Lords Sitting of 24 April 1986

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Lincoln): The LORD CHANCELLOR on the Woolsack.

Stansted Airport: Rail Link
Baroness Burton of Coventry: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government on what date approval was given to the scheme concerning the rail link to Stansted Airport submitted to them by the British Rail Board in November last; and what is the present position.
The Parliamentary Under-Secretary of State, Department of Transport (The Earl of Caithness): My Lords, we are currently considering the British Railways Board's submission for a rail link to Stansted Airport and hope to announce a decision shortly.
Baroness Burton of Coventry: My Lords, is the Minister aware that that reply is quite disgraceful, and if his brief is no better it is unbelievable? Will the Minister please explain to the House why, if the British Government still wish to have a rail link to Stansted—which I doubt—and if British Rail still wishes to supply that link, why it has not pursued its application? Will the Minister further explain to the House why the debate which was adjourned until 6th March, because it was talked out, has since then been deferred to 13th March, 20th March, 27th March, 10th April, 17th April and today? Will the Minister tell the House whether the Government, as they have obviously run into trouble, are afraid of not getting their business through in another place; or have they plucked up their courage to take the matter forward tonight in the Commons?
The Earl of Caithness: My Lords, the noble Baroness raises a number of points which she also raised on Monday, 21st April. My reply to her rather amusing, repetitive account about a Private Bill is that it is not a government Bill. The rail connection to Stansted is a matter for a Private Bill and it is common for it to be put down on the Order Paper weekly. A decision as to when it should be heard in another place is up to the Chairman of Ways and Means and not to the Government.
Baroness Burton of Coventry: My Lords, is the Minister aware, first, that I am not amused, and, secondly, that I thought his reply the other night was a disgrace? Will he please understand that those of us who have worked for months on this matter resent this type of reply? Will he please address himself to what I have said? I have asked him why, if the Government wish this Motion to proceed and if British Rail wishes it to proceed, the matter has not been dealt with and
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has been deferred from 24th February up to today. Finally, can he say whether it will be deferred again tonight?
The Earl of Caithness: My Lords, it will not be heard tonight, because the Chairman of Ways and Means, not the Government, is the person responsible for selecting when the Second Reading should continue. As the noble Baroness will understand, the rail link has two parts to it. It has the investment part which we are considering, and it has the statutory part which has to go through both Houses of Parliament. That at the moment is in another place. A number of points were raised on the statutory part and these are being considered by British Rail with certain people in the locality and with the Government.
Baroness Burton of Coventry: My Lords, the House is very kind, but do noble Lords realise that I am being tried beyond endurance? Will the Minister please address himself to one particular point? Why does British Rail not proceed with the application which it made to the House on 24th February?
The Earl of Caithness: My Lords, as I have certainly tried to explain to the noble Baroness and to the House, British Rail is pursuing its application. As I said, a number of points have been raised since Second Reading and at Second Reading in another place. These affect the investment appraisal and we are discussing it with British Rail. I think it is proceeding as quickly as possible.
Lord Boyd-Carpenter: My Lords, although my noble friend very properly declines to comment on procedures in another place for which he has no responsibility whatsoever, can he nonetheless tell your Lordships whether it is the Government's policy that it would be desirable to establish a rail link to the new airport?
The Earl of Caithness: My Lords, I am grateful to my noble friend for that question. Yes, it is the Government's policy that a rail link is a desirable feature of the development of Stansted, but on the condition that it is economically viable in accordance with the usual terms.
Lord Mellish: My Lords, is the Minister aware that the Chairman of Ways and Means in another place, as he will know, is the Deputy Speaker? If time is to be found by the Chairman of Ways and Means, what is needed is more than a wink and a nod. What is needed is a push from the government managers.
The Earl of Caithness: My Lords, as my noble friend Lord Boyd-Carpenter said, I am not conversant with procedure in another place, and therefore I shall not comment.
Lord Underhill: My Lords, will the Minister give an assurance that this matter is not being held up because of the question of the external financial limit? If that is the problem, will that be adjusted accordingly to allow this matter to proceed?
The Earl of Caithness: My Lords, I can confirm to the House that we wish the matter to proceed as speedily as possible, and we are awaiting further discussions with British Rail.
Lord Tordoff: My Lords, that is not an answer to the noble Lord's question. As the noble Lord, Lord Boyd-Carpenter, suggested, do the Government not understand that Stansted cannot go ahead in any viable way unless there is a rail fink? Will the Government give an assurance that they will put their weight behind British Rail having a proper rail link into Stansted Airport?
The Earl of Caithness: My Lords, the noble Lord, Lord Tordoff, asks me a question which he asked me earlier in the year. The future of Stansted does not depend on a rail link. Similarly, there is no rail link to Heathrow at the moment.
Baroness Burton of Coventry: My Lords, will the noble Earl allow me to ask him (on a point of fact) whether he is aware that I do not remember the first time I put down a Question on this matter, because it is rather a long time ago? But is it not correct that on that Question the Minister himself described the scheme that was put forward by British Rail as being financially viable? If it was financially viable then, why is it not financially viable now? But the Minister gave a very lukewarm reception to the question as to whether or not the Government wished to proceed with the rail link.
The Earl of Caithness: My Lords, I can only repeat that the Government wish to proceed with the rail link, provided that it is economically viable within the terms. As a result of the Second Reading in another place, a number of points were raised which affect the appraisal and therefore we are still considering it.
Lord Underhill: My Lords, does the noble Earl not recognise that it is not just the viability of a rail link; it is the viability of an airport which is the important consideration? Does he also remember that there is a rail link to Heathrow by London Regional Transport? That was constructed irrespective of the point which he has raised in connection with the rail link to Stansted.
The Earl of Caithness: My Lords, the noble Lord is absolutely right to remind the House of the Underground rail link. The noble Baroness's Question referred to a British Rail link, so that is why I answered as I did.
Lord Annan: My Lords, is the noble Earl aware that it is widely believed that the pressure groups, which failed to get their way when it was agreed that Stansted should be developed, particularly those in the North-west of England, are really trying to fight a desperate rearguard action against Stansted being a good airport? But may I go further and ask the noble Earl this question? Clearly, the Channel tunnel is bound to depend on a rail link. Are we going to be told in that case that it is purely a matter for British Rail to decide whether or not it is economically viable? Surely there are certain rail links which must be made available if the project is to be a success.
The Earl of Caithness: My Lords, I think that we should all like Stansted to become the successful airport which it can become. It does not necessarily depend on having a rail link. It would be a tremendous advantage if it did, but the rail link has to be financially justified.
Lord Alport: My Lords, is my noble friend aware that there are many people in Essex who do not want Stansted to be a successful airport at all?
The Earl of Caithness: My Lords, I am aware that there are a number of people who do not want a lot of good things to happen.
Lord Dean of Beswick: My Lords, is the Minister aware that the noble Lord who spoke previously is not from the North-West?
The Earl of Caithness: Yes, my Lords. Having had long discussions in this House with the noble Lord, Lord Alport, I realise that he comes from Essex.

Motor-Cyclists: Driving Practices
3.10 p.m.
Lord Moran: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will take steps to put an end to the widespread practice in London whereby motor-cycles overtake lines of traffic by travelling on the wrong side of the white line.
The Parliamentary Under-Secretary of State, Home Office (Lord Glenarthur): My Lords, overtaking by crossing the white line at the centre of the road is a criminal offence only when it involves reckless, careless or inconsiderate driving or the contravention of road markings such as a double white line. The Metropolitan Police take steps to prevent and detect such offences as part of their general responsibility for policing London's traffic.
Lord Moran: My Lords, I am grateful to the Minister for that reply. Do I understand that to mean that motor-cyclists who cross a single white line are committing no offence? If one drives on any evening from this House to Albert Bridge one sees a large number of motor-cyclists crossing the white line. Is this not a very dangerous practice and does it not put them and other people at risk? I am surprised if it is acceptable to the police and to the Government.
Lord Glenarthur: My Lords, all the information is available to the noble Lord in the Highway Code. I assumed all along that the noble Lord was referring to the white line in the centre. If a person overtakes safely, it is a matter for him.
Earl Cathcart: My Lords, does my noble friend agree that accidents involving motor-cyclists are unlikely to decrease until motor-cyclists can be persuaded to conform to the normal rules of traffic

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control and to desist not only from the practice described in the original Question but also other practices such as weaving among moving vehicles in built-up areas?
Lord Glenarthur: My Lords, I agree with my noble friend that weaving can be dangerous. The Highway Code makes it clear that when traffic is moving slowly in queues motorists should not change lanes to the left in order to overtake. I am well aware of the point my noble friend makes. With regard to numbers of injuries, the commissioner has informed us that 66 motor-cyclists were killed in London in 1985, a decrease of 34 on the 1984 figures. The figures are coming down.
Lord Wigoder: My Lords, did the noble Lord say that it is not an offence to cross a single continuous white line in the middle of the road? If it is not, what is the difference between a continuous white line and a broken white line?
Lord Glenarthur: My Lords, I refer the noble Lord to the Highway Code. Page 21, paragraph 85, says:
"You must not overtake:—if you would have to cross or straddle double white lines with a solid line nearer to you".
There are then two other conditions which the noble Lord will no doubt find interesting.
Lord Underhill: My Lords, the noble Lord said that the Metropolitan Police take appropriate action in such cases. Can he tell the House how many successful prosecutions there have been in the past 12 months or the past two years? Although this is a dangerous offence for motor-cyclists, are not many car drivers also guilty of the offence?
Lord Glenarthur: My Lords, the figures available centrally on the offences of recklessness, carelessness and inconsiderate driving do not distinguish cases involving overtaking. In 1984, the latest year for which figures are available centrally, eight motor-cyclists were convicted in London of failing to comply with double white lines. In England and Wales as a whole the figure was 726. The same technical rules as apply to cars exist in the Highway Code.

Unemployment Figures
3.14 p.m.
Lord Dean of Beswick: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what conclusions they draw from the latest figures issued on unemployment.
The Secretary of State for Employment (Lord Young of Graffham): My Lords, the latest figures, which were released yesterday, show a fall in the number of people without jobs and seeking work of about 100,000 between 1984 and 1985. These estimates of unemployment from the Labour Force Survey compare with an increase of about 160,000 in unemployment according to the monthly claimant count over the same period.
Lord Dean of Beswick: My Lords, I am grateful to the Secretary of State for his reply. How does he relate his Answer today to the headlines in the press a couple of weeks ago—from parts of the press that are normally very favourable to the Government—that said "Rise in unemployment—the biggest for four and a half years"? Does this not indicate that, though the Government and the noble Lord as Secretary of State may alter the criteria for calculating the number of unemployed, the real situation is one of continuing deterioration in a very dangerous fashion? When will the Government and the Secretary of State realise this, stop indulging in self-congratulation and do something about it?
Lord Young of Graffham: My Lords, the very first thing I would say is that neither I nor the Government have in any way altered the basis of calculating the figures. What has happened, and happened this time for the first month, is that there was a delay of two weeks in order that there could be a more correct check of the monthly claimant count. That is what happened recently. I resent the charges made in another place that anyone has fiddled the figures. Accuracy, surely, is something everyone in your Lordships' House would wish to see.
Secondly, there are many ways of counting unemployment. The figure that the noble Lord was referring to was the claimant count; that is the figure announced by the holder of my office each month. There is another way, which is used by many other countries and which we have in the Labour Force Survey. The figure which was published yesterday—that is why I was replying to the Question which asked about the latest figures on unemployment—showed something very surprising. In a period in which the claimant count went up by 160,000, according to the Labour Force Survey the number of people without jobs and seeking work fell by 100,000. The reason is simple. The Labour Force Survey defines as unemployed all those without work and looking for a job. The claimant count is only those receiving benefits.
Lord Elliott of Morpeth: My Lords, has my noble friend noticed some quite accurate figures produced recently? Has he noted that in the financial year just ended English Estates achieved in the North-East of England, which certainly has its unemployment problems, a 20 per cent. increase in lettings of factories and workshops, which represents just over 500 new places of employment and 4,500 new jobs? Has he further noted that on Monday of this week the twelfth Japanese factory attracted to the North-East of England by government policies and encouragement was opened? The same policies are revitalising the town of Consett, until recently wholly dependent on steel production.
Lord Young of Graffham: My Lords, no one would endeavour to diminish the very real problems of the North-East of England in looking for new jobs to replace all the jobs lost in the declining industries. But, on the other hand, we do not often enough give credit to the efforts that are being made in the North-East to find new employment, to the enterprise being shown and to the success that these endeavours are producing.
Baroness Seear: My Lords, does the noble Lord agree that it is almost impossible to draw sensible conclusions from any one set of figures, and therefore questions of this kind must be of very limited usefulness?
Lord Young of Graffham: Yes, my Lords.
Lord Barnett: My Lords, while no one would wish to accuse the noble Lord of deliberately misleading the House by giving incorrect statistics, he will know well that you can do a great deal with statistics. Would it not have been fairer to give the real figures? The underlying fact is that the seasonally adjusted figures of unemployment show an increase. Would it not therefore have been simpler and more honest if he had simply told the House that on present economic policies unemployment will continue to rise?
Lord Young of Graffham: No, my Lords. The last thing that I would wish to do is to mislead your Lordships' House. What the noble Lord is asking me to do—and I shall gladly do it—is to say that, seasonally adjusted, the claimant count shows an increase and has shown an increase each month. But I was pointing out the difference between the claimant count, which is a total of all those receiving benefit, and the Labour Force Survey, which is an estimate of all the people without jobs and seeking work. The Labour Force Survey definition is the definition which is adopted by the United States of America in looking at unemployment. There are those around who say that that provides a better measure of unemployment.
Lord Jenkins of Putney: It is a guess, my Lords.
Lord Dean of Beswick: My Lords, will the Secretary of State tell the House how many times since this Government took office in 1979 they have altered the criteria for calculating unemployment? Why has that been done? Is it not a fact that despite all the figures that are given, there is still a dangerous and underlying increase in the number of adult unemployed?
Lord Young of Graffham: My Lords, I shall be glad to answer the noble Lord's question if he will put it down on another occasion. It is a very different question but one that I shall be quite happy to answer. Secondly, I am not sure that there is an underlying increase in unemployment. I gladly admit that there is an underlying increase in the claimant count. I look at the other evidence before me and it shows a different picture. Just as unemployment cannot be solved by any one, simple solution, nor can we explain away unemployment by one set of figures.
Lord Stoddart of Swindon: My Lords, is the Minister aware that since 1979 the number of changes in the criteria has amounted to six? If those changes had not been made, then the figures would now show 3,800,000 unemployed. That is the stark fact of the matter. I do not want to be unkind to the noble Lord, but when he was appointed we had great hopes of him. In fact, we expected him to do something real and constructive to bring down the level of unemployment. He has failed to do that and we are disappointed in him.
Lord Young of Graffham: My Lords, I am very grateful that the noble Lord does not wish to be unkind to me, but let me tell him to have faith. He will see that the policies that this Government have been following, and in particular the policies of the past few months, will do more than anything else towards dealing with the terrible problem of unemployment.
We must be very careful about not jumping to conclusions around the country on one set of figures alone. Of course the claimant count is a convenient measure. I will not for one moment attempt to decry that the claimant count is a measure that all accept and adopt in looking at the level of unemployment. However, if one looks at the labour force survey—and no one in your Lordships' House would decry the definition of unemployment as meaning those who are without jobs and looking for work—one finds a very different position. I will have a copy of that survey placed in the Library.
The Earl of Onslow: My Lords, will my noble friend the Minister confirm that we have the highest percentage of employed people per head of population in this country than in any other part of Europe? Also, will he give some estimate of the effect of the black economy on unemployment figures in the more prosperous southern and eastern parts of the United Kingdom?
Lord Young of Graffham: My Lords, I am happy to say that 1 million new jobs have come into being since March 1983. I am happy to say also that we are experiencing faster employment growth in this country than in any other country in the European Community. Indeed, I remind the House that France, with a diminishing working population, is still showing a fall in employment. We have a fast-growing working population. Also, we give 65 per cent. of all adults of working age a job. The figures for France and Germany are 60 per cent. and 59 per cent. respectively. However, I must fail to give your Lordships any information about the black economy.
Lord Molloy: My Lords, does the Minister not agree that one simply cannot tell a man who has a family and who has been unemployed for a year or two how much worse matters would have been were he a Frenchman, a German, or an Italian? Is one to tell such a man that 1 million jobs have been created when 4 million people as well as him have not had one of them? All the juggling with figures really makes people who are out of work angry. It increases their despair.
Is the Minister further aware that a number of American economists have been writing in financial newspapers in this country with an indication that the largest contribution to the creation of jobs in their country and to the diminution of unemployment there was state enterprise along similar lines to that created by Franklin D. Roosevelt during the last period of massive unemployment in the 1930s? The Government have done many things, but why do they not have the courage at least to try that approach in attempting to solve the plight of 4 million of our countrymen and women who are unemployed and who face a more miserable situation month after month?
Lord Young of Graffham: My Lords, the one thing that will not help anyone who is unemployed in this country is the preaching of despair at him day after day after day. If there is one thing that I resent, it is those people who go round saying that there is no hope, no opportunity, and no chance. There is. We will work our way out of the problem. There is no simple solution but hard work. I doubt very much whether anyone in authority in the United States would advocate Franklin D. Roosevelt's line of state works to get unemployment down in any other country.
Lord Winstanley: My Lords, will the noble Lord explain to the House how he accounts for the totally different picture produced by the two sets of figures that he has explained?
Lord Young of Graffham: My Lords, part of the answer is that the account figures show that about 40 per cent. of those claiming benefit were not looking for work during the week of the survey. I do not know the explanation for that; but the definition of unemployment in the labour force survey is simply those out of a job and looking for work. The claimant count is simply a measure of those claiming benefit. Neither of them are perfect and neither are absolutely accurate.
Lord Stallard: My Lords, does the noble Lord not accept that, stripped of all the presentational procedures that he outlined in his statistical information, the crucial point is the one that the Minister mentioned a few questions ago; the seasonally-adjusted figure still shows an increase. That indicates that unemployment is still on the way up. The trend is upwards; how does the Minister justify that?
Lord Young of Graffham: My Lords, if it will give comfort to the noble Lord for me to admit that the claimant count, seasonally adjusted, is increasing then I gladly do so because that is true. I was asked in the Question what the latest figures on unemployment show. Not wishing to mislead your Lordships' House, I have therefore referred to the labour force survey.

London Boroughs Grant Scheme
3.26 p.m.
Baroness Birk: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are considering making an order under Section 48 of the Local Government Act 1985 to limit the London Boroughs Grant Scheme expenditure in respect of voluntary bodies and arts organisations.
The Minister of State, Department of the Environment (Lord Elton): Yes, my Lords. The Government's decision will be announced in due course.
Baroness Birk: My Lords, how does the Minister reconcile that reply with the statement made by the Arts Minister on 14th November in another place, and repeated in this House, in which he stated, when
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explaining the rundown in abolition replacement money, that:
"As time goes on, local authorities which have been relieved of GLC and MCC precepts should be able to increase their share".—[Official Report, Commons, 14/11/85; col. 700.]
Does that not indicate a difference of opinion in that respect between the Secretary of State for the Environment and the Minister for the Arts?
Furthermore, does not the use of arbitrary capping of that kind undermine the duty placed on boroughs under Section 48(10) of that same Local Government Act, which places on boroughs a duty to pay due regard to the needs of Greater London? That is being entirely swept aside.
Lord Elton: My Lords, the noble Baroness apparently anticipates both the result of the consideration that we are giving and the level of the absolute figure that we would put into an order if we were to put in an order. I repeat that we are considering whether or not there should be a limit for the reasons that the provision for the limit was put into the Bill and which I explained when we put it there.
Baroness Birk: My Lords, then I must ask the Minister: what are the reasons for talking about putting in an order at this moment when the £27 million has been agreed and accepted, and the draft order that has been sent out, as the Minister knows, does not make any provision for a review but provides for £27 million irrespective of inflation or increased needs, just to continue until another order is put forward? What are the reasons for that?
Lord Elton: My Lords, the figure of £27 million is that arrived at by the London Section 48 scheme known as the Richmond Scheme in its budget, and it was the obvious figure on which to consult. The purpose of having the provision in the Act was to provide against the contingency that a minority of boroughs, after they have arrived at their budgets, might have imposed upon them by a two-thirds majority, as required under the Act, a figure that they would find unacceptable after the beginning of their financial year. The purpose of consulting is to see whether it is necessary or appropriate so to do.
The noble Baroness may perhaps not be aware that the rules that the Richmond Committee has set for itself do not allow for a variation of its budget between one year and the next. However, those rules could of course be changed.
Lord Jenkins of Putney: My Lords, in considering this order will the Government take particular note of the arts support organisations, which seem to have fallen out of consideration in this matter? The Government have made some attempt—to what degree we shall discover in due course—to replace the GLC and the metropolitan counties in so far as arts organisations directly are concerned. However, there are arts support organisations—I take, for example, not the Theatres Trust, with which I am concerned, but the British Theatre Association—which have very much fallen by the wayside. They are already underfunded. The BTA, for example, has lost its Arts Council grant and its GLC grant and the whole

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organisation is in very difficult financial circumstances. Will the Minister look at those organisations which seem to have fallen by the wayside in the course of this reorganisation?
Lord Elton: My Lords, of course we shall look at the context in which the order, if there is to be an order, is laid. We have not yet decided to lay an order. I point out that the responsibility for funding the voluntary sector London-wide now rests with the Section 48 scheme, known as the Richmond scheme, and I also point out the the total volume of money available to the voluntary sector in London is likely to be between £50 million and £60 million, which compares closely (does it not?) with the £56 million funded by the GLC in the financial year 1984–85.
Lord Underhill: My Lords, I hope that I have not misunderstood the noble Lord. Did he say in the final part of his previous answer that if an order is made it will not vary from one year to the next? Surely some consideration will be given to inflation. Will that at least be included in the order if the Government decide to issue one?
Lord Elton: My Lords, I am grateful to the noble Lord for his misunderstanding because it enables me to put right something which I do not think I said at all but which has been, as it were, imputed to me. The duration of the order is simply until the next order and a new order can be made and proposed at any stage, not merely at the end of the financial year. What cannot at present be changed during a financial year is the Richmond budget itself and that is because of a decision by the Richmond Committee as to how to conduct its own business. It is not a matter for government decision.
The Earl of Bessborough: My Lords, am I not right in thinking in relation to the supplementary question put by the noble Lord, Lord Jenkins of Putney, that these arts support organisations come to some extent within the remit of the Department of Education and Science?
Lord Elton: My Lords, I think it depends on what aspect of their activities one looks at.

Business
3.32 p.m.
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Lucas of Chilworth will, with the leave of the House, repeat a Statement which is to be made in another place on BL.
It may be for the convenience of the House if I announce that the Committee stage of the Gas Bill will be adjourned at approximately 7 p.m. for approximately one hour, and that during this adjournment the Draft Child Resistant Packaging (Safety) Regulations will be taken and the House will again be in Committee for the Surrogacy Arrangements (Amendment) Bill.

Business of the House
The Lord President of the Council (Viscount Whitelaw): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debate on the Motion in the name of the Lord Wells-Pestell set down for 30th April shall be limited to 5 hours and that Standing Order 35 and paragraphs 10 to 13 of the Rules for the Conduct of Short Debates shall apply to the debate with the substitution of "5 hours" for "2½ hours" and "25 minutes" for "20 minutes".—(Viscount Whitelaw.)
On Question, Motion agreed to.

House of Lords Offices
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move that the Second Report from the Select Committee be agreed to.
Moved, That the Second Report from the Select Committee be agreed to.—(Lord Aberdare.)
The Report was as follows:
1. Library
A report from the Sub-Committee for the year 1985 was laid before the Committee.
2. Staff of the House
A report from the Sub-Committee was received.
The Committee agreed the Sub-Committee's recommendation for the creation of two general assistant posts in place of one clerical officer and one attendant and authorised the scale of pay proposed.
3. Insurance for Lords
The Committee approved an increase in the personal accident insurance cover for Lords whilst on Parliamentary duty.
4. Parliamentary Delegations
The Committee approved provision for the payment of revised subsistence allowances.
5. Revised Scales of Pay
The Committee confirmed the application of the following Civil Service memoranda to applicable staff of the House of Lords:

CM/722—Starting pay on transfer to a new substantive grade;

CM/725—Restructuring of Legal Groups;

CM/727—Unified grading at Principal level;

CM/726—Clerical Officer scale of pay.

6. Hansard Reporting Staff
The Committee authorised the payment of revised attendance fees for temporary reporters and transcribers and the revision of charges for agency typists,
7. Uniform Allowances
The Committee approved a revision of the allowances paid to Clerks at the Table, the Gentleman Usher and Yeoman Usher of the Black Rod for the provision of court dress and in the uniform allowances paid to Doorkeepers.
8. Doorkeepers
The Committee approved an application by the Civil and Public Service Association to be granted representative capacity for House of Lords Doorkeepers.
9. Superannuation
The Committee were notified of the following awards made under the House of Lords Staff Pension Scheme:

(a) Pension and lump sum to Mr. D. J. Huxley, MBE, M.M., Principal Doorkeeper, who retired on 17th January 1986.

(b) Pension and lump sum to Mrs. J. M. Harris, Bar Attendant, who retired on 20th December 1985.

(c) Preserved pension and lump sum to Mrs. F. M. Martin, Senior Clerk, who resigned on 11th November 1985.

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(d) Preserved pension and lump sum to Mr. G. C. C. Donner, Personal Assistant to the Lords of Appeal, who resigned on 15th November 1985.

(e) Preserved pension and lump sum to Mr. T. O. Ferguson, Head Chef, who resigned on 28th February 1986.

(f) Preserved pension and lump sum to Miss C. P. Farrell, Waitress, who resigned on 31st October 1985.

(g) Preserved pension and lump sum to Mrs. J. E. F. Boddington, Cook, who resigned on 24th December 1985.

(h) Widow's pension and lump sum benefit to Mrs. M. E. Fowler, valid nominee of C. F. Fowler, former Doorkeeper, who died on 8th December 1985.

(i) Short service payment to Miss C. J. Lawton, Reporter, who resigned on 28th February 1986.

(j) Short service payment to Mrs. J. M. Kittou, Cleaner, who resigned on 31st August 1985.

(k) Notional transfer value in respect of Miss E. M. McInnes, Library Clerk, who transferred to the House of Commons on 1st October 1985.

(l) Notional transfer value in respect of Mr. J. Bannister, Clerical Officer, who transferred to the Treasury on 1st October 1985.

On Question, Motion agreed to.

