Lords Sitting of 1 July 1986

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chichester.
Lord Addington Lord Addington—Sat first in Parliament after the death of his father.

Economic Prosperity: Criteria
Lord Beswick: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government by what criteria the Secretary of State for Employment made his assessment as reported on 27th May, that "the country has never had as good a time as it has today."
The Secretary of State for Employment (Lord Young of Graffham): My Lords, I have used the same criteria which one of our leading national newspapers used on 29th May, when it said,
"What the Employment Secretary said is precisely true. There can be no disputing the unprecedented prosperity of the great majority of the 87 per cent. of people who are in work".
That newspaper was the Guardian.
Lord Beswick: My Lords, I thank the noble Lord for his Answer, and am interested to know that he is now hiding behind the Guardian. May I ask him this question? At this stage in our civilisation, when we have so many resources at our disposal if we care to use them, does the noble Lord not think that we ought to be judging progress on the basis of an improvement in the quality of life? On that criterion, would he stand by the statement which he is quoted as making?
Lord Young of Graffham: Yes, my Lords. I think it is important to bring home to everyone that the take-home pay of a married man with two children has risen in real terms since 1979 by 17 per cent., and for those on half-average earnings it has risen by 15 per cent. That is indeed a measure of the way in which the quality of life can improve. Personal judgment about the quality of life is for the individual.
Lord Beswick: My Lords, if the noble Lord is bringing home the facts to the man in the street, may I follow up with this point? At a time when many women are afraid to go out in the evening, at a time when an increasing proportion of our GNP is devoted to sophisticated instruments for the protection of the household, at a time when Her Majesty's Government have brought morale in our great public services, like health and education, to the lowest level I have ever known, at a time when there is so much essential work to be done, and so many people unwillingly idle, can the noble Lord really say that this is improving the quality of life?
Lord Young of Graffham: My Lords, the Question was directed to the quality of life, and in drawing attention to the fact that for the past five years this country has had the greatest growth rate of any country in Europe, which looks like carrying on till next year. I am looking at a time when, year after year, our standard of living is going up. In order to maintain our standard of life, we wanted to have pay increases of 1¼ per cent., but those in manufacturing industry took over 7½ per cent. It is important to put that into perspective. All the other matters to which the noble Lord referred are matters for which there are many different causes, and I think that the Government have only partial responsibility for some of them.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that anyone who travels to other countries on occasions and then comes back here would not recognise this country, if he listened merely to the description of it given by the noble Lord, Lord Beswick? It bears no relation to the true life and the true reactions of our people at this time.
Lord Young of Graffham: My Lords, I am aware that it is a great temptation—to which, I am afraid, not only some noble Lords but many others succumb—to paint the life of this country in the blackest possible terms. I am proud of life in this country. I want to see it better. I work towards that aim, as do all Her Majesty's Government. I think there are occasions when we should look at the improvements that we have made, and should not merely look at the distance we still have to travel.
Lord Barnett: My Lords, would it not have been more accurate if the noble Lord the Minister had actually complained about the growth in earnings, which are doing so much damage to the real growth prospects of the economy, and the likely effect on unemployment?
Lord Young of Graffham: My Lords, I am glad to say that I am able to agree with the noble Lord, Lord Barnett, because I have on many occasions in the past complained about the growth of earnings. But this Question was asked, I suspect, with the motive of showing that in this country things are so bad and we are proceeding so poorly. It is esssential that we put things in perspective. What we should look at and realise is that, our standard of living is going up faster, possibly, than at any time before. That has a rebirth side, and that is the prospect for jobs.
Lord Blyton: My Lords, can the Minister say whether, when he said that we have never had it so good, he was referring to the South of England and not to the North-East of England? We have more unemployment in the North-East of England now than we had when the famous Jarrow march against unemployment took place in the 1930s. When he says that we have never had it so good, does he think of the derelict areas that are being created in the North-East of England?
Lord Young of Graffham: Yes, my Lords. But what I would caution all those sitting opposite about is not to take five words out of a 15-minute interview, and

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then construct something from that. I will repeat exactly what I have already said in your Lordships' House, which is what I said immediately before those words. I said:
"I feel concerned for people who have been out of work for a long time and, more than anything else, I am motivated by a desire to see people back into employment and to see the economy grow and, above all, to have a caring society."
I am precisely aware of what is happening in the North-East of this country, and I shall be back there shortly. It is a problem which faces a large part of the industrialised world, and, in particular, all of Europe. It is something on which we all have to work together. It does not help to pick odd snippets out of long interviews.
Lord Stewart of Fulham: My Lords, is the astounding prosperity the Minister mentions the reason the Government have reached such an exceptional peak of popularity at the present time?
Lord Young of Graffham: My Lords, I am not sure what the noble Lord refers to. There is in my book only one test of popularity. That may well take place within the next two years, and I for one shall wait calmly for the outcome.
Lord Molloy: My Lords, is the noble Lord aware that the newspaper from which he quoted says today that the British National Health Service is at its most poverty stricken since its inception? However, there is a way in which the noble Lord is absolutely correct. Those who have made money out of the National Health Service through the Griffiths Report, those who have made money from the selling off of great British assets, the nationalisation of which was absolutely approved of in the election of 1945 by British ex-servicemen, have never had it so good. What those who have never had it so good have forfeited is their patriotism.
Lord Young of Graffham: My Lords, I must confess that just as the Guardian does not invariably approve of everything I say, I cannot invariably approve of everything the Guardian says.
Lord Molloy: My Lords, the noble Lord should tell us now about British patriotism.
Noble Lords: Order!
Lord Kinnaird: My Lords, the remark from the Benches opposite encourages me still further to say what I had intended to say. Can the noble Lord please inform me, because I am becoming a little confused: are we in the House of Lords or in another place.
Lord Glenamara: My Lords, has the noble Lord excluded the 3¼ million unemployed from his famous comment? Has he forgotten that the unemployed have rather more than one dependant on average, so that 7 million people are living at a subsistence level? How can he talk such nonsense in those circumstances.
Lord Young of Graffham: My Lords, I am aware of a great deal of nonsense that is spoken from time to time, in particular about the number of people who
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live at subsistence level or do not, and the number of people who are in employment who have dependants or do not. What I would ask all in your Lordships' House to do is to accept and realise that unemployment is an evil; that unemployment is not a steady state for 3¼million people; that one out of four who become unemployed are back in work within a month; that half the people becoming unemployed are back in work within three months; that two-thirds are back in work within six months. Two out of 10 are still looking for work after a year.
This Government have embarked on a programme unprecedented in the industrial world, in which they are going to reach out to each and every long-term unemployed person, get them back to work, help to get them back to work, help to bring them training and help to tell them that they have not been forgotten by this Government.
Lord Hatch of Lusby: My Lords, I am sure I am speaking for the whole House when I say that we welcome the return of my noble friend Lord Beswick to Question Time. The noble Lord the Minister has said that he is proud of the state of our country' at the moment. Is he aware that if he leaves aside the 3 million to 4 million unemployed, in addition to those there are between 6 million and 7 million people who are living on low pay in poverty? Is he proud of that, too?
Lord Young of Graffham: My Lords, I at least am proud of my nation, but in saying so I do not mean to say that the nation is as good as it possibly could be. That is why I and my colleagues in government are working towards an improvement. I question very much the basis of the noble Lord's figures. Like all these figures, they are based upon the simple proposition that half the nation is below average and half the nation is above average, and if you keep on moving the average or moving the level you will always vary the number of people.
Lord Hatch of Lusby: My Lords, those figures are from the Manpower Services Commission.
Lord Beswick: My Lords, the noble Lord attempted to explain the motivation behind this Question. May I put to him that it was simply a reaction against—
Noble Lords: Question!
Lord Beswick: My Lords, I am asking a question. May I put to the noble Lord that the Question was a reaction against a temptation to use selected percentages and statistics instead of what is happening to the people as a whole? The noble Lord said there were many causes of the matters to which I called attention. Is it not a fact that one of the basic causes of our present social degeneration is the Government's upholding individual selfishness as a form of enterprise? Is it not a fact that we are now engaged in a form of economic permissiveness which cannot possibly improve the quality of life?
Lord Young of Graffham: My Lords, the noble Lord perhaps criticises me for selective statistics. Is that any different from a selective quotation, taking five or six

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words out of an interview lasting 15 minutes—something which has happened before now? It is no good equating selfishness with incentive, the desire to stand on your own feet, the desire to look after yourself. What we must have is a society in which people look after themselves and look after the less fortunate. What we must not have is a society in which Big Brother thinks he can look after all of us.

May Bank Holiday
2.49 p.m.
Lord Allerton: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will consider cancelling the bank holiday at the beginning of May and adding that day to the Whitsun holiday, preferably on the previous Friday.
Lord Young of Graffham: My Lords, a public consultation in 1982 about the desirability of moving the bank holiday on the first Monday in May showed opinion was divided. Accordingly the Government announced in June 1982 that they had decided not to make any changes. We have no plans to reopen this issue.
Lord Allerton: My Lords, I thank my noble friend for that reply. Would he not agree that there are probably many more people who would prefer to have one reasonably long week-end instead of two days rather close together?
Lord Young of Graffham: My Lords, the process of consultation through which my department went in 1982 showed that, at the very least, opinions were divided. There were many institutions against a change, many for a change, but in the end no clear opinion emerged. In those circumstances it was thought fit that we should not make a change.
Baroness Seear: My Lords, is it possible that the Minister will think again? We keep getting into a situation in which, because Easter moves about so rapidly, we have in a period of six or seven weeks four bank holidays, mostly when it is raining and cold, and then we do not have another through June, July and August, until the very end of August. It seems absolutely crazy to continue with the present distribution of holidays. Everybody would love to have a holiday in June and July, but we have them all in chilly April and May. It is four years since the last consultations. The British public take a long time to change their minds, and would it not be worthwhile looking at the matter again?
Lord Young of Graffham: My Lords, if the noble Baroness will be kind enough to give me a list of the days on which it will be warm and sunny in the next five years, I shall undertake that her suggestion will certainly be considered.
Baroness Seear: My Lords, we can give the Minister some probabilities.
Baroness Phillips: My Lords, would it not be possible for Her Majesty's Government to declare a bank holiday for the Royal Wedding?
Lord Young of Graffham: My Lords, an announcement has already been made; there is no precedent for such a holiday.
Lord Parry: My Lords, before we leave the subject, will the Minister tell the House what he thinks of the weather, both quantitatively and qualitatively, since the Government have been in office?
Lord Young of Graffham: My Lords, I have learnt to have a very selective memory. For the past week it has been perfect.
Lord John-Mackie: My Lords, does the Minister not agree that it would help the situation if Easter was fixed and not moved about over a whole month?
Lord Young of Graffham: My Lords, that is another question.
Lord Airedale: My Lords, in amplification of what has been said by the noble Baroness, does the Minister not appreciate that Easter Monday can occur as late as 25th April? If we keep the May Day holiday where it is, that will bring those two holidays much too close together. Surely that provides a good reason for implementing the Easter Act, which has been on the statute book since 1928 and which confines Easter to the first half of April.
Lord Young of Graffham: My Lords, I believe that there are other considerations concerning the date of Easter, but I shall certainly look at the legislation. I am not sure when it will be that Easter and the May Day holiday will come so close, but as luck would have it, I am sure that when it does happen, it will be a fine, warm spell.
Lord Leatherland: My Lords, have the Government ever considered making a bank holiday of 1st July, which was the day on which we attacked on the Somme in 1916? It was rather tragic, I quite agree, but it is a memorable day in the military history of this country.
Lord Young of Graffham: My Lords, in a nation of the age of ours I suppose that there is cause to commemorate or remember every day in some way or another. We must find days that are suitable and sensible, and for which there is a clear body of opinion in favour. At present there is no clear view for a change. Until there is, I do not see how I can take this matter any further.
The Lord Bishop of Chichester: My Lords, is the Minister aware that the representatives of the Church of England have repeatedly expressed themselves in favour of a fixed Easter? Does he not agree that if there is to be a Whitsun bank holiday, it would be more logical to have it at Whitsuntide than at some other period?
Lord Young of Graffham: My Lords, I hope that all in your Lordships' House are beginning to appreciate the complexities of this apparently simple question.
Lord Wallace of Coslany: My Lords, will the Minister say whether there is any chance of this House rising before the next bank holiday?
Lord Young of Graffham: My Lords, the noble Lord should speak to those who are more learned than I in these matters.

Extradition Arrangements
2.53 p.m.
Lord Campbell of Croy: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government with how many countries they would like to improve present agreements on extradition, or to conclude such arrangements for the first time.
The Parliamentary Under-Secretary of State, Home Office (Lord Glenarthur): My Lords, the Government's priority is to improve our extradition arrangements with those countries with which we have regular extradition traffic. We have published proposals for the reform of our extradition law that would bring us closer to the practices followed by our European partners and enable us to accede to the European Convention on Extradition. In the case of those countries with which we have no extradition treaty and potentially little extradition traffic, we propose to adopt new powers to extradite on an ad hoc basis, as necessary. We have no present plans for entering into new bilateral agreements.
Lord Campbell of Croy: My Lords, I thank my noble friend for his reply. Will he confirm that today is the day when the new extradition treaty with Spain enters into force? Will the Government act quickly to bring to an end the haven that exists there for Britons who are wanted for trial for serious crimes? As regards another country, is my noble friend aware that there is much satisfaction in Britain that the United States Congress is now more willing to sanction extradition where persons are accused of terrorism and there is a prima facie case?
Lord Glenarthur: My Lords, I am grateful to my noble friend. The new treaty with Spain comes into force today and replaces the former treaty that the Spanish denounced in 1978. We look forward to working closely with Spain to make a success of the new treaty in the way that my noble friend hopes. As for the United States supplementary treaty, again we are pleased that that treaty has obtained the support of a substantial majority in the Senate Foreign Relations Committee. The treaty represents an important advance in ensuring that those who have committed crimes of violence cannot evade justice by claiming that their crimes were political.
Lord Mishcon: My Lords, in view of the grave concern that there has been in the past that difficulties
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of extradition have interfered with prosecutions for serious fraud and drug offences, may I ask whether the Government are experiencing difficulties in that connection now? If they are, is it so wise to give up the idea of bilateral agreements in certain cases?
Lord Glenarthur: My Lords, the Extradition Act 1870 certainly does not meet modern conditions. The huge expansion in recent years in international crime, such as drug trafficking, fraud and terrorism, has presented new challenges that our extradition arrange-ments must meet. Hence the need for the changes. So far as concerns new bilateral agreements, as I said in my original Answer, we do not have plans to enter into any new agreements, but I am sure that should any particular change be needed in the light of the legislation that it is to be hoped will follow, that view will be taken into account.
Lord Campbell of Croy: My Lords, can my noble friend give the House any information about when there are likely to be further developments following the White Paper on criminal justice to which he referred?
Lord Glenarthur: My Lords, we published a White Paper and the hope is for legislation at the earliest suitable point. I cannot of course anticipate the Queen's Speech.

Essex Institute Planning School
2.57 p.m.
Lord Alport: My Lords I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether it is intended to close the planning school at the Essex Institute of Higher Education.
Baroness Hooper: My Lords, the matter has not yet been referred to the Secretary of State, but we are aware that a recommendation to close the Planning School at the Essex Institute of Higher Education has been made to the National Advisory Body for Public Sector Higher Education by the Transbinary Town and Country Planning Group.
Lord Alport: My Lords, I thank my noble friend for her Answer. Will she ensure that when he considers this matter, the Secretary of State remembers that this school specialises in rural planning, is the leading school for that particular subject in the country, is extremely important to the rural areas of East Anglia and to the local government authorities that depend on it, and that its loss would mean a great defect in the whole of the planning policies for our part of England?
Baroness Hooper: My Lords, the Government are aware of the school's high reputation in the area of rural planning. In fact, there is a special Government-sponsored study of rural deprivation. Therefore, we will not lose sight of that fact in future deliberations. We are well aware of the geographical location of the school and will bear that in mind also in future deliber-ations.
Lord Glenamara: My Lords, while it is true, as she said, that the Secretary of State has not yet considered this matter, will the noble Baroness confirm that those proposals, and all the proposals of the NAB, are forced upon it by the Secretary of State through his restraint of public expenditure? Is the noble Baroness aware, for example, that the polytechnics in the North-East of England have been threatened with disproportionate cuts in addition to the cuts already made in the two universities there? Will the Secretary of State look very carefully at those proposals before he agrees to them? Will he receive representations from those of us who are concerned with those institutions?
Baroness Hooper: My Lords, the noble Lord has asked a number of questions and I shall deal with some of them. The transbinary working group was set up in response to discussion and consideration of the need to have proper manpower forecasts in certain specialised fields. I remind your Lordships that for the three institutions recommended for closure an alternative was offered in that instead of a four-year planning course, in this case for the Essex institute, they were offered the alternative of instituting a three-year general environmental degree course. The noble Lord's allegations are not, therefore, entirely well-founded.
Lord Taylor of Blackburn: My Lords, is the noble Baroness aware that the supplementary question asked by my noble friend has not been answered by her? My noble friend was referring to the polytechnics in the North of England.
Baroness Hooper: My Lords, in that case, it was very wide of the original Question.
Lord Alport: My Lords, is my noble friend aware that although I am well aware of the problems of the North-East of England, this Question relates to Essex and East Anglia? This is a particularly important problem so far as local government, rural planning and the general environment in East-Anglia are concerned.
Baroness Hooper: Yes, my Lords, I am well aware of that and, indeed, my right honourable friend the Secretary of State for Education and Science will be taking it into consideration.
Lord Walston: My Lords, is not the noble Baroness aware that East Anglia is the fastest growing region in the whole of the country and therefore the need for planning and knowledge of planning in all its aspects is even more important there; possibly more important than even in the North-East?
Baroness Hooper: My Lords, that was obviously one of the considerations that the transbinary working group took into account, and it will certainly be in the mind of my right honourable friend the Secretary of State.

Business
3.2 p.m.
Viscount Long: My Lords, at a convenient moment after 3.30 this afternoon my noble friend the Leader of
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the House will, with the leave of the House, repeat a Statement that will be made in another place on the European Council in The Hague. This will be followed by my noble friend Lord Caithness who will, again with the leave of the House, repeat a Statement on the EC Transport Council.
It may be for the convenience of the House if I announce that the Report stage of the Gas Bill will be adjourned at approximately 7.30 p.m. for approximately one hour and that during this adjournment five supplementary benefit up-rating orders will be taken.

Agriculture Bill
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the amendments for the Report stage be marshalled and considered in the following order—

Clauses 1 to 12,

Schedule 1,

Clause 13,

Schedule 2,

Clauses 14 to 20,

Schedules 3 and 4.—(Lord Belstead.)

On Question, Motion agreed to.

Insolvency Bill [H.L.]
Report received.

Parliamentary Constituencies Bill [H.L.]
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of recommitment be discharged.
Moved, That the order of recommitment be discharged.—(The Lord Chancellor.)
On Question, Motion agreed to.

Protection of Children (Tobacco) Bill
3.4 p.m.
Lord Pitt of Hampstead: My Lords, I beg to move that this Bill be now read a third time.
I should like to say a few words on the Bill. I particu-larly congratulate the honourable Member for East Lothian whose Bill it really is on having taken up this particular cause after winning a place in the ballot. I also feel that we should thank the Government for their very helpful approach to the Bill. The Government have been of assistance throughout the proceedings and we express our thanks to them.
I should like to say a little about why we have this Bill. While adults are reducing their smoking, youngsters seem to be increasing theirs. This is quite

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serious. Thirty years ago 75 per cent. of men smoked cigarettes and 50 per cent. of women smoked cigarettes. Today 34 per cent. of men and 30 per cent. of women smoke cigarettes. Yet a survey carried out in 1984 by the Office of Population Census and Surveys, covering 9,234 pupils in almost 300 schools in Great Britain, showed that 22 per cent. of all secondary school pupils were smokers; that 13 per cent. were regular smokers who were smoking more than 50 cigarettes a day; and that 9 per cent. were occasional smokers. What is worse, a similar survey showed that there was a steady increase in smoking by youngsters. In fact, in every age group except fourth-year pupils there had been an increase. For the fourth-year pupils there was a decrease in smoking by boys but, even there, an increase was recorded in the number of girls who smoked. Therefore, we are dealing with something which is quite serious.
It is estimated that in the same year of 1984 youngsters spent between £70 million and £90 million on cigarettes; yet in 1984 only 45 prosecutions for selling cigarettes to youngsters took place. I notice that noble Lords are concerned about the time, but I need to make some points on this Bill and this is the occasion for me to do so. I hope that your Lordships will recognise why this is necessary. We hope that the Bill will remedy the situation and that there will be more successful prosecutions.
The Bill also amends the definition of "tobacco" to include smokeless tobacco. This will enable the sale to children of Skoal Bandits to be banned. This is a tobacco product for oral use. They are teabag-like sachets of moist tobacco intended to be placed between the cheek and the gum and sucked. They are flavoured like sweets. What is worse, each sachet contains 2.8 per cent. of nicotine, which is very much greater than the amount of nicotine in one cigarette. Medical evidence shows that extensive use of this product can cause cancer of the mouth which, I can assure your Lordships, is a very unpleasant disease which is extremely difficult to treat.
During my Second Reading speech—and your Lordships will now see why I wished to speak at this stage—I said that Skoal Bandits were banned in New Zealand and that the Japanese Government had refused permission to manufacturers of tobacco sachets to open a factory in Japan. I was wrong. The Japanese Government have no power to prohibit the importation of smokeless tobacco which is at present classified as a vegetable. The Minister of Health and Welfare, however, has indicated that smokeless tobacco is harmful to health.
I was also wrong, technically, in regard to New Zealand. The Minister of Health is in the process of having Skoal Bandits banned on the recommendation of the Toxic Substances Board. However, in order to do that the Toxic Substances Act 1979 needs to be amended. The Minister of Health has indicated that he hopes that the appropriate amendment will be put through this year. I was wrong on both counts and I want to correct the error.
I end by thanking the Government for the part they have played in piloting the Bill through your Lordships' House. I also want to ask them to use their influence with the prosecuting authorities to ensure
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that the provisions of the Bill are enforced. It is no use passing laws which cannot be enforced. We must ensure that this law is enforced. We owe it to the children to do everything possible to prevent them from starting to smoke. I beg to move that the Bill be now read a third time.
Moved, That the Bill be now read a third time.—(Lord Pitt of Hampstead)
On Question, Bill read a third time, and passed, and returned to the Commons with an amendment.

Forestry Bill
Read a third time, and passed.

Disabled Persons (Services, Consultation and Representation) Bill
3.11 p.m.
Read a third time.
Clause 7 [Persons discharged from hospital]:
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington): moved Amendments Nos. 1 to 3:
Page 13, line 19, leave out ("is") and insert ("are")
Page 13, line 21, leave out ("its") and insert ("their")
Page 13, line 25, leave out ("is") and insert ("are")
The noble Baroness said: My Lords, if it is agreeable to your Lordships, I should like to move Amendments Nos. 1 and 3 and speak to Amendments Nos. 4 to 7 on behalf of my noble friend Lord Davidson. These are all drafting amendments. I should like to move them en bloc I beg to move.
On Question, amendments agreed to.
Clause 13 [Disabled persons leaving special education Scotland]:
Baroness Trumpington Baroness Trumpington moved Amendments Nos. 4 to 6:
Page 17, line 28, after ("child") insert ("or young person")
Page 17, line 30, after ("child") insert ("or young person")
Page 17, line 34, after ("child") insert ("or young person")
On Question, amendments agreed to.
Clause 15 [Co-operation in planning]:
Baroness Trumpington Baroness Trumpington moved Amendment No. 7:
Page 20, line 30, at end insert—
("(2) The foregoing provisions of this section extend to Scotland only ")
On Question, amendment agreed to.
Baroness Masham of Ilton: My Lords, I beg to move that the Bill do now pass. In moving this Motion, I should like to say just a few words of thanks to everyone who has helped in improving this Bill as it has passed through your Lordships' House. There are two key principles which have been strengthened.
First, disabled people are likely to be able to exert more control over their own lives as a result of more

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detailed elaboration of their rights to have a represen-tative (that is in clauses 1 and 2) and strengthen their influence over the assessment of their needs (that is in Clause 3); and the introduction of a new clause, Clause 4, confirms the duty on the social services to make an assessment under Section 2 of the Chronically Sick and Disabled Persons Act 1970.
Secondly, the principle of crisis prevention has been enhanced. The arrangements in Clause 7 which need to be made before discharge from mental handicap or psychiatric hospitals have been substantially improved, with separate duties laid on the health authorities and the local authorities. In respect of this clause in particular I should like to pay tribute to the Association of County Councils, the Association of Metropolitan Authorities and the National Association of Health Authorities. Their support for the principle of adequate assessment before discharge was crucial to the amendments that were made in your Lordships' House. Even in the original Bill the sponsors had only envisaged a social services assessment. Last Christmas when the Bill was first printed, no one could possibly have envisaged the Bill that we see today.
My last and most deserved tribute for the success of this Bill must go to the Bill's sponsor in another place, Mr. Tom Clarke. Without his good fortune in the ballot, his decision to use that good fortune to advance the status of disabled people and the tenacity with which he fought for his Bill, this Bill would not have been here today. I hope that it will not be long before the Bill, when it becomes an Act, will be brought into force, with all the necessary resources. I hope also that it will be extended to Northern Ireland. I beg to move.
Moved, That the Bill do now pass.—(Baroness Masham of Ilton.)
Baroness Trumpington: May I first turn the thanks on to the noble Baroness, Lady Masham? I should like to congratulate her on all the hard work that she has done on this Bill and on the skilful way in which she has piloted it through your Lordships' House. On this as on other occasions she has shown herself to be a doughty champion of the interests of disabled people themselves and those who care about their needs. All of them owe her a debt of gratitude.
Finally, I should just like to thank all the noble Lords on whatever Benches they sit who have taken such a positive interest in this Bill and contributed so helpfully to our debates.
Lord Ennals: My Lords, I want to do no more than be associated with the congratulations to both the noble Baroness, Lady Masham and the original sponsor of the Bill in another place, Mr. Tom Clarke. It is very rarely that a Bill such as this, which appears in the end to be of such importance, is actually presented by a Private Member's Bill, and it owes a lot both to the Government and to the voluntary organisations which entered into very serious discussion and negotiation with them. To them also I want to offer congratulations and thanks.
Lord Banks: My Lords, from these Benches I too should like to congratulate the sponsors of the Bill: in another place, Mr. Tom Clarke, and in this House the
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noble Baroness, Lady Masham. We are also grateful for the part which has been played in the piloting of this Bill through this House by the Government, and in particular by the noble Baroness, Lady Trumpington. We on these Benches welcome this measure and look forward to it coming into force.
On Question, Bill passed, and returned to the Commons with amendments.

Gas Bill
3.18 p.m.
Report received.
Clause 1 [The Director General of Gas Supply]:
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 1:
Page 1, line 8, after ("shall") insert ("after seeking and receiving the comments of the Select Committees on Energy and Trade and Industry as to the suitability and qualifications of the appointee").
The noble Lord said: My Lords, I beg to move Amendment No. 1 standing in my name on the Marshalled List. Before I speak to the amendment, perhaps I may just refer to a report in today's Daily Telegraph on page 2 which is headlined "Inflation Curb on British Gas". In the report there is an item which reads:
"The Government has struck a deal agreeing to introduce changes demanded in the Gas Bill in return for dropping amendments when the Bill enters its Report stage in the Lords today.
I was rather suprised to see that. So far as I am concerned, no deals have been done. I certainly have not done a deal; indeed, if it got abroad that I had, that might be misunderstood. I do not know whether the noble Lords, Lord Diamond and Lord Ezra, have made any deals, but I doubt it. I feel sure that they would have said something to me about that. I can only assume that a deal has been done with the government supporters. But bearing in mind that they have only a few amendments down, I doubt even that. I think that the noble Lord, Lord Belstead, should be allowed to comment on such a report. It may be misunderstood so far as he is concerned. It is a strange report. If he wishes to intervene, I shall gladly sit down and let him deal with what I have said. Perhaps the noble Lord, Lord Gray, is dealing with the amendment.
The Minister of State, Scottish Office (Lord Gray of Contin): My Lords, I am happy to respond to the noble Lord and add my surprise to his at the article that appeared. I know of no such deal, although during and since the Committee stage the Government have been particularly receptive to the arguments placed before them. As we go through the Report stage the Government will be making a few useful concessions. Together with my noble friend Lord Belstead, I shall be speaking to those in due course. We hope that such a forthcoming attitude by the Government will lead to the co-operation of the House and the speedy passage of the Bill through its remaining stages.
Lord Stoddart of Swindon: My Lords, I am most obliged to the noble Lord for his remarks. As I suspected, it seems that the suggestion is a figment of some reporter's imagination. I had noticed, as other

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noble Lords will have done, that a few government admendments have been put down. I notice too that there are also some alterations to the new draft authorisation, which I saw only this morning. The noble Lord will understand that we have not yet had an opportunity to assess the importance of the amendments and the concessions which have been made, but we shall do so as the Bill progresses through this stage. It will progress with as much expedition as can be arranged, commensurate with our duty to examine amendments properly and thoroughly.
Let me now turn to Amendment No. 1. The noble Lord will remember that during the Committee stage a number of attempts were made to write into the Bill a parliamentary input to the appointment of the Director General of Ofgas. I am afraid that they were to no avail. The noble Lord was not even prepared to take the matter away and look at it before this stage of the Bill. He may say that the amendment is irrelevant as the appointment of a director general has virtually taken place or at least has been indicated. I shall be coming back to that on Amendment No. 4. But although the appointment of Mr. McKinnon has been made, there is still time to seek and receive the comments of both Select Committees mentioned in the amendment; and so it is still relevant and in time.
At Committee stage the amendments referred to consultation. I accept that that could imply a joint decision of the House of Commons through its Select Committees and the Minister regarding the appointment. That may be something which the noble Lord feared and was not prepared to accept. I do not believe that there was any such implication, but he may have thought so and that may have been the reason for his obduracy. In case that was his view, I have put down this amendment, which does not seek consultation between the Secretary of State and Parliament, but merely to provide that the Secretary of State should seek and receive the comments of the appropriate Select Committees as to the suitability and qualifications of the appointee.
I am sure that noble Lords will agree that this is a mild amendment, which would only slightly extend the role of the parliamentary Select Committees. I see no reason why the Government should not accept it, although I am afraid I am not very hopeful. But if they will not, I hope that the House will. Parliament needs strengthening in relation to the Bill. We must not forget that the gas industry is at present responsible to Parliament and therefore subject ultimately to complete parliamentary control. After the Bill is passed there will be literally no parliamentary control and the consumer organisations will also have been weakened and centralised. I hope therefore that your Lordships will support this mild amendment. It would do good to our parliamentary system and it would do no harm to the Bill or to the Secretary of State's prerogatives. I beg to move.
Lord Boyd-Carpenter: My Lords, I assume that the amendment refers to the Select Committees in both Houses; it is not specific on that point. How the system would operate if in either House there were no Select Committees also raises a considerable doubt. The noble Lord did not tell us which House of Parliament's Select Committees were to be involved, nor did he deal
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with the rather entertaining situation if, as is perfectly possible, they took a different view from each other. By whom then should the Secretary of State be guided?
My unhappiness about the amendment is on broader grounds. It seems to be an attempt—admittedly a fairly mild one—to introduce the American practice under which, as your Lordships know, holders of all kinds of appointments have to be approved by the appropriate committee of the Senate. That is quite contrary to our practice and I think to some extent conflicts with our normal and proper policy of such appointments being made on the responsibility of the Minister concerned.
The noble Lord said that there was no parliamentary control. Of course there is. If he appoints someone who is manifestly unsuitable, the Secretary of State can be called to account in this House or in another place. Indeed, I go further; he pretty certainly would be. I agree with the noble Lord that it is an important appointment. If the Secretary of State made a manifestly improper or unsuitable choice, he would have to answer for it. That seems to me to be the proper parliamentary attitude, and not that the Secretary of State should have his responsibility blurred; not that he should be able to say, "I did not think much of the chap but the Select Committee on Energy in the upper House thought he was terribly good and so I did not like to disagree".
I think that such appointments should be made on the clear, unquestioned responsibility of the Minister of the Crown concerned and that Minister should be answerable to Parliament for the making of the appointment. I hope that this amendment will not be accepted.
3.30 p.m.
Lord Ezra: My Lords, the amendment moved by the noble Lord, Lord Stoddart, and the other amendments to Clause 1 relate to a fundamental concern which we on this side of the House have; namely, that the regulatory body proposed by the Government is inadequate for the important task which it faces under the Bill. We believe that there should be a stronger regulatory body to ensure that this new privatised organisation shall, in all respects, do things which are consistent with the interests of consumers and of the public.
We have a number of amendments following this one which return to that point. The ways in which that regulatory body can be improved and strengthened will remain to be seen. It is important at this stage to make it clear to the Government that there are many who are concerned at how the regulation of a privatised monopoly is being introduced. We feel that in the interests of the body itself, the public and the consumer, much greater attention should be paid to how the regulatory body is set up. Whether it be set up on the basis of parliamentary accord or the proposals introduced in later amendments remains to be seen. I should like to emphasise that we are worried by the relative weakness of the regulatory body now proposed.
Lord Diamond: My Lords, my noble friend Lord Ezra and other noble Lords who have spoken on this side of the House are not the only people concerned at

