§ House again in Committee on Clause 1.
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 1334 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 1335 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 1336 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 1337 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 1338 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 1339 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.
1340 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
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 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 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 1341 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 1342 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 1343 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 1344 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 1345 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.
§ 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 1347 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.
1348 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 1349 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 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 1350 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 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 1351 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.1352
§ 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 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 1354 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 1355 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 1357 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 1358 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.1359
§ 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 1360 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 1361 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 1362 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 1363 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.
1364 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 1365 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 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 1366 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 1367 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|
|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.|
|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.1368
§ 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 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 1369 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 1370 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.
1371 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, 1372 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 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 1373 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.
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.