Gas Bill
3.34 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Belstead.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Lord Ezra Lord Ezra moved Amendment No. 1:
Before Clause 1, insert the following new clause:
("Commissioners of Gas Supply.
.—(1) The Secretary of State shall appoint three officers to be known as the Commissioners of Gas Supply, with one of the three officers appointed as Chairman of Gas Supply (in this Act referred to as "the Chairman") for the purpose of performing the functions assigned to the commissioners by this part. These Commissioners shall be responsible respectively for: tariff consumers; contract consumers; and gas purchases and energy efficiency. The appointments of officers as commissioners shall be approved by the appropriate committees of each House of Parliament.
(2) The appointment of persons to hold office as commissioners shall initially be for terms of three, four and five years. Subsequent appointment of persons to hold office as commissioners shall not be for a term exceeding five years; but previous appointment to that office shall not affect eligibility for reappointment.
(3) Subject to subsection (2) above, the commissioners shall hold and vacate office as such in accordance with the terms of their appointment.").
The noble Lord said: This amendment raises a fundamental issue in connection with this important Bill. As we know, the Bill concerns the transfer of a public monopoly to the private sector. It raises issues of policy which we have considered only once before, in relation to British Telecom. The gas industry, however, is more of a monopoly than British Telecom, so the issue is even more serious.
On this side of the Committee we should have been happier had this important matter been subjected to greater debate on the major issue involved. Indeed, in the newspapers this debate continues. This very morning in the Financial Times there is an article entitled "Why ownership is not everything". The
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author of the article, Mr. Michael Prowse, said that it would have made more sense to
"reform competition policy first and then embark on a controversial phase of privatisation".
He went on to say:
"The other main worry concerns the weight of the existing and proposed independent regulators. Organisations like BT, British Gas and Thames Water are both powerful and skilled political lobbyists. Is it really plausible to expect tiny regulators like Oftel, the telecommunications watchdog, and the planned Ofgas and Ofwater, to keep tabs on their charges for more than a short initial period?".
That view as expressed in this morning's Financial Times underlines the amendment now before the Committee. The concern is that if we have to proceed with this massive transfer of a monopoly—and everyone admits that for gas it operates very successfully, but nevertheless, it is a monopoly—from the public to the private sector this must be done with the very greatest care.
There has been much experience gleaned in the United States and there are many public utility commissions operating there with powers which go far beyond those which are proposed for the Director-General of Ofgas. Therefore, it seems relevant at the beginning of this Committee stage that this fundamental issue should be put. If we are to have this transfer undertaken without, as we feel, full public debate on all the issues having first been completed, at the very least we must be assured that there is an effective regulatory body.
What Clause 1 of the Bill proposes is that a Director General of Gas Supply should be appointed. Later in the Bill certain broad functions are assigned to him, particularly in Clause 4. If we try to find out what sort of organisation he is going to have to support him we need to refer to page 64, Schedule 1 paragraph 4, which states:
"The Director may, with the approval of the Treasury as to numbers and terms and conditions of service, appoint such staff as he may determine".
We know what the Treasury's instinct is in all these matters. What indication are we likely to have that the director will have at his disposal a sufficiently substantial staff to do the massive job that he has to undertake?
So it is the contention of these Benches that if we are to proceed with this important measure of legislation, we ought to spell out in the Bill more effectively how the regulatory body is to be organised. After all, we are putting at risk a very large section of the public who for several years have become used to the operation of the gas supply industry under its public organisation.
There will now be a transformation of this body into one with much wider powers and much greater freedom of operation while still retaining its monopolistic stature. This is the nub of the issue. I should like to recommend to the Committee that in going through the Committee stage of this important Bill we should bear in mind that it is the interests of the public above all else that we should try to safeguard. We must see that in order to safeguard the consumers' interests there are sufficient arrangements in the regulatory system, in the consumer representation (which will be dealt with later), in the safety standards, in the obligations to supply and in pricing policy.
But at this stage and in this amendment we are concerned with the regulatory body. When we were debating a similar body in regard to the Telecommunications Bill a number of noble Lords from these Benches expressed concern that the body was too small to do its job. In the event there has been much concern about the way in which the pricing aspects of the telecommunications legislation have been operated. Surely we must learn from experience. There is widespread concern that Oftel is not a strong enough body to do its job. Let us not repeat the mistake in connection with Ofgas.
We feel that in the light of the very important issues involved in the transference of a monopoly from the public to the private sector the proposals made in this amendment are indeed fairly modest. We are trying to obtain some assurance that there will be a regulatory body which will address itself specifically to the problems which are involved in this new Bill. We think that instead of the appointment of a single director general, there should be three commissioners of gas supply, one of whom should be the chairman, and that these commissioners should be endowed by Parliament with specific responsibilities. One commissioner should have a specific responsibility for tariff consumers. That involves all the domestic consumers of gas in this country. It is surely right that there should be a high-powered member of the regulatory body with suitable supporting staff who will concern himself with the 16 million private consumers of gas.
Then there are the contract consumers, who are the people taking large quantities of gas in business and in industry. Time and again in this Chamber we have debated the need for energy prices to industry to be kept as low as possible. There is a need for a commissioner who will concern himself with the supply of gas to the commercial and industrial sectors.
The gas industry has now and will continue to have considerable freedom of action in negotiating terms, conditions of supply and prices in this market, but under its new guise this freedom will be very much greater. I think we can say that we all have confidence in the existing members of British Gas; but this is legislation which is intended to last for at least 25 years, and when we are legislating for a quarter of a century we need to be assured that each segment of the market will be fully safeguarded by the constitution of the regulatory body. Therefore we recommend that one of the commissioners should be concerned with matters affecting contract consumers.
The third commissioner should have the responsibility for gas purchases. British Gas in its present guise—and it will continue to be so in its future guise—is a dominant factor in the purchase of gas from the North Sea. This situation needs to be watched with great care. Hitherto it has been the Government themselves who have intervened when the gas industry, rightly or wrongly, wished to augment its supplies by buying in from certain Norwegian sources. But in future how will this be watched over in the interests of the consumer? So we feel that one of the commissioners should be concerned with this matter as well as with the related subject of energy efficiency.
We add to this recommendation the proposal that:
"The appointments of officers as commissioners shall be approved by the appropriate committees of each House of Parliament".
We put this in because we think that these appointments are of prime and crucial importance. My noble friend Lord Diamond will speak on this aspect later on.
In the subsequent subsections of this amendment we indicate that the commissioners should hold office for different periods of time so that there can be some degree of overlap when they change over.
In this Committee we are raising one of the most fundamental issues concerning this Bill; namely, that in transferring a most important public monopoly into the private sector we are entering uncharted seas. The very least that we can do is to make sure that the regulatory body is strong enough to cope with that situation. It is not our opinion that the proposals contained in this Bill concerning the regulatory body go far enough and therefore we make this proposal to strengthen that body. I beg to move.
3.45 p.m.
Lord Stoddart of Swindon: The Labour Opposition have thought very long about this amendment. We have studied it very closely indeed and we have rolled it around in our minds because it introduces a new concept and one which I think the Committee should treat very seriously indeed.
For ourselves, after we considered it, we decided that it was an amendment which deserved our support. Indeed, we believe that it deserves the support of all the Members of the Committee. I hope that we shall see later how much support it has received. The noble Lord, Lord Ezra, is quite right. At Second Reading we explored just exactly how weak the regulatory system would be under the Bill. In this Bill we are setting up a regulatory authority which will have a single director. We do not know what he will be paid and therefore we do not know what status he will have vis-à-vis the chairman of the gas board. We do not know how many staff he will have to carry out what are, it is quite true, the meagre duties that he will have under the authorisation.
We are under the Bill buying something of a pig in a poke. We do not know exactly what sort of fellow we are going to appoint. What we do know is that this man is going to have to deal with a privatised gas industry that will have perhaps one of the most powerful and able chairmen of an industry, whether nationalised or privatised. That will be a job in itself. Apart from that, the gas board itself is split into various disciplines. There are members of the board who are responsible for each item of the gas business. Here we have a proposal that a single director should be able to challenge, to oversee and to regulate every single part of a gas business that will, in fact, be controlled within British Gas plc by several people. I contend that we are immediately putting such a man at a grave disadvantage. What is more, he will be the single individual under fire from every quarter—from the public, from Parliament and from the gas board itself. He will have no one to support him.

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I believe, therefore, that the amendment attempts to address and to redress the problem, and that, in large measure, it succeeds. We shall have commissioners who will be responsible for the various important parts of the gas business. As experts in their own right, working and meeting together, they will be able to a much greater extent to look after the public interest, not only the interest of the domestic consumer but, also, as the noble Lord, Lord Ezra, said, that of all consumers of gas. We believe this to be a sound idea.
The Secretary of State has already made plain that he does not think much of regulation by commissioners. He said, when appearing, I believe, before the Select Committee on Energy, that he had considered the American system, that he had looked at the regulatory bodies within that system and that he had come to the conclusion that they did not suit us. They were, he said, bureaucratic. Frankly, this Bill is bureaucratic enough. In any event, the Secretary of State, who has said that he wants the least possible regulation, would say that anyway, would he not? If he wants weak regulation, he has ensured that there will be weak regulation through Clause 1 of the Bill. The amendment seeks to improve that regulation. We shall certainly support it.
My noble friend Lord Williams of Elvel, who has some expertise in this matter—indeed, he was the chairman of the Price Commission—will have something to say at a later stage based on the experience that he has gathered. But, certainly, so far as I am concerned, the amendment has attractions not only for the reasons that I have already mentioned but also because it contains the safeguard that the appointment of officers as commissioners shall be approved by the appropriate committees of each House of Parliament. That really does appeal to me and, indeed, to the Opposition. I am afraid that all too often there is an overweening arrogance in government that often leads to the appointment of people who, were they required to go before a committee of each House of Parliament, might not be appointed.
The noble Lord, Lord Ezra, who moved the amendment is of course a man of experience. He has been chairman of a nationalised industry. The noble Lord has proposed that appointments of this sort should now be subject to some control by each House of Parliament. That is a new and radical step. The fact that the noble Lord, who has been chairman of a nationalised industry, has proposed it adds significance. What the noble Lord is saying is that if he were now being appointed, he would not mind going before a committee of each House of Parliament. That is something of which we should take note. If the noble Lord, Lord Ezra, a man who has been a successful leader of a nationalised industry, does not mind going before a committee of each House of Parliament, why should anyone else mind? That is a particularly attractive part of the amendment.
I do not wish to delay the Committee any longer. Obviously, we wish the Bill to make progress, though it will make progress, let me assure the Committee, only in so far as we have the opportunity to improve it. For, by heaven, it is a Bill that needs a lot of improvement! Nevertheless, I shall not seek to delay the Committee any further at this stage, because my
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noble friend Lord Williams will also have something to say about the amendment. I conclude merely by saying that it is a good amendment that deserves the utmost support.
Lord Diamond: I should like to pursue what has already been started and follow exactly the theme established by the noble Lord, Lord Stoddart, in his concluding comments. This is indeed a most important Bill. It is a most difficult task on which we are now embarked. I hope that your Lordships realise that we are charged with the responsibility of doing something that I find immensely difficult. We know what the Government want. They want to increase the efficiency of gas production. They want to increase the protection of the consumer. They propose to accomplish this by withdrawing all the accountability within the present set-up—the accountability to Parliament, to Government and to Members of Parliament, who can put questions to Ministers—as well as the encouragement that exists in the present arrangements for producing gas at the minimum cost to the consumer.
We are charged with the responsibility—the Bill and the principles embodied in it having already had a Second Reading—of trying to make some sense out of the Bill and trying to give effect to the Government's wishes. Your Lordships may say that this is an impossible task. How can one make more efficient a public monopoly simply by transferring it to a private monopoly? How can one increase protection for the consumer by withdrawing all the arrangements for his protection, with the exception of one central committee, that already exist? Nevertheless, that is our duty.
4 p.m.
Why do we find ourselves in this plight? I am perhaps in a special position to answer the question. It is because I take the view very strongly that it is proper for us to follow completely the convention that once a government Bill has received the support of another place, no matter the circumstances in which that other place is able to produce a majority, it is not for this Chamber to attempt to override the general principles of such a Bill and the wishes of the electorate as spoken by their representatives in another place. They are the elected Chamber; we are not. Because of that, we could not vote against the Second Reading of a Bill which has within it this immense internal inconsistency. We had to sit silent, and we have now the duty, as it is Committee stage, with a Bill which has passed Second Reading in this Chamber of trying to make sense of it. That is why I say this is a most difficult task.
We are dealing with an industry of such size and importance that I find it difficult to grasp the immensity of it. If one talks about business on a very large scale what comes to mind immediately is ICI. It simply does not compare. As we all know, gas heating is an important element in the industrial cost of a vast number of our products and exports. It enters into the cost of living of 16.5 million people in this country. It directly affects their standard of living, comfort and health. I was a Treasury Minister for a very long time but I cannot visualise 16.5 million as an objective total. One has to relate it to something or other. I know that when I was a Treasury Minister I took off half a

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day a week to play golf in order to keep myself fit to do my duties. I used to play for half a crown. I knew what that was; I could visualise half a crown. But who can visualise 16.5 million people? Just think of the whole of London, and all the towns and cities throughout Great Britain that are involved. This is the problem which we are now charged to deal with in this Bill.
The figures are quite overwhelming in their size and importance. British Gas, as we know from the figures they have given us, at March 1985 employed approximately 93,000 people directly. British Gas had net assets employed of over £16.5 billion. Gas sold was valued at £6.25 billion. Those are such enormous figures that I do not think I would be wrong in suggesting to Members of the Committee that it is beyond our mental capacity to visualise them. We can only say that this is of enormous size and importance. In terms of the industry of our country and the livelihood of our people very few things could be of greater importance.
We now have this enormous task of trying to make gas cheaper to the consumer and produced more efficiently. The Government propose to do it by appointing one chap, with a grand-sounding title, to stand up to the chairman and board, these powerful and experienced people who have been carrying out their responsibilities for many years, supported by enormous numbers of executive staff and others—those directors, that chairman, with their power with all those customers behind them—and say, "Really, you ought not to have done that, ought you?" It is quite ridiculous to think that one person can stand up to all that.
Perhaps I may give Members of the Committee evidence with regard to that. Perhaps I may be forgiven for giving a recollection of what happened during the course of the Industrial Relations Bill argument which, as noble Lords know, went on for a considerable time in 1972 and 1973 and in which I was closely involved. At one period there was a legal point at issue. I had counsel's opinion which did not agree with the view of the noble and learned Lord the Lord Chancellor. He was good enough and courteous enough to invite me to a meeting with him where it could be discussed. I duly attended that meeting. When the door was opened, who was there to be courteous enough to receive this one single representative of the Opposition? It was of course the Lord Chancellor. He was accompanied by Sir Geoffrey Howe—who I think at that time was Attorney-General—and on each side of the table there were at least six other people. My recollection is that there were at least 20 people there to receive and listen to my point of law just in case it happened that the weight of opinion would affect the issue. That was a simple case of dealing with a point of law. It was felt appropriate that in case there had to be an argument with the noble Lord who had the responsibility of leading for the Opposition at that time, it would be no bad thing if the numbers were somewhat disproportionate.
If Members of the Committee will cast their minds back to their ministerial experience they will find that the question of numbers attending any such meeting were always taken into account. I can only regard it as a compliment that on that occasion they thought it
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appropriate to produce perhaps 20 people to deal with one simple soul who was not even a lawyer.
I return to the reason that I am bothering Members of the Committee with that recollection. It is to make this point. Will one chap, with the grand title of Director General of Gas Supply, be able to stand up to the chairman, the board, the executives, the middle management, the lower management and all the huge strength that they gather from being suppliers of 16·5 million customers, with all the huge strength that they get from having these massive numbers of employees? Will he be able to stand up to that amount of pressure? If Members of the Committee convert this into the circumstances of the present time they may feel disposed to agree with me that the present chairman, an able, powerful and efficient man, could eat such an individual for breakfast and not notice the difference—and still require his toast and marmalade in the ordinary way!
So what can we do but strengthen, and strengthen considerably, the protection that is being envisaged in the Bill, and try to do it in a way the Government would have done if they had thought about it a little more, if they had been concerned a little more with the principles they had expressed, and if they had given themselves time to think about matters other than cash at the end of the line. As my noble friend Lord Ezra has explained, based on the depth of his great experience, which is not exceeded by that of anybody in the Committee, we are proposing something very much stronger. In fact, we are proposing a commission with, to be on the modest side, only three members to begin with.
As the amendment makes clear, the commissioners will have separate responsibilities, as they are described. My noble friend has referred to the reason for that division. That they are good categories I accept completely, because he has the experience of this, but just let us pause for a moment and think of the size of the responsibilities of each individual commissioner. Each individual commissioner is going to have a job which is not only man-sized but giant-sized. One commissioner is to be responsible for tariff consumers. The number of tariff consumers is nearly 16 million. The tariff consumers are the ordinary men and women who pay their meter charges for their gas, and, as I understand it, the non-tariff consumers are the people who make special arrangements because they consume much larger quantities of gas. We are going to have just one commissioner charged with the responsibility of looking after some 16 million customers. That is a man-sized job in itself.
We are going to have one commissioner responsible for contract consumers, the customers who come and argue about each individual arrangement they are making for the supply of gas—quantities, prices, peak loads and all the rest of it. They argue because gas enters so importantly into the price of what they are making and trying to sell either here or abroad. It does not matter which, because if you sell it abroad it is an export and if you sell it here it is the avoidance of an export. The important thing is to sell it to someone who is going to use it, and in order to sell these products as cheaply as possible they want their fuel content, their gas content, to be as cheap as possible. They have gone to the expense of establishing

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enormous installations—enormous in size and enormous in cost—to use the gas to make whatever their final product is, and each individual one is going to enter into a contract with the gas company in order to get the cheapest and most efficient supply of gas that he can.
We are told that the number of contract customers is something like 580,000; that is, 83,000 customers who are industrial and half a million who are commercial, who together make the total number of contract customers. Each one is an individual wanting an individual supply and wanting special arrangements and special terms. I am suggesting to the Committee that that too is very much a man-sized job.
4.15 p.m.
The third category is gas purchases and energy efficiency. We know what happens about the cost of gas supplied. Whatever the gas company finds it has to spend on its purchases is regarded as a proper element in its cost, and it will add that on to its overheads before charging a customer, be it a tariff customer or not. Whatever enters into its cost is a proper element in arriving at the final price, even under the complicated arrangements in this Bill. So what has the regulator, the person who is protecting the nation's interest, to do to satisfy himself that the cost incurred was the proper cost? Nobody is charging anybody with dishonesty, but it concerns not only the proper cost but the minimum cost. Could the cost have been reduced by having some totally different way of getting supplies? I am not a gas man; I do not know. All I do know is that it is common to every single business that the cost of what they buy depends on how they go about their buying and how they go about conceiving what are their necessary supplies in order to arrive at their final product.
The expenditure they incur in research in order to answer that question is often enormous. It is a very difficult task indeed to monitor gas purchases and energy efficiency. We know already that an enormous amount of expenditure is incurred in trying to make a gas light burn to a maximum heat at the minimum volume of gas. It makes a tremendous difference if you can get 10 per cent. extra heat, or 10 per cent. lower volume consumed to produce the same amount of heat. Every one of those engaged in this important task of research is looking at that oversimplified example of the importance of what the amendment describes as energy efficiency. So to have one person only to monitor gas purchases and energy efficiency is surely loading that man with the maximum that he can reasonably achieve.
We have, therefore, three commissioners each of whom, as I have demonstrated—and if I have been too casual or too short in order to save time I shall be glad to explain more fully why I am totally convinced of this—has a fully man-sized job. As a minimum, there should be three top-grade experienced men charged with the responsibilities of together constituting a commission. Of course, as we all know, three members of a commission are a much stronger team than the sum of three individuals. They will act as a team and will stand as a team when doing their job.
Is this very reasonable, very modest and very cost-conscious proposal an original one? Indeed, it is not.
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There is nothing very original in the world these days and there is certainly nothing very original in this proposal. As noble Lords who are familiar with this area will know only too well, every single state in the United States has a commission of this kind to look after its public utility companies. Every state grants a private monopoly, as we would call it. The United States, as the supreme private enterprise country, does what it would regard as appropriate: it ensures that for every monopoly there is a commission monitoring and regulating the work, the prices, the quality and the services of the utility. In not one single state is one man appointed with this grand title. We are talking about gas suppliers whose volume of business is much smaller, who have fewer customers and whose effect on the standard of living, supplies and exports, is much smaller. This private enterprise country is an example to all noble Lords who are sitting on the Tory Benches of how private enterprise should be run. This is a country which is accepted by noble Lords and Baronesses opposite as being the ideal of private enterprise, but every single state has a commission very similar to the kind that we are proposing.
Therefore, there is nothing original about this idea; it is a proven idea. I am particularly glad to be able to refer to the United States because, as we know, each state can do what it likes; each state can do the job differently from, say, a neighbouring state if it wishes. One state could decide to have a commission, whereas another could say that it will have one chap who will have a grand title and who will do the job on that basis; that state may decide to give that person an office in a central town or city of the state so that everyone is kept happy, no matter how far away they are from him; and therefore in those circumstances he will be able to do the job. However, they do nothing of the kind. Each state is apparently satisfied that if a utility is organised as a private monopoly, it must have the protection of a commission.
Therefore, there is nothing original here; we are putting forward a proven system for protecting the trader, the consumer and the householder where, as this Bill creates, we have a private monopoly.
Baroness Macleod of Borve: I hate to interrupt the noble Lord's Second Reading speech, but I wonder whether he is aware that British Gas sent an inspection team to America to see exactly what the Americans were doing, and that team returned with a completely opposite view from the one put forward by the noble Lord to the Committee this afternoon.
Lord Diamond: I am aware that the present chairman of the gas board, who is not wholly hostile to this Bill, has taken the view that what the noble Baroness, Lady Macleod, says is quite right. If I may say so, I am not aware that, in speaking to the first amendment in a Bill, I am making a Second Reading speech. I was not aware of that at all. I am not concerned with the principles, except to explain them, as I have explained them, and to explain why we are committed to them and why it is necessary for us to give effect to them. I take the view that, once the other place has passed a Government Bill, we must accept the principles of that Bill as embodied in the Second Reading. At the time of the Second Reading we made

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no objection, although noble Lords must not imagine that there was not a great temptation to make an objection. I stuck firmly to my guns that that is the convention; that it is in the best interests of your Lordships' House; and that is why the Second Reading was agreed without any vote of any kind.
I am dealing purely with this very important amendment and trying to explain why I take the view that it is a minimum variation of the scheme proposed in the Bill and that all of us ought to support it. It goes a long way towards helping the Government to achieve their stated principles. They are not our principles: they are the Government's principles. The Government want more efficiency and protection for the consumer. I suggest that this can be done only by adding to and strengthening many of the proposals contained in this Bill, which is our function, our duty and our responsibility at the Committee stage.
I was about to explain why the amendment states:
"The appointments of officers as commissioners shall be approved by the appropriate committees of each House of Parliament".
In the interests of avoiding duplication my noble friend Lord Ezra said nothing about this aspect at all and asked me to deal with it. I was invited by my noble friend to explain to the Committee why the amendment contains the words:
"shall be approved by the appropriate committees of each House of Parliament."
First, let me deal with the principle of that proposal, which again is nothing new.
Lord Sandys: Can the noble Lord tell the Committee whether he is now addressing the second amendment or the first one?
Lord Diamond: I am addressing the first amendment, Amendment No. 1. I hope that the noble Lord has the same Marshalled List as I have. I am addressing myself to Amendment No. 1 which, as the noble Lord knows, has three subsections, and I am dealing with the last sentence of the first subsection. I have not yet reached the second subsection. Therefore, I do not know quite how the confusion arose in the noble Lord's mind; but I am sure that it was my fault for not having made clear at the start that I was dealing only with subsection (1).
In subsection (1) it says:
"The appointments of officers as commissioners shall be approved by the appropriate committees of each House of Parliament."
I hope that the noble Lord has found that in his Marshalled List and is following it. Again, although this is not a very original suggestion, it is somewhat original in your Lordships' Committee. So we are faced with a very original proposal; we are faced with a proposal to improve the efficiency of supply of gas and the protection of consumers by creating a private monopoly. That is a very unusual proposal indeed.
In order to try to bring some sense to this matter, we have to think as hard as we can (as we did on this occasion) of some way in which the commissioners themselves will know that they have the support of Parliament behind them. This is a question which I
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know will appeal to all your Lordships because it deals specifically with the issue of the extent to which our Houses of Parliament, including your Lordships' House, should exercise their responsibility.
As the Committee knows, where officers of this kind are being appointed in the States to do the parallel job to the one to which I have referred it is usual for them to be examined and cross-examined by the appropriate Senate Committee. That is their normal practice. That is their right before such a person is appointed. If he does not satisfy the requirements that they feel he should have in order to be appointed to the job. he is not appointed.
4.30 p.m.
That is point No. 1. We need to be sure that we are appointing a person of adequate ability and experience to each of the commissioner's jobs. Therefore we must make sure that he is interviewed and examined by those who have the feel for this kind of thing, and not rely wholly and exclusively on one man, the Secretary of State. We have to be sure that these individuals have a relationship with Parliament and that if they feel they are being unduly pressurised by the Secretary of State, they have reason to believe that they have the support of Parliament behind them. Thus they will not feel as lonely as they otherwise would.
If, notwithstanding that this is a regular procedure and that it has logic wholly behind it, your Lordships still feel doubtful about it, I invite you to consider the history of what has happened. We are not on new territory, we are on existing territory. We are talking about appointing individuals similar to the regulator of Oftel; we are talking about appointing a similar individual as the regulator of Ofgas.
Is it not the case that there has been expressed considerable criticism of the way in which the first office holder of this kind has carried out his duties? If that is the case, ought we not to be even more careful before we repeat the previous error of leaving the Bill unaltered and therefore allowing the customer, the consumer, to be treated in a way in which he would not have been treated had British Telecom not been privatised?
This is a serious point that we have to consider. In my view it is necessary for the commissioners to go through what is perfectly normal procedure in private enterprise utilities; namely, the procedure of ensuring that officers who have this kind of enormous, overriding, country-wide responsibility shall be approved by a committee of each House of Parliament.
Why do we refer to the "appropriate committees"? I can explain that a little more easily to your Lordships' Committee if I may have a glass of water. As the Committee knows, because it has already been discussed in another place, there is there a committee called the Select Committee on Energy, which is precisely geared to do, and is capable of doing, this very job. Select Committees come and go. While they are there they are ideally suited for this purpose, being all-party committees, with the major part of the membership representative of the Governments side. There is no question, therefore, of the Opposition getting any benefit out of all this. It is purely for the

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protection of Parliament, and is by no means for the advantage of the Opposition.
I am making the purely non-party point that a Select Committee of the other House, known as the Select Committee on Energy, should have the responsibility of interviewing a proposed nominee for one of these commissionerships. But of course it is the case that that Select Committee might be changed in the future as it has been changed in the past. Therefore, it has been thought wiser to cover this possible change and any possible eventuality by referring to the "appropriate committees" instead of a particular committee. Of course if the Government say that the term "appropriate committees" is a little loose and that they would accept the amendment if it were more closely defined, we should be only too happy to listen to their closer definition, or to introduce ourselves at a later stage amendments which would meet that quite reasonable objection.
The amendment refers to,
"appropriate committees of each House of Parliament".
So far I have referred only to the other place. In this House we have several committees which might do the job. We have the sub-committee of the Select Committee which deals with European legislation. It might do the job; your Lordships' Committee might consider it as being the appropriate committee for these purposes. Alternatively, we have the services committee and the house committee, which are familiar with appointments and interviewing people and considering their fitness for jobs. But I think your Lordships' Committee will agree that rather than tie it down to one particular named committee it would be better to leave it to the good sense of the House to refer the proposed appointment to the appropriate committee.
Therefore, this amendment proposes that the commissioners shall be approved in what is an absolutely normal manner in the United States by the appropriate committees of each House, those committees having on them a majority supporting the Government of the day, and therefore enabling the Government to get their way at the end of the day. That concludes, rather briefly, my remarks on subsection (1) of the amendment.
I now come to subsection (2) about which I have not said one word so far. I would remind your Lordships' Committee that this refers to the period for which the commissioners shall, in the first place, be appointed. The proposal is, as a variation from what is proposed in the Bill, that they shall be appointed initially for terms of three, four and five years. The logic of that needs little explanation. My noble friend Lord Ezra has already referred to it.
The subsequent appointments would be for a term not exceeding five years. Therefore, we would have the great advantage, which the Government have totally overlooked and completely neglected, of seeing that there was continuity of experience and wisdom with no gap in the responsibilities and the way in which those responsibilities were carried out by the commissioners. We have repeated what the Government have provided; that previous appointment to the office shall not affect eligibility for reappointment.
I hope that the Committee will have been good enough to bear with me while I have endeavoured to explain the usefulness and helpfulness in the Government's terms of this short amendment against the background of the enormous task which rests on the Committee's shoulders and which cannot be ignored of carrying through our responsibilities as the Upper Chamber to try to do what the Lower Chamber was prevented from doing; that is, enabling the Government's policies in terms of greater efficiency and more protection for the consumer to be effective. I hope that I have helped the Committee to understand the purpose of the amendment.
Lord Elliott of Morpeth: It seems a very long time ago that the noble Lord, Lord Ezra, in moving this amendment said that the intention of the Bill was to give the gas industry greater freedom. That is what privatisation means, as I understand it.
Before my noble friend responds to this amendment I should like briefly to express what I am sure is the concern of many besides myself. If the idea of the Bill is to give the gas industry greater freedom, what is this greater freedom intended to do? As I am sure many of us see it, it is greater freedom for the gas industry to compete with other fuel industries; it is greater freedom for the gas industry to consider the needs of its consumers. I am sure that it seems to many others, as well as to me, a contradiction if we are to have this heavy commission (which has been somewhat heavily illustrated to us today) added as an extra bureaucratic body over the head of the gas industry and possibly another bureaucratic layer which other fuel industries do not know. I find myself very unhappy indeed about this amendment and I shall seek to oppose it.
Lord Bruce-Gardyne: I sometimes had the feeling listening to the noble Lord, Lord Diamond, that he thought what he said three times was true, or perhaps one should say 33 times. I share the concern that he expressed about the possible gastronomic activities of Sir Denis Rooke, but I must admit that I have always doubted whether a regulatory body, however contrived, was likely to prove an effective substitute for genuine competition. That is why I made it quite clear on Second Reading that I regretted we had not taken the opportunity on this occasion to achieve genuine competition within gas distribution and supply.
Looking at this amendment one feels rather like the great Duke of Wellington. One does not know what effect it will have on Sir Denis Rooke but, my goodness, it certainly terrifies me! What we are asked to do under this amendment, as I understand it, is to establish three commissions, three watchdogs: one to look after the tariff consumers, one to look after the contract consumers and one to look after supply and what is described as energy efficiency. From that one can deduce that each watchdog will spend most of its time biting the other watchdogs. Furthermore, it appears that one of them is to be appointed a chairman watchdog, and so presumably he would have to devote his entire attention to biting the other two watchdogs to keep them in their place. The one who had to look after gas supplies as well as energy efficiency would presumably have to do a fair amount

