§ 4.6 p.m.
§ Consideration of amendments on Report resumed.
§ Clause 4 [General duties of Secretary of State and Director]:
Lord Diamond moved Amendment No. 63:
Page 3, line 1, after ("and") insert ("subject to the provisions of section (Directorate of Gas Supply).").
§ The noble Lord said: My Lords, I beg to move this amendment which subjects the exercise of the director's functions under Clause 4 to the provisions of an amendment which we have already touched on, Amendment No. 194, under which if the Secretary of 25 State comes to the conclusion that the director of gas supplies (who is the person to monitor the operation of this Bill) is carryng too big a load, he—the Secretary of State—can appoint an additional officer of gas supply to share the burden.
§ It is very difficult to appreciate the width of the responsibilities and so I want to remind your Lordships of some of them. I also want to remind you that here is the main protection under this privatisation measure which creates a private monopoly; here is the major protection of the consumer. The consumer councils add to it after the event; but the individual who has the responsibility for seeing that the practices laid down in this Bill are carried out is the director himself. He is the person on whom rests the justification for turning a public monopoly, with all its parliamentary protection, into a private monopoly with none at all. So an enormous burden rests upon him and a variety of duties are expressed in the Bill.
§ What I want the Government to do is to have regard to what the noble Lord, Lord Belstead, has advised us time and again: do not produce an Act under which arrangements are frozen. Time and again the noble Lord, Lord Belstead, has said: "Don't bring such a proposal into the statute; leave it in the authorisation, leave it as an undertaking, leave it in an annexe. There is more flexibility that way". So says the noble Lord.
§ I am sure that he is accepting what I am accepting. What I am asking the House to do is to say that one cannot foresee the future; that it is not given to any man to foresee the long-term future completely. It may well be that during the course of the next 25 years for which an authorisation is about to be granted—and it can be extended beyond that period, of course—circumstances may change so as to require additional help being given to the director in protecting the consumer and monitoring the processes of this new plc. That is all that we are saying; it may happen. If one looks back over 25 years, one is looking at a very different scene. It is a totally different scene regarding the production and supply of gas, and for all we know it may vary again in a substantial way over the next 25 years or more.
§ I am therefore suggesting that the Government should take powers not to compel anybody but to enable the Secretary of State to say, "Clearly this is not what we anticipated" or "Clearly this is not working out in the way we anticipated and we shall need to give the director greater help". The help that is suggested is for additional officers concerned with gas supply, who together would form a directorate and would therefore be better able to carry out their monitoring duties.
§ I repeat that it is very difficult for your Lordships to appreciate the number and weight of the duties that are put upon the director. I want to remind the House of but a handful of them. Under Clause 4, for example, the director has responsibilities for seeing that all reasonable demands for gas in Great Britain are met: that is a huge responsibility. He has responsibility for protecting the interest of consumers of gas; for seeing to the continuity of supply; for ensuring the quality of gas; and for promoting efficiency and economy on the part of persons who not only supply the gas but who use it. I would ask your Lordships to think of those 26 millions involved. He is also required to protect the public from dangers arising through the distribution of gas and to enable persons to compete in the non-tariff market.
§ Those are some of the existing responsibilities which are laid upon the director, and they are huge. There are other responsibilities which Members of your Lordships' House would welcome. For example, there are the responsibilities of ensuring that gas supplies are managed and used in accordance with the national interest, of promoting conservation and energy efficiency, of ensuring that the gas supplier maintains proper services for the elderly and the disabled; of ensuring that the interests of British manufacturers are taken into account; and of ensuring that persons can compete effectively in the supply of gas. There is also the responsibility to have regard to the interests of purchasers and users of gas fittings and appliances. The Minister himself is anxious that the director should have the additional responsibility of taking into account the interests of those who are disabled or of pensionable age. And so it goes on.
§ Those are enormous responsibilities and in my view, and in. the view of my colleagues on these Benches, they are incapable of being carried out satisfactorily by one man with a small office, which will start with 30-odd members. It is quite impossible. Therefore we hope the Government will recognise that it is wise to provide for the possibility that in the course of time it may be necessary to add strength to the monitoring process in the way suggested. I beg to move.
§ 4.15 p.m.
§ Lord Boyd-Carpenter
My Lords, this is basically the same amendment as the noble Lord proposed at some length and in various variants at the Committee stage and which he proposed last week during the earlier part of the Report stage. They all turn on the simple point about which he has convinced himself—though on these previous occasions he failed to convince your Lordships—that the director general would be unable to perform the important duties entrusted to him because he was one man. Therefore he should be turned from one man into a syndicate. Whatever merit that argument carries, it has been threshed out at really very considerable length; and if I may say so with very great respect to the noble Lord, it seems a little wearisome (despite his observations about the guillotine in another place) that your Lordships should have to consider it now for the third time running.
The point is not one that is intellectually very difficult to apprehend; it is not one of great complexity. It is a perfectly simple point. The noble Lord takes one view. On previous occasions, after full and detailed debate, your Lordships have come to the contrary conclusion. I therefore express the hope, with very great respect to him, that we shall not be expected to spend further time on this same point yet again.
§ The Minister of State, Scottish Office (Lord Gray of Contin)
My Lords, I am particularly grateful, as always, to my noble friend Lord Boyd-Carpenter for his remarks on this occasion. It is true that the amendment to which the noble Lord, Lord Diamond, has just spoken is one of a series of about 25 which I had suggested we might group together. The noble 27 Lord, Lord Diamond, as he is perfectly entitled to do, felt that would not be the way to proceed. He then suggested that we should have eight groups on this issue. He has now delivered his thoughts on the second of those groups.
The first was Amendment No. 46, which we discussed at some length on the first day of the Report stage. With the greatest respect, the speech which the noble Lord has made is largely a re-run of what he said on Amendment No. 46, albeit with some additions. I think my noble friend Lord Boyd-Carpenter is perfectly correct in saying that it does become just a little bit tedious when we have to listen to the same arguments over and over again on what is virtually the same series of points. I am not complaining about that; but I would suggest to the noble Lord—and I am sure he would be the first to accept this, with his very considerable ministerial experience—that he would not expect an extended answer on each occasion, and that in the interests of not boring the House the answers I would be bound to give would become correspondingly shorter each time.
I think I congratulated the noble Lord on his persistence and single-mindedness in pursuing the appointment of commissioners; but he is not content to rest on those amendments and has now armed himself with a fall-back position. We have already explained at length why we believe that the right course is to appoint an independent regulatory body which will have at its head a well-qualified and experienced director, who will be supported by the number of staff necessary for the fulfilment of its functions.
It is likely, as in the case of Oftel, that a deputy director will be appointed; but, for reasons which we have already fully explored and explained, we do not believe it would be right or necessary to go further. Perhaps I could remind your Lordships again that the numbers of Oftel have doubled since it was first set up. It would be the Government's clear intention, as I said earlier, to ensure that Ofgas should be properly staffed in order to carry out the whole of 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. I must therefore invite noble Lords to accept that the Government have recognised the best interests of consumers in these arrangements, and I hope that the noble Lord will consider withdrawing his amendment.
§ Lord Grimond
My Lords, I would not wish to delay the House on this matter, nor to repeat arguments which, as the Minister said, were deployed on earlier amendments. However, it seemed to me that my noble friend was raising a rather different point.
What he is now saying is that some discretion should be left because we cannot foresee what the future may hold. As I understand it, the noble Lord the Minister agrees about that and says that the staff of the director general may have to be increased or altered. Does he take the view that without amendment the Bill would allow the changes which have been suggested by my noble friend? Is he saying that the amendment is unnecessary, or indeed that it is harmful?
§ Lord Gray of Contin
My Lords, by leave of the House, no, I am not saying that these amendments are not necessary. I am saying that we simply do not agree with what the noble Lord is proposing. The noble Lord has come back to this point. We had it in Committee; we had it again on the first day of Report; and we shall have it on a number of occasions before we conclude Report. We believe that in the legislation we have provided a very satisfactory system which will enable the director after negotiation with the Treasury to appoint the staff which is required for the purpose of carrying out his functions.
If I may quote, for example, Oftel, there has been no Treasury difficulty with regard to increasing the number of staff required. We have no reason to believe that such will be the case with Ofgas. For those reasons, and for the many reasons which I have explained at the Committee stage and since, we believe that the Bill as drafted provides a better system than that proposed by the noble Lord.
§ Lord Stoddart of Swindon
My Lords, I had not intended to speak, but following the Minister's reply to the noble Lord, Lord Grimond, it seems that the Government are being particularly obdurate over this matter. All the noble Lord, Lord Diamond, is suggesting, as I understand it, is that there should be provision within the Bill in case the Government at some future time decide that the director needs some assistance by way of assistant directors.
As the Bill is at present drafted if the Government want to do that—and it may well be that a future government would want to do it—they would have to bring forward an amendment to the Act. That would be entirely unnecessary and would be a waste of parliamentary time. I urge the noble Lord to accept this very mild amendment which may well make it much easier for governments of whatever political colour to do what may become necessary in the future in relation to the control and the regulation of the gas industry.
§ Lord Diamond
My Lords, I am most grateful to the noble Lords, Lord Grimond and Lord Stoddart, for making those important points. Perhaps I may deal first with the point made with such perspicacity by the noble Lord, Lord Grimond. My anxiety is based not only on the fact that the number of staff contemplated is totally inadequate for the purpose—30 against 100 which Oftel finds it necessary to have; there is also great concern in all parts of the House that Oftel is unable to function satisfactorily.
It has been established, and it has been made doubly clear by the Minister today, that although the director has power to appoint such staff as the Treasury agrees—and I accept that for the moment the Treasury has put no impediment in the way of increasing the staff—the director cannot strengthen his position. He can strengthen his accountancy arrangements. He can strengthen a variety of administrative arrangements by means of additional staff. He can visit more establish-ments. He can do those things, but what he cannot do is achieve what is the whole purpose of this amendment—and we have been pushing it forward time and again. He cannot strengthen his position as 29 one man on one-third of the salary of his opposite number who is supported by a whole board who are able and experienced in this field. What he cannot do is stand up against that weight of an organisation which is steaming ahead like a huge liner with all the impetus of past years of experience, and going on day after day. There will not be a single change, will there, from the day one licence is cancelled until the new licence—we have just dealt with that—is entered into?
Under its new name the British Gas Corporation will carry on exactly as before with its huge drive, an additional drive, towards commercialism, in the interests of the shareholders, instead of in the interests of both the shareholders and the consumers—the consumers whom we are out to protect. The only way that protection can be given is by having a director who can stand up to all that weight. The only way to stand up to all that weight is by having an equal number of persons. That is the argument we have been trying to put forward time and again.
I am sorry that I have not been able to persuade the Government. It is indeed a very mild amendment, as the noble Lord, Lord Stoddart, says. It compels nobody to do anything. It invites the Government to say, "In X years' time, 10 or 20 years' time, it may be necessary to do something which we did not think of earlier. Let us provide for it in the Bill without any compulsion whatsoever". I assert that that is normal prudency. It is non-political. It has nothing in particu-lar to do with gas. It is normal prudence when you are promoting a Bill. It is normal prudence to say, "Things may change. Let us not have the statute in a frozen form. Let us have the flexibility which Ministers have spoken about again today and give power to the Secretary of State if he wants"—"if he wants to"; nobody can compel him—"to take powers to do something additional to meet the needs of the occasion which are not foreseen at the moment".
I am sorry that I have not been able to persuade the Government as to the reasonableness of the amendment. It is extremely reasonable and moderate. I am not going to ask your Lordships to press it to a Division. 1 am, however, going to seek to continue to persuade the House that this provision ought to be made. Having made my desire and pertinacity clear in the belief that the Government are not as obstinate as all that and will in due course yield to sensible, impartial argument. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
Lord Diamond moved Amendment No. 64:
Page 3, line 3, after ("Part") insert—
(", which functions, without prejudice to the generality of the foregoing, include those described in sections 7(7)(a), 8, 11(4), 19 to 22, 23, 24, 26, 29, 31, 32(3), 34(1), 34(2), 34(4), 35(1), 36, 37, 38, 39(1), 39(2), 39(4), and in Schedules 1(4), 3(3), 4(2)(2), 4(4)(2) and 5(3)(3), together with those described in sections 7(2), 8(1) and 16 and in Schedule 3(1).)
The noble Lord said: My Lords, I can deal with this amendment very briefly. It was raised at an earlier stage in order to meet the convenience of those who had to deal with this Bill. It is a very well-known arrangement which happens in many Bills. There were two arguments put against my suggestion. The first, was that all the powers were not mentioned. I merely
took this from the Government annex. If the Government fail to put all the powers in their annex, it is not my fault; but I have added them now so that they are all here. The second complaint was that by particularising in this way one might be limiting the application of this clause. To deal with that I have said, in a classical form,
without prejudice to the generality of the foregoing".
