HL Deb 03 June 1986 vol 475 cc714-68

3.20 p.m.

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

My Lords, I beg to move that the House do now again resolve itself into a Committee on the Bill.

Moved, That the House do now again resolve itself into Committee.—(Lord Belstead.)

Lord Stoddart of Swindon

My Lords, I am sorry to have to raise this matter and I shall try not to keep your Lordships too long, but I have to say that on the last day of the Recess I was perturbed to read from the Press Association tapes a statement which quite clearly emanated from the Government and which threw doubt on the Opposition's role in assessing the Gas Bill during its Committee stage in this House. If I may quote from the Press Association release, it said: Peers, many of them aged more than 70, will sit up all night in a line-by-line consideration of one of the Session's most controversial Bills. The measure has already completed its Commons stages but has met with delays in the Lords, largely due to lengthy speeches by the SDP leader Lord Diamond. The noble Lord, Lord Diamond, is perfectly able and, I am sure, willing to speak for himself but I think it is right that I should say in his defence that apart from one small lapse at the beginning of the Bill, when he did speak for rather a lengthy period, the noble Lord's contributions have been to the point, succinct, and reasonable, and indeed the points have been well made. No doubt the noble Lord, Lord Diamond, will speak for himself. However, the Press Association report goes on: But after private protests from Lords leader Viscount Whitelaw about slow progress, the Government is determined to complete the Committee stage in the first week after the spring holiday. There is an implication there, as I have said, that the Opposition has been using delaying tactics and I have to refute that implication. Indeed, I am quite sure that other noble Lords will join me in refuting that implication. The noble Lord, Lord Boyd-Carpenter, who has spoken in the debate, will know that the debates on the Gas Bill have been reasonable and there has been no attempt to delay or filibuster. Other noble Lords, too, will know (because they have spoken on the Bill) that all contributions have been reasonable. If I may say so, the reason why the House is having to sit late tonight is not because of any actions by the Opposition but is due to the—I will not say to incompetence, because that is perhaps too strong a word to use from this Bench—as the noble Lord, Lord Belstead, will know, that on two occasions when the Opposition wanted to get on with the discussion of this Bill the Government side were unable to keep a House and the Opposition from all parts of the Chamber viewed with regret that they were some 20 amendments short of the target they had sought to achieve on that particular occasion. So there was no delay on the part of the Opposition but there was failure by the Government to keep a House.

Then there was the occasion when the Government put up another Bill in front of the Gas Bill so that the Gas Bill thereby lost three and a half hours of debate. That is the reason why your Lordships are being called upon by the Chief Whip—not by us, the Opposition, because we believe there is plenty of time to consider this Bill and that plenty of time should be given to that consideration—to sit tonight. It is not because of any obstruction, as is alleged by the Government, on the part of the Opposition.

As I have said, I do not wish to delay your Lordships for too long but there is one further point I must raise, because, finally, the report says this: However, the Government is anxious to return the Gas Bill to the Commons in July and has allowed only four days' debate on the Report stage and one day for Third Reading. I do not know whether that has been discussed through the usual channels. I sincerely hope it has, but I have to say that it has not yet come to my knowledge and I would have thought, frankly, that it was not a question of the Government—perhaps we have had too much of this already—laying down a timetable which they think is adequate for the Bill but rather of agreeing a timetable with all parts of the House to ensure that the Bill has a reasonable passage.

I do not wish to make much more of this, but I have to say that we do resent listening to the radio in the morning, as we did today, and being told that the Opposition are being obstructive. They have not been obstructive, and indeed I have to tell your Lordships that my noble friend Lord Bruce of Donington, in order to assist the passage of this Bill, said that he would not press for a Private Notice Question put down in the other place to be repeated here. So in fact we have been doing all we can to assist the Government in the passage of this Bill. I do hope they will not persist with these leaks, press conferences or whatever they are, accusing the Opposition side of this House of deliberately obstructing the Bill. That has not been so and will not be so. And after all it is up to the Government to get their business through.

Lord Boyd-Carpenter

My Lords, the noble Lord, Lord Stoddart of Swindon, sought to call me as a witness in support of his proposition. I am surprised that someone with his experience as an advocate has not realised the danger of calling a witness without first ascertaining what that witness is likely to say. I am afraid that the effort of the noble Lord, Lord Stoddart, in this respect is an example of that, because he was kind enough to say that I have taken a certain part in the discussions on this Bill, and I had not intended to make any comment on the Opposition's behaviour until he provoked me into doing so.

However, as he has done so, I must say to your Lordships—this is certainly my evidence—that the proceedings so far have been unduly prolonged, not perhaps quite so much by the Official Opposition but certainly by the Liberal-SDP Alliance. Even the noble Lord, Lord Stoddart of Swindon, referred to a speech by one of the official spokesmen for the Alliance, who spoke for 40 minutes on one not very important Committee stage amendment. That is plainly not in accordance with the general way in which we conduct business in this House.