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of biting, as the two concepts obviously and demonstrably will frequently be in conflict.
Lord Diamond: May I—
4.45 p.m.
Lord Bruce-Gardyne: I hope that the noble Lord will allow me to continue because I do not want to detain the Committee for more than a moment or two. We have had quite a long time on this amendment, as I am sure he will agree.
Perhaps the aspect of the proposition advanced by noble Lords opposite that I find most scaring of all is the suggestion that these appointments should be vetted and cleared by the appropriate committees of Parliament. I can see clearly what would flow from that. With whom would these bodies be staffed? They would be staffed with former Members of another place and present Members of your Lordships' House. They would no doubt be eminently qualified for the job but they would be there to convince these Select Committees that there would be a role for them one day in this great new quango organisation.
The noble Lord, Lord Ezra, was deeply concerned about the reference in Schedule 1 to the Treasury. I am relieved to see the Treasury there. I do not want to have some enormous body—which I suspect, let us face it, will not be much of a substitute for competition anyway—spending money on a grandiose scale, appointing one commissioner after another, each to see what the other is up to and stopping him from so doing. I am only too delighted to see that the Treasury is there to ensure that this body is maintained on a modest scale. It will have a modest role, and so it might as well be maintained on a modest scale.
Finally, the noble Lord, Lord Ezra, referred, quite properly and in particular, to the need to ensure that the Gas Corporation did not abuse its monopsony position in the purchase of gas supplies. I agree with him entirely, but the best way to make sure that that monopsony position is not abused (apart from dismantling it, which would be my preference) is to ensure that there is genuine freedom to export so that the suppliers of gas from the North Sea can have an alternative choice of markets and we can tell that the Gas Corporation is purchasing its supplies at a genuine market price. That is infinitely better than any commissioner or any system of regulation. Therefore I hope that when we reach my amendment to Clause 62 in due course I shall enjoy the fullhearted support of the noble Lord, Lord Ezra, and his friends.
Lord Sandys: I oppose this amendment, as do my noble friends on this side of the House, for a number of reasons; most particularly this is a major philosophical divide between both sides of your Lordships' Committee on the role of this Bill. The answer to both the noble Lords, Lord Ezra and Lord Diamond, is contained in the Government's White Paper which we have before us, Cmnd. 9759, on page 9, paragraph 17. This refers to the contract market. It says:
"The contract market will be subject in the normal way to competition law and the legislation provides for complaints to be taken up by the Gas Consumers Council".
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One of the three wise men that the noble Lord, Lord Ezra, proposes is to be concerned with the contract market. In the White Paper it is felt strongly on this side of the House that the normal processes of law will operate. My noble friend has just referred to the situation which so frequently occurs when three wise men are appointed with special responsibilities; the responsibilities overlap. This may well happen because in a complicated market this often overlaps and gives rise to a clash of responsibility. I feel that the Government are absolutely right in concentrating on a single role.
Both the noble Lord, Lord Ezra, and the noble Lord, Lord Diamond, waved the numbers at us, the 16 million private consumers whom we on this side are naturally delighted to support and to consider very carefully indeed. Both efficiency and safety go hand in hand in British Gas, hand in hand in the awards which British Gas have won since 1975. Their track record is excellent, their scale of operations is excellent, and it may be valuable to recollect that among these 16 million private consumers there were, in the year 1984–85, no less than 14,800,000 service jobs undertaken; so it is almost covering the entire market. That is a very considerable undertaking and, I should have thought, a source of confidence for the consumers and confidence for the Government in proceeding with the situation as they outline it.
Lord Whaddon: I appreciate what has been said about the noble Lord worrying too much about bureaucracy. My view of the prospect facing our consumers is somewhat different. I had the great pleasure of accompanying the noble Lord, Lord Bruce-Gardyne, to Romania a few months ago—Romania the country where roamed in legend the great blood-sucking monster, Dracula. When this gigantic monopoly, which up till now has operated, very efficiently as a public servant, is handed over to a public limited company whose main duty will be to work for its shareholders, I have this vision, this nightmare, of the company turning into a Dracula, getting its teeth into the 16 million consumers and sucking the blood out of them.
It is against this nightmare that I think that we are quite right to consider very carefully the need to provide some protection for these 16 million potential victims. The Committee will remember a brilliant speech by the noble Earl, Lord Stockton, a few weeks ago during which he made that unforgettable remark about the danger of selling off the family silver. Not every family has family silver, but every family has a stove and I plead sincerely with the Government to watch their own position here. It is one thing to sell off the silver of a few people, but if they damage the family stove—which applies to every family—their own prestige will be gravely in danger.
One aspect of the gas industry which I have not yet heard mentioned but which is certain to arise more and more in the public mind is the increasing complexity of the technology. The noble Lord, Lord Diamond, in his intervention referred to the efficiency of gas consumption and the need for correct pricing; but all our industries, including gas, are in a period of new technology. Increasingly gas stoves, which only a few years ago were very simple indeed, now have

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electronic devices which control the time at which the clock goes on and off and automatic timing. If one of these goes wrong, the whole system goes wrong. Yet the new company will be responsible for marketing vast numbers of such devices and that will have a great impact on the standard of living and the comfort and convenience of the consumers. How those new devices operate will be of vital interest to every family in the country.
I should like to outline a little difficulty which occurred over the last 12 months with regard to a case of which I am personally aware. A family bought a new gas stove, having been tempted by an advertisement in the gas showrooms. It was a wonderful price for a wonderful new model which could do so many things which the old ones could not do. The stove was fitted rapidly and the money taken immediately, of course. But the following Sunday when the housewife needed to use the stove for several hours instead of for a five-minute test the temperature kept on rising and rising until, on reaching for the controls, she burned her hands.
Naturally she got in touch with the gas board who sent round a fitter. He rapidly diagnosed that one of the controls needed extra grease on it and he saw to this. But within three days the trouble recurred. The fitter came back three times, after which it became necessary to call in an inspector. In the next three weeks the family had four visits by a total of three or four people. Alas, that was not sufficient. The gas board concluded that there were queries concerning the design of the stove and, after several more weeks, called in the manufacturers. The manufacturers immediately produced documents which showed that they had constructed the new stove according to the rules aid down not by a commission of the House of Commons but by the European Commission—very much more distant, very much more unapproachable and very much more complex. Because they were able to demonstrate that their new device had been approved by the European Commission they disclaimed all responsibility.
Weeks and months of delay followed. The burners on the stove were replaced. Still the problem persisted. It was so simple; and yet the family had to go without meals because of a basic fault in the design. After 12 months it was agreed that the whole stove must be replaced and that representations would have to be made to the European Commission as to the efficiency of their supervision. Eventually that was done.
What followed a month later?—a bill for a replacement stove. Three months later it turned out that the computer system run by the gas council was not proof against human error. After threats to cut off the supply for non-payment it was eventually proved that the bill had been paid 18 months before; and, after 18 months of agony and stress the fault was finally put right and the family at last had an efficient stove. A very small fault had taken up 18 months of stress and oceans of time—and this against the background of a gas board which was set up as a public service.
Are we really going to hand over this giant monopoly to a public limited company without being absolutely certain that the consumer will be given instant attention where necessary? I am very sad to say I
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that experience with British Telecom is not encouraging. Following the privatisation of British Telecom my own experience has been that it has a very strange idea of private industry and how it should operate.
I have been in private industry all my life. I am used to cultivating the goodwill of customers, but I am afraid I do not have that impression in relation to British Telecom. On being privatised it seems to have been converted to having a very strange idea of the duties of a public company. It runs like lightning when it has a new model of telephone to sell—cash on the nail—and it sends oceans of literature on new telex machines. But when it comes to service which is at its own expense, oh boy, that is when one waits weeks and weeks, I am afraid. I know that a telephone line in my own village was out of action four times in the last year for a week at a time, waiting for British Telecom to send round engineers to fix it at its expense. But it will run like lightning if it is a question of the sale of new equipment.
So British Telecom's concept of public service in connection with the new company has in my experience left a little to be desired. The Government would deeply regret making a similar error with regard to British Gas. I sincerely advise the Government, in their own interests, to avoid the "aggro" which will result over the next year or two for the 16 million consumers, as pointed out by the noble Lord, Lord Diamond. Those consumers will experience such trouble and inconvenience if we do not do everything we possibly can at this stage to provide a safeguard for them in relation to this giant new corporation, this potential Dracula which I fear.
In view of the experience we have seen with the privatisation of British Telecom and because of what we know are the technical difficulties in connection with gas I wholeheartedly recommend that we strengthen by every means at our disposal the protection machinery for the consumer. I most strongly urge this Committee to express its complete support for the amendment of the noble Lord, Lord Ezra.
5 p.m.
Baroness Burton of Coventry: I wish to say just a very few words on this matter. The Committee need not be alarmed; I shall be very brief and my remarks will be neither learned nor technical. In the debate which we had on 10th April I said I thought that any future regulatory body should be tough, should be strong and should contain within it tough and consumer-minded members. I was very glad when this amendment was proposed today by my noble friends Lord Diamond and Lord Ezra, because I think we must all realise that at the moment the position of consumers, which this amendment would hope to modify or improve, is really quite serious.
The Committee will recall that at the moment under the present proposals the gas industry will not be compelled to disclose the profits it makes from the domestic consumers when it shows its accounts. There will be no way of showing how much those profits from the domestic consumers have contributed to some cross-subsidisation, whereas if we had the commissioners which my noble friends have been

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talking about, we should at least have one who would deal with tariff consumers. I think that should be borne in mind and perhaps when the noble Lord, Lord Gray of Contin, comes to reply he will deal with that particular point, with the transparency of the accounts that will be shown, and say whether or not the profits received from the domestic consumers of gas will be disclosed.
I want to make one other point. I remember that in that same debate—and my noble friend Lord Diamond referred to the same point—while saying that there had been many criticisms of the way Professor Carsberg had conducted affairs in so far as consumers were concerned (and I myself share that criticism) I made the point, and I maintain it again today, that I do not think it is so much Professor Carsberg as the legislation which is at fault. I am sure the noble Lord, Lord Gray of Contin, will recall that in another place right through the Committee stage Members—and not only Opposition Members—tried very hard to get this legislation tightened so that the same thing would not apply when it came to this Chamber.
This legislation has come from another place. It has not been fully discussed because it was guillotined, and it is our job to try to improve it. As my noble friend Lord Diamond said, it is not our job to throw out the Bill, because the other place has passed it, but we wish to improve it. I ask the noble Lord, Lord Gray of Contin, to believe that this is not a party point; I would make it whichever government were in power. I think it is quite essential that the legislation is tightened up, and tightened up adequately, so that what has happened at British Telecom through Professor Carsberg having to act on the legislation which is already in being is considerably improved in this case. Therefore I hope that the Committee accepts this amendment.
Viscount Torrington: I am well aware that I am somewhere near the back of the field in what is a rerun of the London Marathon and so I shall be brief. I also share the fear expressed by my noble friend Lord Bruce-Gardyne of "canine cannibalism"; so I have very little compunction in being against the amendment. I might have been tempted to be in favour if the breakdown between the duties had been slightly different from the way they were phrased, with tariff consumers for one commissioner, contract consumers for another, and gas purchases and energy efficiency for another. I would have thought that the industry breaks down into consumers, the purveyor and reticulator of gas (namely, the British Gas Corporation) and the suppliers.
My noble friend Lord Gray of Contin when in another place got to know the independent sector of the oil industry very well indeed as Minister of State for Energy. I am sure he and most other noble Lords here will know that the independent sector of the oil industry is somewhat frightened of this Bill. We in it are not frightened of British Gas per se: in fact we welcome it coming into the private sector very much indeed. But the independent sector is very worried about the monopoly buying powers of the British Gas Corporation, and while the right to export is certainly
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of great assistance in keeping this monopolistic power at bay, one can envisage—though I will not bore your Lordships' Committee on this—a lot of situations where the right to export would not protect smaller members of the producing consortia, especially, for instance, if British Gas was a member of those same consortia. So if there had been a commissioner drawn from the independent sector of the industry, I would possibly have been very tempted to support this amendment but as there is not I am afraid it cannot have my support.
Lord Williams of Elvel: I speak, as my noble friend Lord Stoddart of Swindon said, as the only person in your Lordships' Chamber who has actually sat across the table from the chairman of the Gas Corporation in an investigatory capacity. As I mentioned in my speech on Second reading, when I was chairman of the Price Commission we produced a major report on British Gas Corporation gas prices and allied charges. This involved a great deal of hard work and study. I say this in order to illustrate not only that I have some experience in this field of regulation but also to make the point that at that time our relations in the Price Commission with Sir Dennis Rooke and the Gas Board were extremely cordial. They were extremely tough but very cordial negotiations and I have absolutely no complaint to make about the way Sir Dennis Rooke and his colleagues comported themselves. I found them very expert but very tough and very concerned to press their point of view.
I want to make one very clear assertion. I do not believe that as the Bill is drafted the director who will be appointed can possibly perform all the tasks with which he is burdened. The US experience has been quoted by Members in various parts of the Committee. There is one thing that comes quite clearly out of US regulatory experience. The regulators need to be wholly familiar with the industry if they are not to be out-manoeuvred. This is a very fundamental point, because, whether it is a commission or a director, whoever is in charge of the regulation must be absolutely conversant with the day-to-day operations of the industry being regulated.
I take issue with certain noble Lords who have said that the director may have a rather minor role because, as the Notes on Clauses tell us,
"Once an authorisation has been issued to a public gas supplier, the day-to-day regulation of the supplier will be a matter for the Director, who is obliged to ensure that authorisation conditions and certain statutory requirements set out in the Bill are adhered to."
I do not regard this as a minor role. I regard this as a very major role. Therefore, I believe it is very fundamental that we should be quite certain that we have the right construction for this very major role. What does "day-to-day regulation" mean? What does "understanding of the industry" mean? They mean whoever is in charge of this day-to-day regulation must have a full understanding not only of the size of the industry, to which the noble Lord, Lord Diamond, referred, but of the complex nature of the industry.
Just to give some examples of the complexity of British Gas's operations, there is the question of the supply of gas, to which I think the noble Viscount, Lord Torrington, referred; the cost of gas, the southern basin of the North Sea versus the northern basin of the

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North Sea; the question whether the cost of gas is properly revealed in the Gas Corporation's, or the successor company's, accounts; whether they are basing their pricing on the long-run marginal cost of gas or the short-run marginal cost of gas; the allocation of different production costs between various sources of gas and between different types of consumer; the relationship between gas prices and oil prices—all these points, and the question of the supply of gas, must be wholly familiar to the director, or his office, and if they are not wholly familiar to him he will not do his job properly.
I go on from there to transmission and storage, load factor balancing and peak load pricing. These are points to which the director, or the commission if this amendment is passed, will have to pay particular attention. There are questions of marketing and servicing, accounting, cost allocation, accounting principles and overhead allocation. How do you tell whether there is cross-subsidisation, to which the noble Baroness, Lady Burton, referred, unless you are quite confident that you understand the accounting principles involved in the accounts which are set out?
There is also the safety consideration, the industrial relations consideration and all sorts of other activities on which the successor company may embark—I come back to something which I think the noble Lord, Lord Ezra, said in the Second Reading debate—which may themselves have an effect on the pricing to their captive consumers on the tariff. I think that the director, whoever it is, will have to be conversant with all these points.
5.15 p.m.
In the Notes on Clauses, we are advised again
"That the drafting of Clause 1 is modelled on Section 1 of the Fair Trading Act 1973 (… and the establishment of the Office of Fair Trading) and Section 1 and Schedule 1 of the Telecommunications Act 1984."
In other words, it is the Office of Fair Trading and Oftel which provide the model for Ofgas.
There are two major problems with this; and I am not going to talk about Oftel, because a number of noble Lords have referred to it and many valid points have been made. I should like to refer to the Office of Fair Trading. That was set up not to supervise and regulate an established monopoly industry; it was set up under the Fair Trading Act for a certain number of functions, to refer certain things to the Secretary of State and to prosecute certain things in front of the competition court. It was not set up to perform—and could not possibly perform—the role of regulating a clear monopoly.
The reason why it could not serve such a function and the reason why the director in this Bill that we have in front of us cannot himself serve such a function is, in my view, two-fold. First, there is the practical problem of one director being conversant with all the questions that I have outlined—and there are hundreds of other questions that one could mention—and being able to answer questions on television, on radio and to the newspapers. He will be the man up-front. He will have to stand up there and argue that long run marginal cost pricing has been observed or has not been observed. The problems of
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one man being able to undertake that particular job seem to me to be quite excessive.
Secondly, it is my experience in the Price Commission—and I think it has been Sir Gordon Borrie's experience at the Office of Fair Trading—that when you have one person standing up in front of the nation, a strong company, whatever it is, he is much more powerful when he has colleagues to support him. The decisions of a commission are much more respected than the decisions of one person—and they will be seen as decisions of one person.
The third reason why I should like to support this amendment from our Benches—because we will support it—is that I believe that in addition to the tasks of the different commissioners, to which the noble Lord, Lord Diamond, has referred, there is a very fundamental problem relating to the regions. This is not the Gas Consumers Council; we will come to the question of regional representation on that later in Committee. I am concerned with the management structure of British Gas and the successor company.
I have been impressed by the representations that have been made to us by Scottish interests on which I cannot speak from direct knowledge; but on Welsh interests I can do so. I believe that one of the commissioners, if the amendment were adopted, would have the task, as well as being responsible for whatever is in the amendment, of making sure that the regional management structure of the successor company was the same as the regional management structure that is at present adopted by British Gas and that has been extremely successful. That is an extra reason why we should consider favourably this amendment.
The Committee may feel that one commissioner should be responsible for Scottish interests and one commissioner should be responsible for Welsh interests. I have no strong feelings on that point. But I feel it would be appropriate, if such a commission were established, that at least one commissioner should be there to ensure that the regional interests, particularly the Scottish and Welsh interests, should be properly protected from the management side, as they will be, I hope, properly protected from the consumer side.
As my noble friend Lord Stoddart of Swindon said, we have thought long and hard about this amendment. For the reasons I have outlined, and for the reasons he gave, we believe that this amendment should be supported and we commend it to the Committee. As I think the noble Lord, Lord Sandys, remarked, we have a clear difference of political opinion on this amendment. We on our side of the Committee believe that this amendment goes straight to the fundamental heart of this Bill. This is what it will be about. If we are going to privatise a monopoly, we must have a proper system of regulation.
If we do not have that, we shall not be fulfilling our duty as a revising Chamber in putting in a proper protection both for the consumer and for the reasons to which I referred. It is for others to say whether they think that there should be three commissioners, four commissioners or five commissioners. It is for the Government, however, to make the case that we are wrong and they are right. I believe that this amendment should commend itself to the Committee.
The Minister of State, Scottish Office (Lord Gray of Contin): We have had a very interesting and lengthy discussion on this amendment—and I make no complaint about that. It is a custom of this Chamber to explore the territory fairly fully in the first amendment of a major Bill of this kind; and although at times we have perhaps wandered rather wide of the terms of the amendment, I think it has been useful to set before each other our views generally on this Bill.
There are a number of issues on which we have no disagreement at all. For example, we all believe that the interests of the public must be paramount in our deliberations. We all believe that we are a revising Chamber, and that it is our duty to examine very carefully the legislation which comes from another place. I cannot accept, however, the suggestion that there has been any lack of debate on this subject. This Bill was guillotined in another place—that is true—but, my goodness, we were well into the Bill before the guillotine became effective. Indeed, the area of the Bill that we shall be discussing after this amendment has already been very carefully tested elsewhere.
The noble Lord, Lord Ezra, is seeking to introduce a new clause which mirrors largely an amendment which was tabled during the Commons Committee stage by a member of his party. I know the noble Lord believes that there are valuable lessons to be learned from experience overseas, and particularly in the United States. I agree with him very much in that view. Where I disagree with him is that I think he has selected one of the areas from the United States with which we certainly should have nothing to do so far as this Bill is concerned. I am firmly of the view that the solution in the Bill with regard to regulation, which has been debated at great length and which we shall have an opportunity to explain and examine at even greater length shortly, is much preferable to that which the noble Lord seeks to have the Committee accept.
We have concluded that the right approach is for the regulatory body to be an independent office, along the lines of the Office of Fair Trading, and ultimately responsible, through a Minister, to Parliament. We are anxious to avoid replacing the present arrangements with the kind of bureaucracy which is apparent in the United States, where hundreds of staff in each state are involved in the regulation of utilities. In a few minutes I shall try to deal with many of the points that were raised by Members opposite. I am grateful to my noble friends Lord Elliott, Lord Bruce-Gardyne, Lord Sandys and Lord Torrington for expressing so succinctly precisely why they have little regard for the amendment.
I was greatly relieved when I read the amendment, inasmuch as it differs from that which was proposed in another place. It recommends only three commissioners. As the noble Lord, Lord Diamond, took us through the activities of these commissioners, I was relieved that they had been reduced from seven to three. Nevertheless, I realise that the noble Lord, Lord Diamond, feels deeply on these matters and I shall certainly try to do him the courtesy of dealing a little later with some of the important points that he made in his speech.
The noble Lord, Lord Ezra, is no stranger to me. We knew each other for a number of years while he was at
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the Coal Board and I was a Minister at the Department of Energy. In his speech this afternoon, in which he characteristically set out his views with great clarity, he mentioned the public utility position in the United States. I am surprised, really, that he sees these large unwieldy and bureaucratic organisations as a good model. In the case of the Public Utility Commission for a single state (California, for example) the number of staff involved runs into many hundreds—almost as large as the whole of the Department of Energy in this country.
The noble Lord seeks to follow the example of the United States of America in the care of this country and to replace the office we have proposed under a director general, following the successful example of the Office of Fair Trading. The noble Lord seeks to replace all of that with a commission. This is surely a recipe for bureaucratic bumble. The more I listened to various Members of the Committee opposite telling us what those different commissioners would do and what their responsibilities would be, the more I envisaged in my own mind the creation of the type of empire-building to which we became accustomed between 1945 and 1951 and then, again, at the return of any Labour Government. This is something which I think we should try to avoid.
The noble Lord, Lord Diamond, in his persuasive speech, failed to convince any of us on this side of the Committee that, although he may nowadays sit on those Benches, the spots of the leopard have not changed. His heart is still with his friends sitting on the adjacent Benches, because he was a very distinguished member of Labour Governments who revelled in the creation of those great bureaucracies with individuals who were more like commissars than commissioners. However, we are arguing our case on its merit, and we shall continue to do that when we come to discuss our own points.
We had a certain amount of scaremongering this afternoon. We had vague references to safety; we had references to Ofgas. My goodness—if I may refer to the speech of the noble Lord, Lord Diamond, again, I can quite see why, when he went to visit that particular Government department, it had 20 officials there to look after him. I am quite sure that, if what we got this afternoon was any example of his prowess, he was well able to take care of the 20 officials without much difficulty.
The noble Lord, Lord Stoddart, said that the Official Opposition had thought long and hard about this amendment and that they had decided that it was worth supporting. Well, they would, wouldn't they? It is hardly likely that an Opposition would not give support to an amendment of this kind, particularly when it flavours so much of their own political philosophy. But the Secretary of State for Energy has rightly pointed to the poor experience of regulation in the United States under the very kind of structure proposed by the amendment. During the 1970s the price of gas was kept down by over-control and by the lengthy procedures involved with the review of prices in that industry, sometimes lasting literally for years, to the extent that exploration for gas virtually ceased and the quantities of gas produced inevitably declined. That led to gas companies having to make cuts in their deliveries to consumers. The consumer was therefore

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disadvantaged, and both consumers and the gas industry itself suffered as a result.
The noble Lord, Lord Diamond, criticised the arrangements under the Bill to protect the consumer. He sought to portray a picture of an industry without any control. He felt that the industry would be released and that control would be removed, or that constraint on its activities would be completely lifted, compared with the present structure. I draw the noble Lord's attention—
5.30 p.m.
Lord Bruce of Donington: If the Minister will—
Lord Gray of Contin: We have had a very long debate. The noble Lord will have several days in which to give us his views. There is an important Statement to follow and I believe that the Committee would want me to bring this debate to a conclusion. I mean no discourtesy to the noble Lord.
I draw the attention of the noble Lord, Lord Diamond, to the fact that for the first time there will be a new office set up solely with the task of ensuring that the industry operates in a way that protects customers and protects their interests. Clause 4, which we shall reach quite soon, will lay a statutory duty on the director of the new office to protect the interests of customers. For the first time there will be an explicit price control formula to ensure that no longer can governments of any political complexion manipulate gas prices to their own financial ends. Noble Lords may laugh, but as they well know I can cite examples of both Labour and Conservative governments acting in that way. The situation in 1976, when the International Monetary Fund had to be called in to sort out the mess into which the Labour Government had got themselves, is one case in point. Under the new structure, that will all be in the past.
The noble Lord, Lord Diamond, suggested also that the powers of the director were too weak. Perhaps I may point out that the director has extensive powers under the enforcement provisions at Clauses 28 to 30 of the Bill. If the public gas supply fails to meet the supply obligations that are set out in key clauses of the Bill, or to meet the conditions of its authorisation, then the director may issue an order requiring the supplier to comply with that obligation. Moreover, failure to comply with such an order entitles any person who has sustained loss or damage as a result to take civil proceedings.
The noble Lord spoke also about research and development. I am sure that he recognises the great efforts made by British Gas in the area of research and development, including that in the area of improved efficiency of gas use. Indeed, in 1984–85 British Gas spent more than £50 million on research and development. British Gas, as a forward-looking business, knows that such expenditure is absolutely vital. Its own long-term commercial future depends on ensuring that gas can be burnt with the highest possible efficiency.
I now turn to the remarks of my noble friend Lord Torrington, who mentioned, quite rightly, that there is a certain amount of apprehension within the oil industry about the Bill. I believe that that has been
1308
because, in some areas, the Bill has not been fully understood, Hopefully, that situation has now been put right. However, the exclusive gas purchasing rights of British Gas were ended by the Oil and Gas (Enterprise) Act 1982. We are satisfied that any abuse of the corporation's powerful purchasing position could if necessary be curbed under existing competition law.
I should like now to answer the question posed by the noble Baroness, Lady Burton of Coventry. I am delighted that she will be taking an active part in this Bill because she is renowned for her defence of the consumer. It will be interesting to hear her views on various issues. The noble Baroness asked me about separate accounts. We shall be debating that subject at some length on later amendments; for example, there is Amendment No. 68 in the name of the noble Lord, Lord Diamond. However, it is already the case that under Condition 2 of the draft authorisation British Gas will be obliged to publish full information about the profits of the gas supply business.
In addition, the director will have full ability under Condition 7 to call for any further information that he might consider appropriate. Under Clause 35 of the Bill, the director has the ability to publish as much information as he considers expedient to give to tariff customers. That will ensure that if the director wishes to publish further information about the finances of the industry in the interests of consumers, he will be able fully to do so.
The noble Lord, Lord Williams of Elvel, who we all acknowledge has very great experience of the whole question of regulation, made a speech that I am sure the Committee found interesting. I noted one or two points from it. The noble Lord mentioned details of information. The Government recognise the importance of ensuring that the director can obtain full information from British Gas about its activities. It is for that reason that Condition 7 of the draft authorisation gives the director very wide-ranging powers to call for any information that he may need for his functions.
In view of the fact that we have had a lengthy discussion on this amendment, and given that we have a lot of business to get through, I shall not attempt to deal with other points that were raised. Let me say in conclusion that there is no difference between us so far as concerns that which we seek to do. We seek to achieve the best form of regulation. There is a basic, political, philosophical difference between each side of the Committee as to how it seeks to achieve that. We believe that the system we have spelt out in the Bill is the most satisfactory way to proceed. We believe that that which the noble Lord, Lord Ezra, and his noble friends seek to do would be merely to create a bureaucracy that we could well do without.
Lord Bruce of Donington: I sympathise with the noble Lord the Minister in his evident inability to reply to the case put forward very cogently by the noble Lord, Lord Ezra, supported by the noble Lord, Lord Diamond, and indeed supported by my noble friends Lord Stoddart of Swindon and Lord Williams of Elvel. Clearly, the noble Lord has no answer to the arguments that have been put forward.

