HL Deb 09 July 1986 vol 478 cc288-351

2.58 p.m.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead)

My Lords, I beg to move that the Bill be now further considered on Report.

Moved, That the Bill be' further considered on Report.—(Lord Belstead.)

On Question, Motion agreed to.

Schedule 5 [Public Gas Supply Code]:

Lord Stoddart of Swindon moved Amendment No. 150:

Page 74, line 41, at end insert—

("( ) A public gas supplier shall in the case of credit meters ascertain at intervals of not more than 4 calendar months, the consumption of gas by the tariff consumer and recover any charges due to him.

( ) Where a prepayment meter is installed the tariff for gas supplied shall not exceed the total of the following—

  1. (a) such proportion of the standing charge as is payable by credit meter consumers;
  2. (b) the cost of gas supplied;
    3. 289
  3. (c) a sum not exceeding 0.1 per cent. of the annual charge (this sum to be used to insure the contents of prepayment meters);
  4. (d) a sum not exceeding two-and-a-half per cent., of the customer's net weekly income where an agreement has been reached for recovery of previous charges.

( ) Prepayment meters shall be recalibrated as soon as is practicable after the granting of any price increase and in any event not later than one calendar month after such an increase. Prepayment meters shall be emptied by the public gas supplier at intervals of not more than three calendar months.")

The noble Lord said: My Lords, this amendment was discussed when we last sat. I have no wish to waste the time of the House by discussing it any further. I beg to move Amendment No. 150 standing in my name and that of the noble Lord, Lord Gallacher.

Baroness Gardner of Parkes

My Lords, I should like to ask the House whether the fact that this matter was discussed previously but not decided means that it may come back for further discussion today, or whether it should simply be moved? I should like briefly to comment that this amendment, if accepted, would be inhibitory in terms of all advances and improvements that are definitely about to take place in terms of remote meter reading and coinless meters. I therefore oppose the amendment.

2.59 p.m.

On Question, Whether the said amendment (No. 150) shall be agreed to?

Their Lordships divided: Contents, 87; Not-Contents, 107.

DIVISION NO.1
CONTENTS
Airedale, L. Hampton, L.
Amherst, E. Hatch of Lusby, L.
Ardwick, L. Hayter, L.
Avebury, L. Hirshfield, L.
Aylestone, L. Hunt, L.
Banks. L. Irving of Dartford, L.
Barnett, L. Jeger, B.
Beswick, L. Jenkins of Putney, L.
Birk, B. Kilbracken, L.
Blease, L. Kilmarnock, L.
Blyton, L. Leatherland, L.
Bottomley, L. Listowel, E.
Bowden, L. Lockwood, B.
Brockway, L. McCarthy, L.
Bruce of Donington, L. McIntosh of Haringey, L.
Caradon, L. Mackie of Benshie, L.
Carmichael of Kelvingrove, L. McNair, L.
Chitnis, L. Mais, L.
Cledwyn of Penrhos, L. Milford, L.
Crawshaw of Aintree, L. Mishcon, L.
David, B. Morton of Shuna, L.
Davies of Penrhys, L. Mulley, L.
Dean of Beswick, L. Nicol, B.
Denington, L. Northfield, L.
Diamond, L. Oram, L.
Donaldson of Kingsbridge, L. Parry, L.
Elwyn-Jones, L. Plant, L.
Ewart-Biggs, B. Ponsonby of Shulbrede, L.
Ezra, L. [Teller.]
Falkender, B. Reilly, L.
Fitt, L. Rhodes, L.
Foot, L. Ritchie of Dundee, L.
Gallacher, L. Ross of Marnock, L.
Glenamara, L. Sainsbury, L.
Gormley, L. Seear, B.
Grey, E. Sefton of Garston, L.
Grimond, L. Silkin of Dulwich, L.
Stallard, L. Wallace of Coslany, L.
Stoddart of Swindon, L. Wells-Pestell, L.
Strabolgi, L. White, B.
Taylor of Blackburn, L. Wigoder, L.
Taylor of Mansfield, L. Williams of Elvel, L.
Tordoff, L. [Teller.] Wilson of Rievaulx, L.
Underhill, L. Winterbottom, L.
NOT-CONTENTS
Alport, L. Kinnaird, L.
Annan, L. Lauderdale, E.
Arran, E. Layton, L.
Beloff, L. Lucas of Chilworth, L.
Belstead, L. Luke, L.
Bessborough, E. McFadzean, L.
Blake, L. Macleod of Borve, B.
Blanch, L. Mancroft, L.
Boyd-Carpenter, L. Margadale, L.
Brabazon of Tara, L. Masham of Ilton, B.
Broxbourne, L. Maude of
Burton, L. Stratford-upon-Avon, L.
Butterworth, L. Melville, V.
Caccia, L. Mersey, V.
Caithness, E. Milverton, L.
Campbell of Alloway, L. Morns, L.
Campbell of Croy, L. Mottistone, L.
Carnegy of Lour, B. Mowbray and
Constantine of Stourton, L.
Stanmore, L. Murton of Lindisfarne, L.
Cottesloe, L. Nugent of Guildford, L.
Craigavon, V. Penrhyn, L.
Cullen of Ashbourne, L. Radnor, E.
Davidson, V. Rankeillour, L.
De Freyne, L. Reay, L.
Denham. L. [Teller.] Renton, L.
Derwent, L. Rochdale, V.
Dilhorne, V. Rodney, L.
Drumalbyn, L. Rugby, L.
Effingham, E. St. Davids, V.
Ellenborough, L. Sanderson of Bowden, L.
Elliot of Harwood, B. Selkirk, E.
Elton, L. Shannon, E.
Fortescue, E. Shaughnessy, L.
Gainford, L. Skelmersdale, L.
Gardner of Parkes, B. Smith, L.
Geddes, L. Somers, L.
Glanusk, L. Strathcarron, L.
Glenarthur, L. Sudeley, L.
Gray, L. Swinton, E. [Teller.]
Gridley, L. Terrington, L.
Hailsham of Thorneycroft, L.
Saint Marylebone, L. Thurlow, L.
Halsbury, E. Tranmire, L.
Hardinge of Penshurst, L. Trenchard, V.
Harvington, L. Trumpington, B.
Henderson of Vaux of Harrowden, L.
Brompton, L. Vickers, B.
Henley, L. Vivian, L.
Hives, L. Whitelaw, V.
Home of the Hirsel, L. Wise, L.
Hooper, B. Wynford, L.
Hylton-Foster, B. Young, B.
Ilchester, E. Young of Graffham, L.
Ironside, L. Zouche of
Killearn, L. Haryngworth, L.
Kimball, L.

On Question, amendment agreed to.

3.7 p.m.

[Amendment No 151 not moved.]

Lord Stoddart of Swindon moved Amendment No. 152:

Page 75, line 5, leave out ("six") and insert ("three")

The noble Lord said: My Lords, this amendment was taken with Amendment No. 135 Therefou, I beg to move.

Lord Diamond had given notice of his intention to move Amendment No. 153:

Page 75, line 6, at end insert—

("( ) Any reference in this schedule to the duties and powers of the Director shall be subject to the provisions of section (Directorate of Gas Supply).")

The noble Lord said: My Lords, I do not suppose that I shall achieve the same success, so this amendment is not moved.

[Amendment No. 153 not moved. ]

Lord Diamond moved Amendment No. 153A:

Page 75, line 41, at end insert ("provided that it has been read by a full-time employee of the gas supplier or of an electricity supplier approved for this purpose by the gas supplier")

The noble Lord said: My Lords, this amendment is in connection with the measurement of gas consumed, and seeks to give power to the gas supplier not only, in effect, to send out his own employee to read the gas meter but also to rely on the services of an employee of an electricity supplier approved for this purpose by the gas supplier. The words are merely an attempt to elicit from the Government—there must be some history about this—their view on a gas meter being read once and at the same time an electricity meter being read by an employee of one or other instead of both companies.

Obviously it has its economic aspects. Obviously it is economic in the use of manpower, but it has its unemployment aspect. On one occasion when I asked an officer of the company reading the gas meter whether the experiment of reading both meters at the same time had been tried or discussed, his answer was the obvious one, "That would merely provide more unemployment, wouldn't it guvnor?" And of course I very much understand that point of view.

There must have been discussions about this point. This is only a probing amendment. I should be grateful if the Government would indicate their attitude with regard to this, and at the same time say whether, as I imagine is the case, there is no bar to the new successor company making such arrangements with the electricity supply company in the future if it so desired. I beg to move.

Baroness Gardner of Parkes

My Lords, I wish to oppose this amendment. It unfortunately is rather out of touch and out of date. This appeared to be a good idea, and I myself thought it might be, although of course it might have resulted in loss of jobs. I took up this matter with the gas authority as recently as two weeks ago. They say that although this has been discussed millions of times in the past—it has been an old chestnut coming up again and again—they think it will never happen because now the move is towards remote meter reading where no one will need to get access into your home at all, and the meter would be read long distance.

Lord Belstead

My Lords, may I say a word a little more generally. Paragraph 5 of Schedule 5, to which this amendment is addressed, needs to be read together with Clause 17 of the Bill. Under that clause a gas meter may not be used unless it has been stamped by, or on the authority of, a meter examiner appointed by the Secretary of State. Before stamping, or authorising the stamping of, the meter the examiner has to be satisfied that the meter conforms with prescribed standards as to its accuracy. We have that assurance before we come to the point of the amendment.

Paragraph 5 simply deals with the meter as evidence of the quantity of gas supplied. That can be used as prima facie evidence by the public gas supplier or by the consumer. On this basis this amendment might have an effect that the noble Lord, Lord Diamond, does not intend. It would suggest that only the gas supplier can rely on the meter reading and not, for example, the consumer in response to an estimated reading from the public gas supplier. I do not think that that is something that the noble Lord was after.

The noble Lord is after another point, and he specifically said to me, "Would it be possible to have joint meter reading with the electricity industry?" The answer is yes, there is no bar so far as the Bill is concerned, but it is something that has been studied on a number of occasions over the last 15 years or so but has simply been found to be impracticable. The areas and regions of the two industries do not coincide, and each has its separate meter reading cycles and computer billing systems. There are great difficulties, but there is no bar so far as this is concerned.

I was interested in what my noble friend Lady Gardner of Parkes said. Not only would this amendment have unlooked for effects so far as consumers are concerned, but from what my noble friend says we may be moving out of the area where we have so much personal meter reading, and it is going to be done increasingly in other ways which I think would be of benefit to consumers, particularly customers who have to be out of their flats or houses for long periods during the day.

Lord Diamond

My Lords, I am grateful to the Minister. I was only anxious to get the Government's reaction to an idea which I said must have been thought of many times, and I am glad to have confirmation that it has been and that there are good, mechanical reasons why it has not been adopted hitherto. Although I understand that this is in the long-term future, it may be that we shall not have the pleasure of officers inspecting our gas meters at all in time to come. Having heard the answer, and having been told—which was my main anxiety—that there is no bar on an arrangement of this kind being made in future if it is desirable to do so, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Belstead moved Amendment No. 154:

Page 76, line 6, leave out ("consumer") and insert ("customer").

The noble Lord said: My Lords, this is simply a drafting amendment. As the word "customer"has been used only two lines above it seemed to us to be consistent to use it in this particular line. I therefore beg to move.

[Amendment No. 155 not moved.]

3.15 p.m.

Lord Bruce of Donington moved Amendment No.156:

Page 76, line 31, at end insert—

("Restriction of gas prices to tariff customers

The public gas supplier may seek to alter his prices in accordance with the following formula: T=( l+RPIt-X )Pt-1+Yt-Kt 100 where T is the average price per therm; RPIt = the percentage change (whether positive or negative in value) in the Retail Price Index between that published with respect to the relevant year t and that published with respect to the immediately preceding April, provided that if there is a material change in the retail price index there may be substituted such basis to take account of the change, or other such index as the Director, in conjunction with the Public Gas Supplier, the Gas Consumers' Council and the Trade Unions in the industry, shall determine X = a value to be determined each year after consultation with the Supplier, the Gas Consumers' Council and the Trade Unions in the industry; but which in any relevant year shall not be lower than 4 per cent. unless Parliament by affirmative order approves anything lower than 4 per cent. Pt-1 = Pt-2 1 + RPIt - X ) but, in relation to the first Relevant Year, Pt_t (and, accordingly, in relation to the second Relevant Year, Pt-2) shall have a value of the cost of gas per therm at the date of flotation; Yt = Allowable Gas Cost per therm in Relevant Year t; Kt = the correction per therm (whether of a positive or negative value) to be made in Relevant Year t (other than the first Relevant Year) which is derived from the following formula— Kt =Tt-1-(Qt-1Mt-1) (1+It) in which Qt 100 Tt-1 = Tariff Revenue from Tariff Quantity in Relevant Year t-l; Qt-1 = Tariff Quantity in Relevant Year t-l; Qt = Tariff Quantity in Relevant Year t; Mt-1 = Maximum Average Price per therm in Relevant Year It-l; 1t = the interest rate in Relevant Year t which is equal to, where Kt (taking no account of It for this purpose) has a positive value, the Specified Rate plus three per cent. or, where Kt (taking no account of I, for this purpose) has a negative value, the Specified Rate.

2 In this Condition—

Allowable Gas Cost" means the aggregate of the following amounts namely—

(1) the amounts paid or payable by the Supplier at any time to each vendor of gas (not being an associated company)—

  1. (a) for, and wholly and exclusively related to, the quantity of gas delivered to the Supplier in the Relevant Year for the Supplier's Gas Supply Business (being payments of purchase price in pounds sterling, or, if not in pounds sterling, converted to pounds sterling at the spot rate of exchange in London for purchasing the relevant foreign currency as quoted by Barclays Bank plc at the close of business on the date of payment thereof); or
  2. (b) as Capacity Charges in respect of the Relevant Year, but—
  1. (i) excluding any payments of interest and of any other amount payable by the Supplier because of any failure by the Supplier to perform its obligations or make any payment to vendors under its contract to purchase the gas so delivered;
  2. (ii) deducting, where payment for gas is due more than 30 days after the end of the month of its delivery, 294 a sum equal to the interest on the price of the gas for the period from 30 days after the end of the month of delivery to the date of payment, at the Specified Rate.

(2) (a) where, under the terms of a contract with a vendor of gas (not being an associated company), the Supplier has made a payment ("initial payment") with respect to gas not taken by it before the Relevant Year and in that Relevant Year, the Supplier either takes gas by reason wholly or partly, of that initial payment or, having taken gas in that Relevant Year for which consideration has been paid or would otherwise be payable, is allowed a credit by reason, wholly or partly, of that initial payment (provided that the consideration which has been paid, or which would otherwise be payable, has not been included under paragraph 2(1) above)—

  1. (i) the amount of that initial payment to which the gas so taken is attributable, and
  2. (ii) an amount representing interest on that payment compounded annually from the date of payment calculated at the Specified Rate for the period beginning with that date and ending on the last day of the month in which the gas is taken or, as the case may be the credit is allowed (and for this purpose payments and gas taken by reference to them shall be treated on a first in/ first out basis),

(b) where any initial payment has been mack by the Supplier and, in the Relevant Year, either the terms of the contract have the effect, or it is shown to the reasonable satisfaction of the Director, that an gas will not be available for delivery or credit which might otherwise have been allowed to the Supplier by reason wholly or partly of that payment will no lunger be allowed, such amount over such period as the Director after consultation with the Supplier shall determine is a fair amount to be included in respect of any one or more Relevant Years;

(3) where any gas which is delivered to the Supplier is purchased by it for a consideration which is not wholly pecuniary or where gas and anything other than gas are purchased as part of the same transaction or arrangement by the Supplier, the amount which the Supplier demonstrates to the reasonable satisfaction of the Director would be the pecuniary consideration for the gas if negotiated at arm's length as between a willing vendor and a willing purchaser;

(4) where gas is purchased otherwise than at the Point of Delivery, such amount as is demonstrated to the reasonable satisfaction of the Director is or would be payable by the Supplier under a third party contract negotiated at arm's length for transporting the gas to the Point of Delivery and for any processing or treatment of the gas which is necessary to render it of suitable quality for entry into the Supplier's Transmission System;

(5) (a) where the Supplier in a Relevant Year appropriates to the Gas Supply Business gas which it produced itself or which it acquired from an associated company ("Own Gas"), the Supplier shall furnish to the Director as soon as practicable after the end of that year a written statement of the amount which the Supplier shall certify to the best of its information, knowledge and belief represents no more than the market value (as defined in the Oil Taxation Act 1975) of such gas, together with an explanation of how any such amount has been arrived at and the amount so certified may be included as an Allowable Gas Cost on an interim basis provided it is not greater than the amount with respect thereto included or to be included (either on a provisional or final basis) by the Supplier or associated company in its return to the Oil Taxation Office of the Inland Revenue (or such other department of the Inland Revenue as is appropriate) but if it is greater, the lower amount shall be included;

(b) in the event of it being ascertained by the Oil Taxation Office of the Inland Revenue in agreement with the Supplier, or determined in legal proceedings that the market value of any Own Gas for the purposes of the Oil Taxation Act 1975 (or, in the case of Own Gas the subject of a tax exempt contract, as defined in section 1 (3) of the Gas Levy Act 1981, by any departrment of the Inland Revenue in agreement with the Supplier, or in legal proceedings, that the market value of any Own Gas for any other tax purposes) is different from the amount permitted by sub-paragraph (a) above to be included on an interim basis for the purposes of the Allowable Gas Cost, the difference shall be reflected in an appropriate manner in the Allowable Gas Cost for the purposes of the formula described in paragraph 1 above and reported by the Supplier to the Director promptly after it has been ascertained or determined;

(6) an amount equal to the gas levy payable to the Secretary of State by the Supplier under the Gas Levy Act 1981 in respect of the aggregate quantity of gas of which account is to be taken for the purposes of calculating the amounts referred to in sub-paragraphs (1), (2), (3) and (5) above;

(7) any amount (whether or not similar to or different from expenditure of the kinds or amounts previously mentioned) which, after written application by and consultation with the Supplier, is determined by the Director to be a cost of gas acquired by the Supplier for the Supplier's Gas Supply Business or to be a cost otherwise fairly related to the gas acquired;

but no amount shall be a component of Allowable Gas Cost both under sub-paragraph (7) above and any other of the preceding sub-paragraphs or under more than one of those sub-paragraphs and for the purposes of this definition of "Allowable Gas Cost", the delivery of gas shall be treated as taking place at the Point of Delivery.

Allowable Gas Cost per therm" means the Allowable Gas Cost in the Relevant Year divided by the Relevant Quantity in the Relevant Year.

Average Price per therm" means Tariff Revenue in the Relevant Year divided by the Tariff Quantity of gas supplied in that Relevant Year.

Capacity Charges" means any amounts which are of a recurring nature and are paid or payable by the Supplier in respect of the Relevant Year to a vendor of gas in order to reserve the availability to the Supplier of deliveries of gas in the year in which the amounts relate but not being any amounts which would fall to be treated in whole or in part as an advance payment (directly or indirectly) for gas.

Relevant Quantity" means the aggregate of the following namely—

  1. (l)the quantity of gas in therms delivered to the Supplier in the Relevant Year and purchased by it (otherwise than from an associated company) for the Supplier's Gas Supply Business being calculated where the price of gas is fixed by reference to an agreed calorific value, using that value, but if the agreed calorific value used in determining the price of the gas differs from the calorific value as measured, the Supplier shall give written notification to the Director of the amount of the difference;
  2. (2) the quantity of Own Gas in therms appropriated by the Supplier in the Relevant Year to the Supplier's Gas Supply Business other than gas from the Rough reservoir.

