and because what the Minister is trying, to do is to make quite sure that the private part of the pipeline is given greater priority.
Therefore, I think we have to ensure—and my noble friends have already put this point—that the overall discipline of running the pipe-line system must be in the hands of one set of people. They must take total responsibility for it. For anybody outside the gas corporation to be doing that is jeopardising safety. I want to draw the attention of the Minister to when he spoke about different kinds of gases. On 11th May, on the second day of the Committee stage of this Bill, the noble Lord, Lord Skelmersdale, said when talking about calorific value and chemical mixtures:
Were this to go down, for example, a BGC gas main, this could very well make the gas in the BGC main impure, and nobody would want this to be done".—[Official Report; col. 193.]One wonders whether there is some jeopardising of safety. Lord Skelmersdale went on to say:For example, the private supplier whose gas contained a higher proportion of impurities than would be accepted in the BGC system might build his own pipeline specifically suited to such gas". [Col. 194.]What worries me and my noble friends is that the Secretary of State takes unto himself this direction; that he will decide if the gas has to go into the new pipe-line when it is built; he will decide if any conflict arises; he will also decide the actual amount of money which is to be paid by the private gas supplier. One wonders whether there is a priority being given to the industrial consumer, against the domestic consumer. The Minister has asked us to probe the Government's intentions. Can he give us a categorical assurance that the domestic consumer will not end up subsidising the private use of any pipe-line, new or old, and the cost of any modification made to the system that will facilitate private use.
§ Lord TanlawCan the Minister in his reply answer the question about the extra numbers that I asked on Lord Beswick's amendment? We are getting worried not only about the tangle of pipes and the other things we are getting into in the intricacies of the various Government amendments, but as to whether the Bill is workable at all in this clause. It would appear so far that more and more requirements from the department are necessary to make the Bill workable. This means more and more forms, applications and directives. This fits in with our view that the Secretary of State has over-armed himself with powers. If he so wished, or if members of the department so wished, they could make this Bill unworkable.
616 We are merely trying to draw the attention of the Government to the fact that the more powers that go to the Secretary of State, the less workable the Bill will become in the more complex subjects. The subject of gas mixtures in the same pipe is one example. On this question, would the Minister confirm that there are no problems on this in Europe where mixtures of gases go down lines of varying qualities depending upon the equipment to receive them at each end? Presumably in Europe there is legislation to safeguard the consumers and to produce an adequate safety factor. Are we with this Bill going out on our own without looking across the Channel at what is happening in a perfectly workable system on the Continent of Europe? I think that the Government are making unduly heavy weather of their legislation and of their practical application of this Bill. We are asking this. Is the Bill workable and how many extra civil servants are required to make it workable?
§ Lord RobbinsWhile expressing reserve about the issues of principle which the noble Baroness has raised, may I, under the Motion that this Clause shall stand part of the Bill, speak on the unintelligibility of paragraph (d) in the Government amendment. I found crystal clear the explanation furnished by the noble and learned Lord the Lord Advocate, but on going back to paragraph (d), the translation of his crystal-clear explanation into lingual gobbledegook I found totally unintelligible. I suggest that it is a disgrace that this clause should go forward in this type of English.
§ Lord Ross of MarnockI am very glad that so distinguished a scholar as the noble Lord, Lord Robbins, has had the same difficulty as I have myself. "Crystal clear" used to be one of the favourite phrases of the Secretary of State. After I pointed it out to him a few times, he changed the phrase; but it is coming back. If ever we required crystal clarity it was in this connection. It may have been a good explanation, but I think we must ask the Government to promise that with every publication of this Bill (when it becomes an Act) there shall be appended, for the benefit of all who read this clause and subsection (d), a copy of the explanation given by the noble and learned Lord the Lord Advocate; although I doubt whether he would like that. I hope that the Government will read this between now and the next stage of the Bill and will see whether there is an easier and simpler way of putting the point. I do not want to offer them my help in drafting it. I know what the intention is, but I do not think that it is very well spelt out in the amendment.
The noble Lord who replied said that this was not bureaucratic intervention. If it is not, what is it? We are dealing not with existing pipe-lines but new pipe-lines. At the present time, having obtained the agreement of the Minister, with the consent of the Treasury, to a capital expenditure, so long as it worked within that, there is no one, no bureaucrat in Whitehall or any department, to say "Yea", or "Nay" to anything that the Gas Corporation do within their statutory duties and obligations.
As from the passing of this Bill, before they can have a new pipe-line—and in fact it does not say they can 617 have a new pipe-line—the clause begins with the words "They shall not unless", and they have to give notice which they do not have to do at the moment. They have to give notice to the department. They have to give maps and details. They have to sit and wait while the Government publish this in some newspapers of their own selection. Then they wait for representations to come in. Then the Government decide on these recommendations and may give orders about modifications of their original plans to the British Gas Corporation. That is not interference? It certainly is.
All this is going to take time. If we need gas for some new project that could have gone ahead if gas was available, people are going to be saying "Why is this?" The delay is not with the Gas Board; the delay is with the Ministry introducing this new bureaucratic tier of consents and new powers.
What is the additional delay likely to be under this procedure? That is my first question. Secondly, many of the representations that are made may not come to anything. I am sure every Member of the Committee is anxiously waiting to hear my speech later on planning permission fees in respect of Scotland. If my neighbour wants to put an extension on to his house, he has to make an application, and it now costs a few pounds to do it. The Government say that this is to pay for the administrative work of the department. Who is paying for the administrative work in respect of the matters we are now discussing? Have the Government thought of charging people for the representations that they are going to make?
Some of them may waste the department's time. There is going to be a lot of time spent; and there is going to be a lot of time spent by the British Gas Corporation. Has the question of payment for the application been considered? I sincerely hope that the Government will look at these points. Personally, I think that they would do far better to drop this and the next two clauses. I am not asking very much: just drop these three clauses. If they do that, the Government will probably decide how daft they are. Here is something that is working well with no complaints from anybody about it. But political dogma comes in and, as my noble friend asked, is this the way to handle a successful business?
§ Baroness Macleod of BorveThe noble Lord, Lord Ross of Marnock, always holds this House enthralled—I think that is the expression—and we always listen to him very carefully, But I cannot believe my ears when I hear him query the fact that planning permission for a pipe-line would have to be obtained from either the Ministry or BGC. If it is not, then anybody would be able to put a pipeline through the noble Lord's property perhaps without consent.
It has to be properly planned and it must be planned by one specific authority. Perhaps I am woolly in the head but I cannot understand why the noble Lord is querying that people should have to conform to a plan, and complaining that that plan will take time. Of course, it will take time, but it would be quite improper, surely, to have anything unplanned going on, especially in laying a pipe-line.
§ Lord Ross of MarnockOf course it takes time and requires planning permission. It requires all the 618 negotiations about easements and everything else. All that is the position at the present time. Local authorities deal with planning permission and the landowners deal with easements. The clause says:
The Gas Corporation shall not at any time execute any works for the construction of a high pressure pipe-line unless".This is what is new. This is what I am objecting to in respect of the clause. The noble Baroness is quite right about all the other things. However, there is no change in them.
§ 4.16 p.m.
§ Lord SkelmersdaleThis has almost been a Second Reading debate on the general principles of the Bill. May I say straight away that the general principle on which this Bill is based is that nobody knows—and I am not prepared to damn anybody for this—how efficient the Gas Corporation is unless competition is introduced into the gas industry.
§ Lord SkelmersdaleYes, really! I have been asked various questions on planning and various things. The noble Baroness, Lady Fisher, asked about the number of pipe-lines spanning the country from coast to coast, from North to South and everywhere you can think of. Why does she think that we are going to enormous trouble in these clauses to make a common carrier provision?
The noble Lord, Lord Ross, asks why this should be hedged around with decision-making powers and directional powers of the Secretary of State. I have already said that when this Bill gets Royal Assent it will be the will of Parliament. The Secretary of State is answerable to the will of Parliament and unless he has such powers he is in danger of being frustrated in the general objectives of the Bill. That is why he has to have these powers.
The noble Baroness, Lady Fisher, asked about the domestic consumer and the effect that all this would have on prices. The intention is that charges and tariffs specified in directions issued by the Secretary of State will be worked out on a fully commercial basis. It will be the BGC which does the working out. In these clauses to which the noble Lord, Lord Ross, takes such exception, we are talking about what is going on with the full knowledge and consent of the BGC in their pipe-lines. Of course they must make the decision on charging. I do not think that there should be anything between us on this aspect.
§ Lord SomersThere is one difficulty. At the moment gas in a main has to be at a given pressure which has to be maintained because that governs the pressure at which it is consumed at the user's point. Supposing another firm comes along and wishes to introduce more gas—its own gas—into that same main; either the gas corporation has to reduce its own gas so as to lower the pressure in order to admit the other or else the pressure is going to be, in the main, too high. What is the solution?
§ Lord SkelmersdaleWe are talking about additions to the BGC mains in the next clause we shall be discussing. I accept that this is a very technical subject, 619 but my understanding is that an increase in capacity will not effect the pressure of the gas coming out, and when we come to the next clause I shall be able to furnish the noble Lord with a proper answer.
§ Lord BeswickI was disappointed that the Government were not able to accept the amendment we moved. Had they done so, it would have justified the claims made by the noble Lord earlier about listening to Parliament. Also it would have given us some slight encouragement to support this clause: otherwise I am bound to say I think this clause should be taken out. It is a bad clause.
The noble Lord asked how we know that the gas corporation is efficient. One reason I know is that I go home and I have practical experience of their efficiency. We have gone through a very difficult winter and I have every reason to be grateful to the people who work within the gas corporation for the service they have rendered. We can make comparisons also with other gas undertakings overseas. Does the noble Lord mean to tell us that all the provisions in this clause are in order to prove whether or not the gas corporation is efficient? Are we really going through all this travail, are we really considering all this expenditure simply to prove whether or not the gas corporation is efficient? There are different methods of checking the efficiency of an undertaking without going through this immense expenditure of money and energy.
Clause 15 is a bad clause and really goes contrary to all that is best in conservative thinking about the public sector. The Conservatives themselves have said time and time again that there should be less intervention from Whitehall, and this clause of this Bill particularly requires more intervention from Whitehall. They have said more than once that productive industry cannot afford to have these non-productive people on their backs and that there should be fewer bureaucrats, as my noble friend Lord Ross has already mentioned. But this clause will mean more bureaucrats—the noble Lord cannot dispute that. There will be more people required in the administration both in the corporation and in the government department.
The Conservatives have said they want to encourage initiative and professional pride, but this clause will frustrate initiative. It will discourage professional pride. I hear the noble Lord asking, "Why?" Can he not understand that if the professional person is given responsibility for carrying out a contract job what you want to do is to let him get on with it? Give him responsibility and let him then fulfil himself and serve the nation by getting on with it—but do not, as is required by this clause, put these plans before the Government, to have another lot of second-guessing and to have the thing crawled over again by another lot of people who have no more expertise to offer than the British Gas Corporation people themselves. I am second to none in my admiration of the noble and learned Lord the Lord Advocate for the way in which he answered my noble friend Lord Ross. We are really grateful to him for that, but otherwise there has been no one at all from the Government Benches who has explained how we are going to get a more efficient gas industry in this country if this clause is accepted. I hope the House will throw it out.
§ Lord Ross of MarnockBefore the noble Lord rises, I am really concerned about one point. He did not answer my question about payment. Will there be any initial payment by those who make representations which may or may not lead to the direction to be given by the Secretary of State to the gas corporation? There is nothing in the clause about it and I instanced the fact that, in relation to an important order which the noble Earl, Lord Mansfield, will deal tonight, people are going to be charged for all sorts of things in relation to their own homes. For example, if they are going to put up a gate or build an extension to their house, and so on, there is going to be an increase of 10 per cent. on the already unjustified charge that the Government have introduced. Have they thought about this, because the expenses are going to be very heavy on his department?
My noble friend asked about the people who are going to do it. I would fancy that the Department of Energy at the moment have not got the people to do it. I do not know where they are going to get them, unless they poach them from the gas corporation so that they could do exactly the same job as the Gas Board have been doing for themselves at the present time. I listened very carefully to the noble Lord's answer to my noble friend Lady Fisher about the question of the rent by the people using the pipe-lines. He said that would be up to the gas corporation, in negotiations between the gas corporation and the private suppliers. Is he correct about that? Otherwise we will need to look not only at paragraph (d) of 32B but at some of the others because, so far as I can see, this all-seeing, all-powerful Government are going to specify the sums or the method of determining the sums which the Secretary of State considers shall be paid to the corporation by such a person. Is it the Secretary of State who is going to specify them in his directions or is it a matter which the British Gas Corporation themselves will decide? That is a very important point and one that should be cleared.
§ Lord SkelmersdaleWe are talking about two different things. I was talking about the costs which would give rise to rental charges. The noble Lord, Lord Ross, is talking about charges, as I understand it, for civil servants' time. Is that correct?
§ Lord Ross of MarnockYes, as well.
§ Lord SkelmersdaleI can tell him that applicants will not be charged for this. This has received consideration, naturally, and we recognise that if such a charge were made it would, firstly, disadvantage the potential private supplier compared to the BGC; and our objective is not to disadvantage anybody in this respect, It is to treat the two sides in an even-handed manner. as indeed was asked for by the Front Bench opposite on Tuesday of last week.
Under Clause 15(5) of the Bill the Secretary of State must within six months give the gas corporation details of what he proposes to include in his direction, so there is no question, as the noble Lord, Lord Ross, appeared to be suggesting, of the gas corporation being kept in the dark about the ideas the Secretary of State and the department were having on this subject. Over the last half hour or so I am afraid I have been 621 rather discourteous to the noble Lord, Lord Tanlaw. He asked me several times last week and has asked again today about the number of staff involved in all this.