1309
The Minister himself said—and I noted down his words—that we have a common interest in this Bill: the interest of the consumer. The noble Lord knows perfectly well that the purpose of the Bill is nothing of the kind. He knows perfectly well that the purpose of the Bill is, first, to produce an increased cash flow or negative expenditure for the Government for tax relief purposes and for electoral purposes; and, secondly, while so doing, to buttress the finances of their friends in the City. Everybody knows that quite well and there is no point in concealing it.
The noble Lord, Lord Elliott of Morpeth, put his finger on the point very well because he was quite disingenuous about the matter. He said that he thought the purpose of the Bill was to free the gas industry. Of course that is its purpose: to free the gas industry in the interests of the new shareholders, many of whom have already made a substantial capital profit out of it.
The noble Lord, Lord Diamond, because he is a generous man, put the best possible construction on the Bill, as is his wont. He said that we are united in a common purpose in that we desire to promote more efficiency within the industry, more cost-effectiveness, and so on. He put it mildly. But, once again, the noble Lord the Minister knows quite well that the machinery he proposes in the Bill for the protection of the consumer—particularly when it is read in conjunction with the code and with the schedule, upon which he will be cross-examined later in great mathematical detail—gives no more protection for the consumer than the regulations governing Oftel have, in the event, been proved to give.
The noble Lord, Lord Diamond, was therefore quite right in coming to the nub of the matter. Who is to protect the interests of the consumer against those of a body which, as the noble Lord, Lord Elliott, said, seeks its freedom and whose primary objective and purpose in straight commercial terms, understandable by a Conservative Government dedicated to it, is profitability for its shareholders. That is its purpose and the purpose of every public limited company. It would be failing in its duty if it were to be otherwise.
The noble Lord brushed off the experience of the United States as being bureaucratic. He need only look at the Bill to realise what the product of bumbling bureaucracy in his own department can produce. No wonder there is a certain sympathy for the noble Lord, Lord Elliott, in trying to free the industry from this miserable ministry. The public utility commissions in the United States, as the noble Lord knows quite well, have a very good reputation indeed. True enough, they employ people. But what they also do in regard to the utilities in their area, including the gas utilities, is, before there can be any price increase for whatever purpose, to review investment, working capital needs, research and development needs, and so on. Evidence has to be given before them, state by state.
In the final event, it is the commission, as an independent public body, that gives its assent as to what prices ought to be. In that way the interests of the public are protected. That is what the noble Lords, Lord Diamond and Lord Ezra, and, I suspect, many of your Lordships in this Committee who have any pretence of trying to protect the public interest, want.
1310
They do not want a miserable formula on which, I warn the noble Lord, he will be cross-examined in much detail, together with the mumbo-jumbo with which the Government have sought to conceal their intentions.
The only person who is capable of protecting the public interests in this area is someone who is not nominated by the Minister or who can be dismissed instantly by the Minister because Conservative Central Office probably has something against his record. An independent commission is necessary which is capable of studying what the Government are quite incapable of studying—the national or the public interest. The Minister may be able to avoid defeat in Committee because he has his cohorts not only here but in the other rooms in the building; but the public will demand proper safeguards. We on this side of the Committee have not the slightest hesitation in supporting the amendment put forward by the noble Lord, Lord Diamond.
5.45 p.m.
Lord Diamond: it would be discourteous of me not to respond to and thank the noble Lord the Minister for his short attempt, as he himself put it, to deal with many of the arguments put forward from this side of the Committee. He seemed to indicate that there will be other occasions when he will reply more fully, but he certainly dealt with some of the arguments, and for that I am grateful. I am also grateful to the noble Lords on the Government side who intervened, because they have helped us enormously, and I shall shortly come to that.
I apologise for seeking to intervene when the noble Lord, Lord Bruce-Gardyne, was speaking. I momentarily forgot that we were in Committee and that I should have ample opportunity later to deal with the point he was making. It would have been quicker if the noble Lord had given way and allowed me to make the point, but he is no doubt in no hurry to see this Bill through its Committee stage.
I am also grateful to the Minister—and I must not forget this—for making the important point that on this major amendment, our first amendment, it is inevitable that we spend a great deal more time than we shall be spending on much smaller and less important amendments later in the Bill. However, this is an amendment which enables us to stake out our ground and explain why we are wholly determined to examine this Bill in every way we can and provide for greater protection of the industry and of the consumer.
The noble Lord, Lord Bruce-Gardyne, takes an irresponsible view of his duties here. He takes the view that, having said on Second Reading that the only way of dealing with this problem is to introduce competition and that there is no way of introducing competition if you create a private monopoly, he has nothing more to say and nothing more to do. I do not share that view. I take the view that, as your Lordships' House accepted by giving the Bill a Second Reading the principles that I have outlined, the Committee has a responsibility to try to improve the efficiency of the industry and the protection afforded to the consumer.
We have made one modest suggestion. I call it a modest suggestion and not a bureaucratic suggestion

1311
with every justification. It is modest because, as the noble Lord the Minister himself made clear, an amendment discussed in another place proposed not a medium strong commission of three commissioners but a much stronger commission of seven or more commissioners. We hope that by being modest in what we seek and, as ever, compromising, we can get the Government to see that one man on his own cannot, as the noble Lord, Lord Williams, made clear, have either the information or the experience to cover this vast area and cannot stand up to the pressure that would face him if he sought to carry out his proper duties as outlined under the various clauses in the Bill. One man is not big enough and strong enough to do that. Therefore, we have to go further and suggest ways in which that should be done.
The Minister made only one criticism. He said that our proposals are bureaucratic. Our criticism is much stronger. We feel that in the present structure of the Bill the Government are avoiding giving administrative arrangements under which their purposes in the Bill can be carried out. It is not a question of arguing whether this is helpful.
Let me read to your Lordships what has been written about the experience to which I have previously referred. I shall read from a letter from Mr. Andrew Warren printed in The Times of 19th April. He is talking about the commissions which are established for every utility in every state of the United States and the machinery which is established wherever there is such a utility. He says:
"Each US state has a public utility regulatory commission charged with safeguarding the customer's interests"—
which is exactly what the Government want.
"The commissions exist to ensure that the utilities make the most cost-effective investments, leading in the long run to the lowest electricity and gas costs and prices to the customer"—
which is exactly what the Government want.
"It is these commissions which have ensured that public utilities keep their costs as low as possible and vigorously promote the most efficient use of energy".
There has been no attempt on the part of the Minister to say other than that these commissions are bureaucratic and to say how they will fail to do their duty in the way we have described.
The noble Viscount, Lord Torrington, helped us considerably. He thought that the amendment proposed by my noble friend was on the whole a good amendment which perhaps he would have supported if the breakdown of duties had been somewhat different. It is perfectly open to him to make that suggestion. It is clearly open to anybody to suggest how these enormous responsibilities should be divided. They are not divided into three in the gas corporation itself; indeed, it has far more than three divisions to carry out its responsibilities, does it not? It would not attempt to do so in so small a division as is now proposed. It is perfectly open to the noble Viscount to suggest a different breakdown which he wishes us to follow. He could put down an amendment.
Better still, if we could discuss the matter, we could put down an amendment at a later stage of the Bill which would satisfy his requirements, and thus do what we always try to do, which is so far as possible to meet the wishes of all the members of this assembly. In
1312
the meantime, I am bound to say that nothing has been said from the Front Bench opposite which denies what we are alleging; namely, that the one-man business is totally inadequate for the huge job that has been suggested. There are very many functions that have to be provided, for which enormous experience and knowledge are needed, and more than one man is required to attempt to do the job. I am very grateful to all the Members of the Committee who have supported the amendment and I remain convinced that it is the right approach.
Lord Ezra: The time has come when we must decide what we are to do about this amendment. I should merely like to say that this question arises from the decision to transfer a monopoly from the public to the private sector. I think that we are all at one in believing that this creates a situation which has to be handled with great care in order to safeguard the public interest. Indeed, the noble Lord the Minister said so.
Where we appear to differ is that whereas the Government feel that the Bill provides for a totally adequate regulatory body, we feel that this body needs some strengthening. We certainly do not propose the setting up of a mammoth bureaucratic organisation. In fact, we have not suggested that anywhere in the amendment. However, we feel that in the public interest and for the image which is created by the transfer of this monopoly into the private sector, there should be a stronger regulatory body than is at present proposed. It is on that basis that we should like to test the opinion of the Committee.
5.54 p.m.
On Question, Whether the said Amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 82; Not-Contents, 114.

DIVISION NO. 1

CONTENTS

Airedale, L.

Grey, E.

Amherst, E.

Hanworth, V.

Ardwick, L.

Harris of Greenwich, L.

Attlee, E.

Howie of Troon, L.

Aylestone, L.

Irving of Dartford, L.

Barnett, L.

Jacques, L.

Birk, B.

Jenkins of Putney, L.

Bottomley, L.

John-Mackie, L.

Briginshaw, L.

Kilmarnock, L.

Bruce of Donington, L.

Listowel, E.

Burton of Coventry, B.

Llewelyn-Davies of Hastoe, B.

Campbell of Eskan, L.

Lloyd of Kilgerran, L. [Teller.]

Caradon, L.

Carmichael of Kelvingrove, L.

Lovell-Davis, L.

Cledwyn of Penrhos, L.

McGregor of Durris, L.

David, B.

McIntosh of Haringey, L.

Dean of Beswick, L.

Mackie of Benshie, L.

Denning, L.

McNair, L.

Diamond, L.

Milner of Leeds, L.

Donaldson of Kingsbridge, L.

Mishcon, L.

Elwyn-Jones, L.

Molloy, L.

Ennals, L.

Mountevans, L.

Ezra, L.

Mulley, L.

Falkender, B.

Murray of Epping Forest, L.

Fisher of Rednal, B.

Nicol, B.

Fitt, L.

Oram, L.

Foot, L.

Phillips, B.

Gallacher, L.

Pitt of Hampstead, L.

Graham of Edmonton, L.

Ponsonby of Shulbrede, L.

Gregson, L.

Prys-Davies, L.

1313

Rathcreedan, L.

Underhill, L.

Rochester, L.

Vernon, L.

Seear, B.

Wallace of Coslany, L.

Seebohm, L.

Whaddon, L.

Sefton of Garston, L.

White, B.

Shaughnessy, L.

Wigoder, L.

Stallard, L.

Williams of Elvel, L.

Stedman, B. [Teller.]

Willis, L.

Stewart of Fulham, L.

Wilson of Rievaulx, L.

Stoddart of Swindon, L.

Winterbottom, L.

Strabolgi, L.

Ypres, E.

Tordoff, L.

NOT-CONTENTS

Abinger, L.

Layton, L.

Airey of Abingdon, B.

Lindsey and Abingdon, E.

Alexander of Tunis, E.

Long, V.

Allenby of Megiddo, V.

Lucas of Chilworth, L.

Belhaven and Stenton, L.

Luke, L.

Beloff, L.

Lyell, L.

Belstead, L.

McAlpine of West Green, L.

Bessborough, E.

Macleod of Borve, B.

Boyd-Carpenter, L.

Mancroft, L.

Brabazon of Tara, L.

Margadale, L.

Brougham and Vaux, L.

Marley, L.

Bruce-Gadyne, L.

Marshall of Leeds, L.

Buckinghamshire, E.

Maude of Stratford-upon-Avon, L.

Caithness, E.

Cameron of Lochbroom, L.

Merrivale, L.

Campbell of Alloway, L.

Mersey, V.

Carnegy of Lour, B.

Milverton, L.

Cathcart, E.

Montgomery of Alamein, V.

Coleraine, L.

Mottistone, L.

Colwyn, L.

Mowbray and Stourton, L.

Cottesloe, L.

Munster, E.

Craigavon, V.

Murton of Lindisfarne, L.

Craigmyle, L.

Newall, L.

Cullen of Ashbourne, L.

Nugent of Guildford, L.

Davidson, V.

Onslow, E.

De La Warr, E.

Orkney, E.

Denham, L. [Teller.]

Orr-Ewing, L.

Drumalbyn, L.

Rankeillour, L.

Dudley, E.

Reay, L.

Dundee, E.

Romney, E.

Ellenborough, L.

Rugby, L.

Elliot of Harwood, B.

St. Davids, V.

Elliott of Morpeth, L.

Saltoun of Abernethy, Ly.

Elton, L.

Sanderson of Bowden, L.

Faithfull, B.

Sandford, L.

Ferrers, E.

Sandys, L.

Forte, L.

Selkirk, E.

Fraser of Kilmorack, L.

Shannon, E.

Gainford, L.

Skelmersdale, L.

Gardner of Parkes, B.

Strathclyde, L.

Gisborough, L.

Strathcona and Mount Royal, L.

Glanusk, L.

Glenarthur, L.

Strathspey, L.

Grantchester, L.

Swansea, L.

Gray of Contin, L.

Swinfen, L.

Grimston of Westbury, L.

Swinton, E. [Teller.]

Hailsham of Saint Marylebone, L.

Thorneycroft, L.

Torrington, V.

Hardinge of Penshurst, L.

Tranmire, L.

Harris of High Cross, L.

Trumpington, B.

Harvington, L.

Vaux of Harrowden, L.

Henley, L.

Vickers, B.

Hives, L.

Vivian, L.

Hood, V.

Ward of Witley, V.

Hooper, B.

Whitelaw, V.

Hylton-Foster, B.

Wise, L.

Kimball, L.

Wolfson, L.

Kinnoull, E.

Young of Graffham, L.

Lane-Fox, B.

Resolved in the negative, and amendment disagreed to accordingly.
6.2 p.m.
Lord Brabazon of Tara: We have reached a suitable moment, I believe, to take the Statement. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

British Leyland
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth): My Lords, with the leave of the House, I should now like to repeat a Statement that has been made by my right honourable friend the Secretary of State for Trade and Industry in another place concerning British Leyland. The Statement is as follows:
"With your permission, Mr. Speaker, I should like to make a Statement.
"When I made my Statement to the House on 25th March following the end of the talks between British Leyland and General Motors on the privatisation of the main Land Rover-Leyland businesses, I made it clear that British Leyland would continue to study alternative ways forward for all the businesses concerned. In the particular case of Land Rover and Freight Rover, British Leyland asked for proposals to be made by 15th April. As the House is aware, four proposals were received. These were from Aveling Barford in respect of Land Rover and Range Rover; J. C. Bamford in respect of Land Rover, Range Rover and possibly Freight Rover; Lonrho in respect of Land Rover and Range Rover; and Schroders, acting for a management and institutional consortium, for Land Rover, Range Rover and Freight Rover.
"The British Leyland board has carefully considered these proposals and has weighed them against the option of retaining Land Rover and Freight Rover within British Leyland for a possible flotation or trade sale at a later date. The board has concluded, on both commercial and industrial grounds, that retention of the businesses within British Leyland pending a later sale presents a more attractive option for British Leyland than any of the bids which have been received. The board has therefore recommended to the Government that none of the bids be pursued and that the companies be retained within British Leyland while preparations for future privatisation are made. The Government have accepted the board's recommendation."
My Lords, that concludes the Statement.
Lord Bruce of Donington: My Lords, we on this side are grateful to the noble Lord for having repeated the Statement made in another place. We should also like to extend our sympathy to him for having to announce such a humiliating decision by the Government. We do not propose to detain the House for long in view of the important business that we have on hand. We shall therefore refrain from rubbing the Governments nose further into the mess that they have created. All we would note for the time being is that this belated decision has cost the industry thousands in terms of uncertainty in the minds of staff and customers. This decision is long overdue. Will the Government give an undertaking to keep their nose, in future, out of the business of British Leyland?
Lord Diamond: My Lords, I, too, thank the Minister for repeating the Statement, but it does not explain in any substantial way why there has been this change of ground. Why did the company, and the Government behind the company, start negotiations to sell something and then decide that they were not going to sell? Would it not have been simpler not to have started upon this? Would that not have saved the anxiety that has been referred to and a lot of uncertainty? Would it not have saved employees the anxiety of not knowing what was happening to them? Why have the Government suddenly decided that what they wanted to do a short time ago they no longer want to do? Is it because the bids were unattractive in size, or is it because the Government have returned to their senses? We hope that it is the latter.
Lord Lucas of Chilworth: My Lords, I have to acknowledge the response of the noble Lord, Lord Bruce of Donington, to the Statement that I have just made. But his response raised no questions for me to answer. The noble Lord, Lord Diamond asked me a question: why have we entered into negotiations that have now been abandoned? The reason, as I have oft repeated in your Lordships' House, is that it is the Government's intention to return British Leyland to the private sector because we believe that the company and its subsidiary companies would be better able to function in the private sector. That we still believe. It has been our intention in pursuing that aim to ensure long-term future viability, particularly of the truck industry to which Land Rover and Range Rover were attached at the outset. Unless some rationalisation takes place, we believed at that time, and believe today, that that future is in some jeopardy.
That the negotiations broke down, as I repeated to your Lordships in a Statement on 25th March, was unfortunate. It was beholden upon the board of British Leyland, however, to pursue the inquiries that were then on the table. That has been done. The British Leyland board has concluded that none of those bids is in the long-term industrial or commercial interests of the company. It has rejected the bids. It has advised Her Majesty's Government of its view, and Her Majesty's Government have concurred with it.
Lord Bruce-Gardyne: My Lords, can my noble friend tell the House what there is in the record and performance of British Leyland's management of this business in the past to lead one to expect that it is likely to make a better fist of managing this business than any of those who are bidding to take it over?
Lord Lucas of Chilworth: My Lords, I say this within the context of the Statement—that is, Land Rover and Range Rover. There is no doubt that the management, through their rationalisation of assembly plants into one establishment (that of Solihull), the past year's improvement in profitability, which was marginally better than the previous year and which brought that subsidiary company from loss to profit, and the plans for wider international distribution of the product, which is gaining a more favourable acceptance, give us reason to suppose that the company may very well prosper. We have faith in the company in pursuing their policies. That will
1316
enable us to secure the aim, to which I have earlier referred, at a later date.
Lord Barnett: My Lords, if the management is that good, why did not the Government agree to the management buy-out?
Lord Lucas of Chilworth: My Lords, because the management buy-out, the conditions attached, and so on and so forth, when set against the option of leaving the company within British Leyland for a future date were not considered as attractive.
Lord Lloyd of Kilgerran: My Lords, in order to reduce the suspense and anguish to members of British Leyland and their customers, is the Minister able to say how long it will be before the preparations for future privatisations—mentioned at the end of the Statement—will take place? Has he any idea? Is the Minister aware whether the trade unions were consulted in deciding not to proceed with these various attempts to modify the position?
Lord Lucas of Chilworth: My Lords, I do not wish to be pedantic but when the noble Lord, Lord Lloyd of Kilgerran, refers to British Leyland we are talking about only one aspect of British Leyland: that of Land Rover-Freight Rover. So far as the timing is concerned it is, frankly, very difficult to tell when a more propitious moment may arrive. We would seek to identify that moment in concert with the British Leyland board and then pursue the objective which I have described. With regard to trade union consultation, my honourable friend the Minister for Industry, and my right honourable friend the Secretary of State, have received every delegation from the trade unions who have asked for consultation. Indeed, my right honourable friend the Secretary of State has made himself available to Mr. Todd who has declined to accept the invitation to discuss these matters with him.

Gas Bill
6.14 p.m.
House again in Committee.
Clause 1 [The Director General of Gas Supply):
Lord Diamond Lord Diamond moved Amendment No. 2:
Page 1, line 8, at beginning insert ("After consultation with the appropriate Committee of the House of Lords,").
The noble Lord said: We have to accept for the moment that there will not be a commission of three persons, with the strength of their combined force, but only one such person who is referred to as the regulator. If that is the case it becomes more important than ever that that person should enjoy the confidence of the Chamber and of Parliament and should feel that he has Parliament's understanding on those occasions in which he may find himself under undue pressure either from the Minister or anybody else. In our view the way to do that is to enable the relevant committee of the House of Lords to be consulted. It is referred to in the amendment as the "appropriate Committee".
I should like to draw attention to one or two aspects of this amendment. We are now talking about consultation. We are not talking about approval. We are trying to find out the Government's position, and whether they would agree to the minimum possible protection—that is to say, consultation. It does not mean that the appropriate committee would have any power of veto or anything like that. It would merely mean that the individual himself, and more particularly the Secretary of State, would know the general reaction of a committee of the House of Lords to a proposed appointment and would be all the better informed therefore as to whether they should or should not make the appointment, and the conditions of that appointment. The amendment refers to "consultation" and the "appropriate Committee".
First, why should it be a committee of the House of Lords at all? The answer is because this has proved a very satisfactory method in other countries where they have adopted what the Government are now adopting: the policy of having utilities managed as private monopolies. I have already described it to Members of the Committee and I am sure that you would not want me to go over the ground again. In their constitution it is not a Committee of the House of Representatives, but the Senate Committee—the Committee of the Upper House—which has this responsibility of receiving reports and examining individuals from time to time. In my view it is highly appropriate that it would be the House of Lords which would approach its duties without any partisan or party bias, in a very objective way. The committee would help the Secretary of State to discover whether the individual proposed has these enormous abilities and the experience to be able to regulate the industry and to be able to stand up to the board, the chairman, all the directors, and the staff and customers behind them. The House of Lords would carry out its duties in a most objective way and would assist the Secretary of State in that aspect.
The Secretary of State would also know not only whether the individual—the candidate—was regarded as suitable for this enormous task but also whether he was a person who understood the needs of the situation as explained to him in examination by a committee of Members of your Lordships' House.
This is a modest amendment. It refers only to consultation. It fills in a most regrettable gap in the whole Bill. Nowhere in the Bill, so far as I can see, do the Government propose to consult Parliament. It has taken a public monopoly away from the control of Ministers and of Parliament as a consequence because we all know that every Member of either House can ask questions of a Minister about his responsibilities. It has completely taken away any protection that an individual consumer, a tariff customer or non-tariff customer may have so far enjoyed and replaced it with nothing. Other than by receiving a report after the event—which it can presumably debate if it finds the time to do so—this Chamber has no powers to affect or influence the conduct of the individual concerned. All those powers of protection have been taken away and replaced with absolutely nothing.
This is an extremely modest attempt to introduce consultation with a committee of the House of
1318
Lords—a committee best able to do it because of its skill and objectivity in dealing with matters of this kind. I beg to move.
Lord Bruce of Donington: On this side of the Committee we are very sympathetic indeed to the proposal that has been put forward by the noble Lord, Lord Diamond. I do not think it is a matter of contention between the parties that we live in a time when the Government themselves, and the Prime Minister in particular, have enormous powers of patronage—patronage that they do not hesitate to use. This may be considered to be a good thing. Indeed, the noble Lord is quite entitled by way of reply to say to me, "Well, previous Labour Governments have exercised the power of patronage. Why, therefore, should there be any particular exception so far as a government who are composed of the opposite political persuasion is concerned?"
There is a short answer to that. Quite clearly the existence of much of this Bill confirms (and we might as well be quite frank about it) that there is a conflict of interest between the principal aims of the privatised gas company, on the one hand, and the interests of the consumer, on the other. Were it not so there would be no necessity for the appointment of Ofgas and the appropriate director. To use a term very much favoured by the Chancellor of the Exchequer, if it is a matter of the law of automaticity, as he was kind enough to refer to it in another context, if the interests of the newly privatised monopoly were identical and naturally in conformity with those of the consumers in all respects, there would be no need to have any regulatory body at all. All that would need to be done would be to stop the nonsense of privatising and leave the existing Gas Acts which provide for statutory regulation and allow the nationalised corporation responsible ultimately to Parliament to operate, as it has operated successfully for many years. There is, therefore, a conflict.
The appointment is one of enormous importance, particularly in the light of the very detailed provisions in the Bill and the enormous responsibilities geographically, technically, financially and from a safety point of view that are put on to this particular director general. Is it really safe for the appointment of this very important person to be left solely to the Secretary of State, particularly if the Prime Minister is leaning on him as she is bound to do from time to time if she has a particular favourite foible of her own? Is it safe to leave it to the Secretary of State unaided? Are we quite sure that the Secretary of State is free from the representations that may or may not quite properly emanate from Conservative Central Office? Is it right that a very sensitive appointment of this kind should be left like that, particularly in the light of the fact that, as Members in all parts of the Committee know, Secretaries of State come and go, at very frequent intervals recently, all over the Government's spectrum?
I do not go the whole way with the noble Lord, Lord Diamond, in the sense that he would seek to compare this Chamber with the Senate in the United States. The functions are different. The Senate is a legislative body; it has elected representatives; and it is really a much more powerful and distinct body than this

1319
Chamber. But over the past five or six years in particular—I would not wish to decry its former history, but I talk only from my own personal experience—this Chamber has come to be held in increasing regard by the public at large, and particularly for the quality and experience of its active Members.
I do not include myself among the experienced and qualified people, but there are very large numbers of noble Lords who are qualified in almost every expert field of administration, for example in engineering, technology, physics, chemistry, the law and accounting. There is a very wide spectrum of experience available in this Chamber, and a Select Committee would have that expertise. In fact, as I believe I have said before in a different context, probably the Select Committee on Overseas Trade has more experience, expertise, intelligence and perception than the Cabinet itself.
We are talking now of future governments as well as of the present Government, who will not be here for very much longer; but so long as they are here surely it would be wise to present themselves with that degree of impartiality that they always affect when they communicate with the electorate, to give them an air of electoral respectability. Even on those narrow political party grounds they might commend themselves to noble Lords opposite.
I think it is a very good idea, when the Minister of State has in mind to appoint a person, either male or female, to a job of this kind, that that person should present himself or herself to a Select Committee of this Chamber for informal conversation and also to be examined in the light of the contents of the Bill. It need not be an extremely full-dress occasion, but the Select Committee could be made aware of the person's qualifications, could assess his personality, could have his CV in their hands, and generally be able to make an objective judgment which they would not express publicly in any way. Then the Minister could consult the committee and the committee could tell him what they thought.
The Minister would not be bound by that. The decision would still be his own but it would be made after consultation and it might be—I do not say it would be, because there is no certainty in these matters—that the Minister of State would have second thoughts about the first choice or the second choice and might, in the event, choose a person more fitted to the task as a result of the consultative process than if he had appointed him purely on caprice, or under pressure from the Prime Minister, or after consultation with the Conservative Central Office. We support the amendment.
6.30 p.m.
Lord Whaddon: This is a worldly amendment. After his appointment, this officer is going to be under the glare of public attention for a period of years. He is going to discharge a most important function, that of looking after the interests of 16 million customers. It is a dreadful burden to have to carry. It is most desirable that he should be seen to be properly appointed and that it should not in any way be a hole-in-corner appointment.
1320
If he is to be examined gently by Parliament, I also think that this House could usefully discharge that function. The other place has an enormous burden of work. I think that it would gladly hand over such a job. Perhaps I may also say that the average age of first election to the other place is 37 years; possibly to our regret we have far more years of experience under our belts in this House, and we can use that experience. A great deal of time and a great deal of industrial, commercial and administrative experience is enshrined here, and we should place that to the public service.
I therefore have the greatest pleasure in recommending with the greatest sincerity that the Government should on this occasion show their magnanimity and open-mindedness by conceding this worthy amendment which has been moved by my noble friend Lord Diamond.
Lord Sandys: This amendment may have certain superficial attractions, but there is one fundamental problem. In moving it, the noble Lord, Lord Diamond, is seeking to tie the hands of the Secretary of State. The suggestion is that advice would not be available. There is certainly a gratifying suggestion here, which is not repeated in any other statute so far as I am aware, that consultation should take place with a committee of your Lordships' House. I am not aware of any other statute and perhaps the noble Lord can inform the Committee on that point. I should be delighted to know whether this procedure of consultation with a committee of your Lordships' House prior to an appointment is in statute law at present. If it is not, I may be correct. However, the noble Lord is proposing an innovation. I suggest that the advice of the Secretary of State, with which he will be amply supplied, will be sufficient without embodying this in a statute.
Lord Harris of Greenwich: Perhaps I may make a few remarks. A few moments ago the noble Lord, Lord Sandys, said that he knew of no precedent for this. I never regard that by itself as an overwhelming argument. It is sometimes a good idea to take some step of an innovative character, and undoubtedly this proposal is one such step.
In this debate one thing we have to recognise is the dissatisfaction of many members of the public, who have no particular partisan feelings on the subject of privatisation, about the wholly unsatisfactory arrangements which obtain at the moment as regards British Telecom. There is a general feeling that the consumers' interest has been treated with, to be quite blunt, scarcely veiled contempt. One has only to look back at one of the most recent decisions on pricing policy to see the amount of severe criticism which was directed at British Telecom and at the consumer interest that exists there because it was felt that the public interest has not been safeguarded.
If we are now involved in a second-rate exercise of the same character where we are creating a new private monopoly, it seems to me that it is probably a good idea to take action of an innovative character. This undoubtedly comes within that category. I believe that it would be warmly welcomed by many outside this House who, I repeat, have no particularly strong