The final point I would make simply rests on the facts. We are now on, I think, the fifth day of the Committee stage and we are beginning with amendments at the start of Clause 7. I do not dispute that this is an important Bill; I do not think it is the most important Bill of the Session by any manner of means, but it is quite an important Bill. However, it is not in accordance with the normal practice of this House to take so much time over a Committee stage, Nor, again, if I may say so with very great respect, is it in accordance with normal practice to table so many amendments which broadly say the same thing or seek to effect the same result with slightly different wording.

Therefore if we are to distribute responsibility—and the noble Lord, Lord Stoddart of Swindon, has invited the House to express an opinion—for the time so far taken on this Bill and for the rather dreary prospect in front of us tonight, I think it is only fair, certainly to my noble friends, to say that responsibility for that lies in the way in which noble Lords in both sections of the Opposition, but particularly in the Liberal-SDP Alliance, have seen fit to conduct the debate. Therefore that is where responsibility lies. If they think they have done a good job for the Bill, for the country or for the House, that is up to them. I do not happen to think so.

The Lord Chancellor

My Lords, the Motion has been put, That the House do now again resolve itself into a Committee upon the said Bill. I beg the noble Lord's pardon, I did not see him rise.

3.30 p.m.

Lord Diamond

My Lords, the noble and learned Lord is obviously quite right. I did not attempt to rise until the Government had said something as to the authority, the propriety and the accuracy of the statement which is being referred to. I do not propose to indulge in an individual argument with an individual noble Lord on the other side, but I was hoping that the Government would say something. If what the Government had to say disposed of the matter there would be no need to say anything further. If what the Government had to say did not dispose of the matter, then it might be necessary to delay your Lordships a moment or two.

The Lord President of the Council (Viscount Whitelaw)

My Lords, the last of my desires would be that your Lordships should be delayed in the discussion of this Bill, so I will of course respond to the noble Lord. I have not seen this particular press report. As your Lordships will appreciate, I was not very likely to see it where I have been for the last 10 days. Certainly I do not think I should have been aware of any leaks in the place where I have been. I must say that if this report did appear in the press it certainly had absolutely no authorisation from me—which I am sure your Lordships will immediately accept—or indeed from anybody else I know of who has anything to do with the Government. Of course, if it were proved that that was so, then I should be very upset because I would not wish that to be said at all and I would wish to repudiate that suggestion.

I hope your Lordships will be able to accept that I am sorry about the long time we have to take on this Bill; I am sorry for the long hours we have to undertake, but I hope we can make good progress. It is a famous principle of progress that the quicker you deal with what you are seeking to do, within reason, the more progress you make. I hope that on that basis we shall be able to proceed with the Bill and give it the really full and proper scrutiny it of course deserves. However, I hope equally that we shall make good progress.

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD ABERDARE in the Chair.]

Clause 7 [Authorisation of public gas suppliers]:

Lord Gallacher moved Amendment No. 60: Page 5, line 1. at end insert (", the Gas Consumers' Council, trade unions and other relevant bodies").

The noble Lord said: Amendment No. 60 is concerned with the question of authorisation and I think it will be generally agreed that authorisation under the Bill is a very important part of it. Indeed, it is the main point of control of public gas suppliers under the Bill and furthermore, once granted, the authorisation will last for a considerable number of years.

Although the Secretary of State is required under the authorisation procedure to consider objections to proposed authorisations, there is no public examination in advance of those objections. This absence of public examination of such an important issue contrasts sharply with, for example, town and country planning procedures in Britain and indeed with the procedure which normally attends the promotion of Private Bill legislation in both Houses of Parliament. Consultation with the Director General of Gas Supply, Ofgas, is provided for in Clause 7 and we welcome this. However, we feel that the process of consultation needs extending and that is the principal purpose of Amendment No. 60, and indeed of Amendment No. 61. In a sense, they give an alternative choice to the Government, and no doubt when the Minister comes to reply he will indicate which, if either, of those choices he prefers.

An aspiring gas supplier under the present arrangements for authorisation need not make his position public. The Secretary of State is therefore in a situation in which he can make private arrangements with such aspiring gas suppliers. While those arrangements may seem appropriate to the Secretary of State, it does not necessarily follow that they are in all respects in the best interests of users. Authorisation itself covers a wide range of matters including standing charges, connection charges, accounting methods and pricing for tariff and contract customers.

Turning to the specific provisions of Amendment No. 60, we are suggesting that at page 5, line 1, there should be inserted, after "Director", the words, the Gas Consumers' Council, trade unions and other relevant bodies". I think the importance of consultation with the national Gas Consumers' Council is obvious. They are the body charged under the Bill with representing consumers in general, and I think they are entitled to be consulted in advance of authorisations being granted. Trade unions also have a prime interest in the authorisation because, apart from their basic role of safeguarding the interests of their members in respect of wages and conditions, other factors also may enter into the reckoning.