Where the problem is for the department, it will obviously mean an increase in departmental staff. As is stated in the Explanatory and Financial Memorandum to this Bill, eight to 10 extra staff will, we think, initially be required in the department and, eventually, a total of 40 to 50 could be required. That is not just because of this clause; it is for the entire provisions of the Bill. I also said last week that the Secretary of State would alter his staffing requirements in the light of experience, and I am afraid that I am unable to go any further than that.
I promised the noble Lord, Lord Somers, an answer on pressure. The noble Lord was quite correct in saying that gas must, for safety reasons, be supplied at or above a certain minimum pressure. That is why Clause 13 provides for standards of pressure to be prescribed—again, by the Secretary of State. It is mandatory in respect of all gas supplies, both BGC and private supplies. So, again, there will be no difference in approach to the two organisations.
§ Lord SomersI am most grateful to the noble Lord, but that still does not explain one thing. If a private gasworks is going to supply gas into the existing main at that pressure, that means that, somehow or other, the pressure from the original gasworks will have to be slightly reduced; otherwise, the gas will not be able to get in.
§ Lord BishopstonIn winding up a few moments ago, the noble Lord the Minister said that we seemed to be talking about two different things. I imagine that it rather appears to your Lordships that the answers rarely fit the questions. I know that this is a technical Bill and one might be excused for thinking that your Lordships' House ought not to be involved in such detailed, technical, scientific, commercial, financial and legal matters, but that is inherent in this Bill. It had a long session going through the other place, and I must say that many questions which have been posed today, and indeed in the last two sittings, have not been answered; hence, the noble Lord is able to claim that we seem to be having lots of Second Reading speeches. But this is a matter of life and death, because we are dealing with gas; we are dealing with an established set-up of known repute and the Government are throwing the whole thing into turmoil.
The noble Lord says as a justification for Clause 15, and indeed for the Bill, that we do not know how efficient the thing is until we have competition. Is that an indication that the Government will denationalise the railways? The airways are already on the slate, but what about electricity and the coal mines? How do we know whether they are efficient until competition is allowed to fan them? This is not my suggestion, but the noble Lord has given it as the reason for changing something to which tribute was paid by Ministers in both Houses on Second Reading, who talked about the considerable success, the profitability and the efficiency of the undertaking. The votes in the last session of the Committee indicated 622 acceptance not only of the degree of efficiency and accountability, but of the almost affection in which the Gas Council and its employees are held.
If the noble Lord wants to avoid all this turmoil of enforced competition, I recommend that he looks at the current issue of Which? under the title "Dealing with the Gasman". In the last sitting, we had a warning that the gasman cometh, and, if noble Lords read some of the questions and answers in this issue of Which?, they will find that there is no need to go to all this trouble of importing private enterprise and creating uncertainty. One question is:
If you suspect a gas leak, your call will he dealt with quickly and free of charge.True or False?True. Under the Gas Act 1972, British Gas has to deal with gas leaks within 24 hours of their being reported. One in six of our members had reported a leak in the past two years: over half these cases were investigated by a fitter within an hour, and the average time was just over two hours".Another question was:The service given by British Gas has deteriorated over the past few years.True or False?False. You can see from Table 3 that our members rated British Gas much more highly in our latest survey than they did in 1974 (when the gas industry had just been reorganised and was converting us all to North Sea gas). For example, more people now seem to be given appointments for their service or repair, fewer appointments are broken by British Gas and more work is completed in only one visit. Overall the number of members dissatisfied with the way their last request for service or repair was handled has fallen substantially".One could go on with quotations like that.Quite naturally, there is a feeling that the gas enterprise has proved its worth. It is not a matter of whether it is publicly or privately owned. The Gas Council and the gas undertakings are responsible to the Gas Consumers' Council and to the public generally, and the council has done an extremely good job in acting as a sounding platform for public opinion. The noble Baroness opposite, who spoke a few moments ago, has played a noble part in that.
We are worried about safety, and that is paramount. Other aspects of administration, such as the problems of planning delays, are probably incidental to it. In commenting on Clause 15, my noble friend Lady Fisher justifiably detailed the problems of planning, of negotiating with farms and local authorities, and of dealing with sewers and other areas where pipes have to pass. There are also planning consents, agreements and so on, which can add quite considerable delay.
During all this process, the gas undertaking will share a great degree of responsibility, and one can understand the dread and fear that established routines will be uprooted and dedicated teams of people will be broken up. Great uncertainty will be thrown into the whole situation.
The clause refers to the role of the Secretary of State in all this. It seems to me that the Secretary of State will have very little else to do, if and when this Bill becomes operative, but be in his office giving consents, making directions and getting involved in the day-to-day affairs of the undertaking. It is certainly not a situation where the Government are justified in saying that they want to get the state off people's backs and to let the enterprise run its own affairs. I think that the Committee is even more concerned that the very 623 important questions asked on these matters are not really being answered, and it may show its displeasure with the present situation, and about the Government's lack of planning or ideas as to how they should proceed, by joining us in the Lobby on the Question, Whether Clause 15 shall stand part of the Bill.
§ Lord SkelmersdaleBefore this goes any further, may I make two points on what the noble Lord, Lord Bishopston, has just said? First, he said that the Secretary of State will not have any time left to do anything else on energy—
§ Lord SkelmersdaleThat is exactly what he has just said, if the gas provisions and the direction-making powers go ahead, as they are currently stated in the Bill. But has it not occurred to the noble Lord that those arguments suggest that there is such an overflowing demand for private gas that there will be all these numerous applications and that therefore all these numerous decisions will have to be taken by the Secretary of State? I really cannot see the force of that argument.
The noble Lord referred to the Consumers Council. Again I cannot see the force of his argument, because in their Which? report the Consumers Council were presumably talking about private consumers of gas—in other words, those people who take 25,000 therms a year or less, or who are within 25 yards of a British Gas Corporation main. We do not know—the noble Lord has not said—but I doubt whether either of those questions was asked of the recipients of the questionnaire. As the noble Lord well knows, the Bill deals with a completely different class of consumer —to a very, very large extent the industrial and the commercial consumer.
§ Lord SomersI apologise for getting to my feet so often, but there is one point I must raise here. When the noble Lord spoke before he said that this was going to introduce an element of competition. I admit, of course, that in some cases competition is excellent. If there is competition between, say, one newsagent and another, it is very likely that it will bring the service of one or the other up to a very much higher level. But there will be no competition whatsoever here, because the gas from the BGC and the gas from the independent supplier will be mixed together in the one main. The consumer will have no idea which gas he is using. He will not be able to say, "So and so's gas is much better than this". The result will be no competition whatsoever. I cannot see that that element will have anything to do with raising the standard of the BGC or of the independent companies.
§ Lord BishopstonIn fairness, perhaps I should say that I was quoting from Which? The survey was not connected with the Gas Consumers Council, but 3,000 Which? members helped to answer important questions about British Gas. The report can be read in full. I am sorry that the noble Lord has not answered the important questions asked by the noble Lord, Lord Somers, about gas in pipes, because the noble Lord 624 expressed concern. May I refer the noble Lord, Lord Somers, to cols. 193 and 194 of our proceedings last week. The noble Lord, Lord Skelmersdale, said, at col. 193:
For example, a supply of a specific calorific value or chemical mixture may be permitted for a specific purpose. Were this to go down, for example, a BGC gas main, this could very well make the gas in the BGC main impure, and nobody would want this to be done".This suggests a lower level of gas, or a different standard of gas from the BGC gas. In col. 194 the noble Lord said:For example, a private supplier whose gas contained a higher proportion of impurities than would be acceptable in the BGC system might build his own pipe-line specifically suited to such gas".Is there a question of "might" or "would have to"? We have been told that incompatible gases cannot go down the same pipe, but the noble Lord said that a private supplier might build his own pipe-line. These are important technical details, and the Committee is anxious to get specific replies to these questions because they concern the public interest and public safety.
§ Lord SkelmersdaleThere was nothing incompatible, if I may use the word, between the two statements I made last week, which the noble Lord mentioned just now, and the statement which I made earlier this afternoon. Let me start from the beginning. I think that I said originally to the noble Lord, Lord Somers, that where two supplies of gas go into the same pipe-line it is quite obvious that there can be no distinction when they come out of that pipe-line: whether it is a private cubic foot of gas or whether it is a corporation cubic foot of gas.
§ Lord BishopstonThey will be a mixture.
§ Lord SkelmersdaleYes, exactly. In that case, the private sector gas has to meet the specification of the BGC, otherwise the BGC will be in clear breach of its own statutory duties, and this will not be allowed to happen. It may be that a private pipe-line is laid for the purpose of supplying a particular piece of machinery in a particular factory, which will be allowed under the terms of the Bill. There is nothing to say that so long as both the pipe-line and the machinery are adapted to take the gas which is being supplied it should not be allowed. This is why I say that one might have different purities, for example, or different calorific values of gas in different pipe-lines. But where they are mixed in a BGC pipe-line the private gas has to meet the BGC specification. I do not see any incompatibility between what I have just said and what I said on the earlier occasion.
Perhaps the noble Lord will allow me to answer the question put by the noble Lord, Lord Somers. I am advised that the British Gas Corporation will have to drop its pressure so that the private gas can get into the system.
§ Baroness Fisher of RednalBGC will have to reduce its pressure?
§ Lord SkelmersdaleIt is not so much a question of BGC gas. The capacity will be used, so I do not see that the noble Baroness can laugh at this explanation.
§ Baroness Fisher of RednalBut the BGC will have to drop the pressure.
§ Lord SkelmersdaleThe pressure, yes, but not necessarily the amount of gas. There is no question of the British Gas Corporation having to drop the pressure of its supplies if this would prejudice the conveyance of gas which the British Gas Corporation requires to perform its statutory duties and contractual obligations. This is to be found in Clause 17(2)(a) of the Bill. In such a situation, if the private gas is at too low a pressure to enter the corporation's pipe-line, then the private supplier would have to instal a compressor to bring his gas up to the appropriate pressure. If the British Gas Corporation pipe-line is not of sufficient capacity to take additional gas, whether its own or that of the private sector, the Secretary of State would not issue a direction to force the British Gas Corporation to transmit it.
The noble Lord, Lord Somers, also said that in reality there is no competition. I would contend that it may be that consumers will be unable to tell one kind of gas from another—as I have said several times this afternoon—hut they will be able to tell the difference between the prices charged by the different suppliers, the service provided and the availability of new supplies of gas to meet new demands. That is what I call competition.
§ Baroness PhillipsHow can the Government say that competition will bring about lower prices, in view of the fact that it is the Government who have forced the British Gas Corporation to increase the price of gas? To my knowledge, many people took gas appliances because gas was far cheaper than electricity as a form of energy. However, because of the recent Act the British Gas Corporation has been forced to increase its charges. So how on earth can competition bring down the price, unless the Government are going to maintain that the British Gas Corporation must keep their gas at a high price, whereas the competitor will be allowed to supply gas at a lower price? It is a totally unfair situation which I am sure no Government could defend.
§ Viscount Massereene and FerrardThe only reason why the price of gas was put up was in order to build up a reserve for the further exploration of gas fields.
§ Lord Wells-PestellI find this very perplexing. I have listened with some interest to what the noble Lord has said—not about two types of gas but about gas coming from two different sources, the private source and the BGC source, and going through the same pipe-line. Then he talked about differentials in price. What will he the price of the gas emerging from the pipe-line if part of it comes from the private sector and the other part comes from the public sector?
§ Lord SkelmersdaleI think that the Committee should come to some decision upon this. When the noble Baroness, Lady Phillips, cross-questions me on the price of gas generally, I really do think it is way outside the scope of the debate on this clause.
§ Lord SkelmersdaleOn the other hand, the noble Lord, Lord Wells-Pestell, asked me a very direct question on this clause. He asked me what the price would be of each individual unit of gas coming out of the end of the pipe-line. Obviously, both suppliers know what they put into the pipe-line because this will be metered. BGC will charge its own price for the gas that it supplies and the private sector will charge its own price to the consumer for the gas that it supplies. Therefore, there will be a true differential and we will know exactly who is competitive with whom.
§ Lord Wells-PestellIs the noble Lord, Lord Skelmersdale, saying that a household must have two meters?
§ Lord SkelmersdaleNo, certainly not. The meters would be on the input end and not the output end of the pipe-line.
§ Lord BeswickCan the noble Lord, Lord Skelmersdale, go a bit further? He has just said that the British Gas Corporation will charge its own price and that the private sector company putting its gas through the same pipe-line will charge for its gas. The noble Lord then made the statement that consumers will then be able to judge the difference between the two prices. Can the noble Lord give an undertaking that the Government will impose the same levy on the private supplier as on the gas corporation?
§ Lord SkelmersdaleNot at this precise moment, no.
§ Baroness Fisher of RednalWill the noble Lord get back to the point made by my noble friend Lord Ross of Marnock? The noble Lord the Minister began by asking us to probe the Government's intentions; so may I ask the noble Lord a question? My noble friend Lord Ross of Marnock explained to the House in great detail how the gas corporation works now; that it has its capital programme and capital approvals, and then it goes forward to build its pipe-lines, to give its services, et cetera. When it can, the corporation accepts for use private gas at the present moment. It is doing that quite competently at the present moment, without all the ramifications of these clauses. Why do the Government want to stop what is quite an orderly procedure, and to stop it at Secretary of State level? Surely it makes common sense for a nationalised industry such as the gas corporation to work compatibly, so far as it is possible, with private enterprise for the benefit of the nation, and bearing in mind that gas is a finite resource.
§ Lord DenhamBefore my noble friend replies, as of course he will, to the noble Baroness, I wonder, are we not stretching a clause stand part debate a little far? We have now been 57 minutes on it. While my noble friend will, of course, reply to the noble Baroness, would ask, since we have a fairly heavy programme could we not after that get on a bit?