3.—(1) If in respect of any Relevant Year the Average Price per therm exceeds the Maximum Average Price per therm by more than 4 per cent. of the latter, the Supplier shall furnish an explanation to the Director and in the next following Relevant Year the Supplier shall not effect any increase in prices unless it has demonstrated to the reasonable satisfaction of the Director that the Average Price per therm would not be likely to exceed the Maximum Average Price per therm in that next following Relevant Year;

(2) if, in respect of any two successive Relevant Years, the sum of the amounts by which the Average Price per therm has exceeded the Maximum Average Price per therm is more than 5 per cent of the Maximum Average Price per therm for the second of those years, then in the next following Relevant Year the Supplier shall, if required by the Director, adjust its prices such that the Average Price per therm would not be likely, in the judgment of the Director, to exceed the Maximum Average Price per therm m that next following Relevant Year;

(3) if in respect of each of two successive Relevant Years the Average Price per therm is less than 90 per cent of the Maximum Average Price per therm, the Director after consultation with the Supplier, may direct that, in calculating K, in respect of the next following Relevant Year, there shall be substituted for Tts-1 in the formula set out in paragraph 1 above such figure as the Director may specify being not less than Tt-1 and not more than 0. 90 (Qt-1Mt-1).

4.—(1) Where the Supplier publishes any change in the price of gas (which shall include any change in standing charges) which it proposes to make to tariff customers, the Supplier shall not later than the time of such publication provide the Director with—

  1. (a) a written forecast of the Maximum Average Price per therm, together with its components, in respect of the Relevant Year in which the change of price of gas is to take effect and also in respect of the next following Relevant Year, and
  2. (b) a written estimate of the Maximum Average Price per therm, together with its components, in respect of the Relevant Year immediately preceding the Relevant Year in which the change in price of gas is to take effect unless a statement complying with paragraph 4(5) below in respect of that first mentioned Relevant Year has been furnished to the Director before the publication of the proposed change in gas price;

(2) if within three months of the commencement of any Relevant Year the Supplier has not published or effected any change in price as is referred in sub-paragraph (1) above the Supplier shall provide the Director with a written forecast of the Maximum Average Price per therm together with its components, in respect of that Relevant Year;

(3) any forecasts as aforesaid shall be accompanied by such information as regards the assumptions (such as economic growth, exchange rate changes and energy prices) which are critical features thereof as may be necessary to enable the Director to be reasonably satisfied that the forecasts have been properly prepared on a consistent basis;

(4) not later than 6 weeks after the end of a Relevant Year the Supplier shall send to the Director a statement as to whether or not in its opinion paragraph 3(1), (2) or (3) applies in respect of the Relevant Year and its best estimate of what K is likely to be in the following Relevant Year;

(5) not later than 3 months after the end of a Relevant Year the Supplier shall send to the Director a statement, in respect of that Relevant Year, showing—

  1. (a) Allowable Gas Cost;
  2. (b) Relevant Quantity;
  3. (c) Tariff Revenue;
  4. (d) Tariff Quantity;

(6) the statement referred to in sub-paragraph (5) above shall be—

  1. (a) accompanied by a report from the Auditor that in his opinion such statement fairly presents Allowable Gas Cost, Relevant Quantity, Tariff Revenue and Tariff Quantity in accordance with the requirements of this Condition and that the amount of Tariff Revenue and, so far as applicable, the amount included as Allowable Gas Cost are in accordance with the Supplier's account-ing records which have been maintained in accordance with Condition; and
  2. (b) certified by a director of the Supplier that no amount included within Allowable Gas Cost represents other than bona fide consideration for gas delivered for use in 297 the Gas Supply Business or an amount permitted under this Condition to be so included;

The noble Lord said: My Lords, I beg to move Amendment No. 156 which seeks to incorporate within the structure of the Bill that part of the proposed authorisation that deals with the restriction of gas prices to tariff customers. In general it follows the text of the conditions laid down in the original proposed authorisation, save in regard to the definition of the X factor, which in the amendment is stated as, a value to be determined each year after consultation with the Supplier, the Gas Consumers' Council and the Trade Unions in the industry but which in any relevant year shall not be lower than 4 per cent. unless Parliament by affirmative order approves anything lower than 4 per cent".

Perhaps I should explain the use of the term "4 per cent." before I go any further. The X factor in the formula is in fact referred to by a figure only, but in his correspondence with me, in particular the letter he wrote to me dated 16th May, the noble Lord said: changes in this part of the price are limited to X per cent. below the rate of inflation".

Therefore, I was torn between the desire to put the simple figure "4" or "4 per cent." as referred to by the noble Lord in his correspondence with me.

If, however, the noble Lord agrees the amendment, I have no doubt that at a later stage in the Bill one could substitute "4" instead of "4 per cent.", whichever the noble Lord thinks correct in the circumstances. Mathematically I think it should be the factor of 4, but in deference to the noble Lord I inserted "4 per cent." because that was referred to by him.

The primary purpose of this amendment is to get the price mechanism, the restriction of gas prices to tariff consumers, into the Bill itself. We argued this not at great length but at some length at the Committee stage of the Bill. For our part we think that including the restriction of gas prices, including the gas price formula, in the authorisation has its dangers. Proposed authorisations can of course be altered without the consent of your Lordships' House. Indeed, there is already an amendment to the Department of Energy proposed authorisation, which revises the previous ones, which your Lordships were able to debate at the Committee stage.

As your Lordships will recall, it was finished long before 30th June, despite the restricted time we spent in Committee.

If your Lordships look at the new proposed authorisation it will be found that it differs very materially indeed from the proposed authorisation that your Lordships had in mind when debating the Bill in Committee. I am not passing any judgment at this stage, but there will be other occasions in the course of the afternoon's debate. I am not making any complaint that the changes that have been made may be beneficial or may be regarded as controversial or even obnoxious. I am not passing any observation on the merits of the new proposed authorisation compared with the old one, which I take it was read by all your Lordships with the greatest possible interest and detail. It is sufficient for my purposes that alterations have taken place.

If alterations can take place without the consent of another place and without the consent of your Lordships, as they have, since we debated it in Committee—and the alterations are material I can assure your Lordships; indeed, those who have ploughed their way dilligently through this new authorisation will know quite well how materially it differs from the old one—it could be done again. So on the first principle we on this side of the House would like to have this in the Bill.

When the noble Lord was debating the question in Committee—he dealt with it very thoroughly and very courteously in view of the time of night it was and the stresses under which we were all operating at that time—he used these words: It is essential for the consumers' interests that we should have a real price control formula and that the value of X should he set for a substantial period".—[Official Report, 3/6/86; col. 950]

This was in complete contradiction to the argument that he had for the reliance on the authorisation itself, because it will be within your Lordships' recollection that he was arguing that it would be necessary 10 have the greatest possible flexibility. That was the reason for the whole of the authorisation as such, rather than having it in the Bill.

I am inviting the noble Lord now to have the best of both worlds. We are offering a situation where we do not ask that he should have the whole authorisation in the Bill; therefore, he has the degree of flexibility that he requires. Secondly, in a field where he wants constancy—the Minister has referred to constancy in his own speech on the subject—then he has that, too, because we have given him stability. We have said: which in any relevant year shall not be lower than 4 per cent. unless Parliament by affirmative order approves anything lower than 4 per cent.

What could be more stable than that? The noble Lord now has his constant figure.

Since we debated the issue some anxieties have been expressed on this side of the House and by the noble Lord, Lord Diamond, as to when the X factor would be announced. Some of us, including myself—I must apologise for this—attributed entirely unworthy motives to its postponement. I could only hazard the guess that they would postpone it for as long as they could until they knew which way the share market was going. This is entirely unworthy of me, because within a fortnight the noble Lord himself announced a factor of 2.

We are suggesting in this amendment that we have a factor of not lower than 4. Why do we do this? On this side of the House we have made it quite clear. I must underline that belief and say that I believe it is still true that the main purpose of this Bill is to put money in the hands of the Exchequer so that it may make tax reductions in the run up to the election. That is an observation that has become increasingly adopted by organs of public opinion normally in support of the Government, who continously refer now to the proceeds of the sale of assets being applied in the reduction of taxation or, rather, to enabling the Chancellor to apply these sums to what is called "negative expenditure", as I believe the new account-ing term is, although it is quite unknown to the accounting profession. Reductions in public expenditure by applying capital receipts against it may enable the Chancellor to make tax deductions before the election.

The noble Lord is nothing if not a firm supporter of the Government of his own party, but he strenuously denies this argument. There is no question at all of there being any effect on public expenditure; there is no question of the money being available for tax cuts. The noble Lord was much more high-minded than that. The noble Lord's argument was that it would free British Gas from the restrictions under which it had previously been working and which apparently will now be enshrined in a Bill some 110 pages long in the most explicit terms. The other reason the noble Lord gave with all sincerity was that the industry would function more efficiently. The very fact of the ownership of the industry being transferred from the palsied hands of the Chancellor of the Exchequer to the young and vigorous hands of the City institutions and overseas shareholders and a fraction of the ordinary individual shareholders in the United Kingdom transform the whole spirit of the industry, give it a new zest, a new drive, and make it more profitable. This was the burden of what the noble Lord said. If that is the case, the assumption is that there will be a considerable increase in efficiency.

The noble Lord apparently values that by a factor of 2 when he deducts it from the movement in the retail price index. May I suggest to him that he is being a little modest? Does he really value the benefit to the consumer in terms of price of the magnificent transformation that he proposes to make under this Bill only as a factor of 2? Is it worth all the time and trouble? Is it worth all the vast expenditure that will be made in the flotation, the millions that will pour into the pockets of the underwriters, the advisers and the City of London merely to achieve for the consumer a miserable 2 per cent. off the RPI? The consumer may not think it is worth all that trouble.

On the other hand, I willingly accept that the noble Lord may have arrived at the factor of 2 after meticulous calculation, after looking at the profit forecasts for the next five or six years, which will undoubtedly already have been prepared. Indeed, one city analyst in one firm of city underwriters employed by the noble Lord's department has already forecast that no fewer than £629 million will be available to investors by way of dividend next year. At least, so it is reported in the Daily Telegraph. I have not seen the document because these documents are not automatically supplied to your Lordships' House or its Members. But, at any rate, this is one opinion.

All these lush funds which are lying about, instead of going to the Exchequer in terms of a dividend available to the taxpayers who, after all, owned this concern, will go into the pockets of private shareholders, mainly institutional. But if there is all this lush money lying about, how does the noble Lord justify merely a factor of 2? If he does not justify a factor of 2, will he present to the House his reasons for objecting to 4.

I am quite sure that the noble Lord has had adequate time to examine the amendment It was put down in good time He has obviously had a word with his advisers, the statisticians, and the City of London and, doubtless, he will be able to prove to your Lordships' House why a factor of 4 would bring disaster upon the new plc, alternatively, he may feel disposed to accept it So that he can put his money where his political mouth is, as it were, and on the basis of proving his own expectations, I hope that he will most willingly accept the minimum factor of 4.I beg to move.

3.30 p.m.

Lord Sanderson of Bowden

I think that this is an important amendment that has to be debated yet again, no doubt, because it is the view of the Labour Opposition that it should be written into the Bill I should like the Minister when he replies to deal with this new idea about the X factor because it seems to me that to have a value to be determined each year after consultation with the supplier, the Gas Consumers' Council and the trade unions in the industry is not the normal way that a business runs its affairs The newly privatised gas plc will surely fix its prices I thought from our debates which have gone on for many hours that the Director of Ofgas would examine that particular price and decide whether it was fair and reasonable It seems to me that perhaps it is a question not of beer and sandwiches round a table for hours and hours on end but, if your Lordships' House is anything to go by, bacon and eggs at 2.30 in the morning.

However, there is one other point that I wish to raise, as the noble Lord, Lord Bruce of Donington, has been good enough to raise it It is this question of 2 per cent which, as we know, has now been announced. If this Bill goes through—and I quote from the press release—it, will ensure that the element of the charge to tariff customers covering the delivery of gas is held at a level of 2 per cent below the rate of inflation". If the rate of inflation is 23 per cent., I can well understand that 2 per cent does not sound very much But when the rate of inflation is as low as this Government have brought it, surely that is a fair and reasonable percentage to be considering.

Finally, I was very interested by what the noble Lord, Lord Bruce of Donington, had to say about this particular flotation. We have heard his views before; we know them well But I was also interested in what he said earlier on in the debates at the Committee stage I quote from col 368 of the Official Report where the noble Lord, Lord Bruce of Donington, said: I am not decrying personal or individual shareholdings". This Bill is an attempt to widen share ownership I consider that the utterances that the noble Lord has made on the whole question of this particular flotation do not exactly go along with his view that personal and individual shareholding is to be applauded.

Lord Diamond

My Lords, I think we ought to be absolutely clear in our minds as to what all this algebra means before we are asked to decide whether or not to support this amendment. I am not very good at algebra, but I think I know what it means and I think therefore that I have every reaon to support the amendment. As I understand it, this amendment has two major points, one of principle and one of such large detail as almost to be considered as being of principle, too.

The first point is the bringing into the statute of what is probably the most important safeguard for the consumer in the new circumstances in which there will be a complete private monopoly. Where the customer—and we are talking about 16 million of them—can go only to one shop as a result of government legislation, it is surely right that the customer should be protected most of all as to the price that he or she (and, probably it will be she) is to be asked to pay. As that is the most important safeguard, it surely ought to go in the Bill; at present it is not in the Bill. It is in an authorisation, a document which is not only capable of being altered but which has already been altered since we started to discuss it. As has previously been pointed out, we on this side of the House are not at the moment concerned with whether the alterations are good or bad. We are concerned only with the fact that it has already been altered, and therefore nobody can possibly assert that it is incapable of alteration.

I go further and say that of course it is capable of alteration. The Bill provides later on—and we shall be coming to it—that this protection of the consumer as regards the price formula is capable of being altered as easily as kiss your hand; indeed it is. All that has to happen is for the director of gas supplies to have a word with the chairman of the new gas corporation plc and say, "Yes, thank you very much for your letter. I see your point. Let's alter it to so much". It is as easy as that, and that is what the Bill provides. If the two of them do not agree, there is very different procedure, but if they do agree on what should happen, the alteration can be done with ease.

Therefore one says that it should not be left to those two individuals to decide among themselves on the fate of the major safeguard of 16-million plus consumers in this country. The protection should be in the Bill. That is the first thing that this amendment does. It takes the protection out of the authorisation and puts it into the statute—and I should have thought that that would have your Lordships' support.

Of course, there is always the argument that putting something in a statute gives it not only strength but also permanency. If you want permanency, that is fine; but those of us on this side of the House take the view that we cannot foretell the future for all time. Therefore, you must have an element of flexibility, and so variation in a major respect must be possible. That is why in regard to the X factor (a most important element in it all) it is provided that it should be possible for Parliament by affirmative order to approve something lower than the figure at present proposed; and that is more to the advantage of the gas supplier.

It will then be for the Minister to explain to Parliament the various reasons, and no doubt with the assistance of his persuasive capacity and his logic —and bearing in mind that the present Government have an enormous majority in both Houses—the will of Parliament will be expressed. So there is no problem there.

That is the first major point of this amendment. It is one which appeals to me and also, I very much hope, to your Lordships. It gives secure protection to the consumer on the main problem of price, but without making that too inflexible.

The second is a point of detail, but as I have said, it is such an important detail that it has almost to be regarded as another principle; that is, the X factor. I return to what I said at the start—we want to be absolutely clear about this. The only way to achieve that in the procedure of a Report stage is, for example, for myself as one of your Lordships to put forward my understanding of what it means before the noble Lord the Minister replies so that the noble Lord the Minister can say "Yes, you have it right", or "No, you are wrong in certain particulars".

As I understand it, this factor applies to that part of the charge which is arrived at by reference to variable items in the cost of supplying the gas other than—and I repeat, other than—the cost of the gas itself. I think we are on fairly easy mathematical grounds here because, as I understand it, the cost of gas—that is to say the material with which you start your purchase of gas—is roughly half the total cost of what is supplied at the gas tap of the consumer. The other half is the cost of the provision of the pipes and everything else in terms of supply. So, if I may put it this way in familiar accountancy terms, the raw material is roughly half. It is only the other half therefore to which the 4 per cent. applies; it is only the other half to which the questions of the retail price index and inflation apply.

Why do I say that, my Lords? For the simple reason that that first half, the cost of the gas itself, is passed directly on to the consumer. If the cost goes up, the price goes up, and if the cost goes down, the price goes down. It is simply cost-plus as far as that element is concerned. It is only the other half which is subject to a fixed starting point added to by the level of inflation.

Now, my Lords, what is that fixed starting point? That is the first question. That fixed starting point is the present price. We are always so ready in argument to assume that what exists must be the right answer—the present price—but no one has ever attempted to justify the present price. Indeed, we know that the present price is partly a remuneration to the nationalised industry which has been producing and supplying gas and partly a return to the Government in the form of taxation. We know for a fact that the price need not have been so high if the Government had not wished, first, to levy certain taxes and, secondly, to get a surplus in the form of taxation returning to the revenue. So we know that we are starting with a price that is higher than it need be in ordinary free market terms, and it is that starting price which is to be continued, and increased. So it is not surprising, that already the successor company is thinking of and looking to very large profits indeed in its first year, because it is starting off with a very large agreed price for its fixed, tied 16,500,000 customers before the year starts. It is a nice position to be in so long as you are not a consumer!

It is that fixed price, that half of it which refers to overheads and things like that, which is subject to the variation we are talking about. The noble Lord the Minister has proposed 2 per cent. and as I understand it that has been agreed with the prospective chairman of the successor company.

My Lords, may I say two things? First, I am not surprised that that has been agreed. There could not have been a more helpful figure so far as the company is concerned. Secondly—and I mean this very sincerely—I am most grateful to the noble Lord the Minister for having arranged for this figure to be made available to us well before our discussion on Report. I attached enormous importance to the provision of that facility. I made it very clear during Committee stage that on these Benches we regarded it as absolutely vital because it could mean the difference between a virtual cost-plus future and an efficient future. So it was that I was very anxious indeed that we should be able to debate this, and we are, and for that I am most grateful.

But what is that figure? It is 2 per cent. of one half. Again, I claim no knowledge of mathematics but I regard that as being equivalent to 1 per cent. of the whole, so we are talking about a possible reduction of 1 per cent. of the price as an inducement to efficiency. I put it to all your Lordships, wherever you are sitting in this House, who have experience of increasing efficiency in your factories, in your retail businesses, your mines, or whatever particular line of industry you are familiar with—that every one of your Lordships would regard a target of 1 per cent. increase in efficiency per annum as a wholly miserable target. The whole of my accountancy experience leads me to assert that without fear of contradiction at all.

Why is the figure put in at 4 per cent.—which is equivalent to 2 per cent. on the whole—only? I will tell your Lordships. It is because the higher figure that I wanted to put into the amendment was not acceptable to the noble Lord, Lord Bruce of Donington, who has great current accountancy experience—mine is a little out of date—and he, with his usual generosity and soft-heartedness towards the Government was not prepared to listen to arguments from me that the figure should be a minimum of 5 per cent., so it has gone down at 4 per cent. We have to have regard for one another's views. The noble Lord is in practice at present whereas I have long since ceased to practise. Therefore his experience is more up to date than mine, and that is why we have the figure of 4 per cent. That figure of 4 per cent. is a minimum; indeed it is. The figure proposed by the Goverment is a figure which virtually means that this new company would start off with an inflated price, inflated by Government action in the past—and would continue with that price plus RPI with the sole exception of 1 per cent. per annum knocked off to cover the whole of its possible increase in efficiency. That is a push for inefficiency of a kind which I hope your Lordships will not accept. Therefore, I hope that the House will agree to incorpo-rate this in the statute.

Lord Harmar-Nicholls

My Lords, I would not pretend to understand the technicalities behind this amendment. I have hardly understood a word about the X factor and so on, taken in the context of the whole of the amendment, but there are parts of this that I am entitled to say that I do understand.