1321
feelings either for or against privatisation but who believe that there should be far more satisfactory protection as far as the consumer and the public interest is concerned. That is my first point.
Secondly, it is sometimes rather a good idea (and I think that there is some general bipartisan feeling on this as well) to limit the powers of ministerial patronage. In the lifetime of this Government there has been constant criticism about the ways in which those powers of patronage have been used. That is not unique to this Government; it has also been directed at their predecessors. It seems to me that if a proposal is made that some committee of your Lordships' House should be consulted, that is not necessarily a bad thing in itself and would probably create a greater degree of public confidence than if it were simply left to the discretion of a Minister acting on his own authority. For those reasons, it seems to me that my noble friend Lord Diamond has made a very persuasive case.
Lord Gray of Contin: The Committee will not be surprised to learn that I cannot accept this amendment; nor am I persuaded by any of the arguments. The procedure which we have set out in the Bill for appointing the Director General of Gas Supply follows a well established precedent and, as the noble Lord, Lord Bruce of Donington, indicated, that is not in dispute. Both the Director General of Fair Trading and the Director-General of Oftel must be appointed by the Secretary of State, and those are but two examples. The list is long. The procedure is well tried and it has been found to be satisfactory. Scores of government appointments are made in this way. It would be entirely unnecessary, and I believe inappropriate, to single out the appointment of the director for consultation with committees from either House of Parliament.
In our consideration of the method of regulating the industry we scrutinised very closely overseas methods, particularly the American method referred to by the noble Lord, Lord Diamond. The requirement to consult parliamentary committees before appointing the director would be similar to the approval of appointments by the Senate committees in the USA. This procedure has been severely criticised in the USA because it leads to considerable delays.
The noble Lord, Lord Diamond, also indicated that there was no consultation in Parliament. Indeed the noble Lord overlooks the process which we are now going through. The Bill itself will be subject to the fullest scrutiny in this House, and it has already been subject to considerable scrutiny in another place. The Secretary of State has also ensured that a draft of the proposed authorisation has been made available during discussions in another place and in this House.
Baroness Seear: I am sorry to interrupt the noble Lord, but if I understand him aright, he is talking about consultations over the Bill. My noble friend Lord Diamond was talking about consultations over the appointment, which is totally different.
Lord Gray of Contin: With the greatest respect to the noble Baroness, I do not think that it is totally different. I am pointing out that there is ample
1322
opportunity to scrutinise the method that we use for making appointments, and that is precisely what we are doing now. We take the view that the Select Committee system is not designed for the purpose for which the noble Lord seeks to use it, and we believe that it is inappropriate that it should be used for such a purpose. We believe that the traditional system of the Secretary of State making such appointments is the best way forward, and it is one which is well tried and which has been found to be satisfactory.
I am not for one moment suggesting that over the years appointments by various Secretaries of State from different political parties have always met with unanimous acclaim. Of course that would never be so. However, by and large, the system has worked well and we believe that it is best for us to stick to it. We do not consider the proposal in the amendment moved by the noble Lord, Lord Diamond, to be an improvement on the existing method. For that reason and for the other reasons which I have mentioned, we do not feel able to accept the amendment.
Lord Harris of Greenwich: It is disappointing that the noble Lord is so inflexible. He did not have the opportunity of dealing with one point that I endeavoured to put to him, and I am sorry to have to take up a small amount of time in repeating it. There has been constant criticism during the lifetime of this Government, just as there was in the lifetime of the previous Labour Government and the previous Conservative Government as well, about the powers of ministerial patronage.
I see with pleasure the noble Lord, Lord Fraser of Kilmorack, in his place. He will remember the great dispute that took place during the lifetime of the postwar Labour Government about allegations that Ministers were appointing political friends. I think the phrase used at the time was, "Jobs for the boys". I do not see an overwhelming argument why in a matter of this sort we should not break new ground.
The noble Lord says that it is right for Ministers to make the appointment. In the final analysis of course they will. What is asked for here is a power of consultation. What is so offensive or so wholly objectionable about a Minister consulting one Mouse of Parliament on such a matter? I cannot see an inherent objection to the principle recommended in this amendment. I should be grateful if the noble Lord could deal with that point.
Lord Gray of Contin: I am happy to do so. I am grateful to the noble Lord for his contribution and for making the suggestion. Whatever department is making an appointment, anybody who has had experience of government will confirm that these appointments are not made, generally speaking, without a considerable amount of consultation among Ministers. It is not a case of Ministers just selecting chums and appointing them at random. There is a great deal of consideration given to appointments because appointments of this sort are going to attract a considerable amount of public attention, and, if the Government get it wrong, the Government will be subject to a considerable amount of criticism.
The Government do not accept the proposal that a Select Committee would be a more suitable or

1323
appropriate body to make such a selection than the Secretary of State, with the benefit of the advice available to him. We have provided that the Secretary of State has responsibility for the director. As well as appointing the director, he receives an annual report from the director on his activities, which is also laid before Parliament. This ensures that the director is accountable, through the Secretary of State, to the whole of Parliament. That is a more satisfactory position than having the director appointed by a Select Committee.
Lord Williams of Elvel: The noble Lord has not addressed the point of the noble Lord, Lord Harris of Greenwich. Nobody is asking for a Select Committee of this House to make the appointment. The amendment specifically refers to "consultation". If I may go back some years to my appointment as chairman of the Price Commission—as commissar, I think the noble Lord referred to it at an earlier stage this afternoon—it was not done in consultation with anybody. I know how these appointments are made. The Civil Service comes up with a list of names. The list of names is known throughout Whitehall. Certain names are chosen for good or for bad reasons. Then somebody comes along and selects the appropriate name.
This appointment, as noble Lords will be aware and as other noble Lords have said, is going to be a matter of enormous interest to the public at large. The person appointed is going to be a major public figure. What we ask is, is it not right, as the noble Lord, Lord Harris, said, just to break new ground and take the consultation of the committee of one House of Parliament?
6.45 p.m.
Lord Gray of Contin: No. The noble Lord is very persuasive, and he was one of the nicest commissars that we could have had. But he has not succeeded in persuading me that he has built upon the point made by the noble Lord, Lord Harris. He was equally persuasive on this, but I cannot accept that a Select Committee of either House, for that matter, is in a better position to give advice to the Secretary of State on an appointment of this nature. They are not necessarily in a better position than the Secretary of State and his advisers.
It may well be that they would come up with many of those to whom the noble Lord referred—the good and the great, as they are known in Whitehall. They may well be on both lists. I am just not prepared in this case to accept that it will be of benefit to move from the established system which we have followed and which I believe to be satisfactory. After all, these committees are not designed for that purpose at all.
It would be wrong to bring a House of Lords' committee into a situation where it could be criticised for being political. House of Lords' committees genuinely pride themselves on being above politics, if I may put it that way. We are coming near to dragging them into politics. If that is what we want to do, perhaps this amendment is right. But I think it is better to leave them in their elevated state where they can look at various problems objectively. I fear that if we involve them in this sort of situation, we may be
1324
putting at least part of that at risk. I would rather leave things the way they are. I hope that the noble Lord may be persuaded to withdraw his amendment at this stage.
Lord Whaddon: The point that the noble Lord has made is that the Select Committees pride themselves on being above politics, which is true, whereas Ministers of course pride themselves on being political. The holder of this appointment will deal with 16 million consumers, members of the public. We on these Benches do not want to be renationalising this industry after a couple of years, and it is important that this officer is seen to be above politics and not a party stooge.
This makes it all the more important that the well known Select Committee, which prides itself on being above politics, should not make the appointment—which the noble Lord appeared to imply a few moments ago—but should scan the nominees. The nominee is going to be before television and the press time and time again over the years. If he cannot stand such exposure at the time of his appointment, he would be better not appointed. Will the noble Lord please rethink and consider whether this is an occasion on which he could legitimately give way?
Lord Gray of Contin: No, I should not dream of giving way on this because I do not think there is a valid point. There is no reason whatever why a Select Committee, if it feels so inclined on a particular appointment, cannot make the Secretary of State aware of its views. But it is quite wrong for us to write that into legislation. A Select Committee has the perfect right, if it chooses to use it, and it would be perfectly in order, to make that view known to the Secretary of State. But I am not happy about writing it into legislation.
Lord Whaddon: How can it make its views known without interviewing the nominees? How is it possible? We are simply asking for what the noble Lord has suggested to be done in a rational system.
Lord Diamond: It will come as no surprise to your Lordships not only that I regret the response of the Minister but that I wholeheartedly reject the snub he intends for this House and for the way in which committees of this House function. I reject it on the basis of my experience. The noble Lord asked for people who were experienced in government and on appointments. I had the privilege of being the first chairman of your Lordships' European committee, and I gained experience of the way in which the Government would listen, and listen fully, to the views of that committee and of its sub-committees, which were based on evidence, interviews and inquiries. Those views were not based on something taken off the top of one's head without being able to see the person.
It is the authority of the individuals and the evidence they give which enables your Lordships' European committees to function so well, to have the respect of both Houses, the respect of this country and of other countries. I reject completely the Minister's approach. I reject completely his suggestion that committees of your Lordships' House work politically. There may be

1325
committees of which I have no knowledge which work that way; but nevertheless I reject it.
The Minister knows that in the other place everybody is very politically inclined and partisan, and has to be because constituencies have to be looked after and parties have to be represented. Yet when Select Committees are formed, with a majority on the Government's side, as they always are, they take an objective view and the party approach is often laid on one side.
Lord Gray of Contin: Perhaps I may—
Lord Diamond: I shall gladly give way as soon as I have finished my point. That is in the other House. But we are not talking about the other House; we are concerned with this Chamber. Anyone who suggests that the Select Committees of this House act more politically than the Select Committees in another place must be drawing on experience which is totally unknown to me.
Lord Gray of Contin: I think the noble Lord must have misheard me. I did not for one moment suggest that the Select Committees of this House were political in any way; quite the contrary. When his noble friend sitting behind him spoke he acknowledged that. He said that they were very proud of being non-political. I think I used the phrase "above politics". I am afraid the noble Lord has it wrong. I did not say that; so I do not know why he will not accept the point. I certainly did not say it.
Lord Diamond: I shall remind the noble Lord of what he did say, and I am not proposing to withdraw one tittle of what I said. The noble Lord said that the present proposals do not involve committees of your Lordships' House in acts which are near political, but that if this proposal were to be accepted, they would come into political activity.
Lord Gray of Contin: They might.
Lord Diamond: What he was saying was that if this amendment were adopted, the relevant or appropriate Select Committee would be acting politically. Your Lordships heard him, and that is the logical outcome of his remarks. I repeat that I reject completely what he said on those arguments.
What the Minister wanted to say to us was that there is no reason for any of this. There is the opportunity through examining the Bill for Parliament to make its views known. I am grateful to my noble friend for making it clear that we are not talking about examining the Bill. But if we were, what benefit would there be in our examining the Bill and making suggestions if every suggestion were turned down flat, as has happened so far?
Noble Lords: We have had only two.
Lord Diamond: They have all been turned down flat without any regard to their logic, validity or value. I do not know how many amendments the noble Lord will accept so as to prove what he is now indicating. We look forward to that very much.
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The noble Lord the Minister also said that we have two excellent precedents. Why change the system when we have two excellent precedents? What are his precedents? The first is the Office of Fair Trading. As has already been made absolutely clear, that is not a parallel. It does not have the same function at all. I do not know how many times the Minister—I hope I may have his attention—wants us to repeat an argument so that it is taken on board by him. We are patient and we shall gladly repeat the arguments as necessary.
Lord Belstead: Until seven o'clock.
Lord Diamond: We have made it absolutely clear so far that, as many noble Lords have said, the Office of Fair Trading has a totally different function and has no parallel with what we are talking about.
The other precedent which the noble Lord so magnificently produced was that of Oftel. The whole of this argument arises because Oftel has proved to have an unsatisfactory method of appointment; otherwise we would not be bothering the Government. There is no need to repeat what the Government know does not work and has not worked. Therefore we say that there should be consultation. The Minister has produced no other consultation proposal in advance of the appointment. All he said is that a year, 15 or 18 months after appointment a report made will be made and the House can say to itself what it likes about the report. In the meantime the officer in question will continue in post and will know that he is supported by the Secretary of State. Whether that is satisfactory to Parliament or the House of Lords is a different matter.
Then we go on to talk about the House of Lords itself. I am very sorry that the Minister is not taking this opportunity to strengthen the standing of this House and the regard which is paid to it. We have moved a very long way in the last few years, but there is no reason why we should not move even further in establishing the respect of the country as a whole. One way to do that is to let it be seen—I mean that we should literally let it be seen—that there is a committee of the House of Lords on a parallel with what has been well established, that it has this function and that it carries it out in an informed, totally objective and non-partisan manner.
The noble Lord says that of course they do this in the States; but it results in delays. Dear me! Have they stopped doing it? Is it not true that they continue doing it? Is it not true that the Senate committee have much more regard for getting the right man than for saving a week through not consulting the Senate? Would it not be wise for Parliament to be consulted as is suggested here?
Noble Lords may ask why I am not suggesting both committees of Parliament. Those of your Lordships who have previously been in another place and are aware of the pressures there know that the committees in the House of Commons are unable to carry out the whole of their functions at present. As I am standing here there are some duties laid upon the House of Commons committees which are not being earned out because of pressure of time.
Therefore the first approach must surely be to let the House of Lords do the work in a complementary way

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to the other place—work which the other place finds itself incapable of doing. What is wrong with that? It would be an objective review—getting the right person, helping the Secretary of State and seeing to it that there is parliamentary understanding. It would mean consulting Parliament on the basis of going to the appropriate committee of the one House capable of doing the job. I am sure that is a good idea and I hope the Committee thinks so too.
6.59 p.m.
On Question, Whether the said Amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 53; Not-Contents, 91.

DIVISION NO. 2

CONTENTS

Amherst, E.

Irving of Dartford, L.

Ardwick, L.

Jacques, L.

Attlee, E.

John-Mackie, L.

Birk, B.

Llewelyn-Davies of Hastoe, B.

Bottomley, L.

Lloyd of Kilgerran, L.

Bruce of Donington, L.

Lovell-Davis, L.

Burton of Coventry, B.

McIntosh of Haringey, L.

Campbell of Eskan, L.

McNair, L.

Carmichael of Kelvingrove, L.

Meston, L.

Cledwyn of Penrhos, L.

Mishcon, L.

David, B.

Molloy, L.

Dean of Beswick, L.

Mountevans, L.

Diamond, L.

Mulley, L.

Donoughue, L.

Nicol, B.

Elwyn-Jones, L.

Oram, L.

Ennals, L.

Phillips, B.

Evans of Claughton, L.

Pitt of Hampstead, L.

Falkender, B.

Ponsonby of Shulbrede, L.

Fisher of Rednal, B.

Seear, B.

Fitt, L.

Stewart of Fulham, L.

Gallacher, L.

Stoddart of Swindon, L.

Graham of Edmonton, L.

Tordoff, L.

Grey, E.

Underhill, L.

Hanworth, V.

Whaddon, L. [Teller.]

Harris of Greenwich, L. [Teller.]

Williams of Elvel, L.

Wilson of Rievaulx, L.

Houghton of Sowerby, L.

Ypres, E.

NOT-CONTENTS

Ailesbury, M.

Elton, L.

Allenby of Megiddo, V.

Faithfull, B.

Belstead, L.

Feversham, L.

Birdwood, L.

Forte, L.

Boardman, L.

Fraser of Kilmorack, L.

Brabazon of Tara, L.

Gardner of Parkes, B.

Broadbridge, L.

Glanusk, L.

Bruce-Gardyne, L.

Glenarthur, L.

Buckinghamshire, E.

Grantchester, L.

Caithness, E.

Gray of Contin, L.

Cameron of Lochbroom, L.

Greenway, L.

Campbell of Alloway, L.

Grimston of Westbury, L.

Carnegy of Lour, B.

Hailsham of Saint Marylebone, L.

Cathcart, E.

Coleraine, L.

Hardinge of Penshurst, L.

Colwyn, L.

Harris of High Cross, L.

Cork and Orrery, E.

Harvington, L.

Cottesloe, L.

Henley, L.

Craigavon, V.

Hives, L.

Craigmyle, L.

Hood, V.

Cullen of Ashbourne, L.

Hooper, B.

Davidson, V.

Hylton-Foster, B.

Denham, L. [Teller.]

Lane-Fox, B.

Drumalbyn, L.

Layton, L.

Dundee, E.

Lindsey and Abingdon, E.

Elliot of Harwood, B.

Lucas of Chilworth, L.

Elliott of Morpeth, L.

Lyell, L.

1328

McAlpine of West Green, L.

Saltoun of Abernethy, Ly.

Macleod of Borve, B.

Sanderson of Bowden, L.

MacLeod of Fuinary, L.

Sandford, L.

Mancroft, L.

Sandys, L.

Marley, L.

Selkirk, E.

Marshall of Leeds, L.

Shannon, E.

Maude of Stratford-upon-Avon, L.

Skelmersdale, L. [Teller.]

Strathclyde, L.

Merrivale, L.

Strathcona and Mount Royal, L.

Mersey, V.

Milverton, L.

Swinfen, L.

Mowbray and Stourton, L.

Swinton, E.

Munster, E.

Thorneycroft, L.

Murton of Lindisfarne, L.

Tranmire, L.

Onslow, E.

Trumpington, B.

Orkney, E.

Vaux of Harrowden, L.

Rankeillour, L.

Vivian, L.

Reay, L.

Ward of Witley, V.

Renwick, L.

Windlesham, L.

St. Davids, V.

Wise, L.

Resolved in the negative, and amendment disagreed to accordingly.
The Earl of Caithness: In moving that the House do now resume, I suggest that we do not return to further consideration of the Gas Bill until five minutes past eight. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Draft Child Resistant Packaging (Safety) Regulations 1986
7.7 p.m.
Lord Lucas of Chilworth Lord Lucas of Chilworth rose to move, That the draft regulations laid before the House on 5th March be approved. [15th Report from the Joint Committee.]
The noble Lord said: My Lords, I beg to move the Motion which stands in my name on the Order Paper. Notwithstanding the delight that I have that the noble Lord, Lord McIntosh of Haringey, wishes to respond from the Opposition Benches, I wonder whether I may pay my tribute to his noble friend Lord Ennals, who really master-minded what we are considering this evening in taking the initiative in setting up the Child Resistant Closures Working Party, which produced what is known as the Scobie Report and on whose recommendation these regulations are based; because there is no doubt that if your Lordships approve the regulations it will give great comfort to very many people in manufacturing industry and, of course, to the parents of very young children.
The purpose of the regulations is to reduce substantially the total of, unhappily, 10,000 small children who are referred to hospital each year for ingestion or suspected ingestion of household chemicals—substances such as white spirit and paint stripper. I do not have to describe the anxiety and distress that this will save for parents and young children or the desirability of freeing scarce National Health Service resources for treating the sick. Similar measures introduced into the United States have reduced child poisoning by some 30 to 80 per cent., and if we can achieve anything like that here the measure will have been well worthwhile.
The regulations operate by making it an offence to supply to the public the hazardous chemicals set out in

1329
the schedule in containers that have not been approved by the British Standards Institute as child resistant to British Standard 6652. The only obvious omission is household bleach, and that omission is as a result of advice that paediatricians have given that it does not cause serious or lasting injury to young children.
The measure is restricted to liquids that can be easily, as I suppose the expression might be, "swigged" by a child while the mother's or father's back is turned, since these present the greatest hazard to young children. Unfortunately, we were unable to make provision for the elderly or disabled, since this would create too large a loophole in safeguarding young children; but the products covered are not such that the elderly or disabled will need to open them in a hurry and unaided.
The cost of initial approvals will be quite high, but spread over time will amount to only 1p or 2p per container, which is, I suggest, a small price to pay for the safety of small children. In order not to create a barrier to trade in the European Community, we will have to accept closures approved by recognised bodies in other member states, but only—and I emphasise this—if they come up to our standards.
We have consulted across the board. The chemicals industry is content. The packaging industry would naturally like the scheme to be slightly less rigorous and would like more time. But we are giving suppliers nearly two years' grace to introduce child-resistant containers, and we do not want small children to be at risk a moment longer than is necessary. The paediatricians whom we have consulted consider that we have got the proposed scheme about right.
Finally, I should emphasise that the first line of defence really must always be parental vigilance. It is for parents in the house to ensure that products of this kind, as indeed with medicines, are kept as far as possible away from children; but this measure which introduces child-resistant closures certainly might be considered to be a long-stop where parental vigilance fails.
I do not think it is necessary for me to go over the regulations paragraph by paragraph: I believe they are self-explanatory. If there are any points noble Lords wish to make of course I should be delighted to answer them to the best of my ability. I therefore commend the regulations to your Lordships' House.
Moved, That the draft regulations laid before the House on 5th March be approved. [15th Report from the Joint Committee.]—(Lord Lucas of Chilworth.)
7.15 p.m.
Lord McIntosh of Haringey: My Lords, it is my pleasure to acknowledge and add my own thanks to those expressed by the noble Lord, Lord Lucas, to my noble friend Lord Ennals. It was my noble friend who in 1982 introduced into another place the Dangerous Household Products (Child Safety) Packaging Bill. That was far too long a title but it was a very necessary initiative on his part. It was that Bill which resulted in the child resistant-closure working Party, to which the Minister has just referred. I think it was remarkable that the working party, which consisted of a number of
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distinguished medical people as well as those interested particularly in child accident prevention, and representing consumers and Members of this House and of another place, was a private working party. It was not actually an official working party sponsored by Government or by any of the major institutions. I understand that the administrative, secretarial and public relations activities were paid for by a grant from the packaging industry and I have pleasure in acknowledging that this initiative, started by my noble friend Lord Ennals and supported financially by the packaging industry, has resulted in a virtual consensus about the steps that need to be taken, in terms of regulation, to deal with this problem of damage to children from swallowing dangerous chemicals in the home and resulting poisoning.
Of course there is no perfect answer to this problem: that has to be recognised. If you make packaging fully child resistant, you are bound to make it more difficult to open for other people, and I believe there have been tests which show that children, who still have an element of lateral thinking which we perhaps have lost, find it is easier to overcome the puzzle of child-resistant packaging, just as young people in their teens are much better at solving Rubik's cube than we are. It could be a problem to have child-resistant packaging which was so difficult that elderly people, for instance with arthritis, might have difficulty in opening the product. However, as the noble Lord has said, none of these is a product which needs to be opened in a hurry. They are household products, and to that extent I am sure the balance is right: in other words, that we should get the packaging made safer as a priority as against a slight inconvenience to elderly people.
There are several particular points which are worth referring to. First, the British Standard which has been quoted deals with difficulty of access to the container. It does not deal with the question of spillage, and if you have been fighting to get something open the risk of spilling some of it afterwards could be that much greater; and some of these products are harmful, or could be harmful, to the skin and to clothing even if they are not swallowed. I wonder whether the noble Lord has any advice to give about that because it leads to my second point, which is the danger involved when products are transferred to other containers, if they are too difficult to get at. For example, if turpentine or white spirit is transferred to a jam jar or if it is transferred to a food or drink container, that is the old case of paraquat in the tool shed in a lemonade bottle, is it not? In that case we may actually be defeating our purpose.
I should like to suggest to the Government that since there is no perfect answer in the form of packaging or of regulations, then these should be accompanied by a programme of education to encourage parents and others living in the home not to succumb to the temptation to transfer dangerous products to other containers but to keep, and continue to keep, dangerous products, even in child-resistant containers, out of the reach of children to minimise the risk of children being left alone in a room where, for example, you leave a paint brush in a jar on the floor after you have been decorating while you go to have a cup of tea. These are the kinds of things where

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education and propaganda, as well as regulations, are appropriate and relevant
The noble Lord, Lord Lucas, referred to the American experience where there was a reduction of from between 30 and 80 per cent. in cases reported to the hospitals. But I would remind him that the American Act of 1970 was accompanied by an advertising and educational programme which covered a large part of the United States, and the two together seem to me to be a more effective answer to the problem. However, it is clear from what I have said that we on these Benches welcome the regulations, and think that they perform a useful function. We believe, as the noble Lord said, that my noble friend Lord Ennals has chalked up another credit on his long list of public services to the people of this country.
Lord McNair: My Lords, may I say that of course we on these Benches welcome these regulations? May I also, from a position of abysmal ignorance, ask the Minister one question? Do these regulations cover products which are normally used in the garden or do they cover only products used in the kitchen? En passant, the noble Lord, Lord McIntosh, referred to paraquat, which you can buy in granular form in a package that any child could undo without the slightest difficulty. I wonder whether this is the subject of some other regulations. Perhaps the noble Lord can answer that question.
Lord Lucas of Chilworth: My Lords, I am most grateful to the noble Lord, Lord McIntosh, and the noble Lord, Lord McNair, for their consideration of these regulations. I should like to add to what I said earlier with regard to the noble Lord, Lord Ennals, and to the packaging industry, which has borne the burden of the report that has resulted in these regulations. Without their help, we should not have been able to get so far as we have.
I think that there has to be a general note of warning sounded here; and the noble Lord, Lord McIntosh, mentioned this. We can go only so far in these matters. What we are considering here is child restraint closures and not some of the wider issues that one might like to consider. For example, as regards the point about spillage which was made by the noble Lord, Lord McIntosh, I do not wish to sound unkind but, in a way, that is irrelevant to the safety of the child. If the child gets into the container and is therefore able to spill it, then the closure itself will have failed the test for approval.
Lord McIntosh of Haringey: My Lords, I was not suggesting that that was the risk of spillage. I was suggesting that if the container, in becoming child resistant, had increased the risk of spillage, the temptation would be for the adult to transfer the liquid to another container. That is the worry that I had about spillage and I think it is relevant to the safety of children.
Lord Lucas of Chilworth: Yes, indeed, my Lords; but I am sure the noble Lord will accept the point I made. Accepting what he said takes me on to his second point, about which I should like to say this. First, we are immensely grateful to the manufacturing
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and packaging industry for doing so much in regard to general advice to parents, householders and so on, about the storage of products of this nature.
At the end of this year we shall enter into a programme which will be called an awareness campaign of what is meant by child restraint closures. That will also encompass the other general points of advice with regard to the storage of these materials and the recklessness of transferring them into other containers. Several thousand pounds will be expended in this area and we feel that, with general support from agencies which are normally helpful to us, we will get this message across. The awareness campaign will therefore encourage the public to be a little more careful about the storage and use of these hazardous liquids.
The noble Lord, Lord McNair, asked me whether the regulations cover garden chemicals. With his knowledge, I think he will probably understand rather better if he studies the schedule of regulated products. What I can say to him in general terms is yes, but liquid paraquat is not sold retail and it is only products that are sold retail that are covered by these regulations. Obviously, wholesale or trade products that find their way into the home will not be covered, and it is for the suppliers to ensure that they do not offer for sale a product which is known to be used by a retail purchaser. Manufacturers themselves will have to ensure that there is not much spillage from their containers if they are to make their products saleable.
It is interesting that there are a number of companies in competition with each other in regard to the product itself. That competition will undoubtedly be extended towards the packaging and presentation of their products and we believe that, to a great extent, that point will be taken care of. I do not think there is anything else that noble Lords have asked of me. In fact, I do not think there is anything else that I can add to what I have already said. It just remains for me to thank your Lordships and to ask that you approve the regulations.
On Question, Motion agreed to.

Surrogacy Arrangements (Amendment) Bill [H.L.]
7.28 p.m.
Lord Swinfen: My Lords, on behalf of the noble Earl, Lord Halsbury, 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.—(Lord Swinfen.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL CATHCART in the Chair.]
Schedule 1 [Amendments to the Surrogacy Arrangements Act 1985]:
Lord Swinfen Lord Swinfen had moved Amendment No. 11:
Page 2, line 35, at end insert—
(". In section 4 of that Act (offences) in paragraph (a) in subsection (1) leave out "3" and insert "6".").
The Deputy Chairman of Committees (Earl Cathcart): In calling Amendment No. 11, I should remind the Committee that the debate on it was adjourned at the previous sitting pursuant to Standing Order No. 55. Unless, therefore, any noble Lords wishes to continue the debate I shall put the Question.
Lord Swinfen: Having considered the matter since the Committee adjourned, I now beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 12 had been withdrawn from the Marshalled List.]
Schedule 1, as amended, agreed to.
Schedule 2 agreed to.
House resumed: Bill reported with the amendments.
Lord Skelmersdale: My Lords, I beg to move that the House do now adjourn during pleasure until five minutes past eight.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.30 until 8.5 p.m.]