§ Lord SkelmersdaleThe noble Baroness asks, in essence, a question concerning a point raised originally by the noble Lord, Lord Ross of Marnock: why interfere with the status quo? The answer to this is 627 quite simple. The answer is that, when this Act gets on to the statute book, it would not be appropriate for any individual or corporation to frustrate what will have been expressed as the will of Parliament. The Secretary of State needs these powers in order to avoid the danger of this happening. I really cannot go any further than that. That is what I very strongly feel.
§ Lord BishopstonWith due respect to the Government Chief Whip, we have been anxious to make progress. A few moments ago, I suggested that we might take a decision on this matter in the Lobbies. I assure the Chief Whip that Members on all sides of the Committee are rather anxious about safety; and there are other aspects which are, rightly, of concern to us all. We hope that if we can get more direct answers (and I make no personal complaint at all) on explanations of Government policy, then greater progress will be made.
§ Lord DenhamI certainly appreciate the sincerity of noble Lords opposite and the fact that they have their worries about this Bill. I just felt that I ought to draw your Lordships' attention to the fact that what is a clause stand part debate is developing not into a Second Reading debate, because the rules are even a little more fluid at Committee stage, but into rather a long debate.
§ Lord BeswickMay I draw the attention of the noble Lord the Chief Whip to the fact that we have still not received answers to questions that have been properly put?
§ Lord SkelmersdaleI hope that the Committee will accept that I am doing my best to answer questions put by noble Lords, but I accept the criticism made by my Chief Whip; that is, that this is taking a rather long time. One of the questions asked of me by the noble Lord, Lord Beswick, was will the Government impose a gas levy on private suppliers as they have on the British Gas Corporation? The answer to this is, no. The gas levy imposed on the British Gas Corporation reflects the fact that the British Gas Corporation receives substantial supplies of gas under contracts which have been in existence for some time. The prices under these contracts were fixed prior to the 1973 oil price rises and the British Gas Corporation alone has the benefit of such contracts. So a gas levy would be inappropriate in the case of the private sector.
§ Lord BeswickI am much obliged to the noble Lord the Minister and I shall study with great interest what he has said. I think it is necessary to read what he has just said and this most important announcement. It drives a coach and horses through the entire Bill, if he is telling us that the purpose of this great change is so that we can make a comparison of prices, and is now saying that the Government will impose a levy on the corporation price, but not on the gas from private sources. This is a most remarkable confession, which I think we will have to consider very carefully.
§ 4.58 p.m.
§ On Question, Whether Clause 15, as amended, shall stand part of the Bill?
§ Their Lordships divided: Contents, 106; Not-Contents, 88.
629| DIVISION NO. 2 | |
| CONTENTS | |
| Airey of Abingdon, B. | Lyell, L. |
| Alexander of Tunis, E. | McFadzean, L. |
| Avon, E. | Mackay of Clashfern, L. |
| Balfour of Inchrye, L. | Macleod of Borve, B. |
| Belhaven and Stenton, L. | Mancroft, L. |
| Beloff, L. | Mansfield, E. |
| Bessborough, E. | Margadale, L. |
| Bolton, L. | Marley, L. |
| Caccia, L. | Marshall of Leeds, L. |
| Cairns, E. | Massereene and Ferrard, V. |
| Camoys, L. | |
| Campbell of Croy, L. | Merrivale, L. |
| Cathcart, E. | Milverton, L. |
| Cockfield, L. | Mottistone, L. |
| Constantine of Stanmore, L. | Murton of Lindisfarne, L |
| Newall, L. | |
| Cork and Orrery, E. | Norfolk, D. |
| Cottesloe, L. | Nugent of Guildford, L. |
| Cromartie, E. | Orkney, E. |
| Cullen of Ashbourne, L. | Orr-Ewing, L. |
| Dacre of Glanton, L. | Pender, L. |
| Davidson, V. | Platt of Writtle, B. |
| De La Warr, E. | Porritt, L. |
| Denham, L.—[Teller.] | Portland, D. |
| Dilhorne, V. | Rankeillour, L. |
| Drumalbyn, L. | Rochdale, V. |
| Ebbisham, L. | Romney, E. |
| Eccles, V. | St. Davids, V. |
| Ellenborough, L. | St. Germans, E. |
| Elles, B. | St. Just, L. |
| Elliot of Harwood, B. | Saint Oswald, L. |
| Enniskillen, E. | Sandford, L. |
| Ferrers, E. | Sandys, L.—[Teller.] |
| Forester, L. | Selkirk, E. |
| Fortescue, E. | Sempill, Ly. |
| Fraser of Kilmorack, L. | Sharples, B. |
| Gainford, L. | Shrewsbury, E. |
| Gibson-Watt, L. | Shuttleworth, L. |
| Gormanston, V. | Skelmersdale, L. |
| Greenway, L. | Spens, L. |
| Gridley, L. | Stodart of Leaston, L. |
| Grimston of Westbury, L. | Strathspey, L. |
| Hailsham of Saint Marylebone, L. | Sudeley, L. |
| Swinfen, L. | |
| Halsbury, E. | Swinton, E. |
| Henley, L. | Teviot, L. |
| Holderness, L. | Trefgarne, L. |
| Home of the Hirsel, L. | Trumpington, B. |
| Hornsby-Smith, B. | Vaux of Harrowden, L. |
| Killearn, L. | Vivian, L. |
| Kilmany, L. | Westbury, L. |
| Lane-Fox, B. | Windlesham, L. |
| Lauderdale E. | Wise, L. |
| Long, V. | Young, B. |
| Lucas of Chilworth, L. |
| NOT-CONTENTS | |
| Airedale, L. | Blease, L. |
| Allen of Abbeydale, L. | Blyton, L. |
| Ampthill, L. | Boston of Faversham, L. |
| Ardwick, L. | Bowden, L. |
| Aylestone, L. | Briginshaw, L. |
| Bancroft, L. | Brockway, L. |
| Banks, L. | Bruce of Donington, L. |
| Beaumont of Whitley, L. | Burton of Coventry, B. |
| Beswick, L. | Byers, L. |
| Birk, B. | Caradon, L. |
| Bishopston, L. | Chitnis, L. |
| Cledwyn of Penrhos, L. | Molloy, L. |
| Cooper of Stockton Heath, L. | Northfield, L. |
| Oram, L. | |
| Darling of Hillsborough, L. | Peart, L. |
| David, B. | Phillips, B. |
| Davies of Leek, L. | Pitt of Hampstead, L. |
| Davies of Penrhys, L. | Ponsonby of Shulbrede, L.—[Teller.] |
| Fisher of Rednal, B. | |
| Foot, L. | Rochester, L. |
| Fulton, L. | Ross of Marnock, L. |
| Gainsborough, E. | Scanlon, L. |
| Gaitskell, B. | Sefton of Garston, L. |
| Garner, L. | Segal, L. |
| Glenamara, L. | Somers, L. |
| Hampton, L. | Stamp, L. |
| Harris of Greenwich, L. | Stedman, B. |
| Houghton of Sowerby, L. | Stewart of Alvechurch, B |
| Hylton-Foster, B. | Stewart of Fulham, L. |
| Ilchester, E. | Stone, L. |
| Jacques, L. | Strabolgi, L. |
| Jenkins of Putney, L. | Tanlaw, L. |
| Kennet, L. | Taylor of Mansfield, L. |
| Kilmarnock, L. | Tordoff, L. |
| Kinloss, Ly. | Underhill, L. |
| Leatherland, L. | Vernon, L. |
| Lee of Newton, L. | Wallace of Coslany, L.—[Teller.] |
| Listowel, E. | |
| Llewelyn-Davies of Hastoe, B. | Walston, L. |
| Wells-Pestell, L. | |
| Lloyd of Kilgerran, L. | Whaddon, L. |
| Loudoun, C. | White, B. |
| Lovell-Davis, L. | Wilson of Langside, L. |
| McGregor of Durris, L. | Winchilsea and Nottingham, E. |
| Mackie of Benshie, L. | |
| Mayhew, L. | Wootton of Abinger, B. |
| Milford, L. |
§ Resolved in the affirmative, and Clause 15, as amended, agreed to.
§ 5.6 p.m.
§ Clause 16 [Increase of capacity etc. of pipe-lines belonging to Gas Corporation]:
§
Lord Ross of Marnock moved Amendment No. 34:
Page 21, line 43, leave out from beginning to ("give") in line 44.
§ The noble Lord said: We now move to Clause 16. This is the clause which deals with existing pipe-lines. What we have been discussing, believe it or not, under Clause 15 was completely new pipe-lines that the British Gas Corporation wish to develop. Now we are dealing with something that is even more tricky; that is, the existing pipe-lines by which the gas corporation, with their whole integrated grid system, give the guaranteed supply to all their customers.
§ The Earl of LauderdaleVery often it is not guaranteed at all; it is interruptible. That is one of the problems.
§ Lord Ross of MarnockThey are statutorily bound to give supplies. There may be difficulties at some times. I do not know whether a private company in which the noble Earl might be interested would give us any better supplies. I can assure him that the supplies that were given by the British Gas Corporation in Scotland during a very difficult time indeed were available there only because of their ability to control an integrated system and to use supplies from elsewhere and so put them into the area that was using most of the gas. The position now, under this clause, is that they can be compelled to increase the capacity of their 630 pipe-lines at the direction of the Secretary of State. On the application of any person—presumably, of course, a person who wants to supply gas from somewhere; it may be a very well known company, it may be one of the cowboy companies that have got hold of gas in some way and want to get it through the pipe-lines of the gas corporation—the Secretary of State can give directions, if he thinks it is all right, that the pipe-line can and should be modified by installing a junction through which another pipe-line may be connected to it, or in the case of the high pressure line itself that the capacity should be increased by modifying apparatus and works associated with the pipe-line.
If the last thing was tricky, this is even more tricky. If the noble Earl, Lord Lauderdale, is interested in breakages, if he is interested in any stoppage of supply, where are these accidents or failures to supply more likely to occur? It may well be by a misplaced junction.
§ The Earl of LauderdaleWill the noble Lord give way? I know that noble Lord does not want to misrepresent anything, but surely he is aware that the British Gas Corporation has contracts to supply gas to certain industrial users on what is known as an "interruptible" basis? It is interruptible; it is not guaranteed. The whole point is that it is interruptible.
§ Lord Ross of MarnockWith all due respect, a contract is a contract. I do not know what the noble Earl is talking about. If they were not complying with the terms of the contract the noble Earl would have some justification for interrupting, but we are talking about their statutory obligation as regards supplies which they guarantee to most of their customers unless they are of the specific type which the noble Earl quite irrelevantly introduced in his interruption. That is what we are dealing with now. We are dealing with the directions to be given by the Secretary of State. We do not know who advises him, but I am perfectly sure that he has not got the people at the moment, and he will need to get them. He is dealing now with a very intricate point in respect of an integrated system which can be broken by doing the wrong thing.
I have had plenty of experience in respect of trunk roads in Scotland. One of the most difficult things about trunk roads, and the new motorways was that all sorts of people wanted to get junctions so that they would get immediate access to the benefit of the trunk road. The Secretary of State is responsible, certainly in Scotland, for trunk roads and usually the local authorities deal with the other roads. But, apart from the planning permission aspects of it, we were conscious of the fact that accidents most often occur at the junction points when someone is seeking to take advantage of the main road system.
It is exactly the same with an integrated gas system. We can put the junction at the wrong place. Who are the people who are best able to tell that?—not the customers who want the supply, because they want it at the quickest and nearest point; not the private person who is supplying the gas that the customers are going to use: it is the people who are responsible for the whole supply—namely, the British Gas Corporation. I am not dealing here with the question of whether or not they should have access to the pipe-line. 631 What we are saying in Amendment No. 34, which is the paving amendment for Amendment No. 35, is that if we are to have modifications, and if we are to direct the British Gas Corporation to do those things, then the people who should have the last say from the point of view of safety are the people who are to carry the responsibility—namely, the British Gas Corporation. So my amendment is to leave out the words:
after giving to the Corporation an opportunity of being heard about the matter".Does anyone think that it is satisfactory that these words should satisfy anyone that the power of the Secretary of State has been properly and safely exercised? What we have suggested instead is that:Before giving any such direction the Secretary of State shall consult the Corporation and shall thereafter inform the Corporation of the modifications he proposes to specify.… If the Corporation is of the opinion that the modifications proposed would prejudice the safe and efficient operation of any of its pipe-lines it shall so advise the Secretary of State who shall have regard to such advice in framing the direction".I do not think that there is a noble Lord, not even the noble Earl, Lord Lauderdale, who could object to that.It has been said by Government Ministers that if the junction, which the Secretary of State is going to determine should be put in a certain place, is inserted, and if, after all this has been done and all this apparatus has been introduced in respect of the gas corporation, anything goes wrong, it is not the Minister who makes the direction and tells them what to do who is responsible. The Ministers have already said that it is the gas corporation. It is a very important matter. I have said before that I do not think that it is a matter where civil servants should come in at all unless it is to see that the directions are complied with. But the type of technical detail here is surely a matter for the people who will ultimately be responsible, the people who know about it, and that is the gas corporation. So the amendments give the final say, in the way of modifications and what is to be carried out, to those responsible for the safe and efficient operation of the pipe-lines.
May I say that I do not know in Europe or elsewhere of another system where the Government are taking this power to order the gas corporation—it may well be against their own wishes from a safety point of view—to take such actions affecting a transmission system? The Bill as drafted empowers the Secretary of State to do all this. I think that noble Lords opposite who have been voting for this Bill should be very uneasy about this kind of power that they are giving to the Secretary of State. To suggest that he should say where a junction should be, what kind of junction it should be, and make these specifications, is quite intolerable. I said before that it was bureaucracy run wild; it has run dangerously wild when it comes to this kind of point.