The noble Lord, Lord Bruce of Donington, made a big point that one had to leave room for variation. The noble Lord said that his amendment left room for variation, that all it had to do was to come back to this House for approval of a regulation supporting the change, and that was it.

The one little bit I do know about it is this. If it is admitted on all sides (and my noble friend also made the point) that you have to anticipate the possibility of variation, and if before you can arrive at any variation, as is shown in the X value paragraph, there must be consultation with the supplier, the Gas Users Council and the trade unions in industry, and if you want a speedy decision, or a reasonably speedy one, on a variation that is seen to be necessary (and all sides have said they think that situation is likely) it has to go through that gamut, there is no question of getting a speedy change.

When you are running a big industry—or a little one for that matter—you often meet situations where speed is important, where you need to give a decision on something, and certainly you must give a decision on what you are going to charge for your product. So, to my mind, from my knowledge of Parliament and what goes on when one has to consult with trade unions and consumer councils, the whole of this amendment means that you are not likely to be able to meet the needs as speedily as desired.

My final word is this. I think it is positively ridiculous to expect an assembly like this to be able to give a reasonable decision on a matter of this sort of technical detail. It is a positive nonsense to think that for one minute, even if we were to put this amendment into the statute. I doubt whether many of my noble friends or noble Lords opposite know what it is all about. Why should they know about something as technical and detailed as this?

So, what do we come to? We come to what are the real motives of those who are moving the amendment and those who are resisting it. Those motives have to be taken into account. We know that the noble Lord, Lord Bruce of Donington, the noble Lord, Lord Diamond, and many noble Lords who would support these amendments if they were pushed to a vote are against privatisation in any circumstances. We know that they want to use parliamentary procedures to avoid privatisation and—

Lord Diamond

My Lords, the noble Lord is absolutely wrong and I should be grateful if he would withdraw. We have explained many times that we are governed by the Second Reading. We have stated what our views are and all the amendments coming from these Benches are directed towards introducing competition and improving efficiency in the new privatised gas industry.

Lord Harmar-Nicholls

My Lords, if the noble Lord will forgive me, I have sat with him for 36 years in another place and here—

Baroness Seear

My Lords—

Lord Harmar-Nicholls

May I just answer this question first, because it is rather personal? I have sat with the noble Lord and gone through this sort of exercise again and again and, if he will allow me to say so—and I have a great respect for him: we are friends outside as well as inside—it is not what he says that I pay attention to, but what he does. And what he has done in relation to this Bill leaves me in no doubt that he does not want this industry privatised and all his moves are in the direction of trying to prevent its being privatised. Certainly I will give way.

Baroness Seear

My Lords, if I may say so, the noble Lord, Lord Harmar-Nicholls, has overlooked the fact that since the day when he sat in another place with my noble friend, my noble friend has suffered a sea change, and a very good one. He has joined the Alliance, which in no circumstances is opposed to the idea of privatisation as such. What we are concerned about is protection for the consumer and that is why we support this amendment. This is privatisation making a private monopoly, and it is the monopoly element that we oppose, not the privatisation element. This amendment is about trying to protect the consumer by ensuring that there is efficiency and that the benefit of that efficiency goes to the consumer. The noble Lord must not recall the regrettable past of my noble friend; he must look at his entirely acceptable and agreeable present.

Lord Harmar-Nicholls

My Lords, if I may reply to the noble Baroness on that, I concede that the noble Lord now sits on a different Bench from that when I first knew him. I have not seen such a change as the noble Baroness describes but I am prepared to kill the fatted calf for him yet. I have not seen in his actions or in the way he approaches the politics and the economics of this country so great a change as the noble Baroness seems to think has taken place.

What I am saying is that we cannot be expected to understand the details of this. I think it is a nonsense to pretend that we in an assembly such as this are in a position to put such a provision directly into a statute. But, since they do not want privatisation and we do, at the end of the day it becomes a battle of the experts. The noble Lord will have had his experts advising him. My noble friend will have his own experts. One is against it and the other is for it, both on grounds of principle, but in view of the fact that I believe in privatisation I shall believe the advisers to my noble friend. That is why I would not vote for the noble Lord's amendment.

Lord Belstead

My Lords, it is clear from the intervention of my noble friend Lord Harmar-Nicholls—to whom I am grateful because I very much agree with much of what he said—that we differ on the basic principle of the Bill: namely, the privatising of British Gas. That said, though, I should have thought there was one thing on which all parts of the House could agree. That is that this Bill gives an opportunity to produce an idea—in this case it is the formula—for giving an undertaking to the ordinary customer, the tariff consumer, that he or she is going to be protected so far as the monthly bills for gas are concerned.

Indeed, it is because we feel very deeply that this is what we need to do that the formula which is in the licence intended for British Gas in the future has one very simple thing in it—even though it runs to a lot of pages, just as this amendment does. That is, it gives to the tariff consumer a guarantee that prices will not rise above the formula which has been put into the licence. Indeed, if British Gas step out of their ground and if they were inadvertently to get their sums wrong in any year or were in any way, also inadvertently, to overcharge, two major safeguards are included in this formula. One is that the Director General of Gas Supply can step in and set prices for the subsequent year. The other is that, before he feels he has to do that, what is called a correction factor can be taken forward in the interests of the consumer to the subsequent year; it is said that the public gas supplier has overcharged and therefore a correction factor of 3 per cent. shall operate on the gas price for the subsequent year, to the detriment of the public gas supplier but very much to the advantage of the customer.

One thing I have been very interested to see is that—I know this has happened inadvertently because the noble Lord, Lord Bruce, and the noble Lord, Lord Diamond understand these things whereas my mathematics are not very strong—entirely inadver-tently they have decimated the correction factor in their splendid Amendment No. 156, so that instead of giving the customer a 3 per cent. advantage over the market rate for a correction if British Gas were to overcharge in any year, they have so applied the correction factor K that I do not think it would actually work at all for the future. But that is by the way.

Let us come to the real reasons for this amendment. If I may say so, they are basically two. The first is that both noble Lords have made it clear—and they have been quite consistent in this at all stages of the Bill—that they would like to see the formula written into the Bill. Let me briefly explain why it is in the licence. It is because we genuinely believe that if it were necessary in the interests of the customer to change any aspect of the price formula, not to mention other things in the authorisation, you would have to come back to Parliament with a new Bill if you insisted on putting the authorisation into the Bill.

I was disturbed when the noble Lord, Lord Diamond, said that so far as this price formula—the guarantee to the customer—was concerned, in fact it could just be changed by a flick of the fingers. With great respect to the noble Lord, I would part company with him on that. If the noble Lord cares to look at the licence, he will see that what has to happen is that British Gas, no sooner than five years, has the right to go along to the director and say, "We should like to have a change to the price formula" or to anything else in the authorisation. The director has to consider the matter and then has the right to go to the Monopolies and Mergers Commission to decide whether it would be in the interests of the customer, because, let us not forget, we have taken enormous trouble to see that both the director and the Monopolies and Mergers Commission have the customer very much in mind in discharging their duties on anything concerned with this Bill.

So if the noble Lord will forgive my crossing swords with him on this point, what is known as the disapplication provisions of the price formula can come into effect only if the effect of making a change will be in the interests of the customer. We have to get that absolutely clear—

4 p.m.

Lord Diamond

My Lords, I am grateful to the Minister. Is the Minister therefore saying that Clause 23, which provides for modification by agreement, does not apply to the price formula, which is part of the authorisation? The first part of Clause 23 states, the Director may modify the conditions"— it does not exclude anyone— of a public gas supplier's authorisation. It then goes on to point out that that has to be done by agreement.

Lord Belstead

I am inviting the noble Lord to look at page 19 of the licence. This is one of the occasions when there is an advantage in the licence not being in the Bill. The noble Lord is troubled because he is reading from Clause 23. We are not looking at Clause 23 at the moment. We are looking at the licence and I am saying to the House that, under the terms of the licence, it is necessary to go through the various steps that I set out to your Lordships and it could never be against the interests of the customer that we would find a change being made in the price formula. That is the first thing that the amendment is about. Incidentally—and I realise that both noble Lords are trained accountants and they feel that the factor is not correct—there is a 2 per cent. factor because there is a divisor of 100 in the authorisation.

Very briefly, I should like to say thank you to my noble friends Lord Sanderson of Bowden and Lord Harmar-Nicholls, who both then made the point that if one looks at the amendment one sees a pretty uninviting alternative. If your Lordships care to look at the top of page 4 of the Marshalled List, you will see that the alternative of noble Lords opposite is that the efficiency factor, which is to work for the benefit of the individual customer, will be a value to be determined each year after consultation with the supplier, the Gas Consumers' Council and the trade unions in the industry.

As my noble friend Lord Sanderson of Bowden asked: how much beer and sandwiches will have to be consumed before you get a quadripartite agreement on an efficiency factor which, under this amendment, will have to be agreed not for a period of, say, five years ahead, but every single year, so that the poor, old tariff customer will never know from year to year what the agreement will be? That is one point in reply.

The other point is that we think that 2 per cent. is right for a very simple reason deriving, again, from what my noble friend said. If you are talking about an inflation rate which is low in single figures, which the present Government have spent so much effort trying to achieve, and when you consider that British Gas has a very good efficiency record compared to the targets which it has been asked to achieve in the nationalised regime, then, if there is an efficiency factor of 2 per cent. which will run for a period of years, there must be a law of diminishing returns over the amount of efficiency which the organisation can achieve as the years go by.

I suggest to your Lordships that on the two grounds of the fact that the efficiency factor will run for, I trust, a period of years and certainly, I trust, will not be agreed annually, and that it is in the context of, mercifully, a low inflation rate at the present time, and, I trust for the foreseeable future, then the figure which has been reached after very close scrutiny by my right honourable friend is the right one and it is the one which ought to remain in the formula.

Lord Bruce of Donington

My Lords, I am most grateful to the noble Lord for having replied to the points that I ventured to lay before your Lordships. Since the noble Lord, Lord Harmar-Nicholls, with his usual felicity, was good enough to make reference to what he conceived to be my motives, may I say to him immediately that he does not criticise from a point of advantage and may well care to take into account the fact that he himself admitted, when he ventured to discuss this amendment, that he did not understand it anyway? May I suggest that in future the noble Lord confines his natural and disarming modesty to himself and does not necessarily project his own feelings and his own sensibilities on to others?

The noble Lord, Lord Sanderson of Bowden, was kind enough to emphasise—and I am very pleased that he did—my approval of ordinary individuals acquiring shares in companies. In order that he may not have to reassert my belief in that, I unhesitatingly affirm that that is the case. I should be very glad if the majority of our citizens had sufficient funds at their disposal to enable them to save in this way—because saving is all it is. It is not owning and controlling.

If the noble Lord will look at the information made available by British Telecom, he will find that the foreign ownership of shares in British Telecom, by value, is roughly seven times as great as the value of shareholdings held by individuals in this country. But I give the noble Lord the point. He has no need to re-emphasise it. I entirely agree with individuals having sufficient funds to be able to save in whatever way they like, whether in building societies, in equity shares or in anything else under the sun.

Lord Sanderson of Bowden

My Lords, by leave of the House, may I say that I am sure the noble Lord, Lord Bruce of Donington, will be delighted to know that the number of private people in this country who now own shares has risen by 16 per cent? There has been a very substantial increase over the last 18 months.

Lord Bruce of Donington

My Lords, I accept for the moment what the noble Lord has said, but it is not really relevant to the argument. I felt bound to reply to the noble Lord, in order to avoid the necessity of him reminding me in the future of my own feelings on this subject.

As regards the reply of the noble Lord, Lord Belstead, I must say that I am disappointed. If I heard him correctly, he made a point about beer and sandwiches and about how long it would take for agreement to be arrived at between the supplier, the Gas Consumers' Council and the trade unions. If the noble Lord had read the amendment carefully he would know that a value has to be determined after consultation. It does not necessarily mean after agreement between all the parties concerned. Consult-ing is consulting.

I know that the Government are not disposed to adopt this course of action very often, because they have to do what they do in accordance with she who must be obeyed. We know that there is very little consultation in these matters. But that is all its amounts to, and it certainly does not produce beer and sandwiches in the way that the noble Lord has suggested. In any case this applies only if a rate below 4 per cent. is anticipated.

The noble Lord has still given no explanation of why he rejects the 4 per cent. and prefers the 2 per cent. Perhaps I may also remind the noble Lord that in addition to the funds made available for dividend by the increases in efficiency which he himself has evaluated, there is the further factor that during the years that lie ahead—and the noble Lord can correct me if I am wrong—the amount of the gas levy which at the moment enters into the price that the consumer pays is to be progressively reduced and ultimately eliminated. If I am wrong, perhaps the noble Lord will tell me; but certainly under the original Act there is a phased reduction in the amount of the Government's gas levy. Is it not right that the consumer should have the benefit of this?

There are minor differences between the noble Lord, Lord Diamond, and myself, which he has described. Between us we arrived at an admirable compromise of 4 per cent. which I think is very reasonable in all the circumstances. I am surprised that the Minister cannot accept it.

But the most important point of all is the incorpo-ration of this part of the authorisation in the Bill. The noble Lord reinforced it once again. He was given a chance to say that Clause 23 of the Bill had some impact in regard to the matter, but, being honest, once again he referred to the authorisation. The authorisation is the real bible for him in this whole question, and he has not assured the House, and he cannot assure it, that the authorisation cannot be altered without the prior consent of the House. He knows that quite well. The proposed authorisation has already been changed. There is no reason why, after the passage of this Bill, it cannot be changed without Parliament's consent.

We think this is wrong, particularly in the case of a private monopoly. We therefore reiterate the argument. We think that this is the honourable course, the one that gives the noble Lord the flexibility he requires in all the remaining parts of the authorisation, but singles out this one point to put into the Bill, and it will lead to the legitimate protection of the British public. The British public will have cause for regret if this part of the authorisation does not go into the Bill. I am very sorry indeed that the noble Lord and some of his supporters at any rate cannot give this amendment the support that it deserves. Therefore I regret that I must press this amendment to a Division.

4.13 p.m.

On Question, Whether the said amendment (No. 156) shall be agreed to?

Their Lordships divided; Contents, 93; Not-Contents, 125.

DIVISION NO.2
CONTENTS
Airedale, L. Kilbracken, L.
Amherst, E. Kilmarnock, L.
Ardwick, L. Kirkhill, L
Attlee, E. Leatherland, L.
Aylestone, L. Listowel, E.
Banks, L. Llewelyn-Davies of Hastoe, B.
Barnett, L. Lloyd of Kilgerran, L.
Birk, B. Lockwood, B.
Blease, L. Longford, E.
Blyton, L. Mackie of Benshie, L.
Boston of Faversham, L. McNair, L.
Bottomley, L. Milford, L.
Briginshaw, L. Mishcon, L.
Brockway, L. Molloy, L.
Bruce of Donington, L. Morton of Shuna, L.
Caradon, L. Mulley, L.
Carmichael of Kelvingrove, L. Nicol, B.
Cledwyn of Penrhos, L. Oram, L.
Crawshaw of Aintree, L. Phillips, B.
David, B. Ponsonby of Shulbrede, L.
Davies of Penrhys, L. [Teller.]
Dean of Beswick, L. Prys-Davies, L.
Denington, B. Ritchie of Dundee, L.
Diamond, L. Rochester, L.
Donaldson of Kingsbridge, L. Ross of Marnock, L.
Elwyn-Jones, L. Scanlon, L.
Ennals, L. Seear, B.
Ewart-Biggs, B. Shackleton, L.
Ezra, L. Shepherd, L.
Falkender, B. Silkin of Dulwich, L.
Fitt, L. Soper, L.
Gallacher, L. Stallard, L.
Gladwyn, L. Stoddart of Swindon, L.
Glenamara, L. Strabolgi, L.
Graham of Edmonton, L. Taylor of Mansfield, L.
[Teller.] Tedder, L.
Grey, E. Tordoff, L.
Grimond, L. Underhill, L.
Hampton, L. Wallace of Coslany, L.
Hanworth, V. Walston, L.
Hatch of Lusby, L. Wedderburn of Charlton, L.
Hayter, L. Wells-Pestell, L.
Hirshfield, L. White, B.
Hooson, L. Wigoder, L.
Houghton of Sowerby, L. Williams of Elvel, L.
Hunt, L. Wilson of Rievaulx, L.
Jeger, B. Winterbottom, L.
Jenkins of Putney, L.
NOT-CONTENTS
Abercorn, D. Craigavon, V.
Bauer, L. Craigmyle, L.
Beaverbrook, L. Cullen of Ashbourne, L.
Belhaven and Stenton, L. Davidson, V.
Beloff, L. De Freyne, L.
Belstead, L. Denham, L. [Teller.]
Bessborough, E. Derwent, L.
Birdwood, L. Dilhorne, V.
Blyth, L. Drumalbyn, L.
Boyd-Carpenter, L. Dundee, E.
Brabazon of Tara, L. Ellenborough, L.
Brentford, V. Elliot of Harwood, B.
Broxbourne, L. Elton, L.
Bruce-Gardyne, L. Fanshawe of Richmond, L.
Burton, L. Fortescue, E.
Caithness, E. Gainford, L.
Cameron of Lochbroom, L. Gardner of Parkes, B.
Campbell of Alloway, L. Glanusk, L.
Campbell of Croy, L. Glenarthur, L.
Carnegy of Lour, B. Gray, L.
Carnock, L. Gridley, L.
Cathcart, E. Hailsham of Saint
Coleraine, L. Marylebone, L.
Constantine of Stanmore, L. Halsbury E.
Hardinge of Penshurst, L. O'Brien of Lothbury, L.
Harmar-Nicholls, L. Orr-Ewing, L.
Harvington, L. Pender, L.
Henderson of Brompton, L. Penrhyn, L.
Henley, L. Perth, E.
Hives, L. Peyton of Yeovil, L.
Home of the Hirsel, L. Plummer of St Marylebone,
Hooper, B. L.
Hunter of Newington, L. Rankeillour, L.
Hylton-Foster, B. Renton, L.
Killearn, L. Rochdale, V.
Kimball, L. Rodney, L.
Kinloss, Ly. Rugby, L.
Kinnaird, L. St. Davids, V.
Knollys, V. Sanderson of Bowden, L.
Lauderdale, E. Selbourne, E.
Lindsey and Abingdon, E. Selkirk, E.
Long, V. [Teller.] Shannon, E.
Lucas of Chilworth, L. Sharples, B.
Luke, L. Skelmersdale, L.
McAlpine of Moffat, L. Soames, L.
McFadzean, L. Somers, L.
Macleod of Borve, B. Stodart of Leaston, L.
Mancroft, L. Strathcarron, L.
Margadale, L. Sudeley, L.
Marsh, L. Swinton, E.
Masham of Ilton, B. Terrington, L.
Massereene and Ferrard, V. Teynham, L.
Maude of Stratford-upon- Thorneycroft, L.
Avon, L. Thurlow, L.
Melville, V. Tranmire, L.
Mersey, V. Trenchard, V.
Milverton, L. Trumpington, B.
Montgomery of Alamein, V. Vaux of Harrowden, L.
Morris, L. Vickers, B.
Mottistone, L. Vivian, L.
Mowbray and Stourton, L. Whitelaw, V.
Murton of Lindisfarne, L. Wise, L.
Newall, L. Wolfson, L.
Nugent of Guildford, L. Wynford, L.

On Question, amendment agreed to.

4.21.p.m.

[Amendments Nos. 157 and 158 not moved.]

Lord Brabazon of Tara moved Amendment No. 159:

Page 77, line 18, leave out ("in writing").

The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 133.1 beg to move.

Lord Gallacher moved Amendment No. 160:

Page 77, line 19, at end insert ("seek an order from the relevant court to—").