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the inadequacy of the regulatory body. Everything that I have read (and I have read a good deal since the Committee stage) confirms the same point—the deep anxiety which exists among various bodies, including those which are totally unpolitical and objective and concerned with good administration and nothing else. Their anxiety is that the proposals contained in the Bill for regulating this enormous private monopoly will not be strong enough.
I shall not go over the ground that was covered previously. Your Lordships will be good enough to remember our views on this matter. We feel strongly that we must enable the Government to carry out their undertaking that when they privatise gas they will do two things to protect the consumer. First, they will strengthen consumer councils, and, secondly and more particularly, they will monitor the operation of the Act. It is that monitoring with which we are concerned now.
The amendment relates to the qualifications of the appointee, a single person. It contemplates one modestly-paid individual with the responsibility of holding at bay all the commercial drive of a huge commercial organisation which has a monopoly of sales to 16.5 million consumers. That individual must maintain a reasonable balance. All that we are asking for on these Benches is that there should be a reasonable balance between the interests of the shareholder, introduced for the first time, and the interests of the consumer.
It is impossible, in our view, for one person to achieve that. If it is to be one person, as the amendment contemplates, let the Minister have the good sense not to listen to the noble Lord, Lord Boyd-Carpenter, but to behave as any Minister would—the noble Lord, Lord Boyd-Carpenter, no doubt did so when he was a Minister but he forgets all that in his desire to support the Government through thick and thin—and take the responsibility of consulting everybody who can help him make that vitally important appointment.
A Minister does not do that off his own bat. He does not toss up a coin and say that he will appoint the first person whose photograph and recommendation he sees. He consults his colleagues, and various distinguished and authoritative Members of Parliament privately. He consults widely. All we are asking is that something be put into the Bill to enable the Minister to avail himself of the help which is available to choose the right man. We know that such help is available.
The people manning the Select Committees have a great deal of knowledge and experience of this matter. They have something more which is not so readily available outside politics. As every Member of this House and of the other place knows, a constituency Member meets thousands of people while representing a constituency. He learns quickly—this is one of the arts of a politician—to assess a man in a way in which no technical selection committee ever works. He has a political feel for how that man will react under political pressures and so on. There is no other body of which I know that can supply that valuable selective technique. It is enormously valuable where one
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individual must relate to the public, to Parliament (in a limited way), to the industry and to the consumer. He must have a very sensitive feel.
I am sure that the opinion of the Select Committees mentioned in the amendment would be of great help. It would be sheer obstinacy by the Minister not to do something along those lines. I hope that if the Government do not accept the precise words—if they feel that they should be sharpened to indicate which House, both Houses, or whatever—they will enable the Minister to do what any good Minister would want to do: avail himself of the best help he can obtain to make an immensely important appointment.
Lord Grimond: My Lords, I wish to speak only briefly in support of the amendment and of the speeches made by my noble friends. There are two points which I think should be made. First, this is a Bill which sets up, as has been said many times, a private monopoly. Many of us who are by no means opposed to privatisation believe that some competition is the best guarantee for the public, and that that is absent in the Bill. Secondly, we have some experience of British Telecom, and as the Government will have noticed from the criticisms made on all sides of the House, our experience of that private monopoly has not so far been entirely reassuring.
It has been said that the appointment of this important official should be placed fairly and squarely upon the shoulders of the Secretary of State. That is a proposition with which in a nationalised industry, for instance, I would generally agree. But I am not at all happy that the Secretary of State will be able to take responsibility for the behaviour of this private monopoly.
I am not clear that Parliament, representing the public, who are vitally affected by the supply of gas, will be able to represent the public point of view. The whole onus, as stated by my noble friends, rests upon one man. It is absolutely vital not only that his appointment should be widely accepted but also that he should be without question the right person for the job. The Government may have other ways of meeting the very obvious anxiety that exists over this whole matter. I would ask them to consider this further step which, to my mind, is justified in the peculiar circumstances of a very powerful private monopoly. It will give some extra power to Parliament and might also ensure that the proper person is appointed to this vital job.
Lord Gray of Contin: My Lords, I listened very carefully to the noble Lord, Lord Stoddart of Swindon, who, as always, carefully outlined his ideas as to how this amendment might operate. I listened also with great care to the contributions made by the noble Lords, Lord Diamond and Lord Ezra, and also by the noble Lord, Lord Grimond, whom I am delighted to see joining our deliberations at Report stage. It is always a great pleasure to have the noble Lord, Lord Grimond, participating in our debates.
None of them, however, was able to produce anything new or anything more than matters with which we dealt at Committee stage when we had a discussion of some considerable length. Indeed. 1 am grateful to my noble friend Lord Boyd-Carpenter, not

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only for highlighting the deficiences of the amendment in detail but also for pointing out the limitations of the amendment in principle. Of course, it is in principle that I disagree basically with noble Lords opposite in their desire to involve outside bodies—in this case, Select Committees—in the selection process.
The noble Lord, Lord Stoddart, rehearsed yet again the same arguments involving those outside organisations and the appointment of the director. I have already explained at Committee stage, and I would not wish to weary your Lordships by going over the same ground again, our fundamental objections to such a procedure. There is, I am afraid, nothing new. I can only repeat what I said at Committee stage. The Bill sets out provisions for strong and effective regulation of a privatised gas industry under a director general who will be fully equipped with the necessary powers to ensure that the industry continues to operate properly and efficiently in the best interest of gas consumers.
Indeed, my right honourable friend the Secretary of State for Energy announced on 24th June that, subject to Parliament approving the Gas Bill, he intends to appoint Mr. James McKinnon as Director General of Gas Supply. Mr. McKinnon was chosen by the Secretary of State after a careful survey of suitable candidates by a well-known firm of executive search consultants. His training as an accountant and his last 10 years spent as group finance director of an organisation with a turnover approaching that of the British Gas Corporation provides an exceptionally good background for the issues that will need attention. Moreover, his personal qualities are admirably suited to the role of regulator.
The noble Lord, Lord Diamond, and others rightly pointed out that the Secretary of State has a wide range of advice available to him. I believe that with that advice he is well able to make a selection that will provide a highly suitable and competent person to carry out the role of this very important officer. I believe that the way that we are proceeding is in accordance with precedent. It is a way that we have followed in the past. Indeed, successive governments have always decided that these appointments should be made by the Secretary of State.
I accept that this is slightly different. This is an industry that is being privatised. The noble Lord, Lord Grimond, or perhaps it was the noble Lord, Lord Ezra, expressed satisfaction with this method of selection for a nationalised industry but felt that something different was needed for a privatised one. I believe that the way we are proceeding is the right way. I have listened carefully to the arguments, none of which has been new and none of which has persuaded me that we should act differently. I must therefore ask my noble friends to reject the amendment unless the noble Lord, Lord Stoddart, is prepared to withdraw it.
Lord Diamond: My Lords, before the noble Lord sits down, can he clarify and explain this point? Is it the case that one candidate was selected by this particular body—
Lord Stoddart of Swindon: A firm, my Lords.
Lord Diamond: My Lords, a firm, a private firm.
Lord Molloy: My Lords, answerable to no one.
Lord Diamond: My Lords, is it the case that one such candidate was selected by that firm and submitted to the Secretary of State, which is what the noble Lord indicated? Or is it the case that a number of candidates were put before the Secretary of State for his guidance?
3.45 p.m.
Lord Gray of Contin: My Lords, the Secretary of State had available to him a great deal of advice. He asked a well-known consultancy firm to submit names to him. I cannot answer in detail what the noble Lord asks. I have little doubt that if I keep talking for a minute or two that doubt will be removed. Indeed, it has been removed. I am told that a full procedure was gone through and that a number of possibilities were identified. The best choice was then made by the Secretary of State.
Lord Ezra: My Lords, before the noble Lord sits down, may I add one further point and ask whether he does not feel that the appointment of persons to regulate privatised bodies of this sort does not raise entirely different issues from all public appointments hitherto; and whether he does not agree that Parliament has a special role in such appointments?
Lord Gray of Contin: My Lords, with great respect, may I remind the noble Lord that we are now at the Report stage of the Bill? It is a quite separate point that he has raised. In any event, I do not accept it. I am making the point that I think I am right in saying that at Report stage I have indeed violated the ales myself because I should have sought the leave of the House before even giving a reply to either noble Lord who has spoken. Noble Lords are not allowed at Report stage to behave as though we were dealing with the Committee stage of the Bill. I shall not read out the rules of order. I am sure that noble Lords are equally as acquainted with them as I am. I think, however, that at this early stage of our proceedings it is right that I should draw the attention of noble Lords to the fact that we are at Report stage.
Lord Stoddart of Swindon: My Lords, the noble Lord, Lord Gray, said that the amendment was not necessary because there were provisions in the Bill for strong and effective regulation. That, of course, is the point. It is the whole point made by the noble Lords, Lord Ezra, Lord Diamond and Lord Grimond. We do not believe, and no other commentator so far as I can see believes, that there are within the Bill arrangements for strong and effective regulation. That is why we are so concerned about the appointment and the personality of the appointee to the post of director general.
The noble Lord, Lord Boyd-Carpenter—whom I thank for his very helpful contribution—raised a number of points. First, he asked which Select Committee did I mean? Clearly I meant the Select Committees of the House of Commons because we have no Select Committee for Energy in this House, which I think is regrettable. Nor do we have a Select Committee for Trade and Industry. However, I think that the noble Lord has raised an important point. It

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would be as well, because of the wide and massive experience of Members of this House, that they too should be consulted. It might very well be that if this amendment were carried—because I intend to put it to the vote—we could move an amendment at Third Reading to include the House of Lords Select Committee on Science and Technology as a Select Committee of the House of Lords whose opinions could be sought. I therefore thank the noble Lord very much for that suggestion, which I shall certainly take into account.
The noble Lord also asked this question. What if there is a disagreement? If there is a disagreement it might tend to show that the candidate was not the right candidate. As the noble Lord, Lord Boyd-Carpenter, knows—he knows it better than me because he has had more experience in the other place and served longer and in a much more senior capacity than I did—the Select Committees of the House of Commons do not disagree and do not come to decisions just for the hell of it. They examine matters very closely indeed. Therefore any disagreement they had with the Minister would be of a serious nature, and their views would be taken very much into account by a wise Secretary of State. That would be the value of the whole system.
With regard to the Secretary of State being answerable to Parliament, yes, I accept that point. But the system which we are proposing through this amendment would ensure that the Secretary of State did not make a mistake in the appointment because he would have additional advice and assistance from the Select Committees.
Time is now getting on. I want to reply to one further point which was raised by the noble Lord, Lord Gray of Contin. He said that there were no new arguments since Committee stage. With respect to him I must say that this amendment was not moved at Committee stage. It is a different and much milder amendment. We must understand that it does far less than the amendments which were proposed at Committee stage sought to do. This is a milder, different amendment.
I shall leave it at that but I fear that I must press this amendment to a Division because it involves important principles and the House ought to be given the opportunity to decide. I beg to move.
3.54 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 100; Not-Contents, 117.

DIVISION NO.1

CONTENTS

Amherst, E.

Blyton, L.

Ardwick, L.

Brockway, L.

Aylestone, L.

Carmichael of Kelvingrove, L.

Banks, L.

Cledwyn of Penrhos, L.

Barnett, L.

Crawshaw of Aintree, L.

Beswick, L.

David, B.

Birk, B.

Davies of Penrhys, L.

Blease, L.

Dean of Beswick, L.

770

Denington, B.

Northfield, L.

Diamond, L.

Oram, L.

Donaldson of Kingsbridge, L.

Parry, L.

[Teller.]

Phillips, B.

Elwyn-Jones, L.

Pitt of Hampstead, L.

Ennals, L.

Plant, L.

Ewart-Biggs, B.

Ponsonby of Shulbrede, L.

Ezra, L.

[Teller.]

Fisher of Rednal, B.

Prys-Davies, L.

Foot, L.

Raglan, L.

Gallacher, L.

Rathcreedan, L.

Gladwyn, L.

Rea, L.

Glenamara, L.

Reilly, L.

Graham of Edmonton, L.

Ritchie of Dundee, L.

Grey, E.

Roberthall, L.

Grimond, L.

Robson of Kiddington, B.

Hampton, L.

Ross of Marnock, L.

Hanworth, V.

Sainsbury, L.

Hatch of Lusby, L.

Seear, B.

Heycock, L.

Serota, B.

Hirshfield, L.

Shaughnessy, L.

Houghton of Sowerby, L.

Shepherd, L.

Jacques, L.

Silkin of Dulwich, L.

Jenkins of Putney, L.

Simon, V.

John-Mackie, L.

Stallard, L.

Kennet, L.

Stewart of Fulham, L.

Kilbracken, L.

Stoddart of Swindon, L.

Kilmarnock, L.

Strabolgi, L.

Leatherland, L.

Taylor of Blackburn, L.

Listowel, E.

Taylor of Gryfe, L.

Llewelyn-Davies of Hastoe, B.

Taylor of Mansfield, L.

Lloyd of Kilgerran, L.

Tordoff, L.

Lockwood, B.

Underhill, L.

McIntosh of Haringey, L.

Vernon, L.

Mackie of Benshie, L.

Wallace of Coslany, L.

McNair, L.

Walston, L.

Mayhew, L.

Warnock, B.

Melchett, L.

Wells-Pestell, L.

Mishcon, L.

Whaddon, L.

Molloy, L.

White, B.

Morton of Shuna, L.

Williams of Elvel, L.

Mulley, L.

Willis, L.

Nicol, B.

Ypres, E.

NOT-CONTENTS

Alexander of Tunis, E.

Fortescue, E.

Allerton, L.

Gainford, L.

Annan, L.

Geddes, L.

Bauer, L.

Gisborough, L.

Belhaven and Stenton, L.

Glanusk, L.

Bellwin, L.

Glenarthur, L.

Beloff, L.

Gray of Contin, L.

Belstead, L.

Gridley, L.

Bessborough, E.

Hailsham of Saint

Boyd-Carpenter, L.

Marylebone, L.

Brabazon of Tara, L.

Halsbury, E.

Brougham and Vaux, L.

Henley, L.

Broxbourne, L.

Hives, L.

Bruce-Gardyne, L.

Home of the Hirsel, L.

Caccia, L.

Hood, V.

Caithness, E.

Hooper, B.

Campbell of Alloway, L.

Hunter of Newington, L.

Campbell of Croy, L.

Ilchester, E.

Carnegy of Lour, B.

Kemsley, V.

Carnock, L.

Killeara, L.

Cathcart, E.

Kimball, L.

Cullen of Ashbourne, L.

Kinloss, Ly.

Davidson, V.

Kinnaird, L.

De Freyne, L.

Kintore, E.

De La Warr, E.

Knollys, V.

Denham, L. [Teller.]

Lane-Fox, B.

Denning, L.

Lauderdale, E.

Drumalbyn, L.

Layton, L.

Duncan-Sandys, L.

Leathers, V.

Ebbisham, L.

Long, V.

Eccles, V.

Lucas of Chilworth, L.

Effingham, E.

Lurgan, L.

Ellenborough, L.

Macleod of Borve, B.

Elliot of Harwood, B.

Mancroft, L.

Elton, L.

Manton, L.

771

Marsh, L.

Sanderson of Bowden, L.

Maude of Stratford-upon-

Sandford, L.

Avon, L.

Sandys, L.

Merrivale, L.

Sempill, Ly.

Mersey, V.

Shannon, E.

Middleton, L.

Skelmersdale, L.

Milverton, L.

Stodart of Leaston, L.

Monson, L.

Strathspey, L.

Moran, L.

Sudeley, L.

Morris, L.

Swansea, L.

Mountevans, L.

Swinton, E. [Teller.]

Mowbray and Stourton, L.

Terrington, L.

Munster, E.

Teviot, L.

Murton of Lindisfarne, L.

Thorneycroft, L.

Newall, L.

Tranmire, L.

Norrie, L.

Trumpington, B.

Nugent of Guildford, L.

Vaux of Harrowden, L.

Porritt, L.

Vivian, L.

Portland, D.

Westbury, L.

Reigate, L.

Whitelaw, V.

Renton, L.

Wolfson, L.

Rochdale, V.

Wynford, L.

Rugby, L.

Young, B.

Saint Brides, L.

Young of Graffham, L.

St. Davids, V.

Resolved in the negative, and amendment disagreed to accordingly.

European Council Meeting, The Hague
4.3 p.m.
The Lord President of the Council (Viscount Whitelaw): My Lords, with the leave of the House I shall now repeat a Statement on the European Council in The Hague which is being made in another place by my right honourable friend the Prime Minister. The Statement reads as follows:
"With permission, Mr. Speaker, I should like to make a statement about the European Council of 26th–27th June, which I attended together with my right honourable and learned friend the Foreign and Commonwealth Secretary.
"The conclusions of the Council have been placed in the Library of the House.
"This Council concentrated on five main issues: the situation in South Africa; the creation of jobs within the Community; the completion of the Common Market; the international aspects of agriculture; and concerted action in the light of the nuclear accident at Chernobyl.
"On South Africa, the European Council expressed its grave concern at the imposition of censorship and the reimposition of the state of emergency by the South African Government and more generally at the deteriorating situation in the country at large. It reaffirmed that the goal of the Twelve is the total abolition of apartheid. It also agreed on a concerted programme of financial and material assistance from the Community and member governments to the victims of apartheid, in particular those affected by the disturbances in Crossroads, and to political prisoners, including those arrested under the recent state of emergency.
"In our own case we shall be making available a further £15 million over five years mainly for education and training of non-white South Africans and additional help for transport projects in neighbouring states. This is in addition to the £22 million which we are already giving.
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"The Council called for the opening without delay of negotiations between the South African Government and leaders of the black people in South Africa. To make such a dialogue possible, it called on the South African Government unconditionally to release Nelson Mandela and other political prisoners and to lift the ban on the African National Congress and other political Parties.
"The Council also agreed that the Community should in the next three months enter into consultations with other industrialised countries on further measures which might be needed, covering a ban on new investment, and the import of coal, iron, steel and gold coins from South Africa.
"Finally, the Council asked my right honourable and learned friend the Foreign and Commonwealth Secretary, in his capacity as President of the Foreign Ministers of the Twelve from today, to visit southern Africa in a further effort to establish conditions in which the necessary negotiations can commence.
"On job creation, the European Council welcomed the programme put forward by the United Kingdom and some other member states for creating the conditions for employment growth. This calls for the job-creating capacity of small businesses to be maximised by reducing the burden of unnecessary regulations; for improved training; and for measures to help the long-term unemployed back into work.
"We want to see greater attention given to the matters within the Community and priority given to them in the operation of the social fund. This will be of particular value to the United Kingdom. Our proposals were clearly reflected in the Council's conclusions. We shall concentrate on implementing them during the United Kingdom's presidency.
"On the Common Market, the European Council urged more rapid decisions if the timetable of completing removal of the barriers to a genuine single market in the Community by 1992 is to be achieved. This will be another priority for the United Kingdom presidency because of the contribution which completion of the market can make to creating jobs. The Council selected some areas for early progress which are of particular interest to the United Kingdom, such as liberalisation of transport and of capital movements.
"On agriculture, the European Council recognised—as had the Economic Summit Seven in Tokyo—the need to look at agricultural subsidies and protectionism on a world-wide basis. It agreed: that the problem of agricultural trade must be dealt with in the forthcoming round of international trade negotiations; that agricultural production in the European Community should be better adjusted to the market situation, so that the share of public expenditure claimed by agriculture can be reduced; and that there should be bilateral discussions with other major agricultural suppliers to try to eliminate the problems of chronic surpluses and competitive subsidies.

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"The Council discussed the lessons to be learned from the nuclear accident at Chernobyl. It agreed on the need for better international collaboration on nuclear safety under the aegis of the International Atomic Energy Authority. It called for general contamination tolerance levels for the Community to be established quickly on a scientific basis. The Council recognised that nuclear power would continue to have a vital role in meeting energy needs in the Community in future.
"The Council also called for rapid progress: on the easing of restrictions on passenger traffic across Community frontiers; on mutual recognition of professional qualifications; and on the action programme against cancer.
"The Council welcomed the intention of the British presidency to hold a Conference of Interior Ministers in the autumn to discuss ways of improving the Community's defences against terrorism, drug trafficking and illegal immigration.
"Mr. Speaker, this European Council set useful priorities for the United Kingdom's presidency of the European Community over the next six months, particularly in the creation of jobs. It also adopted a positive and constructive approach to the bitterly difficult problem of South Africa. We are well aware of the magnitude of the task facing my right honourable and learned friend in the mission on which he embarks. But all who genuinely want a peaceful solution will wish him well".
My Lords, that concludes the Statement.
Lord Cledwyn of Penrhos: My Lords, we are grateful to the noble Viscount for repeating that detailed Statement. The meeting of the Council, as the Statement makes plain, was overshadowed by the crisis in South Africa, but as this subject is to be debated in full in the House next Friday I do not propose to go into any detail upon it today. I shall merely say that while we support the Council's general attitude we are deeply concerned and disappointed by the immediate reaction of Her Majesty's Government to the grave situation there.
I wish to ask one or two questions on fact. First, will the noble Viscount confirm that the Foreign Secretary is to visit Washington, or is a representative from the United States Administration to visit this country to discuss the Foreign Secretary's forthcoming visit to South Africa? Secondly, of course we wish Sir Geoffrey Howe well on his mission. Is he planning to see in South Africa Mr. Nelson Mandela and other leaders of the African National Congress? Will he see Chief Buthelezi? Will he specifically try to arrange a meeting involving the Government of South Africa and the African National Congress in the light of what is said in the statement from the Council?
Finally, do Her Majesty's Government support the Council's proposed sanctions? The Statement that the noble Viscount has just read refers to:
"further measures which might be needed, covering a ban on new investment, and the import of coal, iron, steel and gold coins from South Africa".
Presumably those are measures to be taken in three months if Sir Geoffrey's mission is a failure. Can the noble Viscount make plain that the British Government subscribe to those measures?
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On other matters in the Statement—and there are several—we hope that the British presidency will be a fruitful and successful one, and we welcome some of the decisions made by the Foreign Ministers at their meeting. Of course we regard employment as crucial. Can the noble Viscount say whether the Anglo-Irish-Italian paper on unemployment growth into the 1990s was discussed at the meeting, and whether specific measures were proposed?
We also welcome the new campaign against drugs abuse. Can the noble Viscount say whether any EC moneys will be provided to assist this campaign in terms of treatment facilities, and so on? We note the reference to the Chernobyl disaster. Can the noble Viscount say whether any specific action through the Atomic Energy Authority is to be taken—action which would involve the Soviet Union as well as Western countries? Finally, on the essential and important point of the common agricultural policy can the noble Viscount say whether France subscribed totally to the proposals in the Satement?
Baroness Seear: My Lords, we on these Benches also wish to thank the Leader of the House for repeating this important Statement about a full meeting in The Hague covering issues of the highest importance. Like the noble Lord, Lord Cledwyn, I think that as we are to have a debate on Africa on Friday it would be inappropriate to raise a large number of issues, but there are of course certain matters that we shall have to raise immediately as a result of this Statement.
We are glad that the Government went as far as they apparently did, according to the Statement that we have been given, in the total condemnation of apartheid. Can we take it that this means, as was suggested in the meeting that the Minister, Mrs. Lynda Chalker, had last week, that this includes support for one man, one vote, without which I suspect there is precious little chance that we shall be able to establish any confidence in the leadership of the Africans that we really mean business in getting rid of apartheid?
The Foreign Secretary is going to South Africa, and of course we hope that he will be successful. But we must regret that there is a three-months delay period. This is a time in which events in South Africa are moving extremely fast, and it is a time when the moderate, restrained leaders of the African community are under very heavy pressure indeed. Unless they can be convinced that the Western democracies are really behind them in their struggle for the abolition of apartheid, combined with a minimum degree of violence, there is a serious danger that their leadership will pass to people with whom it would be a great deal more difficult to negotiate.
When the Foreign Secretary goes to South Africa after this three-months delay will he really be in a position to negotiate from strength? In order to get the agreement that he wants, is he prepared if necessary to use sanctions of a sufficient degree of severity to mean business? Otherwise, if the South African Government believe that he is negotiating from a weak position, with little determination to take action if he is unable to get a satisfactory agreement, obviously the chance of success on that mission will be slight. Not only do I greatly wish that the Foreign Secretary will be success-ful, but I am also convinced that if there is anybody in

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the present Government who would wish to make a success of this mission, it is the present Foreign Secretary.
Turning from the question of South Africa to the other matters mentioned in the Statement, of course we are all in support of job creation schemes backed by the Community, but the proposals put forward have a depressingly familiar ring. They are precisely the proposals that we have heard repeatedly in your Lordships' House—the importance of small businesses, and removal of the burdens on business. There will not be economic recovery in Europe simply through small businesses.
It is regrettable that there was apparently no discussion of what is to be done to strengthen the basic industries, the established industries, particularly by seeing that they are able to make the best possible use of the high technology that is becoming increasingly available. Small businesses, without recovery of the major industries, are not going to get us far. One can give only a qualified welcome to the recommendations that have been put forward in relation to job creation. In our view they do not go anywhere near far enough.
We are of course glad that the Government have backed the idea of reducing subsidisation to agricul-ture in order that more of the available resources should be put into industrial development. But we have heard this rather often. We shall be more impressed when we are able to record that there has been a reduction of the proportion of money going to agriculture. So much has been said about this in the past and so little seems in fact to have been done.
We welcome the attack that may have been made on protectionism. This is probably the greatest danger facing the economies of the world at the present time. The EC has not in the past had the best possible reputation in the fight against protectionism, and it needs to set an example in that field. If it was really intended at The Hague to stand up against protectionist forces in the world as a whole, that would be very welcome indeed.
Viscount Whitelaw: My Lords, I am grateful to the noble Lord, Lord Cledwyn, and the noble Baroness, Lady Seear, for their reception of the Statement. I am grateful to them both as well for suggesting that we pursue many of the matters concerning South Africa more fruitfully in the full debate that we are to have on Friday. Perhaps for once I may say that maybe in the discussions through the usual channels, in which both the noble Lord and the noble Baroness took part, we have chosen rather a good time for our particular debate on that account, following the European Council.
The noble Lord, Lord Cledwyn, said he was disappointed at the reaction. I do not quite see why he should be; after all, it was made abundantly clear unanimously by all the nations in the Community that they totally abhorred apartheid and wished to see it ended at the earliest possible moment. It was made very clear that every effort should be made to that end. Of course there are differences about how that may best be achieved, and these can be argued, but of the need to achieve it there was no doubt at all.
The noble Lord, Lord Cledwyn, asked me about my right honourable and learned friend's visit. First, will
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he visit Washington? Secondly, was he planning to see Mr. Nelson Mandela and Chief Buthelezi? At this stage the plans for my right honourable and learned friend's visit on both counts are still being discussed and I cannot give that information this afternoon. Perhaps by Friday I may be able to give the House a little more information. I shall certainly ask my right honourable and learned friend to give as much information as possible to both me and my noble friend Lady Young so that we can acquaint the House on Friday if there is more to be said. The arrangements are being made as urgently as possible.
As to the position of the British Government on sanctions, it was made very clear in the communiqué, to which all the Twelve subscribed, that exactly what happens will depend and must depend on the outcome of the mission. On employment the reference to "our plans" in the Statement refers to the Anglo-Irish paper. With regard to the question on France and agricul-ture, yes, France did subscribe to the agricultural part of the Statement. On Chernobyl I was asked whether the Soviet Union will take part in any action. I can perhaps stray from my brief for a moment to say that when I was in Russia I found Mr. Gorbachev extremely keen to take some part and I am sure that if he is approached by the Community, he will be most anxious to do so. He took a positive attitude towards that. If I have strayed from my brief, I hope that I may be forgiven my Lords.
The noble Baroness, Lady Seear, wanted to know more about the debate; she wanted to know whether the condemnation of apartheid went as far as the one man, one vote question. At this stage I must stick to the terms of the communique and make it clear that it was totally for the abolition of apartheid. The noble Baroness was extremely generous about my right honourable and learned friend the Foreign Secretary. I am extremely grateful to her and so will he be for the remarks she made. He undertakes an extremely difficult and touchy task and many there are who simply prophesy that it will fail, which is a very disappointing attitude. I am all the more grateful to the noble Baroness. She regretted that there was to be a three months' delay. This was decided no doubt on the basis that it was very important fully to explore the possibility of dialogue. After all, that is what is to be done.
On the question of job creation proposals, the noble Baroness was disappointed because they were very much the same plans as before. One can say with some reason that the other countries of the Twelve have in many cases decided to fall in with the efforts that the British Government are making; and that is some credit to what the British Government are seeking to do in an extremely difficult world situation.
When it comes to the question of reductions in agricultural expenditure, the noble Baroness will know, if she visits some parts of the country, that there is already evidence of reduction in agricultural expenditure which has not proved comfortable to those who are suffering from it or who are probably having to endure it. I hope I have answered most of the points made by the noble Lord and by the noble Baroness.
Lord Kennet: My Lords, will the Leader of the House accept that if there is to be the achievement of a full Common Market by 1992, the European Council will have to urge greater priority for this aim? Can he comment on the apparent paradox of a gathering of the Heads of Governments of the Twelve urging the Twelve to meet their own aims? On whom were they urging the desirability of greater priority? Is the European Commission not the Civil Service of the Community? Is it not the government of the Community, when all is said and done? Would it not have been more appropriate for it to instruct its own governments to co-operate at all levels ever afterwards to achieve this priority?
Viscount Whitelaw: My Lords, I am grateful for the first comment of the noble Lord. On his second point, I think it is a clear declaration of intention. Perhaps when one wants those who work for one in a commission or civil service to do something the first thing one should do is give them a declaration of intent. That is what I think the leaders of the countries concerned have done.
Lord Molloy: My Lords, does the Leader of the House agree that the EC Statement seems to be at some variance with the views of members of the British Commonwealth of Nations? Does he not further agree that in so far as all of us wish sincere best wishes to the right honourable and learned gentleman the Foreign Secretary, is it not possible that when Pretoria learnt that Sir Geoffrey Howe was going it stated that there was not much point in his visit? In view of that is it not fairly absurd for the British Foreign Secretary to visit a country that does not even wish to talk to him? Ought we not to try to secure from South Africa an agreement that it will be prepared to speak to our Foreign Secretary?
Viscount Whitelaw: In reply to the noble Lord, first, we have the communique from the Community. As yet we have had no meeting of the Commonwealth and no communique from the Commonwealth. The only judgment which the noble Lord has, to which he is entitled, is based on various statements made by various members of the Commonwealth, perhaps in relation to Pretoria and other matters. If everything in the world were governed by immediate statements by people all over the world, and perhaps by ourselves, before anything happened, we should not get very far. It is good to try to see what one can achieve and in some cases it is better to seek it that way than to go down the road of instant statements of one sort or another. I know the noble Lord will appreciate that it is important to do everything we can to try to overcome some of the prejudices. No doubt statements will be made which may not be the whole truth when it comes to the moment.
Lord Monson: My Lords, will the noble Viscount agree that if certain political figures in South Africa refuse to meet his right honourable and learned friend the Foreign Secretary, there is a great deal to be said instead for trying to meet as many ordinary members of the public as possible, particularly members of those ethnic groups who currently have the vote and are therefore in a position to influence events, so as to
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assess their hopes and fears—I stress the word "fears"—rather than trying to meet politicians whose views are already well documented?
Viscount Whitelaw: My Lords, if I were to respond to the noble Lord in too much detail I might fall into the very trap I was previously lecturing the noble Lord, Lord Molloy, about. It would be unwise for me to make any other comment except to say that 1 very much hope that when the plans are made for my right honourable and learned friend's visit, those whom it would be profitable for him to see will be prepared to see him and to discuss the problems in a very difficult situation. Many problems face all the people in that country.
Lord Hatch of Lusby: My Lords, the measures discussed by the EC about sanctions against South Africa can be represented as a feather duster. As the noble Viscount well knows, new investment in South Africa virtually does not exist. Is he telling the House that the Foreign Secretary is going to South Africa even without the feather duster in his baggage? Is he saying that the British Government are not committed to take any new measures if this mission fails?
Furthermore, the Foreign Secretary has said that he has major weapons in his armoury, and he described them as commonsense and moral justice. Have not commonsense and moral justice been present in relations with South Africa for 70 years? Have they ever worked? Certainly, they were present during the visit of the Commonwealth Eminent Persons Group. What reason have the Government to suppose that where the Eminent Persons Group found that there was no desire and no intention on behalf of Pretoria to move away from basic racial discrimination, another visit by the British Foreign Secretary can have any more positive results? Is it not just a means of procrastination and delaying the inevitable?
4.30 p.m.
Viscount Whitelaw: My Lords, first of all, I do not accept the noble Lord's description of the measures proposed as a feather duster. Secondly, I think I should make it clear that my right honourable and learned friend is going with the full authority of the whole Community as the Foreign Secretary of the country which has the presidency at this time. It is very important to say that. It is therefore their view that there is value in this visit; otherwise, they would not have unanimously backed it.
Therefore, I must say simply to the noble Lord that the difference between his attitude, the attitude of the Community and that of the Government is perfectly simple. He believes the mission will fail; he has made up his mind in advance that it will fail. I reject that as an extremely defeatist point of view and a very serious point of view, because if the opportunities for dialogue are not going to succeed I am not at all sure—and I do not believe that the noble Lord either is sure—what is likely to succeed in the very difficult situation that we face.
Lord Hatch of Lusby: My Lords, I was not quoting my words. I was not saying that I believe that the mission would not succeed. I was quoting the words of

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the Eminent Persons Group. They said virtually that there is nothing more to be done because Pretoria has no intention whatever of changing the basic racial discrimination of the country. Those are their words, not mine. The noble Viscount has not answered the question as to whether the British Government are committed to further measures if this mission does not succeed.
Viscount Whitelaw: My Lords, first, I must make it perfectly clear that we wish to see what will be the outcome of the mission. That was made very clear in the communique and that remains the position of the British Government. As to what the noble Lord believes or does not believe, or as to what the Eminent Persons Group believe, my experience of politics over a long period of time is that when people quote somebody else they usually mean that they agree with that point of view. That is what I assumed the noble Lord did.