There are cases where the BGC will not be able to carry private gas direct to the customer's premises and it may be necessary for the private supplier to construct his own pipe-line. But when it comes to the question of a junction, it may well be that the nearest way is the most dangerous way and that it should be left. Gas travels through Britain and it does not necessarily get from A to B directly; it might go via C and D 632 and then to the particular point you want. The problems of combining these delivery systems and bulk transmission has been recognised in all previous legislation, but not in this Bill. I think that it is wrong that a direction from the Secretary of State should be such that it would mean someone getting a supply in a particular way that presently the gas corporation would not agree to because of the safety questions involved and the safeguarding of the system itself.
It was in another place that the Under-Secretary said that if the system leaks after the modifications have been carried out, it is clear that the sole responsibility must be with the British Gas Corporation. Is that fair if they are asked to do something which they certainly would not advise? The Secretary of State himself said that it is inconceivable that any Secretary of State would make directions which flew in the face of safety. Let us put the ultimate responsibility in respect of the modifications that are necessary for this change where they should be, and that is with the people who carry the responsibility for safety. If the Government are prepared to make statements like that, then they should agree that the intention should be in the Bill and that the last word should be left with the British Gas Corporation.
This is probably one of the most important amendments that we have so far put forward. I am referring not to Amendment No. 34, which is just clearing the way and removing words, but to the new subsection (2) on the following page which is the real part that matters. I beg to move.
§ Lord SkelmersdaleBefore I answer the substantive points of the noble Lord, Lord Ross, he introduced his amendment by making a most astounding statement about statutory supplies and the ability of this Bill to interfere with the corporation's statutory supplies. May I ask him, to clear in my own mind, exactly what he was talking about? With which statutory supplies does the noble Lord think the Bill interferes? In other words, which statute are we talking about?
§ Lord Ross of MarnockWe are talking about the obligations of the British Gas Corporation to provide supplies throughout the whole country. It may well be that if the wrong modifications are made and the wrong apparatus is put in, for which they are not responsible, it could—I do not say that it will—impinge upon their ability to carry out their statutory duties under the original Gas Act.
§ Lord SkelmersdaleThe noble Lord seems to be modifying his tone. He now says "could"; originally he said "did".
§ Lord SkelmersdaleHe did. We shall all be able to read it tomorrow and perhaps be able to settle this argument out of court, as it were.
The statutory demands upon the British Gas Corporation in this situation are, first, to supply on demand—in other words, if they are asked for it; secondly, to supply within 25 yards of the BGC main. This is under the Gas Act 1972 and there is nothing in this Bill which interferes with those two. It may be 633 that contracts run out and are changed, but that has nothing to do with statutory requirements.
In replying to the discussion on the amendments of the noble Lord, Lord Ross, the noble Lord is talking about Clause 16 in the Bill which deals with modifications to existing BGC pipe-lines. The procedures are intended to strike a balance between the needs of the private sector owner of gas and the position of the corporation who, as owners of the national gas transmission system—the noble Lord is quite right; it is not just restricted to a length of pipe-line, it is the system about which we are talking—clearly have a right to expect that their essential interests will be safeguarded.
It is fair to ask—as I believe the noble Lord has in his fashion—how the clause does this. It is a fundamental feature of Part II of the Bill that conditions should be created to enable real competition to be established for the supply of gas to a major part of the market. However, such competition cannot be effective if the private sector has no ready means of transmitting its gas to potential customers. This is why the Government have introduced the measures in Clauses 15 to 17 which ensure that the private sector will, wherever possible, be enabled to have access to the BGC transmission system for the purpose of having its gas transmitted.
But, as I have indicated, the essential interests of the corporation have also to be looked after. Bearing in mind that the corporation will continue to have operational responsibility for their pipe-line system, it would be quite wrong for the Government to impose requirements on them to modify their system before adequate consultation and discussion had taken place with them as to what was entailed.
The Government have no intention of doing this. I am prepared to accept that the purpose of this amendment proposed by the noble Lord, Lord Ross, is to spell out the need for such consultation and discussion, and I accept the spirit of the proposal. But the actual amendment which has been moved is, I would contend, quite unnecessary. Clause 16(1) makes it clear that the Secretary of State must, before giving a direction, afford the corporation an opportunity to be heard about the matter. The noble Lord has already said this.
Lord KeswickIf the noble Lord will allow me, have I misheard him? He said, on Clause 16, that the Secretary of State "must". As I read it, the Secretary of State "may". Which is correct—the noble Lord or the Bill?
§ Lord SkelmersdaleClause 16(1) says:
the Secretary of State may, after giving to the Corporation an opportunity of being heard about the matter, give directions".The "may" applies to the giving of directions and not to the consultation with the BGC. The BGC will be consulted, always. Both my remarks and the Bill are correct.There is no difference between this—in other words, what the Bill says—and the requirement to consult, for which the amendment provides. The amendment, however, provides that the Secretary of State shall thereafter inform the corporation of the modifications that he proposes to specify. There is, again, no need to spell this out. If the Secretary of State did not do 634 precisely that, he would be failing in his duty to give the corporation an opportunity to be heard about the matter.
The second sentence of the amendment again merely adds words to the Bill which would seem to be somewhat unnecessary. The corporation will have plenty of opportunity in the course of their being heard to express an opinion as to whether the modifications proposed would prejudice the safe and efficient operation of their pipe-lines. Furthermore, it goes without saying, I hope, that the Secretary of State will have regard to whatever views the corporation express at the hearing. How could it he otherwise? What would be the point of making statutory provision for the corporation to be heard if the Secretary of State could then go ahead in his own sweet way and ignore their views?
I do not accept that there will be any division of the existing responsibility. The responsibility for the safe and efficient operation of the national transmission system lies with British Gas Corporation and it will remain so. The corporation's views will be fully taken into account in reaching decisions on modifications to the pipe-line system to be the subject of a direction by the Secretary of State using his powers under this clause.
I quite accept that the noble Lords put forward this amendment in the spirit of helpfulness, but I am bound to advise the Committee that this amendment is unnecessary. It is already covered by the provisions of the Bill which I have already, I hope, explained to the Committee.
§ Lord Campbell of AllowayWould my noble friend agree that if, for example, the Secretary of State were to give directions under Clause 16(1) without giving the corporation an opportunity to be heard, that could be justifiable and set aside by way of judicial review in the Divisional Court?
§ Lord SkelmersdaleYes, my noble friend is absolutely correct on that point.
§ Lord Wilson of LangsideIf the attitude of the Government towards this provision is as the noble Lord has explained it, it baffles me why they do not accept the amendment. If that is how they intend it to work, as I understood the Minister to say, why not put it in the words of the amendment, which are clear, specific and detailed? I do not always accept the more colourful expressions of my noble friend Lord Ross of Marnock—I can still call him my noble friend, although I do not know what he calls me; actually, I do from time to time now that I think of it—but when he said that this was not just bureaucracy run mad, potentially, but bureaucracy run dangerously mad, I must say that I thought there was a great deal to be said for that. I do not remember ever seeing it in a Bill or an Act of Parliament before but what exactly is:
an opportunity of being heard"?What is the Minister bound to do? The noble and learned Lord, Lord Mackay, raises his eyebrows. What does it mean in law? We lawyers know what it means to us, but what does it mean and what would it mean when it came to interpretation? Why on earth 635 are not the Government prepared to make it crystal clear what this important matter—which I understand has safety implications—means? I am indifferent about speaking of these matters because I have little knowledge of how gas comes to run through pipe-lines, the curious things it does when things go wrong and I am prepared to leave it to the experts to talk about these technological aspects of it. But I think it borders on the dotty if the Government content themselves with reassuring us that everything will be for the best in the best of all possible worlds if it is left standing as it is now is now. I am sure other noble Lords will wish to speak about this because it is a matter of great importance in the light of what the noble Lord, Lord Ross, has said and the answer that has been given. If this is what they want, why do not they just accept the amendment and let us get on with what is left of this not greatly admired Bill?I was astonished at the suggestion that we were spending too much time over the last clause, which was also an important clause in this Bill, because I heard directed against that clause most forceful and powerful arguments from the noble Lords, Lord Beswick and Lord Ross, and others, and there was not a single voice from the other side of your Lordships' Committee which had a good word to say about that clause. But then we voted on it. Are we going to have to do the same again and have complaints made that we are all talking too much about it instead of listening to the reply and accepting it? If the Government are bona fide in saying what they intend should be, why not accept this excellent amendment?
§ Lord SkelmersdaleBecause, as I sought to explain, it is already in the Bill. We prefer our wording to the wording in this amendment.
§ Lord BeswickI think some things are better understood by repetition but I do not think a bad case is made better by repetition, and with great respect to the noble Lord I do not think that his case is particularly good. Certainly we have had an example, if I may say so with due respect to the noble and learned Lord the Lord Advocate, of instant judgment which was impressive in one way, but I am not convinced about its validity. I look at this just as a student of language to some extent. I see in the clause, as at present drafted, as the noble and learned Lord, Lord Wilson of Lang-side, said:
the Secretary of State may, after giving to the Corporation an opportuntiy of being heard about the matter, give",certain directions. After giving the corporation, "an opportunity of being heard about the matter". I would regard this as an insult. If I read this in a Bill concerned with me, I would consider it a most offensive remark; "I will give you the opportunity of being heard". The noble Lord says that that has the same validity, or the same strength, in a court of law as the wording in my noble friend's amendment, which says:the Secretary of State who shall have regard to such advice in framing the direction".Surely there is a considerable difference in the strength of those two sets of words? If the noble Lord really is concerned about the efficiency of this organisation, I feel that he should at least give way on this occasion.
§ The Earl of LauderdaleI have listened with some interest to this particular debate, much of which has been conducted on a level of hyperbole. However, having said that I wonder whether the Government would consider undertaking to look at it between now and Report? As I see it, the argument is that there may be a difference of meaning between what is in the Bill and what is in the amendment. If there is a real difference, let the Government look at it and identify it and come back and tell us what it is. If, on the other hand, the amendment, as I suspect, does no more than strengthen a provision already in the Bill then surely the Government might look at it in a genial frame of mind, and while not accepting or repudiating it now say that they will consider it in the meantime and give further comment on Report. Surely that would be sensible and would facilitate the passage of the Bill which is full of complexities and not very widely understood.
§ Lord MolloyI listened carefully to the submissions of my noble friends Lord Ross, Lord Wilson of Langside, Lord Beswick, and then the Minister. Listening to the submissions that were made, it appeared to me that what the noble Lord the Minister was saying was that he more or less could say to the Committee that what the amendment desires is accommodated later in the Bill. He just nodded his head. The logic that is left, and there is no escape for him, is to accept the amendment if he agrees that it is covered later in the Bill.
§ Lord SkelmersdaleI do not think that the logic extends that far at all. It is already in the Bill. Therefore, why alter it to change it? But I would be perfectly prepared to accept the advice of my noble friend Lord Lauderdale to the extent that we shall carefully look at this again, but I am totally unable to give any commitment on the outcome whatsoever.
§ Lord Ross of MarnockWell, we are making an advance. The Minister is going to look at it again, read it again, and he is going to have the Lord Advocate by his side, I hope, when he does so. Or it may be that the Lord Advocate wants to consider it on his own. I think the advice of the noble Earl, Lord Lauderdale, was right. What we are concerned about is that a technical judgment should not be taken without the Government knowing fully the express opinion of the British Gas Corporation in relation to that.
What you do at one end of a system is, in an integrated system, inevitably going to affect the other parts. It is because of the importance of this that we thought that these words afford them "an opportunity of being heard" really did not match up to the importance of the matter. We are not denying access to the private supplier. But where it is being done and where modification has to be made, the people who are ultimately responsible, the British Gas Corporation, should have not the last word because they are not making the direction, but virtually the last word, and that the Government should know, and be able to tell the House if they ask for it, what their judgment was on it.
In view of what the Minister has very generously said—well, with a certain reluctance in his generosity, I admit. How his voice rang out when he said, 637 "Without commitment". He should watch the tone of his voice in respect of these things if he wants to instantly seduce us from the path of seeking justice. We are prepared to wait until the next stage of the Bill, and in view of that I withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendment No. 35 not moved.]
§ 5.38 p.m.
§
Lord Lloyd of Kilgerran moved Amendment No. 35A:
Page 22, line 24, at end insert—
("( ) If the corporation is of the opinion that the modifications proposed infringe or are likely to infringe any intellectual property rights owned by it or any other person or firm, it shall so advise the Secretary of State who shall have regard to such advice in determining the sums payable under this section.").
§ The noble Lord said: The intention behind this somewhat technical amendment is to try to avoid disputes that might arise in the course of assessing what sums might be payable to the corporation. When apparatus is to be modified in any way and two or more persons are concerned in the contracts in relation to the modification of the apparatus, a dispute frequently arises at the end as to the cost of that and what parameters should be included in determining the cost. The parties quite frequently can assess the cost of what I refer to as the ironmongery in the arrangements for making modifications of the operators. They can assess the level of labour costs or the costs of materials, and even perhaps agree about the maintenance costs thereafter.
§ However, after the contract has been determined and completed and the work done there arise questions as to infringement, or potential infringement, of patent rights, infringement of exclusive rights in patents, or even in designs, and sometimes expensive difficulties arise as to copyright in the drawings and the misuse of certain drawings involving damages under copyright. Therefore, it then becomes a question of construing the agreement as to where the responsibility lies.
§ I am trying to obtain clarification from the Government as to whether "modifications" as referred to in Clause 16 are not defined adequately to cover potential difficulties that may aries from infringement of what is known as "intellectual property rights" in my amendment. That is the patents, designs, copyright, design rights in particular.