The noble Lord said: My Lords, this amendment is concerned with the problem of those for whom paying gas bills presents great difficulty, which I presume includes many of us, as well as of those who are unable to pay, which unfortunately includes some of us. The purpose of the amendment is to change Schedule 5 to the Bill so that before cutting off a customer's supply British Gas plc would be obliged to seek an order from the relevant court.

The problem of bad debts has been aggravated by the times in which we live, and particularly by such factors as insecurity of employment and the granting of credit too easily—especially hire-purchase credit, which is consequently too dear as a result. It should be said that, so far as concerns the present situation, the vast majority of gas consumers are good payers. The British Gas Corporation, as it now is, is sympathetic to the minority of people who are not good payers. That is evidenced by its code of practice relating to non-payment of accounts.

However, we feel that it is not sufficient simply to use the weapon of disconnection rather than to seek a court order. In the year 1984–85, one-third of a million gas consumers, I am advised, were disconnected. A public limited company may take a different attitude towards poor payers from that which British Gas has taken hitherto. Such a company may feel obliged or even justified in being tougher with its customers than was the British Gas Corporation. That toughness may manifest itself despite the extensive powers given to British Gas plc in the Bill to require security for connection in the first place, as detailed in Clause 11.

If the amendment were to be accepted and a court order was required before disconnection, then it is argued that the court would have regard to the relevant circumstances surrounding the debt. The mere procedure of seeking a court order may itself prompt some debtors to pay before the hearing. In Amendment No. 160 we use the phrase "relevant court" because we feel that it leaves open which court is to be used and would allow for possible changes in the court system for debt claims that may take place in the future. It also takes care of the position in Scotland, where a different court system operates. However, we are not adverse to spelling out the names of the courts in which action might be taken if the sponsors of Amendment No. 160 wish to pursue that course.

British Gas already has powers to take customers to court under the Gas Act 1972. However, it rarely uses those powers and, as will be seen from the figures I have already given, British Gas seems to prefer to choose disconnection, with the consequential high deposit that is required of consumers for reconnection after their supply has been cut off. The purpose of the amendment is to force British Gas plc not to recover debts but simply to spell out to debtors a procedure that is clear, and so that even-handedness will apply in the distressful situations that sometimes arise as regards bad debts. I beg to move.

Baroness Gardner of Parkes

My Lords, I oppose this amendment very strongly as I believe that it would create a cumbersome, time-consuming and expensive procedure that would rebound on all gas consumers. It is essential for the gas authority to retain disconnection as the ultimate way of dealing with non-payment. As I have mentioned at previous stages of the Bill, in the energy industry bad debts are one of the really great worries. I have already quoted the case of the electricity industry, which has millions of pounds of bad debts in the London area alone.

In this country, there is a proportionately small number of disconnections. I think I misheard the noble Lord, because I thought he mentioned a figure of something like a quarter of a million disconnections. I would ask the noble Lord to correct me if I am wrong, but I was listening to his speech and I understood him to mention a total of a quarter of a million disconnections last year. I do not believe it was anything like that number.

We in this country have a very small number of disconnections compared with other countries in the world. That is because we have an admirable code of practice whereby every care is taken to ascertain the reason why there is non-payment before anybody's supply is disconnected. A person who has difficulty in paying their account and who discusses with one of the energy authorities how he or she might gradually pay off the debt is given every opportunity to do so. Disconnection is a weapon that has to be used when a person evades payment in every possible way. Such evasion cannot be allowed, because when it is evasion gradually builds up, with other people copying to the point where huge debts accumulate of the kind that now exist in Southwark, where the council is not collecting council rents and is millions of pounds out of pocket.

Another point that deserves comment is the suggestion that a huge deposit is asked for upon reconnection. That is only the case if a person who has a very bad history of non-payment, and who has had to be disconnected, again requests a credit meter. However, if such a person is prepared, as is usually the case, to change to a prepayment meter, then no deposit is requested. That is the most usual course of action. With a DHSS case, a fuel direct payment is made, and again there is no difficulty. So there is plenty of social assistance available to the person who is in real need. It is absolutely essential to deal with bad payment by means of disconnection, and the court procedure would be intolerable.

4.30 p.m.

Lord Bruce-Gardyne

My Lords, I entirely agree with everything that my noble friend Lady Gardner of Parkes said in objecting to this amendment. It seems to me that there is one relevant piece of evidence which we might have if possible, and it is this. The noble Lord, Lord Gallacher, said that once British Gas went into the private sector it would suddenly transform itself into a wicked, free-booting, entrepreneurial affair, disconnecting everyone on sight and at the drop of a hat—and I paraphrase the implication of what the noble Lord said.

The fact is that we have a precedent for this situation in the shape of British Telecom. All sorts of allegations have been made against British Telecom since it passed into the private sector—most of them, so far as I can make out, wholly without foundation. But so far as I am aware, there is one allegation which has not been made; that is, that British Telecom has gone round in all directions cutting off everyone's telephone. I am not aware that there is any evidence whatever that British Telecom in the private sector has been any more insistent and impatient to disconnect telephones because of non-payment of bills than when it was in the public sector. I admit that I can see no earthly reason why British Gas should be expected to transform its behaviour in a way that British Telecom has not.

The basic objection to this amendment is, of course, that it would mean that the additional cost which would result from delays in obtaining settlement of bills by British Gas would inevitably be carried by the other users of the service and the system. Once again, therefore, I am bound to say that we have evidence of the anxiety of the Benches opposite to load the burdens on the consumer, and I cannot believe that that is in the interests of either British Gas or the public in general. Therefore, I hope that the House will resist the amendment.

Lord Diamond

My Lords, we are always grateful to the noble Baroness, who speaks with great knowledge, authority and experience which the rest of us do not enjoy, about what is happening at present in the nationalised gas industry. It is very encouraging to hear what she has to say and to learn how concerned are the Government with the interests of the consumer. That is excellent.

The noble Lord, Lord Bruce-Gardyne, asks why the successor company should change its skin. We see no reason why it should. We just want to make sure that it does not by making provision in the Bill (as there is a Bill going through Parliament) to see that the existing good practices, of which the noble Baroness reminded us, continue.

The noble Lord, Lord Bruce-Gardyne, says that there is no reason to suspect that, so why bother at all? In that case, why have any legislation at all if there is no reason for suspicion? Why have all this business of a huge authorisation with dozens of conditions? Why have a formula as to price? Why not leave it that the industry charged reasonably in the past and will continue to charge reasonably in the future, knowing that there is a great commercial drive to satisfy the customer? You do not make a profit unless you have happy customers; so why not leave it to the normal commercial motives?

But we do not. We take great care in the Bill, in many clauses, and with many conditions in the authorisation, to provide for the eventuality that there will be a change of mind—possibly not until there has been a change of personnel, but that will happen year after year. Therefore, we must provide for that.

The noble Lord, Lord Bruce-Gardyne, says that there is no evidence that British Telecom is doing anything very different from what happened before privatisation. There is considerable evidence. There have been a considerable number of complaints about certain changes in free services, and there have been a considerable number of complaints on other matters. We know that the level of complaints has more than doubled since British Telecom was privatised. I do not have a breakdown of the figures, but I hope that the Government do and can therefore tell us whether the complaints include complaints about prices or whether—as I have previously said in the Chamber and as I mention again in order to be perfectly fair—increase in complaints is due not to increased misdoings on the part of British Telecom, but merely to an increased awareness among consumers that they now have rights of complaint which they were not aware of previously. We shall not know until there has been an analysis. All I can say is that, superficially, the complaints have doubled.

Lord Bruce-Gardyne

My Lords, I am grateful to the noble Lord, Lord Diamond, for giving way. I think he must have misheard what I said. I said that I accepted that there was evidence of a considerable number of complaints about the conduct of British Telecom in the private sectior. I ventured to say that the evidence suggested that most of the complaints were entirely without foundation. However, what I queried was whether there was any evidence whatsoever—

Lord Campbell of Alloway

My Lords, are we not on Report?

Baroness Gardner of Parkes

My Lords, my noble friend should ask leave of the House to speak again.

Lord Diamond

My Lords, I took it that the noble Lord, Lord Bruce-Gardyne, was intervening to correct a fact. As far as I am aware, every noble Lord is allowed to challenge any other noble Lord on a question of fact without asking the leave of the House, and so I acquit the noble Lord of any discourtesy.

We are back to the fact that there has been a great increase in the number of complaints. Until the Government are good enough to give us a breakdown of that number and we know the precise causes we can only assume that there has been an increase in the number of complaints because there has been an increase in the number of dissatisfied customers. Those are the reasons why we think it better to have this provision in the Bill—I see that noble Lords and the noble Baroness are conversing and I do not want to intervene in a private discussion—and why we are very much concerned to see that the present attitude continues and that there should be an order from the court before there are rare or frequent (whichever it is) decisions to cut off supplies.

May I ask the Minister whether he finds it convenient that we proceed according to the list of groupings, or whether, as we have started on this one amendment, we should stick to it?

Lord Belstead

My Lords, I think we should stick to the groupings, if your Lordships are prepared to do that; otherwise we shall be constantly chopping and changing.

Lord Diamond

My Lords, I am grateful to the Minister because, as I understand it, the House will find it convenient to discuss with Amendment No. 160 my Amendments Nos. 160A, 160B and 160C. Except for Amendment No. 160C, these provide an alternative to the wording suggested by the noble Lord and cover very much the same ground. The amendments suggest that an order should be sought from the court to cut off a supply. The question of expenses is covered in the same way as in the Bill. Amendment No. 160B is consequential.

I say immediately to the noble Lord, Lord Gallacher, that there is nothing between us as to whether or not we spell out the individual courts. I thought it convenient to set them down, and they can be corrected or omitted. In sub-paragraph (7) of Amendment No. 160B the obligations to pay the expenses of reconnection is repeated.

Amendment No. 160C is of a rather different character. It states: There is a duty on all suppliers of gas to provide an adequate network of facilities for payment of bills and access to information and advice". We have touched on this question previously. I think we touched on it at about nine o'clock in the morning after a fairly extended sitting in your Lordships' Chamber, and I do not think that everybody was at the top of their form at that hour. Of course, the Government would have been, but I am hoping that they have reconsidered the view that they then took, which was that they sympathised with the amendment but thought that what was in the authorisation was adequate and there was no reason to put it in the Bill. I think that was the only major difference between the two sides of the Committee on that point. I hope that they will now take the view that it is very important that the facilities should be provided and should be seen to be provided.

There is no difficulty if this goes into the Bill. There is no long-term restriction or difficulty about it. For all time there should be: a duty on all suppliers of gas to provide an adequate network of facilities for payment of bills", and for all time they should provide, access to information and advice". This is not something that will change with changing circumstances, and therefore it is far better that it should be incorporated in the Bill itself rather than be left to a variable—I repeat, variable—authorisation.

As we are discussing this question of authorisation, perhaps I may say to the noble Lord that, as I understand it—and I must preface my remarks in that way—the Bill itself is very clear. Clause 23, which is the clause to which I was referring, provides for the modification of the authorisation by agreement between the director and the gas supplier. What the noble Lord was saying on a previous amendment does not alter one word of that. It is far better that we should understand this from the start and know where we are. We are discussing a Bill which is based on having one single gas supplier—one single gas supplier, nobody else—for the whole of the country, for all normal households, tariff customers; and that one supplier is entitled and required to do everything that is set out in the authorisation.

It is most important to know what that one supplier will do. The terms of the authorisation have therefore been published, but they are altering—they have altered since we started our discussions. I am making the point that they can be altered at any time in the future by either the various processes to which the Minister referred, or—and I shall be grateful if the Minister will contradict me if I am wrong—Clause 23, simply by the agreement of the director and the public gas supplier. The clause states: Subject to the following provisions of this section"— which sets out the detail— the Director may modify the conditions of a public gas supplier's authorisation". It is provided that there shall be agreement between the two of them.

I think that is really very straightforward, and we should bear it in mind. I hope therefore that I have made clear the purpose of the amendments standing in my name. In the meantime I strongly support the amendment which is at present before your Lordships' House.

4.45 p.m.

Lord Belstead

My Lords, let me just set at rest the mind of the noble Lord, Lord Diamond, on a matter which does not have anything to do with this amendment: as I said before, the authorisation cannot be changed in a way which would be detrimental to the interests of the consumer. The noble Lord mentioned Clause 23. It is true that changes to the authorisation can be made, but it must be by agreement between the director and the public gas supplier. As the noble Lord will well know, the very first duty of the director under Clause 4(2) is to consider the interests of customers and consumers. That must come at the top of his list.

Turning now to this amendment, with very great respect to the noble Lord, because I think he is the one who made the assertion, we are not talking here of whether we are putting something in the licence or in the Bill. The rules about whether one can cut off anyone's supply of gas have been in the law for about 100 years. They have not been in a licence; they have been in the statute law. If your Lordships care to look at the Bill, you will see that there they are again in Schedule 5. It is a very long schedule, but the situation is just the same as it has always been for years and years. So we are not talking about that.

We are talking about the attempt which is being made in these amendments to say that before the gas supply of anybody can be cut off the supplier has to go to court. As my noble friend Lady Gardner of Parkes said, this entails some real difficulties. The obvious difficulty is that going to court takes time. It is not like trying to have a sanction against someone who has a hire purchase arrangement on a television or a refrigerator, for instance. While one is waiting to go to court, the gas meter is clocking up and a very considerable debt can begin to accumulate.

In addition, there is the question of how many times the public gas supplier would have to go to court—which was the essence of my noble friend's point. As I understand it, there are more than 34,000 disconnections every year in Great Britain, and there is no question but that the weight of work on the courts would greatly increase. Having said that, let us remember that nonetheless the customer has some protection from the courts in the event of a considered disconnection. Where a defaulting customer refuses a supplier entry for the purposes of disconnection, there must be an application for a magistrate's warrant under the terms of the Rights of Entry (Gas and Electricity Boards) Act 1954. Before granting a warrant a magistrate must be satisfied that access is reasonably required, that a right of entry exists, and that the requirements of the enactment conferring the right have been complied with.

So the customer is by no means prevented from having the protection of the courts. The Government are saying: why should we change the statute law which has been the same for about 100 years in this matter, and suddenly bring into play the full rigour of the courts every time it is, sadly, necessary to consider a disconnection?

There is one last observation that I should like to make. In this group of amendments we have Amendment No. 160C, in the name of the noble Lord Lord Diamond, which would require, all suppliers of gas to provide an adequate network of facilities for payment of bills and access to information and advice". I assume that means showrooms. We can do better than that. As your Lordships may remember, the industry introduced a code of practice on paying electricity and gas bills, and under the terms of its licence British Gas will be required to continue to observe that code. It has already stated its intention to maintain the existing code, which gives particular protection to elderly and disabled people during the winter months.

If I may say so, I think that my noble friends Lord Bruce-Gardyne and Lady Gardner were right to be suspicious of these particular amendments. I think that they would change the law (which has been in existence for a very long time) in a way that would not be reasonable. I do not think it would be reasonable to the gas supplier, nor to the customer, nor to the courts. On those grounds I resist the amendment.

Lord Gallacher

My Lords, I have listened with interest to the Minister's reply and to the speeches in opposition to this amendment. First of all, I should say that when I quoted the figure relating to the number of disconnections, I quoted accurately the figure given to me covering the two years 1984 and 1985 It is significantly less than the figure quoted by the Minister, and I shall make further inquiry regarding the figures that I have. It may be that included in my disconnections are electricity disconnections; that may explain the discrepancy, but I shall certainly look into it.

As to the cost of implementing the proposal in the amendment, one cannot rule out of consideration of the matter some future restructuring of court costs and the claim that the consumer movement has repeatedly made that there is room in the country for small claims courts. Indeed, successful exoperiments have been made with small claims courts, where disputes can be resolved amicably and at considerably less cost than in either the county court or the High Court. That is one reason why we used the phrase "relevant court" in the amendment.

It is also wrong to assume that because a case is taken to court—if it gets there, that is—the court will necessarily take a legalistic and severe view of the debtor. It is within my knowledge that in many instances the court takes a sympathetic view and is sometimes able to make an arrangement between the debtor and the creditor which to some extent may be more favourable than would be the case if the creditor acted within his rights, which are given to him in this case in a schedule to the Bill.

Although the noble Lord said that there is the traditional right to apply to the magistrate for warrants in order to enter to disconnect etc., in the schedule as it now stands there is no mention of court action and the emphasis is totally on disconnection at the discretion of the public gas supplier. In addition to that, the question of reconnection is very much within the discretion of the public gas supplier. And the charge that the public gas supplier is entitled to make for reconnection, on the assumption that he decides to do it, is also at his discretion, although the phrase "reasonable expenses" is used. That, as we well know, may mean different things to different people.

We are not seeking in the amendment, as the noble Lord, Lord Bruce-Gardyne, indicated, to threaten consumers. On the contrary, we are seeking to give them additional protection. The noble Lord said that he was paraphrasing my remarks. All I can say is that I hope that I am not around when he is criticising them.

It appears to us that the right of court action which British Gas has under the 1972 Act is being given up, or, if not, it is certainly not spelt out in the Bill as clearly as it was in the 1972 Act. If its debt position is getting difficult, a public company may make certain decisions. I am aware of commercial decisions and would not wish to constrain British Gas as a plc from being any less commercial in its decisions on bad debts as any other public company. I am well aware that too lenient an attitude may lead to a situation which is finally an embarrassment and to a considerable trading loss.

It would be reasonable and fair to keep the provision in the Bill and to give the court the opportunity to adjudicate where bad debt claims arise. Even if administered generously, the mechanism of disconnection may prove hard for people who find themselves, often through no fault of their own, as I say, in that position. I am not talking about the habitual debtor but those who come upon hard times and difficult days. In such cases courts can sometimes do things which may not be possible in the normal creditor/debtor relationship. Nevertheless, I take note of what the Minister said, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Speaker (Lord Nugent of Guildford)

My Lords, Amendments Nos. 160A, 160Band 160C not moved.

Lord Diamond

On the contrary, my Lords.

The Deputy Speaker

Amendment No. 160A, my Lords—Lord Diamond.

Lord Diamond

My Lords, I spoke to this amendment because it was the wish of the Minister who is in charge of the Bill at the moment that it should be discussed with the other amendment. We all know that that is in the discretion of the mover and of nobody else. May I ask him whether, as a result of that co-operation, I am to be denied the right, which I otherwise would undoubtedly have had, of replying, as the mover of the amendment?

Lord Belstead

My Lords, as the noble Lord knows, we have developed a system of grouping amendments in your Lordships' House. The Government provide suggested groupings on a sheet of paper. We try to do it the day before the debate. It is given, first of all, to all the parties. Provided that the grouping is agreed—and the noble Lord is the leader of his party—it is put in the office. Even then, noble Lords individually can depart from it if they so wish when they come to their amendments. If the noble Lord wishes to say, "I do not like the grouping. This is not the way that I wish to do it", nobody can prevent him. When we came to this group, which was to be Amendments Nos. 160, 160A, 160B and 160C, the noble Lord was good enough to ask me whether it was my wish that we should stick to the group. I said I thought that it was better that we should That is the way that we dealt with it In those circumstances, there is a right of reply for the noble Lord who moves the original amendment but not for noble Lords who have their names down to the other amendments.

Lord Diamond

My Lords, I am grateful for that ruling

Lord Belstead

Interpretation, my Lords.

Lord Diamond

My Lords, one would have to take advice to see whether it is correct. It is an encouragement to Members of your Lordships' House not to agree to grouping, as you deny yourself the right of reply But there is an opportunity for any noble Lord to say "By leave of the House, I should like to respond to the Minister's reply, as I should have been entitled to had I not agreed to the grouping that he suggested" I agreed to the grouping and on my own initiative suggested that we should agree to it, and so let me say, with the leave of the House, that I am sorry that the Minister's comments on the amendments were based on a misunderstanding.