EC Transport Ministers' Meeting, Luxembourg
4.35 p.m.
The Parliamentary Under-Secretary of State, Department of Transport (The Earl of Caithness): My Lords, with the leave of the House, I shall repeat a Statement being made in another place by my right honourable friend the Secretary of State for Transport. The Statement is as follows:
"With permission, Mr. Speaker, I will make a Statement about the meeting of transport Ministers which took place in Luxembourg on 30th June and which discussed road haulage and aviation.
"In advance of the Council, I submitted to the Select Committees on European Legislation last week an explanatory memorandum about a Community standard for drive axle weights. I was most grateful to them for their speedy response and this Statement responds to the suggestion that, following the Council, I should report progress to the House.
"On road haulage, the Council agreed on a Community standard of 11.5 tonnes for the drive axle of 5- and 6-axled vehicles, to apply from 1992. As the House may recall, a 1984 directive set agreed standards for most of the weights and dimensions for road haulage vehicles operating between Community countries. The drive axle weight for these larger vehicles was left outstanding with a requirement that it should be agreed as a matter of urgency. This is the decision which has now been taken.
"As in the case of the earlier directive, which set some overall vehicle weights which exceeded our maximum of 38 tonnes, we successfully negotiated a derogation of unspecified length for the United Kingdom, to enable us to keep our current drive axle weight maximum of 10.5 tonnes. The directive states categorically that the duration of this derogation will be decided by unanimity, which means that our agreement is needed to what is decided. As my predecessor made clear, we remain committed to the undertaking that there should be
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no increase in the maximum weight until Parliament agrees and our roads are suitable.
"To accompany the agreement on a drive axle weight standard, we successfully obtained Council agreement on the main lines of the way forward to full international road haulage liberalisation within the Community. First, and most important, the Council agreed on a cumulative increase in the Community quota of 40 per cent. per annum between now and 1992. Community permits are valid throughout the Community giving road haulage vehicles valuable freedom to travel in any Community country. This will therefore provide new opportunities for our hauliers to compete freely on equal terms, and will progressively liberate them from the cumbersome bureaucracy of the present bilateral permit system.
"Secondly, it was agreed that, while bilateral quotas exist, they will be adjusted to meet traffic needs, including the full requirements of transit traffic. Thirdly, the Council confirmed that from the end of 1992 the bilateral permit system will disappear altogether. The detailed arrangements to implement these principles will now be worked out within the Community, and our aim will be to finalise the necessary Community instruments so far as possible by the end of our presidency.
"On aviation, the meeting confirmed that there remains a wide divergence of views. But the Council did agree on two important principles. First, there needs to be a package of measures to promote increased competition, covering market entry, air fares and the capacity that airlines can operate. Secondly, these measures are elements in the process of completing the internal market by 1992. As with road haulage, there will need to be a gradual movement to fully liberal arrangements, but the need to complete that process by the end of 1992 has been established.
"These are useful starting points. There remains a great deal to do, and we must not underestimate the difficulties that lie ahead. My aim, in the British presidency which starts today, will be to build on these basic principles and, if possible, to reach agreement on the content of a first stage in the process towards the 1992 target. But success in this will depend on whether member states collectively are willing to put aside the restrictive practices to which they are accustomed. I put this question to the Council but did not get a clear answer. I shall need to pursue it during the British presidency. If the answer is that, despite the principles agreed yesterday, member states are not willing to make the effort, then they will have to accept that the alternative is increasing court action and other steps to seek direct application of the Treaty of Rome, particularly its competition rules."
My Lords, that concludes the Statement.
Lord Underhill: My Lords, the House will be grateful to the noble Earl for repeating the Statement, which covers three very important points. On the question of road haulage, I am pleased to note that the Transport Minister negotiated successfully the continuation of United Kingdom derogation for our

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lorry maximum of 38 tonnes and for the drive axle weight maximum of 10–5 tonnes. The Statement says:
"We remain committed to the undertaking that there should be no increase in the maximum weight until Parliament agrees and our roads are suitable".
The Opposition stands quite clear against 40-tonne lorries. Will the Minister confirm that that opposition also remains the view of Her Majesty's Government?
Although welcoming the second part of the document regarding road haulage, referring to the proposed cumulative increase in Community permits, there are a few questions that I should like to put. Will haulage vehicles coming into the United Kingdom continue to be confined to a maximum of 38 tonnes, as are our own lorries? What account was taken of any effect that the increase of Community permits may have on the British road haulage industry and job security?
Reference was also made in the document to opportunities for our hauliers to compete freely on equal terms. Was regard paid to the social conditions of haulage crews, bearing in mind that one of the complaints of your Lordships' own EC Committee in one of its reports was that social conditions are never taken into account by the Community in determining directives?
On the failure to agree on aviation fares and competition policies, I note that the Statement refers to implementation of "fully liberal arrangements" by 1992. What do the Government mean by "fully liberal arrangements"? Does the Minister recall the use by your Lordships' Select Committee of the term "controlled liberalisation"? How far do the Government really intend to go, bearing in mind the consequences and bankruptcies which have followed deregulation in the United States of America? How will full liberalisation, if achieved, affect clauses of the Airports Bill, which is still before Parliament, particu-larly with regard to the Secretary of State's powers to make directives on traffic distribution rules, limits on aircraft movements, allocation of aircraft capacity at certain airports and, also, the development of civil aviation throughout the United Kingdom?
Although everyone would like to have lower fares, will the Government in future negotiations keep in mind certain aspects which happen to be Labour Party policy? These are the sensible use of capacity, the maintenance of a network of services, the highest possible safety standards and the development of employment on terms and conditions which will enable investment for future development? Finally, how far does the Minister believe that fares could decrease? What effect would such a decrease have on British airlines and, in particular, on the possible British Airways flotation?
Lord Kennet: My Lords, on axle weights the noble Lord, Lord Underhill, has asked questions that we would ask. They can all be summed up in one: what is the maximum permitted weight of lorries from now on? Has it changed? Has the future prospect for that figure changed? Will the Government bear in mind that, in order to achieve a unified market, you do not need to have absolute uniformity of regulation throughout the area of the intended market? We do
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not at the moment have absolute uniformity of maximum weights for vehicles throughout the United Kingdom, which is, we commonly suppose, a unified market; there are bridges and so on where there is a maximum weight. That being a fact of economic and social life, it is surely just as readily applicable to the larger unified market that we intend to create in the Community, so that we could forever, without infringing commonsense, stick out for lower weight limits for lorries which come to this country.
On air fares, are the Government aware that we at least shall strongly support them if they go even faster than they say in the last sentence of this Statement, about bringing suits before the European instruments of justice about getting on with it? Can the Government confirm that it is at least 20 years since the cheapest available return ticket to Brussels has been mile for mile, about eight times the price of the cheapest available return ticket to New York? This is no way to treat a serious project like establishing a European Community.
Is it not the case that governments which resist change and liberalisation are shown by that mere fact to be quite flippant about the future of the European Community? Can the Government hold out a hope—even a corner of a hope—that we, in the exercise of our presidency, will be a little more ruthless on this point than the Statement says we will be?
4.45 p.m.
The Earl of Caithness: My Lords, I am grateful for the welcome to the Statement that the noble Lord, Lord Underhill, gave. I will pass on his remarks about what good news it was that we still maintain our derogation to my right honourable friend the Secretary of State. I can confirm to the noble Lord, Lord Underhill, and to the noble Lord, Lord Kennet. that the maximum weight of 38 tonnes or 10.5 tonnes drive axle weight will be the limit for this country, unless Parliament decides otherwise and until our roads and bridges are in a satisfactory condition to bear other lorries, should Parliament decide that those are the lorries that would be suitable for this country.
I can assure the noble Lord, Lord Underhill, that we will continue our monitoring of lorries coming into the country, either at ports of entry or roadside checks in the normal fashion, as we have been doing up to now. That will continue to make sure that other countries are not bringing in heavier lorries than 38 tonnes or 10.5 tonnes drive axle weight. With regard to the social conditions, these are always borne in mind. The directive that we are talking about related to the drive axle weight of the lorries and was an extension of the directive of 1984. The noble Lord will remember that a 1985 directive dealt more broadly with the points that he mentioned.
With regard to aviation, we will proceed to achieve a more liberal market, which we believe to be beneficial. I can tell the noble Lord that this Government would like to see four key ingredients that cannot be taken separately: first, scope for real competition on fares, covering types of fare as well as fare levels, so as to give the consumer a better deal; secondly, scope for airlines to mount capacity on a basis of commercial judgment; thirdly, airlines should be able to enter the market so as to compete on routes

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already served, or to start up new routes much more easily; and, fourthly, there should be a proper application of the competition rules.
If I may follow on by answering a point made by the noble Lord, Lord Kennet, who said that we should make progress faster, we should indeed like full liberalisation as soon as possible. But we believe it is more practicable to achieve this on a basis agreed by all the members of the Community than by a court case, and now that we have the broad parameters of 1992 we hope to make major strides during the term of our presidency. I am pleased to be able to report to the House that, since I answered a question of the noble Baroness, Lady Burton of Coventry, last week, a new service has been set up by British Midland between London and Amsterdam, increasing the potential opportunity for passengers at a low fare.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that many of us on this side also agree with the noble Lord, Lord Underhill, in welcoming the Government's firmness on the weight of vehicles and axle weight? Can he confirm—because one's own observation does not always appear to confirm this—that effective steps are taken at the ports to prevent vehicles which exceed these weights coming into this county from the Continent? Are there really effective steps taken to ascertain the weight of these vehicles and, if they are found to exceed it, are they sent back?
Secondly, on the air side, did the Ministers discuss the very recent decision of the European Court to the effect that restrictions both on fares and, as I understand it, on entry into European countries were illegal under the Treaty of Rome? In view of the fact that the Court decided this just before the Ministers' meeting, did the Ministers ignore this and are we indeed the only country in Europe which hustles and hurries to implement the decisions of the European Court? Surely, when we have a sensible one with which we agree, we ought to be insisting on its application.
The Earl of Caithness: My Lords, I am grateful for the welcome that my noble friend Lord Boyd-Carpenter gave to the derogation that my right honourable friend successfully negotiated on axle weights. I will pass that message on to my right honourable friend. With regard to enforcement, I can confirm that this is undertaken in a very serious manner and will continue to be undertaken in the same vein. Lorries that exceed the weight will not be permitted on our roads and enforcement action will be taken not only at the ports of entry of the country but in roadside checks by police and traffic enforcement officers.
As regards the point made by my noble friend about aviation, the Court decision made it clear that the competition rules of the treaty apply, but left it primarily to governments to decide the details of the application. That was a great help and was certainly not ignored during the discussions yesterday; nor was it ignored that the Heads of Government had agreed at their meeting in The Hague last week that the liberalisation of transport should apply to aviation by 1992.
Lord Bruce-Gardyne: My Lords, with reference to that part of the Statement which referred to civil aviation, can my noble friend tell us whether he is satisfied that the commissioner in Brussels responsible for transport has his heart in the deregulation of air fares, or does he occasionally look over his shoulder at the sort of policies which the noble Lord, Lord Underhill, told us reflected the views of the Labour Party in these matters?
The Earl of Caithness: My Lords, I believe that the commissioner is taking the matter extremely seriously and should like to see greater competition. Indeed, the Commission has indicated that it will wish to take action under Article 89 of the Treaty of Rome if there is not action by the member states themselves.
Baroness Burton of Coventry: My Lords, perhaps I may make a short comment. I regret that a consumer conference elsewhere prevented my being in the Chamber until now. Having seen the papers today, is the Minister aware that I am glad that Mr. Moore said that he did not feel he had received a very clear answer? I hope that means that he will press for one. May I ask the noble Earl whether I was right in hearing him say that we did intend during our presidency to make easier the entry of new airlines into the European competition. I think the Minister will agree that that was the one great detail that was missing from the famous Memorandum Two of the Commission.
Secondly, I was glad to hear the noble Earl say that the competition rules of the Treaty of Rome would apply. I should like to ask him whether the Commission members who had been preparing cases, if these were necessary, against those states which did not keep to the competition rules of the Treaty of Rome will now be enhanced. I hope with him that long before 1992 we shall have made much greater progress on the matter of air fares in Europe.
The Earl of Caithness: My Lords, notwithstanding the noble Baroness's absence earlier, we welcome her to our discussions, particularly as she is a keen liberaliser. Yes, I did say that we would be pursuing the point of easier entry of airlines into the market place. But this cannot be taken in isolation. We are looking for four points, and we want to move forward on all four together.
With regard to what action the Commission will take under Article 89 of the Treaty of Rome, I think it is too early for me to say, not having spoken to the Commission in the immediate past. But having indicated before that it would take action, I am sure that it will be looking carefully at the present position.
Lord Fanshawe of Richmond: My Lords, I share the view of other noble Lords on the Minister's successful decision in maintaining the 38-tonne limit. Can he give an assurance that this limit will be carefully checked on vehicles coming through ports from the Republic of Ireland? Surely if they are carefully checked at ports coming into this country, there will be no need to check them on the roads while they are travelling in this country. Can he give us a firm assurance that in no cases will vehicles over 38-tonnes be allowed to land at our ports anywhere in the United Kingdom?
The Earl of Caithness: My Lords, with regard to heavy lorries coming in from the Republic of Ireland, it too has a similar derogation to us which it put in the 1984 directive and indeed had confirmed yesterday. It is similar to that which my right honourable friend the Secretary of State achieved. We will check with our usual thoroughness vehicles coming into the country. I think it would be impractical for the Road Haulage Association and commerce in general to have every single lorry vetted every time it came in, but we will indeed check up in our usual thorough fashion.
Lord Howie of Troon: My Lords, will the noble Earl the Minister remind his noble friend Lord Bruce-Gardyne that it is not really agreeable to cast aspersions, in however veiled a manner, against one of our commissioners in Brussels? After all, some of us do not like the other one either; and if we were all to carry on like the noble Lord, where would it all end?
The Earl of Caithness: No, my Lords, I regret that I shall not remind my noble friend Lord Bruce-Gardyne of that point because I saw that he was taking careful note of it himself.
Lord Underhill: My Lords, I do not wish to detain the House further, but the noble Earl listed the four points which he said will be taken in a package together to achieve liberalisation. The one question to which he did not reply was whether or not the Secretary of State or the Transport Minister kept in mind in the discussions the possible effect on the four points in the Airports Bill to which I referred and which seem to conflict with complete liberalisation.
The Earl of Caithness: No, my Lords, I regret that I beg to differ from the noble Lord, Lord Underhill. I do not think it conflicts with the Airports Bill. It is all part of the same process. Of course my right honourable friend bore it in mind during the discussion. But if we can increase the opportunities for civil aviation and air traffic—this was so powerfully argued by my noble friend Lord Boyd-Carpenter and I believe that the noble Lord supported it as being one of our success industries—we must do so without delay.

Gas Bill
4.55 p.m.
Consideration of amendments on Report resumed.
Lord Diamond Lord Diamond moved Amendment No. 2:
Page 1, line 8, after ("shall") insert ("after consulting Parliament in whatever way he considers appropriate").
The noble Lord said: My Lords, if this amendment were coupled with Clause 1 the Bill would read:
"The Secretary of State shall, after consulting Parliament in whatever way he considers appropriate, appoint an officer to be known as the Director General of Gas Supply".
This is clearly not as desirable an alternative as the previous amendment on which your Lordships' House showed a considerable measure of understanding and sympathy. It is not as satisfactory as that. But the duty of an Opposition is, if it cannot get its first proposal accepted, to put forward a fall-back position in the hope that the Government will at all events accept that
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lesser proposal. This is indeed a lesser proposal, but a very valuable one.
It is valuable for the reason indicated on an earlier occasion: that it is sensible for a Minister to regard Parliament as an ally rather than as an opponent and to consult where that would be helpful. Indeed, I see sitting on the other side of your Lordships' House a former Member of the other House whom I consulted in a sense when I was a Minister. I mentioned a very sensitive matter to him so that he should be aware of it and received a very encouraging and understanding reply from him. It would be inappropriate for me to identify the noble Lord in any way. I am saying it only to show that, immediately, wherever one moves, one is reminded of the fact that in the normal carrying out of his duties a Minister tries to consult his colleagues, Members of Parliament and Parliament generally wherever he reasonably can and regards Parliament as a possible ally in the event of future difficulties.
This is a positive and creative suggestion. There is really no alternative left. I hope the Minister is not going to say, "Ah, but Parliament is in a sense consulted because the Minister is responsible to Parliament for making the appointment". That has been put forward in the debate—I forget who put it forward. Perhaps I may deal with it for one second.
Just imagine that I am dissatisfied—I am not saying I am—with the proposed appointment that has already been made. We understand that an individual has been appointed as director subject to this Bill going through Parliament. The terms of his contract will have been worked out and written down. Of course nobody is going to appoint either the appointor or the appointee without going through all the terms. That is all that will have been done. Suppose I am dissatisfied and the appointment is ratified, what can I do about it under the system that is being suggested—that of Ministers who are responsible to Parliament? I can put down a Question. A Member in another place can put down a Question. One gets an answer. If there is disagreement, there is disagreement, and we pass on to the next Question and that is virtually the end of the matter unless it is one of such vital importance that there is a huge debate on it, which I cannot imagine. The Government will not be influenced in the slightest degree if they do not wish to be so influenced. They hear after the event. Whatever an MP or a Member of this House thinks about it, it is of no real value.
In terms of determining who should be appointed, it is of no value. It is of no value because Parliament in that sense has no opportunity of questioning the Minister until after the appointment has been made. We are talking here about consulting before the appointment is made. We are talking about the Government altering their pattern of behaviour and showing that, from time to time, they are prepared to consult Parliament in advance.
I am bound to describe the situation in those terms because one of the major difficulties about this Parliament, with the enormous majorities that the Conservatives have in both Houses, is that the Government have shown themselves to be completely unwilling to consult and have got themselves into trouble as a result, starting with Chelmsford and going on. I hope therefore that the Government will not rely

787
upon that pattern of behaviour and will have regard to the fact that it is wise and helpful to consult Parliament from time to time, and that there is no alternative method by which Parliament can express an opinion before the appointment is made.
We tried to make an alternative suggestion and it was voted down. I do not complain. There was a fair vote and many Members of your Lordships' House took an interest and expressed their views. That amendment having been voted down, and that proposal having been voted against, we are left with this minimum proposal, that Parliament should be consulted in whatever way the Minister thinks appropriate. I could not have used lighter, less burdensome language than that, could I?
I have not suggested any particular method. Such methods as were suggested evoked a certain amount of criticism: "This would cause delay. That would create difficulties". I have not suggested anything at all. The Minister can consult to a minimum extent, totally informally, or he can consult to a maximum extent, completely formally. He can do whichever he chooses, and there is a whole range in between. He may consult
"in whatever way he considers appropriate".
There is no burden being laid on the Minister.
There is an opportunity of doing something constructive before the appointment is made, to try to secure the good will of Parliament instead of ill will through lack of consultation and to improve, one hopes, the actual act of appointment. I hope that the Government will look upon this amendment very favourably. I beg to move.
Lord Boyd-Carpenter: My Lords, the noble Lord, Lord Diamond, seems to have put down this amendment, as he has put down a great many others, not for any clearly defined purpose. He certainly multiplies the proposals that he puts forward, no doubt as part of his determination to oppose the Government. This particular amendment is a very curious one because of its vagueness and imprecision. There is nothing whatever in the existing law or in the Bill to prevent the Secretary of State, when making an appointment of this kind, from consulting anyone he chooses. He may consult people who happen to be Members of either House, and it would be perfectly proper for him to do so. However, the amendment would lay on him a statutory duty, failure to comply with which would presumably either expose the Minister to penalties or give rise to the possibility that the courts might rule that the appointment was irregularly and improperly made.
What on earth is meant by the phrase "consulting Parliament"? It must mean a great deal more than consulting individuals. Let us take a purely fantastic example. Let us first have the fantasy that the noble Lord, Lord Diamond, is a Minister and that he desires to appoint to this vacancy Mr. Arthur Scargill, shall we say? If he discussed that matter with one or two selected Members of your Lordships' House, or still more likely Members of another place, he might receive an enthusiastic response. If he consulted some other noble Lords or other Members of another place, he might receive a different response. Therefore it is clear that individual discussion with individual
788
Members, which seems to be the drift of the noble Lord's argument, would not comply with the terms of the amendment if it were put into the Bill.
One can consult Parliament only either through a Motion or by means of some procedure that involves fully both Houses and which involves taking the view of both Houses. The noble Lord did not suggest—and I am sure he is too sensible to suggest—that before making an appointment of this kind there should be a Motion moved by the Minister that Mr. X be appointed director general. On the other hand, unless some parliamentary procedure is evolved by which Parliament can express a view about a particular appointment, it does not seem from my reading of the amendment, and it may not seem so to other noble Lords, that the Secretary of State will have consulted Parliament.
There are in the amendment the words,
"in whatever ways he considers appropriate",
but the essence of the proposal is that the Minister must consult Parliament. I know of no way of consulting Parliament other than by an Adjournment Motion or by various other procedural gambits. What is plainly involved when one wants to consult Parliament is some discussion in both Houses. That would seem a most unfortunate way of seeking to make an appointment of this nature.
Lord Somers: My Lords, I wholly support what has been said by the noble Lord, Lord Boyd-Carpenter. These days we are apt to think that everything we do must be the subject of consultation with Parliament. If the Secretary of State wishes to appoint a director general, then for goodness sake let him consult somebody who knows about the matter. In 99 cases out of 100, probably, Parliament as a whole will know nothing whatsoever about it. It is not necessary to consult Parliament over even a new appointment such as this.
For instance, does the Prime Minister consult Parliament before appointing a member of the Cabinet? I am not saying that she always makes the right choice, but she does not have to consult Parliament before doing so. Why should such consultation be required in a case such as this?
Lord Stoddart of Swindon: My Lords, I support this amendment. I suggested an amendment of my own, which has been rejected by the House. This amendment is even weaker. It has been proposed by the noble Lord, Lord Diamond, and provides another opportunity to the noble Lord, Lord Gray, to respond in any way that he likes. To give the House his own ideas as to how Parliament should be consulted.
I say to the noble Lord, Lord Somers, that many of us believe that at the present time Parliament is not consulted enough. It is a case not of Parliament being consulted too much but of it not being consulted enough. Were Parliament consulted rather more by the Government of the day, it may be that the Government would not slip up on so many banana skins. I would say also to the noble Lord that I believe it is true that when the Prime Minister appoints her Cabinet it will be subject to the approval of the House of Commons, one way or another. In fact, the Prime Minister has to get the approval of the House in the

789
appointment of the Cabinet. If she does not get the approval, the Cabinet will not be formed in the way that she wishes.
The noble Lord, Lord Boyd-Carpenter, seemed to believe that the noble Lord, Lord Diamond, had tabled his amendment for no particularly defined purpose. I feel confident that the noble Lord, Lord Diamond, tabled his amendment because he believes, as I believe, that Parliament is increasingly being ignored by the present Government who are fast becoming the elected dictatorship that the noble and learned Lord the Lord Chancellor warned us against. Indeed, there is much evidence of this. The noble Lord, Lord Diamond, adduced such evidence when he spoke. Only yesterday in the House of Commons the attitude of this Government towards Parliament was very plainly shown in relation to the European Communities (Amendment) Act. It is a constitutional Bill which the Government sought to guillotine by a Motion allowing for only two hours debate on eight major groups of amendments. That would have left insufficient time to have voted on each amendment, let alone discuss them. Further, the guillotine Motion would have allowed only one hour for Report stage and Third Reading.
That is why we are worried. That is why we want more consultation with Parliament. That is why we believe, particularly in relation to matters affecting consumers and where, in fact, Parliament's role of protecting consumers is being lost, that there ought to be some way in which there is a parliamentary input into the appointment of the person who is to act as the surrogate for Parliament; namely, the Director General of Ofgas. So, there are very good reasons why we should do this. There are very good reasons because we are worried about parliamentary democracy and the way in which Parliament is being ridden over roughshod and its opinion not sought, or ignored, on so many issues. That is why the amendment has been tabled.
The noble Lord, Lord Boyd-Carpenter, mentioned Arthur Scargill. It is not very often—in fact, I have never heard him do so before—that the noble Lord, Lord Boyd-Carpenter, strays into the realms of fantasy. Clearly he did so in relation to the possibility of Mr. Arthur Scargill being appointed as the director general. I think the noble Lord was trying to move us away from the real point at issue. That point is that we believe we should make progress in ensuring that Parliament is properly consulted about this type of appointment.
We are not referring to the chairman of a nationalised industry. That is completely and utterly different. If that is raised, it is a red herring. We are talking about a director general of a regulatory authority which is supposed to act—indeed, we hope will act—on behalf of consumers. That is why I support this amendment. If the Minister will not accept the amendment—though I hope he does—and it is pressed to a Division, I trust that it will be carried.
Lord Gray of Contin: My Lords, we have yet again had an interesting and short debate on this subject. The noble Lord, Lord Diamond, will not be surprised
790
to hear that I cannot accept his amendment. Some of the words are different—and I accept that—but his basic intention remains the same as that which he explained in Committee and we remain firmly and utterly opposed to it.
There have been a number of suggestions about parliamentary democracy. I think that parliamentary democracy is working extremely well at the moment, particularly as regards this Bill. We must look at what happened in another place on this Bill. Hours and hours of debate took place in Committee, both before and after the guillotine. When the Bill came to this House we had no less than seven days debating it in Committee. We now have Report stage and eventually we shall have Third Reading. There does not seem to be very much the matter with parliamentary democracy.
5.15 p.m.
Lord Stoddart of Swindon: My Lords, I must correct the noble Lord. He said that we had seven days debate on the Committee stage of this Bill, but he will recollect that it was not seven full days. We were interrupted on several occasions and were not able to reach the Bill until late in the afternoon on a number of days. On two occasions because the Government could not maintain a quorum we were unable to reach the stage we had hoped. Therefore, it is not true to say that we have had seven full days on this Bill. We have not had enough time on the Bill. Only this afternoon we lost at least an hour because of other business. I accept that that must happen. Nevertheless the Minister is slightly misleading the House in saying that we have had seven days when really we have had only six..
Lord Gray of Contin: My Lords, I do not think that I am misleading the House in the slightest. If my memory serves me correctly, we were here until half-past nine the following morning on one occasion. That made up for a fair amount of time that we may have lost during the day. I am not complaining about that. That is what Government Ministers are for. We are prepared to stand at the Dispatch Box and listen to the arguments put to us and answer them to the best of our ability until whatever hour the House decides to sit. I am not criticising that for one moment. I am merely pointing out that in the view of most people in this House parliamentary democracy is working pretty well on this Bill.
I was very interested in what the noble Lord, Lord Somers, had to say. He made a useful point. He asked whether Parliament is necessarily the right place or the right group of people to decide on an appointment of this sort. The noble Lord, Lord Diamond, rightly pointed out that the Secretary of State has a wide variety of people available who can advise him. I am not at all certain that it is either necessary or desirable that such an appointment should necessarily be the subject of deliberation by Parliament. Parliament's job is—I give way to the noble Lord.
Lord Grimond: My Lords, I am grateful to the noble Lord, I am much interested in what he said about the breadth of consultation. Some of us were a little puzzled and possibly perturbed about what he said

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earlier—that the Secretary of State had gone to head hunters. It was not very clear that many alternative names were put before the Secretary of State by either head hunters or anyone else. It may be difficult to consult Parliament, but many people would be unhappy if they thought that head hunters, who may be admirable people for finding executives for a particular purpose, were now looked to by the Government in order to appoint a person of totally different character whose job has a different aspect from that of an executive and which, indeed, involves political decisions.
Lord Gray of Contin: My Lords, I agree entirely with the noble Lord, Lord Grimond. He makes a very valid point. I merely suggested that that is one of the sources which are available to the Secretary of State. He does not have to accept a recommendation. He does not have to accept any of the names which are presented to him. He might decide that the names submitted from other sources of advice are more suitable. This is just another of the examples of those sources which are available to advise the Secretary of State.
The noble Lord, Lord Diamond, seeks to require consultation with Parliament before the director can be appointed. In my view he has not put forward convincing arguments on why the appointment of the Director General of Gas Supply should require the approval of Parliament when hundreds of other such appointees—such as the Director General of Fair Trading, and the Director General of Telecommunications—do not require such approval. What is so different about the post of director of gas supply? In my view it is not sufficiently different to merit any different method of selection. In my view the noble Lord, Lord Diamond, has certainly not identified any such difference.
The noble Lord, Lord Stoddart, really went over the same ground again—as he rightly said, he had moved an earlier amendment which the House rejected—but he is lending his support to this amendment as a fall-back position. That is a perfectly reasonable course for a member of the Opposition to take; but he did not produce any new arguments, and those arguments that he did produce certainly did not sound convincing to me. I think that my noble friend Lord Boyd-Carpenter, as he so often does, has highlighted many of the weaknesses of what is proposed by this amendment, and I do not think that I need take any further time in outlining the Government's position again. I merely reject the amendment and hope that perhaps the noble Lord will be prepared to withdraw it. If he insists on pressing it, I must advise my noble friends to vote against it.
Lord Diamond: My Lords, that is a very unhelpful answer. The noble Lord is quite wrong when he says that this amendment is the same as a previous one with just a few words left out. Obviously he has not taken it seriously at all. He has taken the view that he does not want this Bill to be altered, so whatever amendment comes forward he will reject. That is the situation.
The noble Lord, Lord Boyd-Carpenter, apparently does not understand the reason for my amendment
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and he tries to impute unhelpful motives to me in putting this amendment down, so I shall explain once more. Having gone through the matter at some length on a number of occasions during the Committee stage and having spoken on the earlier amendment, I had hoped that it was perhaps unnecessary to explain; but apparently it is necessary to do so. The Government are creating a private monopoly out of a public monopoly and therefore they are denying the protection of Parliament to the people of this country and the consumers of that particular service. That is what the Government are doing. One of the reasons given for it is that privatisation will stop government interference. That has been said time and again by Members of the Government—those who have apparently been doing the interfering.
What do those words really mean? They mean that nationalised industries are responsible for major policy through Ministers to Parliament, and Ministers have to exercise their responsibility because they administer the taxpayers' funds for running these nationalised industries and for adding to the capital. That is what has happened with nationalised industries. There is here a nationalised industry from which the protection to which I have just referred will be totally removed. It will become completely a plc, a public limited company, in the private sector. It will be removed from the public sector.
What therefore are the Government proposing? The Government themselves are proposing that the consumer should be protected as is proposed by this Bill and that there should be the additional protection of monitoring. That is the main answer of the Government to this vacancy—this absence—of parliamentary representation of the subject, who is the consumer. There will be monitoring and there will be a strong individual to do that monitoring who is duly supported by staff and funds. It is a very important apppointment and I think—and I hope that the House thinks—that a minimum provision would be to say, "As we have removed the protection of Parliament completely"—because as I have explained, the only opportunity that is left to a Member of either House is to ask a Question after the event (not before the event) and to receive an Answer, whatever it may be, which is the end of it—"so the only protection is to have some form of consultation with Parliament before the appointment is made".
I have specially provided for the minimum of consultation so that nobody on the Government side can allege that there is any delay or burden involved. The Minister can decide whatever he thinks is appropriate in the circumstances. That is the minimum protection, and if the Government are not prepared to help to that extent, then of course I must press the issue.
The Minister says that it is the same as with Oftel so what are we complaining about? We are complaining because it is the same as Oftel. From all sides of your Lordships' House and outside in the country at large there are continual complaints about Oftel—not against the individual in particular but against the lack of power which the director (and this office is comparable to the one we are now discussing) has to monitor that industry. For that to be quoted as an example of why we should not depart from the

793
practice seems to me to be very extraordinary indeed. Questions are raised in the other place day after day about that very topic, and dissatisfaction is voiced from all sides of your Lordships' House.
It is because, as I indicated at Committee stage, the Oftel appointment shows that the director has inadequate power to protect the consumer that we think more ought to be done in this case. I repeat that I am suggesting something which is the very minimum and I hope that the House will support this view.
5.26 p.m.
On Question, Whether the said Amendment (No. 2). shall be agreed to?
Their Lordships divided: Contents, 104; Not-Contents, 121.

DIVISION NO.2

CONTENTS

Addington, L.

Lawrence, L.

Amherst, E.

Llewelyn-Davies of Hastoe, B.

Ardwick, L.

Lloyd of Kilgerran, L.

Attlee, E. [Teller.]

Lockwood, B.

Aylestone, L.

Longford, E.

Banks, L.

Lovell-Davis, L.

Barnett, L.

McIntosh of Haringey, L.

Birk, B.

Mackie of Benshie, L.

Blease, L.

McNair, L.

Blyton, L.

Mayhew, L.

Brockway, L.

Molloy, L.

Brooks of Tremorfa, L.

Monson, L.

Burton of Coventry, B.

Morton of Shuna, L.

Carmichael of Kelvingrove, L

Nicol, B.

Chitnis, L.

Northfield, L.

Cledwyn of Penrhos, L.

Oram, L.

Crawshaw of Aintree, L.

Pitt of Hampstead, L.

David, B.

Ponsonby of Shulbrede, L.

Davies of Penrhys, L.

[Teller.]

Dean of Beswick, L.

Prys-Davies, L.

Denington, B.

Rea, L.

Diamond, L.

Rhodes, L.

Elwyn-Jones, L.

Ritchie of Dundee, L.

Ennals, L.

Roberthall, L.

Evans of Claughton, L.

Robson of Kiddington, B.

Ewart-Biggs, B.

Ross of Marnock, L.

Ezra. L.

Seear, B.

Falkland, V.

Sefton of Garston, L.

Fisher of Rednal, B.

Serota, B.

Fitt, L.

Shepherd, L.

Foot, L.

Silkin of Dulwich, L.

Gallacher, L.

Stallard, L.

Gladwyn, L.

Stewart of Fulham, L.

Glenamara, L.

Stoddart of Swindon, L.

Graham of Edmonton, L.

Strabolgi, L.

Gregson, L.

Taylor of Blackburn, L.

Grey, E.

Taylor of Gryfe, L.

Grimond, L.

Taylor of Mansfield, L.

Hampton, L.

Tordoff, L.

Harris of Greenwich, L.

Underhill, L.

Hatch of Lusby, L.

Vernon, L.

Heycock, L.

Wallace of Coslany, L.

Houghton of Sowerby, L.

Walston, L.

Howie of Troon, L.

Wells-Pestell, L.

Jacques, L.

Whaddon, L.

Jeger, B.

White, B.

Jenkins of Putney, L.

Wigoder, L.

John-Mackie, L.

Williams of Elvel, L.

Kaldor, L.

Willis, L.

Kennet, L.

Wilson of Rievaulx, L.

Kilbracken, L.

Winstanley, L.

Kilmarnock, L.

Ypres, E.

Kirkhill, L.

794

NOT-CONTENTS

Abinger, L.

Kinnaird, L.

Alexander of Tunis, E.

Kintore, E.

Allerton, L.

Knollys, V.

Ashbourne, L.

Lane-Fox, B.

Auckland, L.

Lauderdale, E.

Bauer, L.

Layton, L.

Belhaven and Stenton, L.

Long- V.

Bellwin L.

Lucas of Chilworth, L.

Beloff L.

Macleod of Borve, B.

Belstead, L.

Mancroft, L.

Bessborough, E.

Manton, L.

Boyd-Carpenter, L.

Mar, C.

Brabazon of Tara, L.

Massereene and Ferrard, V.

Brougham and Vaux, L.

Maude of Stratford-upon-

Broxbourne, L.

Avon, L.

Bruce-Gardyne, L.

Merrivale, L.

Caccia, L.

Mersey, V.

Caithness, E.

Middleton, L.

Cameron of Lochbroom, L.

Milverton, L.

Campbell of Alloway, L.

Mowbray and Stourton, L.

Campbell of Cray, L.

Munster, E.

Carnegy of Lour, B.

Murton of Lindisfarne, L.

Carnock, L.

Norrie, L.

Cathcart, E.

Nugent of Guildford, L.

Colerame, L.

Orkney, E.

Craigavon, V.

Portland, D.

Cullen of Ashbourne, L.

Rankeillour, L.

Davidson, V.

Reay, L.

De La Warr, E.

Reigate, L.

Denham, L. [Teller.]

Renton, L.

Derwent, L.

Richardson, L.

Dilhorne, V.

Rochdale, V.

Drumalbyn, L.

Rugby. L.

Eccles, V.

Saint Brides, L.

Ellenborough, L.

St Davids, V.

Elliot of Harwood, B.

Sanderson of Bowden, L.

Elton, L.

Sandford, L.

Fanshawe of Richmond, L.

Sempill, Ly.

Fortescue, E.

Shannon, E.

Gardner of Parkes, B.

Skelmersdale, L.

Geddes, L.

Somers, L.

Gisborough, L.

Stodart of Leaston, L.

Glanusk, L.

Strathspey, L.

Glenarthur, L.

Sudeley, L.

Gray of Contin, L.