§
Clause 16 says in subsection (1)(a):
the pipe-line can and should be modified by installing it in a junction through which another pipe-line may be connected to the pipe-line".
That junction may be a very complicated affair and involve all sorts of patent rights and intellectual property rights. Subsection (1)(b) then refers to modifications to the,
apparatus and works associated with the pipe-line".
In subsection (3) we have a definition of "modifications" and we are told that it includes,
in the case of modifications to any apparatus and works, references to changes in, substitutions for and additions to the apparatus and works",
and it goes on to say:
the reference in subsection (1) above to apparatus and works associated with a pipe-line shall be construed in accordance with … the terms … of the Pipe-lines Act 1962",
638
to which I need not refer. I am also conscious that there is a definition of "modifications" in Clause 34, which says that the word includes additions, omissions and alterations. Perhaps one of the omissions was neglecting to consider what intellectual property rights might arise under these modifications of the pipe-line and the apparatus.
§ I realise that this is largely a legal matter of construction. It may be that the noble and learned Lord will be able to say that the scope of the word "modifications" is adequate to give rights to the corporation to specify sums which involve the intellectual property rights which may arise in the course of the modifications to be made under Clause 17. I should apologise for the lateness of my lodging this somewhat technical amendment, and I shall realise—unless the noble and learned Lord has an instant answer for me, as he probably has—that the Minister may want to write to me about it, perhaps by a supplement to the letter which the noble Earl, Lord Mansfield, promised to write to me some days ago in regard to intellectual property rights.
§ Lord Mackay of ClashfernThe clarity with which the noble Lord moved the amendment makes great amends for the lateness with which it was first presented. Modifications could include work which affected intellectual property rights. Our view at the moment is that the general words describing the sums which the Secretary of State is empowered to consider should be paid to the corporation would be enough to cover the kind of considerations to which the noble Lord referred. But I certainly undertake to look at the matter in the light of his explanation, to see whether anything further seems to be required in connection with it. We willingly accept his suggestion to save a letter by adding a supplement to the earlier promised letter on the matter.
§ Lord Lloyd of KilgerranI am obliged to the noble and learned Lord for his kind consideration of the amendment which, in those circumstances, I beg leave to withdraw.
§ Amendment, by leave, withdrawn.
§ Clause 16 agreed to.
§ Clause 17 [Acquisition of rights to use pipe-lines belonging to gas corporation]:
§ 5.45 p.m.
§
Lord Ross of Marnock moved Amendment No. 36:
Page 23, line 17, at end insert ("and is compatible with other gas conveyed in the Corporation's pipe-lines.").
§ The noble Lord said: Clause 17 deals with the acquisition of the right to use the pipe-lines about which we have been talking; that is, the new pipelines of the modified existing pipe-lines. We now come to their use and what is put in them. When an application comes before the Secretary of State from a private individual to be allowed to use a pipe-line, we are giving the right honourable gentleman the right to make directions on the BGC; and once again, the Secretary of State gives them an opportunity of being heard about the matter. That has never satisfied me 639 as being adequate to meet the purpose. But that is not the point I am on now.
§ At the moment I am concerned with what happens after the direction and after the right to use has been given. It is what is going into the pipe that is now the important matter. We have modified the pipe and put in junctions and so on, but the responsibility is still with the BGC, although they may have been against it. Now we come to the actual gas, and we find there is another complication.
§ All the measure says about the gas is that it must be of a kind "so specified" or of a kind "similar to the kind" which the pipe-line is designed to convey. There is nothing very reassuring about that. Who will test it and ensure that the gas is compatible with the gas currently being put through by the BGC? The corporation cannot give any guarantees about it because it is not their responsibility. My concern is to ensure that undesirable things do not happen, and the use of the words in the amendment, "compatible with other gas conveyed", would give some reassurance.
§ After all, the gas which the BGC delivers to its customers comes within a specification which meets the requirements of the pipes and of the equipment which the customer is using, not only in terms of the efficiency of that equipment but its safety. There is also the confidence of the housewife that when she switches to gas mark whatever number she wants, she will get that gas equivalent. There is no guarantee, however, when gas is going through, which is not under the control of the BGC, that it will have that consistency of calorific heat. Nor will there be any guarantee of pressure, purity or anything else unless we have confidence of compatibility.
§ What is being put through might affect the pipe system. If certain chemicals are being used, they could affect the pipe, perhaps causing the sooting of appliances and so on if the gas is not compatible. I hope the Government will accept the amendment and that they have learnt from experience that when dealing with technical matters of this kind, it is better to put the balance on the side of the BGC and safety. Problems could arise in the maintenance of calorific values as a result of the mixing of gases where the rate of flow of an independent supply is not under the control of the BGC. I ask the Committee to remember that if customers receive the gas at a calorific value which is legally declared, any drop below the value would be a loss to the customer and could render the gas corporation liable to prosecution. The responsibility is the corporation's. The contract, interrupted or otherwise, which the noble Earl, Lord Lauderdale, talked about, is there, and if the gas corporation does not comply with it, it faces difficulty.
§
During the Committee stage in another place, the Under-Secretary claimed that the clause as drafted would ensure compatibility. He said:
What will govern the standard of the gas entering the pipe-line is its compatibility with the gas that BGC is conveying".
He undertook to re-examine the certainty that the Government had got the drafting right. I am not satisfied that the drafting is right, arid I should be much more confident about the matter if the amendment that I suggest were made to Clause 17, so that the responsibility is there and it is ensured that the gas is
640
compatible. That would become a statutory responsibility. It would be far better than leaving the matter with the vague words at present in the Bill. I beg to move.
§ Lord SkelmersdaleI fully appreciate that the intention of the noble Lord, Lord Ross of Marnock, in moving the amendment is that private gas transmitted through the corporation's pipe-lines should be compatible with the corporation's own gas. A similar, if not identical, amendment was discussed for some time during the Commons Committee stage, and I think that I can reassure the Committee that the Bill as at present drafted meets the concern of noble Lords. For private sector gas to be acceptable for transmission by one of the gas corporation's own pipe-lines, it is important that the gas should be of a type that the pipe-line is designed to convey, otherwise the safety of the pipe-line system could be prejudiced; and I accept that in extreme cases it would be prejudiced. That point is already covered in Clause 17(1), which ensures that applications for a direction by the Secretary of State to secure a right of conveyance for private gas through a corporation pipe-line must be in respect of gas that is of, or is of a kind similar to, the kind which the pipe-line is designed to convey.
This is not the first time that it has been suggested to us that there might be gas which, although it would be considered as being of the same type—or a similar type—as that which the corporation's pipe-lines are designed to convey, might none the less result in a mixture of BGC and non-BGC gas which fell outside the specification which consumers' appliances were designed to handle, if it were admitted to the corporation's system in significant quantities. We have already taken that point on board in Clause 17(2). Clause 17(2) requires the Secretary of State to be satisfied, before giving directions under the clause, that he would not thereby prejudice the conveyance by the pipe-line of the quantities of gas which the corporation requires, or may reasonably be expected to require to be conveyed in order to carry out its statutory duties and contractual obligations. The Committee has already come across this provision in relation to a previous amendment.
In a somewhat lengthy Clause 15 stand part debate I said—and I am sure that it bears repeating—that it is self-evident that when gas emerges from a shared pipeline the corporation may easily not get the particular cubic foot of gas that it put in. If the gas is not within the tolerance of the corporation's specification, and hence is unsuitable for the purpose for which it was sold, the Gas Corporation would be in clear breach of its statutory duty. The Bill is so constructed as to prevent that happening.
The noble Lord, Lord Ross, asked me two questions. He asked, who is going to test the gas? The gas corporation will test the gas, because it is the corporation's pipe-line containing to an extent, possibly a great extent, the corporation's gas. In extreme cases it might be up to the corporation to prove before the courts that by the introduction of foreign gas it was not in breach of its statutory duty that has already been impressed upon it by previous legislation.
If mixing the two types of gas resulted in a mixture which fell outside the BGC specification, then the gas would no longer qualify as gas which the corporation 641 required; so it would be unsuitable in another sense. The meaning of the suggested amendment is therefore already comprehended within Clause 17(2), and so I do not think that the amendment is necessary. The noble Lord in fact answered his own question in regard to whether the responsibility is that of the British Gas Corporation, and I have sought to explain to him and to the Committee that it is indeed the corporation's responsibility.
§ Lord Ross of MarnockYes, it is the responsibility of the British Gas Corporation once the gas is in the pipes. If the gas is then found to be incompatible, the corporation will be placed in considerable difficulty in regard to making it compatible and safe in relation to, first, the pipes, and, secondly, the appliances. What concerns me is whether it is right that the corporation should be put belatedly to that expense. Who is responsible for testing the gas to ensure that it is compatible before it goes into the pipe-line? The work should be carried out at that particular point. I do not want to see in the pipes any gas that is incompatible, and it would he far better to ensure at source that it was compatible. That is the reason for the amendment. This is an important matter, and doubt has been cast on the adequacy of the present wording of the Bill. So I should have thought that the Government would have been prepared to accept the amendment, and I am very disappointed that they have not accepted it.
§ Lord BeswickI wonder whether the noble Lord will agree to have another look at this matter. As I see it, it is not simply a question of the compatibility of the gas; there is a reference to the point at which one supply joins another supply. I disclose my complete ignorance of these matters, but I should have thought that the expertise was to be found within the corporation. The amendment is proposing that where there is a junction, it should be at a point
identified by the Corporation which would not prejudice the integrity and safety of the pipe-line".If the corporation wanted the junction at a particular point, that would be not a frivolous view, but one based on experience. We are talking about people who have spent all their lives in the industry, and I should have thought it worthwhile giving the assurance that if the corporation is to be required to accept a supply, it should be a supply taken at a pointwhich would not prejudice the integrity and safety of the pipe-line".There can be no party point about this, and I should have thought that the noble Lord could say that he would look at it again.
§ Lord SkelmersdaleAs I sought to explain, the Government have already considered the point because of the questions which were raised in another place, and I have reported to the Committee the results of the Government's further deliberation. I cannot go any further than that.
§ Lord BishopstonI should like to reinforce my noble friend's plea to the Minister since there is some doubt 642 about this matter. In the previous Committee proceedings, on 11th May, the noble Lord stated, as reported at col. 193 of the Official Report:
Obviously, where private gas uses BGC pipe-lines, then the private gas must be compatible with BGC gas".That is the essence of our amendment. I hope the Committee will forgive me if I again refer to another quotation, which I have already given this afternoon, in which the noble Lord said a few lines later, at col. 194:For example, a private supplier whose gas contained a higher proportion of impurities than would be acceptable in the BGC system might build his own pipe-line specifically suited to such gas".The Minister may have made a slip of the tongue, but if he really insisted that the gas must be compatible he would not have said that the private supplier might build his own pipe-line; he would certainly have to do so. But the Minister did not say that he would have to; he just said that he might build his own pipeline, suitable for the particular gas.I think it would help the progress of the Committee if the noble Lord would accept my noble friend's suggestion to have a look at this because, although he has given assurances, which we accept and which are written in Hansard, it is really the Bill or the Act which is the substance of the guidance to the industry. I hope we can make progress in that way.
§ 6 p.m.
§ On Question, Whether the said amendment (No. 36) shall be agreed to?
§ Their Lordships divided: Contents, 59; Not-Contents, 97.
643| DIVISION NO. 3 | |
| CONTENTS | |
| Ardwick, L. | Lloyd of Kilgerran, L. |
| Aylestone, L. | Lovell-Davis, L. |
| Barrington, V. | McGregor of Durris, L. |
| Bernstein, L. | Milford, L. |
| Beswick, L. | Molloy, L. |
| Bishopston, L. | Northfield, L. |
| Blease, L. | Ogmore, L. |
| Blyton, L. | Oram, L. |
| Bowden, L. | Phillips, B. |
| Briginshaw, L. | Pitt of Hampstead, L. |
| Brockway, L. | Ponsonby of Shulbrede, L.—[Teller.] |
| Brooks of Tremorfa, L. | |
| Bruce of Donington, L. | Ross of Marnock, L. |
| Chitnis, L. | Scanlon, L. |
| Cledwyn of Penrhos, L. | Sefton of Garston, L. |
| Cooper of Stockton Heath, L. | Stewart of Alvechurch, B. |
| Stewart of Fulham, L. | |
| David, B. | Stone, L. |
| Davies of Leek, L. | Strabolgi, L. |
| Davies of Penrhys, L. | Tanlaw, L. |
| Donaldson of Kingsbridge, L. | Tordoff, L. |
| Fisher of Rednal, B. | Underhill, L. |
| Glenamara, L. | Vernon, L. |
| Hutchinson of Lullington, L. | Wallace of Coslany, L.—[Teller.] |
| Jacques, L. | |
| Jenkins of Putney, L. | Wedderburn of Charlton, L. |
| Kilmarnock, L. | Wells-Pestell, L. |
| Leatherland, L. | Whaddon, L. |
| Lee of Newton, L. | White, B. |
| Listowel, E. | Wigoder, L. |
| Llewelyn-Davies of Hastoe, B. | Wilson of Langside, L. |
| NOT-CONTENTS | |
| Airey of Abingdon, B. | Hylton-Foster, B. |
| Alexander of Tunis, E. | Killearn, L. |
| Avon, E. | Kilmany, L. |
| Beloff, L. | Kinloss, Ly. |
| Belstead, L. | Lane-Fox, B. |
| Boardman, L. | Lauderdale, E. |
| Bolton, L. | Lindsey and Abingdon, E. |
| Brougham and Vaux, L. | Long, V. |
| Caccia, L. | Loudoun, C. |
| Caithness, E. | Lucas of Chilworth, L. |
| Camoys, L. | Lyell, L. |
| Campbell of Alloway, L. | McFadzean, L. |
| Campbell of Croy, L. | Mackay of Clashfern, L. |
| Cathcart, E. | Mackintosh of Halifax, V. |
| Clifford of Chudleigh, L. | Macleod of Borve, B. |
| Cockfield, L. | Mancroft, L. |
| Colville of Culross, V. | Mansfield, E. |
| Constantine of Stanmore, L. | Margadale, L. |
| Marley, L. | |
| Craigavon, V. | Masham of Ilton, B. |
| Crawshaw, L. | Massereene and Ferrard, V. |
| Cromartie, E. | Merrivale, L. |
| Cullen of Ashbourne, L. | Milverton, L. |
| Davidson, V. | Mottistone, L. |
| Denham, L.—[Teller.] | Murton of Lindisfarne, L. |
| Dilhorne, V. | Newall, L. |
| Drumalbyn, L. | Nugent of Guildford, L. |
| Ebbisham, L. | Orkney, E. |
| Ellenborough, L. | Piatt of Writtle, B. |
| Elliot of Harwood, B. | Portland, D. |
| Enniskillen, E. | Rankeillour, L. |
| Faithfull, B. | Reay, L. |
| Ferrers, E. | Rochdale, V. |
| Ferrier, L. | St. Davids, V. |
| Forester, L. | St. Germans, E. |
| Fortescue, E. | St. Just, L. |
| Fraser of Kilmorack, L. | Sandys, L —[Teller.] |
| Gainford, L. | Sharples, B. |
| Gibson-Watt, L. | Skelmersdale, L. |
| Gormanston, V. | Spens, L. |
| Greenway, L. | Stodart of Leaston, L. |
| Gridley, L. | Strathspey, L. |
| Grimston of Westbury, L. | Sudeley, L. |
| Hailsham of Saint Marylebone, L. | Swinton, E. |
| Teviot, L. | |
| Halsbury, E. | Trumpington, B. |
| Henley, L. | Vaux of Harrowden, L. |
| Holderness, L. | Vivian, L. |
| Home of the Hirsel, L. | Wise, L. |
| Hornsby-Smith, B. |
§ Resolved in the negative, and amendment disagreed to accordingly.