§ I have put forward those two new additions. I am certainly not going to push this amendment to a Division, unless anybody else wants to do so. I merely want to know from the Government whether or not they are happy, now that I have met the only two arguments which they put forward at Committee stage, that this convenience should be provided for in the Bill.
§ 4.30 p.m.
§ Lord Brabazon of Tara
My Lords, as the noble Lord, Lord Diamond, has said, this amendment was tabled at Committee stage on a day when the noble Lord was, I believe, absent, and when the amendment was moved by his noble friend Lord Hanworth. I am surprised, in a way, to see the amendment tabled again because, following the previous debate, the noble Viscount commented, in respect of the response of my noble friend Lord Gray, that:I am impressed by what he said, and I shall, with pleasure. withdraw the amendment". (Official Report, 19/5/86; col 102.]But here we are again. It is not clear why the full explanation that we gave previously did not persaude the noble Lord, Lord Diamond, that the amendment would not be a helpful addition to the Bill. However, I am happy to put our points again in the hope that we may satisfy the noble Lord this time, as we were able to satisfy his noble friend on the previous occasion.
One reason why we do not feel the amendment would be of benefit is that it might confuse the layman. There are functions on the director relating to other clauses in the Bill that are not listed but which are just as important. For example, the principal duties to supply on a public gas supplier under Clauses 9 and 10 are to be monitored and enforced by the director. If the noble Lord's amendment were included, a customer who considered that a public gas supplier had breached one of those duties might be misled into thinking that the director had no role in the matter as Clauses 9 and 10 are not included in the list of functions.
Mainly, however, the Bill already sets out clearly what are the director's functions. Clause 4 lists duties that the director must use as guidelines when exercising his functions. In addition, it is important to note that the duties set out in Clause 4 guide the Secretary of State as well as the director. It might risk further misleading the layman if one were to give a list of clauses that referred only to the director's functions and failed to give those of the Secretary of State. I hope that the noble Lord, upon reflection and having heard our argument again, will recognise the force of our reasoning and will agree to withdraw his amendment.
§ Lord Diamond
My Lords, I would be wasting the time of your Lordships' House if I were to pursue this matter any further. I have said that I do not propose to 31 press this matter to a Division, and I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
Lord Stoddart of Swindon moved Amendment No. 65:
Page 3, line 3, at end insert—
(" ( ) to ensure that gas supplies are managed and used in accordance with national interest and without detriment to other fuels and energy sources;")
§ The noble Lord said: My Lords, for the convenience of the House, perhaps we may take Amendment No. 80 together with this amendment. The debate on Amendment No. 65 was foreshortened at Committee stage because it took place late in the evening. I do not intend to speak at great length today, although I see that according to the timing clock I have been speaking for four minutes already. Nevertheless, we should have a short debate because it is an important amendment that deals with energy policy.
§ There is a need to include the gas industry as a part of a national energy policy. At Committee stage, I made it absolutely clear that we should have an overall energy policy, and we do not agree with the Government that energy policy can be left to the play of market forces. In our view, that is a course for disaster. Long-term investment decisions cannot be taken on the basis of present-day demands or energy prices. We know perfectly well that at the present time we need, for the long term, to continue to explore the North Sea and to sink new mines. But on the basis of present energy prices, it is certain that those decisions will not be taken.
§ We believe, therefore, that it is necessary to have a long-term, overall strategy that will embrace coal, nuclear, gas, oil, renewables and conservation. That is the only true way forward for the proper use and deployment of the energy resources that we have available at the present time and that we are likely to have available to us in the future.
§ As I have said before (but it is worth repeating), gas is a premium fuel and it should not be used in such a way as to hinder the proper development of other energy sources and fuels. I said at Committee stage (and again it is worth repeating) that it would be unfortunate if predatory pricing or any other means were used by the gas industry to place the other industries at a short-term disadvantage. Again, that is another reason why we believe it is necessary to have a long-term, properly-developed energy policy.
§ The Government seem determined to live only for today and appear to have no real concern for the future, which they seem prepared to leave to the exigencies of market forces and the profit motive. We do not believe that is good enough for the country. It is not good enough for the future generations of this country that they should be left in such a situation and that energy should be at the mercy of market forces and the profit motive.
§ I hope that the noble Lord opposite has read the previous debate, has considered what was said, will have made some modification to his own position, and will be able to say either that he accepts this amendment or that he will give it further thought and 32 bring forward his own amendment at Third Reading, which he is of course well able to do. I beg to move.
§ Lord Boyd-Carpenter
My Lords, the noble Lord, Lord Stoddart, said that this was an important amendment, and I agree with him. It is the—
§ Lord Boyd-Carpenter
My Lords, if the noble Lord is so anxious, because of the few opportunities that he has to speak, to speak now, then I shall happily give way to him.
§ Lord Diamond
My Lords, I am grateful to the noble Lord, who speaks with his usual courtesy. I rise only because Amendment No. 80 is coupled with Amendment No. 65, and it is the usual practice of your Lordships' House, when there is a coupled amendment, for the person whose name is to the second amendment to speak after the mover of the first amendment. However, I shall gladly give way to the noble Lord if he prefers to speak now.
§ Lord Boyd-Carpenter
My Lords, the House is always anxious to hear the noble Lord and I would not wish to stand between him and the House. If he wishes to speak now because his name is to the second amendment, then I shall be very happy to listen to him. I hope that the noble Lord will not necessarily give the House that pleasure too extensively.
§ Lord Diamond
My Lords, I am most grateful to the noble Lord. It has been agreed through the usual channels that Amendment No. 80 should be spoken to with Amendment No. 65. Amendment No. 80 raises a similar point but in rather wider terms, and I hope in terms that can be easily understood, in the sense that it provides that:the Secretary of State shall have a duty to exercise those functions which affect, directly or indirectly"—nothing could be wider than that, and it is intended to be so wide—the supply of gas",—and I could give many examples but will refrain from doing so, in order to save time—whether such functions are assigned to him under this Act or otherwise".In short, we are here trying to deal with the responsibility of the Secretary of State, not the director, for having a wide view and for exercising his responsibilities under the Bill after taking account of what effect those decisions may have on the totality of the country's fuel, energy supply, and so on. Nobody can take a decision in isolation, and there is a risk as the Bill is drafted because the Secretary of State is only required to have a blinkered view of that particular, single source of energy—gas—and not to have regard to all the other sources of energy that are involved.
It is the Government who are saying that the present pattern, under which gas, electricity, water and so on are all subject to their overall policy view and that of 33 the Minister responsible, shall be broken and that one energy source should be taken out of that totality and left on its own, and then that the Secretary of State has to act with regard to that one source, totally disregarding the others. Clearly he does not do so at the moment. Clearly he has to answer to the House—to the other place and to Parliament as a whole—for his decisions on gas as they bear on the totality of energy sources.
Of course he does not like the idea of an energy policy, but this amendment does not call for that. This amendment is proposing that, as the Government have altered the situation so that the other sources of energy are now excluded from the Secretary of State's consideration—were it not for this amendment— nevertheless in exercising his functions under this Act he should have regard to the way that he considers will best promote the national interest in regard to the development and use of all sources of energy. I am sure it is a reasonable point of view and I hope that when the Secretary of State comes to take decisions he will in any event do this; but he might not, and this amendment seeks to make clear that his decisions, which are important policy decisions, should be taken having regard to the overall national interest with regard to all sources of energy, the majority of which were under his control before and one of which is now being removed from his control.
§ Lord Boyd-Carpenter
My Lords, Amendment No. 80, which has been tabled by the noble Lord, Lord Diamond, seems to me to say in six lines merely what the amendment of the noble Lord, Lord Stoddart, says in three. It is for that reason that I intend to confine my comments to Amendment No. 65. As I was saying—or was about to say when I gave way to the noble Lord, Lord Diamond, to enable him to speak to his amendment—Amendment No. 65 is an important one. I think it is the first important amendment that we have had this afternoon. Having said that, I also suggest that it is a very dangerous one. It seems to embody that approach to the management of our national economy which was a characteristic of Labour governments on many occasions in recent years. It was an approach which suggested that the whole management of our economic activities in this country was best conducted by a wise, all-seeing and all-powerful government co-ordinating all these activities and allowing neither those in charge of them nor the consumer to have any particular influence on what happened. That, of course, was the approach adopted by Labour governments, and your Lordships are well aware of the disastrous consequences that occurred when it was put into effect.
My only other comment is that I think the last part of Amendment No. 65 is extremely dangerous. Let us consider the meaning of the words:and without detriment to other fuels and energy sources".Let us consider what those words must mean if, for example, under the good administration which we believe that the gas industry will have under privatisation, gas prices are kept so low as to be highly competitive with oil or coal shall we say so as to cause more and more consumers to go over to gas and less and less oil or coal to be used. Then if this amendment means anything, the duty of the Secretary of State 34 would be to compel the gas authority to put up the price of gas so as not to compete unduly with the other sources of energy. So much for the concern for the consumer which has been so eloquently expressed from the Benches opposite on any number of occasions during the discussions on this Bill.
If we really intend to ask the Secretary of State to prevent an efficient, competitive industry in the power world from being so efficient and competitive, because it will damage competing power industries, then whatever else we may do we shall not benefit the consumer. I am bound to say that I cannot read this amendment as carrying any other implication than that. It is for that reason that it seems to me that although this is an important amendment, as the noble Lord, Lord Stoddart, has rightly said, it is important in the sense that it will be highly damaging in its effect.
§ 4.45 p.m.
§ Lord Ezra
My Lords, the noble Lord, Lord Boyd-Carpenter, always speaks very logically and effectively, but it seems to me that on this occasion he has missed an important issue: these are three industries which for the moment are crucial to the energy supply of this country and which are under public ownership. Under public ownership they come under the same sort of control and supervisory powers of the Secretary of State for Energy. Now one of them is being removed and is being privatised; the other two are to remain as they are. It seems not unreasonable that the Secretary of State, who will still retain a role in regard to the privatised gas industry, because indeed, it is defined in this Bill, should include in that role the overall relationship between the three industries and should bear that in mind. Surely this is the point of the amendment that has been moved by the noble Lord, Lord Stoddart, and of the other amendment of my noble friend, Lord Diamond.
The noble Lord, Lord Boyd-Carpenter, asked what would be the position if the gas industry, through its good management, were able to reduce its prices and capture a good deal of the market that is presently held by electricity and coal. Should the Minister intervene—
§ Lord Ezra
Coal and oil, my Lords. The noble Lord asked whether the Minister should then intervene. My opinion is that he should not. But if a future gas enterprise were deliberately to reduce its prices in order to acquire a dominant position in the market, and having acquired it then put up its prices in a new, captive situation, I should have thought that those were circumstances in which the Minister should have the power to intervene. Therefore, we merely propose that, in addition to the other powers that will be given to him under this Bill, the Secretary of State, so long as other sectors in the energy group of industries remain under public ownership, should have an overall responsibility for the public interest.
§ Viscount Hanworth
My Lords, I believe that the issue behind this amendment is probably the most important that we have had to consider on this Bill so 35 far. My reason for taking this view is that it raises the question of our whole national policy on the use of limited energy resources. I have a horrid suspicion that the ministry that is promoting this Bill has, under extreme pressure, declined to take this wider view and on departmental grounds will again turn down this amendment or will not agree to something on similar lines.
Let us be quite clear about the national issue which I believe is at stake. So far all governments have endeavoured to keep the four major energy sources—electricity, gas, coal and oil—in rough balance; and I emphasise the word "rough". Our power stations have been forced to use British coal at uneconomical prices. The way in which governments constantly change agreements with the oil and gas companies operating in the North Sea is another example. So, of course, is the Government's gas levy. Without regulation, industrial uses of limited resources of natural gas would have skyrocketed. The use of gas and oil resources must surely be considered by any government.
Only a government with no concern for the welfare of future generations could contemplate leaving the gas industry and its policy to be determined always and only by market forces. Such market forces, for example, in the oil industry change almost overnight. Surely the Government must have some regulatory mechanism. Perhaps they can show that they have, because in the extreme they must be able to take some action. A good illustration which I have already given is the excessive use of gas in industry, which has so far been prevented.
I should be the last person to suggest that the Government should constantly interfere. All I am saying is that they should have the power to do something when energy uses are so obviously out of balance that some action must be taken. I hope that they can perhaps persuade us now that one way or another they have sufficient powers to do that without the amendment. If they have not, I hope that the matter can be taken to a Division.
§ Lord Campbell of Alloway
Before the noble Viscount sits down, does he recognise that the amendment could constitute the type of "national interest" clause which could adversely affect the drafting of the prospectus?
§ Lord Harmar-Nicholls
My Lords, that was the point that I wanted to make after hearing the speech of the noble Lord, Lord Ezra. I rather think that he defeated his own argument. He was being fair. He presented the situation as he saw it. At the end, it meant that we should not accept the amendment. The first point I wish to raise lies behind the question which has just been asked by my noble friend. The more restrictions that one puts on allowing real competition without government interference, the more it is bound 36 to affect the price of shares when the industry is put on the market. There is no doubt about that. We have had the experience of the noble Lord, Lord Stoddart, and his friends on previous privatisation measures. They have attacked the Government if the share price has not been in the highest bracket.