Swinfen, L.

Greenway, L.

Swinton, E. [Teller.]

Hailsham of Saint

Terrington, L.

Marylebone, L.

Teviot, L.

Halsbury, E.

Tranmire, L.

Hampden, V.

Trefgarne, L.

Henley, L.

Trenchard, V.

Hives, L.

Trumpington, B.

Home of the Hirsel, L.

Tryon, L.

Hood V.

Vaux of Harrowden, L.

Hooper, B.

Vickers, B.

Hunter of Newington, L.

Vivian, L.

Hylton-Foster, B.

Whitelaw, V.

Inglewood, L.

Wolfson, L.

Ingrow, L.

Wynford, L.

Kemsley, V.

Young, B.

Kimball, L.

Zouche of Haryngworth, L.

Kinloss, Ly.

Resolved in the negative, and amendment disagreed to accordingly.
5.36 p.m.
The Deputy Speaker (Lord Nugent of Guildford): My Lords, before I call Amendment No. 3, I should explain that if it is agreed to, Amendments Nos. 4 and 5 cannot be called.
Lord Diamond Lord Diamond moved Amendment No. 3:
Page 1, line 8, leave out from ("appoint") to end of line 11, and insert—
("three officers to be known as the Commissioners of Gas Supply (in this Act referred to as "the Commissioners") for the purpose of performing the functions assigned to them by this Part.")
The noble Lord said: My Lords, I beg to move this amendment, which provides for the appointment of,
"three officers to be known as the Commissioners of Gas Supply…for the purpose of performing the functions assigned to them by this Part"
of the Bill. Those noble Lords who were good enough to be present at our Committee proceedings will know that an amendment embodying the essential point here, but including a number of others as well, was moved by my noble friend Lord Ezra, who shares my strong feelings on the matter, in order to put before your Lordships the possibility of protecting consumers in the way that the Government have undertaken that they should be protected. It would do that so as to meet their purpose but in a way that they have not provided for.
As your Lordships know, this is the regular practice in the United States. I think that I would be right in saying that it is the universal practice where such utilities have monopolies in the various states for a body of commissioners to be appointed to protect the consumer interest. That is vital when one has a private monopoly such as that which the Government are creating by the Bill. We think that that is a good precedent to follow. We know that the Government have tried to pour scorn on it several times by saying that it leads to shortages of supply. The short answer to that is, notwithstanding whatever difficulties and growing pains the Americans may have experienced, their view—indeed, I think that I am right in saying their unanimous view—in all the separate and independent states is that they should continue with the principle of having a body of commissioners to protect the consumer interest wherever a utility is being run as a private monopoly.
That happens in a country whose philosophy can only be described as one of making itself the apotheosis of private enterprise. Nothing that this Government can say in favour of private enterprise is half as strong as the belief that is accepted in the United States. There they believe that what we are doing now should be accompanied by the appointment of commissioners, as the amendment suggests. I repeat that I regard that as an excellent precedent. It has worked; it is not theoretical. The provision is to replace the protection of Parliament which this Bill is removing by turning gas supply from a public monopoly into a private monopoly. I repeat that the provision works. I hope that the Government will regard it with favour and realise that this is a sensible way to protect the consumer, whom they claim they wish to protect.
It is not an additional burden on the public gas supplier. It ensures that what the Act says should be done, will be done. Our point is that it will not be done. The terms of the Bill will not be carried out if we have one officer of the kind proposed in the Bill, because one such person cannot possibly have the weight to withstand all the commercial pressures that will come from this huge organisation. That might happen with a commission of an appropriate size.
When my noble friend moved an amendment of this kind previously, we put forward a number of suggestions to assist the director general. Those suggestions were not liked so they have been left out. The words of the amendment have been left as:
796
"for the purpose of performing the functions assigned to them by this Part".
That makes the matter clear. It does not particularise. It does not make one commissioner responsible for one aspect and one for another, though we know in. practice that that is what would happen.
As at the moment Oftel is divided into branches, so would the commission divide its work into branches. There would be one commissioner at the head of one branch and one at the head of another. There is no need to put that in the Bill. They would do that of their own good sense. We hope that with that improvement which to that extent meets the Government's point, the Government will look kindly upon the proposal. There has been practical experience of it. There is solid precedent in support of it. It should therefore work well to achieve what the Government claim they want to achieve—the protection of the consumer in a private monopoly. I beg to move.
Baroness Macleod of Borve: My Lords, before the noble Lord sits down, on my list of groupings there are many amendments in the noble Lord's name. I think there are 12 or more. Was he talking to them all?
Lord Diamond: My Lords, I am as usual most grateful to the noble Baroness. I was talking to the following amendments, without straining your Lordships's patience: Amendments Nos. 6, 10, 20, 23, 25, 28, 30, 34, 35, 37, 38, 39, 43, 44 and 45. Why? To save time.
Lord Somers: My Lords, I am opposed to this Amendment. I apologise to the noble Lord, Lord Diamond. My experience is that the moment any concern has three directors it is practically impossible for them to agree on any subject. By all means let the director have as many assistants as he wants, but there should be one supreme director.
The noble Lord is anxious to maintain and preserve the voice of democracy. He seems to forget that the voice of democracy, in other words the voice of the people, includes every conceivable opinion in this country. I cannot think such a mixture would be an efficient guide for any concern.
Lord Sanderson of Bowden: My Lords, I do not suppose that any noble Lords opposite will be surprised that I oppose the amendment. We have almost been here before. I recall a great deal of discussion earlier. It was not about the wording of this amendment, but the noble Lord, Lord Stoddart, said at the last stage of the Bill that he had rolled such an amendment round in his mind. I have also done that. I see the suggestion coming up again. I could not agree more with what the noble Lord, Lord Somers, said.
We now know a little more about the director designate of Ofgas. If one man with such experience as the man in control will have cannot deal with the chairman of the newly-privatised British Gas plc, I do not know who can. If there is one thing about watchdogs (and we are talking about three watchdogs) it is that if they are all equal they usually bite one another's ankles. I am anxious that they should not bite one another's ankles because Sir Denis Rooke could then descend upon them from above and get the better of the argument. This amendment should be rejected by the House.
Lord Boyd-Carpenter: My Lords, we discussed the substance of the amendment at considerable length in Committee, as the noble Lord, Lord Diamond, admitted. I thought that we had sufficient discussion about it. It seems rather a pity that we should take up the time of the House to discuss it once again on Report. The only argument which emerged then and has perhaps emerged now is the sympathy felt by the noble Lord, Lord Diamond, for the director general, for a lone man put up against this enormous industry. Of course the noble Lord, Lord Diamond, knows as well as anyone that the director general would not be a lone man. He would have a proper staff which included properly qualified assistants. Some would be of considerable seniority, and there would be a proper organisation. I hope that on Report we shall not feel it necessary to go over again and again this idea of three commissioners. As I say, we discussed it at considerable length in Committee.
5.45 p.m.
Lord Shepherd: My Lords, I do not think that the noble Lord, Lord Diamond, has much alternative but to go over and over again the arguments, on this matter, because this is a revising Chamber. We are looking at a piece of important legislation. The difficulty that the noble Lord, Lord Diamond, and his colleagues face is that the Government are unable and unwilling to accept that there is genuine anxiety about the ability of the organisation that they propose, to meet the basic difficulties and problems of consumers in relation to a private monopoly.
For many years, I had the privilege of serving with the chairman of British Gas, Sir Denis Rooke. He is a man for whom I have considerable admiration. I know that he paid special attention to British Gas and its relationship with the consumers. Occasionally he had major battles with the Government, because the Government were seeking to impose upon him certain proposals which he felt were contrary to the interests of the industry and contrary to the interests of, and unfair to, the consumers. Sir Denis Rooke will not always be there. We are considering a piece of legislation that will have to see the passing of time.
The idea of three commissioners is no different from what they have in the United States. That has worked extraordinarily well there. Speaking from memory, I believe that even Australia has a similar system. I have all along shared the axieties of the noble Lords, Lord Diamond and Lord Stoddart, about the machinery which the Government have in mind to deal with this large and complex industry.
We need, to think about the position of the director general and his ability to be independent and achieve a fair hearing. We must remember that although British Gas will be privatised there will be no way in which the Secretary of State for Energy will not, in one way or another, be interested in the policy of British Gas, not on a day-to-day basis but in how reserves and investments are made. So there will be a developing relationship—a changed relationship—from now. But if the director general is to be appointed by that Secretary of State, he could well find himself under considerable pressure as to the line that he may be taking in fulfilling those duties that fall in Part 1.
798
The noble Lord, Lord Boyd-Carpenter, knows as well as I do that departments and particularly civil servants can exert considerable pressure upon those they have appointed. I give an example. I did not want to, but I shall. I had an executive director at the National Bus Company who had given a lifetime of service to the bus industry. He was a main board member, and he no longer had a service contract. He was appointed by the Secretary of State for five years. After that time, his appointment would be up for renewal. We were having some difficulties with the department.
That individual came to me, as chairman, in a state of considerable alarm and despondency. A senior official had said to him, "Look, your reappointment is coming up for consideration". All that the executive director was doing was fulfilling the wishes of the board. But, here, pressure was being put upon a person that if he did not become more amenable to the department he should bear in mind that his reappointment was up for consideration. I am not suggesting that this is usual. I have no doubt, however, that it does happen because departments wish to have their way. What the noble Lord, Lord Diamond, seeks, I believe, is not only the independence of the director general but also the independence of the employees of the director general. In my view, it is as necessary to establish that as the independence of the director general.
The Government have not so far been willing to go along the lines proposed in Committee. So the noble Lord, Lord Diamond, has come forward with what I consider a very practical and sensible solution. It is the appointment of three commissioners who, together, would be able to ensure their own independence more easily and more satisfactorily than if there was only one appointee; that is, a director general. The staff of the office, who will be involved in difficult and complex issues and who will be working under considerable pressure and constraints, will at least feel that there are three to whom they are answerable, three who have been able to establish together their independence with the department and with the new private monopoly.
This has worked in the United States. There, monopolies are dealt with in a much more radical way than is even now proposed in this country. I see no reason why we should not try it here. It seems that the Government are deeply entrenched, taking the view that if they were to make any changes to the Bill this would appear to be a reflection on what they had included in the Telecommunications Act. Whether they were right in that regard, only time will tell. I see no reason why we should not look for a new way to establish this new regulatory board. I recommend strongly that the suggestion moved with considerable skill by the noble Lord, Lord Diamond, should be accepted by the House.
Lord Ezra: My Lords, the noble Lord, Lord Shepherd, has made some telling points in support of the proposal moved by my noble friend Lord Diamond. I have been a little surprised to hear the views expressed by noble Lords on the othe side about the need to have a single person making all the decisions in organisations of this kind. I would remind

799
them that under the Companies Act every single enterprise in this country has to have a board. Every single nationalised industry has a board. In this way, carefully selected persons between them can impart strength to one another. We are now venturing into a new order of things—the creation of regulatory bodies—that we have never had in this country before, for the purpose of regulating the activities of private monopolies. I do not see why, in doing that, we should depart entirely from previous practice in all other fields.
The United States has adopted the same principle of having a collegiate system. We run all enterprises in this country on a collegiate basis. Of course, that does not mean that they are all equal. In other words, one has to be appointed chairman. But it would enormously strengthen the body if we applied the same collegiate principle to the regulatory bodies that we are now having to introduce as a result of government legislation that we have applied to running the normal commercial, industrial affairs of the country. This needs to be examined carefully. The issue is very simple. We on this side of the House, and a large number of people in the country, I believe, are concerned about the way in which this new arrangement will work. One reassurance that the Government could give would be to strengthen the regulatory body.
Lord Belstead: My Lords, I find it difficult to accept that the number of people at the head of the Office of Gas Supply—I am sorry I have pre-empted the noble Lord, Lord Stoddart.
Lord Stoddart of Swindon: My Lords, that is quite all right.
Lord Belstead: My Lords, I shall continue then. I cannot accept that the sheer number of people at the head of the Office of Gas Supply is vital to regulation under the Bill. I should have thought that what really matters is the statutory powers and rights provided in the Bill. I have been interested, in listening to this short debate, to observe that none of the noble Lords—the noble Lord, Lord Diamond, the noble Lord, Lord Shepherd or the noble Lord, Lord Ezra—has said anything about the powers and duties of regulation in the Bill. None of those three noble Lords has even glanced at Clause 4, which sets out the general powers and duties on my right honourable friend and on the director from which flow the many other duties and powers in the Bill.
Lord Diamond: My Lords, will the noble Lord give way?
Lord Belstead: No, my Lords; I shall not give way for the moment. I agreed with the noble Lord, Lord Shepherd, when he talked about undue interference. All of us know that, over the years, governments have felt it necessary to give their views as to how a nationalised industry should conduct itself. I put it to your Lordships that one of the advantages of privatisation is that departments will no longer be able to exercise the kind of undue influence on the affairs of the gas industry to which the noble Lord, Lord Shepherd, referred.
800
With respect to noble Lords who have spoken to the amendment, I really believe that what is crucial is to look at what the powers and duties of regulation are, not the way in which the actual office is going to be organised. I should have thought that any director worth his salt—and certainly the director designate, subject to the agreement of Parliament to the Bill, is a very highly qualified man indeed—will not want to be told how he should organise his office. That is what this amendment is about. That is why the Government are opposing it.
6 p.m.
Lord Stoddart of Swindon: My Lords, I should like to say a brief word. I had hoped to intervene before the noble Lord got to his feet. I wish to say that the Opposition support the amendment. It is, we believe, a modest amendment. I am surprised that the noble Lord has not accepted it. The noble Lord says that the director would be a strong figure and would not want to be messed around by commissioners.
As we see it a single director would be a lonely figure carrying the whole burden of regulating this huge and complicated industry. There is absolutely no reason why a commission—as the noble Lord, Lord Diamond, explained when he moved this amendment—could not so organise itself as to be responsible for various areas of work. I reject the view which has been put forward on a number of sides of the House that commissioners never agree on anything.
We have a Monopolies and Mergers Commission. I understand that the Monopolies and Mergers Commission comprises about 50 commissioners. They agree on a lot. They were praised by the Government for their report on the gas industry. They were praised for their report on the coal industry. Quite clearly therefore they can do the job even though they have 50 commissioners. However, they organise themselves in such a way that they can do the job properly. That I think gives lie to the view that has been put forward that three commissioners could not agree on anything. If 50 commissioners can agree, I am quite sure that three commissioners can agree.
I merely want to say in conclusion that if we had a commission, it would show to the country, and indeed to the gas corporation, that the Government meant business on regulation. I believe that is the message which should go from the Government and from this House: that we mean business on regulation. By passing this amendment the House would show that that is exactly what we intended to do because we had set up a commission which had the power, the duty and the will to make a good job of regulation on behalf of the consumer.
Lord Diamond: My Lords, the noble Lord, Lord Belstead, is right in one matter. He identifies one of the differences between the two sides of the Committee as the belief on this side that one person acting on his own is no match for a huge organisation like British Gas plc will be with its great variety of board members all acting in unison and providing added strength to one another. The noble Lord, Lord Belstead, is right in identifying that as one of our differences. But he thinks

801
that one such person will be able to protect the consumer. I do not think that he will. All those who have spoken on this side do not think that he will.
I am sorry that the noble Lord, Lord Belstead, not only misquoted me but was unwilling to give way when I sought to correct the misquotation. In the other place it is the golden rule that if anybody misquotes a Member then they have to give way immediately if that Member asks them to. The noble Lord, Lord Belstead, probably did not intentionally misquote me and he therefore did not think that I was merely seeking to correct a misquotation. The noble Lord suggested that I had not dealt with powers and duties. I made this special point that we were not talking about the powers and duties; we were talking about the inability of one man to carry out those powers and duties. That was the whole point.
We have been told by two members of your Lordships' House—one a well-known Member, an ex-director of a famous company, who spent most of his business life as a member of a board very competently and successfully—that it is impossible for a number of adult individuals with the same purpose in mind to work together in a group of three or in a group of members of the board. I find that such an absurd argument as not to be worth replying to. If the noble Lord will forgive me, his experience of his own life tells him how absurd that is.
Of course when one has three people working together for the same purpose they will have no difficulty in reaching conclusions. Every committee, group and board has that problem. They add to one another's wisdom and strength. Without that strength the powers and duties in this Bill will not be given effect. It is not only I who am saying this. I wish that the Government would realise that this is the general comment of non-City views throughout the country. I say "non-City views" because the City is very anxious to get this very profitable flotation—part of the business of the City—going as soon as it reasonably can. They are very anxious to support it.
But the views elsewhere are quite the reverse. I have already indicated that I have done a lot of reading. I do not want to trouble your Lordships with a number of extracts from various learned magazines all pointing to the same conclusion. I shall read a short part of the transcript of a programme on Channel 4 on 27th May of this year. There were a number of interviews with people concerned with British Telecom, and the way in which the watchdog Oftel was working. I read their conclusion:
"This is an unhealthy precedent, and bodes ill for consumers when British Gas, British Airways, and the Water Industry are privatised. When drawing up any final legislation, we hope the Government will ensure"—
this is summing up the programme—
"that any consumer body created to monitor these newly privatised monopolies will have more teeth than Oftel, the telephone watchdog".
"More teeth than Oftel"—in three words that is saying what I have been trying to say. We want here three commissioners to have the strength which they find necessary in every state of the United States of America where one has a private monopoly running a business of this kind.
802
If the Government are not prepared to meet us on this we must test the opinion of the House yet again.
Baroness Seear: My Lords, can I ask the noble Lord, Lord Belstead, why it is right to have a multi-member board to run the gas industry but wrong to have a multi-member commission to run the regulatory body?
Lord Belstead: My Lords, if one is running a plc one needs to bring together on the board different expertises to achieve success. One needs to bring together the technical, engineering, marketing and finance expertise on a board. If one has a regulatory authority, one needs a firm hand in which the industry and people generally will have confidence. One does not need to bring together the different expertise on the board. That is not to say that the director is not going to need to have, and want to have, skilful and well-qualified people in his office. But it is a matter for the director to decide how he deploys it.
Baroness Seear: My Lords, can he appoint other commissioners if he so wishes? If he finds, faced with a multi-member board of expert people working in a number of different fields, that he himself does not command the degree of expertise that is required to deal with this wide range of expertise with which he is confronted, will he be able then to appoint commissioners—people with power?
Lord Belstead: My Lords, may I refer the noble Baroness to the schedules? The noble Baroness will see that obviously there will be quite a free hand. On the other hand, the Treasury is written into the schedules. But I do not think I would depart from what I have said. If the House will give me leave to say this once again, I think that it will be for the director to decide how his office ought to be organised.
6.10 p.m.
On Question, Whether the said Amendment (No. 3) shall be agreed to?
Their Lordships divided: Contents, 84; Not-Contents, 108.

DIVISION NO.3

CONTENTS

Amherst, E.

Ewart-Biggs, B.

Ardwick, L.

Ezra, L.

Attlee, E. [Teller.]

Falkland, V.

Aylestone, L.

Fisher of Rednal, B.

Banks, L.

Fitt, L.

Barnett, L.

Gallacher, L.

Birk, B.

Gladwyn, L.

Blease, L.

Graham of Edmonton, L.

Blyton, L.

Grey, E.

Brockway, L.

Grimond, L.

Burton of Coventry, B.

Hampton, L.

Chitnis, L.

Harris of Greenwich, L.

Crawshaw of Aintree, L.

Hatch of Lusby, L.

David, B.

Hooson, L.

Davies of Penrhys, L.

Houghton of Sowerby, L.

Dean of Beswick, L.

Jacques, L.

Denington, B.

Jegar, B.

Diamond, L.

Jenkins of Putney, L.

Donoughue, L.

John-Mackie, L.

Elwyn-Jones, L.

Kilbracken, L.

Evans of Claughton, L.

Kilmarnock, L.

803

Kirkhill, L.

Seear, B.

Llewelyn-Davies of Hastoe, B.

Sefton of Garston, L.

Lloyd of Kilgerran, L.

Serota, B.

Lockwood, B.

Shepherd, L.

Longford, E.

Silkin of Dulwich, L.

Lovell-Davis, L.

Stewart of Fulham, L.

McGregor of Durris, L.

Stoddart of Swindon, L.

McIntosh of Haringey, L.

Strabolgi, L.

Mackie of Benshie, L.

Taylor of Blackburn, L.

McNair, L.

Taylor of Gryfe, L.

Mayhew, L.

Tordoff, L.

Monson, L.

Underhill, L.

Morton of Shuna, L.

Vernon, L.

Nicol, B.

Wallace of Coslany, L.

Pitt of Hampstead, L.

Whaddon, L.

Ponsonby of Shulbrede, L.

White, B.

[Teller.]

Wigoder, L.

Raglan, L.

Williams of Elvel, L.

Rhodes, L.

Willis, L.

Ritchie of Dundee, L.

Wilson of Rievaulx, L.

Roberthall, L.

Ypres, E.

Robson of Kiddington, B.

NOT-CONTENTS

Abinger, L.

Ingrow, L.

Airey of Abingdon, B.

Kemsley, V.

Alexander of Tunis, E.

Killearn, L.

Allerton, L.

Kimball, L.

Annaly, L.

Kinnaird, L.

Ashbourne, L.

Knollys, V.

Auckland, L.

Lauderdale, E.

Bauer, L.

Layton, L.

Beloff, L.

Long, V. [Teller.]

Belstead, L.

Lucas of Chilworth, L.

Boyd-Carpenter, L.

Macleod of Borve, B.

Brabazon of Tara, L.

Mancroft, L.

Brougham and Vaux, L.

Mar, C.

Bruce-Gardyne, L.

Marshall of Leeds, L.

Caccia, L.

Maude of Stratford-upon-

Caithness, E.

Avon, L.

Cameron of Lochbroom, L.

Merrivale, L.

Campbell of Alloway, L.

Middleton, L.

Campbell of Cray, L.

Mowbray and Stourton, L.

Carnegy of Lour, B.

Munster, E.

Carnock, L.

Murton of Lindisfarne, L.

Cathcart, E.

Napier and Ettrick, L.

Coleraine, L.

Norrie, L.

Colville of Culross, V.

Nugent of Guildford, L.

Colwyn, L.

Orkney, E.

Cowley, E.

Peel, E.

Craigavon, V.

Peyton of Yeovil, L.

Davidson, V.

Rankeillour, L.

De La Warr, E.

Reay, L.

Denham, L.

Reigate, L.

Drumalbyn, L.

Renton, L.

Eccles, V.

Richardson, L.

Ellenborough,

Rugby, L.

Elliot of Harwood, B.

St. Davids, V.

Elton, L.

Sanderson of Bowden, L.

Faithfull, B.

Sandford, L.

Fanshawe of Richmond, L.

Sempill, Ly.

Fortescue, E.

Skelmersdale, L.

Gardner of Parkes, B.

Somers, L.

Gisborough, L.

Strathclyde, L.

Glanusk, L.

Sudeley, L.

Glenarthur, L.

Swinton, E. [Teller.]

Gray of Contin, L.

Teviot, L.

Grimston of Westbury, L.

Tranmire, L.

Hailsham of Saint

Trefgarne, L.

Marylebone, L.

Trenchard, V.

Harmar-Nicholls, L.

Trumpington, B.

Henley, L.

Vaux of Harrowden, L.

Hives, L.

Vickers, B.

Home of the Hirsel, L.

Vivian, L.

Hood, V.

Whitelaw, V.

Hooper, B.

Windlesham, L.

Hunter of Newington, L.

Wynford, L.

Hylton-Foster, B.

Young, B.

Inglewood, L.v

Zouche of Haryngworth, L.

Resolved in the negative, and Amendment disagreed to accordingly.
6. 18 p.m.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No 4
Page 1, line 8, after ("officer") insert ("with intimate knowledge of the gas industry, of finance and consumer interests").
The noble Lord said My Lords, I beg to move No 4, which stands in my name on the Marshalled List The amendment seeks to ensure that the person appointed as the director general of Ofgas has intimate knowledge of the gas industry, of finance and of consumer interests As we said during the Committee stage, the director general of Ofgas will have to be an exceptional man, well-versed in the intricacies of the gas industry as well as in finance and consumer affairs He needs those qualities and to be a strong personality if he is to stand up to Sir Denis Rooke and his board of experts.
We have tried unsuccessfully this afternoon to strengthen the regulatory authority by the appointment of three commissioners rather than a single director general We are now seeking to ensure that the person appointed is the right man for the job and holds the relevant qualifications to perform his functions efficiently and to the benefit of the country and the customers.
I suppose that the Minister will tell me that it is a bit late in the day to be moving this amendment as the Secretary of State has already intimated that he intends to appoint Mr James McKinnon to the post of Director General of Gas Supply I must acknowledge that the Secretary of State had the courtesy to recognise that this House is still considering the Gas Bill because he said that the appointment was subject to Parliament approving the Gas Bill The fact that the Secretary of State acknowledges that is certainly a step forward The Secretary of State was also good enough to say that the appointment was full time—and that was something that we raised at Committee stage and to which we got no real answer—and would be for a period of three years So we really are making progress now We are getting some information out of the Secretary of State for a change.
What the Secretary of State did not mention was the salary attached to the post Nor did he give any indication of the extent of the short list of possible appointees from which Mr McKinnon was selected Again this afternoon when noble Lords on this side asked for that information, the Government refused to give it, although it is relevant to this debate and past debates.
Perhaps the noble Lord will inform the House of the salary that will be paid to Mr McKinnon As we pointed out at Committee stage, this is important information that we ought to have, because there is, or should be, a relationship between the salary for the post of director general and the salary that will be enjoyed by Sir Denis Rooke, who of course has also been appointed as the chairman of the new board when British Gas becomes a public limited company As we have seen in the case of the chairman of the Post Office Board, salaries of the chairmen tend to rise three-fold, or around three-fold, once the industry is privatised.
Under those circumstances it could well be that Sir Denis Rooke will be paid a salary in the region of

805
£ 160,000 after a year, or perhaps a couple of years, in office as the chairman of the privatised British Gas plc. Therefore it is important that we know the salary relationship between the director general and the chairman of British Gas plc. I hope that we can have some information about that this evening. It was not forthcoming at Committee stage. I hope that the noble Lord, Lord Gray, who is going to reply will be able to give us that information. I cannot believe that the noble Lord is unable to give us it, because I cannot conceive that Mr. McKinnon would have been offered the job without also having been offered the salary attached to it.
Good, I understand that the noble Lord is going to give us that information. I shall not dwell on that any further. We look forward to having the information.
My amendment refers to three qualifications for this post. Mr. McKinnon certainly has one—that of considerable experience of finance. In its press release the Department of Energy described Mr. McKinnon thus:
"Mr. McKinnon is an accountant with considerable experience in commerce, and until recently was finance director of the Imperial Group. His background is ideally suited to assessing the financial information needed to carry out his duties in safeguarding the interests of consumers".
I must accept, and I think we would all accept, that Mr. McKinnon is an accountant of high calibre. Were he not so, he would not have been appointed as financial director of Imperial Group. There is no question about his qualifications in finance. Therefore, he meets one part of the criteria set out in this amendment. However, he has no background in the gas industry, which is a completely different industry from those controlled by the Imperial Group. I think that the noble Lord will accept that.
His experience with Imperial may perhaps have had more to do with protecting the interests of the shareholders rather than those of the customers. I imagine that is probably what the Imperial Group appointed him to do, and the Minister might like to comment on that particular aspect. It may well be that through his experience in private industry Mr. McKinnon will have learned a thing or two as to how customers are exploited by large organisations, and will bring his inside knowledge to bear on the gas industry; but of course that is to argue against myself and I do not want to do that.
The amendment is perhaps a little late; nevertheless I would welcome, as I feel sure the House would welcome the comments of the noble Lord, Lord Gray, on it, and we shall be much obliged if he gives us the information that I have requested. I beg to move.
Lord Grimond: My Lords, this is an attempt to specify the qualities of the winner after the race has been won. Nevertheless, I should like to support this amendment because it gives us an opportunity— which indeed we have had before—for discussing further this important post and its functions. I was unable to be present at some of the earlier debates on the Bill because I was in hospital, which may excuse me for repeating arguments that have probably been heard.
806
This amendment highlights the arguments for the previous amendment—that the Government are unlikely to get somebody who is an expert in the gas industry and finance and who can represent the consumer. I wish to concentrate on the representation of the consumer, because there the danger lies in this Bill. I would suggest that the ideal officer so far as the consumer is concerned is a woman—a bloody-minded woman, if one can find such a person; a woman who has been at the sharp end of paying the gas bills, arranging her cooking and so forth; and a woman who is not likely to be taken in by either the hierarchy of a big industry or the arguments about the technical difficulties, the finance, and so forth. After some experience in politics I have found that understanding is a splendid but rather dangerous thing. One begins to understand all the difficulties, one begins to sympathise with the head people, with Ministers and others. Every now and again it is necessary to have someone who says, "I do not pretend to be an expert about this, but I can tell you that it is all going wrong. Gas is too expensive, it is not supplied in the right way, and the consumers are getting a bad deal".
I know nothing about Mr. McKinnon, and he may well be capable of doing that, but it requires a different quality from that of an accountant, a tycoon, or even knowing about the gas industry, although I certainly accept that these things, too, are necessary. Even if the Government have made a decision, I hope that when it comes to appointing extra staff for Mr. McKinnon the points I have made will be taken into account.
I find it a little alarming that he should have emanated from a headhunters' office. I find it a little alarming, too, that he should be nominated now—admittedly subject to the passing of the Bill—because this seems to me to be jumping the gun. Parliament still has the right to amend this Bill and put into it all sorts of qualifications, and yet we are told that the decision about the man who is vital to the Bill has already been made. I believe that it is the consumer interest that is important, that women are the best representatives of consumers on the whole, and that it would have been much better to have had three commissioners who would have been expert in the different forms of expertise mentioned in this amendment.
6.30 p.m.
Lord Gray of Contin: My Lords, I hope that the noble Lord, Lord Grimond, did not in any way feel that my earlier remarks suggested that he should have been with us in Committee when he was not. I certainly had no intention of imputing that.
Lord Grimond: My Lords, I hope I detected a note of regret.
Lord Gray of Contin: My Lords, there was a genuine note of regret, but I am delighted that the noble Lord has made such a good recovery and is with us for Report.
There was no question of any sex discrimination in the selection of the appointee in this case—
Baroness Seear: My Lords, my noble friend's point is that there should have been.
Lord Gray of Contin: Yes, my Lords; he thinks that there should have been. I am not aware whether any ladies were on the short list, but there may have been some.
The noble Lord, Lord Stoddart of Swindon, moved this amendment, which has a striking resemblance to one tabled by him at Committee. As I said to him then, we fully accept the importance of the character-istics identified in the amendment. Such qualities are clearly important, but they are (I am sure he will agree) not the only important qualities. One of the most important will be 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.
The person who has been selected, subject to Parliament approving the passing of this Bill, will meet those requirements aptly. In making judgments and decisions he will have the expert advice provided by his staff who will be working closely with the industry, consumer organisations and other bodies. The director will also need other skills if he is to be an effective protection for the interests of consumers. He will also of course have to manage his office effectively and ensure that all the tasks assigned to him by the Bill are properly carried out.
The noble Lord, Lord Stoddart, asked me about salary. I said I would be able to give him this informa-tion. During the Committee stage the noble Lord, Lord Diamond, suggested that somebody in this position would merit a salary somewhere around that of an Under-Secretary in government service. We have gone a little better than that and the salary is based at the level of a Deputy Secretary. The salary will be £47,000 per year. We are extremely fortunate to have found somebody of the calibre of Mr. McKinnon for that figure. It is an excellent salary, but it is nothing more than someone of the ability of Mr. McKinnon merits.
While I fully recognise the importance of the characteristics which are picked out in the amendment, I realise that there are also some other equally important characteristics, and to list them all is both inappropriate and unnecessary.
The noble Lord, Lord Grimond, had a useful point when he suggested his preference for a lady to fill this post, but as I explained earlier the Secretary of State had a wide range of advice available to him. Having considered the various suggestions put to him, he has decided that Mr. McKinnon is the most appropriate person to be appointed and, subject to Parliament approving the legislation, that will be his choice.
I return to the amendment moved by the noble Lord, Lord Stoddart. From his remarks and in view of the situation which has now developed in which there is an appointee, I do not think he expected me to accept his amendment. Therefore he will not be too disappointed if I suggest that perhaps it might be as well if he were to withdraw it.
Lord Diamond: My Lords, we on these Benches are very interested in this amendment and are anxious to ascertain in what direction it points. The noble Lord, Lord Stoddart, hopes to find somebody with intimate
808
knowledge of the gas industry, of finance and consumer interests, and all for a salary of £47,500. Perhaps the figure I have given is £500 too much.
Lord Gray of Contin: My Lords, the sum is £47,000.
Lord Diamond: My Lords, my figure was too much; it is £47,000. As an ex-Chief Secretary, I approve of the reduction of £500. So we have a salary of £47,000, which the Minister will recollect is almost spot on what I suggested in Committee it would be. The salary of £47,000 is available for a man or woman who has intimate knowledge of the gas industry, intimate knowledge of finance and intimate knowledge of consumer interests. What a paragon; what a modest person; how very much he understates his own value! In particular, what chance has one person at that known salary level in standing up against a man who is known to have or will at that time have three times the salary level, supported by board members many of whom will have a greater salary than the director himself? What chance has a single individual of protecting the consumer, ensuring efficiency and, in certain cases, requiring British Gas to alter course? What chance has one man of doing that?
I am bound to say to the noble Lord, Lord Stoddart, that I have agreed with a great deal of what he said. I think he will agree that I have supported him on many occasions and been persuaded by his arguments. This only shows that it is quite impossible, in the strategy that the Government have, to find and appoint a person who will do the essential job without which the consumers will not be protected in the way the Conservatives stated in their manifesto would result from competition being introduced into this industry. It is that charge I level against them and I cannot see that we shall get much sense out of this.
It has been demonstrated already that the person who is likely to fill the job has one great qualification in his favour in that he is a chartered accountant. That is a very good start indeed. I say that with all the objectivity of which I am capable as a long-practising chartered accountant. That is in his favour, as is the knowledge of industry and finance, but I doubt very much whether he knows more about consumer affairs in practice in having to deal with them with sensitivity than does the woman who is the chairman of the Gas Consumers Council. We have at least one noble Baroness in office in this House at the moment, indicating how right my noble friend is in suggesting that women have special abilities in this area. But I doubt whether the individual in question can combine all those qualities. I do not know whether the noble Lord wishes to press this to a Division. He said that what the Government are doing is inadequate for the purpose.
Lord Stoddart of Swindon: Yes, my Lords. I agree absolutely with the noble Lord, Lord Diamond. It is impossible to get somebody of the calibre we need for the price that the Government are prepared to pay. If I may say so, there is only one man in this country who could do this job adequately, but he would not do it for £47,000 a year. I refer to Sir Denis Rooke. He is the chappie who knows the industry inside out. Nobody could fool him, but he is not available. He would