I hope that I may have this attention, because this may affect our future arrangements The misunderstanding arose from the fact that we are trying to put dissimilar amendments together to discuss them at the same time The desire on all sides is to save time But Amendment No 160C is of a different character, and it was with regard to that one and not to the others that I was saying that the provision should be in the Bill It is not in the Bill or in the schedules That was the only point I wanted to make on that.

On the other amendments, I sought to say that we should have regard to the court The noble Lord replied to that in two rather contradictory answers. First, he said that going to the court would hold up everything Secondly, he said that there was no need to put the provision in the Bill because there is already power to go to the court I never find—

The Deputy Speaker

My Lords, I think I should interrupt the noble Lord There is nothing in front of the House The noble Lord, Lord Gallacher, asked leave to withdraw Amendment No 160 and leave was given The implication of the remarks of the noble Lord, Lord Diamond, is that he wishes to move one of his amendments I therefore propose to call the amendments one by one That will give him a chance to move whichever he wishes and to put himself in order to make the speech with which he is proceeding. I call Amendment No 160A, Lord Diamond.

Lord Diamond had given notice of his intention to move Amendment No. 160A:

Page 77, leave out lines 20 to 23 and insert—

("(a) seek an order from the court to cut off the supply to the premises by disconnecting the service pipe at the meter (whether the pipe belongs to the supplier or not) or by such other means as he thinks fit, and

(b) if such an order is granted recover any expenses incurred in so doing from the customer.")

The noble Lord said: My Lords, I am most grateful to the Chair. The amendment was previously called and I said that I was moving it. That is why I ventured to address remarks to the House, which I am now concluding. Although I am not persuaded by the Minister's two contradictory arguments, it is not our desire to press the amendment to a Division. It was our desire to highlight the difficulties that arise because a reference to the court is not a clear provision in the Bill. I am sorry that the Minister has not been persuaded by the arguments of either the noble Lord, Lord Gallacher, or myself. There is nothing further that I want to do about it, and so I beg leave to withdraw the amendment.

The Deputy Speaker

My Lords, the amendment has not yet been moved, and so the amendment is not moved.

[Amendment No. 160A not moved. ]

[Amendments Nos. 160B, 160C and 161 not moved. ]

5 p.m.

Lord Stoddart of Swindon moved Amendment No. 162:

Page 79, line 37, at end insert—

("Emergency service safety

  1. .—(1) The supplier shall provide an effective and continuously attended service for the receipt by telephone of reports of escapes of gas supplied, or believed to be supplied, by the supplier. Effective arrangements shall also be made for the receipt at the suppliers points of contact during their normal working hours of such reports made in person. The supplier shall by appropriate means secure that adequate publicity is given to the ways it can be contacted for the purpose of reporting such escapes.
  2. (2) The public gas supplier shall make safe all escapes of gas whether by cutting the supply of gas or otherwise, free of charge. Where repairs are associated with a supply of gas, the first half hour of work associated with that repair shall be carried out without charge to an individual tariff customer.

The noble Lord said: My Lords, as noble Lords will recall, a similar amendment, Amendment No. 103A, was moved at Committee stage. But in fact the amendment now before us differs from that amendment in some respects. I can perhaps remind noble Lords that the last sentence of Amendment No. 103A at Committee stage read: Where repairs are associated with a supply of gas, the first half hour of work associated with that repair shall be free of charge".

My new amendment, in its last sentence, says: Where repairs are associated with a supply of gas, the first half hour of work associated with that repair shall be carried out without charge to an individual tariff customer".

So there is a difference. I have sought to tighten up the amendment in the hope that the noble Lord, Lord Belstead, will be able to accept it. The new wording specifies that only tariff customers would be entitled to the half hour's repair work without charge—that is, without charge to him as an individual. The free service would not extend to larger customers; it would be confined to the tariff customer.

We had a long discussion about the matter at Committee stage. I do not propose to go over the same ground again except to emphasise that this service is available at the present time. I also wish to remind the House that at Committee stage the noble Lord, Lord Gray, remarked that British Gas had said that it intends to continue its present policy. My point is that although British Gas may give the assurance at this stage, there is no guarantee that such an assurance will be honoured in the future by a privatised British Gas. The composition of the board will undoubtedly change. With it, so may policies. There will be all sorts of different pressures on the board of a privatised British Gas, including pressure to maximise profits for distribution to shareholders. As we know, British Telecom is now to charge for repairs to the 999 system out of normal hours. We fear that the same will happen in the case of the emergency safety service and the first half hour's work without charge to the individual consumer.

The safest course is to include this provision in the Bill. I hope that the noble Lord will be sympathetic. He can lose nothing at all. I have no doubt that his brief, at the top, says, "Resist". I hope that he will resist the "Resist". The amendment makes no difference, or very little difference, to the Bill. I would go further and say that if the noble Lord has difficulty about including it in the Bill, I would accept an assurance that he will include the words in the revised authorisation—that is, in Condition 11 dealing with the emergency service. It would be good to have this additional provision in the Bill to safeguard the customer. If the noble Lord is prepared either to accept the amendment or to agree that it should be put in the authorisation, he will engender goodwill on this side of the House. I am sure that at this stage of the Bill the noble Lord wants to do that—and we want him to do it.

I appeal, therefore, to the Minister either to say to the department, if it is advising him to resist, that he will not accept its advice and that he will accept the amendment, or at least to give an undertaking that he will amend Condition 11 of the authorisation in the way that I suggest. I beg to move.

Lord Belstead

My Lords, this amendment is all about providing an emergency service to deal with escape of gas and British Gas is called out to deal with the escape. If the escape is on British Gas's side of the Bill iself. Paragraph 13 of Schedule 5 requires a public gas supplier to prevent escapes of gas or make safe. When we discussed this in Committee it was explained from this side that where a statutory duty is placed on a body and no statutory provision is made for charging, that body must carry out the obligation free of charge. Schedule 5 says nothing about charging in this respect.

I wish to say first, therefore, that there can be no question of customers being charged if they suspect an excape of gas and British Gas is called out to deal with the escape. If the escape is on British Gas's side of the meter—that is to say, it is in the supply network up to the house, and, indeed, up to the meter that may very well be under the stairs—then British Gas must undertake work both to prevent the escape and to maintain supplies to the customer without making any charge. This applies however long the work takes.

In addition, we have put a new obligation into the Bill. It is that British Gas, if this Bill becomes law, must deal with escapes of gas on the customer's side of the meter; that is, in the home. This has never been in must make the installation safe on the customer's side of the meter without charge, however long this takes. If, however, the escape if from an appliance belonging to the customer that needs repair work done before it can be operated safely, then, of course, it is for the customer to ask British Gas or any other competent repairer to do the work. It would not be sensible to require in the Bill that British Gas has to do all those repairs free of charge, since this would be an unreason-able and open-ended obligation.

As we discussed in Committee, British Gas currently operates the policy of not charging for the first half hour of repair work done during a call to deal with an escape. It is this point that the noble Lord wants the Government to put into the Bill. The Government have explained previously that this half hour policy will continue after privatisation. I understand that the chairman of British Gas is going to make this clear to the Secretary of State. I take the opportunity to put this on the record now. I have tried to explain that the law as it stands gives very comprehensive protection for the consumer so far as free protection after an escape of gas is concerned; that we have put a new obligation in the Bill for British Gas to deal with escapes of gas on the customer's side of the meter; and that British Gas must make the installation safe without charge however long this takes. To want to put this additional provision in the Bill as the noble Lord does is asking more than I am prepared to offer. I repeat the assurance which has been given, but to put that in addition onto the face of the Bill is a matter to which I cannot respond.

If British Gas fails to carry out its obligations properly it is guilty of negligence. Then the normal remedies for such negligent action are available to customers who might have suffered damage. This is referred to in Clause 28(3) and becomes very important indeed if there were to be some major disaster. However, let us remember that we are talking in the context of an industry which has taken very great care and has a good record. I am sorry that I cannot go all the way to meet the noble Lord but I hope that the assurances I have given have convinced your Lordships that the protection provision for the escape of gas is very reasonable as it is on the face of the Bill.

Lord Somers

My Lords, on a point of information, can the noble Lord say whether British Gas will be responsible for the repairs to systems that are already installed in a house before the date of denationalisation?

Lord Belstead

My Lords, yes. If the noble Lord, Lord Somers, glances at Schedule 5, paragraph 4, he will see that there are, not surprisingly, duties laid on the customer to treat the pipes in the house in a reasonable way. It is therefore not possible for complete neglect to take place—not reporting that rust is forming, or something of that kind—and to expect after a catastrophe that the customer should get off scot free. Under Schedule 5 there is a duty on the customer to do his bit. However, in that context the answer to the noble Lord is, yes.

Lord Stoddart of Swindon

My Lords, I thank the noble Lord for the assurances that he has given but I am afraid that we remain divided about this. I am sorry that he has not been able to come some way towards meeting what I asked for. He said that the chairman of British Gas has been in touch with the Secretary of State and has assured him that this service will be continued; that is, as long as he is the chairman. His assurance can last for only three years, since he will be the chairman for only three years.

As an alternative I asked the noble Lord—I understand his difficulties about accepting it in the Bill—whether these words could be tagged on to Condition 11 of the authorisation, which the amendment repeats. The last sentence says: Where repairs are associated with a supply of gas, the first half hour of work associated with that repair shall be earned out without charge to an individual tariff customer". If the noble Lord had only assured me that he would tag those words on to paragraph 2 of Condition 11 I would have been able to withdraw this amendment and honour would have been satisfied on all sides: the honour of the Gas Corporation, the Secretary of State, the noble Lord, Lord Belstead, and my own. It was such a simple request. I am sorry that he was not able to accept it. Because I feel so strongly about it, he has forced me into a position where I shall have to divide. But he still has the chance to get up now and say, "Let us put it in Condition 11".

Lord Belstead

My Lords, I have spoken twice but if the House, just this once, will allow me to speak a third time very briefly I will say this. The Bill is continuing the law as it exists at the present time except that we are taking an extra step forward and putting into statute the fact that on the customer's side of the meter—in other words, in the home—there will be a statutory duty in future for British Gas to make safe after an escape. That is a free service, although, as I have explained, the half-hour business comes in if there is other work to be done. It is the half-hour business on which the noble Lord is pressing me. The noble Lord is being reasonable, as he has been throughout our consideration of the Bill. I entirely understand the reason why he says that if we could have put it into the licence there could have been agreement here. But, on behalf of the Government, I am trying to say that we are going further in statute than any Government has gone before. I am repeating an assurance which the chairman of British Gas is giving to my right honourable friend, that the entirely non-statutory assurance which has been given up to now will be continued for the future.

Talking of honour, the chairman and the board of British Gas will become the chairman and the board of the new plc. Knowing their integrity, I am absolutely sure that their assurance will be honoured by the new company.

Lord Stoddart of Swindon

My Lords, I accept the honour of the chairman of British Gas, but, as I said, he will be there for only a limited period of time. I do not know that I am allowed to speak any further on this. I must, I am afraid—regretfully, as a matter of fact—press the amendment.

5.16 p.m.

On Question, Whether the said amendment (No. 162) shall be agreed to?

Their Lordships divided; Contents, 87; Not-Contents, 125.

DIVISION NO.3
CONTENTS
Airedale, L. Kilmarnock, L.
Ardwick, L. Kirkhill, L.
Aylestone, L. Lawrence, L.
Banks, L. Leatherland, L.
Barnett, L. Llewelyn-Davies of Hastoe, B.
Blease, L. Lloyd of Kilgerran, L.
Blyton, L. Lockwood, B.
Boston of Faversham, L. Longford, E.
Bottomley, L. Mackie of Benshie, L.
Bowden, L. McNair, L.
Briginshaw, L. Masham of Ilton, B.
Brockway, L. Meston, L.
Brooks of Tremorfa, L. Milford, L.
Bruce of Donington, L. Molloy, L.
Caradon, L. Morton of Shuna, L.
Carmichael of Kelvingrove, L. Nicol, B.
Chitnis, L. Northfield, L.
Cledwyn of Penrhos, L. Oram, L.
Crawshaw of Aintree, L. Phillips, B.
David, B. Ponsonby of Shulbrede, L.
Davies of Penrhys, L. [Teller.]
Dean of Beswick, L. Prys-Davies, L.
Diamond, L. Rhodes, L.
Donaldson of Kingsbridge, L. Rochester, L.
Elwyn-Jones, L. Ross of Marnock, L.
Ennals, L. Scanlon, L.
Ewart-Biggs, B. Seear, B.
Ezra, L. Sefton of Garston, L.
Fitt, L. Shepherd, L.
Gallacher, L. Silkin of Dulwich, L.
Gladwyn, L. Stallard, L.
Glenamara, L. Stoddart of Swindon, L.
Graham of Edmonton, L. Strabolgi, L.
[Teller.] Taylor of Blackburn, L.
Grey, E. Taylor of Gryfe, L.
Grimond, L. Taylor of Mansfield, L.
Hampton, L. Tordoff, L.
Hanworth, V. Underhill, L.
Hatch of Lusby, L. Wallace of Coslany, L.
Hayter, L. Walston, L.
Houghton of Sowerby, L. Wells-Pestell, L.
Hunt, L. White, B.
Irving of Dartford, L. Williams of Elvel, L.
Jeger, B. Wilson of Rievaulx, L.
Kilbracken, L.
NOT-CONTENTS
Abercorn, D. Coleraine, L.
Airey of Abingdon, B. Colville of Culross, V.
Alexander of Tunis, E. Constantine of Stanmore, L.
Bauer, L. Craigavon, V.
Belhaven and Stenton, L. Craigmyle, L.
Beloff, L. Cranbrook, E.
Belstead, L. Cullen of Ashbourne, L.
Bessborough, E. Davidson, V.
Blyth, L. Denham, L. [Teller.]
Boston, L. Derwent, L.
Boyd-Carpenter, L. Digby, L.
Brabazon of Tara, L. Drumalbyn, L.
Brougham and Vaux, L. Dundee, E.
Broxbourne, L. Eccles, V.
Bruce-Gardyne, L. Eden of winton, L.
Burton, L. Ellenborough, L.
Butterwoth, L. Elliot of Harwood, B.
Caithness, E. Elliott of Morpeth, L.
Cameron of Lochbroom, L. Elton, L.
Campbell of Alloway, L. Erroll of Hale, L.
Campbell of Croy, L. Fanshawe of Richmond, L.
Carnegy of Lour, B. Feversham, L.
Fortescue, E. Murton of Lindisfarne, L.
Gardner of Parkes, B. Nugent of Guildford, L.
Geddes, L. O'Brien of Lothbury, L.
Glanusk, L. Orkney, E.
Glenarthur, L. Orr-Ewing, L.
Gray, L. Pender, L.
Gridley, L. Penrhyn, L.
Hailsham of Saint Peyton of Yeovil, L.
Marylebone, L. Plummer of St. Marylebone,
Halsbury, E. L.
Hardinge of Penshurst, L. Portland, D.
Harmar-Nicholls, L. Rankeillour, L.
Henley, L. Renton, L.
Hives, L. Ridley, V.
Hooper, B. Rochdale, V.
Hunter of Newington, L. Rodney, L.
Hylton-Foster, B. Rugby, L.
Keith of Castleacre, L. St. Aldwyn, E.
Killearn, L. St. Davids, V.
Kimball, L. Salisbury, M.
King of Wartnaby, L. Sanderson of Bowden, L.
Kinnoull, E. Selborne, E.
Knollys, V. Selkirk, E.
Lauderdale, E. Sharpies, B.
Layton, L. Skelmersdale, L.
Lindsay, E. Soames, L.
Lindsey and Abingdon, E. Somers, L.
Long, V. Stodart of Leaston, L.
Luke, L. Strathcarron, L.
McAlpine of Moffat, L. Sudeley, L.
McFadzean, L. Swansea, L.
Macleod of Borve, B. Swinton, E. [Teller.]
Mancroft, L. Terrington, L.
Margadale, L. Teviot, L.
Maude of Stratford-upon Teynham, L.
Avon, L. Tranmire, L.
Mersey, V. Trumpington, B.
Milverton, L. Vaux of Harrowden, L.
Montagu of Beaulieu, L. Vickers, B.
Montgomery of Alamein, V. Vivian, L.
Mottistone, L. Wynford, L.
Mowbray and Stourton, L. Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

5.25 p.m.

Lord Diamond moved Amendment No. 162 A:

Page 79, line 44, at end insert ('" and it is hereby declared for the sake of removal of doubt that such preventative action shall be at the expenses of the supplier. ")

The noble Lord said: My Lords, I beg to move Amendment No 162A. I hope it will be for the convenience of the House if, with this amendment, there can be discussed the two following amendments in my name, Amendments Nos. 162B and 162C.

On the issue of discussing amendments, perhaps I may make one further point to the noble Lord who is in charge of the Bill. There is no difficulty whatever about agreeing groupings. The noble Lord slightly misunderstood me on the last occasion. I share the view that, within reason, groupings are helpful to the discussion, and save time. But I put to the noble Lord, Lord Belstead, a question which perhaps he will be good enough to consider at his leisure. Here we have three amendments in my name. Having moved the first amendment and having spoken to the other two amendments, I have the right to reply to the one debate on all amendments. Therefore, where a grouping of amendments takes place in the name of one noble Lord, that noble Lord has his full unrestncted right, without seeking the leave of the House, first, to move the first amendment and to speak to all the amendments, and, secondly, to reply to the debate on all the amendments.

However, on a previous occasion one had a grouping of amendments which comprised an amendment moved by one noble Lord and three other amendments moved by other noble Lord. The second noble Lord found himself in the position that, having merely spoken to those other amendments, the first noble Lord had the right of reply and the other noble Lord, who had consented to the grouping, had no such right, as interpreted by the noble Lord, Lord Belstead, who I think is right.

This therefore raises the problem of what we do about groupings: do we group merely the amendments of one noble Lord or do we alter the interpretation? I leave it to the noble Lord the Minister. I am sure that he has taken the point, and I am sure that he will be good enough to look at the matter at his leisure during the very long Recess which we shall all enjoy.

The amendment which I move is to be inserted at the end of line 44 on page 79 of the Bill. Line 44 is still the same provision in Schedule 5 regarding the prevention of escapes of gas, and deals with the problem of who is to pay. The amendment states: and it is hereby declared for the sake of removal of doubt that such preventative action"—

it should read "preventive" action; it is a misprint— shall be at the expenses"—

and again there is a misprint; it should read "expense"— of the supplier".

We have accepted that it is a proper statement of the law that, where there is a statutory obligation which says nothing to the contrary, the person upon whom that obligation is placed is the person who has to foot the expense. That we have accepted. The noble Lord the Minister has said that that is the situation, and we have no wish to challenge it.

However, in a previous debate we tried to make it clear that that is not a matter of general knowledge. We made it clear that we, my noble friend Lord Ezra and myself, for example—and I now refer to col. 1108 of 5th June—regarded ourselves as normal individuals, and we did not understand that. We believe it is reasonable to assume that masses of other gas consumers will not automatically understand it, either, and therefore it should be stated. Therefore, we have this amendment, which is a declaratory amendment which removes any doubt about it and is put in merely for that reason, that such preventive action shall be at the expense of the supplier".

I hope that the noble Lord will accept this amendment. It does no more than make the same knowledge available to all. There are all sorts of people who will want to know, and who will not know without consulting counsel, as to what is the effect. We know from letters that we have had from citizens advice bureaux, and so on, that this is the kind of question that they are being asked from time to time, and how are they to turn up anything and find the answer? If they have the Act they turn up the relevant section and the Act says, if your Lordships accept the amendment, what I am proposing. It is helpful and makes matters clearer if this amendment is accepted.

We then come to the other two amendments which are grouped but which are really different matters. They are grouped because they refer to the same subsection. Amendment No. 162B is that on page 80, in line 1, we should, leave out ('twelve') and insert ('eight')".