The more restrictions we include the more they are bound to affect the share price. I do not think that would be a good thing. What the noble Lord, Lord Ezra, said in effect was: yes, we are going to privatise one out of the three categories of energy producing industries, but let us do it in a way which will ensure that it is not really privatised. Let us keep a safety chain, he argued, in the interests of the nation which will in some way be an obstacle to the people who have to manage a great industry being able to do what they like.
The words of the amendment moved by the noble Lord, Lord Stoddart, interest me. He does not say, "without detriment to the nation". We know that the Minister has all the powers necessary in the Bill to deal with any matter which he thinks would not be in the nation's interest. The words of the amendment are:without detriment to other fuels and energy sources.Anyone who runs a business knows that, when one is in competition with others, if one is successful and as a result does more business than if unsuccessful, which affects one's competitors, the competitors would like someone to step in and remove the advantage which has been produced by one's skill and energy. If we want to test the effectiveness of privatisation in this important area, we must keep the safety chains to a minimum.
To give the impression to the oil and coal industries that they will have the Minister's protection—that is what the amendment does—to prevent someone more efficient or more capable of taking advantage of that efficiency or ability is bound to be detrimental. That point came out clearly in the speech of the noble Lord, Lord Ezra.
I make a point of listening to the noble Lord on these matters because he is one of the Members of your Lordships' House who has some practical experience of the competitiveness that always exists. He has had to sit in the chair where the buck stops in one of our most important industries. I do not believe we should add to what is already in the Bill with regard to the Minister's power to defend the nation's interest. That is correct and it is in the Bill. To put into words that he must intervene to protect the gas industry's competitors would be a constraint that could do only harm.
§ Lord Elliott of Morpeth
I intervene only briefly. When I listened to the noble Lord, Lord Stoddart, it occurred to me that that which he was advocating— the long-term plan for this industry or any industry— was exactly what the nationalisation Acts were all about. A banner headline was before us at breakfast time in the Guardian which read:Labour turns away from nationalisation.Instead we are now to have something called social ownership. Perhaps after the persuasion of all these years the Labour Party also believes in a property-owning democracy.
37 Nationalisation has had its run and its chance. Planning, in the intense form advocated by the noble Lord, Lord Stoddart, when he moved the amendment, has not succeeded. After all, there was a magnificent overall plan for the nation's industry produced after 13 consecutive years of Conservative government when the Labour Government took over the government of the nation in 1964. It was called the National Plan. It was introduced by the late Lord George-Brown when he was Minister in another place. He was an energetic Minister as he was an energetic man. I well remember the National Plan being produced as the answer to all our industrial problems because at the time it seemed that a Conservative Government had been unable to plan. All I would say is: where is the National Plan now? does it still exist? Does it lie a little flyblown, perhaps, on some bookshelf in the Labour Party's national headquarters? We have heard little of the National Plan for some years. I suggest that planning in the intensive form which the amendment suggests has failed. It is time to try privatisation.
§ Lord Bruce-Gardyne
My Lords, I find myself in some small degree of dilemma over the amendment. I put down an amendment in Committee which is now Amendment No. 78. It is also germane to this argument. I hope that when my noble friend replies to the debate he will perhaps be able to deal with the point that was then raised to an extent that he could not do when we were discussing the matter in Committee. I go along with everything that my noble friend Lord Boyd-Carpenter had to say about the inevitable conclusion that one would draw from the amendment—that its intention is to deny the consumer the benefit of lower gas prices when the Opposition parties insist that it is the consumer's interests that they have in mind.
There is one aspect of the competition which we cannot ignore entirely. As far as I am aware, it has not been touched on. It is the subject of electricity generation. The trouble is that the CEGB is not in a free market for energy supplies. It is required by the Department of Energy to acquire its sources of supply not in the most competitive market but predominantly from the National Coal Board. It is therefore conceivable that when British Gas has gone into the private sector, British Gas could be acquiring a market share at the expense of the CEGB, not by predatory pricing of the sort that one could presumably expect the regulator to sort out, but simply because the CEGB was hamstrung to high coal prices through being required to buy from British domestic supplies; namely, the National Coal Board. This is an aspect of the consequences of competition to which the Government need to address their mind. I hope that my noble friend in responding to the debate can offer some reassurance as to how the relative competitive position of the CEGB is to be defended in an environment when the gas corporation has gone out as a monopoly into the private sector.
§ 5 p.m.
§ Lord Belstead
My Lords, this amendment would seek to ensure that gas supplies are managed and used in accordance with national interest and without detriment to other fuels and energy sources. One of our aims in putting forward the privatisation of British 38 Gas is to create an environment where market forces can control and shape the nature of the industry' within the overall framework of regulation set out in the Bill. This is something that we believe is central to our approach to energy issues generally. I join with my noble friend Lord Boyd- Carpenter in saying that we really do not believe that ministers and civil servants can sit down and work out a grand plan in which all the industries are allocated a role which they have to carry out according to a rigid set of rules. My noble friend Lord Elliott of Morpeth reminded us of what happened, despite the enormous persuasiveness and energy of Lord George-Brown in those days, to the national plan in the 1960s. I cannot help but feel that a concept of this kind, put forward in these two amendments, would go very much the same way.
Noble Lords opposite may ask what we have to put in its place. As I say, we have this Bill, which we believe will be valuable for the future development of the industry. We believe that business and individuals should make up their own minds about the best kind of fuel for their needs and that the energy industries should then go out into the market place and sell their products in the way that they understand best. Talking of selling, it was my noble friend Lord Boyd-Carpenter who pointed out that the final words of Amendment No. 65 must inevitably involve price interference that could only be to the detriment of the customer. Indeed, it is extraordinary that noble Lords opposite who have the customer's interest very much in mind should put forward an amendment that could certainly be interpreted as one that would lead in certain circumstances to the artificial increasing of gas prices to the detriment of the consumer.
Having said that, I turn to the intervention of my noble friend Lord Bruce-Gardyne relating to the position of the electricity industry. I have thought a good deal about what my noble friend had to say at Committee stage on that subject. I realise that the position of the CEGB and British Gas, when this Bill goes on the statute book, will be different. I have to say, however, that my noble friend's intervention today is made in the context of the announcement by my right honourable friend the Secretary of State for Energy on 5th June. My right honourable friend announced that British Coal and the CEGB had reached a commercial agreement covering the supply of coal that would take due account of the fall in the price of oil. That agreement would mean, my right honourable friend said, a reduction of some 3.5 per cent. on the unit rate previously announced for electricity consumers, with consumers on the Economy 7 tariff benefiting even more. The average reduction for industrial consumers would be likely to be some 5 per cent.
I say seriously that the CEGB and British Coal are clearly taking account—it is stimulating that they should do so—of the position in which they find themselves with the reduction in oil prices at present.
The noble Lord, Lord Ezra, asked about predatory pricing. What would happen, he asked, if the gas industry in the private sector was artificially to reduce its prices in order to capture markets and then, once customers had become committed to using gas. put up its prices artificially in an unfair way. That, as I understand it, would clearly be predatory pricing. 39 Remedies already exist under competition law policed by the Office of Fair Trading to deal with such unfair practices. Indeed, our Bill takes full account of this possibility. There is no reason to saddle my right honourable friend with a duty that he could not possibly fulfil when the Director General of Fair Trading can already take action.
There is one more point with which I should like to deal. My noble friend Lord Campbell of Alloway was absolutely right when he indicated that we should not litter the statute book with meaningless duties concerning the national interest or indeed anything else when the the statute book already contains well thought out and specific provisions to deal with any problems that may arise. I understand the reasons that have prompted noble Lords to bring forward these amendments. As my noble friend Lord Boyd-Carpenter said, they are important amendments; but they carry dangers. I hope that those dangers have become apparent to the House in our short debate on these two amendments.
§ Lord Stoddart of Swindon
My Lords, this has certainly been a most interesting debate. I am grateful to all those who have taken part, although I do not necessarily agree with all the points of view put forward. However, the fact that so many noble Lords have spoken shows the importance of the amendment. I shall try, in as short a period as I can, to deal with some of the points raised, because they are important.
The noble Lord, Lord Boyd-Carpenter, thought that this was a dangerous amendment. I have to disagree with him entirely. I believe that it is a relevant amendment and that not to have it in the Bill is, in fact, dangerous—dangerous for the long-term energy stability of our country. The noble Lord said he believes that Labour Party policy is that the economy should be managed by a wise, all seeing authority, and that there would be no choice for the consumer. As a matter of fact, that is not Labour Party policy. I shall not go into Labour Party policy for the simple reason that it would take me rather longer than I intend to speak. But what I shall not take from the noble Lord, Lord Boyd-Carpenter, is that the Labour Party is centralist, as he suggests. As noble Lords know, we have in power at the present time the most centralising government we have ever had. For example, power has virtually been taken away from local government and centralised in Whitehall. The present Government quite obviously believe that decisions should be taken not locally, but centrally.
But the Labour Party's position is not (nor indeed is it the position of any other party, so far as I know) that there should be this all-embracing, all-powerful, centralised authority. However, we expect the Government to ensure that the privatised gas industry works within a national framework for the benefit of the consumer, and indeed for the national benefit. We believe that that is what should happen: that the gas industry should be as patriotic as everybody else and should work in the national interest. That is what the amendment is all about.
The noble Lord, Lord Boyd-Carpenter, also said that our price competitiveness in gas or any other 40 source of fuel was a matter for the market. Price cannot be the only criterion. As I said in my opening remarks in relation to energy, there are all kinds of other matters which should be taken into account. The long-term supply of our energy sources is a must. It is pre-eminent among the considerations which should be taken into account. It is no use, for example, and no benefit to the consumer if gas pricing forces other energy users such as the coal industry to close down resources or fail to develop them for the long term. If that were done the consumer would not benefit and he would be hurt in the long term because there would be an energy shortage when gas supplies ran out. That was the very relevant point that the noble Lord, Lord Ezra, put to the House. It must be taken into consideration. That is what we are trying to get the Government to do.
The noble Lord, Lord Harmar-Nicholls, seemed to believe that this amendment would affect the price of the shares. I am not at all sure that it would. But that is not our main concern. In this amendment we are concerned not about the price that the shares will be sold at, but that the long-term future of our energy supplies should be safeguarded. We shall rue the day unless we ensure that that is so.
The Government have taken themselves out of the oil market. They are now taking themselves out of the gas market. We have all seen what happened in the oil market. We have seen that depletion policy has led to a situation where we are now selling oil at knock-down prices and in a very few years' time we shall have to import oil at a much higher price. The depletion policy of this Government will, in a very short time, hurt the consumer and our energy industries. That ought not to have happened. Had we had a national energy policy, it would not have happened.
The noble Lord, Lord Elliott of Morpeth, said that nationalisation has had its run. Certainly it has had its run with this Government, because they are denationalising everything under the sun. They are denationalising, or privatising, the gas industry. But why are they doing it? They are not doing it because the gas industry is inefficient or is not profitable. The gas industry is one of the most efficient and most profitable industries that we have in the country, private or public. Therefore in a real sense nationalisation—public ownership—certainly has not had its run.
It has had its run with regard to this Government simply and solely because the Government are pressed for money and they are prepared to sell off our publicly-owned industries—at knock-down prices if necessary—in order that they can balance their books at the next Budget and at the same time give tax handouts in readiness for the general election. That is what it is all about—make no mistake about that. Nationalisation certainly has not had its run. We are here talking about one of the most efficient industries in the country which will be sold off at knock-down prices.
The noble Lord, Lord Elliott, also mentioned the national plan. The national plan did not collapse because it was not a good concept. It collapsed because the Treasury was against the Department of Economic Affairs.
§ Lord Stoddart of Swindon
My Lords, it was never tried. It did not have sufficient time to get established. The fact is that it collapsed because the Treasury was against it and was going to make sure that it did not have any rivals over the control of our economic policy. But we should have had a national plan then. Had we had a national plan at that point in time, perhaps our manufacturing industry would not have collapsed as it has, and we would still be competing well not only in the home market but also the overseas market. The noble Lord, Lord Elliott, may be completely wrong about the national plan. Had it continued—had it been given a chance—this country might very well have been far better off than it is at the present time.
The noble Lord, Lord Bruce-Gardyne, mentioned electricity generation. He was right to do so because that is a very important element in our energy policy and one of the reasons why we have put down this amendment. The noble Lord, Lord Bruce-Gardyne, understands the matter perfectly. He is saying that the electricity supply industry uses coal and is being forced to use British coal by the Government, whereas the electricity generating industry says that it can buy 30 million tonnes of coal on the overseas market at a cheaper rate. The noble Lord, Lord Bruce-Gardyne, is absolutely right. He knows the score. But, again, in the long term it will not benefit the electricity supply industry or any other industry—certainly not our energy policy—if the Government decided to allow the electricity supply industry to buy coal where it liked, because it would close British coalmines which we would need in 20 or 30 years' time.