One can of course recall that in 1948, when the first nationalisation measure created British Gas, among the undertakings to be taken into public ownership at the time—following an independent public inquiry, I might add—was the largest of all the bodies at that time involved in the gas industry, namely, the Gas Lighting Company. That company was noted in the gas industry for its policy even then of paying bonuses on wages; so in addition to the normal questions concerning wages and conditions, the bonus and wages issue may now be relevant so far as authorisations are concerned. Indeed, the Government themselves have, in a sense, made it relevant by their recent proposals for profit sharing and, without in any way seeking to endorse or recommend the proposals, it is an undoubted factor with which trade unions will have to live in the future. What better way to begin than by conferring about this issue, if they are to be consulted before authorisations are granted?

Of the other relevant bodies mentioned in the amendment, I think local planning authorities are an obvious example of bodies who ought to be consulted. They have a major interest in planning matters and an authorised gas supplier is someone who will inevitably be heavily involved in planning machinery. One recalls again that under the 1948 Act no fewer than 300 municipalities were engaged in the gas industry. They are well aware of the factors which planning subsequent to their own involvement requires and I think that justifies full consultation with them.

The other relevant bodies might include representatives of industry and commerce in the areas concerned, and here again substantial users are likely to be interested in authorisations. I feel they should be consulted in advance of authorisations being granted. That is the purpose of Amendment No. 60. I beg to move.

Lord Belstead

I appreciate the concern of the noble Lord, Lord Gallacher, that there should be proper consultation on the important matters associated with public gas supply; in particular, on the question of the authorisation itself. This is, I agree, a matter of the widest public interest and it is right that the legitimate views of all interested parties should be taken into account.

Where I part company with the noble Lord is that I think that the Bill provides precisely for public interest to be taken into account in the granting of authorisations. I say that because Clause 7 of the Bill already provides for the publication by my right honourable friend of notice of the Government's intention to grant an authorisation when that happens and to give reasons. In reaching a view the Secretary of State will take into account a wide variety of matters; in particular, his duty in Clause 4 to secure the satisfaction of all reasonable demands for gas. The consumers' interest will therefore be a prime consideration.

But in a sense the Bill goes further than the amendment, because my right honourable friend is also required under the Bill, before granting an authorisation, to allow a period for representations or objections. There is no restriction as to who may make such representations or objections and once made they cannot be rejected out of hand. They must be properly considered—that is specifically written into the Bill—whether the objections or representations come from individuals or from representative bodies. It is for that reason that I feel that we have made in Clause 7 as wide provision as is possible for public consultation on possible future authorisations. Although I quite understand the thinking behind this amendment, I like to think that the Bill has got it just about right.

Lord Gallacher

I think that the Minister's reply, though not unexpected, is somewhat disappointing. Indeed, if I may say so without disrespect to the Government Front Bench, it follows the tenor of all the replies we have had to all the amendments on the four previous Committee days and I think that it indicates in some measure a fairly closed mind so far as the Government are concerned which, in itself, is indicative of a determination to see this Bill not merely on the statute book, which would be understandable and acceptable, but on the statute book without any single amendment. We on these Benches, at least, find that to be completely unacceptable.

The Minister said that there is provision in Clause 7 for the consideration of objections to the authorisation, and that is not in dispute. What is at issue between us is whether or not, before the event rather than after it, there should be consultation. Our firm view is that such pre-consultation should take place because of the importance of the authorisation document per se and because of the variety of interests involved so far as the granting of an authorisation is concerned. For those reasons I think, unless the Minister can give me some encouragement in respect of Amendment No. 60, or even No. 61, I shall have little option but to test the feeling of the Committee on the matter.

Lord Ezra

Would the noble Lord not agree that there ought to be in such an important matter consultation with other relevant bodies? If the noble Lord would be prepared to consider such an amendment, I think that some of us would be quite happy with that. But the suggestion of simply consulting the director and not other relevant bodies seems to us to mean that a decision could be reached without full consideration of the issue.

Lord Belstead

With great respect to the noble Lord, Lord Ezra, the Bill does not substantiate what the noble Lord has just asserted. If he would care to glance at page 5 of the Bill, he will read there that before—not after—granting an authorisation the Secretary of State shall give notice that he proposes to grant the authorisation, that he must state his reasons and that he must specify, the time (not being less than three months from the date of publication of the notice) within which representations or objections … to the proposed authorisation may be made, and shall consider"— that is a duty— any representations or objections which are duly made and not withdrawn". It is therefore not possible for there to be given, by some sleight of hand, an authorisation without giving the fullest possible opportunities for consultation.

3.45 p.m.

On Question, Whether the said amendment (No. 60) shall be agreed to?

Their Lordships divided: Contents, 89; Not-Contents, 121.