If your Lordships will be good enough to refer to page 80, line 1, it is on the same question of prevention of escapes of gas. As at present drafted, the Bill proposes: If a public gas supplier fails within twelve hours from being so informed effectually to prevent the gas from escaping, he shall be guilty of an offence and liable on summary conviction to a fine".

He is allowed 12 hours, and if he does not do it within 12 hours he is liable to a fine. It is treated as a criminal offence. Therefore, one has to allow plenty of leeway.

We suggest that 12 hours is not leeway but an inducement to the corporation to be casual. This is because—and this was asserted and accepted in our previous discussion—the target time is two hours, and that is the average time taken. It is two hours, not 12: not even eight hours, as proposed in the amendment, but two hours. The difference between two hours and eight hours is adequate. If one left it at 12 hours one would be encouraging the inadequate response to alarms about escaping gas.

Why is the figure of 12 hours put in? It is for no good reason. It is in the Bill, but for no good reason. It is merely half of the 24 hours that used to be provided. It used to be 24 hours, and now the Government propose 12 hours. That is a step in the right direction, but one ought to go a little further and think about it more carefully.

Therefore, I suggest that eight hours should be provided. I know that it is a criminal offence and that one has to err on the safe side in terms of not fining people unnecessarily, but there is a double escape here. The following subsection says: In any proceedings for an offence under sub-paragraph (2) above it shall be a defence for the Public gas supplier to prove that it was not reasonably practicable for him effectually to prevent the gas from escaping within the said period of twelve hours".

Therefore, if he did his best and failed to prevent the escape within 12 hours—perhaps the roads were blocked by snow and he tried and could not get there—he would not be guilty of an offence. He is covered.

We need not take too much care about fining a gas supplier for not dealing with an escape, because if he does his best and tries he is not liable in any event. It is only when he does not do his best, and when he does not do his best there is a limit in the Bill of 12 hours, there is a target time of two hours, and eight hours is the fullest amount one should allow if one does not want to encourage sheer disregard of escapes. I beg to move.

Lord Brabazon of Tara

My Lords, regarding Lord Diamond's first amendment, No. 162A, I think my noble friend Lord Belstead covered most of the ground on that when he said on the last amendment that, where a statutory obligation is created, the person on whom the obligation falls must foot the bill unless specific provision is made for the recovery of costs.

The noble Lord, Lord Diamond, in his amendment seeks to give publicity to this, and I accept that that is necessary. That is why we have it in Condition 11 of the authorisation, where paragraph 2 says: The Supplier shall make available when requested by any person details of its emergency service, stating that the Supplier will make safe, whether by cutting off the supply of gas or otherwise, free of charge all escapes of gas", etc. Therefore, the point in the first amendment is satisfactorily covered without need for the amendment.

Turning to the question of the response time, as the noble Lord pointed out we are in this Bill already reducing the response time by half, from 24 hours to 12 hours. The noble Lord seeks to reduce it still further to eight hours. I am afraid that I cannot agree to that. The fact is that British Gas have stated, quite rightly—and given an assurance to the Secretary of State which covers safety services including the emergency service—that they will continue their current practice of aiming to respond to uncontrolled escapes in fact within one hour (not two hours) of being informed, and that with escapes which have been controlled—for example, by the customers themselves switching off at the meter—they will aim to respond within two hours.

My only argument with the noble Lord on this amendment is the question of it being a criminal offence. We have already halved it from 24 hours to 12 hours. I think that is certainly not an inducement to be casual on the part of British Gas, and we have every assurance that they will not be casual. As they are going into the private sector it is in their own commercial interests not to be casual, because they want to promote their fuel to the consumer as being safe, and they want to honour their commitment. Therefore, I hope that the noble Lord will agree to withdraw these amendments.

Lord Bruce of Donington

My Lords, I have one small query. The noble Lord indicated that paragraph 2 of Condition 11 in the revised authorisation covered substantially the point made by the noble Lord, Lord Diamond, when he moved the amendment, that, it is hereby declared for the sake of removal of doubt that such preventive action shall be at the expense of the supplier. I listened carefully to the noble Lord when he made his response, and the impression I got from his reply was that that point was already covered under paragraph 2 of Condition 11 of the revised authorisation. It may be that I was wrong, but I am bound to inform the noble Lord that paragraph 2 of Condition 11 reads as follows: The Supplier shall make available when requested by any person details of its emergency services, stating that the Supplier will make safe, whether by cutting off the supply of gas or otherwise, free of charge all escapes of gas which it supplies"— and then this is the crucial wording— and the extent to which a customer may be liable for the costs of repairs associated with an escape". On reflection, does the noble Lord still say that paragraph 2 of Condition 11 in the revised authorisation covers the first amendment put forward by the noble Lord, Lord Diamond?

Lord Brabazon of Tara

My Lords, with the leave of the House, yes, the first amendment put forward by the noble Lord, Lord Diamond, was a way to secure publicity for this service which is outlined in Condition 11. I am saying that it is there already.

Lord Diamond

My Lords, these are unhelpful replies. We have been into this area before and the Minister merely repeats the arguments used on a previous occasion, when we are making quite different points and are relying on his objections on a previous occasion to secure the good will of the Government by meeting those objections and putting forward amendments accordingly on a different basis. It was said previously that it was clear what the law was and that there was no need to state it. We said it was not clear and that we should state it, and therefore we put it in the Bill merely as a declaratory proposition. It cannot hurt anybody to have it in the Bill in that sense.

Moreover, as the noble Lord, Lord Bruce, says, the provision contained in Condition 11 is not the same. It is a provision which merely says that a certain part of the expense of stopping the escape will be borne by the supplier and a certain part will be borne by the customer, and the extent to which a customer may be liable for the costs of repairs associated with an escape. So it is not the same thing. What we want to do is to secure the continuing rights of the consumer. It is in the interests of all of us—all flat dwellers, for example, whether they are above or below escaping gas in a block of flats—that the escape should be ended at the earliest possible moment. Therefore, it is right that it should be fully known and incorporated in the Bill itself. It is an act in the public interest, and should be covered by a statutory obligation. It is not very helpful when the Minister merely continues to rely on what he has said previously.

In relation to the period, I am delighted to hear how that the period had gone down by half since we last discussed it. When we last discussed it two hours were stated. It is now in Hansard as the target period, and it is now one hour. I am delighted to hear that, and it shows how reasonable is the figure that I put forward. To move from one hour to eight hours is surely enough time to cover any eventuality. The Minister did not spend one moment on dealing with this argument, but as the Bill says it does not matter how long you take, you do not commit an offence if you do your best to stop the leak. The Minister said nothing about that, and there it is written into the Bill. I read it out to your Lordships. There is adequate and full cover for the eventuality that the gas company is prevented through forces of nature or in some other way from carrying out its obligation. In those circumstances, eight hours is surely sufficient.

I am therefore suggesting to the House that one should show one's unhappiness about the lack of concern shown by the Government by taking one of these amendments to a Division. I should not want to bother the House about two of them because the point I want to make is as much an expression of dissatis-faction with the Government's continuing refusal to have regard to any amendment, however helpful, however much it meets previous difficulties and previous doubts. It is part of the purpose of the vote to put that to the test. Therefore, I think the best thing would be to vote against the first amendment and to let the other two go.

5.45 p.m.

On Question, Whether the said amendment (No. 162A) shall be agreed to?

Their Lordships divided; Contents, 79; Not-Contents, 110.

DIVISION NO.4
CONTENTS
Airedale, L. Hunt, L.
Ardwick, L. Irving of Dartford, L.
Aylestone, L. Jeger, B.
Barnett, L. Kilbracken, L.
Blease, L. Kilmarnock, L.
Blyton, L. Kirkhill, L.
Boston of Faversham, L. Leatherland, L.
Bottomley, L. Llewelyn-Davies of Hastoe, B.
Bowden, L. Lockwood, B.
Briginshaw, L. McNair, L.
Brockway, L. Milford, L.
Brooks of Tremorfa, L. Mishcon, L.
Bruce of Donington, L. Molloy, L.
Caradon, L. Morton of Shuna, L.
Carmichael of Kelvingrove, L Mountevans, L.
Chandos, V. Nicol, B.
Chitnis, L. Phillips, B.
Cledwyn of Penrhos, L. Ponsonby of Shulbrede, L.
Crawshaw of Aintree, L. Prys-Davies, L.
[Teller.] Rhodes, L.
David, B. Ritchie of Dundee, L.
Davies of Penrhys, L. Rochester, L.
Dean of Beswick, L. Ross of Marnock, L.
Diamond, L. Scanlon, L.
Donaldson of Kingsbridge, L. Seear, B.
Elwyn-Jones, L. Sefton of Garston, L.
Ennals, L. Shepherd, L.
Ezra, L. Silkin of Dulwich, L.
Fitt, L. Stallard, L.
Gallacher, L. Stoddart of Swindon, L.
Gladwyn, L. Taylor of Blackburn, L.
Glenamara, L. Taylor of Gryfe, L.
Graham of Edmonton, L. Taylor of Mansfield, L.
[Teller.] Tordoff, L.
Grey, E. Underhill, L.
Grimond, L. Wallace of Coslany, L.
Hampton, L. Walston, L.
Hanworth, V. Wells-Pestell, L.
Hatch of Lusby, L. White, B.
Hayter, L. Wilson of Rievaulx, L.
Houghton of Sowerby, L.
NOT-CONTENTS
Abercorn, D. Davidson, V.
Alexander of Tunis, E. Denham, L.
Bauer, L. Derwent, L.
Belhaven and Stenton, L. Drumalbyn, L.
Belstead, L. Eden of Winton, L.
Blyth, L. Ellenborough, L.
Boston, L. Elliot of Harwood, B.
Boyd-Carpenter, L. Elliott of Morpeth, L.
Brabazon of Tara, L. Elton, L.
Broxbourne, L. Fanshawe of Richmond, L.
Bruce-Gardyne, L. Feversham, L.
Burton, L. Gardner of Parkes, B.
Butterworth, L. Geddes, L.
Caithness, E. Glanusk, L.
Cameron of Lochbroom, L. Glenarthur, L.
Campbell of Alloway, L. Gray, L.
Campbell of Croy, L. Hacking, L.
Carnegy of Lour, B. Hailsham of Saint
Carnock, L. Marylebone, L.
Coleraine, L. Hardinge of Penshurst, L.
Colville of Culross, V. Harmar-Nicholls, L.
Constantine of Stanmore, L. Harvington, L.
Craigavon, V. Henderson of Brompton, L.
Craigmyle, L. Henley, L.
Cranbrook, E. Hives, L.
Cullen of Ashbourne, L. Hooper, B.
Hunter of Newington, L. Portland, D.
Hylton-Foster, B. Rankeillour, L.
Kimball, L. Renton, L.
King of Wartnaby, L. Rochdale, V.
Knollys, V. Rodney, L.
Lauderdale, E. St. Aldwyn, E.
Lawrence, L. St. Davids, V.
Layton, L. Salisbury, M.
Lindsay, E. Sanderson of Bowden, L.
Lindsey and Abingdon, E. Selborne, E.
Liverpool, E. Selkirk, E.
Long, V. [Teller.] Sharpies, B.
McFadzean, L. Skelmersdale, L.
Macleod of Borve, B. Somers, L.
Mancroft, L. Stodart of Leaston, L.
Massereene and Ferrard, V. Sudeley, L.
Maude of Stratford-upon Swansea, L.
Avon, L. Swinfen, L.
Mersey, V. Swinton, E. [Teller.]
Milverton, L. Terrington, L.
Montgomery of Alamein, V. Teviot, L.
Mottistone, L. Teynham, L.
Murton of Lindisfarne, L. Tranmire, L.
Nugent of Guildford, L. Trumpington, B.
O'Brien of Lothbury, L. Vaux of Harrowden, L.
Orr-Ewing, L. Vivian, L.
Pender, L. Windlesham, L.
Penrhyn, L. Wise, L.
Peyton of Yeovil, L. Wynford, L.
Plummer of St Marylebone, Young, B.
L.

Resolved in the negative, and amendment disagreed to accordingly.

5.54 p.m.

[Amendments Nos. 162B and 162C not moved. ]

Lord Gallacher moved Amendment No. 162D:

Page 80, line 25, leave out paragraph 14 and insert—

  1. (a) by standing agreement with the other supplier, or
  2. (b) by charging that other supplier per call-out. ").

The noble Lord said: My Lords, Amendment No. 162D is concerned with paragraph 14 of Schedule 5, which is headed, "Information as to escapes of gas". We feel that the paragraph as drafted is in need of strengthening, and the purpose of the amendment is to delete the existing paragraph and to replace it entirely with the one which appears in the amendment. It seems to us that the paragraph as it stands places certain duties on a public gas supplier in respect of escapes of gas which are not his escapes but those of another gas supplier, whether public or otherwise.

Under the paragraph as drafted, if such escapes occur and it comes to the notice of a public gas supplier that they have occurred and he knows that they are not his escapes, all that the paragraph as drafted obliges him to do in order to escape responsibility is to pass the information on as soon as reasonably practicable either to the person who appears to the public supplier to be responsible or, in the case of an escape affecting the authorised area of another public gas supplier, to that other public gas supplier.

It seems to us that in this vital area of safety the duties which paragraph 14 currently impose are nowhere near strong enough, and certainly not strong enough from the point of view of protecting the general body of the public. They seem to be more concerned simply with stating the legal position of a public gas supplier who knows about an escape which is not involving his supply. Amendment No. 162D would in our opinion give better protection to the public because it would oblige the public gas supplier, as soon as he became aware of an escape of gas, not his, to take action in the matter and thereafter, having taken action in order to protect the public, to recover the costs of the action that he had taken in respect of emergency repairs either on the basis of a standing agreement with the other supplier or simply by charging that other supplier on a call-out basis. That seems to us to be preferable, to be better and to be safer. I hope that the Government will find it possible to accept it. I beg to move.

Lord Brabazon of Tara

My Lords, we touched on this in Committee. As was then pointed out, paragraph 14 is a new provision. It recognises that in future gas may be supplied by another company but that British Gas will remain by far the most familiar company in the mind of the public so that any escape might be reported to them. I am sure that with their experience British Gas can be relied upon in the circumstances to take whatever steps are appropriate.

In terms of resources, they will be by far the best equipped to deal with escapes. But I do not believe that it will be appropriate to tie the hands of British Gas now in establishing whatever arrangements seem best between themselves and any third party in the future. We have already effected significant improvements in the Bill in respect of the escapes provisions, and we do not feel that it is either necessary or appropriate to go further. The record of British Gas in this area is second to none, and as I think I said on the last amendment, they have a strong commercial interest in promoting gas as a safe fuel and in honouring their commitments. I hope, therefore, that the noble Lord will agree to withdraw this amendment.

6 p.m.

Lord Gallacher

My Lords, the noble Lord the Minister seeks to disarm me by telling me how good British Gas is in this area. That is not in dispute. The noble Lord the Minister seeks further to disarm me by telling me that after privatisation British Gas will be by far the largest public gas supplier; and that is not in dispute. What the noble Lord did not touch on was why, if it is necessary to make a provision of this kind in order to give information about escapes of gas, he considers paragraph 14 as currently drafted superior to the amendment we have put down. With due modesty, since I did not draft it, I think that the amendment we have put down is superior and will give the public better reassurances than they currently have. I do not doubt that in a situation in which there was an escape of gas not being the responsibility of British Gas plc they will take pretty prompt action to deal with it in the interest of the industry.

Nevertheless, the effect of paragraph 14 as currently drafted is the apportionment of liability, or the non-apportionment of liability, rather than, as it seems to us, any real sense of urgency so far as the protection of the public is concerned. In these circumstances I found the answer of the noble Lord the Minister mildly disappointing. One only hopes that the situation will never arise; but if it does, the record will show that an attempt was made to deal with it.

Having made that rather caustic observation which I hope the noble Lord the Minister will not worry about unduly—I know he will not—I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 163 to 165 not moved. ]

Lord Gallacher moved Amendment No. 166:

Page 82, line 46, at end insert—

("Services to consumers

  1. .—(l)The public gas supplier shall maintain in every area convenient points of contact for the consumer which shall sell appliances and offer services to customers including payment of bills, advice on installation and servicing of appliances, and advice on general energy matters as well as the use of gas.
  2. (2) The public gas supplier will offer advice on the purchase, installation and use of appliances, positioning of gas meters; servicing and safety checks and pass word schemes for the protection of the blind, free of charge to elderly and registered handicapped people.
  3. (3) The point of contact shall be available for lodging of complaints on all matters connected with gas whether or not arising directly from gas supply. The point of contact shall keep a record of all complaints received.
  4. (4) At the point of contact the supplier shall use his best endeavours to resolve complaints. If he is unable to do so he shall refer the matter to the local Trading Standards Officer If the Trading Standards Officer is unable to resolve such complaints, he shall forward the complaint to the Gas Consumers' Council. Both the supplier and the Trading Standards Officer shall forward any relevant documents together with the complaint to the Council. At all times the consumer will be kept informed. ")

The noble Lord said: My Lords, we return to the showroom question which we discussed in Committee and which we believe to be a subject of considerable importance to consumers and therefore worthy of reconsideration on Report.

The object of this amendment is to protect the existing service which showrooms offer to all groups of consumers because they are an integral part of the gas industry and as such, are used for rather more than the retailing of appliances. My advice is that at the present time only some 20 per cent. of the business conducted in showrooms relates to retailing. If that is an accurate figure, it shows they have a fairly wide use above and beyond the business of selling. The provision of showrooms by British Gas is particularly important in outlying and rural areas. That service has been of value to consumers and is regarded by them as an integral part of the gas business.

As currently constituted, however, it seems to us that the Bill is trying to reintroduce showroom closures by the back door, by the device of excluding them from the definition of the gas business. One purpose of the amendment is to include their continuity in statute without being unduly specific about location.

Although there is satisfaction with the showroom service at the present time, I am advised that the number of showrooms is declining and that of the 800 which exist at present, this represents a decrease of 100 by comparison with the position which existed in 1980–81. The amendment goes rather beyond that, or at least would seek an additional function for the gas showrooms above and beyond that which it currently undertakes. For example, we would wish to see showrooms available for use by customers not merely as a point of contact for service or the ordering of spares—and that is very important—but also, as the amendment proposes, as an area where advice could be given to the handicapped. It would serve also as a point at which complaints by customers involving British Gas plc might be considered. We think this takes on an even more important role because of the refusal of the Government to re-establish regional gas consumers' committees. I know a concession has been made on an earlier part of the Bill during the Report stage, but in our view, welcome as it is, it does not go far enough.

More important, however, we suggest that the showroom might be used as a place whereby complaints could be resolved without the necessity of channelling them to the Gas Consumers' Council, which will be a national body. To this end we suggest in sub-paragraph (4) of the amendment that if such complaints arise and are not capable of resolution between the customer and the spokesman for British Gas, the services of the local trading standards officer might be used at that stage to get the matter resolved; and by so doing it would take a considerable workload from the shoulders of the Gas Consumers' Council.

Your Lordships will see set out in sub-paragraph (4) the manner in which we think the machinery might operate. I believe that trading standards officers are willing to give this service because it represents an informal kind of arbitration which is often best conducted on the spot, and conducted at or about the time of the complaint, rather than being put into the procedural mill and reaching the national parties a long time after the complaint in question arose, when there may be difficulty in establishing the facts or the situation as it existed at the time. We feel that although we have already had a refusal on this from them, the Government might care to have second thoughts about it. For that reason I beg to move.

Lord Belstead

My Lords, the first sub-paragraph of this amendment seeks the maintenance in every area of a point of contact for the consumer, in other words, the continuation of existing showrooms. It is this commitment in the amendment which is not acceptable. Certainly it is quite clear that British Gas will wish to go on selling appliances, and they have already given an undertaking that showrooms will continue to offer full range of services covering all of the matters to which the noble Lord has referred in the amendment.