I am obliged to noble Lords for speaking in this debate. It has been rather longer than I expected. The Government are obviously not prepared to make any concession at all in this regard. We think it is an important amendment and I therefore feel that I must press it to a Division.
§ 7 p.m.
§ Question, Whether the said amendment (No. 65) shall be agreed to?
§ Their Lordships divided: Contents, 95; Not-Contents, 112.43
|Addington, L.||Carmichael of Kelvingrove, L.|
|Airedale, L.||Chitnis, L.|
|Amherst, E.||Cledwyn of Penrhos, L.|
|Ardwick, L.||Crawshaw of Aintree, L.|
|Attlee, E.||David, B. [Teller.]|
|Aylestone, L.||Davies of Penrhys, L.|
|Banks, L.||Dean of Beswick, L.|
|Barnett, L.||Denington, B.|
|Birk, B.||Diamond, L.|
|Blyton, L.||Donaldson of Kingsbridge, L.|
|Boston of Faversham, L.||Donoughue, L.|
|Bottomley, L.||Elwyn-Jones, L.|
|Briginshaw, L.||Ennals, L.|
|Brockway, L.||Ewart-Biggs, B.|
|Bruce of Donington, L.||Ezra, L.|
|Burton of Coventry, B.||Falkender, B.|
|Caradon, L.||Foot, L.|
|Gallacher, L.||Morton of Shuna, L.|
|Graham of Edmonton, L.||Mulley, L.|
|Grimond, L.||Nicol, B.|
|Hampton, L.||Northfield, L.|
|Hanworth, V.||Parry, L.|
|Harris of Greenwich, L.||Phillips, B.|
|Hatch of Lusby, L.||Pitt of Hampstead. L.|
|Heycock, L.||Ponsonby of Shulbrede, L.|
|Hunt, L.||Rochester, L.|
|Jacques, L.||Ross of Marnock, L.|
|Jeger, B.||Scanlon, L.|
|Jenkins of Putney, L.||Seear, B.|
|John-Mackie, L.||Serota, B.|
|Kilbracken, L.||Shackleton, L.|
|Kilmarnock, L.||Shepherd, L.|
|Kirkwood, L.||Silkin of Dulwich, L.|
|Listowel, E.||Stallard, L.|
|Llewelyn-Davies of Hastoe, B.||Stoddart of Swindon, L.|
|Lloyd of Kilgerran, L.||Strabolgi, L.|
|Longford, E.||Taylor of Mansfield, L.|
|Lovell-Davis, L.||Tordoff, L.|
|McGregor of Durris, L.||Turner of Camden, B.|
|McIntosh of Haringey, L.||Wallace of Coslany, L.|
|Mackie of Benshie, L.||Walston, L.|
|McNair, L.||Whaddon, L.|
|Mayhew, L.||White, B.|
|Meston, L.||Williams of Elvel, L.|
|Milner of Leeds, L.||Willis, L.|
|Mishcon, L.||Wilson of Rievaulx, L.|
|Molloy, L.||Winstanley, L.|
|Airey of Abingdon, B.||Hailsham of Saint|
|Aldington, L.||Marylebone, L.|
|Allenby of Megiddo, V.||Hampden, V.|
|Auckland, L.||Harmar-Nicholls, L.|
|Bauer, L.||Henderson of Brompton, L.|
|Belhaven and Stenton, L.||Hesketh, L.|
|Beloff, L.||Hives, L.|
|Belstead, L.||Home of the Hirsel, L.|
|Bessborough, E.||Hood, V.|
|Boyd-Carpenter, L.||Hooper, B.|
|Brabazon of Tara, L.||Hylton-Foster, B.|
|Brougham and Vaux, L.||Killearn, L.|
|Butterworth, L.||Kimball, L.|
|Caithness, E.||Kinloss, Ly.|
|Cameron of Lochbroom, L.||Kinnaird, L.|
|Campbell of Alloway, L.||Lane-Fox, B.|
|Campbell of Croy, L.||Lauderdale, E.|
|Carnegy of Lour, B.||Layton, L.|
|Carnock, L.||Long, V.|
|Coleraine, L.||Lucas of Chilworth, L.|
|Constantine of Stanmore, L.||Luke, L.|
|Cullen of Ashbourne, L.||Lyell, L.|
|Davidson, V.||Macleod of Borve, B.|
|Denham, L. [Teller.]||Mancroft, L.|
|Derwent, L.||Margadale, L.|
|Dilhorne, V.||Marshall of Leeds, L.|
|Dormer, L.||Maude of Stratford-upon-|
|Drumalbyn, L.||Avon, L.|
|Eccles, V.||Mersey, V.|
|Ellenborough, L.||Monk Bretton, L.|
|Elliot of Harwood, B.||Montgomery of Alamein, V.|
|Elliott of Morpeth, L.||Mowbray and Stourton, L.|
|Elton, L.||Norfolk, D.|
|Enniskillen, E.||Nugent of Guildford, L.|
|Erroll of Hale, L.||Orr-Ewing, L.|
|Faithfull, B.||Penrhyn, L.|
|Fanshawe of Richmond, L.||Peyton of Yeovil, L.|
|Foley, L.||Porritt, L.|
|Fortescue, E.||Rankeillour, L.|
|Fraser of Kilmorack, L.||Ridley, V.|
|Gardner of Parkes, B.||Rodney, L.|
|Gibson-Watt, L.||Romney, E.|
|Glanusk, L.||St. Aldwyn, E.|
|Glenarthur, L.||St. Davids, V.|
|Gray of Contin, L.||Sanderson of Bowden, L.|
|Gridley, L.||Sandford, L.|
|Grimthorpe, L.||Sandys, L.|
|Shannon, E.||Swinton, E. [Teller.]|
|Shaughnessy, L.||Teviot, L.|
|Skelmersdale, L.||Thomas of Swynnerton, L.|
|Somers, L.||Trefgarne, L.|
|Strathcarron, L.||Vaux of Harrowden, L.|
|Strathspey, L.||Vickers, B.|
|Sudeley, L.||Vivian, L.|
|Suffield, L.||Wolfson, B.|
|Swansea, L.||Young, B.|
§ Resolved in the negative, and amendment disagreed to accordingly.
§ 5.26 p.m.
Lord Ezra moved Amendment No. 66:
Page 3, line 5, leave out ("so far as it is economical to do so")
The noble Lord said: My Lords, I beg to move Amendment No. 66. This matter was indeed raised at the Committee stage, and after reflection we think that it is sufficiently important to be brought up again. This is because we believe that the wording of the subsection goes too far against the consumers' interests. It is very difficult to visualise a reasonable demand for gas, which is not an economical demand for gas, otherwise what could the word reasonable mean? Therefore, we think that not only would it be more economical in words, but it would a fairer balance between the gas supplier and the consumer for the words:
so far as it is economical to do so".
§ to be omitted.
§ When we discussed this matter at the Committee stage I believe that noble Lords opposite stated that these words had been used throughout gas legislation as far back as one could remember. However, we have been reminded that the intention of this Bill is to change all that past legislation and to introduce a new era in which there could be greater freedom. Therefore, we believe that this small but quite important amendment could help introduce that new era, to give a better balance between the gas supplier and the consumer, and to promote the interests of both. I beg to move.
§ Lord Stoddart of Swindon
My Lords, I believe that this amendment and my amendment, Amendment No. 67, are grouped together and, although I entirely agree with what the noble Lord, Lord Ezra, has said, I have put down a possible alternative. The problem with the words:so far as it is economical to do sois that this may be read as being profitable to do so. Then of course the question could arise: How profitable is profitable to be economical?
The amendment that I propose removes the word "economical" and substitutes the word "practicable". That is a good word which rolls nicely around the mouth, and I believe that it is probably a better word and more even-handed as between supplier and customer. I hope that the noble Lord, if he does not accept Lord Ezra's amendment, will see that this is a constructive attempt to overcome the difficulty, and that if he feels unable to accept Amendment No. 65 then this is an alternative.
§ Lord Brabazon of Tara
My Lords, as the noble Lord, Lord Ezra, reminded us, we discussed this at an earlier stage. The noble Lords will perhaps not be surprised if I am not too friendly to them again this afternoon. I should like to comment first on the proposal to delete the qualifying words:so far as it is economical to do soin the main supply duty on the Secretary of State and the director. The noble Lord pointed out, and it is right, that these words have been a feature of gas legislation since nationalisation in 1948, and in my view they provide the proper qualification for a general supply duty.
It is unfortunately the case that the cost of laying distribution pipelines is substantial and there are many locations where it is simply not economic for suppliers to supply gas. It would be a nonsense to give the director and the Secretary of State the duty to secure that all demands should be met irrespective of their individual circumstances and the economics of giving a supply. The duty we have proposed is, in the context of the gas industry, the right one, and one that I believe has stood the test of time since 1948. It will ensure that whenever supplies are economic, the director and the Secretary of State should do their best to encourage them. I think that that is the important point there.
Turning now to the proposal of the noble Lord, Lord Stoddart, to replace "economical" with "practicable"—and I think he was probably speaking as well to his Amendment No. 119 to Clause 9—it is, in the nature of gas supply, that the laying of pipes to premises a long way from a main may not be economic given the volume of gas to be delivered, whereas a similar supply to premises near to a main could be economic. It is for this reason that gas legislation has referred to an economic criterion rather than simply a practicable criterion. I believe it would be a mistake to change this now.
It has been appropriate for the British Gas Corporation in the public sector and for its predecessors, the area gas boards, only to be under an obligation to supply where this is economical, and I believe this is just as appropriate for British Gas in the private sector. To require British Gas to meet requests for gas which were uneconomic could prejudice the viability of the whole operation.
We all want to see a continuing healthy gas industry well into the next century, and an industry which can provide essential services to customers at a reasonable price. This is true both for domestic customers and for industrial customers who need low-cost energy supplies to enable them to maintain their competitiveness.
I should like, however, to mention, in the context of these amendments, the specific duty contained within Clause 10 of the Bill to supply any customers within 25 yards of a British Gas distribution main, or those already connected to a main. This provides full protection for those who already have gas and those in areas where there is a gas supplier. The Bill, taken as a whole, therefore provides proper protection for customers already using gas as well as incentives for gas supplies to be given to those areas not already served but without prejudicing the economics of the overall operation.
45 Removing the economic qualification might result in British Gas having to provide gas to some customers at an uneconomic price which could have a devastating effect on all other present customers depending on gas. None of us, I do not think, would want to see that; and I therefore urge the noble Lords not to press their amendments.
Lord Bruce of Donington
My Lords, the noble Lord in the course of his reply thought fit to refer to the performance of British Gas as a public corporation in this regard. He said that in so far as the public corporation is concerned this has functioned satisfactorily. One of the reasons it has functioned satisfactorily is that all the time the British Gas Corporation has been responsible, through the Minister, to Parliament. Therefore its operations have always been conducted on the basis that in the event of marginal circumstances occurring the Minister himself in another place is answerable for the actions of the corporation.
I do not think that the noble Lord is wise to call in aid the past performance and past conduct of the gas corporation in this respect. We are now operating in totally different circumstances. Under the new legislation the gas corporation will no longer be responsible through the Minister to Parliament and to the people.
Under the provisions of this Bill it will no longer run the risk of being called to account in another place for anything that it is suspected may have been done contrary to the public interest.
Indeed the Government are boastful of it. They make no apology. British Gas plc will be responsible to its shareholders and to no one else, subject always to the oversight of a somewhat restricted director of Ofgas. This amendment, combined with the amendment of my noble friend, seeks to widen the circumstances so that there is ground for intervention in the public interest.
The old gas corporation could take "economical" in a far wider sense than the new plc will be able to do with its prime responsibility to its shareholders. Therefore, it is quite useless carrying forward the circumstances under which the old public corporation still functions and comparing them in any way with the new. I should have thought that in the light of the extremely able advocacy put forward on behalf of this amendment, and also on behalf of the subsequent amendment by my noble friend the Government would have felt it wise to eliminate the words concerned.
As the noble Lord pointed out, under Clause 10 there is responsibility to connect supplies up to 25 yards. I repeat the question: what happens at 25½ yards? At 26 yards? At 27 yards? At 28 yards, and so on? Who is to determine? I suggest that either the amendment proposed by the noble Lord, Lord Ezra, is accepted, leaving it in the hands of discussions between the Director General of Ofgas and the corporation, or else the word "practicable"—which has a rather wider connotation in the public interest than "economical"—ought to be substituted. I would invite the noble Lord to reconsider the Government's opposition to these amendments.