Airedale, L. Crawshaw of Aintree, L.
Amherst, E. David, B. [Teller.]
Ardwick, L. Davies of Penrhys, L.
Aylestone, L. Dean of Beswick, L.
Bacon, B. Diamond, L.
Banks, L. Dowding, L.
Beswick, L. Elwyn-Jones, L.
Birk, B. Elystan-Morgan, L.
Blyton, L. Ennals, L.
Bottomley, L. Ewart-Biggs, B.
Brockway, L. Ezra, L.
Brooks of Tremorfa, L. Fisher of Rednal, B.
Bruce of Donington, L. Gallacher, L.
Burton of Coventry, B. Galpern, L.
Carmichael of Kelvingrove, L. Gladwyn, L.
Cledwyn of Penrhos, L. Glenamara, L.
Graham of Edmonton, L. Ponsonby of Shulbrede, L. [Teller.]
Grey, E.
Hampton, L. Prys-Davies, L.
Hanworth, V. Ritchie of Dundee, L.
Hatch of Lusby, L. Roberthall, L.
Heycock, L. Scanlon, L.
Hirshfield, L. Seear, B.
Houghton of Sowerby, L. Shackleton, L.
Hunt, L. Stallard, L.
John-Mackie, L. Stedman, B.
Kagan, L. Stewart of Fulham, L.
Kilbracken, L. Stoddart of Swindon, L.
Kilmarnock, L. Strabolgi, L.
Kinloss, Ly. Strauss, L.
Leatherland, L. Taylor of Blackburn, L.
Listowel, E. Taylor of Gryfe, L.
Llewelyn-Davies of Hastoe, B. Taylor of Mansfield, L.
Lloyd of Hampstead, L. Tordoff, L.
Lloyd of Kilgerran, L. Turner of Camden, B.
Lockwood, B. Underhill, L.
McCarthy, L. Vernon, L.
Mar, C. Walston, L.
Maybray-King, L. Wells-Pestell, L.
Mayhew, L. Whaddon, L.
Morton of Shuna, L. White, B.
Nicol, B. Wigoder, L.
Northfield, L. Williams of Elvel, L.
Oram, L. Winstanley, L.
Phillips, B. Ypres, E.
Ailesbury, M. Hemphill, L.
Aldington, L. Henderson of Brompton, L.
Alexander of Tunis, E. Hives, L.
Allenby of Megiddo, V. Hooper, B.
Allerton, L. Hunter of Newington, L.
Auckland, L. Hylton-Foster, B.
Bauer, L. Inglewood, L.
Belstead, L. Kaberry, of Adel, L.
Bessborough, E. Killearn, L.
Boyd-Carpenter, L. Kinnaird, L.
Brabazon of Tara, L. Kitchener, E.
Brougham and Vaux, L. Lauderdale, E.
Butterworth, L. Lawrence, L.
Caccia, L. Layton, L.
Caithness, E. Long, V. [Teller.]
Campbell of Alloway, L. Lothian, M.
Campbell of Croy, L. Lovat, L.
Chelmer, L. Lucas of Chilworth, L.
Constantine of Stanmore, L. Luke, L.
Cottesloe, L. Lyell, L.
Cowley, E. Macleod of Borve, B.
Cox, B. Mancroft, L.
Craigavon, V. Manton, L.
Crawford and Balcarres, E. Marsh, L.
Cullen of Ashbourne, L. Merrivale, L.
Davidson, V. Mersey, V.
De Freyne, L. Montgomery of Alamein, V.
Denham, L. [Teller.] Morris, L.
Denning, L. Mottistone, L.
Drumalbyn, L. Munster, E.
Dundee, E. Norfolk, D.
Eccles, V. Norrie, L.
Effingham, E. O'Brien of Lothbury, L.
Ellenborough, L. Orkney, E.
Elliot of Harwood, B. Orr-Ewing, L.
Elton, L. Peyton of Yeovil, L.
Faithfull, B. Porritt, L.
Fortescue, E. Portland, D.
Fraser of Kilmorack, L. Rankeillour, L.
Gibson-Watt, L. Reay, L.
Glenarthur, L. Reigate, L.
Granville of Eye, L. Reilly, L.
Gray, L. Renton, L.
Gray of Contin, L. Rochdale, V.
Gridley, L. Romney, E.
Grimthorpe, L. Rugby, L.
Hailsham of Saint Marylebone, L. St. Aldwyn, E.
St. Davids, V.
Harmar-Nicholls, L. Sandford, L.
Harris of High Cross, L. Sandys, L.
Savile, L. Thorneycroft, L.
Seebohm, L. Tranmire, L.
Shannon, E. Trenchard, V.
Skelmersdale, L. Trumpington, B.
Somers, L. Vaux of Harrowden, L.
Stamp, L. Vickers, B.
Stockton, E. Vivian, L.
Stodart of Leaston, L. Ward of Witley, V.
Strathspey, L. Westbury, L.
Terrington, L. Whitelaw, V.
Teviot, L. Wolfson, L.

Resolved in the negative, and amendment disagreed to accordingly.

3.45 p.m.