809
certainly not be available at that salary, but he is not available because he is to be the chairman of British Gas plc. His salary will undoubtedly go up to about £160,000 a year. He would not accept this job at £47,000 a year.
There is one question I should like to ask the noble Lord, and perhaps the House will give him leave to answer. At the present time the salary of £47,000 is about two-thirds of the salary paid to Sir Denis Rooke. Will it keep its relationship? In other words, will it go up and keep the two-thirds relationship with the salary of the chairman of British Gas plc? I think that he might expect that and I think that the Government really ought to be expecting to pay it. Perhaps the noble Lord can give an answer. I am not going to press this amendment. I think it would be wrong for me to press the amendment; although I listened to the noble Lord, Lord Grimond, and he really put his finger on the point. Why not a woman? Why have we not considered a woman for this post? The noble Lord opposite did not tell us who had been considered. I should like very much to hear whether or not a woman was considered by the Secretary of State. I bet not. We should like to hear whether a woman was considered.
All this could have been avoided—and I say this for the noble Lord, Lord Grimond, for I so much agree with him—and without the positive discrimination that the noble Baroness, Lady Seear, apparently wanted or indicated that she might like. We could have solved the problem. If we had appointed three commissioners, then one of them could have been a woman. But all is not lost because the amendment following this one will give the opportunity to the House once again to appoint not commissioners but assistant directors so that the noble Lord, Lord Grimond, with his persuasive tongue may be able to persuade noble Lords opposite—and he does not have to persuade those on this side of the House—that the next amendment would give the opportunity to the Government to save themselves.
They would give themselves this opportunity of having much wider experience, including female experience, on the regulatory authority. I shall say no more for we really must get on. Does the noble Lord, Lord Gray, want to invervene to tell us whether a woman was considered?
Lord Gray of Contin: My Lords, by leave of the House—and I always try to be helpful to the noble Lord—he asked me about the salary in the future of the director. The director is remunerated at the level of a deputy-secretary and that salary will rise as the salary of a deputy-secretary rises in due course. So far as Sir Denis Rooke is concerned, that will be a matter for British Gas plc.
Lord Stoddart of Swindon: My Lords, there is no doubt that the director general is going to be the poor relation. There is no question about that. In those circumstances, I can do no more than to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.45 p.m.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 5:
Page 1, line 10, after ("Director)") insert ("together with two Assistant Directors of Gas Supply").
The noble Lord said: My Lords, I beg leave to move Amendment No. 5 which stands in my name and in that of the noble Lord, Lord Diamond. It may be for the convenience of the House if, with this amendment, we discuss Amendments Nos. 7,9,21, 22, 24, 26, 27, 33, 36 and 40. I do not intend to speak for very long because we have had a debate on the question of commissioners. As was shown in the previous debate, there are great merits because of the possibility of diversity in having more than one director.
The noble Lord, Lord Gray, argued against the appointment of commissioners. He does not like a commission. He believes that it would be unwieldy. We do not accept the arguments that were put up. We believe, as we said on Amendment No. 3, that a commission would be a more relevant regulatory authority. But the House in its wisdom decided that we should not have a commission.
What this group of amendments does—and it does not seek to appoint commissioners—is to call for the appointment by the Secretary of State of assistant directors. They will have the status, having been appointed by the Secretary of State, of not being dismissed by anyone other than the Secretary of State. That gives them a particular status in relation to the job and in relation to the director general himself.
Assistant directors, because of their special position, would not be in the subordinate position of employees, but they would be part of a team where the director was (I suppose the right phrase would be) primus inter pares. That would be the situation. It is not the ideal position. The ideal position, as we have said already, is the commission and commissioners. But this gives the House the opportunity to consider the possibility of giving the director general more expert assistance and a wider view of the whole business of regulation. He would also be enabled to assign the roles to the assistant directors and therefore would still be able to maintain his overall control of the regulatory machinery and how he wanted the regulations to proceed.
It would be possible under this amendment to appoint a person who had intimate knowledge of the gas industry and another with experience of consumer interests (as was mentioned in the previous amendment) and the director, Mr. McKinnon, could concentrate his mind and main effort on finance and co-ordination. But the beauty of this amendment is that while it does not form a commission, it gives the government the opportunity of diversifying and it would give the opportunity to place a woman within the regulatory machinery.
She could be one of the assistant directors. I think this amendment really has merit. I said that I would not speak very long on it and I do not intend to do so; but it does have great merit. I think it gives the House probably the last opportunity to give the director general the assistance which he should have (and which he will need) to deal with the chairman of British Gas plc and the expert board that he will have.
Lord Grimond: My Lords, as no other noble Lord is going to address the House, I think that it would be highly discourteous of me to remain silent after the very kind invitation expressed by the noble Lord, Lord Stoddart, on the last amendment that I should support him on this matter. I am very glad to support him. He has eloquently moved his amendment and he has outlined the main arguments. I do not intend to go over them again. However, I should like once again to point out to the House that in my view we are asking for a director who has not only to have diverse qualities but actually contradictory qualities. He has to be experienced in big business, in accountancy and finance. That means that he looks at the world from that point of view. He is accustomed to a secretary; he is accustomed to a car; he is accustomed to a high salary and a share in the profits. And he is no doubt interested in the prestige of his post. We have heard already that he may consider £47,000 merely a pittance.
I suggest that most gas consumers do not consider it a pittance and nor are they accustomed to have a secretary. They have to pay their own gas bills and write out a cheque or put in the money themselves. The consumer's interest is quite different from that of the tycoon. I am not sure that we can get a director who is both a tycoon and an anti-tycoon. That is what we are asking for. But that is a very powerful argument for having two assistant directors. I do not deny for one moment that it is necessary to have either an assistant or a director who knows about the gas industry and about finance. But this amendment would give us the opportunity to divide the post to some extent and have, I suggest, a woman who has practical experience of consumer affairs and who is an acerbic personality, and not likely to give way simply because of the prestige of those who have been longer in the industry. Therefore, I am very happy to support this amendment, because it is our last chance to make a great deal more of this post than we have done up to now and to write in more protection for the consumer.
Baroness Carnegy of Lour: My Lords, after all this sexist talk, I wonder whether the noble Lord might think that we should also be racist. As we have the good news that the director-designate is a Scotsman, we might make sure that the assistant directors were English and Welsh.
Lord Belstead: My Lords, the Government agree with the noble Lords, Lord Stoddart and Lord Grimond, in wanting to see effective regulation, but I think we part company as to how best to achieve that aim. The noble Lord in moving the amendment saw beauty in it. They say that beauty is in the eye of the beholder, and all I can say is that I do not see how it can be right to spell out in this Bill the structure of the Office of Gas Supply. It is not something that Parliament thought it was right to do with the Office of Fair Trading, it is not something that Parliament thought it was right to do with the Office of Telecommunications, and I do not think it is right to do it with the new ofgas.
Lord Diamond: My Lords, if I may say so, that is a wholly inadequate answer. I am sorry that the noble Lord has once more shown that he is not prepared to
812
take an amendment seriously. There is nothing at all here about an office. There is something here about assistant directors. There is already power in the Bill about an office and we have no need to say any more. I shall read it out to the noble Lord, in case he has forgotten the contents of the Bill. Paragraph 4 of Schedule 1 states:
"The Director may, with the approval of the Treasury as to numbers and terms and conditions of service, appoint such staff as he may determine."
We are not talking about staff. We are talking about the lack of stature of a single person in trying to achieve the monitoring of the huge organisation which the Government have provided under this privatisation measure.
What the amendment refers to is two assistant directors, so that together you will get a triumvirate. I do not know the sexless word for triumvirate; I suppose it is triumpersonate. I do not know how it is dealt with today, but everybody knows that it means a group of three who would strengthen one another and be available, respectively, to take on major tasks. One of them could be a person who had vast experience in consumer affairs and, therefore, could handle problems with much more sensitivity than a person whose experience was purely as a high-level account-ant and director of a commercial company, who might know very little about the problems of consumers in the gas industry, which are very sensitive, as every Member of Parliament knows full well from his postbag.
So I am saying to the noble Lord, Lord Belstead, that I am sorry he has taken the attitude that none of these amendments is worth serious consideration— because that is what he has done. This is a very solid amendment. It enables us to do the minimum that we can do because the Government have rejected out of hand every other proposal for strengthening the monitoring to an adequate level and this is the last one that is left to us. I hope that the noble Lord, Lord Stoddart, will pursue his views on this amendment.
Lord Stoddart of Swindon: My Lords, I am very sorry that the noble Lord, Lord Belstead, should have been so dismissive of this amendment. I think I gave good reasons why the Government should think again, and I prefer to believe that the noble Lord himself was not being dismissive, because that is not his style. The noble Lord is much nicer than that. He does his best to consider things reasonably and rationally and I prefer to think that his reply to my amendment was so dismissive because he has had his orders from the Secretary of State and not because he listened to the argument and decided himself, with that good mind of his, that this was not a good amendment. The Secretary of State knows his own mind, but we do not agree with his mind and I feel obliged, particularly in view of the cavalier manner in which this amendment was treated, to pursue the matter and press the amendment to a Division.
6.56 p.m.
On Question, Whether the said Amendment (No. 5) shall be agreed to?
Their Lordships divided: Contents, 78; Not-Contents, 95.

DIVISION NO.4

CONTENTS

Airedale, L.

Kirkhill, L.

Amherst, E.

Llewelyn-Davies of Hastoe, B.

Ardwick, L.

Lloyd of Kilgerran, L.

Attlee, E.

Lockwood, B.

Banks, L.

Longford, E.

Barnett, L.

Lovell-Davis, L.

Birk, B.

Mackie of Benshie, L.

Blease, L.

McNair, L.

Brockway, L.

Mayhew, L.

Burton of Coventry, B.

Morton of Shuna, L.

Carmichael of Kelvingrove, L.

Nicol, B.

Chitnis, L.

Pitt of Hampstead, L.

Crawshaw of Amtree, L.

Ponsonby of Shulbrede, L.

Dean of Beswick, L.

[Teller.]

Diamond, L.

Raglan, L.

Donoughue, L.

Ritchie of Dundee, L,

Elwyn-Jones, L.

Ross of Marnock, L.

Ennals, L.

Seear, B.

Evans of Claughton, L.

Serota, B.

Ewart-Biggs, B.

Shackleton, L.

Fitt, L.

Silkin of Dulwich, L.

Gallacher, L.

Simon, V.

Graham of Edmonton, L.

Stewart of Fulham, L.

Gregson, L.

Stoddart of Swindon, L.

Grey, E.

Taylor of Blackburn, L.

Grimond, L.

Taylor of Gryfe, L.

Hampton, L.

Taylor of Mansfield, L.

Hanworth, V.

Tordoff, L.

Harris of Greenwich, L.

Underhill, L.

Hatch of Lusby, L.

Vernon, L.

Heycock, L.

Wallace of Coslany, L.

Hooson, L.

Walston, L.

Houghton of Sowerby, L.

Whaddon, L. [Teller.]

Howie of Troon, L.

White, B.

Jeger, B.

Williams of Elvel, L.

Jenkins of Putney, L.

Willis, L.

John-Mackie, L.

Wilson of Rievaulx, L.

Kagan, L.

Winstanley, L.

Kilbracken, L.

Ypres, E.

Kilmarnock, L.

NOT-CONTENTS

Abinger, L.

Glenarthur, L.

Airey of Abingdon, B.

Gray of Contin, L.

Allerton, L.

Greenway, L.

Annaly, L.

Grimston of Westbury, L.

Ashbourne, L.

Hailsham of Saint

Auckland, L.

Marylebone, L.

Bauer, L.

Harmar-Nicholls, L.

Belhaven and Stenton, L.

Henley, L.

Beloff, L.

Hives, L.

Belstead, L.

Hooper, B.

Bessborough, E.

Hylton-Foster, B.

Brabazon of Tara, L.

Inglewood, L.

Broadbridge, L.

Ingrow, L.

Brougham and Vaux, L.

Kimball, L.

Bruce-Gardyne, L.

Kinloss, Ly.

Cameron of Lochbroom, L.

Kintore, E.

Campbell of Alloway, L.

Lane-Fox, B.

Campbell of Croy, L.

Lauderdale, E.

Carnegy of Lour, B.

Layton, L.

Coleraine, L.

Lindsey and Abingdon, E.

Colville of Culross, V.

Long, V. [Teller.]

Craigavon, V.

Lucas of Chilworth, L.

Davidson, V.

Macleod of Borve, B.

De La Warr, E.

Mancroft, L.

Denham, L. [Teller]

Mar, C.

Drumalbyn, L.

Marshall of Leeds, L.

Elliot of Harwood, B.

Massereene and Ferrard, V.

Elliott of Morpeth, L.

Maude of Stratford-upon-

Elton, L.

Avon, L.

Fortescue, E.

Merrivale, L.

Gardner of Parkes, B.

Mersey, V.

Glanusk, L.

Middleton, L.

814

Mowbray and Stourton, L.

Skelmersdale, L.

Munster, E.

Strathclyde, L.

Murton of Lindisfarne, L.

Sudeley, L.

Norrie, L.

Swinfen, L.

Nugent of Guildford, L.

Teynham, L.

Onslow, E.

Tranmire, L.

Pender, L.

Trefgarne, L.

Rankeillour, L.

Trenchard, V.

Reay, L.

Trumpington, B

Reigate, L.

Vaux of Harrowden, L.

Robertson of Oakridge, L.

Vickers, B.

Rochdale, V.

Vivian, L.

Sanderson of Bowden, L.

Whitelaw, V.

Sandford, L.

Windlesham, L.

Sempill, Ly.

Wynford, L.

Shannon, E.

Young, B.

Sharpies, B.

Resolved in the negative, and amendment disagreed to accordingly.
7.4 p.m.
[Amendments Nos. 6 and 7 not moved.]
The Deputy Speaker (Lord Murton of Lindisfarne): My Lords, the next amendment is Amendment No. 8. I should point out that if this is agreed to, I shall not be able to call Amendments Nos. 9 to 15 inclusive.
Lord Diamond Lord Diamond moved Amendment No. 8:
Page 2, line 5, leave out from beginning to ("the") in line 7.
The noble Lord said: My Lords, I gather that it will be convenient to discuss at the same time Amendments Nos. 13, 14 and 15, although not all of them are in my name. This amendment refers to the resignation of the director, either voluntary or involuntary. At the Committee stage we drew attention to the fact that the director could resign his office by notice in writing without the period of notice he had to give being denned, and obviously he could create havoc by resigning at very short notice. Therefore, various amendments were put forward, of six months and so on. The Minister said that he would consider those amendments. He has been good enough to do so, and has down a proposal as Amendment No. 15. Therefore all I need do is, as it were, open the batting and leave it to the Minister to continue. 1 beg to move.
Lord Gray of Contin: My Lords, I am pleased to be able to come back to the House on the matter of the length of notice to be given by the director if he wishes to resign from office. Noble Lords may recall that we had a constructive debate on the issue under Amendment No. 9 on 29th April on the second sitting of the Committee stage. As my noble friend Lord Boyd-Carpenter pointed out, that amendment which sought to impose a time restriction of six months on the director when giving notice of resignation would have imposed an overly-rigid requirement which could have caused difficulty.
The noble Lord, Lord Diamond, expressed concern that the director could resign at extremely short notice and thus create difficulties in finding a suitable replace-ment. Both the noble Lord, Lord Diamond, and the noble Lord, Lord Stoddart, suggested a revision requiring reasonable notice to be given. We have studied this point carefully and we agree that the proposed revision would be an improvement to the

815
Bill. Our amendment would therefore require that "reasonable notice" be given, and I hope therefore that the House will support it.
Lord Stoddart of Swindon: Yes, my Lords, of course I am tempted to support it, but I happen to think that my Amendment No. 13 is better than Amendment No. 15 of the noble Lord, Lord Belstead. In effect, my amendment would read that he would resign, "by reasonable notice in writing". But the amendment of the noble Lord, Lord Belstead, would merely allow him to resign with "reasonable notice". There is a difference, and I think it is an important difference.
In a post paying £47,000 a year I do not think we would expect the director general to pick up the telephone and say to the Secretary of State, "I say Peter, old boy, I think I don't like this job. I am going to resign in three months". I feel sure that that is a relevant point and that the noble Lord would expect notice to be in writing. Therefore I urge him to accept my amendment, No. 13, and drop his amendment, No. 15.
Lord Gray of Contin: My Lords, by leave of the House, I am not suggesting that the noble Lord is looking a gift horse in the mouth, but I can give him a perfectly reasonable answer to his query. The Government amendment removes the words "in writing" because the phrase is already defined in Clause 48 of the Bill. Line 22 on page 48 of the Bill states:
" 'notice' means notice in writing".
It is therefore unnecessary to specify that the director's notice under Clause 1 should be in writing. I can assure the House that it is merely a technical drafting amendment.
Lord Diamond: My Lords, the Government have been good enough to meet the substance of the amendment moved by the noble Lord, Lord Stoddart, and the substance of the amendment moved by myself. All that remains for me to do is to thank the Government. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 9 to 14 not moved.]
Lord Belstead Lord Belstead moved Amendment No. 15:
Page 2, line 6, leave out ("notice in writing") and insert ("reasonable notice").
On Question, amendment agreed to.
Lord Diamond Lord Diamond moved Amendment No. 16:
Page 2, line 7, after ("may") insert ("after such consultation with Parliament as the Secretary of State considers appropriate").
The noble Lord said: My Lords, this amendment is in the context of subsection (3), which states that:
"the Secretary of State may remove any person from that office on the ground of incapacity or misbehaviour".
When we last considered those lines, there was a good deal of discussion about the meaning of the phrase "incapacity or misbehaviour", about any legal precedents that there might be for such words, and about what the effect of those lines might be. There was a general feeling that the Secretary of State
816
removing a person from an office of that magnitude, and of such public relevance and sensitivity, was something that should not be done lightly.
Therefore, we are proposing in this amendment that the Secretary of State, before removing any person on such ill-defined grounds, should first consult with Parliament to the extent that the Secretary of State considers appropriate.
I hope that we do not have to go over the argument all over again, as to how on earth one can consult Parliament in whatever way one considers appropri-ate. The power is given in the Bill to leave the matter entirely to the discretion of the Secretary of State. Secretaries of State are responsible individuals with wide experience. They are not expected, except on very rare occasions, when they immediately resign office, to act in an unusual and irresponsible way. Therefore, the Secretary of State knows how to consult Parliament as far as may be necessary.
It is wise that he should do so in advance of removing the director from office; very wise indeed, because there is bound to be a row afterwards, and it will be of great benefit to the Secretary of State to be able to say that he has consulted in some measure—in whatever measure he may consider appropriate. If the person who is to be removed is found guilty of a criminal offence, then obviously the Secretary of State will not need much consultation with Parliament to satisfy himself that the director ought to be removed from office. There may be other cases that are marginal and in a shadowy area, where the Secretary of State would be well advised to attempt to ascertain the feeling of Parliament in whatever way he considers necessary before taking the drastic action involved.
I hope that this amendment will be seen as a constructive and sensible suggestion. It probably merely puts into words that which the Secretary of State would anyway do. I beg to move.
Lord Stoddart of Swindon: My Lords, I support this amendment, which is really very mild, and one that the noble Lord would do well to consider. It asks that the director be removed,
"after such consultation with Parliament as the Secretary of State considers appropriate".
It may be that the Secretary of State would read the word "consultation" as meaning information, but even that would be better than the situation we have at present. Usually when somebody is dismissed or resigns, the press get hold of the story and put their own construction on that dismissal or resignation. There is then a row in Parliament. I suggest that it ought to be the other way around. We had an example only this afternoon, at the beginning of our proceedings, when I quoted a news item from the Daily Telegraph which the Government were able to say had no truth in it at all.
As I have said, what happens is that there is a huge news story and the public and Members of Parliament get the wrong end of the stick. There is then a huge row about it that could be avoided if only the Government would take Parliament into their confidence, tell Parliament about it, and explain the reasons for it, before the story appears in the press and a great meal is made out of the incident, when perhaps there is no meal to be made out of it at all. That is why I support this amendment.
7.15 p.m.
Lord Belstead: My Lords. I understand why the amendment has been moved. The noble Lord, Lord Diamond, has made very clear the case for it, and the noble Lord, Lord Stoddart, has supported him. I will put two points to noble Lords. The first is that if the noble Lord, Lord Diamond, is concerned, as I believe he is, about Parliament having some oversight of such matters, then the Bill provides that the Secretary of State will have responsibility for the director, as well as having the power to remove him. He receives an annual report from the director on the director's activities. That report must be laid before Parliament. That ensures that the director is accountable through my right honourable friend to both Houses of Parliament.
The second point arises from the main reason for the amendment, which was shown when the noble Lord, Lord Diamond, stated it was very important that the director should not be removed lightly on grounds that might be frivolous. The grounds are incapacity or misbehaviour, and I suggest to your Lordships that those grounds are stringent.
In order that I might reply to this amendment, I examined statutory precedents. Going back 16 years, to 1970, it was easy to find 16 different examples in statute of cases where bodies had been set up under statute and where members of those bodies could be removed on the grounds of incapacity or misbehaviour. I was delighted that the last precedent I found was the Taxes Management Act 1970, which was passed at a time when the noble Lord, Lord Diamond, held high office as Chief Secretary to the Treasury. In that statute it was the Lord Chancellor who could, if he thought fit after consultation with the Lord Advocate, remove a special commissioner of income tax on the grounds of incapacity or misbehaviour.
I am simply saying that the grounds are not grounds that can be taken up lightly for the removal of a director. Parliament will have an oversight of what is happening because through the Secretary of State the director will, by laying his annual report before Parliament, be responsible to Parliament. And the Secretary of State is responsible, as all ministers are, to Parliament.
Therefore, I do not believe it is right to seek, as this amendment does, to set up a form of direct parliamentary oversight of the removal of the Director General of Gas Supply in a way that would not be the same as the precedents that I have discovered, nor the same as the precedents for the Director General of Fair Trading and the Director-General of Oftel, which are more recent examples. It is on those grounds that I resist this amendment. I quite see that there can be different points of view about the amendment, but I think that the grounds for removal in Clause 1 are the right ones.
Lord Diamond: My Lords, I am grateful to the Minister who on this occasion has given the matter careful thought and explained the reasons why the Government do not think that this is a happy amendment. He said that there was room for two points of view. I take a slightly different point of view
818
in the sense that it would cost the Government nothing to accept this amendment which provides the minimum kind of consultation—consultation only to the extent that the Secretary of State considers appropriate. He could gain medals and lose no time by carrying out a procedure of this kind, and I should have thought that the Government would have been well advised to accept it; but they prefer not to.
I am not going to speak about incapacity because that is dealt with in the next amendment, but I repeat my gratitude to the noble Lord, Lord Belstead, for having considered this matter carefully. If no other Lord wishes to contribute to the discussion, I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Diamond Lord Diamond moved Amendment No. 17:
Page 2, line 8, leave out ("incapacity or").
The noble Lord said: My Lords, in moving this amendment I shall discuss at the same time Amendment No. 18. We are now dealing with the question of incapacity and I recognise immediately that there is considerable statutory precedence for the words in the Bill. Nevertheless, I am not all that happy about them. It is a great penalty to be removed from office and it carries obloquy as well as lack of salary. To remove a person from office on the ground of misbehaviour is something that one can understand; it has happened in the past. By his actions the individual in question, the director, is not in the view of the Secretary of State fit to continue to hold office because he has misbehaved.
But the ground of incapacity is a much more difficult concept. It is not on the ground of incapacity that it has taken place. Incapacity is an assessment of what the individual will be doing in the future. It is an assessment that he will show himself—continue to show himself, if you wish—incapable of carrying out his duties. "Incapacity" should be defined as "incapacity that has persisted" for some time. I have suggested three months, and if the Government want to suggest two months or four months, that is neither here nor there. At all events, it gives the Secretary of State the security of knowing that he has solid ground on which to move, whereas "incapacity" as it is shown at the moment could be subject to considerable difficulty and could well be a matter of opinion. My amendment introduces an element of certainty into the matter and is therefore helpful in legislation of all kinds. I beg to move.
Lord Marshall of Leeds: My Lords, I do not want to prolong this discussion, but surely the noble Lord, Lord Diamond, should take account of the strict meaning of the word "incapacity" which was not quite the meaning he was ascribing to it a few moments ago. The word "incapacity" refers to a series of happenings which incapacitate a person from carrying out a contract of employment. I do not want to recite them all because, frankly, I do not remember them; but three important ones are: first, that the person in question has been made a bankrupt; secondly, that he has become of unsound mind; and, thirdly, that he has been committed to prison for the commission of a felony.

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It would be unhappy if this amendment were to find favour because one would then be in a position of having to tolerate a director who could come under one of the three instances I have just given. For those purposes of course it is preferable that the decision should be immediate and not delayed for three months.
Lord Diamond: My Lords, the noble Lord speaks on these matters with immense authority, as I recognise. He has given examples which are straightforward and the Secretary of State would have no difficulty in deciding on his action. However, I ask the noble Lord to turn his mind to the more marginal problem of where the individual has a physical incapacity and is for the time being incapable of carrying out his job. For example, he may be bed-ridden and cannot carry out his job but, as I mentioned on a previous occasion, he may have recovered in a fortnight's time or may consider that he will have recovered in that time.
If the Secretary of State removes him from office on the grounds of physical incapacity—and I assume "incapacity" includes, in law, physical incapacity as well as the other kinds of incapacity to which the noble Lord, Lord Marshall, referred—it would be much easier if this is defined in some way as to introduce more certainty than is in the Bill. Therefore, I ask the noble Lord whether he will help us by saying what he thinks would be the situation with regard to marginal physical incapacity.
Lord Marshall of Leeds: My Lords, with permission, the situation generally is that the question of ill-health is quite separate from the word "incapac-ity" and is dealt with in a separate clause in every contract of employment where one can find that the most generous leeway is given to someone who is ill. Certain periods are laid down which generally have nothing to do with the particular clause and have nothing to do with the word "incapacity".
Lord Belstead: My Lords, I recognise that in the second of these two amendments the noble Lord, Lord Diamond, is endeavouring to make more specific an amendment which he moved in Committee. However, for reasons which have been deployed by my noble friend Lord Marshall of Leeds I prefer to stick to the wording in the Bill.
My noble friend Lord Marshall was good enough to intervene on this point in Committee and he has done so again saying, as I understood him, that the expression "incapacity", and, indeed, "misbehaviour", are expressions well known in contracts of employment. The noble Lord, Lord Diamond, is worried as to where one draws the line. I hope that I am not going to be so foolish as to try to wade into what should be a matter for the courts if there is a disagreement, except to say that my understanding and advice is that if there were to be a case which is contested, the courts would take all the relevant circumstances into account.
Why am I worried about the second of the amendments tabled by the noble Lord, Lord Diamond? I am worried because if there were circumstances where a permanent incapacity suddenly
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arose, and the specific time limit which the noble Lord puts forward in his amendment of three months were included in the Bill, there could be a real impediment upon anything being done; and that would not serve the interests of the proper discharge of the functions of the director or, indeed, the interests of consumers of gas generally.
Therefore, if I may say so, I think that to leave the words "incapacity or misbehaviour" in the Bill is a reasonable thing to do, and it has of course appeared reasonable to governments of different political complexions for many years now, as I said when I spoke on the previous amendment.
Lord Diamond: My Lords, before the noble Lord sits down, I wonder whether he is able to tell us as a matter of fact if the present draft contract which is no doubt being prepared for the prospective holder of the office includes a separate clause dealing with the problem of physical incapacity.
Lord Belstead: My Lords, I cannot answer that question. All I can say to the noble Lord is that I have no doubt that the draft contract will mirror the provisions in Clause 1 of this Bill, provided that Parliament agrees with Clause 1.
Lord Diamond: My Lords, all I can say at this time of day is that I very much hope that the Minister will be good enough to bear in mind the reason why I thought fit to put forward this amendment for discussion and probing. I am very grateful for the helpful attitude of the noble Lord, Lord Marshall of Leeds. One expects anybody coming from Leeds to be very helpful, and I am very grateful to him. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 18 not moved.]
Lord Brabazon of Tara: My Lords, I think that we have reached a suitable moment to adjourn consideration of the Bill on Report. In doing so, I suggest that we do not return to this Bill until half-past eight. I beg to move.
Moved accordingly, and, on Question, Motion agreed to.

Supplementary Benefit Up-rating Regulations 1986 Family Income Supplement (Computation) Regulations 1986 Child Benefit (Up-rating) Regulations 1986 Pensioners' Lump Sum Payments Order 1986 Social Security Benefits Up-rating Order 1986
7.33 p.m.
Baroness Hooper: My Lords, I beg to move that the draft Social Security Benefits Up-rating Order 1986,

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which was laid before the House on 8th May be approved. This order is accompanied by a report from the Government Actuary on the effects of the proposals on the national insurance fund and by a statement on mobility allowance.
With your Lordships' permission, I will deal also with the other four Motions in my name on the Order Paper, which are the draft Child Benefit (Up-rating) Regulations 1986, laid before this House on 8th May; the draft Family Income Supplements (Computation) Regulations 1986, laid before this House on 8th May; the draft Supplementary Benefit Up-rating Regulations 1986, laid before the House on 5th June; and the draft Pensioners' Lump Sum Payments Order 1986, laid before the House on 8th May.
These statutory instruments put into effect the up-rating of social security benefits announced by my right honourable friend the Secretary of State in another place on 24th February. They also provide for the payment of a £10 Christmas bonus.
This is in some ways an unusual up-rating. As your Lordships already know, we are changing the date of the up-rating from November to April in order to bring the tax and benefit years more closely into line. This will also have the effect of giving beneficiaries an increase at a time when many of them may have bills such as rate demands to meet. To introduce this change smoothly we brought forward the 1986 up-rating to July, which means that this up-rating comes only eight months after last November's 7 per cent. up-rating and is therefore based on only eight months' movement in prices. The next up-rating will be from April 1987, again after only 8 months. This, coupled with the fall in inflation, accounts for the relatively low level of the increase.
It might be helpful to your Lordships if I outlined some of the main features of the proposed up-rating. Most benefits, including retirement pension, widows' benefits and unemployment benefit, are going up by 1·1 per cent., which accurately represents the increase in prices between May 1985 and January 1986, the measurement period for this intermediate up-rating. This means, for example, that a married couple's retirement pension will go up from £61·30 to £61·95 a week; the pension for a single person will go up from £38·30 to £38·70 a week. The long-term rate of supplementary benefit will go up by the same cash amount as the relevant contributory benefit. Child benefit will go up by 1·4 per cent.—from £7·00 to £7·10 a week. Mobility allowance will be increased in line with the retail price index to £21·65 a week.
Not only does it cover only 8 months' price rises rather than a year; it is 8 months of a period when inflation was falling rapidly. This up-rating is a demonstration of the success of our policies—a success that I believe even noble Lords opposite grant us. Inflation is now at its lowest level since 1968. This is good news for the whole country, but it is especially good news for pensioners and others on low or fixed incomes. Pensioners no longer have to go into shops and see prices going up almost before their very eyes. Nor are they forced to watch as the value of their savings is inexorably eaten away, as when—and I have to say it—under the previous administration the real
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value of a pensioner's savings invested in a building society fell by a third. We should therefore welcome the small size of this up-rating as a sign that inflation is under control and that we have managed to get off the treadmill of massive increases in public expenditure generating massive increases in prices which in turn fuel further increases in public expenditure. We do not propose to get back on that treadmill, and we certainly do not agree with the unusual economics of those who would like inflation to be higher so pensioners can appear to get a bigger increase because it is inflation-linked.
One reaction to the level of the uprating has been to say, "If it matches the retail price index increase then the retail price index must be wrong". That is not the case and I am sure that some people have erroneously been comparing the increase with annual rates of inflation. The retail price index is a generally reliable indicator of the effects of inflation, and it is certainly the best we have. There are indeed some circumstances when variants of the whole retail price index seem to be better measures for benefit increases, but, on the whole and for most benefits, the retail price index remains the best measure for inflation.
The retail price index minus housing costs—which I believe is known as the Rossi index—is the measure which has been used to up-rate supplementary benefit since 1982. We have decided to vary the measure this year and to keep the up-rating in line with the cash increase in the relevant contributory benefit in order to minimise the problem of people being floated on and off supplementary benefit by tiny variations of 5p or lOp between the supplementary benefit scale rates and the rates of other benefits received by supplementary benefit recipients. I do not claim that we have acted here out of anything other than pragmatism. But with three up-ratings in 16 months it is not sensible either for claimants or for the administration of the system to shuffle people on and off supplementary benefit, possibly on each occasion.
For similar pragmatic reasons we do not propose through these regulations to up-rate most of the additional requirements in supplementary benefit. We have to balance the administrative effort of Carrying out the up-rating against the advantage to claimants of the extra 5p or at most l0p. Again I remind your Lordships that the transition to a new up-rating timetable means that this is the second of the up-ratings in a very short period. Up-ratings mean a tremendous additional burden on local offices, which hampers their ability to deal with other benefit issues expeditiously. We took the view that so far as possible we should simplify their task, and these up-rating regulations therefore provide only for increases in the adult and children's scale rates, the various personal expenses rates, and a limited number of additional requirements. The recent announcement of a 3½ per cent. cut in electricity prices from July will, of course, give further help to beneficiaries.
It is appropriate to make a special mention of the increase in child benefit, which, though small in itself, at l0p, demonstrates the Government's commitment to child benefit as an important feature of benefit support for families with children. We remain anxious to concentrate more resources on low-income families with children, as we shall be doing in the new income-s

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related benefit structure set out in the Social Security Bill, which, as we know all too well, is currently being considered in your Lordships' House.
Child benefit is an essential feature of our benefit system, and we have reaffirmed that in this up-rating. In general, these instruments set out to achieve price protection of all main social security benefits with the minimum of administrative effort and disruption for claimants. As usual, increases in prices taking place between the end of the measurement period—in this case January—and the implementation of the up-rating from 28th July will be taken into account for the next up-rating, on which an announcement will be made in the autumn.
As your Lordships are aware, the next up-rating will take place in April 1987 and will be based on price rises between January and December. From then, we return to a normal up-rating track but with benefit increases aligned to the time when most other financial changes affecting households take place: in April. I remind your Lordships that even this interim up-rating will cost some £420 million in a full year in addition to the £2 billion cost of last year's up-rating. Total spending on social security will thus stand at almost £43 billion in 1986–87–31 per cent. of all public expenditure. That is a massive sum in anyone's book and a convincing demonstration of our commitment to the welfare of those dependent on social security benefits. I beg to move.
Moved, That the Supplementary Benefit Up-rating Regulations 1986 laid before the House on 5th June [25th Report from the Joint Committee]; the Family Income Supplement (Computation) Regulations 1986 laid before the House on 8th May [23rd Report from the Joint Committee]; the Child Benefit (Up-rating) Regulations 1986 laid before the House on 8th May [23rd Report from the Joint Committee]; the Pensioners' Lump Sum Payments Order 1986 laid before the House on 8th May [23rd Report from the Joint Committee]; and the Social Security Benefits Up-rating Order 1986 laid before the House on 8th May [23rd Report from the Joint Committee] be approved.—(Baroness Hooper.)
Baroness Jeger: My Lords, I congratulate the noble Baroness on her audible reading of her brief. As an old-age pensioner, I look forward to collecting 40p a week extra very soon. I must set that off against the fact that a cup of coffee in your Lordships' establishment costs 25p. That means that I can have only an extra one and a bit cups of coffee for my 40p.
To be serious, the noble Baroness said that the up-ratings were especially good for pensioners. I cannot agree with her. At present, the perception of people on low incomes and pensions is that the retail price index is irrelevant to their spending patterns. People who go out shopping and looking at prices complain constantly that the prices they pay for those things on which they spend most of their money are not coming down. That happens because, as we know—the Institute of Fiscal Studies has made it clear—poorer people spend more on essentials such as heating and food, and 10 per cent. of householders in the lowest income groups have an expenditure which has risen 17 per cent. above the average prices paid for goods by the
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top 10 per cent. of income recipients. That is because the poorest people do not spend a great deal of money on petrol, gin, jewellery and many other such items which come into the retail price index.
The thought that I want to leave the noble Baroness with tonight is that it is essential that there be some revision of the retail price index. It is based on a basket of purchases. It does not relate to the purchases of the poorest people.
I was interested to see in Hansard a Question about the retail price index put to the noble Lord, Lord Young of Graffham. He said:
"My Lords, the weighting of the index is revised as a matter of routine at the beginning of each year. I have no immediate plans to change the way that this is done. However, I expect to receive shortly a report from the RPI Advisory Committee and will be ready to consider making changes in the light of its recommen-dations".— [Official Report, 10/6/86; col. 115.]
It would be helpful if the noble Baroness could tell us tonight that we can look forward to hearing something soon about that report and knowing whether the Government will make some changes which will help people whose expenditure does not reflect the RPI. They know it. Their pattern of spending is completely different.
I must refer to child benefit. I cannot understand why it is not index linked. Indexing of child benefit would maintain a tax equity. If the Chancellor increases personal allowances, for instance, it is the only way to ensure that the tax relief benefits not so much the single and the childless as the family with children, and thus we can ensure a tax free benefit for the family. Child benefit was cut by £175 million last year. That has not been reinstated. I cannot see how the noble Baroness can apparently rejoice in an increase in child benefit of lOp. That is disgraceful.
There was agreement in Parliament that child benefit was the best way to deal with family poverty. When family allowances and child income tax allowances were abolished, child benefit replaced them. There was a cut of £175 million last year. We now have this pitiful increase of lOp. That does not restore the 35p cut which was made last year. I do not know what is the Government's real thinking on child benefit. It is now worth less than the previous combination of family and income tax allowances. It is not making the impact on poor families that we envisaged.
I wish to mention housing. I wonder how much the Government will save by the removal of the non-householder rent addition from young adults aged 21 to 24. That will hurt poor households which are not claiming supplementary benefits or housing benefit. It will further erode the independence of young adults. That is another question.
I am worried and puzzled—I am not very good at figures—because I have looked up the Government Actuary's report on up-ratings and I find in paragraph 10 (I would not trust myself to do other than quote):
"The new estimate for 1986–87 shows a surplus of £108 million compared with the estimated deficit of £80 million in the November 1985 report".
If the national insurance fund is doing so well that it has a surplus, I cannot understand why there is such meanness particularly with child benefit. We must go back to the fundamental political point.