§ Baroness Seear
My Lords, I too should like to ask the noble Lord to consider again whether he really needs both, "economical" and "reasonable"? If it is really uneconomic, other things being equal to do it, it is not "reasonable" to do it. Why does one need to have "economical" as well as "reasonable"? On the other hand, if you leave in "economical" as well as "reasonable" then it could be that it was not really within the powers of the gas company to put in a gas pipe where they might well think it was sensible and desirable to do so because they are restricted to it being economical in the narrow sense of the term, although they could see that it would be reasonable and even in their long-term interests to do it.
I draw the Minister's attention to the fact that Electricité de France, for example, which runs a very successful outfit, provides electricity to the most remote parts of France. One could well argue that when it laid the line it was not economical to do so but it was highly reasonable and the result has been satisfactory. Does he not have the protection he needs simply in the word "reasonable"? Does that not leave him the scope he might wish to have?
§ Lord Brabazon of Tara
My Lords, with the leave of the House I should perhaps respond to one or two of the points raised. The noble Lord, Lord Bruce of Donington, said that the Minister in Parliament no longer had any responsibility in this field. However, Clause 4 lays out the duties of the Secretary of State and the director and therefore if any of these matters were found to be unsatisfactory the Minister would be responsible and have to answer to Parliament for them.
Turning to the points which the noble Baroness, Lady Seear, raised, she asked: why have both "economical" and "reasonable"? I tried to answer that in my opening remarks. The phraseology is generally what has been used in the past and it has stood the test of time. The noble Baroness also mentioned the supply of electricity in France to the remoter areas. In some cases it is easier to lay an electricity line by overhead cable than it would be to lay a pipe in the ground.
§ Lord Brabazon of Tara
My Lords, the noble Baroness said that to use the word "economical" might restrict the powers of a gas company to connect a new supply. I can assure the noble Baroness that that would not be the case. This duty is on the Secretary of State,to secure that persons authorised by or under this Part to supply gas through pipes satisfy, so far as it is economical to do so, all reasonableand so on.
There is nothing to stop British Gas, if that is the public gas supplier in question, laying a pipeline even if it felt that it might not necessarily start off by being profitable. If it could see the supply going to a new town or something like that, so that it would develop over a period of years, it would certainly be able to do that. The reasonableness of demand is surely to be seen in the light of the person asking for the supply. A person in the country may want gas in exactly the 47 same way as any city dweller and it may be reasonable for him to do so. The question of the economics of such a supply is a quite different one. That is why we need to draw the distinction that we have.
§ Lord Somers
My Lords, with all the references that the noble Lord has made to the various duties of the Secretary of State, it seems to me that this Bill will make the gas corporation merely a different form of nationalised gas. I cannot see why, if it is to be denationalised, the Secretary of State has to have so much say. Perhaps the Minister can explain that.
§ Lord Ezra
My Lords, the amendment was intended as a relatively minor step towards increasing the flexibility in the cirumstances in which gas could be supplied. I regret to note that the Government are still adamant in not accepting it. Nevertheless, I do not wish to press it to a Division, and therefore I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ (Amendment No. 67 not moved)
§ 5.45 p.m.
Lord Diamond moved Amendment No. 68:
Page 3, line 9, after ("able") insert ("at the date of authorisation").
The noble Lord said: My Lords, we have touched on this matter before, but it is important to get it clarified because a very important principle is at stake. Clause 4(1)(a) provides for the supply of gas through pipes to satisfy "all reasonable demands". Subsection (l)(b) proceeds to pick out especially the duty to secure that,
persons are able to finance the provision of gas supply services".
§ That is picked out as being of special importance and therefore meriting reference, although none of the other matters coming under Clause 4(1 )(a) requires it.
§ I do not think that the words produce the answers that the Government want. I think that what the Government are really after is the sensible duty of seeing that at the date of authorisation (which are the words of my amendment) the person who is to be given the licence to supply gas should be able to finance the provision of gas supply services. That is fine: of course he should. There is the responsibility of the Government to see that such a person has the necessary financial stability and standing in the financial markets to be able to secure the financing of the gas supply.
But it does not say that. It says:
to secure that such persons are able to finance the provision of gas".
§ That means not only at the time of authorisation but in the future as well. How can a government secure—I ask your Lordships to have regard to the word "secure"; it is not "provide"—that an authorised supplier will for all time be able to finance the provision of gas, unless the Government do the one thing they say, and said at Committee stage, that they do not want to do; namely, provide such a cushion of inefficiency to a gas supplier that no matter how inefficiently he ran his business and therefore wasted the capital he started with and which was sufficient to justify the grant of authority, he would have to be 48 given the right to price his product in such a way that there would always be enough margin left over for financing the continuation of the supply of gas? There is no other way in which the continuity of the ability to finance could be secured.
I hope I do not need to remind the Government of what they said on this matter. I am quoting from the relevant Committee discussion. The Minister, Lord Gray of Contin, said:
This means only that efficient suppliers can do this and not"—
this is the part I want to underline—
that inefficient suppliers must be tolerated. The Government therefore share the feelings of the noble Lord that such a cushion should not be given". —[Official Report, 8/5/86; col. 928.]
That is the view of the Government, but I do not see how the words can achieve that. As the clause stands, there is a ridiculous situation. First, there is a privatised monopoly without any competition at all; and the whole argument behind privatisation is that competition is introduced. The second argument behind privatisation is that the weak go to the wall. If a firm runs inefficiently, it goes bankrupt. Only the efficient firms are left. That is the second argument for the private sector.
§ But here is a provision which can only mean that for all time the gas supplier in question is protected from going bankrupt. That is why I believe that the Government and ourselves are on the same side in saying that what is really intended is that they should have the responsibility for seeing that when the authorisation is granted the supplier should be financially capable of carrying out the terms of the authorisation.
§ From then on, it is up to the supplier to run his show efficiently. If he does not do so then he meets the fate that all inefficient undertakers of business in the private sector meet: they are unable to carry on; and they are not to have this cushion which the Government say should not be granted. I hope that this is an occasion therefore when we are on the same side, and that the Government are prepared to accept the amendment.
Lord Bruce of Donington
My Lords, I hope that the Government are going to find themselves able to accept this amendment. Clause 4 in itself relates to Part 1 of the Bill, and Part 1 of the Bill includes not only British Gas but, under Clause 8, other suppliers, Nobody doubts, unless there has been undue incidence of squandermania by British Gas over the past few months, that British Gas is capable financially at the time of authorisation of being able to supply the gas requirements, and to do the various things that are required of it under the Bill. But there are going to be other suppliers, particularly those that are under Clause 8 of the Bill.
It seems to me to be quite reasonable that the Secretary of State and the director should be able to be satisfied at the time of the authorisation to these various other bodies that are covered under Clause 8 that they are capable of financing the provisions of gas supply services. Otherwise, authorisations might be hawked around or might be sought by people who do not have the finances available at the time of authorisation and who are relying on the issue of the authorisation itself to be able to raise the necessary 49 capital for that purpose. I do not think that this would be a very satisfactory position. As I say, it would enable people, perhaps people even friendly to the party opposite comprising the Government, to apply for authorisation without having at the time of the authorisation the necessary resources.
For the purpose of straightforward commercial dealing, I do not think that the insertion of the words proposed by the noble Lord, Lord Diamond, impose a grave and onerous responsibility upon either the Secretary of State or the director. They would seem, I hope, to your Lordships to be plain commonsense, and I hope that the Government will be able to accept this very moderate amendment that has been so moderately moved by the noble Lord, Lord Diamond.
§ Lord Campbell of Alloway
My Lords, I am not quite sure what "at the date of authorisation" means. If you are able to borrow, say, £100 million as at the date of authorisation, it will appear you are able (if that is the sum required) to finance the provision of gas supply services. How does that become enforceable in practical terms? Do you have to show that you are able to borrow? Do you have to produce some form of document? Does this really make sense? Is it not an unnecessary and restrictive requirement in the Bill? Does it really serve a tangible, practical purpose?
§ Lord Ezra
My Lords, the difficulty arises surely from the use of the word "secure". It implies that in some way or other the Government will ensure that these people for ever and a day will remain in a viable situation. What I suppose it is meant to mean is, "satisfy themselves". If that is what it is meant to mean, it would have been better if it had said it. The reason for the amendment moved by my noble friend is to overcome that implication.
§ Lord Brabazon of Tara
My Lords, perhaps I can attempt to explain why the Bill is drafted as it is. There are two main duties in Clause 4(1) of the Bill. The first one, as we have discussed, is to secure that all reasonable demands for gas are met. That is in paragraph (a). Paragraph (b) is to counterbalance that. It ensures that, in exercising their functions, not only must the Secretary of State and the director be concerned about the financial viability of the suppliers at the time of granting their authorisation—which they would be—but that this concern must continue throughout the duration of any authorisation.
This will ensure that no action is taken gratuitously to drive suppliers into losses by over-regulation. However, I would stress that the duty we have included in the Bill in no way provides a guarantee for the public gas suppliers irrespective of their efficiency. The duty is designed simply to ensure that the actions of the Secretary of State or the director do not put a well-run and efficient company out of business; and that it should remain able to finance its business. Therefore, I think that, with that explanation, the paragraphs (a) and (b) go very well together, without the words suggested by the noble Lord's amendment.
§ Lord Diamond
My Lords, I find the Minister's answer as unsatisfactory on this occasion as it was on the previous occasion. It does not deal with the 50 argument at all. It is simply not the case that using the word "secure" means that the Government do not have to provide a cushion. Of course they do. How else can they do that? Of course, it would be very inconvenient if the single gas supplier were to go bankrupt and not be able to supply gas. We on these Benches were not proposing the privatisation of the gas industry; the Government are doing that. If the Government are doing it, they are doing it on the grounds that there will be no lessening of efficiency—let us put it that way—at all events.
Here is a guarantee that, no matter how inefficiently this business is run, there will be for all time the necessary balance or surplus—and it can only come from profit making—to enable this business to continue. The Minister says that the Government must not take any step deliberately to force the undertaker into bankruptcy. Of course they must not; but what are the Government promising to do about, for instance, the gas levy? The Government are proposing so far as we know, to continue the gas levy—a most important addition to the costs of this company. It is one of the expenditures that it incurs. If it had to incur it in certain circumstances, it would mean it would have to go bankrupt. It might not be able to pay either its other creditors or the Government—and the Government come first, as we all know; they have preference.
What are the Government going to do about that? The gas supply company may be running at such a low level of profitability that it could not afford any gas levy at all. Does that mean that the Government are not going to raise the gas levy? Of course not. It means, and can only mean so far as it means anything, that the words will ensure (and what the Minister has had to say will ensure) that for all time, no matter how inefficiently run this business is, there will have to be a margin of profit left over sufficient to pay for capital expenditure, capital additions and to run profitably. I repeat that it means not only that we have a private monopoly without any competition at all, but that we now have the added nonsense of a private monopoly that does not even allow an undertaking being carried on in the private sector going bankrupt. It provides them with the sole right to supply 16 million customers, and ensures that however inefficiently they carry out they will remain a viable concern financially. This is surely the most arrant nonsense on which we must divide.
§ 6.1 p.m.
§ On Question, Whether the said amendment (No. 68) shall be agreed to?