Lord Gallacher moved Amendment No. 61: Page 5, line 1, at end insert ("and after a public hearing")

The noble Lord said: Amendment No. 61 is in some respects similar to Amendment No. 60 although it gives the Government an alternative option which I hope may appeal to them. This would provide that in addition to consulting with the Director General of Gas Supply before granting an authorisation the Minister should call a public hearing. The idea of a public hearing before granting an authorisation is one which should appeal to all parties because it is in keeping with the current vogue and fashion of open government and of making information to the public fully and freely available whenever this is possible. The granting of an authorisation is just such an occasion.

I do not think that a public hearing of this character need in any way be bureaucratic; neither need it be time-consuming. Nor do I think that the information which may be divulged at a public hearing would be too revealing from the commercial angle or indeed that the cost of holding the public hearing as such would be excessively expensive, having regard to the importance of the issue involved and the amount of money which an authorisation represents for the public gas supplier.

There have been criticisms of the concept of public hearings based on the system of public hearings in the United States. While the system in the United States is not devoid of merit, I do not think necessarily that a public hearing in Britain need follow the American example, although some of the information which is made available at public hearings in the United States would be of considerable value to consumers in this country. It is mildly ironic that the citadel of private enterprise can arrange public hearings of this kind whereas I fear we are going to listen to a rejection by the Minister of the same concept in the United Kingdom.

The number of authorisations under the Bill is likely to be fairly limited so that the feasibility of public hearings is, as I say, quite assured. Similarly, the expense of an occasion such as this would also be limited. Indeed, the regulatory system provided in the Bill is to be met by fees on public gas suppliers. I do not think it is unreasonable that, in addition to the cost of the regulatory system, the gas suppliers should bear the cost of public hearings. Those of us who are concerned with the interests of consumers know full well that, although in the first instance the public gas supplier may bear the cost of a public hearing, ultimately the gas user or consumer will pay for it as part of the price structure of the industry.

For these reasons and many others it would be a sound concept to have a public hearing prior to the granting of an authorisation, rather than merely dealing with complaints after the authorisation has been granted. I hope that the Government will see their way clear to accepting the amendment. I beg to move.

Lord Belstead

The noble Lord, Lord Gallacher, is very persuasive in putting forward this amendment; but I must confess that first and foremost it would have the effect of leading to quite substantial delays before supplies were authorised and consumers received the gas for which they were waiting. Having said that, I think we ought to keep this in proportion.

We are talking about the possibility of an authorisation, in addition to the authorisation planned for British Gas, some time in the future. In advance of granting such an authorisation, the Secretary of State, as we said on the previous amendment, will have to wait for the public to make representations or objections, and statutorily the Secretary of State will have to give proper consideration to those representations and objections. Despite the persuasive powers of the noble Lord, I do not like the idea of overlaying public inquiries on the top of all that procedure which is already in Clause 7.

Lord Bruce of Donington

We are sorry that the noble Lord has not seen fit to accept this amendment. At first he said we ought to realise that it would have very limited effect because he did not anticipate there being many applications for authorisation. Then he said that in any event they were likely to take a long time. If the applications were reasonable they ought not to take a long time. If they were unreasonable in themselves, surely this fortifies the necessity for having a public inquiry.

I am bound to return to the point made so ably by my noble friend concerning the practice in free enterprise America. They apparently do not find it incompatible with the working of a predominantly free market system to have in the case of monopolies, particularly private monopolies—in some cases going only over one state, but one state is very often the size of the United Kingdom—proper public inquiries. I cannot see why the noble Lord takes such a view against them. If he had been at the Department of Industry instead of at his parent department, the Ministry of Agriculture, then he might have taken a slightly more refined view.

The relationship between the Ministry of Agriculture and the farmers is a very cosy one. The National Farmers' Union and the Ministry of Agriculture live on terms of easy amity. One very often wonders which is which, for there is so much unanimity of view. But here we are dealing with a matter of commerce. How on earth is the ordinary machinery of free enterprise interfered with to any greater extent than it is in the United States, by holding what on the noble Lord's own say-so must be a comparatively rare event—that is, a public inquiry?

One of the difficulties is that the noble Lord seems to think that precisely because a complaint can be made after an authorisation, or because there is machinery for complaining after the Government themselves have made a decision, that satisfies the position. I remind the noble Lord that there is a world of difference between consultation while or even before a decision is made and consultation, or listening to representations, after a decision has been made.

The noble Lord must know, having spent some time in public life, that one of the nuances of being in government in particular is that one should never take up a public position from which one cannot retreat. That is one of the dicta in which noble Lords opposite must have been instructed by their civil servants when they assumed office. What we are really trying to do is to rescue the noble Lord, to prevent him from taking up a public position from which, as a matter of prestige, he would find it difficult to retreat following representations.