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I do not propose to detain your Lordships much longer tonight on the subject of social security, to which we shall return again and again. When we had a policy of linking the up-ratings to earnings, people on social security were much better off. Because they are now linked to the RPI, which itself arguably does not reflect the spending habits of the poorest people, less money is awarded. Time after time under this Government we are having up-ratings which are inadequate on the Government's theory of relating them to the retail price index. They do not even relate child benefit to the retail price index.
The situation is unsatisfactory. We are glad if anybody gets a halfpenny more, but for people needing child benefit to receive only 10p a week extra is unacceptably mean. I do not know what old-age pensioners will do with their 40p a week! I trust that they will respond when they have a chance at the next general election.
Lord Banks: My Lords, I am grateful to the noble Baroness, Lady Hooper, for explaining some of the content of the orders. We on these Benches agree with the moving of the up-rating date. We think that it is sensible to align the benefit year and the tax year, but I do not think that what the Government are doing is fully understood in the country. That is one reason why they have received a great deal of hostile criticism about the smallness of the increase. Nevertheless, previous experience has shown that when the period of reference is altered beneficiaries can suffer.
If we look at this case, from July 1986 to November 1986 claimants will be 1.1 per cent. better off than they would have been had the alteration not been made. But it seems to me that from November 1986 to April 1987 they are bound to be worse off, since the annual rate of inflation to May 1986, which would have determined the rate of benefit paid during that period, is unlikely to be 1.1 per cent. Indeed, it is likely to be in excess of that. Will that not almost certainly mean an overall loss for beneficiaries? If so, how much will that overall loss be? Would it not have been better to increase the up-rating by a higher percentage than the particularly low rate of inflation in the shorter reference period in order to ease the transition?
The noble Baroness, Lady Jeger, pointed out that the real value of child benefit was cut last November. In this up-rating that cut is not made good, but at least there is no further cut in real value. Can the noble Baroness, Lady Hooper, say that there will be no further cut in the real value of child benefit in future up-ratings? I should be most grateful if she could direct her attention to that question. Is it the Government's intention to maintain the real value of child benefit? It would be helpful to us if she could give a direct answer to that question. Will the Government make good last year's cut in the real value at some point in the future?
There is to be no increase in the basic pension, although it is falling behind earnings. What do the Government propose to do about that? When will be a suitable time to allow pensioners to catch up with earnings? If nothing is done, the basic pension will form a lower and lower proportion of the state
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pension. In due course the bulk of the state pension will be earnings-related. Must not that affect the poorest adversely?
Looking at the £10 Christmas benefit, I note that it is not intended to increase that in this up-rating and it remains at that sum. Is it never to be increased? Is it to be allowed to decline in value year by year?
Paragraph 8 in the Government Actuary's report is a little disturbing. It says:
"Statistical information from different sources does not appear to be consistent and therefore the figures contained in the current report have a higher margin of uncertainty than usual".
But it says that further work is under way to reconcile the data. What progress has been made with that work?
Finally, today is 1st July. These rates in the main become operative this month. The Government must have made all arrangements on the assumption that the House will agree to the orders this evening. I wonder what the Government would do if we were to reject them today, as we have a right to do. Is it right that the Government should rely on our being bound by convention not to do so? Does not the House being asked for its approval at this late date make the whole process a mere formality?
Baroness Hooper: My Lords, this has been a short but interesting debate. I am sorry that it has been necessary to limit the discussion of these important instruments and that they have arrived so late in the timetable, but noble Lords will appreciate the difficulties that the business managers have been experiencing of late. Nevertheless, I believe that the quality if not the quantity of the debate has shown that your Lordships' scrutiny of the instruments is in no way affected by the timing.
With your Lordships' permission, in view of the time, I do not propose now to deal with any of the points raised in the debate which could best be taken up in the context of our consideration of the Social Security Bill. However, I shall do my best to respond to other issues directly related to the up-rating.
First, I should draw your Lordships' attention to the fact that the increases in the up-rating will for most beneficiaries be free of tax for this financial year. This easement was announced in his Budget Statement by the Chancellor of the Exchequer and will not only mean that pensioners and others receive the full benefit of their increases but also that they do not have the disruption of a tax recoding in the middle of the year. From April next year when we move the up-rating cycle to its new starting point, there will no longer be any change in tax codings during the year on account of benefit changes. I am sure that your Lordships will welcome that sensible move, which will be a convenience both for claimants and for administration.
I was grateful to the noble Lord, Lord Banks, for welcoming the need for the change in the up-rating cycle. The noble Baroness, Lady Jeger, referred to the fact that the increase would buy only one more cup of coffee, but I remind your Lordships that the cost of that cup of coffee is the same as it was a year ago. The

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noble Baroness is therefore much better off than she would be had it doubled in price as a result of a higher rate of inflation.
The noble Baroness and the noble Lord asked about the basis and level of up-rating for pensioners. We are all accustomed to finding individual items of expenditure that have increased by a greater percentage than the RPI, but we never look at the items which have increased by less than the RPI or not at all. The RPI attempts to balance out such variations according to the weight of their impact on the individ-ual household. As noble Lords know, the composition of the RPI is the responsibility of technical experts advised by the Retail Price Index Advisory Committee who regularly review the weights used and other issues. It is at present sitting and is due to report shortly. Its recommendations will, I understand, be incorporated into the RPI in January next year, as is normal practice with any revisions.
The committee is also reviewing the special pensioners price indices which are designed to reflect specifically the exchanges in expenditure experienced by pensioner households heavily dependent on state benefits. Those indices, which exclude housing costs, show that pensioners have experienced lower rates of inflation than the population at large. For example, in the period from November 1978 to November 1985 the RPI rose faster than the pensioners' price indices by more than 6 percentage points and the rate of retirement pension rose by 16 percentage points.
It has been proved both that the RPI is more favourable to pensioners on the whole than the specialised index and that if the RPI or the special pensioners' price indices should understate in any way the true level of inflation experienced by pensioners and other social security beneficiaries, as claimed in the recent report by the Institute of Fiscal Studies, which was referred to by the noble Baroness, that is cushioned by the real-terms increases that the pensioners have received.
The noble Baroness, and indeed the noble Lord, also made specific reference to child benefit. The noble Baroness, in particular, referred to the index linking of child benefit. These instruments provide for an increase in child benefit in line with prices. I shall not repeat the arguments about the permanent indexation of child benefit given by my noble friend last night during the debate on the Social Security Bill. I confirm, as my noble friend did, the Government's commitment to this benefit.
Lord Banks: My Lords, I hesitate to interrupt the noble Baroness. What exactly is the commitment if it does not entail indexing? Could it mean that the value is allowed to decrease to the point of extinction? The commitment requires some definition.
Baroness Hooper: My Lords, we can I believe assure the noble Lord that the Government's commitment is not to see any decrease or suffering in real terms in respect of child benefit. I can perhaps refer the noble Lord to the statement made by my noble friend Lady Trumpington in the course of the debate last night. No doubt this point will be discussed at further stages of the Social Security Bill.
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The noble Baroness referred to the level of the national insurance fund. A working surplus in the national insurance fund is necessary to ensure that benefits can actually be paid. Referring back to child benefit, this is not of course paid out of the national insurance fund. I can go further in respect of the noble Lord's supplementary remarks and say that our commitment is to maintain child benefit as a major and valuable contribution to all families' incomes.
Baroness Jeger: My Lords, before the noble Baroness leaves the subject of child benefit, can she explain to those of us who have no actuarial knowledge or experience how it is worked out that there should be an increase of 10p a week? What is the underlying mathematics of 10p? Could it not have been 12p or 20p?
Baroness Hooper: My Lords, no doubt it could have been more or indeed less. I shall have to do a little more research before I can give an actuarial definition, as I do not claim in any way to have the knowledge of an actuary in the matter. I shall certainly be happy to refer back to the noble Baroness on that point.
The noble Baroness asked how much was saved by removing the non-householder addition from young people's benefits. She asked how much the Government were saving by removing this supplementary benefit from the 21 to 24 year-olds. The gross 1986–87 savings will be around £8 million a year. We have never made any secret of this. But this change is not within the scope of the Motions before the House tonight.
The noble Lord, Lord Banks, asked about the effect of the change of date in terms of what people were going to receive. Trying to compare pensioners' incomes under the new up-rating with what it would have been if there had been a November up-rating in line with former practice is akin to an exercise in leapfrogging. A further up-rating will take place in April 1987 during the period that would have been covered by the November up-rating. It is more or less a case of swings and roundabouts. What you may lose in the short term, you will gain in the long term. I see that the noble Lord shakes his head. I apologise if I have not been able to deal sufficiently fully with all the questions or indeed all of the points raised. After reading Hansard carefully, I shall, if necessary, write to noble Lords to follow up any outstanding points.
I have already referred to the tremendous burden that a benefit up-rating places upon the staff of the Department of Health and Social Security particularly in local offices. I should like to take this opportunity to pay tribute to their efforts in carrying out this task. I must repeat that this up-rating fully honours the Government's pledges to protect the levels of pensions and linked benefits and further demonstrates the successes of our economic policies in defeating the evil of inflation. I commend the regulations and the orders to your Lordships.
On Question, Motion agreed to.
Viscount Long: My Lords, I beg to move that the House do now adjourn during pleasure until 8.30 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 8.6 until 8.30 p.m.]

Gas Bill
Consideration of amendments on Report resumed.
Lord Diamond Lord Diamond moved Amendment No. 19:
Page 2, line 8, at end insert ("such removal, without prejudice to the Appellant's other remedies, being subject to appeal to an industrial tribunal established under Section 128 of the employment Protection (Consolidation) Act 1978").
The noble Lord said: My Lords, I beg to move this amendment standing in my name. The word "removal" in the amendment refers to the removal of the director. Your Lordships will remember that this point was subject to some discussion and inquiry during Committee stage. We elicited the fact that the director was not going to be an employee for the purposes of the Employment Protection (Consoli-dation) Act and that therefore if he felt himself to have been unfairly dismissed from his office, he could not appeal in the same way as every other employee could appeal. He could go to the courts and he would get his answer there if he lived long enough, but the courts are a very slow process, while the tribunal is a very fast and inexpensive process. Therefore it seemed to me that it was only fair, that it was, indeed, an essential part of the freedom of the individual, that he should be entitled to appeal to an industrial tribunal if he felt himself to have been unfairly or improperly dismissed.
During the course of the discussion in Committee it was also suggested that the director might prefer to go to court in search of damages. That is why the amendment proposes that the appeal to the industrial tribunal should be,
"without prejudice to the Appellant's other remedies",
namely, his remedy of going to court if he prefers. Whether he can do both I know not, but it matters not so long as he can choose whichever he wants to do. Certainly I think that he ought to have the right, which is the main purpose of this amendment. I hope that the Government share that view. I beg to move.
Lord Belstead: My Lords, the noble Lord, Lord Diamond, is quite correct in recalling the proceedings which took place in Committee. The 1978 Act extends only to employees and not to office holders. I have to make the point that this was not an Act which was passed by a Conservative Government; it was passed by a Labour Government. If the government of the day thought that it was right that the legislation should extend only to employees and not to office holders, I think that we are in a position where, if there is to be an amendment, it needs to be made to the 1978 Act and not in this way to this Bill.
Having said that, there is more than a technical problem here. As I understand it, there are reasons why the 1978 Act extends only to employees. The
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noble Lord, Lord Diamond, has not addressed himself to that problem. He simply wants to see the director in this particular case covered by the Act. That would be an exception which would not be possible. One could not possibly legislate in that way. It is on that ground that with regret I must resist this amendment.
Lord Diamond: My Lords, I certainly have not considered all the provisions of the Employment Protection (Consolidation) Act. Naturally I assumed that the Government with the resources and advice at their disposal would be in a better position to do that than a single Member of your Lordships' House such as myself. I have listened to what the Minister has had to say. I recognise that it is not wise to legislate for a particular difficulty in this way. We ought to address the Act itself, but the Act is not to come before us and this is therefore the only method we have of dealing with the problem. I think that what the Minister has said has force and therefore with your Lordships' permission I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments No. 20 to 23 not moved.]
Schedule 1 [Director General of Gas Supply]:
Lord Diamond Lord Diamond moved Amendment No. 41:
Page 64, line 3, leave out paragraph 1.
The noble Lord said: My Lords, I beg to move this amendment. I do so in order to probe the contents of paragraph 1 of the schedule. Although we have been given a certain amount of information, this is an excellent opportunity for the Minister to give the remaining information which I know he was anxious to give in reply to the noble Lord, Lord Stoddart, earlier but he was not sufficiently informed at the time. On further reflection I remember that the Minister recollected the information in question and gave it to the noble Lord. Unless the noble Lord, Lord Stoddart, wants to pursue any further question on this I shall beg leave to withdraw the amendment.
Lord Stoddart of Swindon: My Lords. I do not wish to pursue it any further.
Amendment, by leave, withdrawn.
[Amendments Nos. 24 to 28 not moved.]
Lord Gray of Contin Lord Gray of Contin moved Amendment No. 29:
Page 64, line 12, leave out ("it appears to the Secretary of State") and insert ("the Secretary of State determines")
The noble Lord said: My Lords, the noble Lord, Lord Diamond, in the debate on his Amendment No. 16 in Committee, raised a point about the drafting of paragraph 3 of Schedule 1. Although we were unable to accept his amendment, we looked very carefully at this point and in the light of what he said we decided that something ought to be done in the interests of clarity. We believe that this amendment effects a significant improvement and achieves the clarity which we were seeking. I therefore recommend it to the House. I beg to move.
Lord Diamond: My Lords, I am grateful to the Minister for having taken on board the daring suggestion that the drafting was not perfect. I am grateful to the Minister and congratulate the draftsman on a very neat piece of redrafting.
On Question, amendment agreed to. [Amendment No. 30 not moved.]
Lord Gallacher Lord Gallacher moved Amendment No. 31:
Page 64, line 17, leave out ("with the approval of) and insert ("after consultation with")
The noble Lord said: My Lords, in moving Amendment No. 31 I shall, with the leave of the House, speak also to Amendment No. 32. These two amendments are designed to give the director greater freedom as regards the appointment of staff than is currently afforded to him under paragraph 4 of Schedule 1. As paragraph 4 now stands,
"The Director may, with the approval of the Treasury as to numbers and terms and conditions of service, appoint such staff as he may determine".
Amendment No. 31 would simply delete the require-ment to have the Treasury's approval, and would oblige the director to consult with the Treasury, but no more than that. Amendment No. 32 would allow the director to be the judge of the number of staff which he deems necessary for the fulfilment of his functions.
In broad essence, the amendment seeks to draw attention to the importance of Ofgas and in particular to its having sufficient resources in terms of staffing to be effective in its role. Treasury consultation would still be required under the amendment, but it would remove from the Treasury the power which it now has to give approval to proposals for staffing.
In view of the discussion which we had on previous amendments regarding what I call the "top echelon" of the directorate, it is equally important that in the matter of staff in general, the director should be the judge rather than require Treasury approval for what he is seeking to do. It is understandable that the Government want to involve the Treasury in the matter because it concerns finance. However, as Ofgas is to be financed by a fee on public gas suppliers, funding in that connection should not be an insuperable problem even though the Treasury may have a legitimate interest in it. Therefore, for that reason I feel that the argument about the supremacy of the Treasury in matters of finance should not apply in this case.
In addition, as regards both the privatisation of British Gas and the privatisation of British Telecom, much has been made of the suggestion that one of the objects of the exercise is to free the private statutory monopolies—the plcs being created by Parlia-ment—from undue supervision by Ministers of the Crown and by senior civil servants. I do not accept that argument since it only took the stage, as it were, when the Government of the day decided to privatise successful public corporations. Although it may be a supporting argument for what they are doing, it is not one to which we on these Benches attach a great deal of importance. Nevertheless, if there is any merit in it, it rather supports the proposition in Amendments
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Nos. 31 and 32 that if this public company—British Gas plc—is to have this magnificent freedom, then some minor degree of freedom might be afforded to the director of Ofgas the better to discharge his duty of protecting consumers in accordance with other provisions in the Bill. I beg to move.
8.45 p.m.
Lord Gray of Contin: My Lords, we have already debated in Committee the necessity for the involvement of the Treasury in approving the number, terms and conditions, of Ofgas staff. As we made clear then, Ofgas will be a non-ministerial government department manned by civil servants. It is therefore inevitable that the Treasury will be involved. It will not be sufficient for them merely to be consulted; they must specifically give their approval to these matters to ensure that funds are properly spent. As to the second amendment, it is certainly the Government's intention that Ofgas should be properly staffed. Since the director and Ofgas will be creatures of statute, they will be required to ensure that their statutory duties and functions are properly fulfilled and to employ sufficient staff to achieve that end.
These amendments are really inappropriate and, without in any way being disrespectful to the noble Lord, I think that they are also unnecessary. They go over well-trodden ground. We could not accept amendments of this kind in Committee and I am afraid that we are still not persuaded that they are of value. I must therefore ask the House to reject the amendments.
Lord Diamond: My Lords, before the noble Lord sits down, I wonder whether he can help the House by giving some indication about the size of the staff. Obviously that is a matter which is troubling those of us on this side. There has been the tentative appointment of a director. There have presumably been discussions with the director about the tentative size of the staff. Is the noble Lord able to give us an indication of what size of staff is contemplated? We know the size of the staff of the Oftel. In this instance is it to be similar, greater or smaller? If the noble Lord could help us in that respect, it would remove a great deal of anxiety.
Lord Gray of Contin: My Lords, the present estimate for 1985–86 is up to approximately 30 staff. It will then be a matter of seeing how that number works out. It may be necessary to increase it slightly, but that is the present estimate.
Lord Stoddart of Swindon: My Lords, I am rather puzzled by the noble Lord's reply. I thought that the case put forward by my noble friend Lord Gallacher was very reasonable. The case which he is putting is rather different from the case which was put forward in Committee, because it seeks to continue consultation with the Treasury and I feel quite sure that that would be sufficient, bearing in mind new Condition 15 of the authorisation. I may be misreading it, but new Condition 15, concerning the payment of fees, appears

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to relate the licence fee directly to the staff and the running costs of the director general and of the Gas Consumers' Council.
It seems to me that here we have a situation where the costs of those organisations are being raised directly—and it is implicitly so in the authorisation—from the gas suppliers themselves. Therefore, the Treasury ought not to be able to put a veto on the amount of money which the director general and the gas council need because it is being paid not by the Treasury—although it may very well be being paid through the Consolidated Fund—but, under Condition 15 of the authorisation, by the suppliers themselves. The amounts of money about which we had no idea in Committee, are specified here and, I am glad to say, they are specified very clearly. Indeed, this is new information which I welcome. However, it poses a different position from that which appertained when we were discussing the matter in Committee. Perhaps the noble Lord will address himself to that aspect.
Lord Gray of Contin: My Lords, with respect I think that the noble Lord, Lord Stoddart, is mistaken. By leave of the House, perhaps I may say that, as I explained when I originally answered the amendment, Ofgas will be a non-ministerial government department manned by civil servants, and it therefore is inevitable that the Treasury will be directly involved. That is something that we just have to accept, because the Treasury itself, as is its custom in government, would insist that it was involved in order that it could have direct sight of how the money was being spent.
The licence fee will be calculated to cover the costs of the council and of Ofgas and any MMC investigations under the Bill. I should like to correct one thing. When I answered, I think, the noble Lord, Lord Diamond, I said that the estimate of staff was up to about 30 for 1985–86.I should have said 1986–87. I am sorry that that mistake was made. The points that the noble Lord, Lord Stoddart, has made, and those of the noble Lord, Lord Gallacher, do not really make the position any different from that which existed when we debated this matter in Committee. The position so far as the staff is concerned is unchanged.
Lord Gallacher: My Lords, I found the Minister's reply somewht disappointing, because it is obvious on this side of the House that the structure of the staff of the director is to be a Civil Service affair. That means establishments and all that jazz, and it allows very little flexibility from the point of view of the director in recruiting people with specialist skills to discharge specialist tasks. Let us imagine within the framework of the establishment a situation in which immediately under the director—who, as I understand from information given previously, is to have the rank of a deputy secretary in the Civil Service—the No. 2 in the department is an under-secretary, and that that is virtually the only under-secretary that the Treasury is prepared to authorise within a staffing complement as low as 30 people.
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Then let us assume that the director, who is a qualified chartered accountant, discovers early in his career that he is no lawyer, and that he badly needs a lawyer not merely to give legal opinions in due course of time but quickly in order that he can respond to the pressures upon him. The job is advertised, but it will have to be advertised within the Civil Service range. If it cannot be advertised at the under-secretary's rate because there is already an under-secretary, it may have to be advertised at the assistant secretary's rate. Whether that will attract someone with the necessary legal experience and capabilities in a highly specialised field of law is open to question.
I make this point by way of illustration to show how inflexible is paragraph 4 of Schedule 1. Those of us on this side have previously expressed doubts about the balance of ability. Whoever is the lawyer in the office of the Director General of Ofgas, he will certainly be up against some fairly highly-skilled legal people in the employ of British Gas plc, to whom these restrictions on salary will certainly not apply. For this reason the competition is beginning to take on a rather one-sided appearance.
I feel that the Government are wrong to resist these amendments, and the arguments they have advanced in defence of their position are somewhat anaemic, to say the least. Nevertheless, I do not propose at this time of night to divide the House, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Diamond Lord Diamond moved Amendment No. 42:
Page 64, line 17, leave out ("Treasury as to numbers and") and insert ("Secretary of State as to numbers and of the Treasury as to").
The noble Lord said: My Lords, I beg to move this amendment all the more strongly in view of the discussion to which we have just listened. May 1 read the paragraph with the amendment which I propose? It would read:
"The Director may, with the approval of the Secretary of State as to numbers and of the Treasury as to terms and conditions of service, appoint such staff as he may determine."
This is related to a discussion we had previously but is a quite different proposal, and is much strengthened by what the Minister was good enough to say to me a short time ago.
The proposal in this amendment is that the Treasury should continue to be concerned with what is its proper business; and the proper business of the Treasury is the terms and conditions of service. The numbers are not the proper business of the Treasury, and I say that with knowledge that from time to time it has not been the business of the Treasury to determine numbers in cases like this. The Treasury has to have oversight of expenditure, but the numbers from time to time are not part of the Treasury's responsibility.
Ministers opposite will know that this responsibility has gone to and fro from time to time. I am suggesting therefore nothing very novel or revolutionary when I suggest that the Treasury should do the part it is best capable of doing, and that the Secretary of State

835
should do the part that he is best capable of doing. The Secretary of State will know what is required. He will be advised by the director as to what is required, and he will act responsibly in terms of numbers, and then the Treasury will perform its usual job in terms of the financial side. That is the first point I want to make.
The second point is that the numbers which have so far emerged show that it is proposed to run this enormously important establishment with approxi-mately half—half, my Lords!—the staff that Oftel has. It is 30 as against the last authorised number I have of 58, but it is probably about 60 by now. I am open to correction, but that is the information that I believe is accurate and that I am putting to the House. The proportion is about a half.
In my view that is quite impossible. The responsibilities resting on the office of Ofgas will, if anything, be greater and not less than the responsibilities on Oftel. A much bigger task; many more consumers involved; and much more important in the standard of living of the consumers concerned, quite apart from the problem that with Ofgas there is no competition whatever. There is nothing to help the monitor, as competition would, in securing efficiency, whereas in Oftel of course there is. There is Mercury, and we all know that that is designed to encourage—and does in fact encourage—a measure of competition.
Both on grounds of theory and of practice it seems to me superficially—because naturally I have had no opportunity of examining it; we are on the outside and we depend on the Government for advice—that far from the staff being half the size, it should be considerably larger than the staff of Oftel. That is my second point; the anxiety I have as to the question of numbers. If the numbers were to be at the final decision of the Secretary of State, it would still be a very responsible decision but it would be much more objective and have regard to the true need in carrying out this important service of monitoring.
The third point I want to make is that we have been told time and time by the Front Bench opposite that of course there are important responsibilities resting upon the director but that he will have ample opportunity of appointing whoever he wants to do this job and that job. Of course he will not on these numbers.
The first example that the noble Lord, Lord Gallacher, referred to was that of a legal officer. Of course he would need a legal officer. I have in front of me a copy of the list of Oftel staff and details of the organisation of it. It is divided into branches under the director and the deputy director. There is a director of each branch. Branch 4 is the legal department and there is a director of the legal branch of Oftel. Of course it is necessary to have one such person. All the difficulties to which the noble Lord, Lord Gallacher, referred in the discussion on the last amendment would therefore apply.
For those three reasons I think that the director will evidently be in real difficulty if he is limited to the numbers proposed. One can only assume that they have been proposed with a view to saving money and
836
not with a view to carrying out the responsibilities under the Bill. He will be under great difficulty if the provision is left as it is in the Bill. We know that we are not talking about any costs to the Exchequer. That has been made clear. The costs incurred in running the office of director will be recovered from the licence fees charged to the licensed applicants. So no cost falls on the taxpayer at all. Therefore, the Treasury could consider this with a more relaxed mind than might otherwise be the case.
I repeat that I hope the Government will have regard to the needs involved in doing the job, as Ministers have previously mentioned. I hope that the Govern-ment will recognise that the present intended size of staff is wholly inadequate to do a proper job of monitoring, encouraging efficiency and protecting the consumer, and that this amendment therefore is wholly appropriate in an attempt to achieve that. I beg to move.
Lord Gray of Contin: My Lords, once again we are dealing with an area of the Bill which we have already considered in Committee, and which was voted against at that time. However, the noble Lord has raised no new points which have persuaded me that the present provision is in any way likely to give rise to difficulties. As I have explained before, the Government have expressed their clear intention that the office should be properly staffed to meet the demands that will be made on it.
If necessary, the director will have the power to engage staff with special skills. The director will determine the number of staff he needs to fulfil his functions. However, as Ofgas will be a Government department it must be right that the Treasury should be consulted, especially on the Ofgas staffing levels, as part of its overall responsibility for public service manpower. As I pointed out in Committee, the numbers at Oftel have doubled without any restriction from the Treasury, since it obviously takes a realistic view on these matters. I cannot accept the simple comparison with Oftel. For example, the jobs are quite different and the number of staff must reflect the different jobs, but the figure I have given is for 1986–87. If experience shows that this number is not adequate for the tasks, it is possible that the complement will be increased. I can tell the noble Lord that Oftel increased its staff significantly after the first year.
Lord Diamond: My Lords, I am sorry to interrupt, but it would help if the noble Lord could tell us the up-to-date staffing position of Oftel.
Lord Gray of Contin: My Lords, I cannot give that figure immediately, but no doubt it will arrive in due course.
There are important differences between telecommunications and the gas industry. Therefore, the two are not wholly comparable. But I use the example for illustrative purposes so that your Lordships will understand the much-maligned Treasury—though it is probably no more maligned now than it was when the

837
noble Lord was Chief Secretary. The Treasury is a department which is maligned because it keeps the tabs on every other department to ensure that they do not spend unnecessarily. I am told that the up-to-date figure for Oftel is approximately 100. So whatever we may say from time to time about the Treasury, it is being realistic in this matter. We have no reason whatever to suspect that it would not be equally realistic with Ofgas. Therefore, I am not persuaded that the amendment is necessary. Perhaps the noble Lord will consider withdrawing it.
Lord Stoddart of Swindon: My Lord, before the noble Lord withdraws his amendment, perhaps I may say that I am becoming just a little confused. I have listened to what the noble Lord has said, but I have also read Condition 15 of the revised authorisation. Condition 15 states:
"The Supplier shall pay the following amounts to the Secretary of State for Energy at the times stated—(a) on 31st March, 1987, or such earlier date as the Secretary of State shall determine upon giving the Supplier not less than 4 weeks' notice, the sum of £3 million, and (b) on 1st April 1987 and on each anniversary thereof (the year beginning on each such date being hereinafter referred to as a 'fiscal year') a renewal fee which shall represent a fair proportion of the costs".
Then it goes on:
"(i) estimated by the Director as being likely to be incurred in that fiscal year in the regulation and enforcement of public gas suppliers' authorisations and in the exercise of his functions under the Act".
And then it continues.
I read that as saying that the director in estimating his costs obviously will be estimating the number of staff that he shall have; and the cost of the number of staff that he shall have will be covered by raising money by way of licence fees from the gas suppliers. Therefore, if that is so under the authorisation, why is it necessary for the Treasury to intervene? In fact, it is explicit in the authorisation that the director is entitled to raise the money by way of licence fee. It is true that it does through the Treasury but the position is rather different from what it was at Committee stage and the noble Lord, Lord Diamond, was quite correct to return to it because I think it is necessary, bearing in mind Condition 15, that we should know the position exactly.
Otherwise, it could be that the director estimates a given amount of money and it is raised by way of licence fees and then the Treasury says, "Oh, no! You may have estimated for 100 staff and we have raised the licence fee to cover that 100 staff. But we do not think that you should have 100 staff; you should have only 80. Therefore the money involved in the difference, between 80 and 100 staff, will be paid into the Treasury". The noble Lord, Lord Diamond, is quite correct to be a bit cautious and to ask ask for further explanation over and above that which was given to us at Committee in the light of Condition 15.
Lord Gray of Contin: My Lords, by leave of the House, regarding Condition 15, the matter which the noble Lord, Lord Stoddart, has raised, £3 million is the estimate of the 1986–87 costs of Ofgas and the Gas Consumers' Council. For subsequent years, the
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authorisation fee will cover the costs of Ofgas and the Gas Consumers' Council, but the Treasury has overall control of public sector manpower and costs to ensure that there is no extravagance or unnecessary Civil Service manpower. Is that clear to the noble Lord? Would he like me to repeat it?
Lord Stoddart of Swindon: My Lords, I think it is clear. I am wondering what the Treasury will get up to.
Lord Diamond: My Lords, I think that the discussion we have had clearly underlines the necessity for a clause of this kind. We are told now—and 1, as usual, have been very modest and have under-estimated the figure—that the figure is not 58 as it used to be at the end of 1984 but is now nearer 100. The Minister says that the proposed staff of ofgas which, I repeat, at first glance would seem to have much more onerous duties than those of oftel, is to be 30—something less than one third of the present staff of Oftel.
I do not know how the Government expect us to believe that this office will be capable of carrying out the duties which are being placed upon it (and on which the Government are relying and asking the country to accept) with a handful of 30 people in staff. It is incredible. It has to cover Scotland, Wales, all the districts of the UK, all the districts into which the gas board is at present divided. It has to cover the whole country, to cover all these responsibilities of improving efficiency, protecting the consumer, with a handful of 30 people looking after the long-term developments of gas—all the problems which we have been discussing for hours at Committee stage. I do not understand it.
Lord Stoddart of Swindon: My Lords, perhaps the noble Lord will give way. I am just as puzzled as he is about this staff of 30. Although a figure of £3 million has been mentioned in relation to Condition 15, for the fiscal year beginning 1 st April 1987, the figure shall not exceed £6 million, and after 1st April 1988 it shall not exceed £9 million; so that there is built in here additional costs. I am wondering what is happening to that additional money if we are talking about 30 staff.
9.15 p.m.
Lord Diamond: My Lords, I am just as puzzled as the noble Lord; but I am, as usual, very cautious about attempting to interpret figures when I do not know what they refer to. All I know is that they refer to more things than the staff of Ofgas. So far as I recollect, they refer to the consumers' council as well, so it may well be that it is contemplated that the consumers' council will build up its responsibilities in the various areas of the country over a period and that the out-of-pocket expenses will be very high. Certainly, if there is going to be only one consumers' council in London, and everybody has to pay fares to get from distant parts of the country to London every time there is a meeting, there will be a huge bill in respect of travelling expenses alone which will run into millions. I do not know how this is made up and I cannot guess. 1 am trained to look at the facts and not to pull them out of the air.