Gas Bill
House again in Committee on Clause 1.
Lord Diamond Lord Diamond moved Amendment No. 3:
Page 1, line 8, after ("State") insert (", after consultation with the appropriate Committee in each House of Parliament, or with the appropriate Joint Committee of both Houses of Parliament,").
The noble Lord said: We had a short discussion before the break on the general principles of consultation with Parliament. Unfortunately, we were unable to persuade the Government of the wisdom of that course. Perhaps they took the view—and I think this was hinted at—that consulting with one committee of the House of Lords had its difficulties and umbrage might be taken by the other place. I do not think so, but as always we are ready to compromise and to ascertain the extent to which the Government would be willing to come with us. We are therefore proposing this amendment, which has two parts.
The first part states,
"after consultation with the appropriate Committee in each House of Parliament".
I have already explained why I think consultation would be a wise change of direction on the part of the Government. The Government are becoming renowned for their lack of consultation. They have got themselves into difficulty on many occasions. I do not want to detail them but we have only to think of Cheltenham as a first and major example.
If the Government would change their line and start consulting Parliament, they may find that Parliament would not only assist them to avoid making mistakes in the first instance but would be ready to come to their help and succour when things went wrong, as they do go wrong in this world, whichever party is in power. My first point is that there should be consultation with Parliament as an aid to good government, as an aid to
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the relations between Government and Parliament and as an assistance in making sure that they get the right man and consent as to the right man or right woman.
The second part of the amendment states:
"or with the appropriate Joint Committee of both Houses of Parliament".
I have already indicated what I mean by "appropriate committee". There is already in the other place an appropriate committee ready to take on this duty. There are at least two committees in this place which would be ideal for the purpose. It would be for this Chamber to suggest to which of those committees it remitted this responsibility. There is no difficulty in finding useful and objective committee members to carry out this function, with benefit to relations between the Government and Parliament, for the protection of the consumer and for the efficiency of the industry.
The second point in the statement,
"or with the appropriate Joint Committee of both Houses of Parliament",
is this. I view with considerable affection the idea of the two Houses working together. As the Committee will know, there is a moderate amount of joint working in committees at the moment. This is a fruitful way forward. The House of Commons cannot carry out its functions because of the extreme pressure of work and the inability to find time for it to be done. This often means that matters which ought to be decided by Parliament are delegated and are not decided by Parliament. Not only is that the case, but the other place finds itself unable to man committees which are particularly time consuming. One thinks in particular of Private Bill Committees.
The work of the other place is not carried out fully, and that is a great danger to democracy. That is what the other place is for. It is so bogged down with work despite the fact that, these days, every Member there is a full-time Member who is able by virtue of the remuneration he receives to be a full-time Member. Even so, they are not able to carry out duties that Parliament has laid upon them.
One of the ways in which the burden and volume of work resting upon the House of Commons can be reduced would be for the House of Lords to help. If there is a joint committee, that means only half the number of Members of another place being involved. If some Members feel, as they sometimes do in a joint committee, that they have more pressing responsibilities and are unable to attend, and if they leave it to Members of this House who are very public spirited and willing to put in the time, and who perhaps have a little more time available, the work will be done and well done, and Parliament will be fully consulted.
That is a development which we ought seriously to encourage. It is very good for the House of Lords that we should be able to demonstrate our ability to come to the aid of the Commons whenever necessary. That is one of our functions—to complement the work of another place. Here is an example of our doing that very thing. For all those reasons I hope that the Minister will look favourably upon this amendment. When speaking on the previous amendment he

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encouraged me by indicating that although he did not look favourably upon it, he might look favourably upon other amendments. This amendment, which is an alternative to that we have already discussed, might therefore fit the bill. I hope very much that it will. I beg to move.
Lord Stoddart of Swindon: I listened very carefully to the arguments in the previous debate. I listened particularly carefully to the noble Lord, Lord Gray of Contin. I have to say that I was very surprised to hear the noble Lord, who, generally speaking, I consider to be a man of progressive thought, brush aside the very reasonable proposition that was made.
The noble Lord certainly did not apply the mind of a radical to that amendment. I hope that he will be more radically inclined towards this particular amendment. As the noble Lord, Lord Diamond, has said, this amendment seeks to ensure that both Houses of Parliament have some input—though not very much—into the appointment of the director of Ofgas.
The noble Lord, Lord Gray, stated that if we had the system proposed, there would be a delay in appointment. He cited in his own aid the experience of the United States. However, there is absolutely no reason why there should be any delay. A Select Committee of either House or of both Houses can be summoned at very short notice. I do not expect, and I feel sure the noble Lord, Lord Diamond, does not expect, that there will be hearings lasting for days. I should have thought that one hearing would be adequate. So what delay would there be?—hardly any, if I may say so. Frankly, that excuse—because that is what it was—is not worthy of the noble Lord, Lord Gray.
8.15 p.m.
I do not understand why the Government should have so little confidence in the Select Committees that they are not prepared simply to say to them: "This is our appointment. We should like you to interview and to have your point of view". The amendment does not ask that the joint committee should appoint. It merely asks that Parliament should be consulted. Why should it not be consulted?
Here we have a situation where British Gas is being privatised and regulated and where Parliament is to be kept very much at arm's length. It simply is not good enough for the noble Lord to say that Parliament has an input because the report of the director will be placed before Parliament. That really is quite laughable, and the noble Lord knows it, because he has long experience in another place and he has detailed experience of your Lordships' House.
If we believe in Parliament, if the Government believe in Parliament, and if they believe that Parliament should be playing a greater role, surely they should say in this instance, "Let us as an experiment have a situation where in making this appointment we allow a Select Committee or a joint committee of both Houses to look at this man, ask him a few questions, and then see whether it has any points that it wishes to make to us".
In another place I served on the Select Committee for nationalised industries. That Select Committee
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undertook an examination into that matter. Certainly the Government were opposed to it. If my recollection serves me correctly, the chairmen of nationalised industries were opposed to a Select Committee having any input. Nevertheless, the Select Committee, or at least most of its Members, came to the conclusion that it would do no harm at all for there to be some relationship involving the chairman of a nationalised industry—or, as in this case, the director of a regulatory body—and for there to be some input and some contact between the candidate who had been put forward by the Government.
There is another point—
Lord Diamond: Before the noble Lord moves on to that other point perhaps he will be good enough to assist me. I have been following very carefully what he has said about his experience on the Select Committee and that is very valuable. Would I be right in assuming that the majority of the members of the committee, which came to the conclusion that he defined, were supporters of the Government?
Lord Stoddart of Swindon: Yes, indeed they were.
I again return to the last debate, because I want to emphasise the point that Select Committees are independent bodies. They do not discuss matters on the basis of party politics. They discuss matters and come to their conclusions on the basis of the evidence. Again I cite my own experience, this time with the Select Committee on energy, which investigated the Government's nuclear power programme.
I can safely say that at the beginning of that inquiry most members of the committee—and perhaps I was the sole exception—supported the Government's nuclear energy programme. But at the end of the inquiry, after we had heard the evidence and paid the visits, it was a different story. Indeed, members of the committee who had previously been in favour of the policy had turned against it. That was on a cross-party basis. It did not have anything to do with Labour and Tory; it had everything to do with hearing the evidence and seeing and assessing the facts. That is how Select Committees work, and that is why it would be a very good thing if they had an input into the appointment of the director.
There is another point. It would strengthen the position of the director himself. Here would be a man who had not merely been appointed at the whim of a Minister, perhaps from a list of the great and the good. He would have been before a parliamentary committee and obtained its confidence. A man appointed in that way would feel very much stronger and, indeed, we should have much more confidence in him.
I have a further point. It tests the calibre of a man, even a Secretary of State, to appear before a Select Committee of either House. If a man, an appointee of the Minister, can go before a Select Committee and convince it that the Minister has made the right appointment, by heaven, if he can convince a Select Committee of that he is the right sort of man to be dealing with the Denis Rookes of this world.
For all those reasons I hope that on this occasion we shall hear from the noble Lord, Lord Gray, that he will

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support us. I say to the noble Lord, Lord Diamond, that it may be too much to ask the Minister to give a decision tonight because he has only just heard the debate. But if he cannot support the amendment and say that he will accept it, I hope he will at least say to us, "I have listened carefully to what you say. I am a parliamentarian. I voted for the Select Committee system when it was put before the House by one of my right honourable friends, Mr. St. John-Stevas, and I should like to think about this and come back to the Committee at a later stage and perhaps give some encouragement".
I do not think I am being unfair to the noble Lord; I like him. That is one of the problems. I do not like being tough with him and, therefore, I am giving him this opportunity, which I hope he will take, of saying that he has listened carefully to this interesting debate and will be able to offer us encouragement.
Baroness Seear: I hope the noble Lord the Minister will not give us the same answer as on the previous amendment. It must be apparent to the Government that there is grave concern about the position of the consumer when an industry which is either entirely or very nearly a monopoly is being privatised. I am sure the noble Lord will also agree that nobody seriously thinks that under the old nationalisation Acts the position of the consumer was adequately dealt with. I know there have been occasions when consumer councils have done well, but nobody pretends that we have ever found the answer for the proper protection of consumers under nationalisation and where there is a monopoly, either private or public.
We are not filibustering on behalf of the consumer. I beg the Minister to recognise that we are deeply concerned that the position of the consumer under a monopoly never has been solved; that is especially so for a monopoly like the gas industry, which is dealing with a commodity of great importance to a very large number of people. Nothing satisfactory has ever been devised, so surely this is a good argument for trying something new. The Minister will forgive me for saying that there was a degree of complacency in his statement that these old methods have been tried and proved successful. We do not agree that they have been successful. If they have not, that is a very good reason for trying something new.
Finally, I should like to ask the Minister to reply to this question. He told us that the Secretary of State has his advisers. With all due respect to the Civil Service, does the Minister really think that full-time career civil servants have the same kind of knowledge and expertise that can be mobilised from the industrialists, the trade unionists and the other experts in this House who could bring their knowledge and experience to bear when deciding who is a suitable person? If so, where do they get that experience which equips them to do that?
Lord Whaddon: I find as I grow older that my memory increasingly plays tricks. I have been trying to remember the name of the poet who wrote a poem that was a great favourite of mine. In that poem he explained how his heart yearned to go back over the ground that he had once trodden, to retrace his steps
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and so be able to take a different path from the one he chose, and how in life it was so unusual to have such a chance. One is nearly always forced to live with decisions unfortunately taken in past years.
The Minister has a rare opportunity tonight to retrace the steps that he unfortunately took an hour or so ago, when most convincing arguments were put to him for consultation with this House in the appointment of the officer. It seemed to me that just before we adjourned for dinner the Minister was somewhat embarrassed. I thought I caught a glimpse in his eye of his having been persuaded; that he felt the force of the arguments but that the forces of the party behind him were pushing him to resist. On this side of the Committee we have always felt that the noble Lord has rather more backbone in him, if we could only dig deep enough, and that given the persuasion in his own mind he will stand up and do the right thing, which clearly he knows is to yield on this point.
Having said that, I feel the need for a little clarification from one or two colleagues who have spoken. For example, I understood the noble Lord, Lord Stoddart, to say that one meeting should normally be sufficient for a Select Committee. Perhaps I misunderstood him but I am sure I heard him say that. I am sorry but I must take issue with him. For such a vitally important appointment the man chosen—I beg the pardon of the noble Baroness, Lady Seear; the man or woman—to take this position will require heroic qualities. It could easily take half a dozen sessions, in my opinion. However, if I have misunderstood, I stand corrected.
Lord Stoddart of Swindon: I was seeking to show that it would not be necessary to have a long series of meetings. After all, we are not asking for an appointment board but for consultation. Therefore, because what we are asking for is so small, I feel that probably in most cases one meeting of the Select Committee—a day's meeting—would be adequate.
Lord Whaddon: With deep respect to the noble Lord, I appreciate what he says and I know that he means it. But consider today's proceedings. Apparently simple amendments have led to endless points of great gravity which deserve thrashing out. I feel it is overwhelmingly likely that for this appointment there will be endless points needing clarification.
Consider what this man or woman will have to face every day. There will be economic questions. We have heard mentioned today short-run or long-run marginal costs. Bless me! I am not sure what those are and perhaps someone can enlighten me. But the new officer will clearly have to be clear in his own mind, because this will be an everyday occurrence for him.
As regards the technical side of economics, I think that he will need to be an expert in thermodynamic physics. I gave earlier an example of how the correction of an apparently simple fault in everyday service turned upon the interpretation of European regulations and on what one or two companies had interpreted those regulations to mean. If he is effectively to represent consumer interests, he must have some appreciation of these matters. So he must have some knowledge of the technical side of

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economics, and certainly he must know about administration. He, or she, will have to be a first-rate administrator, because there will be a most important organisation under his authority.
8.30 p.m.
These are matters which I can immediately pick out which will have to be faced every day by the new officer. I find it very difficult indeed to believe that one meeting will cover the abilities of the new appointee in the various fields in which he will have to operate. The noble Lord, Lord Diamond, made out a very convincing case, but I find myself somewhat perplexed. I am convinced of the need for consultation, but the noble Lord has somewhat confused me and I should be grateful if he would clarify the situation.
When speaking on the previous amendment, he completely convinced me of the need for consultation with a Select Committee of the House of Lords. An hour later we are now discussing consultation with a committee from each House of Parliament, or a joint committee. The only difference between this amendment and the previous one lies in the position that it occupies in the Bill; they are a few words apart. I cannot see why wording similar to that in Amendment No. 2 could not have been put down again as Amendment No. 3 in a different position. I find it very difficult to swallow a change in the form of the Select Committee which is to be consulted from a committee of the House of Lords, (which I think is clearly the correct body to supply such expertise) to a Select Committee of the House of Commons or a Joint Select Committee with the claim that they could do the same job. I should be grateful if the noble Lord would take the time to clarify this point for me and help me to make up my mind.
The noble Baroness, Lady Seear, spoke of the need for control of a monopoly, whether it be a public or a private monopoly. In principle she is right, but I have always believed firmly that it is much more difficult to control the public interest with regard to a private monopoly than it is with regard to a public one. The interests of a private monopoly are plainly to maximise the profit. I think that there is a clear case to be made out that the public interest needs a much more skilful and extensive body to guard it than is the case with a nationalised industry.
I agree with the noble Baroness that the problem of adequate representation for consumers' interests with regard to the nationalised industries has never been adequately solved. She is absolutely right about that. But in the case of a private monopoly, the difficulty is even more acute, and therefore the amendments that we are now discussing assume an even greater gravity. I shall be most grateful if the noble Lord, Lord Diamond, could clarify my mind in regard to this amendment.
Lord Diamond: I do not know whether it would be more convenient to wait for the noble Lord the Minister to reply or whether I should deal at the moment in a limited way with the questions which my noble friend Lord Whaddon has put to me, which I am very happy to do.
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My noble friend found himself impressed by the many qualities that are required of the individual man or woman who is a candidate for this most important job. I entirely share his views about the magnitude of those qualities and the experience required. My noble friend went on to deduce from that that there might be need for more than one sitting of a Select Committee to satisfy appropriate consultations.
Lord Gray of Contin: He said six.
Lord Diamond: I shall give way to the noble Lord gladly if he wishes to say something.
Lord Gray of Contin: I am always prepared to help with a filibuster. If I heard the noble Lord correctly he suggested that the committee might need six sittings to come to such a decision, but I thought that that was rather at variance with the noble Lord's own view. No doubt he will clarify that point.
Lord Diamond: Indeed I shall.
Lord Whaddon: I think I am entitled to speak, since a comment has been made about my own remarks. I plucked that figure out of the air. Let me clarify what I was saying. It concerns the difficulty and complexity of the industry, which is not a matter of sticking gas into one end of a pipe and taking it out of the other end. It is an immensely complex industry which is full of technological and economic problems as well as of personnel problems. The chief person responsible for dealing with consumer representation will have to be a man or woman of outstanding ability.
I simply used the figure six in a poetic sense, if I may say so. I believe it is a virtual impossibility to cover the ground adequately in one session. Heaven knows, it may require a dozen sessions or more. I simply believe that it will need thorough—the noble Lord smiles, but we are dealing with a multi-billion pound industry which has 16 million customers. We must treat it with the gravity that it deserves.
Lord Gray of Contin: I am most grateful to the noble Lord, and I accept that, as he himself said, he plucked out the figure of six, but he has now plucked out the figure of 12. If one of the serious arguments for this is that there would not be delays, I have suggested that it would lead to delays. Really the noble Lord is making my case for me.
Lord Diamond: Perhaps I may continue with what I was trying to explain before the noble Lord the Minister sought to delay progress by intervening in the way he did. It was a very unhappy intervention, if I may say so. I may have been mistaken but I thought that the noble Lord allowed a word to escape his lips which was quite unintentional. I thought he used the word "filibuster".
Lord Whaddon: Yes, he did.
Lord Diamond: I hope that the noble Lord, when he has had an opportunity of reading Hansard, will explain which of the comments of any individual named on this Bill from either side were irrelevant to

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the issue. That is the definition of a filibuster. Perhaps he will be good enough to do that for us. In the meantime, I reject totally what he has said. May I throw the word straight back at him and say that I very much regret that he chose to use a word such as that when we are trying to deal with a most important Bill of this Session to which we have given a Second Reading without hesitation and without amendment of any kind. I very much regret that the noble Lord allowed himself to use that word even jocularly, and I can only assume that it was jocular.
As I said, my noble friend Lord Whaddon was impressed by the many qualities that such a prospective employee would need to have. That is right. He is absolutely right to be weighed down by a sense of the magnitude of the experience and qualities and knowledge that such an individual would have to possess. To go on from that to say that consultation would take a long period is, with respect, not necessarily correct. There is no reason to jump from one statement to the other. But the fault is mine for not having explained the intention behind this amendment. I am bound to do so now; otherwise, this misunderstanding will continue.
It is not intended that the Select Committee should go through the details of an appointments board and ask all the questions that an appointments board would have to ask before making an appointment to an important position of this kind. The amendment refers to consultation. And it is only consultation that those of us who approve this amendment have in mind. Why do we say that? It is because we know that when an appointment is made in Whitehall much ability and experience goes into the selection of the individual before his name is put before the relevant Minister. There is, however, a great and enormous gap in the experience of those who collect the views in order to make the decision; there is an enormous gap in their knowledge and experience. They are very able civil servants and, no doubt, very able people of all kinds. But they are not politicians. They are not people who have their ear to the ground. They are not individuals who attend political surgeries every week and hear the problems of their constituents. They are not people with that kind of experience.
In order to fill that important gap a wise government—I say this without hesitation—would prefer to have the support of a Select Committee. In such an important appointment as that which we are discussing, should things go wrong, as they have already, the Government would have the backing in the future of the Select Committee and the individual in question would know that he could not be pressurised into doing the wrong thing because he depended solely on the Secretary of State. That would not be the case. It would partly be a question of the view taken by Parliament because Parliament had, through consultation, accepted that in general terms he was the right man for the job.
I would therefore say to my noble friend that it is certainly right to assert that the individual in question would need to have enormous experience, wisdom and ability. But the task of consultation, in my view, could easily be carried out in one session. Members of
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Parliament, who are continually meeting new people, have the facility, as the Minister will agree, to be able to assess characters very quickly. It is something that they learn very quickly.
I have no doubt that consultation would easily be achieved within the scope of one meeting. The delay of seven days that might be caused would be far less an argument than the argument I have already deployed of having the right man acceptable to Parliament, with good advice available to the Secretary of State together with support for the Secretary of State who would know, if difficulties arose, that there had been this consultation.
I agree with my noble friend that the amendment is not as good an amendment as the first one. The first amendment related to consultation with a committee of your Lordships' House. It would have removed any possible charge of partiality and political partisanship and there would have been no problem of putting further work on to over-loaded Members of the other place. Unfortunately, that amendment was not accepted. It was, as already stated, brushed aside. I hope, therefore, that as we proceed to put forward by way of compromise suggestions that are less acceptable on this side of the House but, as a consequence, we trust more acceptable to the Minister, there will be developed an attitude of goodwill that will enable us gradually to find some meeting of minds. I hope that this amendment will be such an occasion.
8.45 p.m.
Lord Whaddon: I am grateful to my noble friend for that clarification. I must take issue with him over his opinion that one session would normally be adequate. My noble friend has years of distinguished service in financial matters. Who was it who said that accountants know the cost of everything and the value of nothing? They take a limited view. It is a very necessary and essential view, but also a partial view. It relates to only one aspect. I am afraid that my noble friend has tended to take too narrow a view of this job. I am constantly impressed by the explosion of technical expertise and technical development in the world that is rising exponentially and that will continue to go up. I remember some years ago being involved in a two-month fight with the Government over a change of one word in a Bill. It related to the chemical industry, my own industry. The Bill referred to duties that would be refunded for mixtures. The word should have been "compounds". I explained to the Ministers concerned that there was a vast difference between the two words. They could not see it. The reason was that they were not skilled in the arts of chemistry. It took many weeks, with millions of pounds hanging on the outcome, to get that one word changed. The same will be increasingly true of the gas industry.
It is not simply a matter of putting in large amounts of gas at one end of the pipe and taking it out in small amounts at the other. Increasingly the private company will find itself under the pressure, always experienced by private companies, of trying to maximise profits. When we have finished with the Bill the salesmen of British Gas plc will come forward as

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never before in the gas industry and they will be under pressure to sell not just gas but also added value components to the service. They will be told that they are selling service and value and not just selling therms of gas. If they can sell an electronic device, a timer or an infra-red control which means that the housewife need never go to the stove but can simply press a button from her armchair, they will find that they are selling love and care for the family and not just so many therms. In return they will be able to collect for their shareholders a much higher premium. This is where the real danger will lie in the future.
It is relatively simple to keep control over the price. We have seen this incomprehensible jargon that we shall be discussing later in the Bill by which the price per therm shall be governed. I believe that on the whole this is liable to work. The real danger to the consumer will not be the price per therm—that will be relatively easily looked after—but the extras. How many housewives are aware of the pressures that will be put on them? Increasingly these days householders are rung up by people saying, "Have you got this device or that device?" There is also the pressure from television advertising showing that the really "with-it" family will have an electronic device on their stoves and that it only costs an extra £75. What is not disclosed, of course, is that as a condition of having the device there will be a maintenance contract costing £ 100 a year and that within five years the device will be overtaken by a new super device, and that they should scrap the one they have and buy a new one. I might inform the noble Lord that only yesterday—
Lord Swinfen: I wonder what relevance what the noble Lord is saying has to the amendment under discussion.
Lord Whaddon: I am grateful to the noble Lord for bringing me back to the subject. I can explain to him. As he appreciates, this is a complex matter. I am trying to explain that the whole regime under which a private company operates is different from that under which a public nationalised monopoly operates. Heaven knows! we have been told that this will lead to greater efficiency. Perhaps it will: I hope so. But there is another side to the coin. There are dangers of which we must be aware. We are trying to protect the Government from rushing ahead, putting their foot in it and creating difficulties not only for themselves but for the consumers.
I am trying to get across this point. Boards are working to maximise the profits of private companies, which is their main duty. If the noble Lord buys shares in this company he will be anxious for it to increase its profits. He will like to see it advertising new devices which will have a higher profit margin. He will know if he has been concerned with private companies that the salesmen are constantly told by the boards "Go out and sell this adjunct, this additive, because it has a higher profit margin. We do not make our money on the bulk. We make the main profits on the little additives here and there". This will apply to gas in just the same way. We have seen this in other industries.
The safeguarding of the public interest requires that the officers concerned with the protection of the public must be aware of the pressures operating on the
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salesmen. They will only be doing their job, but unless we protect the public they will be in danger of being exploited.
The appointment we are considering tonight must be of a man or a woman fully aware of these dangers. If a Joint Committee of the House of Commons or the House of Lords is not aware of this, then it needs to be. Who else will protect the public?
I should have preferred the previous amendment. That referred simply to an appropriate committee of this Chamber. But I realise that that cannot be so at this stage. I therefore bow to the wisdom of my noble friend and I am willing to agree with what he has suggested in this present amendment.
Lord Williams of Elvel: I want to make two points very briefly. First of all, this is the last amendment, as I understand it, which deals with possible parliamentary control or influence on the appointment of the director at this stage of the proceedings in Committee. Once we pass this amendment we then get on to different matters. If the amendment is not accepted we then lose, it seems, the ability of Parliament to influence the appointment of the director.
I do not want to repeat what I said at an earlier stage. The appointment of a director is, from our side, a fundamental question. The director's office will form a separate government department. He will have his own Vote. He will be his own accounting officer. I do not think that one can lightly brush that aside as not being a consideration of the utmost importance.
The second point is that by introducing some form of parliamentary consultation on the appointment of the director there would automatically be parliamentary consultation on the reappointment of the director or the appointment of a new director. Therefore, although it might be a one-off position at first, nevertheless, when he came up for reappointment, Parliament would in some form have its input to make. I very much hope that the noble Lord the Minister will recognise these as being serious points, because it is a matter of importance to this side of the Committee.
Lord Gray of Contin: We have had another fairly in-depth discussion on this matter. I do not think I would volunteer to act as arbiter between the noble Lords, Lord Diamond and Lord Whaddon. I do not think either was able to convince the other, and neither has been able to convince me.
I am quite sure that we should consider the additional difficulties which would be raised by consultation with both Houses of Parliament. Suppose, for example, that the committees of the different Houses had totally oppposed views. How would that assist the Secretary of State? It is far better to proceed as we propose in this legislation and leave the clause as it stands. We should leave the matter to the Secretary of State who will be responsible, like any other Minister, to Parliament for his actions, and he will have to defend these in the normal way in Parliament, if necessary.
I should also add that under this Bill the Secretary of State in exercising any of his functions, including that

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of appointing the director under Clause 1, will have to be guided by his duties under Clause 4. We shall debate these more fully before too long—or perhaps not for quite some time at the rate we are going at the moment—but time will pass and we shall debate Clause 4 ultimately. The Committee can look again at what is proposed there and will have another opportunity of discussing it.
I thought that the point made by the noble Baroness, Lady Seear, was worthy of note. She was concerned about consumer protection. The noble Baroness, in an eloquent speech, in my view put the case for privatisation. I thought her speech was an excellent one, which highlighted the benefits of privatisation. I have no doubt that some of her colleagues opposite may find that a little uncomfortable but I certainly found that I was in agreement with much of what she said.
Baroness Seear: I spoke of the benefits; but I was also underlining the dangers.
Lord Gray of Contin: I did not suggest that the noble Baroness did not make a balanced speech and had not considered both angles. I was particularly attracted to the benefits, she will not be surprised to hear. However, as I was saying, a new approach is needed in order to protect the consumer properly. That is what we are providing under the Bill.
The noble Lord spoke about the advice from the Civil Service to the Secretary of State. He asked whether such advice will be given to the Secretary of State. The answer is, yes of course it will. He will have the opportunity of listening to advice from other sources, too. I am quite sure that in making this appointment the Secretary of State will give full attention to and take full account of all the advice put to him from any quarter, including that from Members of this Committee and indeed from Members of the other place. However, that does not mean that it is necessary to write into the legislation the proposals which the noble Lord has put forward any more than it would be appropriate to have written in the proposals which were debated on Amendments Nos. 1 and 2.
I must make this point. These amendments were not brushed aside by the Government. They were brushed aside by Members of this Committee. They went to the vote and were defeated. They were defeated by the Committee. That is a point of which we should not lose sight. The noble Lord, Lord Stoddart, used for him a not very convincing argument. He sought to use his experience as a member of the Select Committee which studied nuclear power and which eventually came out opposed to nuclear power—with reservations about nuclear power.
Lord Stoddart of Swindon: The noble Lord is completely wrong. It did not come out against nuclear power in any sense at all. It said that part of the Government's nuclear power programme was not correct and it criticised the CEGB. But it is completely wrong to say that it came out against nuclear power; quite the reverse.
9 p.m.
Lord Gray of Contin: I withdraw that. Of course, I apologise to the noble Lord. I did not mean to misrepresent him in any way, and if that is the correct fact, then I withdraw. He used the argument to support the fact that here was a Select Committee which had come to a conclusion with which I did not agree; nor, I think, did a great many other people support it. Nuclear power has made a very significant contribution to energy in this country. Indeed, that element of the Government's energy policy which included nuclear power has contributed substantially to it; so I did not find that a very convincing argument for using the Select Committee system for the purpose which is suggested by the noble Lord, Lord Diamond.
The noble Lord, Lord Diamond, in talking about political input to appointments, spoke about the need for political input from those who have political surgeries, for example; in other words, Members of Parliament who are used to assessing these things. That is precisely why we are giving the power to the Secretary of State. We are giving it to a politician, if that is what the noble Lord wants. He suggests that he wants a political input. He himself suggested that the Secretary of State was a politician, as he always must be, of whatever party, and he has the power under the Bill to make the appointment after availing himself of the best guidance and opinions available to him.
This has been a useful 56-minute debate, but I am as unconvinced as I was in minute one. I thought that the exchange which took place between the noble Lord, Lord Diamond, and the noble Lord, Lord Whaddon, highlighted the difficulties which exist. Those who are commending this measure to the Committee would need to get their act much more together and to give a much more convincing argument before the Government can consider it. Therefore, I must ask the noble Lord if he is prepared to withdraw the amendment, and would tell him that if he insists on pressing it I shall have to oppose it.
Lord Bruce of Donington: The noble Lord disappoints us a little. Nobody who has spoken so far has tried to take any power away from the Secretary of State. All that has been imposed on him is the obligation to consult. The noble Lord will observe that there are alternatives proposed within this particular amendment. It says:
"after consultation with the appropriate Committee in each House of Parliament, or with the appropriate Joint Committee of both Houses of Parliament,".
The option is there. If, for example, he consulted the Select Committee in the Lords and the Select Committee in the Commons and they gave him conflicting advice, he would act on the best of his judgment, but at least he would have consulted with them. That is really all that is required.
The noble Lord has brought all this upon himself really. He started off with a proposition that one of the main reasons for the introduction of this silly Bill was that the Government departments are not capable of giving effective guidance to a nationalised industry, that they are interfering and that they are bureaucratic. The intellectual limitations placed upon the department of state are intellectual limitations that he himself has imposed on them: either they are capable