Surely it is better for good government that consultation should take place and that a private inquiry should take place before the making of a decision. It is the difference between what one might call positive democracy and negatived-by-objection democracy. I appeal to the noble Lord to be reasonable about this matter. It does not strike at the roots of this Bill—a sordid little Bill that is merely concerned with the raising of money for the Government. It does not strike even at the root of that. It is a proposal to which any reasonable person anxious to make progress with the Bill would immediately agree. Unless the noble Lord considers that he has already taken up a public position from which he cannot retreat, then I implore him to accept the amendment.

Baroness Burton of Coventry

I feel more strongly about the amendment upon which we have just voted, when the Opposition was defeated, than I do about this amendment. However, I am worried about the attitude of the Government towards consumers, which does not seem to have made the progress that the Government believe that it has. The noble Lord, Lord Belstead, in replying to the previous amendment, stated that before authorisation was given various things would be done. I thought at the time that surely—and this is what the noble Lord, Lord Bruce, has just been saying—discussions should take place before the authorisation, or whatever it is, is made.

Those of us who have worked with consumer councils, particularly consumer councils concerned with nationalised industries, know full well that they are told of events after they have been arranged and that opinion has never been sought beforehand. I would have thought that the gas consumers council would have merited the opportunity of being able to give an opinion on such matters before the Government implements them. I agree entirely with what the noble Lord has just said.

Obviously it is much easier for the Government to —shall I say?—amend what they have said before taking up a public position. It is very much more difficult to do that afterwards. Although I feel more strongly about the amendment that we on this side of the Committee have just lost, I think that the Government should allow the consumer council to have more say in such matters, and seek its opinion, before decisions are taken.

Lord Ezra

I rise to support that which has just been said by my noble friend Lady Burton of Coventry. Indeed, I support what the noble Lord, Lord Bruce of Donington has said: that consultation before a decision is taken is far better and more democratic than consultation after a decision has been made. If the noble Lord, Lord Belstead, were to argue that supplies of gas to consumers would be seriously jeopardised if the amendment were agreed, then I am sure we would have to think again. If that is not the case, however, then there is a strong argument for supporting wider consultation before decisions are reached.

Lord Belstead

The noble Lord, Lord Ezra, puts a direct point to me, which refers back to one that was made by the noble Lord, Lord Bruce, about experience in the United States. With respect to the noble Lord, I do not think that the United States experience is a very good one to follow. My advice is that in the 1970s the need for public hearings contributed significantly to delays in processing applications for price rises and the regulatory chaos that led to mass shortages in gas supply. That is not an example we would want to follow.

My conclusion is that although it is the case that we must not get this matter out of proportion—and we are talking only about the possibility of some applications for authorisations in the future after British Gas has its authorisation—nonetheless, I believe that if we overlay the provisions for public consultation that are in Clause 7 with provisions for public hearings, then there could genuinely be a danger, when there is an application for an authorisation, of having a long delay for consumers wanting to receive gas.

I remind the Committee that one of the primary duties of the Secretary of State under Clause 4 of the Bill will be to satisfy all reasonable demands for gas, and that a director will be appointed to oversee the regulation of gas supplies. His expertise will be available to my right honourable friend, and then, as I have already endeavoured to explain, the views of the public will also be available before, and not after, a decision is taken. Although I quite understand the case that has been put to the Government, I do not consider it is reasonable to lay a provision for public hearings on top of all the existing safeguards.

Lord Gallacher

The Minister's reply is quite disappointing. He paid me the compliment of saying that I was persuasive. All I can say in answer to that is I am grateful for the fact that I am not being paid by results. If so, I should be in danger of dying from starvation. I do not believe that the suggested delays to consumers that the Minister has mentioned are not capable of being borne by consumers. Neither do I believe that the analogy with the United States that the Minister called in aid, that public hearings there had resulted in delays in price increases, would be likely to find disfavour with consumers in the United Kingdom. My own view is that a public hearing will satisfy the legitimate interests of a wide variety of people as to what is happening. Moreover, it will have the effect ultimately of reducing the number of rejections subsequent to the granting of an authorisation, if people have had their say before the authorisation itself has been granted. Therefore, to that extent it is a case of swings and roundabouts so far as the time factor is concerned.

The Minister did not say, in answer to the noble Lord, Lord Ezra, that there was the likelihood of public jeopardy so far as supplies are concerned, if hearings have to take place in advance of authorisations. Taking this and the other arguments adduced into consideration, and the response of the Minister to those arguments, I think we should once again seek to divide the House.

4.11 p.m.

On Question, Whether the said amendment (No. 61) shall be agreed to?

Their Lordships divided: Contents, 89; Not-Contents, 127.