§ 6.9 p.m.
§
Lord Beswick moved Amendment No. 37:
Page 23, line 24, leave out ("to the pipe-line by the Corporation") and insert ("by the Corporation to a pipe-line at a location identified by the Corporation which would not prejudice the integrity and safety of the pipe-line.").
§ The noble Lord said: I beg to move Amendment No. 37. I referred to this in the discussion on Amendment No. 36, and I thought it was all of one part, I thought it was a common problem; but this is a particular aspect of it. The noble Lord, Lord Skelmersdale, when he replied, said that he was unable to give us any assurances about going back on this or about looking at it again because, he said, they had already considered it after the discussion in the other place. He probably had in mind the question of compatibility, but I was talking about this rather narrower point, as to where the junction should be located.
§ I ventured to say that in my view there was reason to believe that the expertise of the corporation would be 644 at least equal to the expertise in the Minister's department, and that as they had responsibility for the main pipe-line, anyhow, conceivably their judgment as to where the junction should be located would be even superior to that of the Secretary of State. In this case I would have thought it was absolutely essential that the corporation's professional people should be satisfield that there was no danger in locating a junction at a particular place, and that the corporation's view as to where the integrity and safety considerations were best satisfied should be accepted. As I have said, I do not believe this to be a party case. I should have thought this a technical matter. I am fairly satisfied in my own mind that the corporation themselves would be happier if this amendment were accepted. I have no evidence that there has been any further discussion about this. I should like some assurance from the noble Lord that he will go back and think about this again. In the meantime, I beg to move.
§ Lord TanlawMay I support the noble Lord, Lord Beswick, in this (what I would call) helpful amendment —mainly for the reason he has given and because, from our point of view, we are not clear how the department or the Secretary of State are going to operate their authority on these particular occasions, bearing in mind that the main trunk system will be run by the corporation and we are almost certainly here talking about a spur or branch pipe-line. Can the Minister say that the Secretary of State and his department are not merely drawing lines on maps, but will have to have a team of people able to go out on to the site to check the location for one reason or another, mainly, no doubt, to satisfy the environmental and other departments? But they also have to have people technically equally as capable, as Lord Beswick has said, in order to ensure that what the corporation are suggesting is both safe and correct and so on.
I am not getting a clear picture of how these kind of meetings will take place. Presumably, one lot will be an exchange of theoretical papers, with maps; the other lot will be meetings of technical people looking at equipment and discussing technical matters; and the third lot will be meetings of people on the site. Perhaps the noble Lord can explain how each of these sections of what is going to be the application of this Bill is going to operate in practice. I believe that this amendment is helpful in the sense that it leads to one way of seeing how this Bill can become workable.
§ Lord SkelmersdaleThe question of safety of the gas corporation line is related to the point raised in the last amendment, No. 36, as the noble Lord has said. However, I would say that it is not a close connection; it is a separate point. It would help me, and perhaps other members of the Committee, if we could direct our remarks on each amendment to that amendment. This is meant as a mild criticism. I will not push the point.
I should stress that before giving a direction under Clause 17(3), Clause 17(1) provides that the Secretary of State must have given the corporation an opportunity to be heard, and Clause 16(1) also ensures that before giving any direction under Clause 16(2) that the corporation should install a junction to enable another pipe-line to be connected, he must similarly have given them an opportunity to be heard. There is no question, 645 therefore, of the corporation being unable to voice any objections to such a proposal on grounds such as safety. Moreover, Clause 17(2) requires the Secretary of State to be satisfied that the giving of directions under Clause 17 would not prejudice the conveyance by the pipe-line of the quantities of gas which the corporation requires. It is therefore inconceivable that the Secretary of State would give such a direction if it flew in the face of a matter such as safety. I believe, that the intention behind this part of the amendment is already assured by the Bill.
The powers in Clause 17 are not new in concept; indeed, they are based on provisions introduced by the then Labour Government in Section 23 of the Petroleum and Submarine Pipe-lines Act 1975 which deals with the acquisition by persons of rights to use offshore pipelines in general that belong to others. They have been carefully thought out in the past and I think provide a valuable model for inclusion in this Bill.
Turning to the idea that the corporation should have the final say in where a connection with a private pipe-line should be made, I must confess that I cannot understand the noble Lord's concern behind this intention. The primary purpose of Part II of the Bill is to create conditions of real competition in that part of the gas market that the gas corporation does not have a statutory obligation to supply. I thought that I might have made this point clear before. To facilitate this, it is essential that all parties have the same opportunities to transport their goods. Otherwise, with a virtual monopoly of the means of delivery by the corporation, true competition would be limited. That is the reason why we have included provisions designed to give private suppliers access to the national pipe-line system. We have made it clear that it will be up to private suppliers to negotiate with BGC in the first instance for the use of their pipe-lines and that the process of appealing to the Secretary of State is to be used only as a last resort if negotiations break down.
However, if the questions cannot be resolved in direct negotiations between the parties, and an appeal is made to the Secretary of State, then it is essential that the Secretary of State should have the power to determine what modifications to BGC's pipe-line are needed, should he find for the appellant. In other words, this is a reserve power we are asking Parliament to give to the Secretary of State. Leaving a decision such as the siting of a connection between the two pipe-lines entirely in the hands of the corporation would be tantamount to asking the private supplier to sign a blank cheque and would be a far cry from the conditions of real competition that we hope to create. I therefore cannot agree to the amendment and invite the noble Lords opposite to withdraw it.
§ Lord Ross of MarnockI listened carefully. I did not see any great advance by the Minister, remembering that he already has promised to look at Amendment No. 34. I think that Amendment No. 34 is more tied to Amendment No. 37 than any other amendment because it deals probably more generally with the question of safety. This deals with one specific point: that access has been granted and the direction has been made in respect of access; but to achieve that access, to achieve the supply going to a particular customer of the private supply, a junction has to be made. All that 646 this says is that it will be identified by the corporation, which will not prejudice the integrity and safety of the pipe-line. Who is responsible for the integrity and safety of the pipe-line? It is the BGC. Surely it is reasonable to suggest that they should identify where best the junction should be located. That is the simple reason and the simple purpose of the amendment.
I would have thought that the Government would accept this amendment with alacrity. Leaving the matter in the other position there is quite an argument that if anything did happen and the direction of the Secretary of State was against the advice on grounds of safety of the British Gas Corporation, it might be held in law that it was the Secretary of State who was responsible.
Here, by gaining the point that the Government want, that there should be access, when it comes to the matter of how to achieve that access, it should he left to the BGC. I would have thought that this would satisfy the Government. It clearly shifts the responsibility to the BGC.
When the noble Lord says that it is inconceivable that the Minister will do this, that, or the next thing—well, I do not have to examine the years very closely to find that Ministers have done things that were quite inconceivable. I will not expand on that.
§ The Earl of LauderdaleThe Scottish Office included.
§ Lord Ross of MarnockYes. It was under my control for only eight years.
§ The Earl of LauderdaleEight years too long.
§ Lord Ross of MarnockI can assure you that things may well have gone wrong then, too. Where there is the technical expertise—and everyone admits that it is there with the BGC—surely this amendment, which is a good amendment, is harmless to the Government's main purpose and principles of achieving competition. How the technical aspects are going to be dealt with surely should be left to the BCG. That is what this amendment does.
§ Lord Lovell-DavisI should like to support my noble friend. As a Minister who was responsible in this House for energy under the last Government, I had the opportunity of visiting many research and safety centres of the British Gas Corporation which, as my noble friend Lord Ross said, probably has the greatest expertise of any corporation of its type in the world. It has the best knowledge of its own system and installations. Are the Government saying that it is not worth ensuring that the greatest experience available is brought to bear in such matters as we are discussing?
§ The Earl of LauderdaleListening to this amendment, as to previous ones, I get the strong impression that they may well have been inspired by BGC. I am led to believe that the BGC have been very co-operative at a technical level about this Bill. They have put their expertise at the disposal of the department over and over again without any inhibition or restraint even if, at board level, the BGC have tried politically to fight this Bill tooth and nail.
647 On the technical level, then, they have been very co-operative, and I think everybody in touch knows that is so. If this amendment, as I sense, may well originate in the minds of the corporation, surely it deserves a careful look by the Government. I do not attempt to say whether it adds to or subtracts from the Bill; whether it makes the Bill better or worse; whether it makes the trusteeship of the pipe-line safer or not. So I wonder whether this is not a case, once again, where the Government may be well advised to be flexible and agree to look at the amendment again on Report?
§ Lord Lloyd of KilgerranMay I presume to support what the noble Earl, Lord Lauderdale, said? This is a matter that should be looked at again. The answer of the Government in relation to this proposed amendment is that it is already in the Bill. When one is dealing with questions of integrity of a pipe-line, the safety of the pipe-line, surely it would be good from the Government's point of view to introduce those specific words in the Bill. I agree with what the noble Lord, Lord Beswick, said about the great expertise of the gas corporation. If the main theme of this amendment is already in the Bill and can he spelt out in the Bill, it would be politic—if that is the right word—to introduce definitely a clause of this kind which is in a direction to be issued.
§ Lord SkelmersdaleI promised at the beginning of this afternoon's proceedings that I would listen, and have listened to the advice from all round the Committee. Most certainly in this case I am prepared to be flexible. We will certainly reconsider this amendment.
§ Lord BeswickThe influence of the noble Earl, Lord Lauderdale, in this Committee seems to be growing with every amendment. I am grateful to him. I think that it is just as well that the noble Lord gave that undertaking. We shall look forward to hearing at Report stage that he has found it possible to accept it. In the meantime, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ 6.27 p.m.
§
Lord Skelmersdale moved Amendment No. 37A:
Page 23, leave out lines 33 to 42 and insert—
("(4) Where the Secretary of State proposes to give directions to the Gas Corporation under section 15(4) or 16 above, it shall be his duty before doing so—
and subsections (1) to (3) above shall have effect in relation to such an application made by virtue of this subsection as if for references to a pipe-line there were substituted references to the proposed pipe-line or, as the case may be, the pipe-line as it would be with those modifications.").
§ The noble Lord said: I have already spoken to this amendment with Amendment No. 32BA. I beg to move.
§ On Question, amendment agreed to.
§ On Question, Whether Clause 17, as amended, shall stand part of the Bill?
§ Lord UnderhillWe are opposed to the whole principle of this clause, the clause which gives the Secretary of State very strong powers to give directions on a number of points to the corporation for others to have rights to use the pipe-lines which belong to the corporation. I do not want to go over all the arguments which have come up on a number of the points; but I believe that it is necessary to go through the clause to see precisely what are the powers that are being given to the Secretary of State.
Under subsection (1), the Secretary of State has the power to consider an application that he shall direct the corporation to give a person the right to use a pipe-line for the conveyance of that third person's own gas supplies; and power to decide whether to proceed with the application or to reject it. What will be the nature of the technical advice on which the Secretary of State will make that first important decision? That is whether to throw the application out of court or that it shall be considered further. Should he decide to consider the application further, he shall then give notice to the corporation and an opportunity for it to be heard. We have heard the criticisms made of the particular words "to be heard". What we are hoping it will mean is the fullest possible consultation on all the technical, safety and other matters involved in the application. When one looks at Clause 17, it would appear that that will be the last opportunity written into the clause for the corporation to make known its views on any matters.
Subsection (2) says that when the Secretary of State is satisfied that the grant of application would not prejudice the statutory duties and contractual obligations of the corporation, he may then give directions to the corporation. I must ask what is the position should the technical advice given to the Secretary of State differ from the technical expertise of the corporation. Everyone will agree that there is excellent technical expertise in the corporation. Ministers have repeated that time and time again to your Lordships and also in the other place, but there is nothing in Clause 17 which makes any provision for the corporation "to be heard" on the directions which the Secretary of State proposes to give or any provision for the corporation to make any appeal against those directions if they believe they are ill-founded.