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of advising him properly or they are not. If they are capable of advising him and he can arrive at wise decisions, there is no point in privatising the industry at all.
The whole essence of the proposal is to remove it from bureaucratic control, thereby implying that all bureaucratic control is dumb and unintelligent and is incapable of arriving at the correct conclusion. The noble Lord wants to have it both ways. He wants to call the Civil Service fools, which is what he is doing in polite language. Nobody can say that this present Government have done anything other than hurl veiled insults at the Civil Service ever since they have been in office. Yet he is now depriving himself of skilled advice from either House of Parliament.
The Minister himself needs a little education. If the Committee refers to pages 6,7 and 8 of the Marshalled List of amendments, they will find occupying many pages—to be put in as a Schedule at our suggestion—the authorisation to be granted by the Secretary of State for Energy to a Public gas supplier under Clause 7. We shall want to know whether the Secretary of State for Energy to a public gas supplier under Clause 7. We shall want to know whether the director-general who is appointed will have to understand it thoroughly. I doubt whether, despite the skill of the noble Lord's Parliamentary draftsmen, his bureaucracy—the term is his—can understand it either. The necessity for having consultation before the new director is appointed is therefore all the more necessary.
The noble Lord has referred to delay, such as the delay that occurs sometimes, as the noble Lord Diamond said, when a matter goes before the Senate in the United States. Why is the time factor so important in getting this new privatised set-up actually in operation? What is the urgency about it? Where is the public clamour for it? The only urgency is that the Government want to get their hands on the cash in order that they can make the appropriate tax reliefs before the general election. That is the only reason for urgency. This is not public duty, and I invite the Committee to reject any suggestion that this process as suggested by the noble Lord, Lord Diamond, would result in undue delay.
I sincerely hope that the Committee will dismiss the explanations given to it by the Secretary of State, which I must say are unworthy of the noble Lord, and that they will vote for this very sensible amendment.
Lord Diamond: I am grateful to the noble Lord the Minister for such attention as he felt able to pay to the arguments which we put forward in supporting this particular amendment. I am also grateful to him for drawing attention to the fact that we on these Benches are prepared to discuss the matter with great objectivity, no matter whether or not it results in differences of view. I am delighted that my noble friend Lord Whaddon, who has far greater experience in this field than I, was so impressed by the weight of experience, skills and ability that would fall upon the proposed regulator that he felt that even the process of consultation could not necessarily be carried out in one meeting of the Select Committee.
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There is a difference of view about how long it will take to do something which one has never tried to do before. There is no problem about that on this side of the Committee. We do not feel regulated to troop in upon getting the telephone call, as Members do on the other side of the Committee. I have my simple methods of ascertaining whether the final call is coming through because there are two or three noble Lords who always turn up on that occasion. They are good friends of mine and they enter the Chamber at the end of the argument in order to walk into the appropriate Lobby as good, noble and loyal members of the Government. That is how they proceed on that side of the Committee. So be it. However, we do not proceed in that way on this side of the Committee. I am very grateful to the noble Lord for drawing attention to the fact that we are able to express differing views as to what might happen in circumstances which so far have never occurred.
I return to what the Minister said about the actual amendment. The noble Lord objected to my statement that he, and therefore the Government, had brushed aside the views that we had put forward on the previous amendments. I stick to that. It is unfair of the noble Lord to blame that brushing aside onto the Committee and say "It is the Committee which made these decisions; it is not us, the Government". Of course it was "Us, the Government" and of course, as I have already indicated, some noble Lords and noble Baronesses were present throughout the debate and listened to it all. They were fully aware of all the details and therefore fully entitled to take whatever view they did in fact take.
As we all know, that does not apply to all those Members who come rolling in either after the Division Bell or at the point when the debate is nearly over. Therefore, the noble Lord ought to stand by his own responsibilities. It was he who brushed aside our arguments and we regret that very much. As has already been indicated, many aspects of the last amendment are better than this particular amendment. I still believe that the noble Lord ought to accept at least this amendment, which only goes as far as suggesting that the Secretary of State should consult, and in that sense should have cover from Parliament. I do not know what has happened to Ministers these days.
Noble Lords: Go on!
Lord Diamond: I do not know what has happened to Ministers these days and I also do not know what has happened to the normal courtesies which apply. As I was saying two or three minutes ago, I do not know what has happened in these latter days but I hope very much that the Government will accept—
Baroness Gardner of Parkes: I thank the noble Lord for giving way. Perhaps I may point out to the noble Lord that those sitting in the second row of seats find that their voices are heard only with great difficulty in other parts of the Committee. On this side of the Committee we often have considerable difficulty hearing the noble Lord. I know from experience that one has to be in row one or row three in order to be

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picked up by the microphones. Therefore, perhaps I may ask the noble Lord to speak a little more clearly.
Lord Diamond: I am most grateful to the noble Baroness. What she has said is absolutely right. For the past three years we have been dogged by this problem. We have been told that in many quarters of the Chamber it is impossible to be heard from this Bench. We have tried every way of inviting the authorities to provide stronger or differently placed microphones, but unfortunately that has not been done.
Lord Whaddon: Will my noble friend give way?
Lord Diamond: No, not at the moment. Albeit I am grateful to the noble Baroness for her remarks, I am even more grateful to her for not saying "We cannot hear you on this side of the Chamber, thank God"!
In winding up on this amendment I respond to what the noble Lord the Minister has said by saying that it is a pity that the Government seem determined to take the view here and on other occasions that consultation with Parliament is a time-wasting effort. It is very unwise. The Government can save themselves lots of criticism and trouble later. It is a good investment to get cover in Parliament by a Secretary of State putting forward in the appropriate way his views, and consulting. We are not asking for anything more than that. I want to impress on the Minister how keen we are that some amendment of this kind should be accepted.
I know that the Minister did not reject it completely out of hand, and he invited me to withdraw the amendment. I am going to suggest to the Committee that perhaps the best thing would be to consider carefully what the noble Lord the Minister has said, and when we have had a chance to read the Official Report to come back again—and we shall certainly be coming back again—at the Report stage with an amendment which is more suitably drawn.
9.15 p.m.
Lord Gray of Contin: I am grateful to the noble Lord for giving way. It is of course his pleasure whether he withdraws the amendment and comes back at a later stage or not, but I must make the record clear. What I said was that if he sought to force the amendment, then I would have to oppose it. I did not suggest to him to take it back and look at it again, because that would give the impression to the other side that I was prepared to look at this again myself. I am not prepared to look at it again. If the noble Lord cares to bring it back in another form that of course is his pleasure, and we shall consider it at that time.
Lord Diamond: I was not suggesting more than that. I was not putting any words into the Minister's mouth. We on this side have to take what small crumbs of comfort we can. We know that we are in a situation in which, whenever they want to do so, the Conservative opposition can vote out any proposal we put forward. We realise that full well. We know that whatever the merits of the argument we cannot convince the Committee if they are not here to listen to the arguments, but if they come in in droves and vote us
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down. Therefore, we have to be satisfied with crumbs from the rich man's table.
It is in that respect that we look forward to having a further discussion when time has been given for the Government to realise that there is a major widespread criticism of this Government's attitude that they do not consult, and that in particular they do not consult Parliament. It would be wise for the Government to take that criticism on board and do something about it. In the meantime, I hope I have leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 4:
Page 1, line 8, after ("officer") insert ("with detailed knowledge of the gas industry and of consumer interests").
The noble Lord said: This, I suppose, is the fallback amendment. We discussed earlier this afternoon in the amendment moved by the noble Lord, Lord Ezra, the possibility of setting up commissioners rather than an officer. But the Committee this afternoon—in my opinion unfortunately—decided to reject that amendment. It may well be that there will be another opportunity for them to discuss a similar amendment at a later stage of the Bill. Nevertheless, this amendment seeks to ensure that any officer who is appointed should have a knowledge of the gas industry and of consumer interests.
It is a short but important amendment which attempts to write into legislation the necessity for the director general to have a knowledge of the gas industry as well as consumer affairs. The British Gas Corporation is a formidable organisation to attempt to regulate. It is a private monopoly with over 90,000 employees and massive resources.
As we have heard this afternoon, the United States regulatory experience has shown that regulators need to be familiar with the industry if they are not to be out-manoeuvred, and the performance of Oftel does not encourage public confidence in the effectiveness of someone with an academic background. During the debate on Lord Ezra's amendment, my noble friend Lord Williams outlined—and I am not going to go over it all again—the sort of businesses that British gas has. It was a formidable list indeed. That is why we say and believe very sincerely that anybody who is appointed as the director should have a wide knowledge of the gas industry. Indeed, it is essential that he should have a detailed knowledge of the gas industry as well as of consumer interests.
When we discussed the Telecommunications Bill we were assured that the director of Oftel would have sufficient clout and resources to defend the interests of consumers. We now know from experience so far of the privatised telecommunications industry that the director—I do not wish to criticise him in any way on a personal basis—does not have the clout and indeed it appears that he does not have the knowledge of the industry itself to enable him to work properly, and as Parliament expected, on behalf of consumer interests. That is the experience so far. We ought to learn from experience; that is what it is all about.
Not only should members of the Opposition learn from experience, but one should have thought that the

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Government would learn from experience. I had hoped that, having seen how the director of Oftel has been underresourced and is in great difficulty in dealing with British Telecom, the Government would have wanted to do something different here. We are trying to ensure that the Government do something different by appointing someone with detailed knowledge of the gas industry and consumer affairs. That is what we want and nothing short of that will do.
The Director General of Ofgas will have fewer powers and duties than the Director General of Oftel, so far as I can see. If that is not so, it would be useful at this stage of the Bill if the noble Lord would explain to us why the director of Ofgas does not have fewer powers under this Bill than the Director General of Oftel. Noble Lords would be very interested in that and it would assist them in the later stages of the Bill. It is absolutely necessary that we have an officer who is not merely a banker or an academic used to the dreamy and leisurely environment of the university campus, but somebody who is in touch with the gas industry, knows the gas industry, knows consumer thinking, and indeed, has been at the sharp end of business. That really is most important. Gas is a business and it needs somebody who knows a lot about business to be able to act as the regulator.
The person appointed will be dealing with Sir Denis Rooke. We all know Denis Rooke. I admire the man so much. He has been a superb officer. What he has done for British Gas has been almost indescribable. I am thinking of the way he has pulled that industry round. We know that he is a tough cookie whom most if not all of us admire, even though perhaps we have had our own fingers burnt when we have crossed swords with him at some time or another. He knows the gas industry inside out, back to front and every other way.
He was brought up in the industry. He has been in the industry all his life. Here is a man to be reckoned with—make no mistake about that! In fact he will be able to run rings around any director not as tough and as experienced as he is. We are entitled to know from the Government what sort of person they intend to appoint as director. Surely that is the least that we can expect. Here we are discussing this massive and almost incomprehensible Bill and we are discussing a director. We ought to know from the Government, who have rejected any form of parliamentary control, what sort of person they intend to appoint. That at least, would give us a little reassurance. I hope that the noble Lord will give us a lead when he winds up later on.
Will the Government, for example, ensure that he or she has a wide and detailed knowledge of every aspect of the gas industry as outlined by my noble friend Lord Williams—the supply of gas, distribution, installation of equipment, safety and showrooms? Is the post to be full time or part time? We do not even know that; we have not been told. We should like to know whether this is to be a full-time or a part-time appointment. Can we be assured that the director will be expected to devote his whole time to looking after the interests of the gas consumer, or will his contract allow him to have a few jobs or directorships on the side? That is another important question which we should ask and to which we are entitled to have an answer.
What is his salary to be? We have no indication, no idea, of what his salary is to be. And that is very important. We need to know what his salary is going to be because his status vis-à-vis British Gas plc and its chairman may well be discerned by the relative salary levels of both appointments. If there is a great disparity, people will of course form their own views about the relative importance of both appointments. And in this connection it is interesting to note that in the case of British Telecom—and we are back again to British Telecom—the chairman's salary has rocketed from £67,900 in 1983, before privatisation, to £160,000 in 1986 after privatisation.
Lord Diamond: Is that a year or is it a century?
Lord Stoddart of Swindon: I am sorry to tell the noble Lord that it is a year. He gets it every single 12 months. It is £160,000 every year. I think it is taxed, but it is a 130 per cent, increase in three years.
So much for income policy. Here we have a Government and, indeed, people in industry telling workers that 6 per cent. is too much—6 per cent. a year, which is about 20 per cent. over three years. And we see that the chairman of British Telecom has had an increase of 130 per cent. in three years. On this basis Sir Denis Rooke's salary will zoom from £65,000 a year to at least £150,000 a year. Is it intended that the director of Ofgas should have a similar salary; or is he to be regarded as the poor relation of Sir Denis Rooke and treated as such by him?
As I said earlier, the salary relationship is an important one and we need to know the Government's thinking on it. Is the salary to be £35,000, £50,000, £75,000, £100,000, or what? The Government must have some idea. It will be of no use the noble Lord, Lord Belstead, saying to us tonight, "We don't know". If he says that to us, it will show either that they do not wish to give the information or that they do not know. And if they do not know, that is incompetence of the worst order. I hope that the Minister will be able to give us some idea of the salary that it is intended to pay the director-general of Ofgas.
We need answers to these questions. In our view the Government, in their mad stampede to privatise British Gas in time to finance an election bonanza, have given insufficient thought to consumer protection and have brought forward this weak, regulatory regime. They need to assure us that the director-general has not only, as I have said, to know the gas industry from back to front but also to know what the interests of the consumers are, because he has had some experience of consumers in the gas industry. I hope that the Government will give us an answer and assure us that the person who will be administering the regime does indeed have the necessary qualifications to do a first-class job on behalf of the consumers.
9.30 p.m.
Lord Belstead: Before the noble Lord, Lord Whaddon, speaks, may I just ask whether he will be speaking to Amendment No. 5?
Lord Diamond: I understand it would be for the convenience of the Committee that Amendments Nos. 4 to 5 should be discussed together. I was proposing to follow on what the noble Lord has just said—
Lord Stoddart of Swindon: I am so sorry. I should have indicated that when I spoke. I apologise to the noble Lord.
Lord Diamond: Not at all; I think we understand that. I hope it will be for the convenience of the Committee if I now rise to explain, but not to move, the amendment standing in my name and the extent to which it differs from the amendment which has already been moved.
I want to support very strongly the amendment that has already been moved for the cogent reasons that have been given. I add that this amendment is an alternative, and I want to explain why I thought when I put it down, which of course I did before I had seen the amendment in the name of the noble Lord, Lord Stoddart, that it was on the whole a good amendment. I now think it is an even better amendment than the noble Lord's, if he will forgive me saying so. I shall endeavour to explain it.
My amendment is a probing amendment, intended to find out what the Government have in mind with regard to satisfying themselves that they are going to find this giant—a giant in terms of mental capacity and of strength of character—who is to carry this fantastic weight on one pair of shoulders. What we want to know are the qualities which they think are the minimum essential to find in this one super-human individual.
We think he is bound to be super-human to be able to do the job adequately. That is why we suggested at an earlier stage that we should need at least three commissioners to combine the necessary knowledge and experience to be able to stand up to the chairman and the board of the privatised gas corporation in an attempt to protect the consumer and to ensure the maximum efficiency.
I assume—and perhaps the noble Lord the Minister will correct me immediately if I am wrong—that it would be reasonable to suppose that the board of the new privatised company would consist of at least 10 members. He cannot give me an answer as to how many there would be, because that is within the control of the new company. But having regard to the size of the board at the moment and the fact that its functions are to be no less but will indeed increase over the years, I assume it is reasonable to suppose that the individual regulator will have to match the abilities, skills, weight of opinion and character of at least a chairman and board numbering some 10 very competent individuals. The purpose of putting down this probing amendment is to find that out.
Why do I think that it is, if anything, a slightly better amendment than Amendment No. 4? It is not that there is magic in the words "full knowledge" as opposed to "detailed knowledge". It is not that there is magic in the words "adequate experience of consumer affairs" as opposed to "detailed knowledge … of
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consumer interests". Both descriptions could be construed as covering the same needs.
The reason I think it is a slightly better amendment is that the Government pointed out at an earlier stage in the other place, when this matter was being considered, that it was unwise when you were dealing with a number of qualities which were required of an individual to particularise one of them only. With respect, and having regard to a good deal of experience that one has had in legislation, I think that that is found to be good advice and a good reason for the Government's suggestion that the amendment which was moved in another place had that slight defect. Of course, it could easily have been amended had the Government wanted so to do, but it was not.
This is in order to help the Government, and in order to enable the noble Lord the Minister to get up and say "I indicated to the noble Lord, Lord Diamond, that it was not necessarily the case that we were going to brush aside every single amendment on the Marshalled List, and here is a case in which I can give way and help him suggest a modification" or whatever. I am hoping that the inclusion of the words "in particular" will cover that point.
What is being suggested is that the person to be appointed under Clause 1(1) should be an officer with either "full knowledge" or "detailed knowledge" of the gas industry "with … adequate experience of consumer affairs" or "with detailed knowledge … of consumer interests" in particular. All sorts of other qualities would be required, and those we are asking the noble Lord the Minister to describe. That is why this is regarded at this stage as a probing amendment.
Lord Sanderson of Bowden: I should like to intervene in this part of the discussion because I have a great deal of sympathy with what the noble Lord, Lord Stoddart, has said about detailed knowledge of the gas industry and of consumer affairs for this giant of a man as he has been described. However, I am somewhat worried that if we write these words into the Bill we are going to decrease the number of possible candidates for this very important job. In the whole of the discussion this afternoon and this evening we seem to be wishing to increase the number of examiners and to decrease the number of candidates. The second would be a great shame.
I feel very strongly that one phrase which was used by the noble Lord, Lord Stoddart, will be very important when the Secretary of State comes to decide what sort of man should do the job. He said that he should be someone who has been at the sharp end of business. With that phrase I totally agree, because if you are going to deal with Sir Denis Rooke or any other strong leader of an industry with vast experience the choice is very important. I do not feel that to limit the choice at this stage to somebody who has knowledge of the gas industry or of consumer affairs is necessarily fair either to the person himself who has to do the job or to the industry which he is to serve.
While agreeing with the objective of trying to get at the person who will have to do the job, I feel that to write it into the Bill could be counter-productive. I say that with some experience of industry. I know very well that it is not necessary for the best captain of industry to have been brought up in one industry. He

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may, for instance, have changed to another industry in mid-career. That has happened with very good effect. And if the Committee will forgive me for saying so, it also happens in politics. Very many Ministers who start off being good on one particular subject—be it transport, Treasury matters or whatever—end up with totally different portfolios and are very good at covering their subjects. That might even be said of the present Leader of the Opposition who has a lot to learn perhaps about commanding respect in any department that he may have to cover in the future. In conclusion, I feel that we should be very careful about being too restrictive in looking for what has been described as a giant to deal with an important job.
Lord Diamond: Before the noble Lord sits down perhaps I may say that I followed every word he said and I am grateful to him for intervening. It is obvious that he speaks with knowledge of the subject and, if I may say so with respect, he is equally right in his conclusions with regard to business as he is in his conclusions with regard to politics and Ministers. May I ask him therefore what objection he has to the form of words used in the second amendment, "in particular, a full knowledge", in which the other requirements are deliberately not excluded? What objection would he have to a form of words of that kind, which are not restrictive in any way?
Lord Sanderson of Bowden: In reply to that, it would obviously be very useful for the said gentleman to have knowledge of consumer affairs, but I know, and I think the noble Lord will know, many captains of industry—the noble Lord, Lord Stoddart, referred to people who have been at the sharp end of business—who may not have knowledge of consumer affairs. I should hate to have their names excluded from any possible list. You will probably find after a very short time that somebody of that calibre would pick up the whole ethos of consumer affairs, which is a very important part of the job.
Lord Whaddon: These suggested amendments are necessary. They stress again the vital importance of this appointment. As I mentioned earlier, the industry will be operating in a completely new universe where the importance of achieving profitable sales is the criterion on which a man's performance, his future career and his pay will be decided. Whoever is to be the director must be well versed in the techniques of salesmanship and of gaining profits, as well as the techniques that verge on trickery which are sometimes used to maximise profit.
I take, for example, what has happened in regard to many foreign cars which started some years ago to come into the country cheaply. People were startled by how cheap some of these foreign cars were. They bought them because they were cheap, not realising that the profit of the foreign companies would be earned in later years on the sky-high costs of spares. This is drummed into salesmen. They will often sell a product cheaply and make the profit on its adjuncts. Once a housewife is hooked on a particular appliance—and sales are usually made to housewives—that appliance can rapidly be made redundant.
9.45 p.m.
I had a beautiful example of that with British Telecom recently. I have been under pressure for a long time to buy one of the new super telex machines. I have seen advertisement after advertisement, and I have had sales rep after sales rep onto me about the wonders of those new machines. I was perfectly satisfied with the machine which I had had for several years and which performed beautifully, and I wanted to keep using it.
However, out of the blue there suddenly arrived a notice to say that from immediate effect maintenance on the old machine would cease and would no longer be provided. Against my will and against my interests, I shall be obliged to buy a new machine. That is the kind of technique used to maximise the profitability of companies that previously worked as nationalised industries and as a public service. In future, they will be working to maximise their profits, and the director general must know that world.
Sales techniques involve, for example, the setting out of shelving in stores. Any parent knows that when one goes into a supermarket, one has to walk to the back of the store to reach the cheaper, everyday articles. To reach the items that one must have, one has to pull one's children past shelf after shelf of goods that they see and cannot avoid grabbing and putting into the basket.
Parents are almost forced to pay for items that they do not want. That is a standard sales technique. One sells not the goods themselves but mother love and father love. The television advertisement makes mention of:
"Hands that wash dishes can be soft as your face".
It is not the product's cleaning ability that is sold so much as mother love. There are deep forces in parents that are played upon, and those psychological pressures are the everyday means by which salesmen manipulate the public.
The same pressures will be used without question by the gas industry upon its becoming a private monopoly. Whoever is appointed to the position of director-general for consumer affairs must be aware not only of the technology of producing gas but also of the techniques of selling and of manipulating the market.
I shall mention one further technique, which concerns patents. We shall have a gigantic gas industry that will certainly put a lot of effort into developing new consumer goods and devices that use gas. Those devices will be patented as they are developed. By patenting those products, their inventors will produce a restrictive market that keeps competition out, and thus they will maximise their profits.
It may be argued, quite legitimately, that firms that put effort and expense into research are entitled to a decent profit, but there is more to it than that. Firms will continue their research, and if they find that there is a product due to come out of patent in five years' time and they have already developed the next generation of that product, they will not market the newer generation immediately. They will wait until the previous product is just about to come out of patent before marketing the product that is the subject

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of the new patent. They will thus extend the life of their research and production and they will maximise their profits.
Those are all legitimate techniques which are drummed into salesmen and which salesmen are taught on the courses they take. I do not blame them, for that is their job. However, it is imperative that the director general should be fully educated in those
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techniques before he is appointed. All the more reason why we were so anxious that he or she should be subjected to a thorough analysis before appointment.
I believe that both these amendments have merit. Personally, I prefer Amendment No. 5, but I should be most interested to hear what the Minister has to say. I hope he will show that he has absorbed the importance of the case that we have been making.
Lord Belstead: I fully accept the importance of the two characteristics which noble Lords have identified in Amendments Nos. 4 and 5. However, like my noble friend Lord Sanderson I would be against making special mention of these two particular qualities in the Bill, for the reasons which my noble friend gave, even though it is the case that the noble Lord, Lord Diamond, has so worded his amendment that it would only be "in particular" that the characteristic of expertise in consumer affairs should be taken into account.
Several noble Lords—the noble Lord, Lord Stoddart, in particular—asked what are the characteristics that the Government would be looking for in the director general of Ofgas. I direct your Lordships' attention to Annex A to Clause 1 in the Notes on Clauses, where there is a long list of the 21 different functions which the director general, when he is appointed, will be called upon to fulfil when the Bill becomes law. Therefore, there are important qualities which he will need in order to fulfil those 21 functions. These will include the ability to make effective judgments on the basis of assessments of all the relevant factors in a particular case, be they technical, legal, economic or otherwise.
On the previous amendment, Amendment No. 3, the noble Lord, Lord Whaddon, was really suggesting that the director will need to be a man, or a woman, who has a very wide range of qualities and expertise. In addition, of course, the director will, through the expert advice of his staff who will be working closely with the industry, consumer organisations and other bodies, be mastering his brief. He will need various skills if he is going to be an effective protection for the interests of consumers. He will, of course, have to manage his office effectively and ensure that all the tasks assigned to him by the Bill are properly carried out.
I conclude that although knowledge of the gas industry is going to be a very useful attribute to the director, I do not think it ought to be singled out and given statutory preference. On behalf of the Government, I feel the same about knowledge of consumer affairs. It is enormously important, of course, and recognised to be so, because in Clause 4 we have placed a specific duty on the director, as well as on my right honourable friend, to protect the interests of gas consumers. We are also providing for a separate body, the Gas Consumers' Council, whose whole purpose will be to protect consumers' interests. I hope that when we come to those clauses your Lordships will agree that we are making extensive provision in the Bill for the general protection of consumer interests in relation to the responsibilities charged on the director and the Gas Consumers' Council.
Lord Diamond: May I interrupt the noble Lord and ask him to clear up a point which is very relevant to what he has said but which is beyond my knowledge? He referred to an annex which I do not have with me—although that is my fault, I know. I take it he is not referring to a schedule, but to an annex. I ask him, therefore, what is the status of that annex? Is it to be attached to the Bill? Is it to be used for guidance? Is it
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to be published, or is it to be kept confidential? If it is to be published, I cannot follow the argument that it should not be put in the Bill but should only be put on a piece of paper, called an annex, which is published and which is, therefore, just as restrictive—in the terms that the noble Lord, Lord Sanderson, is anxious about, and I understand his point—as if it were in the statute itself. Therefore, can the noble Lord assist us on the status of this annex?
Lord Belstead: I apologise to the noble Lord for not making myself clear. I was simply referring to an annex called Annex A to the Notes on Clauses which has been put in the Printed Paper Office for any noble Lords who are interested, and to the note for Clause 1. That shows that there are broadly 21 different areas where it can be said that the director has functions if one looks through the Bill. Perhaps it would be helpful to the noble Lord if I briefly identify one or two of those functions.
For instance, in order to protect the interests of consumers, there are strong and effective powers for enforcement of obligations under Clauses 28 to 30, and that enforcement falls to the director. The director will have the ability to propose modifications to authorisations under Clauses 23 to 27 if circumstances concerning the control of the tariff market change and new provisions are necessary. The director will have the duty to investigate complaints under Clause 31 and other duties and powers such as advising consumers and powers to get information under Clauses 34 to 39. I have just mentioned a few of the functions of the director which I think, taken together, show that he will exercise strong and effective control over the industry and ensure that under privatisation the consumer will have a better deal.
Perhaps I may end by saying that I was interested that the noble Lord, Lord Diamond, with his great experience of the parliamentary process, said that he felt that picking out a particular characteristic or characteristics was undesirable. I had always understood that it was undesirable because it could suggest that other qualities were not worthy of mention and could be held to limit the qualifications which in this case the Secretary of State ought to take into account in choosing the director.
For that reason I say on behalf of the Government that I do not like Amendment No. 4. I have to say that, though the noble Lord, Lord Diamond, with his accustomed skill, has worded Amendment No. 5 rather differently, it also suffers from the same defect. It would mean that one characteristic, and only one, would be put more prominently than any other when it comes to the point of choosing the new director. I should have thought that that was something which the Committee would not wish to support.
Baroness Seear: The noble Lord has asked us to believe that this paragon will exercise strong control over the industry. As I listen to this debate I become more and more pessimistic and feel that this device for protecting consumers is eyewash. I simply cannot believe it. Like most of the members of this Committee taking part in the debate, I know and