Airedale, L. Lovell-Davis, L.
Amherst, E. McCarthy, L.
Ardwick, L. Mayhew, L.
Aylestone, L. Molloy, L.
Bacon, B. Morton of Shuna, L.
Banks, L. Mulley, L.
Beswick, L. Nicol, B.
Birk, B. Northfield, L.
Bottomley, L. Oram, L.
Brockway, L. Phillips, B.
Brooks of Tremorfa, L. Pitt of Hampstead, L.
Bruce of Donington, L. Ponsonby of Shulbrede, L. [Teller.]
Burton of Coventry, B.
Carmichael of Kelvingrove, L. Prys-Davies, L.
Cledwyn of Penrhos, L. Ritchie of Dundee, L.
Crawshaw of Aintree, L. Roberthall, L.
David, B. [Teller.] Rochester, L.
Davies of Penrhys, L. Sainsbury, L.
Dean of Beswick, L. Scanlon, L.
Diamond, L. Seear, B.
Elwyn-Jones, L. Sefton of Garston, L.
Elystan-Morgan, L. Shackleton, L.
Ennals, L. Simon, V.
Ewart-Biggs, B. Stallard, L.
Ezra, L. Stedman, B.
Fisher of Rednal, B. Stewart of Fulham, L.
Gallacher, L. Stoddart of Swindon, L.
Galpern, L. Strabolgi, L.
Gladwyn, L. Taylor of Blackburn, L.
Glenamara, L. Taylor of Gryfe, L.
Graham of Edmonton, L. Taylor of Mansfield, L.
Grey, E. Tordoff, L.
Hampton, L. Turner of Camden, B.
Hatch of Lusby, L. Underhill, L.
Heycock, L. Vernon, L.
Hirshfield, L. Walston, L.
Houghton of Sowerby, L. Wells-Pestell, L.
Hunt, L. Whaddon, L.
John-Mackie, L. White, B.
Kilbracken, L. Williams of Elvel, L.
Kilmarnock, L. Winchilsea and Nottingham, E.
Leatherland, L.
Listowel, E. Winstanley, L.
Llewelyn-Davies of Hastoe, B. Winterbottom, L.
Lloyd of Kilgerran, L. Ypres, E.
Lockwood, B.
Ailesbury, M. Belstead, L.
Aldington, L. Bessborough, E.
Alexander of Tunis, E. Birdwood, L.
Allerton, L. Boyd-Carpenter, L.
Ashbourne, L. Brabazon of Tara, L.
Auckland, L. Brougham and Vaux, L.
Bauer, L. Butterworth, L.
Caccia, L. Macleod of Borve, B.
Caithness, E. Mancroft, L.
Campbell of Alloway, L. Manton, L.
Campbell of Croy, L. Mar, C.
Chelmer, L. Margadale, L.
Clinton, L. Marsh, L.
Constantino of Stanmore, L. Maude of Stratford-upon-Avon, L.
Cottesloe, L.
Cox, B. Merrivale, L.
Craigavon, V. Mersey, V.
Crawford and Balcarres, E. Montgomery of Alamein, V.
Cullen of Ashbourne, L. Morris, L.
Davidson, V. Mottistone, L.
De Freyne, L. Munster, E.
Denham, L. [Teller.] Norfolk, D.
Dilhorne, V. Norrie, L.
Drumalbyn, L. O'Brien of Lothbury, L.
Duncan-Sandys, L. Onslow, E.
Dundee, E. Orkney, E.
Eccles, V. Orr-Ewing, L.
Ellenborough, L. Pender, L.
Elliot of Harwood, B. Peyton of Yeovil, L.
Elton, L. Porritt, L.
Faithfull, B. Portland, D.
Fortescue, E. Rankeillour, L.
Fraser of Kilmorack, L. Reay, L.
Gardner of Parkes, B. Reigate, L.
Gibson-Watt, L. Renton, L.
Gisborough, L. Rochdale, V.
Glenarthur, L. Romney, E.
Gray, L. Rugby, L.
Gray of Contin, L. St. Aldwyn, E.
Gridley, L. St. Davids, V.
Grimthorpe, L. Sanderson of Bowden, L.
Hailsham of Saint Marylebone, L. Sandford, L.
Sandys, L.
Harmar-Nicholls, L. Savile, L.
Harris of High Cross, L. Seebohm, L.
Hemphill, L. Shaughnessy, L.
Henderson of Brompton, L. Skelmersdale, L.
Hives, L. Somers, L.
Hooper, B. Stamp, L.
Hunter of Newington, L. Stockton, E.
Hylton-Foster, B. Stodart of Leaston, L.
Inglewood, L. Strathspey, L.
Kaberry, of Adel, L. Terrington, L.
Kimball, L. Teviot, L.
Kinloss, Ly. Tranmire, L.
Kitchener, E. Trenchard, V.
Lauderdale, E. Trumpington, B.
Lawrence, L. Vaux of Harrowden, L.
Layton, L. Vickers, B.
Lloyd of Hampstead, L. Vivian, L.
Long, V. [Teller.] Ward of Witley, V.
Lovat, L. Westbury, L.
Lucas of Chilworth, L. Whitelaw, V.
Luke, L. Wolfson, L.
McAlpine of Moffat, L.

Resolved in the negative, and amendment disagreed to accordingly.