839
If the Minister can help us, that will be fine. Until he can, I am bound to say that common sense means that the staffing of the office of Ofgas, as presently intended, is far too low to enable the Government to implement their undertaking and to enable the director to carry out his enormous heavy responsibilities.
I am asked: what do we do about it at this stage? We are in the difficulty that it is already late at night, but the Government are under this ridiculous pressure of business and want to carry on, no matter how late the night and no matter how few the numbers. As I indicated earlier, I do not want to embarrass the Government by finding out how few supporters they have, so I cannot push the amendment to a Division at the moment. But it may well be that we shall have to come back to this because it is quite impossible to persuade me—and I hope other Members of your Lordships' House—that the director will be able to carry out his functions when he is limited in this way.
I have already indicated that there is no reason for tying the numbers to the Treasury. They have a different and necessary outlook. The Secretary of State is a responsible person and the Government could well accept this amendment without causing embarrassment in any quarter whatsoever. But if the Government are not going to move on this, all I can do is beg leave to withdraw the amendment.
Lord Gray of Contin: My Lords, before the amendment is withdrawn, may I say that I am most grateful to the noble Lord for his consideration of the Government's feelings. I can assure him that there is no danger of the Government being embarrassed. If the noble Lord feels that he wants to press this amendment to a Division, then I suggest that he does so. The Government will not be embarrassed in any way. The Government have plenty of people here, and if the noble Lord feels that he must divide then I suggest that he does so.
Lord Diamond: My Lords, I am grateful to the noble Lord. Presumably, he was not here on the two occasions when the Government did not sustain a House and when, if the matter had been carried to its proper lengths, business would have come to an end earlier than it did. Therefore, I have to have regard for carrying on the business of the Government, even if the Government do not have regard to it.
Amendment, by leave, withdrawn.
[Amendments Nos. 32 to 40 and 43 to 45 not moved.]
Lord Diamond Lord Diamond moved Amendment No. 46:
Page 65, line 10, at end insert—
("( ) Any reference in this schedule to the duties and powers of the Director shall be subject to the provisions of section (Directorate of Gas Supply).").
The noble Lord said: My Lords, I beg to move Amendment No. 46, with which I think it will be convenient to discuss Amendment No. 194. This—
Lord Belstead: My Lords, I wonder whether I may interrupt the noble Lord one minute. May I ask: what
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about the 20 or so amendments which fall between Amendments Nos. 46 and 194, all of which hang between the two amendments?
Lord Diamond: My Lords, I have already been consulted about this. There are very good reasons why they should be grouped in the way that I invited them to be grouped, and in the way that, so far as I know, they are grouped. We shall have a discussion on Amendments Nos. 46 and 194, a separate discussion on Amendment No. 63, which is a different point; a separate discussion on Amendment No. 109, which is a different point, and then my list does not cover the rest. But there are three more groupings covering the whole of those amendments. That being the case—and I shall have no difficulty in satisfying the noble Lord, Lord Belstead, that the most convenient way of dealing with the various amendments is in the way I have indicated and in the way they have been grouped—I am now moving Amendment No. 46 and speaking at the same time to Amendment No. 194, to which this paving amendment leads.
Perhaps I may deal first of all with Amendment No. 194, which is to be found on page 44 of the Marshalled List. Amendment No. 194 proposes a new clause:
"If at any time after the passing of this Act it shall appear to the Secretary of State, whether on representations made to him by the Director or otherwise".
I need not dwell on that. It is obvious that the Secretary of State can either think about it on his own initiative or the director himself can have a word with the Secretary of State or other people can. The amendment continues:
"(a) that in order to protect the interests of consumers or to promote efficiency and economy or to protect the public from dangers or to enable persons to compete effectively, all as described in Section 4(2) above".
In other words, I am not inventing any words at all. I am merely repeating what the Bill—and we have not reached Clause 4(2) yet—provides in terms of protec-tion of the consumer, the promotion of efficiency and so on. I return to the new clause, which reads:
"If at any time after the passing of this Act it shall appear to the Secretary of State …
(b) that in order to enable the Director fully to perform any one or more of the functions assigned to him by this part".
Then I have gone on to list them as they are listed in the Government's annex to their own notes, because I think it is for the convenience of everybody looking at the Bill and considering this to know which duties are being referred to and where they are to be found in the Bill itself. They are listed. So if it appears to the Secretary of State that for either of these two major reasons,
"it is requisite for him so to act, he shall appoint one or more additional Officers of Gas Supply to join with the Director in constituting the Directorate of Gas Supply (in this Act referred to as 'the Directorate') for the purposes referred to in paragraphs (a) and (b) above."
One is not inventing any new purposes; they are the purposes laid down in the Bill. They are the responsibility which this Bill puts on the Secretary of State and on the director in protecting the public, encouraging efficiency and so on. Up to now we have endeavoured quite unsuccessfully to persuade the

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Government that one director will not on his own be able to match up to the responsibilities that are laid upon him and which are repeated here. Those of your Lordships who are good enough to be looking at paragraph (b) of the amendment will see how many duties are laid upon him—a vast number of duties. We believe it is quite impossible for one man to stand up to that total weight of commercialism in order to protect the consumer as is required. We have not been able to convince the Government that that is so.
The Government have said. "No, we believe that one man will be able to do it". But we are then forced back to the position—not that we believe this is right but we know it is all we can do—of saying to the Government, "Just suppose for one second that you can be wrong". It can happen to even the most able of governments that they occasionally make a miscalculation. We are saying to the Government, "Just suppose that you are making a miscalculation in regard to the ability of the director to carry out all the responsibilities that you are laying upon him by statute. Suppose you are wrong, then here is a method of dealing with the situation, at the discretion of the Secretary of State and with no compulsion whatsoever, if, after a period of six months or a year, it becomes obvious that this huge ongoing commercial concern that is British Gas is far too powerful and dynamic for the newly-fledged child of Ofgas to stand up to it, especially as there will be but one officer with a handful of staff who is paid a salary of one-third of the level of the chairman and probably of several members of the board of Ofgas". If it transpires that such is the case, then the Government should welcome the opportunity of putting that situation right.
It is the Government's position that this Bill will not prejudice consumers or gas efficiency. It is the Government's case that, notwithstanding the privatisation of gas, a situation will arise, partly as a result of the appointment of a director to monitor matters and partly as a result of the duties and responsibilities being placed upon him by this Bill, where there will be protection for the consumer; where there will be encouragement and efficiency and all the other duties to which I have referred.
Here is an opportunity for the Government to say, "We thought that there was enough. We thought that we were right in having one person. We thought that we were right in denying the director the help of two assistant directors. We thought that we were right in refusing to consider the American pattern of three commissioners. We thought that we were right in doing all those things, but it has turned out to be the case that the director has insufficient teeth to be able to do his job". I have referred already to writings, to television programmes and to other such points of view joining in the conclusion that we see expressed in many sections of the press that the director of Ofgas had better have more teeth than the director of Oftel if he is to be able to do his job.
That is why I hope that the Government will look kindly upon an amendment that compels them to do nothing but gives an opportunity, if it should turn out to be necessary in the future, to appoint one or more
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additional officers of gas supplies to join with the director in constituting the directorate ofgas supply. In those circumstances there would be a directorate, that directorate might consist of two people, or three, or four. It might consist of as many people as the Secretary of State was satisfied, on the basis of experience and not of conjecture, there should be.
I hope that the amendment to which I am speaking is seen by the Government as being a thoroughly constructive proposal. However, the amendment that I am moving is Amendment No. 46, to insert at the end of line 10, on page 65 of the Bill, that,
"Any reference in this schedule to the duties and powers of the Director shall be subject to the provisions"
of the section to which I have just referred; namely, the creation in certain circumstances of a directorate of gas supply. The particular reference here is at line 10 on page 65. It is at the end of Schedule 1 and refers to all the duties described in that schedule which are imposed on the Director General of Gas Supply. That is a start.
There are many other duties contained in the Bill. Some of them are of a parallel nature and some are of a separate and extremely onerous nature and require separate discussion and decision. So far as the responsibilities mentioned in Schedule 1 are concerned, I hope that the Government will feel that it may be necessary to give themselves the freedom of action which is provided for in this amendment. It is in that spirit that I beg to move.
9.30 p.m.
Lord Whaddon: My Lords, I appeal to the House to support this eminently sensible and reasonably argued amendment.
The Government are taking the nation into an entirely uncharted sea with this Bill. The argument that we have all heard for decades from the Conservative side and that we all learned in our studies of basic economics is that competition could and should produce efficiency and the best deal for the consumer. There is a strong argument to be made for that.
But we on this side of the House are deeply disturbed at the risk the Government are taking with tens of millions of consumers in feeding them to this new monster of a privately-owned monopoly; or, as it has been called on previous occasions, this Dracula, waiting to get its fangs into the jugular of the housewife. The situation facing the sales managers of the new public limited company must be making the mouths of every salesman water. There is this huge public supply to which millions of households are committed and as soon as they wish to buy any device which depend on gas they must do so from British Gas plc.
Tens of millions of devices will be sold, but who is to protect the housewife? There will be a staff" of only 33 against the many sales points suggested. The odds are overwhelmingly in favour of the company. I beg the Government to reflect on Cromwell's words: "Consider ye might be wrong". This pitiful barrier of

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33 may prove to be totally inadequate. How ashamed the Government will be if hundreds of thousands of cases are queuing up, unresolved and unrequited.
This amendment very reasonably does not force the Government to increase the number of staff to protect the public, but simply keeps the option open so that any future Minister will not be able to say, "I cannot increase the staff. I am bound by statute". It gives the Minister a little extra power to use for the protection of the poor British housewife whose future is at stake in this Bill. I have the greatest pleasure in supporting the eloquent case made by my noble friend.
Lord Gray of Contin: My Lords, we have already explained at some length why we believe that the right course is to appoint an independent regulatory body which will of course have at its head a well qualified and experienced director. He will be supported by the number of staff necessary for the fulfilment of its functions.
The director of Ofgas will be the head of a non-ministerial government department and will be able to negotiate additional staff with the Treasury on equal terms with any permanent secretary. Therefore it is not necessary to provide for the Secretary of State's intervention. It is of course likely that, as in the case of Oftel, a deputy director will be appointed, but for reasons that we have already fully explored and explained we do not believe that it would be either right or necessary to go further than this.
Perhaps I may again remind your Lordships that the numbers at Oftel have doubled since it was first set up. As I said a little earlier, it would be the Government's clear intention to ensure that Ofgas is properly staffed to carry out all its functions effectively. We believe that we have provided in the Bill for a strong and effective regulatory body with the appropriate machinery for the appointment of staff. Therefore I must invite the noble Lord to accept that the Government have recognised the best interests of consumers in these arrangements and perhaps he will consider withdrawing his amendment.
Lord Sanderson of Bowden: My Lords, before the noble Lord considers whether or not he will withdraw his amendment, I must say that it was quite interesting to hear from the Benches which he occupies the noble Baroness, Lady Seear, who said at an earlier stage of this Bill that the position of the consumer under a monopoly has never been solved and nothing satisfactory has ever been devised. My view is that surely we are now moving into the uncharted waters of privatisation of the gas industry, but I should have thought that with the Ofgas directorate in position and the clear guidelines that it is given, we are moving into an area which, with those safeguards, we should do well to explore.
Lord Diamond: Whatever that means, my Lords. The position is, as has truly been stated, that we are moving into uncharted waters. So far as I am aware it has never previously been the case that gas has been a single entity in private hands. It has either been under the limitations of control by its constitution, or under dividend limitations and so on. Price control has been
844
effected through dividend and profit limitation rather than in any other way. So far as I am aware it has never been a wholly private sector business—one single business running the whole of the gas supply industry and serving, therefore, all the 167 million consumers in this country—never.
That being the case, surely one ought to provide for eventualities. That is all I am saying. It is the Government's present view that one person can do the job. That is not our view, and it is not the view held outside this Chamber. Even if we were wholehearted Government supporters, we must not convince ourselves that people outside the Chamber take the same view as Government supporters in this Chamber. Far from it. They take the view that the Oftel arrangement is unsatisfactory and that, as they put it, "For Heaven's sake, if you are going to do the same with gas, then give Ofgas more teeth than Oftel". That is the view that they take.
All that the Government are proposing in substan-tiation of that view is to reduce the staff that Oftel finds necessary by two-thirds. The suggestion is preposterous, however much the number of staff increases in the future—and we have no assurance about that and no assurance that the director will be free to have his and the Secretary of State's responsible views as to increases in staff carried into effect. However, we are asked to believe that that is a possible way to carry out the Government's undertakings to protect the consumer and to promote the efficiency of gas. That is quite incredible.
I am sorry that the Government are so adamant. The amendment puts no compulsion whatsoever on them. It does not require them at any stage to do anything different from what they would have done had the amendment not been in the Bill. The amendment imposes no compulsion. If the amendment is adopted into statute, nobody could ask in five years' time, "Why did you not do so and so?". The Government can say that they did not want to, they thought it best and it was their view not to do anything different. It puts no compulsion whatsoever on them. It gives them a freedom that they may wish they had. More than that, it gives a future government a freedom which they may wish they had.
If the Government continue to insist on privatising gas in a way that is wholly unacceptable to the other half of the country, they must not be surprised if at some future date a Labour Government come to power and say, "This was totally objectionable to us. We shall reverse it".
Lord Gray of Contin: Whose side is the noble Lord on, my Lords?
Lord Diamond: My Lords, I am on the side of the Alliance; I am on the side of reason, compromise and good sense. I am on the side of those who believe that no government ought to act as if they had such a steamrollering majority that it entitled them to steamroller every possible opposition and every suggestion. That is the side that I am on.
Lord Gray of Contin: My Lords—
Lord Diamond: I shall give way in a moment, my Lords. The noble Lord has asked for the view of the Alliance on the problem of the privatisation of gas and other privatisations. Our view is that a government with the enormous power that this one have in both Houses should exercise it with restraint and have regard to the future. They should not force the country into the situation which we have, and of which we are all sick and tired, of nationalising and privatising, nationalising and privatising. That is our position.
Lord Gray of Contin: My Lords—
Lord Diamond: I shall give way, my Lords. I have not forgotten. 1 do not have such a bad memory. The noble Lord will be patient, I am sure. We have lots of time. It is not yet a quarter to ten. That is the view of the Alliance. I wish that that view could be taken on board by a government who are acting in the most power-sick way that I have ever known any government to act. I shall now gladly give way to the noble Lord.
Lord Gray of Contin: My Lords, am I right in thinking that the noble Lord said that the policy of a future Alliance Government, if such were to happen, would be to renationalise the gas industry?
Lord Diamond: My Lords, if the noble Lord thought that I said that, I can understand why he is incapable of answering sensibly any of the amendments we have put forward. He is incapable of listening to what has been said. I never said one word about that. I was not vague; I was precise. I was talking about a future Labour Government. We have to contemplate that; it is a possibility. Whether or not it is welcome is a different matter. But a Labour Government may come
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to power and decide that a Tory Government had been obstinate and onesided—indeed, pigheaded—and had insisted in refusing every possible amendment, however reasonable, and forcing down the throats of Parliament a Bill which takes away the protection of Parliament from 16½ million consumers. If the Government are so determined to do that, they must not be surprised if another government take an opposite view.
I said if a Labour Government were to do that. The noble Lord encourages me to say what an Alliance Government would do. The Alliance, as has been said many times, is totally objective about nationalisation and privatisation. Each case must be considered on its merits. The onus of proving it must be on those who wish to change. If an industry were in private hands, and there were a proposal to nationalise it, those who proposed to nationalise it would have the onus of proving the case. That is what happened when gas was nationalised in the first place. There was a huge inquiry. The Heywarth Committee was set up to look into the gas industry as it was then being run. It was not being run within the private sector.
The committee reported in favour of nationalisation and that is what happened. I hope that I have answered the noble Lord. I hope that he is fully informed as to Alliance policy even if he is not fully informed as to the amendments which we are moving. I am sorry that he is not prepared to accept the amendment. In the circumstances, I must await a more suitable opportunity to impress our view upon the Government. In the meantime, if no other noble Lord wants to intervene, I beg leave to withdraw the amendment.
Lord Belstead: Not content.
On Question, amendment negatived.
9.45 p.m.
Clause 2 [The Gas Consumers' Council]:
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 47:
Page 2, line 20, at end insert ("together with the Chairman of the Regional Gas Council for Scotland, the Chairman of the Regional Council for Wales and four Regional Chairmen of the Regional Gas Councils in England who shall serve in rotation in accordance with a scheme prepared by the Regional Gas Councils for England and approved by the Secretary of State").
The noble Lord said: My Lords, it is convenient to take with this amendment Amendments Nos. 48, 56 and 57. Amendment No. 48 is a purely consequential amendment. Amendment No. 56 lays down duties for the regional gas consumer councils, and Amendment No. 57 constitutes the councils. Your Lordships will recall that in Committee we had a significant discussion about regional consumer councils. At that time the Government's view was that regional councils were not appropriate to the new, privatised British Gas, and would in any event be too large and unwieldy. I think that summarises the Government's case in Committee.
I have always tried to be helpful, as noble Lords opposite know. When the Government are in difficulty over something I try to get them out of that difficulty. That is precisely what I have tried to do with this series of amendments. I listened to the Government's argument in Committee, and although I did not necessarily agree with them, I have tried to meet their arguments and criticisms. First, I have limited the number of regional council chairmen who would serve on the Gas Consumers' Council. I have also limited the number of members of regional councils to a maximum of 20 plus the chairman.
In Amendment No. 56 I have identified the duties of the regional councils. One of the duties that I have included is that of appointing local committees or representatives in accordance with a scheme approved by the Secretary of State. I have tried my best to meet all the objections which were raised in Committee.
I hope, having done my homework and drafted these new amendments, that the Government may feel able to accept them. Without repeating all the arguments made at Committee stage, there are very good reasons for maintaining the regional councils. First, British Gas has said that it will maintain its regional organisation intact after privatisation. It seems logical therefore that there should be regional councils to follow the regions that will still exist when British Gas is privatised. Secondly, regional councils can recruit people from a wide range of interests who have knowledge of the regions, because they live there, and of the problems related to the regions. Thirdly, the opportunity is given to people, on a voluntary basis, to assist their fellows, and points of contact can be maintained between the gas industry and consumers at grass roots level. I would have thought that this would commend itself to every noble Lord present.
We should take into account the fact that the regional councils have worked very well without complaint for the last 40 years. Indeed, they have done
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a valuable and useful job for gas consumers and the gas industry during that time. That is again something that we should take into account. Why sweep away organisations that have done such a good job of work over such a long time? That seems to me quite ridiculous and absurd. We should not do it. That is why I am giving the House the opportunity to reconsider the matter at this stage.
I believe that there is a need for some other body than the national Gas Consumers' Council. It is frankly absurd to centralise in this way. That is what we are doing. We are saying to the regional councils and to the local committees that they are to be abolished and that everything will be done at national level. There is a great danger in having just one central body. There is the danger that a cosy relationship will develop between the national Gas Consumers' Council and British Gas plc, and if we have regional councils with local committees, that simply would not be allowed to happen and could not happen. This is another good reason for retaining regional councils.
Following this amendment, we shall be discussing Amendment No. 49 in the name of the noble Baroness, Lady Macleod, which deals with regional representation on the national council and later, Amendment No. 59, proposed by the noble Lord, Lord Belstead, which deals with local representation. I must not at this stage discuss those amendments in detail. They are not grouped with mine. I am, however, entitled to say that they are in no way a substitute for what I propose and that they do not reflect the need for a proper regional representative structure.
I have been brief because we must get on with our business. We have much to do tonight. I feel sure that the House does not want to stay up all night. I am prepared to do so, as, no doubt, the noble Lord and also the noble Lord, Lord Diamond, are prepared to do so. We are used to it, but there are others who are not used to it. We must have some consideration for them.
Baroness Macleod of Borve: Hear, hear!
Lord Stoddart of Swindon: Yes, my Lords; I was looking at, and thinking about, the noble Baroness. I appreciate the enormous effort that she puts in, in particular in respect of matters relating to gas and energy. We have consideration for her. I have therefore moved the amendment very briefly. I hope that noble Lords, having listened to the arguments, will accept them and will support the amendment. I beg to move.
Lord Taylor of Gryfe: My Lords, I should like to support the amendment which has been proposed. At a later stage—I hope not tonight—we shall reach Amendment No. 196 in my name, which deals with the regional structure of the organisation. However, tonight we are specifically dealing with the regional structure of the consumer council. While the Bill goes some way to meet the requirements of the noble

849
Lord—that the Secretary of State shall have regard to the desirability of having members familiar with the special requirements—this amendment makes it quite specific that the regions with their own separate problems will have representation in the central body and that the regional councils will continue to exist.
I do not need to describe to the Minister con-cerned—he has just left, although he was on the Front Bench a moment ago, and who was Member for a constituency in the far north of Scotland—the special problems of that area, which are quite distinct from those of other parts of the United Kingdom. I know that Scottish Peers who are present tonight will appreciate this point. It is important that the gas consumer council dealing with these special problems should continue to exist on a local basis. There is nothing revolutionary about this. We are creating a private monopoly in this case. But in the case of state monopolies it is already provided for in the constitutions of British Rail. I had the pleasure of being the Chairman of British Railays in Scotland for a number of years. Why was there a British Railways Board? Because we were close—much closer than Marylebone—to the problems of Scotland and the problems of distribution, transport, rural transport and so on. So we created that separate organisation.
The same is true of broadcasting. They have local regional boards for broadcasting. The IBA and BBC have Scottish boards because they know that they are exercising a monopoly service and that they should reflect local interest and concern. This is true also of the Post Office structure, which has regional consumers' organisations, which make represent-ations to them on local matters. Quite apart from the state monopolies, most of the large building societies recognise that in these areas there are special problems and situations and almost all of them have local consumer boards on representation in their structure. The banks also do it.
We are now creating a private monopoly. In these circumstances it is all the more important that that private monopoly should not abuse its power and that the consumers' organisation—which are already doing a first-class job in this industry—should continue to exist on a regional basis. I would hope that the Government will see the wisdom of this proposal.
Baroness Carnegy of Lour: My Lords, noble Lords made reference to the more remote parts of the United Kingdom and the way in which the problems are different. We do not want to repeat the arguments. I know that the rules of the House are that one does not repeat arguments at length on Report. We have discussed all this already at Committee stage.
We need to remind ourselves that what we are now setting up is not a state monopoly. It does not have the attitude of mind of the state monopolies. The problems of the state monopolies are different from the problems that there will be with a private monopoly. It will be very important to have access to local opinion from time to time. I am interested to see that there are amendments down to do this in a flexible way. It will be the greatest mistake to perpetuate the enormous network of gas consumer councils, excellent
850
though they be. I have never been on one, but they are quite excellent. However, there is no need for them. To create that structure would be a waste of many people's efforts. Personally, I hope very much that we shall not accept the amendments.
10 p.m.
Lord Belstead: My Lords, these amendments are seeking once again to maintain the existing structure of gas consumer representation, although they have gone a step further in providing for the regional chairmen, other than for Scotland and Wales, to serve on the national body on a rotational basis, and in defining the role of and a reporting structure for the proposed regional councils.
First, I am grateful that the noble Lord. Lord Stoddart, and the noble Lord, Lord Taylor of Gryfe, have made it quite clear that the objective of the amendments is to continue with the structure as we know it today. My noble friend Lady Carnegy has put very briefly the argument in the opposite sense; namely, that a rigid regionalised structure, which we debated at the previous stage of the Bill, is something which we believe we can improve upon. Of course. it is right to remember that that is also what the chairman of the Gas Consumers' Council felt She gave evidence to that effect in another place. My understanding is that the existing national Gas Consumers' Council thinks in the same way.
It was very much against the background of that evidence given to the Select Committee by the chairman of the Gas Consumers' Council and after consultation between the Department of Energy and the Department of Trade and Industry (which is and will remain the department ultimately responsible for consumer matters) that we came to the decision that the representation and protection of consumer interests would be more effective under the more flexible structure that we are proposing in Clause 2. That structure would be set up only after consultation with the regional council offices which is currently under way, and as a result of the work being undertaken in the organising committee of the new council.
There is a little more to the story than that. The noble Lord, Lord Stoddart, was characteristically very fair when he mentioned that, in response to views expressed during the Committee stage, we have sought to clarify how the interests of consumers at regional level may best be met. I believe that those interests will be properly protected by the next amendment, which is to be moved by my noble friend Lady Macleod. I am referring to Amendment No. 49. We are also bringing forward, as the noble Lord, Lord Stoddart, mentioned, Amendment No. 59, in response to the case made by my noble friend Lady Gardner of Parkes in Committee to provide for local representation of the Gas Consumers' Council.
Therefore, there is no difference between all of us in the House on the importance of a grass-roots link with consumers in all parts of the country. The aim of our proposals is to provide a body which can provide speedy and effective help. However, I have to say that we on this side of the House believe that there are strong consumer arguments in favour of moving away from a rigid, statutory structure. It was my hope that,

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on reflection, your Lordships would agree that the amendments which we have yet to reach would meet the case and would render this group of amendments unnecessary.
Lord Stoddart of Swindon: My Lords, I should like to thank the noble Lord, Lord Taylor, for his support. He has experience of the difficulties which may be caused when there is no local organisation to deal with local problems. I agree with the noble Baroness, Lady Carnegy of Lour, that the problems that will arise when the gas industry is privatised will be different. However, they will be no less acute and they will certainly not concern local customers any less than they do now. Indeed, the problem consumers will find is that whereas previously they used to be able to go to the regional council or to their local representative and, of course, to their Member of Parliament—there were three avenues of approach—under the Bill they will have nowhere to go other than to the Gas Consumers' Council. The local customers are being robbed in three ways of their representative rights.
The situation is different. I cannot imagine—and I do not believe that the noble Baroness, Lady Carnegy, imagines—that the privatised gas industry is going to think better of its customers than the nationalised gas industry does. The privatised gas industry will be compelled to maximise its profits, and it may well do so at the expense of the customers. Therefore, the customers need more protection and not less.
The noble Lord, Lord Belstead, quoted the chairman of the previous national Gas Consumers' Council, who of course is Mrs. Sheila Black. He said that she was against keeping regional councils. She was about to be appointed chairman of the new Gas Consumers' Council, so "She would be against them, wouldn't she?" After all, it was in her interests to be against them because she was going to be the chairman of the new council, and she knew it.
Even more important than that, the lady spoke for herself. She certainly did not speak for the regional councils because most of them—and indeed my own South Western Regional Council—disowned her. They disowned her in public and in writing by resolution. Therefore, that is no argument that the noble Lord puts up. It is no argument against the reasonable case that I put forward that the chairman of the existing national Gas Consumers' Council is against the retention of regional councils. That is no argument. That is an argument on my side, because if she wants to centralise then we should beware. We ought to beware of centralisation generally. There is too much of it, and far too much of it under this Government. This Government are worse than Henry VII. They seem to want to centralise everything—local government, and now the regional gas consumers' councils. It is not good enough.
There is a good case to be made for the retention of these councils. I believe I made it, and I believe that they should continue. This is an important amendment, and I appeal to noble Lords to have regard to what I have said, to have some consideration for the future needs of gas consumers, and to support this amendment, which I am bound to press to a Division.
10.9 p.m.
On Question, Whether the said amendment (No. 47) shall be agreed to?
Their Lordships divided: Contents, 26; Not-Contents, 47.

DIVISION NO.5

CONTENTS

Airedale, L.

Kagan, L.

Blease, L.

Kilmarnock, L.

Crawshaw of Aintree, L.

Pitt of Hampstead, L.

David, B.

Ponsonby of Shulbrede, L.

Dean of Beswick, L.

[Teller.]

Diamond, L.

Simon, V.

Elwyn-Jones, L.

Stoddart of Swindon, L.

Ezra, L.

Taylor of Gryfe, L.

Gallacher, L.

Whaddon, L. [Teller.]

Grey, E.

Williams of Elvel, L.

Hacking, L.

Willis, L.

Hanworth, V.

Wilson of Rievaulx, L.

Howie of Troon, L.

Winstanley, L.

Jeger, B.

NOT-CONTENTS

Abinger, L.

Long, V. [Teller.]

Bauer, L.

Lyell, L.

Belstead, L.

Macleod of Borve, B.

Boyd-Carpenter, L.

Mar, C.

Brabazon of Tara, L.

Marshall of Leeds, L.

Brougham and Vaux, L.

Murton of Lindisfarne, L.

Burton, L.

Onslow, E.

Caithness, E.

Pender, L.

Cameron of Lochbroom, L.

Polwarth, L.

Carnegy of Lour, B.

Rankeillour, L.

Crathorne, L.

Renton, L.

Davidson, V.

Sanderson of Bowden, L.

Elliot of Harwood, B.

Sandford, L.

Elton, L.

Shannon, E.

Gardner of Parkes, B.

Skelmersdale, L. [Teller.]

Gisborough, L.

Stodart of Leaston, L.

Glenarthur, L.

Trumpington, B.

Gray of Contin, L.

Ullswater, V.

Halsbury, E.

Windlesham, L.

Hives, L.

Wise, L.

Hooper, B.

Wynford, L.

Ingrow, L.

Young, B.

Kimball, L.

Young of Graffham, L.

Lindsey and Abingdon, E.

Agreed in the negative, and amendment disagreed to accordingly.
[Amendment No. 48 not moved.]
10.17 p.m.
Baroness Macleod of Borve Baroness Macleod of Borve moved Amendment No. 49:
Page 2, line 22, leave out from ("shall") to end of line 24 and insert ("so far as practicable, ensure—

(a) that the members of the Council include members who, by reason of their familiarity with the special requirements and circumstances of the different areas of Great Britain or of small businesses, are able together to represent the interests of consumers of gas supplied through pipes in all those areas and of such businesses; and

(b) that the interests of consumers of gas supplied through pipes in different areas are represented by different members wherever that appears to the Secretary of State to be appropriate having regard to the manner in which the various parts of the gas supply industry in Great Britain organize themselves.")

