HL Deb 23 October 1985 vol 467 cc1227-9

205 After Clause 80, insert the following new clause— (" Supplies by utilities: Part II. .—(1) If a request is made by or with the concurrence of the office holder for the giving after the relevant date of any of the supplies mentioned in subsection (2) below, the supplier—

  1. (a) may make it a condition of the giving of the supply that the office holder personally guarantees the payment of any charges in respect of the supply; but
  2. (b) shall not make it a condition of the giving of the supply, or do anything which has the effect of making it a condition of the giving of the supply, that any outstanding charges in respect of a supply given to the company before the relevant date are paid.
(2) The supplies referred to in subsection (1) above are—
  1. (a) a supply of gas by the British Gas Corporation;
  2. (b) a supply of electricity by an Electricity Board (within the meaning of the Energy Act 1983);
  3. (c) a supply of water by statutory water undertakers or, in Scotland, a water authority within the meaning of the Water (Scotland) Act 1980;
  4. (d) a supply of telecommunication services (within the meaning of the Telecommunications Act 1984) by a public telecommunications operator (within the meaning of that Act).
 (3) In subsection (2) above the reference to telecommunication services does not include a reference to services consisting in the conveyance of cable programmes, that is to say programmes included in cable programme services (within the meaning of the Cable and Broadcasting Act 1984). (4) For the purposes of this section "the relevant date" is whichever is applicable of the following dates, namely—
  1. (a) the date on which the company went into liquidation;
  2. (b) the date on which the administration order was made;
  3. (c) the date on which the administrative receiver was appointed or if he was appointed in succession to another administrative receiver, the date on which the first of his predecessors was appointed;
  4. (d) the date on which the provisional liquidator was appointed; and
  5. (e) the date on which the composition or scheme was approved by the meetings summoned under section [Summoning of meetings] above.".)

Lord Lucas of Chilworth

My Lords, I beg to move that this House do agree with the Commons in their Amendment No. 205, and at the same time I should like to speak to Amendment No. 357.

357 Before Clause 179, insert the following new clause: ("Supplies by utilities: Pan III. .—(1) This section applies where on any day ("the relevant day")—

  1. (a) a bankruptcy order is made against an individual or an interim receiver of an individual's property is appointed;
  2. (b) a composition or scheme proposed by an individual is approved under Chapter I of this Part; or
  3. (c) a deed of arrangement is made for the benefit of an individual's creditors;
and in this section "the office holder" means the official receiver, the trustee in bankruptcy, the interim receiver, the supervisor of the composition or scheme or the trustee under the deed of arrangement, as the case may be. (2) If a request falling within subsection (3) below is made for the giving after the relevant day of any of the supplies mentioned in subsection (4) below, the supplier—
  1. (a) may make it a condition of the giving of the supply that the office holder personally guarantees the payment of any charges in respect of the supply; but
  2. (b) shall not make it a condition of the giving of the supply, or do anything which has the effect of making it a condition of the giving of the supply, that any outstanding charges in respect of a supply given to the individual before the relevant day are paid.
 (3) A request falls within this subsection if it is made—
  1. (a) by or with the concurrence of the office holder; and
  2. (b) for the purposes of any business which is or has been carried on by the individual, by a firm or partnership of which the individual is or was a member or by an agent or manager for the individual or for such a firm or partnership.
 (4) The supplies referred to in subsection (2) above are—
  1. (a) a supply of gas by the British Gas Corporation;
  2. (b) a supply of electricity by an Electricity Board (within the meaning of the Energy Act 1983);
  3. (c) a supply of water by statutory water undertakers;
  4. (d) a supply of telecommunication services (within the meaning of the Telecommunications Act 1984) by a public telecommunications operator (within the meaning of that Act).
 (5) In subsection (4) above the reference to telecommunication services does not include a reference to services consisting in the conveyance of cable programmes, that is to say programmes included in cable programme services (within the meaning of the Cable and Broadcasting Act 1984).")

There two amendments introduce new clauses which give effect in cases of corporate and individual insolvency to the commitment made by the Government in November last year to introduce legislation dealing with the position of the essential utilities on insolvency. The new clauses provide that the major utilities listed shall not make it a condition of providing a supply to an insolvency practitioner who is a liquidator, provisional liquidator, administrator or administrative receiver, or, in the case of individuals, a trustee in bankruptcy, an interim receiver, a trustee under the deed of arrangement or a supervisor under a corporate or individual voluntary arrangement, that any charges unpaid at the date of appointment must be met.

This has the effect of placing the practitioner in the position of a new customer with the same right to supply as any other new customer. These rights are statutory in the case of the gas, electricity and water industries, and in the case of public telecommunications operators they derive from the licence granted to them by the Office of Telecommunications.

In future any practitioner refused supply either by way of an outright dismissal of a request for supply or by way of a condition that all, or part of, unpaid pre-insolvency debts must first be repaid, will be unable to pursue a legal remedy to ensure that supplies are provided. Naturally, I would expect that this will only rarely be necessary once the new legislation is understood.

In return for the new rights granted to practitioners, the utilities will be entitled to ask them to guarantee payment for post-insolvency supplies. This will not, of course, be necessary in most cases but it will provide protection where there are genuine worries on the part of utilities. In adding those last few remarks, I have no wish at all to pre-empt anything that the noble Lord, Lord Bruce of Donington, may wish to say when he puts before your Lordships his amendment No. 205A. I did feel, however, that it tidied up my explanation of what my two amendments sought to achieve. I beg to move.

Moved, That this House do agree with the Commons in their Amendment No. 205.—(Lord Lucas of Chilworth.)