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greatly respect Sir Denis Rooke. As I sit here, I am picturing the unfortunate fellow who, it is said, does not even need to know the gas industry, surrounded by advisers whom he has picked and who are probably being paid at a rate somewhere in the middle grades of the Civil Service, taking on Sir Denis Rooke and the very able directors he will have with him and arguing with them about what is going on in the gas industry. If the noble Lord expects us to believe that this is giving the consumer protection, he can expect us to believe absolutely anything. I am deeply depressed by the whole proceedings.
Further, what is this fellow to be paid! If he is any good he will be in the international market for an international industry. I spent several years on the Top Salaries Review Body and I know perfectly well that there are jobs which must be filled—and this will be one of them—but where there are only a small number of people who have even a hope of doing the job properly. These people are almost beyond price in the international market and there is not a hope in hell of getting them. This proposal is a farce in terms of consumer protection.
Lord Belstead: I would just ask the noble Baroness whether she has taken the trouble to read Annex A to the Notes on Clauses to Clause 1 or whether the noble Baroness, for whom I normally have a great admiration, took the trouble to listen to what I said in reply to the noble Lord.
10 p.m.
Baroness Seear: I listened very carefully. It was what the noble Lord, Lord Belstead, said that finally got me to my feet.
Lord Belstead: Very well. Which of the characteristics that I gave in answer to the noble Lord does the noble Baroness think is eyewash?
Baroness Seear: I think that the whole proposal is eyewash. That is the point I am making. We are being asked to discuss the details of a proposal that, as a proposal, is useless, in my view.
Lord Belstead: The trouble is that we are being asked to discuss an amendment ahead of discussing a great deal of the detail of what the director does. That is not the fault of the Government. It is the fault of the amendment that the noble Baroness is supporting.
Lord Stoddart of Swindon: Before the noble Lord sits down, earlier I asked him a number of questions. May I repeat them? I asked if the director was to be full or part-time. I do not think that we have had an answer. Will he be expected to devote the whole of his time to looking after the interests of gas consumers, or will his contract allow him to have directorships or jobs other than the directorship of Ofgas? I asked whether the noble Lord could give some indication of the salary that the Government had in mind for the director. I also asked the noble Lord to explain why he
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believed, if he does so believe, that the regulatory regime set out in the Bill is as strong as the one set out for the telecommunications industry. We need to know the answers.
Lord Belstead: I do not in the least mind being asked but, with great respect, the noble Lord would be the first to criticise the Government if we had made up our minds about the terms and conditions of employment for the director before the Bill had even started going through your Lordships' House. The fact is that no appointment has yet been made, and therefore the answers to the questions do not exist. What does exist is the fact that my right honourable friend is of course considering very seriously all the points that the noble Lord has put forward. It is for that reason that I do not in the least mind being asked the questions. It is absolutely right that we should go over this ground in debate. I repeat, however, that if I was able to stand up and say that conclusions had been reached on all those questions, I really believe that the noble Lord would say to me that the Government were treating the Committee with disrespect when the Bill had only just begun going through your Lordships' House.
Lord Stoddart of Swindon: I understand that. But, unfortunately, I have been a little confused. I understand that the chairman of the new gas consultative council has already been named. That is the first thing in advance of the Bill going through. I also believe that some advertisements appeared in the Guardian yesterday for staff. If so, it seems that the Government have made certain decisions—about the gas consultative council, anyway. One of the reasons that I asked the question was that I thought that the Government would have made up their minds and that they would indeed have been able to give us information. What is going on?
Lord Bruce of Donington: The noble Lord was kind enough to refer to Annex A in the hope that it would give us some enlightenment as to the Government's thinking about the qualifications required by the director general. All that Annex A is, in fact, is a sift through the various clauses summarising in respect of each relevant clause where the director general has something to do. For example, there is the collection of information under Clause 34. It does not require a genius to collect information. The rest is very much on the same fines. The noble Lord tried, I believe, to confuse us, albeit unintentionally, by referring us to Annex A as being a schedule of qualifications when it amounts only to a summary of the functions under various parts of the Bill. The noble Lord may reply that he has to have certain qualifications to carry out these functions. That is legitimate. I am bound to say that I think the noble Baroness, Lady Seear, encapsulated the whole business by saying that this is a lot of eyewash. Of course it is; but it has to be.
The noble Lord has two tasks to fulfil. He is trying to fulfil them both at once, and it is most difficult. The first is to convince the Stock Exchange and the institutions that the limitations put on the new free enterprise concern will be cut to the minimum, because the more ineffective the director general will be the better it is for

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the profits of the industry. Indeed, the noble Lord has read the newspapers as much as anybody else. He knows that when the Bill was published, even in the Financial Times, which is not normally a paper bought in the Walworth Road, they were discussing quite openly that his Minister would have to be very careful not to restrict the industry too much by laying down too rigid terms; Otherwise investors might be scared off. That becomes a relevant consideration now, in view of the fact that they will have the additional anxiety of the decline in the price of fuel generally following the decline in the price of oil.
I can see that the noble Lord has the task of convincing the City, on the one hand, that the control will be innocuous and will therefore not affect profitability; and, on the other hand, he has the duty to the country and Parliament to persuade them that it is an iron regime which will be enforced with great skill in the interests of the consumer. This is the art of the Conservative Party. We are familiar with it. Indeed, I should like to congratulate the noble Lord, Lord Belstead, in particular, because I thought he attempted this part of the task very skillfully.
However, had the noble Lord been wise he would have conceded the amendments which were moved earlier. Those amendments tried to give the Secretary of State's relationship with the director general some credibility. He would have been wise to have done that. It might have affected the issue price of the shares and therefore the money coming into the Chancellor. But those who try this kind of financial gain have to expect that. However, he did not do that and I think it was a great mistake.
The trouble, which has been implicit in the amendments that have been put forward and in the long discussions that have taken place upon them—because we are aware of this duplicity, this double-dealing, on the one hand, to satisfy the Stock Exchange, and, on the other hand, to pretend to try to satisfy the Chamber—is the reason that the discussion has taken so long. This is the reason why, quite correctly, the amendments have been pressed to a Division.
Lord Williams of Elvel: I just want to join with my noble friend Lord Bruce of Donington briefly and repeat something that I said in an earlier intervention this afternoon. I believe that I am the only Member of the Committee who has run a regulatory authority and who has had the opportunity to have the sort of discussion that I think a future director will have with the chairman of British Gas.
I can assure the noble Lord, Lord Belstead, that the noble Baroness, Lady Seear, is absolutely right. Unless you have somebody (I should prefer a commission) and you describe that somebody who has the authority, the status and the international reputation to stand up to Sir Denis Rooke, or whoever is the chairman of the successor company, I am afraid that you are on to a loser. And if you are on to a loser in this particular field it will hang around your neck for the rest of the life of this Bill. I hope very much that the noble Lord will bear this in mind. I speak from very deep personal experience on this.
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I hope that the noble Lord will consider these amendments and make some concessions to us on this. It is eyewash, but it is very dangerous eyewash. It is something that I personally feel very strongly about. It is dangerous because if we are stuck with this then we are stuck with it for ever.
Lord Swinfen: Noble Lords opposite are trying to suggest that you get the best man for the job, but they are limiting it in these two amendments to a man designed for today. They are leaving absolutely no scope for a man to be chosen in a few years' time to deal with the needs of that time, which are not necessarily the needs of today. Needs change. The man who leads that industry may need to be a different type of man, with different types of skill.
Quite obviously, he must be a captain of industry. That means a leader of men, who will be able to get the best out of those who serve under him. He needs to do what is required at the time: to use the skills of others to get the gas industry moving in the right direction today; or he needs to go in a different direction in six years' time if that is what is necessary.
It is absolutely hopeless today having a man who is capable of designing and selling the Austin 7 when we have the Range Rover on the road. The market is totally different. The world is different today. The world will also change with gas, and it would be wrong to tie the hands of those who have to appoint the leaders of that industry, no matter which party they come from. Those opposite, if by any mischance they come to power in the future, may very well regret their actions if either of these amendments goes through.
Baroness Gardner of Parkes: Having listened to all the comments on Denis Rooke, it appears that some people in this Chamber seem to think there is no other man in the whole of the United Kingdom equal to him. After all, why a man? Why not a woman? I have the highest regard for Denis Rooke, as I think we all have, but to listen to this debate it sounds as if he were a most terrifying and impossible giant to deal with. That is throwing quite a false image before the House. There will be plenty of people capable of taking this job.
I have a certain sympathy with the amendment in that I think it is desirable to have someone who has experience in the gas industry, but I also appreciate the point that by tying in those exact words we may be ruling out someone who does not have the experience but who is 10 times better and more capable than the person who has. For that reason, I cannot support the amendment.
Lord Stoddart of Swindon: I have listened closely to the debate. I say first of all to the noble Baroness, Lady Gardner of Parkes, that we do not think that Sir Denis Rooke is a god, but he is a highly competent operator and a very competent person. We want to ensure that there is somebody just as competent who is regulating the business of which Sir Denis is chairman. We are not saying that there is nobody like Sir Denis Rooke. What we are saying is that there are people like Sir Denis Rooke, and we want to be assured someone like that is appointed as director of Ofgas. I hope I have made that point clear, because it is important that we

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get such a man. The noble Baroness knows Sir Denis Rooke as well as I do, and he is highly competent.
The noble Lord, Lord Swinfen, said that we needed a leader of men and that we needed to adjust to change. That is true. We need people who are leaders. The problem is that technical change is such that, if you do not have somebody with the basic knowledge of the technology, it is difficult for him to know what the changes are and whether they are beneficial or otherwise. Therefore, that is why we believe that he should have some qualifications. However, I must say that I listened particularly carefully to the noble Lord, Lord Sanderson of Bowden, and I was very impressed with what he had to say. I think that we should read what he said.
10.15 p.m.
I do not want to be painted with the same brush as the Government of not wanting to listen to what other people say. I should also like to give the noble Lord, Lord Belstead, the opportunity to reflect on the questions I asked him but which he was unfortunately unable or unwilling to answer—I do not know which. I should like to give the noble Lord the opportunity to give the Committee that information. Under those circumstances, in the light of the admirable speech by the noble Lord, Lord Sanderson of Bowden, and the fact that we really do not have the information, being reasonable I think that I shall withdraw my amendment. However, I may very well bring it back at some later stage. As I say, I shall withdraw my amendment, but if the noble Lord, Lord Diamond, intends to press his amendment, that raises a different issue as a matter of fact, a specific issue, and as he said it is a probing amendment. If the noble Lord presses that amendment to a Division, I think we would join him. I beg leave to withdraw Amendment No. 4.
Amendment, by leave, withdrawn.
Lord Diamond Lord Diamond moved Amendment No. 5:
Page 1, line 8, after ("officer") insert ("with, in particular, a full knowledge and adequate experience of consumer affairs")
The noble Lord said: I beg to move Amendment No. 5. I hope that your Lordships' Committee will permit me to say a few words about it because I deliberately avoided saying anything on it in response to the noble Lord, Lord Belstead, when he made a number of comments referring to it and to the arguments which I put forward.
I should like to deal, first, with the comments made by the noble Baroness, Lady Gardner of Parkes, and to thank her for the interest that she has shown in the debate and for her attention and attendance. We would of course want to meet her point of view in every possible way. The noble Baroness has misunderstood this point, and it is entirely my fault; or perhaps she was not here earlier when I made this point very fully. We are not claiming that you cannot have an individual who could stand up to Sir Denis Rooke. I have not had the pleasure of meeting the gentleman, and I accept that he is a very capable, powerful and effective businessman. We are saying: how on earth can one person cope with what Sir Denis Rooke has at his command? What he has at his command is, first, a board—a group of 10 or so individuals of enormous competence. That is why we want at least a commission—a small group—which
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will be able to stand up to that. Sir Denis Rooke has at his command a huge staff and investigators. We think that it is beyond the capacity of any single human being to have such qualities—
Baroness Gardner of Parkes: I thank the noble Lord for giving way. I appreciate the points that he is making. I consider that the points which he made very clearly and at some length earlier were relevant to Amendment No. 1, but they are not relevant to Amendment No. 5. As I read Amendment No. 5 I do not consider that it suggests a panel of people. Amendment No. 5 is really covering the special qualifications of one particular person. Therefore, I think his comments at this moment are not precisely relevant to this particular point.
I hold Sir Denis Rooke in the highest regard, but, as I said, I believe that there are other people in this country who could fill this post perfectly well. It think that if a number of people were under consideration and one had experience in the energy field, the gas field or the appropriate technology, that in itself would be almost a recommendation and an additional qualification and it would probably mean that that person was chosen for the post. But to say that a person must have a particular qualification changes the situation in that it rules out people who may have other parallel and suitable qualifications but who do not precisely match the very words set out here. It is for that reason that I oppose this amendment as I opposed the previous amendment.
Lord Diamond: I understand the point that the noble Baroness is making. We are on the same point. We would have preferred a commission of at least three commissioners. They might have been able to do the job. We might then not have had need of any of these amendments we are considering. But as we are now considering one individual we do not hesitate to say that that one individual shall have in particular one qualification.
I entirely accept what the noble Lord, Lord Belstead, said about the better way of legislating. But that point is met entirely in my view by the wording of the amendment, which says:
"in particular, a full knowledge and adequate experience of consumer affairs".
That does not rule out any other qualification at all.
I now withdraw the importance I attached to Lord Belstead's comments on the annex in which he was merely saying to me, "As I do not know the answer to the question as to who were the Prophets of Israel, I hereby give you a list of the Kings of Israel." We are not considering functions and duties; we are considering qualifications, as has already been pointed out. The qualifications are such that one of them, in our view, should be that which is proposed in the amendment.
In the view of some noble Lords or noble Baronesses—this is the great danger, and it proves the point I am making—it is not necessary to have an individual who at the time of his appointment has adequate experience of consumer affairs. I do not accept that. What I am saying is that this arrangement will not succeed if it is not seen by everybody at the start that the person appointed is likely to be able to

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look after the consumers' interests. That is the first requirement. You will get nowhere with this Bill, with the protection that is is claimed this Bill provides, unless you have an individual who is seen to be likely to succeed by virtue of his having,
"a full knowledge and adequate experience of consumer affairs".
Of course he may be able to pick this up in the course of two or three years. But he may make all sorts of mistakes in the course of two or three years and land the Secretary of State and the Government in considerable trouble as a result, as is happening with regard to Oftel. That is why this particular qualification should be possessed by the candidate who wishes to take on the job.
It is for that reason that I think my noble friend Lady Seear was right in saying not what the noble Lord, Lord Belstead, imputed to her, but what in fact she said—that this whole arrangement (not this particular amendment) is nonsense. It will not work. You are trying to find somebody with qualities which are beyond contemplation as being in the hands and brains of a single individual. That is not in the amendment before us. Because we could not get what we wanted, the amendment before us is the next best thing, that the population and consumers as a whole should see that the Government have gone out of their way to make sure of one thing at least: that the person in question shall have adequate experience of consumer affairs.
Although it is so late—I apologise for this—I cannot withdraw the amendment, which seems to me sensible in every way. It meets the arguments that have been put forward, it meets the anxieties expressed on the other side of the Committee and provides for the one drafting difficulty that has been mentioned.
10.26 p.m.
On Question, Whether the said amendment (No. 5) shall be agreed to?
Their Lordships divided: Contents, 14: Not-Contents, 21.

DIVISION NO. 3

CONTENTS

Bruce of Donington, L.

Pitt of Hampstead, L.

Dean of Beswick, L.

Ponsonby of Shulbrede, L.

Diamond, L.

Seear, B.

Gallacher, L.

Stoddart of Swindon, L.

Hanworth, V.

Whaddon, L. [Teller.]

Harris of Greenwich, L. [Teller.]

White, B.

Williams of Elvel, L.

McNair, L.

NOT-CONTENTS

Belstead, L.

Long, V. [Teller.]

Brabazon of Tara, L.

Macleod of Borve, B.

Caithness, E.

Maude of Stratford-upon-Avon, L.

Cork and Orrery, E.

Craigmyle, L.

Mountevans, L.

Elliott of Morpeth, L.

Reay, L.

Gardner of Parkes, B.

Saltoun of Abernethy, Ly.

Gray of Contin, L.

Sanderson of Bowden, L.

Harvington, L.

Skelmersdale, L. [Teller.]

Henley, L.

Swinfen, L.

Lindsey and Abingdon, E.

Trumpington, B.

Resolved in the negative, and amendment disagreed to accordingly.
10.34 p.m.
Lord Ponsonby of Shulbrede: Before the next amendment is called, I think that I should point out to the Government that it is the Government's responsibility to maintain a quorum in the Committee. If it had not been for the co-operation of the Opposition, there would have been no quorum at this time. I give notice that if there is another Division called this evening, we may not be able to co-operate on a second occasion.
Lord Diamond Lord Diamond moved Amendment No. 6:
Page 1, line 11, at end insert—
("( ) The Director shall, after consultation with the Secretary of State and with the appropriate Committee of each House of Parliament, appoint an Assistant Director with special responsibilities for Scotland, and an Assistant Director with special responsibilities for Wales.").
The noble Lord said: I beg to move Amendment No. 6.
I cannot imagine that the Committee will not regard this amendment with considerable sympathy and treat it as a very important amendment. We have so far been unable to persuade the Government that there should be a commission rather than a single individual, and that the commission as earlier put forward might, if it had had three members, in addition to the responsibilities described in that earlier amendment, have found it convenient to have one of those commissioners looking after Scottish affairs in particular and one looking after Welsh affairs in particular.
Certainly there can be no doubt whatever, whether or not you say it in the Bill, that the needs of Scotland and the needs of Wales are separate needs which have to be considered, and there is no doubt whatever that, in political terms, any Government which have no regard to these special needs and do not show that they are catering for these special needs are running into serious trouble and being very unwise in doing so. I hope, therefore, that on the first point I shall have the sympathy of the Government and of the noble Lord the Minister.
I have suggested that there should be consultation, of course, with the Secretary of State. Of course the Secretary of State is responsible to Parliament, and of course he holds high office and has a great deal to bring to the decision-making process with regard to the director and assistant directors. Therefore, he at least should be consulted. Then there should be consulted the appropriate committee of each House of Parliament.
As your Lordships know, I would prefer consultation with a Select Committee of the House of Lords. For the reasons I have given I think it would be a more manageable process, and one which was very suitable to the present activities and to the growing stature of your Lordships' Chamber. But that has not been accepted, and so I have kept it to the appropriate committee of each House of Parliament. I hope that consultation will be agreed as well.
The major point of the amendment, of course, is the regional aspect. I hope I can speak very shortly on that at this stage, because surely any Government would be persuaded of that and I am only pointing to the obvious. If I find I cannot persuade the Government

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with the few words I have said, then I shall have to come back to it at a later stage. I am keeping it very short, and I beg to move.
Lord Elliott of Morpeth: I find myself in some difficulty in agreeing with this amendment. I come from the North-East of England, where in regional terms there has been an almost constant dialogue and discussion with successive governments on the comparison between the English regions and the countries of Scotland and Wales. The population of Scotland at this time, if I remember rightly, is something like 5 million. The population of England is 50 million. If we are to have a special assistant director for Scotland and another for Wales, what about another ten for the various English regions? This seems to me to be an unfair and unreasonable suggestion. Once again, if I may, I will suggest to your Lordships that in terms of the regions of England it is a wholly unfair suggestion. I therefore wish to oppose this amendment.
Lord Gallacher: On behalf of these Opposition Benches, may I say that we are sympathetic to the amendment which the noble Lord, Lord Diamond, has moved. Our sympathy is based on a number of considerations which I hope the Minister will take into account when he comes to reply.
We are genuinely concerned about the likely impact of privatisation on regional structures for British Gas as such. There is a feeling that the new management may decide that regions, which have always existed since nationalisation, are superfluous and that in the interests of economy and in the interests of concentrating the whole of the decision-making process with British Gas, the regional structure may disappear. That to us would be regrettable, because in the mind and in the view of the public British Gas does not exist but the regional structures do—Segas, Norwest, Northern Gas and the like. We are in favour of the retention of the regions, and subsequent amendments will attempt to convince the Committee that that is a desirable end in itself.
We are particularly in favour of regional structures for Scotland and Wales, and in response to the noble Lord who last spoke I should like to say that he should not consider this matter in terms of arithmetic or anything else, but rather he should look at the bright side, which is that if there are separate assistant directors for Scotland and Wales, the remaining chief directors will be able to devote more of his time and energy to looking after the regions in England.
The noble Lord, Lord Gray of Contin, will be well aware as a home Scot, and will not need reminding by an Anglo-Scot, that Scotland has its own law relating to land tenure, to planning and, above all, to commerce. Indeed, as students we spend a great deal of our time concentrating on the differences between Scottish and English commercial law. That is a very important consideration in defending consumer interests, which is the primary task of the director of Ofgas. Similarly, by accident or design, Scotland is totally separate in the matter of electricity. It has nothing to do with the Central Electricity Generating Board and has two entirely separate boards. If we were
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privatising electricity instead of gas, the Government would presumably have a dilemma as to what to do about Scotland because of the existence of those boards.
Furthermore, the Government inherited in 1979 from the outgoing Labour administration some very effective machinery for the protection of consumers. I refer to the National Consumer Council, which the Government quite rightly continue to fund to the extent of just over £1¼ million a year. But the Minister again will not need reminding that, as well as the National Consumer Council, as part and parcel of that machinery there are separate councils for Wales and also for Scotland. I submit to the Committee that that recognition and that acceptance by government indicate that there is a case for the amendment standing in the name of the noble Lord, Lord Diamond.
Furthermore, both Wales and Scotland are countries. They enjoy a considerable measure of devolution—in the opinion of many Scots, not enough—and I think that this proposition would encourage Scotland to feel that its interests were going to be looked after; and the same consideration would apply in Wales. Therefore, on all these grounds I hope that the Committee will accept the amendment and, if the Minister cannot accept it, I hope that he will at least make a sympathetic response to it.
Baroness Gardner of Parkes: I am slightly puzzled by this amendment. Is this yet another proposal to have three people instead of one? Is it really a similar type of amendment returning through the back door? I support very strongly the view put forward by my noble friend who said that this amendment would definitely discriminate against England, because at the moment there are many regions in England and Scotland is just one region. To compare this with electricity board structures or with electricity supply structures would be quite wrong, because the way in which the electricity industry is operated throughout the United Kingdom is quite different from the means used for the gas system. I cannot support this amendment as it stands, and I ask the Committee to reject it.
10.45 p.m.
Lord Whaddon: I very shortly beg from the Minister a small point of information. Years ago I remember introducing a Private Member's Bill in another place. I was taken completely by surprise by a question from the Floor as to how my Bill applied to Northern Ireland. I suddenly realised that for all my study of the subject I did not have a clue as to how Northern Ireland fitted in. The position of Northern Ireland is relevant to this amendment. I suddenly realised that I did not have a clue how gas is at present supplied in Northern Ireland or what would be the position after privatisation. In connection with this amendment, I should be most grateful if the noble Lord can clarify the position for the Committee.
Lord Gray of Contin: Perhaps I can deal with that last point first. The Bill does not apply to Northern Ireland.

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The party opposite, and now the Social Democratic Party, have made known their views on the extent to which a regional structure for the gas industry should be provided for in the Bill. This again was discussed at considerable length in another place, and so we are not in any doubt about where the parties' views lie on this matter. I reiterate that our purpose in setting up the new regulatory regime is to avoid inflexible requirements of the type in the present legislation. To cast in stone a requirement for regional directors would make change impossible if such an arrangement proved to be counter-productive.
I was particularly interested to hear what my noble friends Lady Gardner and Lord Elliott had to say on this subject. I reiterate that the director is given a number of duties and functions in the Bill which he must fulfil properly. If in the light of experience he considers that it is most effective to give his staff responsibility for a particular area he will be able to do so. But to place a duty upon him to this effect would run counter to the whole philosophy of our approach, which seeks to provide for flexibility in pursuit of maximum efficiency and minimum alternative waste.
At this late hour I do not propose to say very much more. I merely point out to the noble Lord, Lord Diamond, and to the noble Lord, Lord Gallacher, who spoke on behalf of the Official Opposition and with whom I find it difficult to take issue, being a good countryman, that on this occasion I cannot be persuaded by their arguments. I am afraid that I cannot accept the amendment.
Lord Harris of Greenwich: I wonder when we are to hear a Government spokesman on this Bill say that he has been persuaded by any argument, ever. We had this on the Telecommunications Bill. There was total resistance. We are having the same again, except that the Committee is now sitting only because the Opposition were good enough to supply the Government with a quorum on the last debate. It is a most extraordinary situation that on the major privatisation measure in Parliament the Government cannot keep their supporters in the Committee to support them in the Division Lobby and provide them with a quorum.
At the same time, there is not the slightest indication that they are prepared to make any concession whatever. When noble Lords opposite complain, as they have been, that we are not making a great deal of progress, they might ask themselves this question. What contribution have they made to the progress of this Bill? If they were prepared to give any indication at all that they would listen seriously to the points raised on the Opposition Benches, I suspect that we should be making a great deal more progress. But in the meantime, if they are going to be so inflexible, I suggest that they persuade their supporters to remain in the Committee.
Lord Diamond: I am very disappointed with the answer of the noble Lord the Minister. It was short in length and short in content; very short indeed. I understand the first; I do not understand the second. I do not understand why the noble Lord does not feel that he has to justify resisting the fifth amendment running; five out of five. According to my arithmetic,
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that is approximately 100 per cent. I fail to understand why the noble Lord feels compelled to resist on every single amendment and why, though a good Scot himself, he is not able to say that there is something to be said for having representation of the Scottish point of view, with special responsibilities for Scotland and special responsibilities for Wales. I am totally astonished about that.
A number of noble Lords have been good enough to make a contribution to this debate. However, they have not persuaded me that when one is providing for special representation for certain sections and not for other sections, as they put it, the right answer is to provide special representation for nobody. I am sorry, but I cannot accept that as a valid argument.
If the noble Lord, Lord Elliott, were to say that there is a good, solid argument for dealing not only with the national representation problem but also with the regional representation problem within England, for example, of course I would agree with him. That is perfectly all right, and we would have no difficulty about it on these Benches. That is part of established, written public policy.
I start merely by making the most modest amendment, as we have done throughout, and hoping that the Government will agree with us step by step. The same remark applies to the noble Baroness, Lady Gardner of Parkes. She takes the view that we ought not to differentiate between regions within England and those within Wales and Scotland having their own separate representation. We accept that perfectly well. The way to deal with that point, if I may say so, is to expand the amendment—as we can easily do at a later stage—and say that there should be appointed an assistant director with special responsibilities for Scotland, an assistant director with special responsibilities for Wales, and an assistant director with special responsibilities for each of the present regions, as the gas board has them, within England. Presumably that would satisfy the real wishes of the noble Baroness and of the noble Lord, Lord Elliott. I hope that I have understood what they have indicated.
There is one further point that I must make. The noble Lord, Lord Elliott, understands as well as do the rest of us that there is a distinction between regions and nations. The noble Lord knows as well as I do, because it is not far for him to go from his old constituency over the Border, that the Scots regard themselves as a separate nation. Anybody who tries to do business in Glasgow and takes no note of that situation is heading for a fall straight away. We know that that aspect must be taken into account, and the same kind of remark applies to Wales.
I am bound to say that I cannot understand why the Government will not move even on this amendment. I repeat that a 100 per cent. refusal is getting a little boring. We wonder why we are providing a Committee for the convenience of the Government. We are providing a Committee for the convenience of the Government—
Lord Brabazon of Tara: No!
Lord Diamond: I do not know why the noble Lord says "no". Would he like to explain that? No, he would not. We are providing a Committee because we

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did not take the opportunity that was available to us, and which we considered, of not providing one. It is as simple as that. We considered it and decided that we would provide a quorum. We made sure that we would all vote so as to enable a quorum to be shown to exist. That is the answer. I am absolutely right in saying that we provide a Committee for the convenience of the Government under the mistaken assumption that the Government want to make progress with this Bill. Yet in spite of that, with each amendment that we have put forward we have been denied the opportunity of having even a meaningful debate about it. The arguments have been merely brushed aside.
We shall do what it is open to the Opposition to do, when we come to a later stage of the Bill, by tabling amendments and forcing them as far as we can. I understand that we cannot go all that far. I understand that the Government do not have to rely on arguments but merely on the forces which they can summon; except of course this evening when they failed to do so, but with notice they will no doubt do that on other occasions.
We should have thought that the Government could give us some helpful indication on an amendment of this nature. I feel that I should ask the Minister whether he is not prepared, even now, to say that he is willing to reconsider this amendment in the light of what has been said from behind him, too, about the desire for the responsibilities due to the different regions in England being taken into account as well as the responsibilities for Scotland and Wales, and say something which is more helpful to us.
If the noble Lord is not prepared to do so, I am placed in the difficult position of either bringing business to a close by so arranging the vote or withdrawing the amendment. I can only take the responsible line on this occasion and seek leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Long: As we are sitting at eleven o'clock tomorrow morning, I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at three minutes before eleven o'clock.