§ Their Lordships divided: Contents, 93; Not-Contents, 117.51
|Addington, L.||Boston of Faversham, L.|
|Airedale, L.||Bottomley, L.|
|Ardwick, L.||Briginshaw, L.|
|Attlee, E. [Teller.]||Brockway, L.|
|Aylestone, L.||Brooks of Tremorfa, L.|
|Banks, L.||Bruce of Donington, L.|
|Barnett, L.||Buckmaster, V.|
|Blyton, L.||Burton of Coventry, B|
|Carmichael of Kelvingrove, L.||Lovell-Davis, L.|
|Chitnis, L.||McIntosh of Haringey, L.|
|Cledwyn of Penrhos, L.||Mackie of Benshie, L.|
|Crawshaw of Aintree, L.||Mayhew, L.|
|David, B.||Meston, L.|
|Davies of Penrhys, L.||Milner of Leeds, L.|
|Dean of Beswick, L.||Mishcon, L.|
|Denington, B.||Molloy, L.|
|Diamond, L.||Monson, L.|
|Donoughue, L.||Morton of Shuna, L.|
|Elwyn-Jones, L.||Nicol, B.|
|Ennals, L.||Northfield, L.|
|Ewart-Biggs, B.||Oram, L.|
|Ezra, L.||Parry, L.|
|Falkender, B.||Phillips, B.|
|Foot, L.||Pitt of Hampstead, L.|
|Gallacher, L.||Ponsonby of Shulbrede, L.|
|Graham of Edmonton, L.||Rea, L.|
|Grey, E.||Ross of Marnock, L.|
|Grimond, L.||Scanlon, L.|
|Hampton, L.||Seear, B.|
|Hanworth, V.||Shackleton, L.|
|Harris of Greenwich, L.||Shepherd, L.|
|Hatch of Lusby, L.||Silkin of Dulwich, L.|
|Heycock, L.||Stallard, L.|
|Howie of Troon, L.||Stoddart of Swindon, L.|
|Hunt, L.||Taylor of Mansfield, L.|
|Jacques, L.||Tordoff, L.|
|Jeger, B.||Turner of Camden, B.|
|Jenkins of Putney, L.||Underhill, L.|
|John-Mackie, L.||Wallace of Coslany, L.|
|Kilbracken, L.||Walston, L.|
|Kilmarnock, L.||Whaddon, L.|
|Kirkhill, L.||White, B.|
|Kirkwood, L.||Wigoder, L.|
|Llewelyn-Davies of Hastoe, B.||Williams of Elvel, L.|
|Lloyd of Kilgerran, L.||Wilson of Rievaulx, L.|
|Longford, E.||Winstanley, L.|
|Aldington, L.||Faithfull, B.|
|Alexander of Tunis, E.||Fanshawe of Richmond, L.|
|Auckland, L.||Fortescue, E.|
|Bauer, L.||Fraser of Kilmorack, L.|
|Beaverbrook, L.||Gainford, L.|
|Belhaven and Stenton, L.||Gardner of Parkes, B.|
|Bellwin, L.||Gibson-Watt, L.|
|Beloff, L.||Glanusk, L.|
|Belstead, L.||Glenarthur, L.|
|Bessborough, E.||Gray of Contin, L.|
|Birdwood, L.||Greenway, L.|
|Boardman, L.||Gridley, L.|
|Boyd-Carpenter, L.||Grimthorpe, L.|
|Brabazon of Tara, L.||Hailsham of Saint|
|Brentford, V.||Marylebone, L.|
|Brougham and Vaux, L.||Harmar-Nicholls, L.|
|Butterworth, L.||Henderson of Brompton, L.|
|Caithness, E.||Henley, L.|
|Cameron of Lochbroom, L.||Hesketh, L.|
|Campbell of Alloway, L.||Hives, L.|
|Campbell of Croy, L.||Home of the Hirsel, L.|
|Carnegy of Lour, B.||Hood, V.|
|Carnock, L.||Hooper, B.|
|Coleraine, L.||Hylton-Foster, B.|
|Colville of Culross, V.||Killearn, L.|
|Constantine of Stanmore, L.||Kimball, L.|
|Craigavon, V.||Kinnaird, L.|
|Cullen of Ashbourne, L.||Lane-Fox, B.|
|Davidson, V.||Lauderdale, E.|
|Denham, L. [Teller.]||Layton, L.|
|Derwent, L.||Lindsey and Abingdon, E.|
|Dilhorne, V.||Long, V.|
|Donegall, M.||Lucas of Chilworth, L.|
|Dormer, L.||Lyell, L.|
|Drumalbyn, L.||Macleod of Borve, B.|
|Eccles, V.||Mancroft, L.|
|Eden of Winton, L.||Margadale, L.|
|Elliot of Harwood, B.||Maude of Stratford-upon-|
|Elliott of Morpeth, L.||Avon, L.|
|Elton, L.||Melville, V.|
|Mersey, V.||Sandys, L.|
|Monk Bretton, L.||Selkirk, E.|
|Montgomery of Alamein, V.||Shannon, E.|
|Mottistone, L.||Shaughnessy, L.|
|Mowbray and Stourton, L.||Skelmersdale, L.|
|Munster, E.||Strathcarron, L.|
|Norfolk, D.||Strathclyde, L.|
|Nugent of Guildford, L.||Sudeley, L.|
|Orr-Ewing, L.||Suffield, L.|
|Penrhyn, L.||Swinfen L.|
|Peyton of Yeovil, L.||Swinton, E. [Teller.]|
|Portland, D.||Teviot, L.|
|Rankeillour, L.||Teynham, L.|
|Ridley, V.||Thomas of Swynnerton, L.|
|Rodney, L.||Vaux of Harrowden, L.|
|St. Aldwyn, E.||Vickers, B.|
|St. Davids, V.||Vivian, L.|
|St. John of Bletso, L.||Wolfson, B.|
|Sanderson of Bowden, L.||Young, B.|
§ Resolved in the negative, and amendment disagreed to accordingly.
§ 6.9 p.m.
§ [Amendment No. 69 had been withdrawn from the Marshalled List.]
§ [Amendment Nos. 70 and 71 not moved.]
Lord Ezra moved Amendment No. 72:
Page 3, line 22, at end insert—
("( ) to promote conservation and energy efficiency by ensuring that any public gas supplier has an energy saving programme covering all consumers and by monitoring the implementation of that programme on the part of the supplier;").
§ The noble Lord said: My Lords, Amendment No. 72 refers to the promotion of conservation and energy efficiency. This is a subject to which we have referred repeatedly during the Committee stage of this important Bill. At one time during our Committee deliberations the noble Lord, Lord Belstead, undertook to consider these issues. By that I thought he meant that he would be introducing suitable amendments during Report stage. However, so far such amendments have not appeared and we feel it necessary to continue to emphasise our concern about the promotion of conservation and energy efficiency, particularly so far as consumers are concerned. It has been a surprise to us throughout our deliberations on this particular subject that the Government, who have in other ways done so much to seek to promote energy efficiency, should have resisted implanting that idea fairly and squarely into the Bill. We think this represents a degree of inconsistency in thinking which needs to be put right.
§ So it is that in this amendment and in a number of related amendments—for the benefit of your Lordships I will read them out: they are Nos. 103, 104, 117, 118 and 123, which are grouped with this one—we shall at various stages in the course of the Report stage be coming back to this. I should like at this point only to reiterate our serious concern that under one or other of these amendments the subject of the promotion of conservation and energy efficiency by consumers should be introduced into the Bill. I beg to move.
§ Lord Stoddart of Swindon
My Lords, if I may say a few brief words in support of this amendment, the new Condition No. 13 of the proposed authorisation, so far 53 as I can see, goes some way towards meeting the demands contained in this amendment. However, it does not go as far as I would wish since it does not state explicitly that British Gas should be required to promote energy efficiency. However, it does require British Gas to prepare statements about efficiency and to disseminate them to their customers.
We should like to see British Gas doing much more to conserve our gas reserves and not to deplete them unnecessarily to provide short-term profit for the shareholders. Energy efficiency promotion is good for the country as well as for the consumers. Even on the most optimistic forecasts, we shall cease to be self-sufficient in oil by the end of the century and it is very important that we should conserve stocks of gas, which is a premium fuel, and indeed conserve every sort of energy. I support this amendment.
§ Lord Grimond
My Lords, before the Minister replies, may I draw his attention to the old subject of the flaring of gas? He will know full well that it is still going on, and on an immense scale, in Orkney and Shetland. I do not know whether that comes under this provision for the promotion of energy conservation, but, if it does not, it ought to.
From time to time it has been suggested that there are various ways of using the gas which is now flared off on Flotta and at Sullom and at all gas installations and refineries. I believe that we should keep up the pressure so that if the gas cannot all be used for some useful purpose at least some of it will be. For instance, there is no gas supply in Orkney and Shetland; and yet this gas is flared off continually into the heavens.
§ Baroness Gardner of Parkes
My Lords, I do not think we should under-estimate the interests of the energy authorities in promoting energy efficiency. I do not see that it is necessary to write anything further into the Bill. Only within the last few weeks there was a major display of combined gas and electricity authorities in the Guildhall, and that concerned energy efficiency in business. That is only one of many energy efficiency displays that I have attended recently. I believe these industries are very well aware of the need for efficiency.
§ 6.15 p.m.
§ Lord Gray of Contin
My Lords, I am grateful to the noble Lord, Lord Ezra, for including with his amendment five other amendments which are all related to the same subject. Amendment No. 72 would require British Gas to have an energy-saving programme monitored by the director or the Secretary of State. Many noble Lords have already referred to British Gas's commitment to helping their customers save energy, covering the use of existing equipment and developing new and more efficient appliance systems and controls. Perhaps I might mention some of their promotional activities—and my noble friend Lady Gardner of Parkes has just touched on this point—which include, for example: the Gas Energy Management award, now in its eleventh year; extensive publicity and advice to the domestic consumer in showrooms and through advertising, and "Thermsaver" energy efficient products; the Gaswarm Homes certificates; Therm, an exercise to assess 54 conservation measures in buildings, and a Design for Energy Management Award, sponsored jointly with the RIBA, for energy-efficient architectural design; and energy efficient education material and projects for schools.
These are all backed up by British Gas's considerable research and development effort for all sectors, including the development of energy efficient appliances. I do not believe that the requirement to have a programme, which they clearly already have, would add anything to British Gas's strong commitment to energy efficiency. It will need to continue the promotion of the efficient use of gas if it is to be successful in the competitive energy market in which it operates.
Amendment No. 104 would permit the Secretary of State to include conditions relating to energy efficiency in the Bill. This is already the case under Clause 7, so far as advocacy and advice through the publication of information is concerned. Clause 7(7) reads:An authorisation under this section may include … such conditions … requiring information to be furnished to the director or published, as appear to the Secretary of State to be requisite or expedient having regard to the duties imposed by section 4 above:".Amendment No. 117, which requires public gas suppliers to observe the principle of least-cost resource acquisition, is very similar to Amendment No. 43 which the noble Lord, Lord Ezra, put down at the Committee stage, except that the duty now falls directly on the public gas supplier in Clause 9(1) of the Bill rather than on the director and the Secretary of State, as in Clause 4.
Amendment No. 123 refers to the development of energy efficient appliances. It would not be appropri-ate to lay such a duty on all public gas suppliers. A public gas supplier, supplying a small area, would probably not have the resources or the expertise to carry out such work and yet provide an efficient and effective gas distribution network. As I have mentioned, British Gas already carries out such activities, often in association with appliance manufacturers.
The noble Lord, Lord Ezra, will be glad to hear that I now turn to the good news. We undertook, in response to amendments at Committee stage, to consider an addition to the authorisation to require British Gas to provide information and advice to its customers. A completely new condition, Condition 13, has now been added to the authorisation. It will require British Gas to provide published information free of charge to tariff customers about the efficient use of gas, following consultation with the director and the Gas Consumer Council. The information must be updated when necessary. The British Gas Corporation will also be required to give every contract customer once a year a statement describing the advisory and other services available for contract customers which can help them to improve their gas efficiency. I hope your Lordships will welcome this new condition, which will reinforce the gas efficiency message and oblige British Gas to continue providing information and advice to its customers, and that in view of what I have said they will agree to withdraw the proposed amendments.
§ Lord Ezra
My Lords, I should like to thank the noble Lord, in particular for the last part of his 55 remarks. That is very helpful news indeed. We should like time to study this amendment to the authorisation. I should just like to emphasise that there is no doubt in anybody's mind on this side of the House or, I believe, on the other side that British Gas is at present doing a very good job in promoting efficiency. What we are concerned with is what could happen under some future administration which might not have the same motivation and should be brought back to this point. Having said that, and having heard that there is this amendment in the authorisation, we should like to study it and possibly come back to this matter at a later stage. In the meantime, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 73 to 75 not moved. ]
Lord Bruce of Donington moved Amendment No. 77:
Page 3, line 28, at end insert—
("( ) to ensure that the interests of British manufacturers and suppliers are taken into account in the procurement policy relating to plant, equipment and appliances of a public gas supplier and to monitor the buying policies of such suppliers in this regard.").
§ The noble Lord said: My Lords, I make no apology for returning to this important amendment which was moved at the Committee stage. My intervention this afternoon to re-open this question arises from the nature of the reply from the Government Benches to the proposal that is set out in the amendment.
This amendment is very modest. It lays a duty on the Secretary of State and the director,
to ensure that the interests of British manufacturers and suppliers are taken into account in the procurement policy relating to plant, equipment and appliances of a public gas supplier and to monitor the buying policies of such suppliers in this regard".
All the amendment seeks to do is to impose on the Secretary of State, the director general and British Gas the same obligations that have been carried out in the past, as the Minister was himself careful to point out in his reply, by British Gas.
§ They are policies that are followed in the United States of America by the Trade and Commerce Department in intervening directly to ensure that the maximum consideration is given in terms of supplying American requirements from American manu-facturers. It is a policy adopted also by MITI in Japan, which most carefully co-ordinates the buying activities of the various large-scale industries in Japan to ensure that wherever possible Japanese manufacturers get a fair consideration, to put it as its mildest, in comparison with imports from other countries. It is a policy pursued quite openly in the Federal Republic of Germany whose public utilities make every endeavour to ensure that the supplies required by those public utilities are supplied wherever possible from German resources. Similar considerations apply in France.
§ There is very good reason for that. It has been found in these various countries that the large public utilities exercise an effect on the manufacturing sectors of the economies within which they function. It is one of the advantages of public utilities that are directly responsible through the Minister to Parliament that they can in fact, sometimes under government persuasion, sometimes under government argument 56 or sometimes even by direct instruction when it appears in the interests of manufacturing industry within the country, use every possible endeavour to ensure that their requirements are satisfied within their countries, and in the Government's case within the United Kingdom.