Your Lordships will also recall that the draft authorisation of British Gas is going to require the preparation of codes of practice on the services available to tariff customers and on the payment of bills. Therefore, there will be a strong incentive to develop services and to make available to customers as much information as possible. But that said, a provision, a duty to keep showrooms open even if they are uneconomic is something which we really cannot put in the Bill.

If I may quickly say so, I think there are good answers to almost all the rest of the amendment; for instance, the second sub-paragraph, which has a number of elements. Of course, it is a normal part of the activities of retailers of goods of whatever description to advise customers on the most suitable items to meet their needs and tastes. Particular considerations do, of course, arise, in relation to the installation and use of gas appliances. The new training initiative recently announced by the Health and Safety Executive with the publication for consultation of an approved code of practice on standards of training in safe gas installation, together with the creation of an independent, broadly based certification body, will do a great deal to improve standards in this area. British Gas, of course, offer full servicing facilities and an inexpensive five-point safety check to all customers. We have already talked a lot in this Bill about the elderly and the disabled, but I should like once again to reassure your Lordships that British Gas will continue to offer free safety checks to the elderly and the disabled.

The noble Lord also seeks to make showrooms the point of contact for complaints. I have no complaint about that, although I do not think it is reasonable to single out in statute British Gas, and British Gas alone, for statutorily having to have a complaints record.

Finally, as to sub-paragraph (4) of the amendment, the supplier will of course want to do his utmost to resolve complaints. We have provided in the Bill for comprehensive arrangements for the director and the Gas Consumers' Council to deal with the full range of complaints and, indeed, your Lordships will recall that the purpose of Clause 33 is to ensure the Gas Consumers' Council can investigate any complaint relating to appliances. I think it is unnecessary, therefore, to require, as the amendment does, that trading standards officers should act as an intermediary. I hope that what I have said shows that we can and will go a very long way in this Bill to meet what is wanted in this amendment; but to accept a duty that showrooms should be kept open in every area whether they are economic or not is something which I do not think we can put into the Bill.

Lord Ezra

Surely, my Lords, the underlying proposition of this amendment is that in every area in which a public gas supplier operates there should be publicised a point of contact to which the tariff customer could go to lodge his complaints, to seek advice or service or for other purposes related to the supply of gas. It seems to me this is a totally reasonable proposition which should appear either in the Bill or in the authorisation. If no point of contact is given, how is the consumer to be able to relate to the gas supplier in matters of day-to-day requirements and how can complaints be submitted first to the gas supplier before going to the consumer's council or being dealt with in other ways?

Lord Gallacher

My Lords, disappointment with the Minister's reply is well encapsulated in the speech made by the noble Lord, Lord Ezra. I think what the Minister fails to grasp is that British Gas plc is a different organisation. We have the feeling that the regional aspect of British Gas, with which the public has been familiar since 1948, even if it does not totally disappear—I refer to Segas and North Thames Gas and the various other regions up and down the country—and even if it is not physically dissolved (and we have been given assurances that this will not happen), is likely to be somewhat overshadowed by the fact that we are now to have a single company running the business.

To the extent what we fear is a sense of remoteness so far as consumers are concerned, and I must tell the Minister that we are not reassured by the way in which, although he has found some good things to say about the amendment, on balance he is unable to accept the propositions it contains. The idea that the public gas supplier shall maintain in every area a point of contact does not mean that, if there is a showroom in town A and it is felt by British Gas that that showroom would serve the area better if it were moved to town B, British Gas would be precluded from making such a switch. "Area" is not defined and it is a fairly wide term. Therefore, if on economic grounds British Gas decided that there was a better showroom with more space available—and that is often a major consideration in the retail trade—in another location, then we see the amendment as allowing that kind of change to take place. We would certainly not wish to inhibit British Gas from making improvements of that kind in its showroom network which ultimately would be to the advantage of the consumer.

While we appreciate that nobody these days, in retailing or anywhere else, can afford to carry on for too long showrooms which are not as profitable as they might be, 1 do not think that in the interests of customer relations it is stretching the potential claims upon British Gas' profits to suggest that at least the maintenance of these points of contact should rank alongside the fairly lavish advertising campaigns in which they indulge from time to time on television and elsewhere. Therefore, it seems to us that a physical arrangement of this kind is highly desirable for consumers and I cannot believe that British Gas, as it now is, would attempt to argue otherwise.

Similarly, in the matter of facilities for consumers, all that the Minister has said leads us to think that in point of fact the role for these showrooms is likely to be greater rather than less. If safety checks on a five-point basis and things of that kind are to be handled by British Gas through the showrooms, surely it would not be unreasonable to suggest that the showrooms might be given a place in the Bill and, by this process, seek to reassure consumers.

In dealing with complaints, the suggestion we make, that the trading standards officer might come into the picture at some stage, is a good one. I am aware that for a variety of reasons the Director General of Fair Trading is disenchanted with codes of conduct covering the service trades and that in point of fact he is contemplating their abandonment in favour of a legal obligation to be placed in a Bill which no doubt will come before your Lordships in due course, obliging all traders to trade fairly. I wish him joy in attempting to encapsulate that legal concept in a Bill. But, in the meantime, given the fact that we are not to have regional gas consumers' councils, and that therefore a complainant will in the normal way have to find his or her way to the Gas Users Council in London, I think this simple intermediate step, which could be provided at no great cost to anybody, would represent a gesture by British Gas in favour of a new method of dealing with customers' complaints—a method which is cheap for the customer and equally cheap for the supplier and which may very well set a pattern for the service trades as a whole. Therefore, taking all these things into account and bearing in mind the support I had from the noble Lord, Lord Ezra, for which I am grateful, I feel that we should test the opinion of the House on this amendment.

Lord Belstead

My Lord, with the leave of the House, may I just make one very quick observation? Noble Lords, for understandable reasons, have gone rather wider than I had expected on the amendment and they have started to talk about a complaints procedure. Let us remember that earlier on in our proceedings on this Bill the House has accepted an amendment from my noble friend Lady Gardner of Parkes which will ensure that it will be possible in future for there to be voluntary "trouble-shooters" for complaints for the Gas Users Council in districts and localities, in addition to the fact that there will be regional representation on the Gas Users Council as well. Therefore, with respect to the noble Lord, Lord Gallacher, if somebody in the future is going to have a complaint it will not be necessary to have to find someone in London to take on the complaint. There will almost certainly be district representation.

Lord Sanderson of Bowden

My Lords, I entirely endorse what my noble friend the Minister has said. Would the noble Lord, Lord Gallacher, not agree that we are dealing with the retail business? As he must know, if you are going out to sell things to the general public up and down the land you need points at which you can sell those things. It seems to me, if one studies the development of the retail trade in this country, as in any of the large stores and so on, that they must be responsive to customers up and down the land. That. I am sure, will be the intention of the new company. I know that many people do not like the terms "the market" or "market forces" and so on, but surely, if gas is to be successful in competition with other forms of energy, it must have a network which is effective and widespread.

Lord Diamond

My Lords, I agree entirely with what the noble Lord, Lord Sanderson, has just said. Of course there will, without any compulsion from a clause like this, be a development by the Gas Corporation of points of contact with the customer where it can sell its products and ideas. That is why this amendment puts no limit whatsover in its definition of "area" on the Gas Corporation. What it does do is to enable to happen the very thing the Minister says should happen.

The Minister has just reminded us that the noble Baroness, Lady Gardner of Parkes, has moved an amendment under which there will be a point of contact. There will be the volunteers who will be glad to help in dealing with complaints from members of the locality. My anxiety was to find out how the consumer would know. How would the consumer get at these persons? What was the answer given by the noble Baroness, Lady Gardner of Parkes? They would go to the gas showroom and there they would see the list. Without a gas showroom they would not know. But at the gas showroom they would see the list of volunteers and would know whom they should ring up if there was a difficulty.

We are not talking about the normal good relations between the gas corporation and its customers and the development of its business, which we hope will go ahead. We are talking about the case where difficulties arise and where a complaint has to be dealt with. This is a sensible provision which provides the very point of contact without which the amendment of the noble Baroness is virtually meaningless and helps very little indeed. Under that inexpensive arrangement, with the services of volunteers, there will be a possibility—provided that there are points of contact in every area—of complainants making their complaints known without going through the whole business of getting in touch with London. This arrangement is much simpler. It avoids tempers rising and attitudes getting sour. A complaint will be dealt with quickly and conveniently. I am sure that this is a very good amendment and I hope that the noble Lord in whose name it is will feel disposed to pursue it.

6.22 p.m.

On Question, Whether the said amendment (No. 166) shall be agreed to?

Their Lordships divided; Contents, 70; Not-Contents, 101.

DIVISION NO.5
CONTENTS
Ardwick, L. Kilbracken, L.
Attlee, E. Kilmarnock, L.
Aylestone, L. Kirkhill, L.
Blyton, L. Llewelyn-Davies of Hastoe, B.
Bottomley, L. Lloyd of Kilgerran, L.
Bowden, L. McNair, L.
Brockway, L. Mishcon, L.
Brooks of Tremorfa, L. Molloy, L.
Bruce of Donington, L. Morton of Shuna, L.
Caradon, L. Nicol, B.
Carmichael of Kelvingrove, L. Oram, L.
Chandos, V. Phillips, B.
Chitnis, L. Pitt of Hampstead, L.
Cledwyn of Penrhos, L. Ponsonby of Shulbrede, L.
Crawshaw of Aintree, L. [Teller.]
David, B. [Teller.] Prys-Davies, L.
Davies of Penrhys, L. Rea, L.
Dean of Beswick, L. Rhodes, L.
Diamond, L. Ritchie of Dundee, L.
Donaldson of Kingsbridge, L. Robson of Kiddington, B.
Elwyn-Jones, L. Rochester, L.
Ennals, L. Ross of Marnock, L.
Ezra, L. Seear, B.
Fitt, L. Sefton of Garston, L.
Gallacher, L. Silkin of Dulwich, L.
Glenamara, L. Stallard, L.
Graham of Edmonton, L. Stoddart of Swindon, L.
Grey, E. Taylor of Blackburn, L.
Hampton, L. Taylor of Gryfe, L.
Hanworth, V. Taylor of Mansfield, L.
Hatch of Lusby, L. Tordoff, L.
Hunt, L. Underhill, L.
Irving of Dartford, L. Walston, L.
Jeger, B. White, B.
John-Mackie, L. Wilson of Rievaulx, L.
Kagan, L.
NOT-CONTENTS
Alexander of Tunis, E. Boston, L.
Bauer, L. Boyd-Carpenter, L.
Belstead, L. Brabazon of Tara, L.
Blake, L. Bridgeman, V.
Blyth, L. Brougham and Vaux, L.
Broxbourne, L. Mancroft, L.
Bruce-Gardyne, L. Mansfield, E.
Burton, L. Massereene and Ferrard, V.
Butterworth, L. Maude of Stratford-upon
Caithness, E. Avon, L.
Cameron of Lochbroom, L. Mersey, V.
Campbell of Alloway, L. Milverton, L.
Campbell of Croy, L. Montgomery of Alamein, V.
Carnegy of Lour, B. Mottistone, L.
Carnock, L. Munster, E.
Colville of Culross, V. Murton of Lindisfarne, L.
Constantine of Stanmore, L. Newall, L.
Craigavon, V. Nugent of Guildford, L.
Craigmyle, L. O'Brien of Lothbury, L.
Cullen of Ashbourne, L. Orr-Ewing, L.
Davidson, V. Pender, L.
Derwent, L. Peyton of Yeovil, L.
Dilhorne, V. Plummer of St Marylebone,
Drumalbyn, L. L.
Eden of Winton, L. Portland, D.
Elliot of Harwood, B. Rankeillour, L.
Elliott of Morpeth, L. Rochdale, V.
Elton, L. Rodney, L.
Fanshawe of Richmond, L. Russell of Liverpool, L.
Feversham, L. Salisbury, M.
Gardner of Parkes, B. Sanderson of Bowden, L.
Geddes, L. Selborne, E.
Glanusk, L. Skelmersdale, L.
Glenarthur, L. Slim, V.
Gray, L. Somers, L.
Greenway, L. Stodart of Leaston, L.
Hailsham of Saint Swansea, L.
Marylebone, L. Swinfen, L.
Hardinge of Penshurst, L. Swinton, E. [Teller.]
Harmar-Nicholls, L. Teviot, L.
Harvington, L. Teynham, L.
Henderson of Brompton, L. Tranmire, L.
Henley, L. Trefgarne, L.
Hives, L. Trumpington, B.
Hooper, B. Vaux of Harrowden, L.
Hylton-Foster, B. Vickers, B.
Knollys, V. Whitelaw, V.
Lauderdale, E. Windlesham, L.
Layton, L. Wise, L.
Lindsay, E. Wynford, L.
Long, V. [Teller.] Young, B.
Macleod of Borve, B. Young of Graffham, L.

Resolved m the negative, and amendment disagreed to accordingly.

6. 30 p.m.

[Amendment No. 167 not moved. ]

Lord Bruce of Donington moved Amendment No 167A.:

Insert the following new Schedule:

("Definition of the Gas Supply Business

  1. 1 The Gas Supply Business means the procurement, treatment, storage, transmission and distribution by the supplier of gas for sale and safe delivery through pipes to customers in Great Britain and the conveyance of gas for third-party suppliers and in this paragraph—
  2. 2. For the avoidance of doubt there shall be included in the Gas Supply Business if, and to the extent that, they are undertaken by the supplier for the purpose of such business, the following activities namely—
    1. (i) the design, procurement, installation testing commissioning, maintenance, repair, replacement and operation of any plant and machinery, including pipe work and transport;
    2. (ii) research and development;
    3. (iii) commercial and administrative functions including—
      • planning;
      • purchasing and stores;
      • marketing and promotion of gas;
      • selling;
      • accounting and finance;
      • personnel management;
      • and other general management and administrative activities to the extent that they are undertaken by the supplier for the purpose of the Gas Supply Business.
    4. (iv) installation of gas appliances or supplies (from the outlet of the meter on the customer's premises) or work undertaken under the terms of a repair, maintenance or installation contract with gas customers, including safety checks and emergency and all other work related to the supplier's safety obligations and in pursuance of its statutory safety duties;
    5. (v) exploration for and production or manufacture of gas;
    6. (vi) consultancy exclusively related to the requirements of gas supply in Great Britain.").

The noble Lord said: My Lords, your Lordships will recall that on 3rd June in Committee we had the opportunity of considering Annex A to the proposed authorisation to be granted by the Secretary of State to the British Gas Corporation. Annex A was important for this reason. It endeavoured to supply some definitions as to what constituted the gas supply industry. It included certain items and it excluded other items. We desired Annex A to the proposed authorisation to be incorporated in the Bill. The amendment before your Lordships on that occasion was identical to Annex A.

The noble Lord, Lord Belstead, was fully seized of the importance of Annex A and when my noble friend Lord Stoddart of Swindon pointed out the desirability of having it in the Bill, for reasons of accounting treatment among other things, the noble Lord still said that he did not think it necessary. This is what has come to be known as the "flexible approach" to the matter because if it was in the Bill it would of course be inflexible.

But the noble Lord clinched his argument at the end by saying this: There is nothing sinister in the way that we have drawn Annex A. It is simply that for accounting purposes we believe that the annex correctly defines the business of supplying gas. It is for that reason that I would hope that we can leave Annex A as it is".—[Official Report, 5/6/86; col. 1151.]

Just so, but what does one find? Before making such a reply the noble Lord would obviously refer very carefully to his brief on the subject and he would, I take it, have felt it unwise to depart from his brief. Nevertheless he was speaking on behalf of Her Majesty's Government and I think we were entitled on that occasion to rely on his words: I would hope that we can leave Annex A as it is".

We are talking now about the Committee stage of the Bill on 3rd June. But on 30th June we have a revised proposed authorisation, in which, among other things, the nomenclature used in the original authorisation was changed and it became Schedule 3. One cannot complain about that but on the basis of the assurances of the noble Lord that he, would hope that we can leave Annex A as it is",

I am bound to say that the new Schedule 3 is not as it was.

In the course of his zeal in following the brief—and I am afraid that it may have escaped the noble Lord's mind at the time, or it may have escaped his mind since—certain crucial words have been omitted from Schedule 3 that were in Annex A. If the noble Lord will refer to Annex A as it was he will find "transmission and distribution" defined as meaning: the conveyance, including the provision and installation of meters and associated controls, of gas belonging either to the Supplier or to other persons".

In Schedule 3 the words, including the provision and installation of meters and associated controls",

have been omitted. Tut, tut, my Lords. I was hoping that we could leave Annex A as it was, but it is a little more than that. When we turn to the section of Schedule 3 dealing with, For the avoidance of doubt",

the original Annex A said: For the avoidance of doubt there shall be included in the Gas Supply Business if, and to the extent that, they are undertaken by the Supplier for the purpose of such business, the following activities namely".

The amendment followed faithfully the original proposed authorisation which the noble Lord hoped we could leave as it was; Schedule 3 omits research and development. It may well be that, somewhere in the text of some other obscure document with which I have not been acquainted, these words appear in some other convoluted way. That may well be so Your Lordships are aware that we on this side of the House do not have a high-powered Civil Service behind us to draft our briefs or to provide us with the research documents. We have no assistance whatsoever. We act in an entirely unpaid capacity. I have searched for the reappearance of these words that were in Annex A but are not in Schedule 3 and I cannot find them. Perhaps I have made a mistake. But it draws once again, or should do, the attention of the House to the fact that authorisations are not immutable, and that even after the most definite assurance given by the noble Lord as recently as 3rd June last, by some sudden conjuring trick words disappear.

There may be a perfectly innocent explanation for this. If so, I shall be very glad to have it; but in the meantime I must respectfully draw the attention of the noble Lord to what appears on the face of it—that the original principle on which the noble Lord stood and which he invited the House to accept seems in the event to have gone astray somewhere.

Lord Diamond

My Lords, the Government have a point to answer; in fact they have two points to answer. The first major point is that we have been asking time and again for the authorisation, at all events when it is finalised, to go in the Bill or in a schedule so that it can be seen and everybody will know what it is about. Certainly, if it has to be altered, then at the latest possible stage—but it certainly should go in. It should go in, if you like, with a control clause which says that it can be varied by a certain procedure. If it is to be varied, well and good—it can be varied by a certain procedure.

Already we have in the Bill a series of clauses which set out the procedure—a procedure by agreement: procedure where there is not agreement; procedure of going to the courts; procedure of having the Monopolies and Mergers Commission involved; procedure of having fair trading legislation involved. All that is already in the Bill. What we do not have is the authorisation itself. That is the first point, which again illustrates very well that there have been several alterations.

My second point—and there are three—is that there is continual alteration without the alterations being brought to the particular attention of the House. We are spending all our time trying to consider this Bill * with totally inadequate resources. We are giving an enormous amount of time voluntarily to examining each line of the Bill to see where it can be improved. But, as I have said, not much indication is being given of the alterations to those of us who are concerned with the Bill.

My third point is different. I hope no one believes that it is purely technical and that it does not matter how one defines gas business. It matters enormously. It matters in arriving at the price which every customer will pay for his gas. The definition has an effect on the costings, on the accounting, and on the way in which the price formula will work—and therefore on the price at which 16½ million customers will pay for their gas. It is important. It is not a technicality, and we are right to spend a great deal of time looking at that matter carefully.

Lord Belstead

My Lords, I hope that neither noble Lord will feel that I am being unfriendly when I say that they are not even making a mountain out of a molehill—I am so sorry; is the noble Lord going to make a speech?

Lord Stoddart of Swindon

I am, my Lords, but a very brief one, and I thank the noble Lord for giving me a chance to do so. I come to the Dispatch Box merely to support the remarks of the noble Lord, Lord Diamond, about lack of information and to emphasise to noble Lords opposite that all the opposition parties in this House and in another place must work on their own account. They do not have the research assistance and the secretarial assistance that is available to the Government.