Subsection (3) give further arbitrary power to the Secretary of State. He may give directions to the corporation to specify the terms of an agreement to be entered into by the corporation with the applicant. The agreement may include various items which again will be specified by the Secretary of State. We have just had a long debate regarding the specification of the kind and quantity of gas to be conveyed. I shall not go into that argument now, but there was a long discussion in the other place, just as there has been here today. Will those points be discussed with the corporation, because it would appear to me that they 649 are fundamental and yet there is no provision in the Bill?
Then we find that the agreement may secure that the exercise of the right of the applicant shall not be prevented or impeded. We were told by the noble Lord, Lord Skelmersdale, that these powers being given to the Secretary of State are needed to ensure that there will be no frustration. Again, in view of that, one would hope that the corporation will be consulted on all these points to be included in the directions and the agreement, which will specify certain matters on which again the Secretary of State will give directions. The agreement may regulate the charges for conveying the gas. I ask again: where is there direct provision for consultation with the corporation? It would secure the right of the applicant to have his own pipe-line connected to that of the corporation.
The Minister has agreed to look at this matter, but I must assume that when we come back on Report there will be no change. If that should be the case, therefore, we must ask who will decide the type of junction and where it will be located. Surely on that issue there must be provision for consultation. The clause talks about the exercise of rights of the applicant, and surely, therefore, the corporation must be fully consulted on that matter. However, there is no provision in the clause for that. The directions that may be given by the Secretary of State may specify the sums to be paid for this right and for the method of determining how these sums shall be worked out. In the event of the applicant paying such sums or agreeing to do so, the corporation shall enter into the agreement on the terms specified. Again, where will there be consultation with the corporation on those particular points on which the Secretary of State will give some directions?
The clause in effect means that a person can be offered a contract which gives firm supplies of gas, whereas at present an industrial consumer may have interruptible supplies: that was a point which was raised by the noble Earl, Lord Lauderdale. How can that be done while at the same time the corporation meets its statutory responsibilities to the domestic consumer? How can both be guaranteed? The Minister may answer that it is very simple because the private supplier will put in his gas and the corporation NA ill put in its gas; but the Under-Secretary of State replied to this latter point on 16th March in another place, saying:
Whether companies in future pursue firm or interruptible supplies must depend, first, on other suppliers prepared to supply and, secondly, on the contractual arrangements entered into by the parties".It would seem to me that, because of the absence of the first offer right under the Bill, the ability of a supplier to supply a private company may prejudice supplies to the corporation. I must ask what will be the position if the corporation finds it necessary to interrupt supplies to a domestic consumer in order to comply with its responsibilities to the third party. Alternatively, what would be the position if, in order to adhere to its contract with a private supplier, it cannot fulfil its responsibilities to domestic consumers? The Bill appears to be silent on that matter. In other words, if the much-desired competition prevents the corporation getting all the gas required to meet the 650 needs of its domestic consumers, what will the situation be?As my noble friend Lady Fisher stressed when she spoke on Clause 15, the British Gas pipe-line system is an integrated network. That is one primary reason for there to be a public national gas industry, because a decision which affects any one part of the network can have serious repercussions throughout the whole of the network or on another part of it. I think it would be generally agreed that the corporation have an excellent record of guaranteeing supplies under their statutory responsibilities. It is argued, and I believe it will be accepted, that gas can be supplied to most premises in Great Britain by more than one route in the network of pipe-lines. That is made possible because there is the integrated national network. If this sensible policy is to continue, clearly British Gas must have the responsibility to make professional judgments affecting their transmission system and, if they disagree with the technical advice given to the Secretary of State, which he would need to have if he is to exercise the powers under Clause 17, who will decide and who will arbitrate?
Clause 17 gives the power to the Secretary of State, but surely that cannot possibly be right; it cannot be left in that position. The British Gas Corporation has the expertise. Surely its views must be paramount on the amount of gas to be transmitted, the kind of gas and the route by which it shall be conveyed. Having taken decisions and given directions to the corporation, it would appear that the Secretary of State will then leave the corporation to work out the technical details. I heard the words of the noble Lord, Lord Skelmersdale. He said that the responsibility would still rest with the corporation. Surely that makes it imperative that at all stages the corporation shall be consulted and its technical expertise taken into consideration. I believe one could put it even higher than that because of the safety provisions and its other statutory responsibilities.
There is no provision in the Bill for all these different stages of consultation; and it will be insufficient to be told, as we have been told in other Bills, that statements have been made by Ministers—because statements by Ministers have no status in law, no legal standing. These matters should be written into the Bill. In the other place during Committee stage the whole question of consultation was discussed and—I paraphrase—the Under-Secretary of State said that Clause 17 was formed to ensure proper consultation and was set into a smooth working framework. If I may use a colloquialism, you could kid me!—because you have only to look at the provisions of Clause 17 and you will see there is no smooth framework there; certainly there is no basis for sound consultation with the British Gas Corporation. As other noble Lords have said, this is setting up a bureaucracy which is unnecessary in the light of the efficiency of the corporation. It also means day-to-day interference with a very efficient publicly owned corporation and we would oppose the provisions of this clause, which give these powers to the Secretary of State.
§ The Earl of LauderdaleI intervene on Clause Stand Part to draw attention to, and raise one or two questions arising from, the wording of the clause. But I must first declare an interest. I am a director of a 651 company holding a majority share in the Frigg gasfield in the North Sea, which provides something like one-third of all the gas that is used in Britain at the present time. My company have not briefed me to speak on this, but, arising out of that connection, one encounters a certain amount of talk about gas, and the problems of finding it and selling it. It is in the light of that general talk that I have one or two questions to raise.
As I read this clause—and I have read it several times —I cannot help thinking that it arises from a genuine fear in some quarters that the BGC, having for many years enjoyed a monopoly position, may find it psychologically difficult to switch to being a public trustee for a common carrier pipe-line. With an organisation which is so well disciplined (as, indeed, the BGC) is and with such an esprit de corps that we have known for many years, it would not be surprising if the psychology of monopoly took some while to be transmuted into the psychology of a trustee. In view of a pretty strenuous political campaign that has been conducted by the BGC board against this Bill—I repeat that on a technical level they have been most co-operative—and of some of the things that we hear from BGC executives from time to time, it is not surprising that there are anxieties about the way in which the BFC will perform the new trusteeship to be laid on it by Parliament.
I draw attention, therefore, to subsection (3) of this clause, under which the Secretary of State has powers for securing to the applicant the right to have his gas conveyed; for securing that the exercise of that right is not prevented or impeded and—this is perhaps what the clause is really getting at—for making sure that, in the exercise of the new trusteeship conferred by Parliament, the word should go all the way down the line that this Bill will be implemented loyally by the BGC. Then there is power to secure for the applicant the right to have his pipe-line connected. This raises a whole lot of points that have not been aired in this Committee and it is important that we should look at them for a moment.
First, there will be need for gas exchange and balancing services between private enterprise producers and the BGC. With the best will in the world, at any time a source of supply can go wrong and the trusteeship, which is now to be laid upon the BGC for maintaining a common carrier line, must surely include a responsibility to make sure that there are no accidents that cannot be covered at the time. So there will be need for gas exchange and balancing services between the BGC and private enterprise, and indeed between private enterprise producers themselves.
Secondly, private enterprise producers should be able to borrow gas from existing fields against gas from other fields to be produced at such-and-such a time. This would be, of course, provided that the BGC's own resources (which originate in private enterprise under contract) are not jeopardised. So gas exchange and balancing services will be needed both ways to make the thing work and that must surely be one of the ideas behind these requirements in subsection (3)(a)(i), (ii), (iii) and (iv).
Then there is the difficulty of private enterprise producers negotiating with a consumer—mostly industrial, and probably an industrial consumer—within easy access of the North Sea, such as in Central Scotland, 652 the Nigg Bay area or around Humberside. Presumably, those consumers, who are crying out for more gas feedstock, negotiating with possible producers, will have between the two parties the right of access to the common carrier pipe-line. So the BGC would be in a position, if it so chose, to obstruct the working of this arrangement. BGC might insist, for example, on impossible conditions, whether about junctions or about tariffs. Tariffs may very well be at the heart of the matter. So it is important that, when the BGC proposes a particular tariff to a private enterprise producer to carry his gas to another consumer, the basis upon which that tariff is calculated should be open and above-board. Thus it is surely going to be incumbent on the BGC to disclose the costs, revenues and volumes on which their pipe-line tariffs are based, to enable serious negotiations in good faith to proceed.
This leads to a further point, which is that at some stage there will be a need of working guidelines about the tariffs. It is not clear to me. But it may be intended to be covered in this subsection of this clause that guidelines will emerge so that everybody can know on what basis tariffs are negotiated. This seems to me to be part of the inwardness of subsection (3)(b), which states that the Secretary of State can,
specify the sums or the method of determining the sums which the Secretary of State considers should be paid".Here, as I read it, the Secretary of State is being put—I think very properly—in the position of requiring that there is no more blockage by the BGC; that the BGC co-operates in facilitating the passage of gas from other producers to other consumers. Therefore, at some stage there must obviously be need for a disclosure of the calculations on which the BGC is to negotiate its tariffs.We must surely assume, despite the political campaign which the chairman and board of the BGC have been conducting, that if this Bill passes through Parliament it will be loyally operated by the corporation. Equally, we will all have to be safeguarded to make sure that all goes well. My only complaint about this part of the Bill is that it looks like a cumbersome procedure, and one wonders whether appeal to the Secretary of State may not prove to be a drawn-out affair, and so drawn-out that it may discourage private enterprise producers from producing and, in the first instance, from exploring for the gas at all.
Those are general considerations. That is how having been exposed to a good deal of talk about gas in the last year or two, read subsection (3). I hope that I have got it tolerably right; I hope that I have not embarrassed my noble friends on the Front Bench any more than I normally do, and I certainly hope that Clause Stand Part is carried.
§ Lord SkelmersdaleThe Committee will recognise the experience of my noble friend Lord Lauderdale. He has put his finger squarely on the intentions of the clause. Clause 17 provides that a person may apply to the Secretary of State for directions securing to the applicant the right to use a pipe-line owned by the corporation and regulating the charges the corporation may levy for use of the line. As I have stressed before, the Secretary of State may only give the corporation directions where he is satisfied that this will not prejudice the conveyance of gas required by the corporation or, 653 for that matter, by other persons with existing rights to use its pipe-line.
The intention behind the clause is that the first step for a person who wishes to use the pipe-line will be to negotiate with the British Gas Corporation. This is sound commercial sense. It is their pipe-lines about which we are talking. If agreement is reached in the normal commercial manner, all well and good; discussion need not proceed any further. If, however, the private supplier is unable to reach agreement with the British Gas Corporation—or if, indeed, it should be the other way round—they will be able to appeal to the Secretary of State to determine, for example, whether capacity can be made available and, if it is in dispute, on what terms it can be made available. Before hearing such an appeal the Secretary of State would naturally wish there to have been genuine negotiations between the two parties, and he has the option, under Clause 17(1)(a), of rejecting an application out of hand if he is not satisfied on this point.
I have been asked various questions. My noble friend asked me about an exchange and balancing of gas supplies between private sector companies and the corporation. This, like most of the matters dealt with in this part of the Bill, will be a matter for negotiation between the two parties. There is no intention or, indeed, any power in the Bill by which the Government could force the British Gas Corporation to exchange or lend gas which they already have under contract and which they may well need for their own purposes.
I still do not seem to have been able to convince many members of the Committee that we are not talking about the domestic consumer. The domestic consumer is not going to be affected in any way by the Bill, except, as I mentioned on the last occasion when we discussed the point, those living in houses round an industrial complex. The noble Lord, Lord Underhill, will, I am sure, remember that point.
The noble Lord, Lord Underhill, asked about the occasions when the Secretary of State will decide that an application should be rejected. The primary cause for such a rejection would be in cases where the Secretary of State is not satisfied that negotiations have taken place between the applicant and the corporation or that the negotiations which have taken place are adequate. He would also reject a frivolous application. I cannot imagine it coming to that, but the Secretary of State would certainly reject it if he considered the application to be frivolous.
The noble Lord, Lord Underhill, asked about the decision-making capabilities of Secretaries of State generally. He asked me what would be the position if the technical advice of the British Gas Corporation differed from other technical advice. By "other" I assume he means the technical advice of the potential private supplier. The Secretary of State must weigh up the conflicting advice with the extra advice and consultation within his own department. That is the interaction which always occurs on these occasions. It is not going to be any different in this case.
The Committee has taken great exception during the last few hours to the phrase "opportunity to be 654 heard". I must tell the Committee that this means an opportunity to present to the Secretary of State a full account of all objections to the matter proposed and to examine all its implications. Those people who are to be given an opportunity to be heard most certainly shall be heard, and their comments will naturally be taken into consideration when the Secretary of State makes his decision.
Lastly, I was rather confused by the noble Lord, Lord Underhill, and, indeed, by other noble Lords who supported him, when they spoke about interruptible supplies to the domestic consumer. There is no such thing.
§ Lord UnderhillI referred to interruptible supplies to the industrial consumer.
§ Lord SkelmersdaleI apologise to the noble Lord. I misheard. I thought the noble Lord was talking about interruptible supplies. This does not happen. But interruptible supplies are part of the original contract between the consumer and the British Gas Corporation. There would be a clause in the contract which stated upon what conditions the interruptibility would apply. I cannot see that this should enter into the argument at all.