§ It is common knowledge that manufacturing industry in the United Kingdom has still to regain its 1979 level of output. It is common knowledge that we have large-scale unemployment in the manufacturing industries. In those circumstances surely it is not unreasonable to lay down not that the British plc shall prefer British manufacturers but that it shall ensure, more modestly, that they are taken into account. I should have thought that that would appeal to every Member of your Lordships' House.
§ We were told when British Telecom was privatised that every endeavour would be made to ensure continuation of purchasing policy. Your Lordships will recall that British Telecom had 95 per cent. of its requirements supplied by manufacturing industry. We were told at the time that there was every confidence that this policy would continue, but since British Telecom has been privatised it has sought far wider in the interests of its shareholders. We have to decide whether this should apply to the very considerable requirements of supplies by British Gas that amount to thousands of millions of pounds and provide considerable employment throughout the United Kingdom.
§ The answer given by the noble Lord, Lord Brabazon of Tara, in cols. 948 and 949 of the Official Report for 8th May, was that he very much hoped that the new British plc would continue in the same way as its predecessor. He was very guarded about it. But, more importantly, he concluded on a note upon which I must now challenge the Government—not the individual Minister, because the Minister replying will reply on behalf of the Government and will commit the Government, as indeed the noble Lord did in the course of his final objection to the amendment reported at col. 949 of Hansard for 8th May.
I quote the noble Lord:
Finally, perhaps the main reason that I cannot accept this amendment this evening is that such a specific focus on British products would be contary to Article 30 of the Treaty of Rome".
Since this involves quite a constitutional point I must now challenge the Government. Article 30 of the Treaty of Rome reads as follows:
Quantitative restrictions on imports and all measures having equivalent effect shall, without prejudice to the following provisions, be prohibited between member states".
§ I invite the Government to say quite categorically and responsibly as a government (because there will be other Bills of constitutional importance coming before your Lordships' House) whether it is the considered view of the Government as a whole that the insertion of a provision to ensure that the interests of British manufacturers and suppliers are taken into account in the procurement policy relating to plant, equipment and appliances of a public gas supplier, specifically brings it within that article. If it does bring it within that article, there are very profound constitutional consequences on the independent courses of action that this country may pursue.57
§ The noble Lord can reply, and he may reply—and I warn him that he is speaking on behalf of the Government as a whole—that any edict that comes from the Commission, and any directive to the United Kingdom that comes as a consequence of Article 30, must go through the Council; and that if it is considered to be against the British interests, it can be vetoed under the Luxembourg compromise. Perhaps I ought to warn the Government that I have before me a detailed memorandum by the noble Baroness, Lady Young, concerning the application of the Luxembourg compromise and the right of veto.
§ Will the noble Lord therefore tell the House that the veto is applicable in an instance of that kind, or is it inapplicable? It seems to me that if the Commission or the Council endeavoured to object to a British plc taking into account, in a procurement policy relating to plant, the interests of British manufacturers, then that is something to which the British veto ought to apply.
§ The question that I must ask the Government to answer definitely is this: if any endeavour were made in those circumstances, would they invoke the Luxembourg compromise, the details of which I have before me? I hope that the noble Lord would come to the sensible conclusion, first, that Article 30, which he invoked in aid of his argument, does not apply, secondly, that if it did apply, it could be overcome by the application of the Luxembourg compromise and the veto. In the meantime, it seems intolerable that, contrary to the practice of every other industrial country of significance, it should be wrong somehow for a large public utility, which will remain such even thought it will be in private hands, to be prevented from taking into account a procurement policy relating to plant, equipment and appliances, in order that the interests of British manufacturers may be reasonably taken into account and regard.
§ I would have hoped that, in this country, such would be a non-contentious matter. However, if the Government still resist, then I give notice that this amendment will be taken to a Division, and that the constitutional implications will be considered later.
§ Lord Campbell of Alloway
My Lords, before this matter were ever taken to a Division, perhaps it would be right to correct a possible misapprehension on the part of the noble Lord, Lord Bruce of Donington. As I see it, the right of veto and the Luxembourg compromise are not really applicable at all to a situation such as this. This is a legal matter for the Commission and then for the court of justice under Community jurisprudence.
In that context, if I am right, two points arise. The first is that the clause as such does not fall within Article 30 and following it the Treaty, but that its implementation could, on the facts of any particular case, be found to be in breach by the Commission and also by the court of justice. If that analysis is correct—and I hope that it is—then that of itself would be a very good reason for not including a clause of the kind proposed specifically by amendment to the Bill.
The next point that arises, if I am right, is that implementation of a similar clause in the context not only of freestanding companies, as proposed in the Bill, but also in the context of state monopolies as 58 under Article 92, has been held by the court of justice in many circumstances to be unlawful and in contravention of Community law. If it is a freestanding company, then your Lordships will be concerned with Article 30. If it is a state monopoly, then your Lordships will be concerned with another aspect of the treaty, which is Article 92.
Apart from all that, is it not wrong in principle to muzzle the buying policies of a freestanding board by statute? If it is right, is not that kind of muzzling the very sort of thing that would tend to operate to the detriment of the consumer so far as concerns prices?
§ Lord Ezra
My Lords, I support the amendment proposed by the noble Lord, Lord Bruce of Donington, because it raises a very important issue that goes considerably beyond the scope of the Bill. First, I am glad that the noble Lord, Lord Campbell of Alloway, has confirmed that the wording put forward in the amendment does not contravene Article 30 but that in particular cases there might be held to be a contravention. Obviously, that could be overcome by avoiding particular cases of that kind. That is the point I should now like to discuss, because British Gas as currently constituted, like the other nationalised industries, has for years pursued a policy very success-fully of giving full opportunity to British suppliers to compete for its business. I know from my personal experience with the coal board that that has been done on a proper, competitive basis.
It does mean, however, that one stimulates people. There is nothing in our international obligations that prevents us from stimulating our suppliers to give us what we want and from offering them the facility of seeing our installations—as we did, by taking suppliers to the coal mines and showing them the kind of opportunities that there could be for them. The British Gas Council has pursued that policy with great success. We want to ensure, naturally, that any successor organisation would do the same; would continue to give full opportunity, encouragement and stimulus to the British suppliers, on the understanding that they would only get the business if they were competitive. That was certainly the basis on which we in the coal board worked, and I understand that the other nationalised industries do the same.
I believe that the amendment as drafted, which is not in contravention of Article 30 if it were applied in the way that I have indicated, so that it did not give rise to any proceedings of the court of justice, is a desirable one. One of the ways in which British industry generally can be stimulated is by the large purchasers giving every possible opportunity to British suppliers to meet their needs. Opportunity and stimulus means encouragement, and that is what we should like to see under the new regime. We believe that the amendment proposed would achieve that.
§ Lord Boyd-Carpenter
My Lords, the noble Lord, Lord Ezra, knows that many British companies in the private sector do show preference to British suppliers. In the noble Lord's previous incarnation and in a previous incarnation of mine—he may recall the conjuncture—preference was given by a British company to the great organisation of which he was chairman. It was not without a certain amount of 59 discussion nor even perhaps without a certain modest adjustment on his part to the price, but still a preference was given. This is a perfectly proper attitude and certainly, as I understand it, does not get into the difficulties involved with the Treaty of Rome.
Putting this kind of provision into a statute troubles me because of its imprecision. If it is to be the statutory duty of the Secretary of State and the director to ensure something, they are entitled to know what that something is. How does one ensure that the interests of British manufacturers and suppliers are taken into account? Does it mean that if the price they quote is even marginally above that of the foreign competitor, it is the duty of the Secretary of State to see that the new gas authority goes to the British manufacturer? If that is so, what margin of preference is required to be given?
It is surely an extraordinarily vague phrase:to ensure that the interests of British manufacturers and suppliers are taken into account".If your Lordships would put yourselves in the position of either a Secretary of State or a director, who are supposed to ensure that as a matter of law this is done, I think that you would feel that far more guidance as to what is meant would be required. The amendment does not say in terms that a preference shall be given up to 2 per cent., 5 per cent., or 10 per cent., which, whatever its many demerits would at least be precise. It just says that one takes into account the interests of British manufacturers. Well, the interests of British manufacturers are of course to secure the contracts. But how can one ensure that— again using this very vague phrase—they are taken into account?
Leaving aside the complications of the possible implementation, involving problems under the Treaty of Rome, with which my noble and learned friend has dealt, I am against this amendment simply because of its imprecision. If one is to impose a statutory duty on anybody, be he a Secretary of State or a director general, that person is entitled to ask that it should be clear what that duty means. I think that any of your Lordships who might have the duty of carrying out this provision if it were in the Act would be in a position of very real difficulty.
§ Baroness Seear
My Lords, with all due respect to the noble Lord who has just spoken, I should have thought that in his previous speech the noble Lord, Lord Ezra, had made it very clear how in fact he had taken the interests of British manufacturers into account. He explained what they did, and to me it sounded as though it were a perfectly reasonable approach that was easy to understand. If, as the noble Lord appeared to be suggesting, one were to write into the Bill a percentage of preference, then in my view one would very quickly get into deep trouble with the Treaty of Rome. It has to be worded in this way in order that one can give due encouragement and go out of one's way to do precisely the sort of thing that the noble Lord, Lord Ezra, mentioned, which is to take prospective customers along to the suppliers and along to the pits to see what is required so that they can get their designs right and be in a good position to compete. That is what he was saying and it seemed to 60 be quite clear and make good sense. If anything precise is written in, one will indeed be up against the European Court.
§ Baroness Gardner of Parkes
My Lords, is this not the same problem to a large extent that we have with British industry? For a long time British industry has been unwilling to go out and sell its own products, and it is asking too much to put the obligation on the gas authority to go out and approach British industry. I think that the manufacturers in this country ought to be so competitive and so good that the contract should automatically go to them. I do not think it should be necessary to write this condition into the Bill. Sadly, all too often I am forced to buy overseas products simply because British manufacturers will not update their products or, frankly, they do not care about the market. I think it is up to British manufacturers to take a more positive approach.
§ 6.45 p.m.
§ Lord Brabazon of Tara
We have had an interesting debate on this issue—and this is the third time round in fact so far as concerns this amendment because by accident we discussed it twice at Committee stage. On this occasion I shall obviously concentrate on aspects of Article 30 of the Treaty of Rome. We have been over the ground that British Gas has a very good purchasing record in Britain at the moment and I see no reason why that should not continue. I remind noble Lords that so far as offshore is concerned, it is very carefully monitored by the Offshore Supplies Office. This has resulted in a very large amount of business coming into this country; if I recall, it is 85 per cent.—
§ Lord Diamond
My Lords, may I ask as regards the offshore business whether anyone has alleged that it is contrary to Article 30?
§ Lord Brabazon of Tara
I gather not, my Lords; no, it is not. So far as I understand it, the agreement known as the Luxembourg Compromise, which was mentioned by the noble Lord, Lord Bruce, relates to voting in the Council when member states believe that a vital national interest is concerned. The application of Article 30 of the Treaty of Rome to this Bill concerns the interpretation of a treaty obligation which the British Government have entered into and which has been properly ratified by Parliament. As my noble friend Lord Campbell of Alloway explained very clearly, the application of Article 30 in a given case is a matter for the European Court of Justice and not a matter for the Council of Ministers. As he explained, it would not necessarily be from the actual amendment as proposed; it would be from any possible implementation of the amendment that trouble could arise.
Regarding the Treaty of Rome, I can only repeat what I said when we discussed the amendment in Committee: we consider that the imposition of this duty in the Bill would amount to a measure having equivalent effect to a restriction on imports, which is prohibited by Article 30. I know that many noble Lords opposite do not support the Government's commitment to our European partners and to the principles of freedom of trade underlying the Treaty of 61 Rome. That is only one aspect of the policies of those noble Lords opposite on which I believe that we are bound to differ, and I believe that noble Lords opposite are wrong.
My noble friend Lord Campbell of Alloway said that this provision would muzzle the buying policies of a free-standing company. One of the duties laid down in Clause (4)(2)(b) is:to promote efficiency and economy on the part of persons authorised by or under this Part to supply gas".It could well be—I hope it is not applicable and I have no reason to believe it would be, because I believe that British suppliers can and will continue as they do at the moment to produce the right goods at the right price to supply British Gas with its needs—that subsection (b) and the new amendment would come into complete conflict if British Gas were always to choose from a British manufacturer when it might have been able to buy something cheaper from a foreign competitor.