We are upset, and the Government ought to take note of that. We were not informed of the detailed changes in the revised authorisation. Nor were we informed that there was a new draft authorisation. I picked up that information from the press, in an announcement that was made by the Secretary of State in one of his press releases. It was then that I knew something was afoot. I make that point to the noble Lord I understand his difficulties and I understand the Government's difficulties, but I want them to understand our difficulties as well, and to try to ensure that the Opposition is properly informed and properly supplied with information and papers to enable it to do its job of opposing properly. After all, we on these Benches are Her Majesty's Opposition, and the Alliance is entitled to consideration as well.

Lord Belstead

My Lords, I am surprised that the noble Lord, Lord Stoddart, is worried about informa-tion on the Bill. I believe that I am correct in saying that I wrote to noble Lords who are concerned with the Bill about alterations that had been made to the authorisation. As I said when we debated this Bill two days ago, the redraft of the authorisation was placed in the Printed Paper Office.

The point that I really want to make is that changes to the authorisation have been made for only two reasons. They are not even molehills of reasons; they are hardly any reasons at all. Changes have been made in order to tidy up the drafting, and that is why I use the phrase that they are hardly any reasons at all.

However, some important changes have been made, I agree, in order to take into account views that have been expressed in this House. It is on that point that I believe I am right in saying that where changes of that kind were made, I drew the attention of noble Lords opposite to those changes. In this particular case, the noble Lord, Lord Bruce, has raised two matters which, with respect to him, are not points at all.

The words referred to by the noble Lord concerning matters have merely been moved from paragraph 1 of the former authorisation to sub-paragraph (b)(i), and research and development has not disappeared at all. It has simply been moved to the opening words of paragraph (l)(a) of the schedule. If noble Lords will forgive me for saying so, if they will be prepared to read the new authorisation just once they will see that the words which they are complaining have just disappeared are there larger than life after all.

6.45 p.m.

Lord Ezra

My Lords, do noble Lords opposite not agree that in a Bill of this importance it is rather surprising that the definition of what we are talking about should not figure in the Bill itself, so that it may be fully debated and agreed upon? I find it rather surprising that it should be relegated as a schedule in the authorisation and be capable of being changed from time to time. I hope that for that fundamental reason noble Lords opposite will consider it appropriate that the definition of what the whole Bill is about should figure in the Bill itself.

Lord Bruce of Donington

My Lords, I am most grateful to the Minister for his reply. I draw his attention to the effect of the original Annex A, where research and development was a separate sub-paragraph (2) of paragraph 2, it being considered of sufficient significance. The reference that the noble Lord has made to research and development has been put in paragraph 1(a) but it is subject to a qualification. The noble Lord will be well aware of that qualification when I read it to him: Research and development and the conveyance of gas for third party suppliers". That is not the same as research and development taken on its own. It is not always possible, as the noble Lord, Lord Stoddart, has made clear, for us who have no facilities, and who have not the resources that noble Lords opposite have at their disposal in respect of such documents, to be able to trace everything through in absolute detail. The fact is that the noble Lord wanted Annex A left as it was. It was not left as it was. In the case of research and development, it is by no means in the same unambiguous terms as it was in Annex A.

Lord Belstead

My Lords, with the leave of the House, we have been over the ground as to whether the Annex ought to be in the licence or in the Bill. I remain of the same view. The noble Lord, Lord Bruce, is, if I may say so, somewhat misreading the text. I believe that there is a full definition of research and development at the bottom of page 36 of the authorisation.

Lord Bruce of Donington

I still do not regard the Minister's reply as being satisfactory, my Lords. I record once again our protest at not being notified formally of the extent of the alteration to Annex A. In order to save time, however, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 16 [Standards of quality]:

[Amendment No. 168 not moved.]

Lord Brabazon of Tara moved Amendment No. 169:

Page 16, line 30, leave out ("public gas supplier") and insert ("person authorised to supply it by or under section 6, 7 or 8 above.").

The noble Lord said: My Lords, this amendment was spoken to with Amendment No. 84. I beg to move.

On Question, amendment agreed to.

Clause 18 [Safety regulations]:

[Amendments Nos. 169A and 169B not moved.]

Lord Stoddart of Swindon moved Amendment No. 170:

Page 19, line 18, leave out ("may") and insert ("shall").

The noble Lord said: My Lords, in moving this amendment it may be for the convenience of the House if we discuss Amendment No. 171 at the same time. If accepted, Clause 18(4) would then read: Regulations made under subsection (2) above shall make provision for prohibiting any person not licensed by the Health and Safety Commission".

The objective of this amendment is, of course, to bring in a compulsory registration scheme for gas installers. The noble Lord, Lord Belstead, will be aware that a voluntary scheme already exists through CORGI—that is, the Confederation for the Registration of Gas Installers. It has worked reasonably well. However, I believe, as do many people in the industry, that the time has now come for a compulsory registration scheme to be introduced. We now have the means through this Bill, and I hope we have the will, to bring about that desirable project.

There are many compulsory licensing schemes. Gas is, of course, a very dangerous substance, but there are other dangerous substances. As an example of where a compulsory licensing scheme exists, we can go to asbestos. Organisations which engage in removing asbestos are required to hold a licence to do so They are also obliged to take responsibility for the work of their employees. Gas is potentially more dangerous since it carries a greater risk of injuring other people in addition to those handling it.

I understand that the Government have said that in the public interest they are anxious to ensure that high standards of gas safety exist. Indeed, during our debates in Committee the Government showed themselves to be most concerned that safety regulations should be strong, and I accept that that is their view. The problem, of course, is to find the most practicable way of achieving it.

Again I understand that the Government's opposition to compulsory registration is based partly on a fear of excessive bureaucracy and cost, and partly on the fear of giving a commercial advantage to a restricted number of companies. With respect, if those are the Government's arguments I do not accept them. In the first place, the fear of bureaucracy seems quite groundless. A compulsory scheme need be no more bureaucratic or costly than the proposed voluntary certification scheme. In the asbestos licensing system the Health and Safety Executive has devised the simplest method of licensing. This starts from the assumption that all applicants who fulfill the objective criteria for registration are given a licence to begin with.

The period of validity of the licence varies according to certain judgments made by the issuing authority. The licence then periodically comes up for renewal and can be withdrawn at any time in the light of reports of the licensee's performance. The underlying assumption, at least initially, appears to be that an applicant is competent. A similarly non-bureaucratic basis from which to start with the compulsory licensing of gas installers would be to approve initially all CORGI registered installers. Therefore, there is a simple way of bringing in a compulsory system. It can be built on the voluntary system which already exists.

I turn now to commercial advantage. Established gas installers, including those in the heating and plumbing trades, readily acknowledge that compulsory registration probably would tend to favour them since they are the people with experience over many years of competent work with gas. Indeed, around 70 per cent. of the training given to craft apprentices is common to heating and ventilating, plumbing and gas-fitting apprenticeships. The overriding consideration in this matter is the safety of the public: and on that I feel sure we all agree. Commercial considerations are surely of a secondary nature. The fear of giving commercial advantage to the established trade with any consequent effect on the cost of work is, in my view, a red herring and I hope that the Government will not use that argument in reply.

To illustrate the point, a comparison can be drawn with MoT tests for road vehicles. It is clear enough that the introduction of the MoT test resulted in some advantage to motor manufacturers and to garages which undertook MoT tests and repair work; but it also resulted in a considerable improvement in the standard of vehicles on the road. We all accept that. We know that the standard has improved arising from the compulsory MoT testing of vehicles over three years old. Would anyone now argue—I am sure the Minister will not—that the MoT test should cease with all the dangers for road safety which that implies simply because the motor trade benefits from the existence of the compulsory scheme?

At present, the Government's intention, as we know, is to put their faith in an approved code of practice for standards of training in safe gas installation. The code of practice is still out for discussion and that is why I have not returned to it at this stage. But, as I understand it, the code will not be mandatory. In the event of prosecutions of an installer, failure to comply with the code would place the onus on the installer to prove his competence in some other way. Again, compared with road transport that exposes the risk which is inherent in relying on voluntary arrange-ments. Thus, would the Government ever contemplate making driving licences voluntary and putting drivers on their honour to train to the Highway Code standard and obey the code throughout their driving career without supervision? That is absurd. However, we are debating here something which is just as dangerous, and perhaps more dangerous, than driving. That is why we believe that there should be a compulsory registration scheme.

The scale of the possible risk is illustrated by estimates from CORGI that indicate that around 30,000 individuals currently engaged on gas associated work are doing so in firms that are not on the CORGI register. Therefore, there are around 30,000 people who are possibly not qualified messing about with a dangerous and volatile substance. Put another way, at present there is a nearly 50 per cent. chance that a member of the public will end up having gas-associated work carried out by an operative who is not covered by CORGI registration and whose competence is therefore subject to no accepted form of supervision.

The experience of CORGI in terms of rejection and inspection statistics indicates that a number of the firms operating in the market are not of the appropriate calibre to ensure the safe use of gas. That has already been discovered through a voluntary system, so that we now know that, because of the voluntary system, there are people who may enter our houses tomorrow who are not competent and who could put the lives of ourselves and our families, and the existence of our property in danger. I believe that we should take the opportunity presented to us in this Bill because this is the best way of doing it, to tighten up the whole position, ensure the safety of the public and bring to an end some of the cowboy firms which put the lives of people in danger.

I hope that I shall receive a sympathetic response from the Minister and that he will accept these amendments. The Minister has an opportunity to make a name for himself tonight, to be highly popular and to go down as the man who was wise enough and all-seeing enough to ensure that we have a safe system of gas installation, with people installing gas appliances who have been tried and tested and who are competent to go into people's homes and repair their appliances properly without putting life and property at risk. I beg to move.

7 p.m.

Lord Graham of Edmonton

My Lords, I intend to be very brief in following the point made by my noble friend Lord Stoddart. It is not a question of knocking the present system. In fact there is a great deal of good and satisfaction to be obtained from the voluntary method whereby, under the umbrella of CORGI, the industry is attempting to do a very good job. However, if one looks at lines 20 to 35 on page 19, of the Bill, the enormity of the damage and danger is apparent. The noble Lord, Lord Stoddart, or I myself certainly will not wish to be accused—nor shall we stand accused—of being alarmist, but we are dealing with a very important issue.

Perhaps I may say at once that the Minister might feel that some of my questions may be better answered by letter following this Report stage of the Bill, and I quite understand that position. We on this side of the House are concerned with what may happen in the future in comparison with our present situation. I should like the Minister to tell me, if not tonight then perhaps later in a letter, how he envisages not only the maintenance but also the improvement of the existing system in giving security of mind not merely to the organisation (that is the new gas corporation), the employers or employees, but, more importantly, to the consumers of gas.

I understand that CORGI, which if not wholly funded is primarily funded by the gas corporation to the extent of £1½ million to £2 million, has a system which covers a national network with a number of inspectors. I am told however that there are far too few inspectors to do the whole job. In his reply I should like the Minister to tell me how he sees an improvement being made in the number of inspectors who inspect installations.

I wonder whether the Minister can tell me that he is satisfied that the arrangements for the new kind of body which is envisaged will pay proper regard to the various trade associations of which it will be composed. I understand that there has been some talk of underwriting the maintenance of a future CORGI to the extent of about three years. In view of the billions of pounds that are involved, surely the Minister could do a little more to secure the peace of mind of all concerned by underwriting such an organisation for a far longer period than three years—perhaps for 10 years, or even 15 years.

The noble Lord, Lord Stoddart, has made a very telling point. We all agree that it is right and proper that everyone in the business ought to subscribe to the standard of inspection and the discipline which is part of the CORGI organisation, but as the noble Lord has pointed out, perhaps half of the businesses at the moment are not even registered. We should like to be sure that everybody who enters our homes, factories and offices to tinker about with gas is at least under the umbrella of a bona fide organisation.

Perhaps the Minister can also tell us his views in this respect on Clause 2, which, as he knows, deals with the responsibilities of the Gas Consumers' Council, and Schedule 2 which also deals with the council. How will the new body be related to the functions of the Consumers' Council and work closely with it? Can the Minister tell us how trade associations and their members will have the opportunity of making an input into the quality of training and the precise detail of the training that needs to go into making gas installers competent?

I understand that the Minister may write to me later. The questions I have raised are all of general interest, but certainly they are in support also of the case that has been made out by my noble friend Lord Stoddart.

Lord Belstead

My Lords, the purpose of this amendment is to provide that any person allowed to reconnect a fitting or restore a gas supply under subsection (4) must be licensed by the Health and Safety Commission. There is nothing between noble Lords opposite and the Government concerning safety and the improvement of standards of training and competence. It has already been made clear in the debates on this Bill that the Health and Safety Commission is planning to introduce an approved code of practice for installers. Noble Lords have referred to this code already this evening. The Commission is also working on proposals for an independent successor body to CORGI (the Confederation for the Registration of Gas Installers).

The main reason I resist this amendment is that the Health and Safety Commission has made it plain on several occasions that it does not consider that a full scheme of licensing would be an appropriate step at this point. I do not think that one has to look very far for the reason. It is that in the last few years we have made a great deal of progress, in the way that I have just described, in beginning to produce a new independent successor to CORGI—despite the fact that CORGI has done a tremendous amount of good work—and in the production of a new code of practice, and we do not believe, as the HSC does not, that an absolutely blanket scheme of licensing would be appropriate.

Perhaps I may pick up very quickly one or two of the points which were put to me. The noble Lord, Lord Stoddart, referred to the dangers of asbestos. With respect to the noble Lord, this is a very different kind of problem. The hazard concerned is on a quite different scale. I understand that between 700 and 800 people die every year as a consequence of the terrible hazard of asbestos, and a very much smaller number of people are exposed to that hazard, compared with the dangers of gas.

The noble Lord, Lord Graham of Edmonton, asked me a series of questions and put those questions in the context of Clause 18, which we are at present discussing. Perhaps I may remind the noble Lord that the great advantage of Clause 18 is that it extends the purposes of Part I of the Health and Safety at Work Act 1974 in respect of gas safety matters, which means that the enforcement and other powers of the Health and Safety at Work Act 1974 will be available in regard to gas safety matters. I know from the way in which the noble Lord spoke that he will welcome that.

The noble Lord asked me about inspectors so far as concerns gas. The noble Lord did not say so, but it is of course the case that recruiting ceased for a time so far as concerns HSC inspectors. As I understand it, recruiting is again taking place and I think the outlook is good.

The noble Lord asked me about the relationship with the Gas Consumers' Council. Of course we have recognised the important contribution to gas safety made by the present Consumers' Council. Of course it is represented on the HSC committee. It is likely that the future council will take over this role and we hope that it will be involved with the successor to the CORGI organisation. I shall be very happy to write a letter to the noble Lord in answer to any of the other points about which he asked me, if he will allow me to do so.

I am sorry to resist the amendment, but I do so for this reason. The objective of the Government and of noble Lords opposite is precisely the same. We want to see greater safety and better training. But, as with many other things, we are talking about the art of the possible. The Health and Safety Executive has said that it does not at this stage want to see a blanket licensing procedure, and nor do we.

Lord Stoddart of Swindon

My Lords, in practically his opening sentence the Minister said that about 800 people die from asbestos-related diseases every year. Many of them are dying because for years asbestos installation was not under a compulsory licensing scheme. When in the 1950s and 1960s asbestos lagging in power stations was removed, it was slapped around with a hammer. Dust was created all over the place and asbestos was lying everywhere. It is because people inhaled the dust and had that contact with asbestos that we now have that death rate. When it was discovered that asbestos caused asbestosis, lung cancer and other diseases, a compulsory registration scheme was introduced and asbestos had to be treated with the respect that it deserves. I know that because I was associated with the electricity supply industry and worked in a power station.

What the Minister says is not valid. However, I appreciate what he said about the Health and Safety Executive, although I do not agree. We have too long delayed imposing a compulsory registration scheme for gas installers. We do not know how many unreported accidents, burns and near gassings have occurred because of incompetent and inefficient installation of appliances in the home. There may have been thousands and thousands, but we do not know. I do not want to delay the House longer, but I believe that it is right that we should have a compulsory registration scheme. Because we feel so strongly and because it is about time the opinion of the House was tested, I intend to divide the House on the amendment.

7.12 p.m.

On Question, Whether the said amendment (No. 170) shall be agreed to?

Their Lordships divided: Contents, 47; Not-Contents, 79.

DIVISION NO.6
CONTENTS
Ardwick, L. Carmichael of Kelvingrove, L.
Attlee, E. Cledwyn of Penrhos, L.
Brockway, L. Crawshaw of Aintree, L.
Bruce of Donington, L. David, B. [Teller.]
Dean of Beswick, L. Lloyd of Kilgerran, L.
Diamond, L. McNair, L.
Elwyn-Jones, L. Mishcon, L.
Evans of Claughton, L. Molloy, L.
Ezra, L. Morton of Shuna, L.
Gallacher, L. Nicol, B.
Glenamara, L. Phillips, B.
Graham of Edmonton, L. Pitt of Hampstead, L.
Gregson, L. Ponsonby of Shulbrede, L.
Grey, E. [Teller.]
Hampton, L. Ritchie of Dundee, L.
Hatch of Lusby, L. Robson of Kiddington, B.
Houghton of Sowerby, L. Rochester, L.
Howie of Troon, L. Ross of Marnock, L.
Irving of Dartford, L. Seear, B.
Jeger, B. Silkin of Dulwich, L.
John-Mackie, L. Stoddart of Swindon, L.
Kilmarnock, L. Taylor of Mansfield, L.
Kirkhill, L. Underhill, L.
Llewelyn-Davies of Hastoe, B. White, B.
NOT-CONTENTS
Alexander of Tunis, E. Lindsay, E.
Annandale and Hartfell, E. Liverpool, E.
Ashbourne, L. Long, V. [Teller.]
Bauer, L. Mansfield, E.
Belstead, L. Maude of Stratford-upon-
Blake, L. Avon, L.
Brabazon of Tara, L. Mersey, V.
Bridgeman, V. Milverton, L.
Brougham and Vaux, L. Montgomery of Alamein, V.
Burton, L. Mottistone, L.
Cameron of Lochbroom, L. Munster, E.
Campbell of Alloway, L. Murton of Lindisfarne, L.
Campbell of Croy, L. Napier and Ettrick, L.
Carnegy of Lour, B. O'Brien of Lothbury, L.
Carnock, L. Pender, L.
Colville of Culross, V. Peyton of Yeovil, L.
Cottesloe, L. Plummer of St Marylebone,
Craigavon, V. L.
Craigmyle, L. Rankeillour, L.
Cullen of Ashbourne, L. Renton, L.
Davidson, V. Renwick, L.
Dilhorne, V. Rochdale, V.
Drumalbyn, L. Selborne, E.
Eden of Winton, L. Shannon, E.
Elliot of Harwood, B. Sharpies, B.
Elliott of Morpeth, L. Skelmersdale, L. [Teller.]
Elton, L. Stodart of Leaston, L.
Fanshawe of Richmond, L. Swansea, L.
Ferrers, E. Swinton, E.
Gardner of Parkes, B. Teviot, L.
Glenarthur, L. Thurlow, L.
Gray, L. Tranmire, L.
Greenway, L. Trumpington, B.
Harmar-Nicholls, L. Vaux of Harrowden, L.
Henley, L. Vickers, B.
Hives, L. Whitelaw, V.
Hooper, B. Wise, L.
Hylton-Foster, B. Wynford, L.
Kinloss, Ly. Young, B.
Lauderdale, E. Young of Graffham, L.
Layton, L.

Resolved in the negative, and amendment disagreed to accordingly.

Lord Brabazon of Tara

My Lords, in moving that further consideration on Report be now adjourned, I suggest that we do not return to the consideration of this Bill before ten minutes past eight.

Moved accordingly, and, on Question, Motion agreed to.

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