§ Lord UnderhillMay I reply to two or three points which have been made. Having listened to his excellent points, one could imagine that the noble Earl, Lord Lauderdale, had almost drafted Clause 17 for the Government. He said that if there are any differences of opinion, Clause 17 makes it clear that the final decision is to be left with the Secretary of State. The noble Earl, however, did not refer to one matter; nor did the Minister. The question of private supplies affects depletion policy. This is one reason why we dislike the Bill. The matter seems to have been ignored and it must be taken into consideration.
The noble Lord, Lord Skelmersdale, said that his noble friend had put his finger on the purpose of Clause 17. However, in the light of what the Minister has said, one feels that the whole of Clause 17 needs to be recast. What he said—at least, I gather that this is what he said—was that all matters shall be left to the corporation to work out with the private supplier and that they will go to the Minister only if there is disagreement. That is not in the Bill. If the noble Lord is saying that every one of the technical matters to which I have raised objection will be determined in advance by the corporation with the applicant, and that then there is to be provision for a properly conducted appeal to the Minister, then we are in a different ball game. It seems to me to be quite clear that the whole of Clause 17 needs to be recast, because it goes much further than that. Before we decide whether or not we should ask the Committee to disagree to Clause 17, I should like to know what are the Minister's comments.
§ 6.58 p.m.
§ On Question, Whether Clause 17, as amended, shall stand part of the Bill?
§ Their Lordships divided: Contents, 74; Not-Contents, 49.
655| DIVISION NO.4 | |
| CONTENTS | |
| Airey of Abingdon, B. | Hylton-Foster, B. |
| Avon, E. | Killearn, L. |
| Balfour of Inchrye, L. | Kilmany, L. |
| Beloff, L. | Lauderdale, E. |
| Belstead, L. | Lindsey and Abingdon, E. |
| Brougham and Vaux, L. | Long, V. |
| Caccia, L. | Loudoun, C. |
| Caithness, E. | Lucas of Chilworth, L. |
| Camoys, L. | Lyell, L. |
| Campbell of Croy, L. | McFadzean, L. |
| Clifford of Chudleigh, L. | Mackay of Clashfern, L. |
| Colville of Culross, V. | Mackintosh of Halifax, V. |
| Constantine of Stanmore, L. | Macleod of Borve, B. |
| Cork and Orrery, E. | Mansfield, E. |
| Craigavon, V. | Margadale, L. |
| Cullen of Ashbourne, L. | Marley, L. |
| Davidson, V. | Massereene and Ferrard, V. |
| Denham, L.—[Teller.] | Monckton of Brenchley, V. |
| Dilhorne, V. | Mottistone, L. |
| Drumalbyn, L. | Murton of Lindisfarne L. |
| Ellenborough, L. | Newall, L. |
| Elliot of Harwood, B. | Platt of Writtle, B. |
| Enniskillen, E. | Rankeillour, L. |
| Faithfull, B. | Rochdale, V. |
| Ferrers, E. | St. Davids, V. |
| Ferrier, L. | St. Just, L. |
| Forester, L. | Sandys, L.—[Teller.] |
| Fortescue, E. | Shannon, E. |
| Fraser of Kilmorack, L. | Skelmersdale, L. |
| Gibson-Watt, L. | Spens, L. |
| Gormanston, V. | Stodart of Leaston, L. |
| Gridley, L. | Strathspey, L. |
| Grimston of Westbury, L. | Sudeley, L. |
| Hailsham of Saint Marylebone, L. | Swinton, E. |
| Trumpington, B. | |
| Henley, L. | Vaux of Harrowden, L. |
| Holderness, L. | Vivian, L. |
| Hornsby-Smith, B. |
| NOT-CONTENTS | |
| Ardwick, L. | Lloyd of Kilgerran, L. |
| Aylestone, L. | Lovell-Davis, L. |
| Beswick, L. | McGregor of Durris, L. |
| Bishopston, L. | Milner of Leeds, L. |
| Blease, L. | Molloy, L. |
| Blyton, L. | Oram, L. |
| Bowden, L. | Peart, L. |
| Brockway, L. | Pitt of Hampstead, L. |
| Brooks of Tremorfa, L. | Ponsonby of Shulbrede, L. —[Teller.] |
| Bruce of Donington, L. | |
| Chitnis, L. | Ross of Marnock, L. |
| Cledwyn of Penrhos, L. | Scanlon, L. |
| David, B.—[Teller.] | Stedman, B. |
| Davies of Leek, L. | Stewart of Alvechurch, B |
| Davies of Penrhys, L. | Stewart of Fulham, L. |
| Elwyn-Jones, L. | Stone, L. |
| Fisher of Rednal, B. | Strabolgi, L. |
| Glenamara, L. | Tanlaw, L. |
| Gosford, E. | Taylor of Mansfield, L. |
| Harris of Greenwich, L. | Underhill, L. |
| Howie of Troon, L. | Vernon, L. |
| Jenkins of Putney, L. | Wells-Pestell, L. |
| Lee of Newton, L. | Whaddon, L. |
| Listowel, E. | White, B. |
| Llewelyn-Davies of Hastoe, B. | Wilson of Langside, L. |
§ Resolved in the negative, and Clause 17, as amended, agreed to accordingly.
§ Clauses 18 and 19 agreed to.
§ Clause 20 [Safety zones around installations]:
§ On Question, Whether Clause 20 shall stand part of the Bill?
656§ 7.6 p.m.
§ Lord BishopstonI will try not to detain the Committee too long, but this is an important clause; now, of course, we come on to the oil side. Clause 20 refers to offshore activities, and it is particularly concerned with safety zones around installations. This is an important clause and this debate will give the Government an opportunity to give your Lordships' Committee some information regarding the safety aspects.
As the Minister of State said in another place in Standing Committee, our experience of operating in the difficult conditions of the North Sea has shown up some of the inadequacies and uncertainties regarding the interpretation of existing legislation. I take it that the changes in this clause deal with them—especially so far as they relate to such legislation and safety provisions as the Continental Shelf Act 1964 and the Mineral Workings (Offshore Installations) Act 1971, sections of which are repealed by this particular measure. As the Committee will know, there have been many accidents arising from oil rigs in recent years, where the rigs have capsized—often affecting the safety and lives of the workers.
The Burgoyne Report on offshore safety called for a clarification of safety under the 1971 Act, with regard to both accommodation and installation. I want to ask briefly whether the noble Lord the Minister will say more about what action has been taken in the Bill to deal with the Burgoyne recommendations. The report was published a year or two ago and it is a very important document. The Committee will recognise that in a fast-changing, technological era, which particularly affects the oil and gas industries—and their exploration, research and development—there is a great need for foresight and flexibility in legislation to anticipate the needs of such scientific and technical advances. Can the Minister say why the Government have not taken the opportunity to effect fundamental changes in safety practices? Why have the Government not consolidated at this time of great change the separate Acts, regulations and codes governing offshore and oil and gas industries?
The need for this arises not only in the case of offshore installations and workings in our own waters but also with foreign sectors of the continental shelf. How do the provisions of Clause 20, and indeed of other clauses, fit in with the requirements of the 1958 Geneva Convention? I have taken a look at the Burgoyne Report—and I am sure that the Minister has an well—and also at the provisions of the Geneva Convention, which are relevant. Under the provisions, each safety zone must come before participation, with orders subject to annulment within 21 days.
I will curtail my remarks, except to say that I am sure the Committee will agree that safety is very important. This gives the Government the opportunity to look at the Burgoyne recommendations. I will not weary the House with too much reference to them, except to say that the report says that there is need to look at some of the particular problems. For instance, the most common accident is falling and in a high proportion of these cases it means into the sea. There are 657 the fatalities. There is the problem of drilling, the area which has the bleakest record of fatal and serious accidents, Diving is another area of concern, boats and cranes and so forth. It is a very big report. I do not expect the Minister to go into it in detail, but I would like to know why the Government have not taken this opportunity to make fundamental changes, becuase the need for review is long overdue and this Bill gives the opportunity for a radical look not only at our present situation but future trends with regard to science and technology as it affects the installations in this clause.
§ Lord Mackay of ClashfernFirst, may I refer to the Burgoyne Report, which, as the noble Lord said, was a very comprehensive document. So far as I know, only two recommendations of the Burgoyne Report required primary legislation. The first was the recommendation that suggested clarification of the legal status under the 1971 Act of accommodation installations. That is provided for in Clause 23, where the safety provisions under the 1971 Act are extended to cover accommodation installations. The second recommendation that would require primary legislation was the suggestion that the United Kingdom civil and criminal law should he applied to vessels engaged in pipe-line works and to attendant vessels. There are very formidable difficulties, as the noble Lord will appreciate, in doing that, in view of the international law situation. The extent to which a coastal state may claim and seek to exercise powers on the high seas, even in special circumstances, is very narrowly defined. It is important also to recognise that there is little use in taking powers if in practice it is likely to prove impossible to enforce them. What we have done is to take the opportunity of this Bill to make legislative provision on the lines of the first of those recommendations, the second one being very much more difficult for the reason I have given.
So far as consolidation is concerned, it is an unfortunate necessity that, before one consolidates, one should have the legislation in the form that one wishes, and the importance of this Bill is that it does make important improvements of a quite fundamental character in the régime, for example, in relation to safety. Clause 20 itself enables safety zones to be established if installations are in place in tidal and territorial waters, and, secondly, it will enable safety zones in certain circumstances to cross the boundaries of states. I hope that with this explanation the noble Lord will feel that we should agree that Clause 20 should stand part of the Bill.
§ Lord BishopstonI thank the noble Lord the Minister for his comments. He did say there were changes of a fundamental character, although the Minister of State in another place said the proposals were not designed to effect fundamental changes in our safety practices. It was that assertion by the Minister of State which made me doubtful. After all, although we are anxious to adjourn our proceedings shortly, the safety of all those who work in these installations and rigs in the North Sea is very important. I am grateful to the Minister for his comments. I may be able to pursue some other aspects in later clauses of the Bill.
§ Clause 20 agreed to.
658§ Clause 21 [Application of criminal law etc.]:
§
Lord Lloyd of Kilgerran moved Amendment No. 37B:
Page 27, line 26, at end insert—
("(9) For subsection 132(4) of the Patents Act 1977 (application of Act) there shall be substituted the following subsection—
(4) This Act applies to acts done in an area designated by order under section 1(7) of the Continental Shelf Act 1964 or specified by Order under section 21(5) of the Oil and Gas (Enterprise) Act 1982 in connection with any activity falling within section 22(2) of that Act.".").
§ The noble Lord said: This is a purely drafting amendment and, with the leave of the Committee, I would like to refer to my Amendment No. 55A. The whole purpose of both these amendments is to bring the Patents Act 1977 from the deep obscurity of page 60 of the Bill and to bring it forward into the very clause where it belongs. The Patents Act is a very complicated Act and these amendments will help advisers to understand the clauses in the Bill, Clauses 21 and 22, more easily. It is the kind of amendment that would please the noble Lord, Lord Renton, who spends so much of his time in trying to clarify Acts of Parliament.
§ The reason I attach some little importance to this amendment is that it is concerned with Clauses 21 and 22, both of which extend the scope of Her Majesty's law, the criminal law and the civil law. Clauses 21 and 22 make the criminal law of the United Kingdom and the civil law of the United Kingdom apply, as it says, to "any act or omission which takes place on, under or above an installation in waters to which this section applies", and the waters to which the section applies are "territorial waters adjacent to the United Kingdom, waters in any area designated under Section 1(7) of the 1964 Act". That further extends the application of the law of the United Kingdom—I need not go into the details of that Act. It also extends to "waters in any area specified under subsection (5)". That subsection says that the criminal law and the civil law of England shall apply to "any area which is in a foreign sector of the continental shelf". So your Lordships can see that it applies to installations well away from the United Kingdom. It also specifies "any area which comprises any part of a cross-boundary field". That is the kind of area to which the law of the United Kingdom is extended.
§ Schedule 3 to this Bill amends a section of the Patents Act 1977; namely, Section 132(4). If somebody is trying to advise in regard to this Bill, he may quite easily overlook the fact that the Patents Act is referred to obscurely at the end of the Bill. Therefore, as the Patents Act is a difficult Act, it seems to me much better if the reference to the Patents Act is included in Section 21 so that it is quite clear that there is an amendment of that difficult Act. Extra-territoriality of the law is a contentious and difficult part of the law, and therefore my amendment, in my submission, simplifies the position of the application of Clauses 21 and 22 of this Bill to the Patents Act. I beg to move.
§ Lord Mackay of ClashfernThere is not a great deal of substance between us on this matter. The noble Lord is in effect transferring paragraph 38 of Schedule 3 to Clause 21. Clause 21 is concerned with the criminal law, and one possible consequence of putting the provision into Clause 21 might be to make people think that it was the criminal aspects of the Patents Act 659 only that were being affected. The position is that the modifications of the Patents Act, which are provided for in paragraph 38 of Schedule 3, are consequential on the main extensions of the order in council areas which are provided for in the main clauses of the Bill. Therefore, it is not in any way denigrating the importance of the Patents Act, which I entirely agree is important and complicated, to treat consequential amendments of it in their appropriate place in the Bill—namely, in paragraph 38 of Schedule 3.
I think that the noble Lord has also in his amendment deleted the last few words of the relevant section of the Patents Act. I am not sure, with great respect, that that is an improvement. I rather think that it might be something that might do damage. I hope that, in the light of these explanations, the noble Lord will feel able to withdraw his amendment.
§ Lord Lloyd of KilgerranI am very much obliged to the noble and learned Lord for his explanation. I shall consider what he has said. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Lord DenhamI understand that noble Lords wish to say something on Clause 21 stand part. In view of that, I think that this is probably a convenient moment to resume the House in order to take the intervening business. I suggest that we return from the break, if we have completed the intervening business in time, at 10 minutes past eight. I beg to move that the House do now resume.
§ Moved accordingly and, on Question, Motion agreed to.
§ House resumed.