The noble Baroness said: My Lords, we are now on Clause 2. With your Lordship's permission, I feel that I must say one or two words about how this

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amendment arose in my name. Noble Lords who were here on the Committee stage will probably remember that I moved an amendment to Clause 2, from which I hoped that the Secretary of State would be able to appoint regional chairmen to be members of the national Gas Consumers' Council. My noble friend the Minister in his reply drew my attention to the fact that my amendment was incorrectly worded. He said that he would help to draft something which we all wanted to be put into the Bill; and, indeed, as the noble Lord, Lord Stoddart, has said, it is absolutely essential.
But, unfortunately, the words that I used were incorrect. The first word was "regional". That was because the word "region" is not on the face of the Bill. "British Gas" is not on the face of the Bill. "The supplier" is what is alluded to on the face of the Bill. It was for that reason that my noble friend the Minister gave me his helpful advice so as to put forward this particular amendment instead this evening. It is more complicated than the one that I put forward. It is not perhaps in my normal language, but it is in parliamentary language. I think it covers completely the ground that I wanted to cover originally in that the Secretary of State will be asked to appoint people who have specialised knowledge of certain areas to sit on the national Gas Consumers' Council.
The reason why British Gas, and anything to do with that body, is not mentioned in the Bill is, as I understand it, that British Gas might alter considerably in the next 20 or 25 years and it is felt—in my view, absolutely rightly—that to tie the future organisers of gas to a word like "regions" might be wrong. They are now called regions, which is why several noble Lords have already referred to the regions of British Gas, and indeed to what is coterminous—the regions of the national Gas Consumers' Council. But in view of the fact that the regions will perhaps not exist in the future and, as I have said, they are not on the face of the Bill, I have tabled this amendment with the help of my noble friend.
I am certain that everybody who has had anything to do with British Gas, or with the national Gas Consumers' Council, as the noble Lord, Lord Stoddart, so very rightly and eloquently said, realises that the regional structure, and the people representing the various parts of this country on that council, do an excellent and necessary job. I am told that it is the intention of British Gas plc to continue with the representation, although it will not be tied and it will be more flexible, and that the representatives from the various parts of the country will be appointed by the Secretary of State.
It is a complicated matter and I felt that I owed it to those who knew that I wanted this structure—if that is the right word—to be part of the Bill, even temporarily, to move this amendment. I hope that the Minister will agree to accept it. I think it is couched in terms that are acceptable to the parliamentary draftsman and that it can be put in the Bill. Noble Lords will notice that the authorisation has been changed very slightly and that Condition 12, which is to do with the consumers' interests, has also been changed. When we hear the Minister I think he will be able to tell us that the codes of practice which are now
854
enshrined in the authorisation will meet all the problems about this part of the Bill. I beg to move.
Lord Williams of Elvel: My Lords, we must be very grateful to the noble Baroness, Lady Macleod of Borve, for moving this amendment. She has shown consistently very great interest in these affairs and we must honestly pay her very great tribute for trying very hard to get something acceptable to all sides of your Lordships' House.
I have certain problems with the drafting. I hope that the noble Baroness will excuse me, because I mean no offence, and I am not sure to whom I should address the problems I have on the drafting, but perhaps I should start with the noble Lord. Lord Belstead. I have precisely 11 points which I should like to raise on the drafting of this amendment. First, what is the meaning of the expression "so far as practicable", when the Secretary of State "shall, so far as practicable, ensure"? I wonder whether the noble Lord could enlighten me as to exactly in what circumstances it should be considered practicable, and in what circumstances it should be considered impracticable.
My second point is that in paragraph (a) of the amendment the "members of the Council" shall include members. We are not clear from this—and perhaps the noble Lord can give us some guidance—about how many members: what proportion of the council might be composed from members appointed under this amendment. Arc there going to be 153 members of the council with two members appointed under the amendment? What proportion does the noble Lord have in mind?
My next point is on the question of familiarity. What does "familiarity" mean? The noble Baroness when she introduced her amendment said, I think, that they would come from the areas in question. There is no reference in the amendment to the fact that their geographical origin should be from the areas in question. They should be familiar with the areas in question, and familiarity can take a number of different forms. Some of us would claim familiarity with all sorts of areas and all sorts of businesses on a fairly superficial plane. I hope very much that the noble Lord may be able to enlighten us on that.
Then there is a point of English on the question of different areas. I was always brought up to believe that something was different from something else. You cannot simply say that there are different areas. You can say that there are various areas, there are regions, but for something to be different it has to differ from something. Will the noble Lord ask the draftsmen whether they can possibly correct what I regard as a slight misuse of the Queen's English?
Then we come to the small businesses. As I understand the amendment, it is members who—and I shall paraphrase the amendment for the sake of convenience—are familiar with the special require-ments of areas or small businesses. It is to me unclear whether these members are going to be both familiar with areas and the small businesses; or, alternatively, familiar with one or the other, in which case one would wish to know how many members were going to be familiar with small businesses and how many

855
members were going to be familiar with the areas. I think the noble Lord will wish to comment on that.
My next point is that they will act together. Paragraph (a) says,
"are able together to represent the interests of consumers".
Does this mean that they will act as a body on the council? Does this mean that they will be required in some way to co-ordinate their advice and their votes on the consumer council, or is that an expression which perhaps is a little superfluous? Perhaps the noble Lord will enlighten us on that.
Then there is the expression,
"in all those areas and of such businesses".
Again I come back to more or less the same point as I made before. Are these members required to act together in both those areas and those businesses; or can some members act for some areas and others for some businesses? The amendment is unspecific on the question and we should like to know more about it.
Paragraph (b) uses the expression "different areas" but then it goes on to say that those should be represented by "different members". Does this mean that there is one member for each area? Does this mean that different areas which differ one from another will be represented by members who differ one from another? What is the meaning of this?
My tenth point concerns the "various parts" in the penultimate line of the amendment,
"the various parts of the gas supply industry".
Are we to assume because of this amendment that the gas supply industry in Great Britain is going in some way to divide itself up into various parts? If so, perhaps the noble Lord will be able to enlighten us on what these "various parts" are or might in the course of time become.
Lastly, there are the last two words in the amendment "organise themselves". It appears from the amendment that it is now envisaged that,
"the various parts of the gas supply industry",
will be able to organise themselves. I am quite unclear from all I have heard—and I have sat through a number of debates on this Bill—that we have any authorisation for the various parts of the industry to start organising themselves. I should be most grateful if the noble Lord would kindly illuminate me on these points.
10.30 p.m.
Lord Sanderson of Bowden: My Lords, I too am very grateful to the noble Baroness for moving this amendment. Listening to the noble Lord, Lord Williams, reminded me of someone trying to do a Latin unseen, and I must say that I have some sympathy with the points that he has raised. I look forward to hearing the detailed answers from my noble friend Lord Belstead.
I have only one question to put to my noble friend before he replies. In this I believe I have the sympathy of the noble Lord, Lord Taylor of Gryfe, because I too have concern for matters north of the border. Am I to understand, among all the difficulties of trying to comprehend the parliamentary draftsman's wording, that we are to have regional representation from all
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parts of Great Britain? Is that the intention behind all of this? I should like to have confirmation of that. I know that we are not allowed to talk about amendments that are to follow, but if that is the case, then in combination with Amendment No. 59, that seems to satisfy many of the needs that those of us north of the border have so far as concerns consumer councils.
Baroness Gardner of Parkes: My Lords, I greatly enjoyed listening to the noble Lord, Lord Williams, but more as an entertainment than anything else. I rise to support the amendment of my noble friend Lady Macleod, and I hope that my noble friend the Minister will in his reply make clear that he does not wish to define too precisely some of the words and phrases, as requested by the speaker from the Opposition Benches.
Flexibility in the way in which members are appointed, and the choice of those to be appointed, are matters that should be left open so that any individual who may be perfect for the job can be selected. The more that these matters are dealt with in specific terms, the more limited the Minister will be in choosing the right people. Also, the person who may be right for the appointment one year, may be different from the type of person who would be right for appointment some years ahead, when the reappointments are due to be made. I hope that in answering the points raised on this amendment, my noble friend the Minister will accept the amendment and will not tie himself to any inflexible structure of the kind for which the noble Lord, Lord Williams, might wish.
Lord Belstead: My Lords, in Committee on 8th May my noble friend Lady Macleod, supported by the noble Viscount, Lord Hanworth, moved Amendment No. 20 calling for tighter wording on regional representation on the Gas Consumers' Council. In debate on an earlier amendment from the noble Lord, Lord Stoddart, the Committee had established there was all-party support for such a change. The noble Lord opposite asked the Government to consider also changing the indirect words,
"the Secretary of State shall have regard to the desirability of having members",
to something more direct.
While I was unable to accept the noble Lord's amendment on that occasion, I readily agreed to take away the consensus view that regional representation at a national level was a desirable aim and to consider how that could best be expressed on the face of the Bill.
Also, in Committee on 11th June, the noble Lord, Lord Bruce of Donington, tabled Amendment No. 133, which also attracted all-party support, concerning advice for the director on matters affecting small businesses. On that occasion my noble friend Lord Gray was unable to accept the amendment as it stood, but he agreed to take that subject away for future consideration. The noble Lord, Lord Diamond, made the suggestion that it might be possible to appoint to the Gas Consumers' Council a member with special knowledge of the interests of small businesses.
Amendment No. 49 represents further consideration on those two matters—regional representation

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and the interests of small businesses. It represents also a certain amount of discussion that has gone on with my noble friend Baroness Macleod and the Government between the two most recent stages of the Bill. However, I must make it clear that this is my noble friend's amendment. She is very much to be thanked, together with the noble Viscount, Lord Hanworth, for bringing forward the original amendment.
I hope, despite the difficult questions that the noble Lord, Lord Williams, has posed, that the Committee will feel that Amendment No. 49 fits the bill. Paragraph (a) provides that in appointing members of the council the Secretary of State shall "so far as practicable", and so on. That means he will take steps to secure proper representation if this is practicable, taking into account various factors such as an efficient size for a council of this nature. In other words, he could not be forced to take into account things which were clearly impracticable.
To return to paragraph (a), it provides that my right honourable friend shall, so far as practicable, ensure that members shall include, first, people who are able to represent the interests of small businesses, and, secondly, people who are familiar with the special requirements and circumstances of different areas of Great Britain, so that those members together are able to represent the interests of all gas consumers in Great Britain.
I shall come back later to one or two of the other questions on paragraph (a). As regards paragraph (b), I shall try to answer the noble Lord, Lord Williams, in this way. Paragraph (b) provides that the Secretary of State is to ensure also that he has regard (again, so far as practicable) to the way in which the industry is organised in making appointments so that different areas may be separately represented. This will enable recognition to be given to the particular interests of consumers in specific areas—for example, those with a particular terrain and with dispersed population —where this is reflected in British Gas's regional organisation. In other words, the regions of British Gas in the future can be represented on the Gas Consumers' Council by statutory right on the face of the Bill.
My noble friend Lady Macleod explained why the amendment is tortuous. It is because we cannot, in this part of the Bill, refer to the regions of British Gas. Part I of the Bill does not refer to British Gas. It refers only to public gas suppliers. We cannot, in Part I, start referring to British Gas or the regions of British Gas. However, I assure my noble friend Lord Sanderson that it is the intention of my right honourable friend to appoint separate members to represent the interests of gas consumers in each of the British Gas regions. I repeat what I said a moment ago, that the sum total of this amendment is that by statutory right, if my noble friend's amendment is accepted, the regions of British Gas can be individually represented on the Gas Consumers' Council.
Before I conclude, may I quickly try to pick up one or two of the questions—
Lord Diamond: My Lords —
Lord Belstead: My Lords, may I finish before giving way? Otherwise I am in some difficulty.
The noble Lord, Lord Williams, asked a string of questions. On the issue of how many members, the advice of my noble friend Lady Gardner of Parkes is wise. We want to leave as much flexibility as possible, provided there is the assurance that there will be representation for each of the regions—and that is the intention—on the Gas Consumers' Council.
The noble Lord asked why the word "familiarity" was used, because that means that the person should be acquainted with the special requirements and circumstances of different areas. There are, of course, a number of different areas in Great Britain and this is what the amendment refers to; but it occurs to me that, again, one needs a certain flexibility in the wording. It could be that somebody is familiar with an area because he lives there but possibly does not work there. That might be the reason. The noble Lord asked what "acting together" meant. I think I have already answered that in what I have said.
Finally, on the reference to different areas, the intention is that there should be a member for each British Gas region. I am repeating myself but I believe it is worth doing so. I wish we could have used the word "region", because I think that my noble friend Lady Macleod would have liked it much better, but I advised her in conversations that the word "region" was something which I thought would run us into difficulties. My noble friend accepted that advice when drafting her amendment, and that is the reason why the word "areas" is used in the particular amendment that my noble friend has brought forward.
Lord Williams of Elvel: My Lords, before the noble Lord sits down, may I say that I am most grateful to him for his response, but does he recognise that in his statement he has more or less completely rewritten the whole amendment? Does he think it possible to take the amendment back again and ask the parliamentary draftsman to look at it and to draft it in slightly clearer terms for Third Reading? Is this not a fair request? The noble Lord has given us a lot of extra information about the amendment which we did not have before. We will take his word as a Minister and accept the assurance that he has given, but I would ask whether it would not be proper to have it on the face of the Bill.
Lord Diamond: My Lords, before the noble Lord sits down, would he be good enough to clarify the point that he was making and say what he contemplates or imagines will be the size of the council, having regard to both regional representatives and other interests? Can he give us some idea of the number—between two figures, what will be the total number of the council?
Lord Belstead: My Lords, just before I come to that particular question, may I say incidentally that on the question of flexibility there was a specific question which the noble Lord, Lord Williams, asked me about small businesses. It was the same sort of question again: what would be the amount of representation?
Here again I must take the question absolutely head on. This point is deliberately left vague by my noble friend. The point is that as of right small businesses should have statutorily on the face of the Bill a

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representation on the council. Let us not forget that there is statutory representation on the council for disabled people, which results from one of the schedules. I do not think that I have heard anyone complain that there might only be one representative as a result of that. Therefore I do not think that we ought to overplay the fact that small businesses might have representation of only one or two people. My advice is that we would think of the council as consisting of up to about 25 members.
Before I sit down, may I say finally that this is the amendment of my noble friend Lady Macleod? However, the noble Lord, Lord Williams, asked the Government a direct question as to whether, for our part, we should advise that the amendment ought to be brought back again. I think that nobody knows better than my noble friend Lady Macleod that there has been a certain amount of agony over how to draft what appeared to be a very simple point. I warned my noble friend Lady Macleod during the Committee stage that there was a drafting difficulty. If I remember rightly on that occasion I said that we could not refer in the Bill—at least not in Part I—to the "regions of British Gas" because British Gas is not mentioned in Part I; only public gas suppliers are mentioned, and therefore there was a drafting problem.
In discussions with my noble friend I think she kindly took on board that it was really quite difficult to draft this amendment to get what was wanted. I shall certainly have a word through the official channels with the parliamentary draftsman and draw his attention, so far as the Government are concerned, to what has been said in this short debate. But if my noble friend Lady Macleod wishes to put the amendment to the House, as I very much hope she will, then I hope that we shall get it on to the face of the Bill.
May I end by saying on behalf of the Government that this amendment achieves one simple point, which we promised the House that we would try to achieve? By moving this amendment my noble friend is achieving it: namely, by statutory right there can be regional representation on the new Gas Consumers' Council.
Lord Diamond: My Lords—
Noble Lords: Order!
Lord Diamond: My Lords, I do not know what the cries of "Order!" are about. I have not spoken so far on this amendment.
Lord Gray of Contin: My Lords, the noble Lord has intervened.
10.45 p.m.
Lord Diamond: My Lords, I intervened once to ask for clarification while the Minister was on his feet. I do not know if that counts as a speech; if it does not, then, not having spoken, I seek the leave of the House to speak now.
I was merely going to say to the noble Baroness, Lady Macleod, that she deserves the congratulations of the House for the endeavours that she has put into this amendment and the hard work that has gone into it.
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I say to the Government and to my noble friend Lord Hanworth, who is also closely interested in the matter, that, frankly, I well understand the difficulty of the wording. We are pleased that the point has been raised and that the Minister has promised to have another word with the draftsman. I hope that the noble Baroness presses the amendment and that the House accepts it. It is a step, or perhaps two steps, forward. It does not go anything like the distance that we want. But they are two tiny steps forward. To that extent we are grateful to the Government.
Baroness Macleod of Borve: My Lords, with the leave of the House, I thank my noble friends Lady Gardner and Lord Sanderson very much indeed for their support, and I also thank noble Lords on the other side of the House, despite the fact that, quite rightly, the noble Lord, Lord Williams, did not go along with all the wording of the amendment. He might have done better with the drafting, but I did my best.
I also thank my noble friend the Minister very much indeed for agreeing to the amendment. It seems to dot the "i"s and cross the "t"s, or whatever one does. At this time of night, in this dark and gloomy Chamber, it is difficult to know what one is doing. I am most grateful to him for accepting the amendment.
On Question, amendment agreed to.
[Amendment No. 50 not moved.]
Lord Diamond Lord Diamond moved Amendment No. 51:
Page 2, line 27, at end insert—
("( ) The Council shall have the power to do anything which is calculated to facilitate, or is incidental or conducive to, the performance of any of its functions under this Act")
The noble Lord, said: My Lords, I gather that it would also be convenient to discuss Amendments Nos. 52, 53, 55 and 60. Amendment No. 51 merely transfers from the schedule to the Bill itself a most important statement about the council's powers:
"The Council shall have power to do anything which is calculated to facilitate — the performance of any of its functions under this Act".
Those are very wide powers indeed. With respect to the draftsman and to the Government, it seems to me that those powers are so important that they should be incorporated in the body of the Bill and not left in a schedule where they might be overlooked or might be thought to have less than their full power. In my experience it is not normal to have powers like that put in a schedule. Details of pay and so on are appropriate to a schedule, but a main statement of the powers of the council should go into the body of the Bill. That is the purpose of the first amendment.
Amendment No. 52 reads:
"if at any time it appears to the Secretary of State that the represent-ation of consumers throughout Great Britain or their ease in voicing individual complaints, can be improved by providing additional facilities, he shall, after full consultation, take such steps as appear to him appropriate for those purposes".
The purpose of this amendment is fairly plain. It is to enable individuals who have complaints to know where to go to voice them, or where to write or to ring up—to have human contact. If at any time the Secretary of State feels that the present representations

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are inadequate and that they can be improved by providing additional facilities, he shall do so. He shall take such steps as appear to him appropriate for those purposes.
It is not putting an obligation on the Secretary of State to do anything other than to think about it, and he shall do that after full consultation. That means what it says; consulting all the bodies which are relevant and which ought to be consulted. The amendment is necessary because in the future the present arrangements may not appear to be adequate. I do not think that they are adequate. The Government must think that they are, because they are not providing for anything else. As a safeguard, I should have thought that it was asking little of the Government to ask them to accept an amendment which does not compel the Secretary of State but which enables him to improve the representation of consumers, if he thinks that it is necessary. It does not compel him to do so. He may feel, with experience, that he wants to make those changes. That is the purpose of Amendment No. 52.
Amendment No. 53 starts in the same way and is therefore merely an alternative. It goes on to say in the last four lines:
"In reaching a conclusion as to the provision of additional facilities the Secretary of State shall have regard to the need to ensure that the gas consumers' voice is heard at local level in all parts of Great Britain.".
Those words are excellent. They describe exactly what we want, and they are the words of the noble Lord, Lord Belstead, copied straight out of Hansard. With respect to the prophet, I can do no better than use the prophet's own words. That may be regarded as an unnecessary frill. The Government may think that it is wise to say what the Secretary of State shall have regard to. If they think that is so, they will prefer the second form of the amendment (Amendment No. 53) to the first form (Amendment No. 52).
It is for them to decide whether they will accept either of them. I hope that they will because it is, as I say, mainly an attempt to give flexibility in the future to the Secretary of State, if he feels that something more needs to be done to cope with the problem of individual complaints and if having on the national council somebody who comes from the locality does not completely satisfy that need for those who want to know where they can telephone or to whom they can write if they have a complaint. If the Secretary of State thinks that is necessary in the future, he has powers in the Bill to provide for that without having new legislation. I hope that the Government will look very favourably on either Amendment No. 52 or No. 53.
Amendment No. 54 merely gives the construction of the matter. It states:
"All references to the Secretary of State in this section and in Schedule 2 to this Act shall be construed as references to the Minister of the Crown for the time being having responsibility for consumer affairs".
Normally the Secretary of State would be the Secretary of State dealing with energy matters, but here we are dealing with consumer matters. It is a valuable point. It was suggested to me by a Member of your Lordships' House. When we are dealing with consumer matters, the Minister of the Crown who is
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responsible for consumer matters should be the Minister to be consulted, amendment No. 54 provides for that. It says:
"All references to the Secretary of State in this section and in Schedule 2 to this Act shall be construed as references \o the Minister of the Crown for the time being having responsibility for consumer affairs".
Amendment No. 60 merely leaves out the paragraph in the schedule which is transfered under Amendment No. 51 to the Bill.
There are a number of amendments, but the one which I have moved is the first one. It embodies in the Bill the powers that the council has. I hope that, in addition, the Government will look in a kindly manner at some way of improving the ability of the relevant Secretary of State—the Minister of the Crown dealing with consumer affairs—if at any time in the future he wants to add facilities in the way that the noble Lord, Lord Belstead, said that they should be provided. I beg to move.
Lord Belstead: My Lords, these are important amendments. I recognise the concern that the noble Lord, Lord Diamond, has expressed about the adequacy of consumer representation arrangements at local level. I come straight to the point and say that we are bringing forward an amendment about this when we come to debate Amendment No. 59. This has been tabled in response to the Committee stage amendment of my noble friend Lady Gardner of Parkes, supported at Committee stage by the noble Lord, Lord Diamond.
As I made clear in Committee, we believe that the power in Schedule 2, which the noble Lord. Lord Diamond, seeks to transfer to Clause 2—I refer to the first of the amendments—is sufficiently wide to enable the council to do anything necessary for the performance of its functions. However, in response to my noble friend Lady Gardner and to avoid any possible doubt, we are bringing forward Amendment No. 59 to Schedule 2 which will make clear that the council may appoint persons at local level to assist it. This will ensure that the grass roots link with consumers, which we all agree is vitally necessary, will be maintained. Given the broad nature of the existing power in Schedule 2 and the proposed amendment which we shall be debating very soon—Amendment No. 59—I do not think it is necessary to make further provision for additional facilities to enable consumers' complaints to be dealt with. That is my answer to Amendments Nos. 51, 52 and 53.
As to Amendment No. 55,I would wish to make it clear that there will be no gap of the type envisaged in that amendment. The national and regional gas consumers' councils will cease to exist as a consequence of the new Gas Consumers' Council coming into existence. This is made clear in subsection (6), which the noble Lord is seeking to amend, by the inclusion of the words:
"In consequence of the provisions of this section".
They make the matter explicit.
In addition, the noble Lord, Lord Diamond, spoke to Amendment No. 54 on a rather different point. It was a matter to which the noble Lord alluded in Committee—namely, making clear to which Secretary of State the references are when we talk about the

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Secretary of State having responsibility for consumer affairs. It is a well established practice in legislation to refer to the general expression "Secretary of State" rather than a particular Secretary of State so that the duties and functions set out under a particular section or schedule can be exercised by whichever Secretary of State the government of the day consider to be most appropriate. Where appointments to the Gas Consumers' Council—one of a number of statutorily appointed consumer bodies—are concerned, it is this Government's policy that the appropriate Secretary of State will be my right honourable friend the Secretary of State for Trade and Industry who has the responsibility for consumer affairs.
There is obviously a necessity to have some flexibility here in the event of changes of responsibility within government. To tie oneself down on the face of primary legislation to a particular Secretary of State when one can use the now accepted general expression "Secretary of State" would be a pity. I hope that in not accepting the noble Lord's amendments, I have nonetheless indicated that this has been a valuable exchange. It gives the Government for the first time the opportunity to refer in a little detail to Amendment No 59 that we intend to bring forward. I like to think that that amendment meets the local level point made in the noble Lord's amendment, Amendment No. 53.
Lord Diamond: My Lords, before he sits down, I should like to ask the noble Lord to clarify one point. Will he be a little more clear about Amendment No. 51? This is the proposal to transfer the statement of powers from the schedule to the clause. Is the noble Lord saying that the powers will not be increased as a result of putting them in the clause and that these powers—vitally important and very wide, as he says —are adequately placed in the schedule?
Lord Belstead: My Lords, I do indeed think that the power is adequately placed in the schedule.
Lord Diamond: My Lords, it only remains for me to thank the Minister for having in large measure met most of these points and to delay the substantive discussion until we get to the amendment to which he has referred, in the name of the noble Baroness, Lady Gardner of Parkes. I therefore beg leave to withdraw Amendment No. 51.
Amendment, by leave, withdrawn.
[Amendments Nos. 52 to 57 not moved.]
Schedule 2 [Gas Consumers' Council]:
11 p.m.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 58:
Page 65, Line 20, at end insert—
("(1A) Any contract of employment with either the National Gas Consumers' Council or a Regional Gas Consumers' Council in force immediately before the transfer date shall become a contract of employment with the Gas Consumers' Council, on the transfer date, upon the same terms and conditions of the said contract of employment. The rights and liabilities of the National Gas Consumers' Council and the Regional Gas Consumers' Council under any agreement or arrangement for the payment of pensions, allowances or gratuities shall be vested in the Gas Consumers' Council upon the transfer date and accordingly any
864
period of employment with the National Gas Consumers' Council or a Regional Gas Consumers' Council shall count for all purposes as a period of employment with the Council.
(1B) Access to the pension scheme of the public gas supplier will be retained following transfer of undertakings.").
The noble Lord said: My Lords, I move Amendment No. 58—the words on the Marshalled List. This is a very simple amendment and I shall be brief.
It refers to contracts of employment with those who are at present employed by the national Gas Consumers' Council or regional gas consumers' councils. On this side of the House we believe that there should be, as is usual in these cases, no rupture in the terms of employment once the national Gas Consumers' Council or regional gas consumers' councils no longer exist, and the Gas Consumers' Council as proposed under the Bill starts to exist. It is a question of making sure that the employment of the people in the consumer councils is protected, that their contracts are honoured and that their pension entitlements are protected. This is in (1B).
I think that this is a relatively simple amendment and I am sure that the noble Lord will have no difficulty in either agreeing to the amendment or explaining exactly how the Government propose to meet this rather important point for the employees of the Gas Consumers' Council. I beg to move.
Lord Belstead: My Lords, as I think I made clear at a previous stage of the Bill, it is the Government's policy to standardise the terms and conditions of employment of non-departmental public bodies—such as the new Gas Consumers' Council will be—on terms analogous to those of the Civil Service. This policy has begun to be put into effect in the London Regional Transport Act 1984 and the creation of the London Regional Transport Committee.
We think that this is a logical development since the functions involved in representing the interests of consumers have a general application which makes it appropriate for bodies charged with this responsibility to be run along public sector lines. The task that these councils perform, and the responsibilities with which they are charged, are clearly more akin to those of the Civil Service than those of the industry over which they have oversight, whether the industry be in the public or the private sector.
The new consumers' council will be a strong public body for protecting the public interest in this important area and it will carry on the excellent work which has been done previously. I have no hesitation in paying tribute to the services which have been given by the staff of the current councils. Because of the changeover, however, to terms and conditions analogous to those of the Civil Service it will be necessary for some staff redundancies to take place and to have redundancy notices issued to all staff. But staff have already been invited to apply for jobs with the new council, and existing staff—whether or not they are taken on again by the Gas Consumers' Council-will receive full compensation payments on terms analogous to those of the British Gas redundancy scheme. It will be for the new Gas Consumers' Council to decide on which staff to appoint. However, it is clearly a very relevant consideration that staff of the

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existing councils will be experienced in dealing with gas consumers, and obviously this will carry an advantage for them in applying for jobs with the new council.
So far as pensions are concerned, it would not be appropriate for those re-employed by the new council to stay with the British Gas pension fund. The purpose of the change is for employees of the GCC to be employed on terms analogous to the Civil Service—and this includes their membership of a pension scheme analogous to that for the Civil Service. It would be anomalous to do otherwise.
Current employees re-employed by the new council will thus be able to freeze their existing pension within the British Gas scheme and start afresh with the Civil Service analogous scheme, or transfer across their length of service entitlements to the Civil Service analogous scheme under the public sector transfer arrangements, whichever is more favourable to them. Although I have not met all the points which the noble Lord has made—for, indeed, the main thrust of the amendment is to receive assurances that there will not be redundancies, and that, of course is an assurance that I cannot give—nonetheless I hope that the information which I have given will be both an assurance and of interest to the noble Lord.
Lord Williams of Elvel: I thank the noble Lord for his reponse but, of course, as he admitted, it does not go as far as we should like. However, the noble Lord has explained the circumstances in which those employees who are required to do so will move across, and that goes some way, although, as he says, not the whole way, to satisfying what we want. In the light of that and the fact that it is late, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Belstead Lord Belstead moved Amendment No. 59:
Page 65, line 23, at end insert—

("(2A) For the purpose of ensuring that there are persons available in particular localities to assist the Council in the performance in those localities of its functions under this Act, the Council may, without any such approval as is required by sub-paragraph (1) above, appoint such persons to be so available as it may determine.

(2B) Persons appointed under sub-paragraph (2A) shall not be paid any sums by the Council for or in respect of their services except sums reimbursing them for their travelling expenses and such of their other out-of-pocket expenses as do not relate to loss of remuneration.")

The noble Lord said: My Lords, I beg to move Amendment No. 59. Your Lordships will recall that in introducing her amendments on local consumer councils, my noble friend Lady Gardner said that the aim was to introduce a statutory basis for genuine grass roots representation. I have now referred to the Government's reaction to that, which is that we are bringing forward Amendment No. 59 in order to try to meet the case which my noble friend made so eloquently at Committee stage.
The amendment to Schedule 2 which I am proposing, in response to my noble friend Lady Gardener, would insert two new sub-paragraphs in paragraph 3. The first of these would make clear that it is within the council's power to appoint persons to be
866
available in particular localities to assist the council in the performance of all of its functions. Your Lordships will note that it will not be necessary to obtain the approval of the Secretary of State as to numbers and terms and conditions; this is because these local representatives will not be employees as such but rather in the nature of volunteers. I believe that it was the voluntary service which has been given in the past to the gas industry at local level which was one of the reasons which prompted my noble friend to move her Committee stage amendment.
The second sub-paragraph provides that local representatives shall be paid expenses. This is a normal practice with appointments of this kind.
I hope that your Lordships will take the view that this amendment gives clear expression on the face of the Bill to the power of the Gas Consumers' Council to appoint local representatives on a clear basis which I trust is acceptable to you. If it is acceptable, I should like to congratulate my noble friend Lady Gardner on creating a situation in which this amendment has been brought forward. I beg to move.
Lord Diamond Lord Diamond moved, as an amendment to Amendment No. 59: Starred Amendment No. 59:
Line 2, after ("available") insert ("at no addresses").
The noble Lord said: I shall deal with this amendment very briefly. I do not know what has happened regarding the printing, but as it stands it is unintelligible. What I intended to ask was whether the amendment which the noble Lord has moved will make it possible for complainants and other consumers who want to make complaints to get in touch with these individuals who will be local volunteers, as it were, at given addresses and telephone numbers. It is no use unless complainants know how to get hold of their representatives. That is all that I need say about it. Having asked that question. I suppose that I had better move the amendment. I beg to move.
Lord Williams of Elvel: My Lords, may I address my remarks to the original amendment moved by the noble Lord, Lord Belstead. I apologise for appearing in the form of a gadfly on the question of drafting but there are some points in this amendment on which I should like clarification. I do not understand (2A) in the amendment. If I may omit some words which I think are omittable, if I may use that expression, and read it out I think your Lordships will understand why I do not understand it.
"For the purpose of ensuring that there are persons available in particular localities … the Council may … appoint such persons to be so available as it may determine.".
In other words, in order to ensure that there are people in certain localities the council may appoint people to be in certain localities. That is what the words, as I understand them, mean, as opposed to what the noble Lord might wish them to mean or indeed the noble Baroness, Lady Gardner of Parkes.
It is a purely drafting question. In other words the council may move people, or pick on people, or may pick on whoever it likes, and say, "You are to be available in a particular locality", whether or not that

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person actually resides in that particular locality at the time. This is a drafting point. I am not claiming that it is anything else.
The second point on (2B) is a little more serious, and perhaps the noble Lord can help us on this. I do not understand why in the original schedule members of the council may be paid—and this is paragraph 2 of Schedule 2:
"The Council may pay to any member such sums … as the Secretary of State may with the approval of the Treasury determine"—
and yet the person, or persons, who are to be available in particular localities are specifically in the schedule to be prohibited from being paid such sums, and they are only allowed expenses. I wonder whether the noble Lord can explain to us exactly why that is the case. I have two problems. One is the drafting of (2A), because I am not sure that it makes sense, and the second is the problem of payment under (2B).
Lord Belstead: My Lords, may I, with the leave of the House, say with respect to the noble Lord, Lord Williams, that although we sit on opposite sides of the House I often follow his advice and always listen to him, but I think just for once he is not on to a good point so far as (2 A) is concerned. The difficulty of the criticism that the noble Lord aimed at the Government is that the noble Lord uncharacteristically rather unfairly left a lot of words out. It is:
"For the purpose of ensuring that there are persons available in particular localities to assist the Council in the performance in those localities of its functions under this Act, the Council may …appoint such persons to be so available as it may determine."
With respect, that even to me is absolutely as plain as a pikestaff, and there is no difficulty about it.
I have received advice which says, "Persons should be available in particular localities to assist the council". The noble Lord, Lord Williams, has omitted important words. Therefore, my rather off-the-cuff reply is in line with the official advice I have received, and I am still receiving advice.
Of course I shall look at it again and wait to hear what the noble Baroness, Lady Gardner of Parkes, has to say, but at the moment I do not go along with the criticisms that the noble Lord aimed at subsection (2A). But I do not want to be hidebound, and I am very ready to have a word with the parliamentary draftsman to see whether we can make it any clearer, though I like to think it is clear.
So far as the second question is concerned, these are supposed to be local representatives who would be in the nature of volunteers, and would not be paid in the same way as full members of the council, but would of course need to be paid expenses. If the noble Lord likes to cast his mind back several weeks, I have no doubt that he and I had a look at the proceedings in another place in Standing Committee, where there were considerable eulogies delivered early on about how the voluntary principle had worked at grass roots level so far as working for the gas consumers' councils in the regions was concerned at district or locality level. It is for that reason that in paragraph (2B) we have gone for the voluntary principle.
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I think that is enough from me. Perhaps my noble friend Lady Gardner would like to intervene before I am allowed to put the amendment to your Lordships.
11.15 p.m.
Baroness Gardner of Parkes: My Lords, I am delighted to see this amendment because I feel so strongly that there is need for local availability of people to deal with the problems of local consumers. I should perhaps comment first on starred Amendment No. 59. I am glad that the noble Lord, Lord Diamond, said it was unintelligible as printed on the Marshalled List because I have looked at it and tried to puzzle over what it might mean. It does not signify very much as it is printed there. I accept the principle of what he said and I should like to assure him that the way in which these local district committees have operated in the past and the way in which local representatives would continue to operate is that there is always a list published and exhibited in the showroom of the local gas office or authority giving the name, address and telephone number, where that is appropriate if a number exists, where the local person can be contacted. Strangely enough, I found that I had finished on the gas consultative council by the time that everyone started to telephone me. That was because there was delay in printing the lists. I hope that will not happen again. It is important that these lists should be available, and we are hoping that it will be done at an early date.
The essence of my amendment originally was that-speaking basically about London—to have one large Gas Consumers' Council in the centre of London would not help people on the fringes of the metropolis who needed to get in touch with somebody nearby who could pop round to speak to them or see for themselves what the problem was and then report back to the centre. In this way the amendment as it stands ensures that local people can be appointed. The principle of money is not at issue because the committee that I served on, or the consultative council as it was called, did not receive any payment, but out-of-pocket expenses are very useful and can cover babysitting or the costs of someone to care for an elderly relative. It helps people in that way who would like to serve on these bodies and who might otherwise not be able to do so. The description in paragraph (2B) of the amendment is perfectly acceptable, continuing the tradition of voluntary service that has proved to be so successful in the past.
I spoke in terms of London because that is the area I know; but the House would like to hear that today I had a letter from the Gas Consumers' Council for Scotland. It writes to say how delighted it is about this matter. The letter makes the point that the council supports the amendment because of the understanding of the need to ensure that there is effective representation for consumers at local level. The important sentence is:
"The West District Committee considers this especially important in areas such as Scotland where townships can be very isolated".
I was interested to receive that because speaking from quite a different part of the country where the big city creates its own type of isolation for people, it is interesting to hear that this is just as important to people in isolated parts of Scotland, and no doubt, in

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other parts of the country as well. I am most grateful to my noble friend the Minister for bringing forward this amendment. If further matters are to be considered at a later stage, I should be happy for him to look at it again following the points raised during the debate. I am grateful to him and I am sure that this will be to the benefit of consumers in general and to the good will and good spirit that will be maintained between the consumers and the gas industry in the future. I thank my noble friend for bringing forward this amendment.
Lord Sanderson of Bowden: My Lords, before my noble friend Lord Belstead rises, I too should like to say how grateful I am to see this coming into the Bill. My noble friend Lady Gardner of Parkes has mentioned Scotland. I think that this is just the very point where the over-rigidity, perhaps, of what has been going on with the regional consumer councils in the past is overcome by something that is more flexible. I know that in some parts of England it is thought that Scotland is not a very big country. It is, in fact, an extremely big country so far as the mileage is concerned. To have this kind of flexible approach is important—and I know that my noble friend Lord Gray will realise this since he comes from Inverness and I come from just over the Border and there are 250 miles between us—because it is extremely difficult to get a Scottish regional consumers' council to work effectively. This arrangement, to my mind, recognises the geography and recognises that volunteers are absolutely crucial to the success of any consumer body. The flexibility that the amendment gives, I think, answers a lot of the questions that have been raised in the House over this matter.
Lord Belstead: My Lords, I am wholly out of order but if I may be given the permission of the House to be wholly out of order for just 20 seconds and reply to the noble Lord, Lord Diamond, on starred Amendment No. 59, really the detailed arrangements must be for the Gas Consumers' Council. But, of course, the clear statutory intention in government Amendment No. 59 is that local representatives shall help locally with problems that arise in their areas. I would like to think that the value of this is that it is on the face of the Bill.
Lord Diamond: My Lords, may I seek leave of the House to withdraw my amendment to Amendment No. 59?
Amendment to the amendment, by leave, withdrawn.
On Question, Amendment No. 59 agreed to.
[Amendment No. 60 not moved.]
Lord Brabazon of Tara: My Lords, this is a convenient moment for me to beg to move that further consideration on Report be now adjourned.
Moved accordingly and, on Question, Motion agreed to.
House adjourned at twenty-three minutes past eleven o'clock.