In fact, I do not think that does any good at all to our industry either, because our industry must realise that if it is to compete overseas—and we do not want any restrictions placed on our industry to compete overseas—then it has to produce the goods at the right price and on time. If it has a sheltered market in this country, so to speak, then it will not receive the encouragement to do that. In fact, my noble friend Lord Boyd-Carpenter said that the amendment is so vague as to make its meaning almost uninterpretable. I suppose that it has to be vague if it is not allegedly to contravene Article 30; but in that case what is the point of having it in the first place? Really, we have been over this ground twice already. I do not believe that the noble Lord, Lord Bruce of Donington, has said anything new on this occasion to persuade me that this would in any way be a suitable amendment to add to the Bill. I therefore urge my noble friends to join me in rejecting it.
§ Lord Diamond
My Lords, I was sorry to hear the tone of the Minister's reply because it did not indicate that he is sympathetic to what is behind the amendment. I asked him whether the offshore supplies which have been achieved by British Gas and monitored by the Government (no doubt by the Treasury carrying out the responsibility which it used to carry in my time, when the responsibility of competition policy rested on my desk) contravened Article 30. His reply was that he thought it did not. There was no contravention.
The main argument that the Minister is proposing for refusing the amendment is that it would lead us into difficulties and, more particularly, is in contravention of Article 30. He went on to say that noble Lords opposite were opposed to the Community and liberal ideas of trade. I make it clear that on these Benches there is no party more sympathetic to the European experiment or determined to see that it shall live and expand, or more committed to free trade, than the Liberal Party. That has been the policy of the Liberal Party as long as anybody can remember. I am told that that was the case long before the Conservative Party came into existence.
The noble Lord is wrong on both those matters. He is wrong about Article 30 and about our motivation. I cannot imagine words more representative of the 62 Prime Minister than this amendment. We are concerned to see that the policy pursued by many governments continues to be carried out; namely, that other things being equal the interests of the British manufacturers and suppliers are taken into account.
As has been said, there are many British private sector retailers. When we talk about the gas industry, we are thinking about very large retailers such as Marks and Spencer. I think that in the case of Marks and Spencer we are talking about an enormous percentage. I think they have something over 98 per cent. of British goods. Reference has already been made to British Gas having over 85 per cent. of British goods. There have in those cases been no complaints about breaching Article 30.
All we are asking is that the same policies should continue. It is not a question of preference. It is a matter of understanding the needs of British industry and taking them into account and co-operating with British industry. British Gas should continue to obtain a competitive quote but there should be co-operation with British industry.
I was delighted to hear my noble friend Lord Ezra talking about the matter as he saw it from the National Coal Board. That corresponded with how I saw it from the Treasury. The intention was being worked out exactly. The interests of British manufacturers were being taken into account. There was no breach of Article 30. There was competition. There was the economy in expenditure which every Treasury Minister must try to achieve.
I repeat that there is no reason why the amendment should not be accepted. I hope that a number of Conservative and Cross-Bench Peers will support the idea that the principle should be stated in the Bill to give everyone a reminder about the importance of properly maintaining and supporting British manufacturing internationally. I should have thought they would welcome the inclusion of the amendment in the Bill.
§ Lord Campbell of Alloway
My Lords, may I have the leave of the House to deal briefly with the point made by the noble Lord, Lord Diamond, about Article 30? Article 30 applies only where it affects trade as between member states. In the circumstances that the noble Lord has proposed in respect of offshore supplies from outside the United Kingdom into the United Kingdom, there is no appreciable effect on trade as between member states. Therefore, with respect to the noble Lord, Article 30 cannot apply.
§ Lord Sanderson of Bowden
My Lords, I see the difficulties which the amendment brings. I have some sympathy with the idea that British manufacturers should have a chance to supply goods to British Gas and so on. I feel, and this is something for the Government to think about, that the "Better Made in Britain" campaign should be given added force. That is the way to bring manufacturers and customers together. The movement has recently had several exhibitions where various trades and industries have been brought together so that one understands the problems of the other. Price, delivery and general quality standards are discussed openly in those forums. Rather than their being a passive observer, 63 that is something which the Government should support financially and actively. I understand that is not the case at the moment. Perhaps that is the way to deal with the problem which is now facing us.
Like my noble friend Lord Boyd-Carpenter, I see difficulties in implementation for the director. However, I sympathise a great deal with the feeling behind the amendment that buying British should be a priority for major British companies.
Lord Bruce of Donington
My Lords, I am sorry that the noble Lord has not been able to respond favourably to the amendment, which, as your Lordships will note, does not require any preference to be given to British manufacturers even though within the terms of practice in other countries, including members of the EC, that might well have been justified.
This is a moderate amendment. I am glad that that point was conceded by the noble Lord, Lord Boyd-Carpenter, whose illogical support, which was confined to this issue, I think that I probably had. At any rate, he was kind enough to express himself in that way. All he complained about was the lack of precision. There is a little time yet before the Bill reaches its final stages in your Lordships' House. I give notice that I should welcome the able and erudite assistance of the noble Lord, Lord Boyd-Carpenter, to give our mutual wishes in this matter more precision.
I am sorry to note that the noble Lord speaking on behalf of the Government, and therefore committing the Government as a whole, has delivered his opinion that the amendment is likely to be in breach of Article 30. That point was qualified by the noble Lord, Lord Campbell of Alloway.
The need to have due regard to the interests of British manufacturers is in a way outlined by the remarks of the noble Baroness, Lady Gardner of Parkes, who complained bitterly about the inefficiencies of British industry. In Industry Year, I thought that those remarks were rather unjustified. She must surely be aware that the interests of British manufacturers should be studied at this time precisely because of the grossly distorted exchange rates which have made British manufacturers uncompetitive abroad and have encouraged imports into the United Kingdom.
§ Baroness Gardner of Parkes
My Lords, if the House will allow me, I did not complain about the inefficiency of British industry. My point was that it should be competitive. I am a strong supporter of British industry. I believe that British industry should produce the best value and best designed goods. There would then be no need to consider British manufacturers because they would automatically be best. I take exception to the noble Lord's description of me as claiming that British industry was inefficient. I did not claim that. I claimed that we have never been good enough at selling our goods.
Lord Bruce of Donington
My Lords, I am most anxious not to do the noble Baroness any injustice. If I have misinterpreted her in any way, I apologise. However, when she reads in Hansard tomorrow the 64 exact words she used she will find, I believe, that my comments were not entirely unjustified. If they could perhaps have been more moderately expressed, I shall next time express them more felicitously in order to lay rather less emphasis on the particular points she made.
If the Government do not accept an amendment of this kind, which lays a responsibility to have regard to the interests of British manufacturing industry, they lay themselves open to the accusation, borne out by their conduct over the last seven years, that they are quite willing, regardless of their interest rate policies and regardless of their exchange rate policies, to expose British industry to completely unfair competition; that they are prepared for its best interests not to be regarded; that they would prefer stuff to be imported from Korea, where wage rates are 30 per cent. what they are in Western Europe; and that they would prefer it to meet the chill winds completely unfairly.
The Government can get themselves out of that dilemma by being reasonable. That is all we are asking. We are not asking for anything extreme at all. We are asking the Government to ensure, for once, that the interests of British manufacturing industry, despite all the damage that they have done to it, are studied and had regard to by the new corporation.
§ 7.2 p.m.
§ On Question, Whether the said amendment (No. 77) shall be agreed to?
§ Their Lordships divided: Contents, 83; Not-Contents, 110.65
|Addington, L.||Heycock, L.|
|Airedale, L.||Hooson, L.|
|Amherst, E.||Hunt, L.|
|Ardwick, L.||Jacques, L.|
|Attlee, E.||Jeger, B.|
|Barnett, L.||John-Mackie, L.|
|Boston of Faversham, L.||Kilbracken, L.|
|Bottomley, L.||Kilmarnock, L.|
|Brockway, L.||Kirkhill, L.|
|Brooks of Tremorfa, L.||Kirkwood, L.|
|Bruce of Donington, L.||Llewelyn-Davies of Hastoe, B.|
|Buckmaster, V.||Lloyd of Kilgerran, L.|
|Burton of Coventry, B.||Longford, E.|
|Carmichael of Kelvingrove, L.||Lovell-Davis, L.|
|Chitnis, L.||McIntosh of Haringey, L.|
|Cledwyn of Penrhos, L.||Mackie of Benshie, L.|
|Crawshaw of Aintree, L.||Meston, L.|
|David, B. [Teller.]||Milner of Leeds, L.|
|Dean of Beswick, L.||Mishcon, L.|
|Denington, B.||Molloy, L.|
|Diamond, L.||Morton of Shuna, L.|
|Donoughue, L.||Nicol, B.|
|Elwyn-Jones, L.||Northfield, L.|
|Ennals, L.||Oram, L.|
|Ewart-Biggs, B.||Parry, L.|
|Ezra, L.||Phillips, B.|
|Falkender, B.||Pitt of Hampstead, L.|
|Fitt, L.||Ponsonby of Shulbrede, L.|
|Graham of Edmonton, L.||Rea, L.|
|Grey, E.||Rochester, L.|
|Hampton, L.||Ross of Marnock, L.|
|Hanworth, V.||Scanlon, L.|
|Harris of Greenwich, L.||Seear, B.|
|Hatch of Lusby, L.||Shannon, E.|
|Silkin of Dulwich, L.||Walston, L.|
|Stallard, L.||Whaddon, L.|
|Stoddart of Swindon, L.||Wigoder, L.|
|Taylor of Mansfield, L.||Williams of Elvel, L.|
|Tordoff, L.||Wilson of Rievaulx, L.|
|Turner of Camden, B.||Winstanley, L.|
|Underhill, L.||Winterbottom, L.|
|Alexander of Tunis, E.||Hesketh, L.|
|Allenby of Megiddo, V.||Hives, L.|
|Arran, E.||Hood, V.|
|Ashbourne, L.||Hooper, B.|
|Auckland, L.||Hylton-Foster, B.|
|Bauer, L.||Kimball, L.|
|Belhaven and Stenton, L.||Kinloss, Ly.|
|Bellwin, L.||Kinnaird, L.|
|Beloff, L.||Kinnoull, E.|
|Belstead, L.||Lane-Fox, B.|
|Bessborough, E.||Lauderdale, E.|
|Boardman, L.||Layton, L.|
|Boyd-Carpenter, L.||Lindsey and Abingdon, E.|
|Brabazon of Tara, L.||Long, V.|
|Broadbridge, L.||Lucas of Chilworth, L.|
|Brougham and Vaux, L.||Lyell, L.|
|Butterworth, L.||Macleod of Borve, B.|
|Caithness, E.||Mancroft, L.|
|Cameron of Lochbroom, L.||Maude of Stratford-upon-|
|Campbell of Alloway, L.||Avon, L.|
|Campbell of Croy, L.||Melville, V.|
|Carnegy of Lour, B.||Mersey, V.|
|Carnock, L.||Monk Bretton, L.|
|Cathcart, E.||Montgomery of Alamein, V.|
|Coleraine, L.||Mottistone, L.|
|Colville of Culross, V.||Mowbray and Stourton, L.|
|Colwyn, L.||Munster, E.|
|Constantine of Stanmore, L.||Napier and Ettrick, L.|
|Craigavon, V.||Norfolk, D.|
|Craigmyle, L.||Nugent of Guildford, L.|
|Davidson, V.||Orkney, E.|
|Denham, L. [Teller.]||Orr-Ewing, L.|
|Derwent, L.||Pender, L.|
|Dilhorne, V.||Penrhyn, L.|
|Donegall, M..||Peyton of Yeovil, L.|
|Drumalbyn, L.||Rankeillour, L.|
|Eccles, V.||Reay, L.|
|Elliot of Harwood, B.||Rodney, L.|
|Elton, L.||St. Aldwyn, E.|
|Enniskillen, E.||Sanderson of Bowden, L.|
|Faithfull, B.||Sandys, L.|
|Fanshawe of Richmond, L.||Skelmersdale, L.|
|Fortescue, E.||Soames, L.|
|Fraser of Kilmorack, L.||Strathclyde, L.|
|Gainford, L.||Suffield, L.|
|Gardner of Parkes, B.||Swinfen, L.|
|Gibson-Watt, L.||Swinton, E. [Teller.]|
|Glanusk, L.||Teviot, L.|
|Glenarthur, L.||Thomas of Swynnerton, L.|
|Gray of Contin, L.||Trefgarne, L.|
|Gridley, L.||Trumpington, B.|
|Grimston of Westbury, L.||Vaux of Harrowden, L.|
|Hailsham of Saint||Vickers, B.|
|Marylebone, L.||Vinson, L.|
|Harmar-Nicholls, L.||Vivian, L.|
|Henley, L.||Young, B.|
§ Resolved in the negative, and amendment disagreed to accordingly.
§ 7.10 p.m.
§ Lord Brabazon of Tara
My Lords, I think that we have reached a suitable moment to adjourn for dinner, and I suggest that we do not return to consideration on Report of the Gas Bill until ten minutes past eight. I beg to move that further consideration on Report be now adjourned.
§ Moved accordingly, and, on Question, Motion agreed to.