4.19 p.m.

Lord Bruce of Donington moved Amendment No. 62: Page 5, line 2, after ("authorise") insert ("by order").

The noble Lord said: I beg leave to move Amendment No. 62, with which I propose to discuss Amendments Nos. 63 and 63ZA. Since these amendments are concerned with Clause 7, it might be for the convenience of the Committee if I read subsection (2) as it would appear if these three amendments were accepted. It would then read: The Secretary of State after consultation with the Director may authorise by order any person to supply gas through pipes to any premises in that person's authorised area, that is to say, so much of the area designated in the authorisation as is not for the time being designated in a subsequent authorisation under this section". There would then be a new subsection reading: No order shall be made under subsection (2) above unless a draft of it has been laid before and approved by both Houses of Parliament". By inserting Amendment No. 63ZA there will be a further subsection stating: An order under subsection (2) above shall not come into operation until after the end of the period of 28 days beginning with—

  1. (a) the day on which copies of the order and of the authorisation are laid before each House of Parliament; or
  2. (b) if such copies are so laid on different days, the last of those days".

The purpose of this series of amendments is to incorporate in this Bill the identical provisions in the Telecommunications Act on the issue of licences. Precisely because that is so and in order to save the time of the Committee I shall not elaborate further, because I assume that the Government are prepared to accept the amendments automatically without the necessity of my having to address the Committee. In the confident belief that the Government are bound to accept these reasonable amendments, I beg to move.

Lord Belstead

The noble Lord, Lord Bruce, is basing his argument for this group of amendments which hang on Amendment No. 62 on the fact that there is a parallel with the Telecommunications Act. Indeed, I agree with the noble Lord that the provisions of Section 9(2) of the Telecommunications Act provide that where an order designating a public telecommunications operator is given it shall be subject to a parliamentary procedure.

I agree with the noble Lord so far, but I do no think that the analogy with this Bill is a proper one. In the case of telecommunications the licence to be given to operators provides the main legal framework for an operator's activities and can vary from licensee to licensee, whereas in the case of gas the regulation of those matters which affect all public gas suppliers is to be dealt with in the Bill itself; for example, the specific duty in Clause 10 to supply, the gas supply code in Schedule 5 and the provisions concerning compulsory purchase of land and the breaking up of streets in Schedules 3 and 4.

Parliament will have given its approval for these provisions which will apply automatically to any public gas supplier who is granted an authorisation. Therefore, I am saying that what the amendments seek is already adequately covered by the consultation provisions in the Bill—which is the case I have made on the last two amendments—and by the procedure for parliamentary scrutiny. With respect to the noble Lord, and for the reasons I have given, I do not think that the analogy with the Telecommunications Act is apt in this case.

Lord Bruce of Donington

I am sorry that the noble Lord has taken that attitude. While it is true, as the noble Lord said, that much of the regulatory machinery is incorporated in the Bill, that was also the case in the Telecommunications Bill. There is certainly a deal of regulatory matter of very considerable importance to Parliament contained in the proposed authorisation.

The noble Lord is really seeking to say that the authorisation itself is of little consequence to Parliament and that it does not contain matters of any vital substance that need go before the Houses of Parliament. Surely that must be wrong, as anyone who has seen the proposed authorisation must agree.

It seems to me that the noble Lord is quite incapable of putting himself in the kind of political position in which his noble friend the noble Lord, Lord Cockfield, was put when we were dealing with the Telecommunications Bill. The noble Lord, Lord Cockfield was, and is, a man of some intellectual attainments and is a very good politician. He knew quite well how to persuade the Committee to get through a Bill with the greatest possible speed. When the noble Lord, Lord Cockfield, was confronted with the situation that the main purposes of the Bill might be held up for a considerable time he tended to be more and more reasonable.

The arguments that I have in support of my amendments I did not advance earlier because it never occurrred to me that the noble Lord the Minister would not accept them. The noble Lord, Lord Cockfield, when dealing with the Telecommunications Bill said: My Lords, this amendment gives effect to an undertaking that I gave in Committee to ensure that there would be effective parliamentary scrutiny of British Telecom's licence. I then said it was important also to ensure that the arrangements made preserve the independence of the director general in carrying out his regulatory functions, and equally preserve the flexibility of the licence modification procedures. I proposed, therefore, that we should proceed by building on the procedures in Clause 9 under which a system, the running of which is authorised by a licence to which Clause 8 applies, can be designated as a public telecommunications system and the licensee as a public telecommunications operator". The noble Lord, Lord Cockfield, went on to deal with the second part of the amendment that he had introduced and which was accepted by the House. He continued: In providing a 28-day period, we believe we are providing a reasonable and sensible period of consideration before the order takes effect. But I can give your Lordships a firm assurance that we will lay British Telecom's licence and the order designating British Telecom as a public telecommunications operator while Parliament is sitting and that the 28-day period will also run while Parliament is sitting. It would be our intention that if noble Lords were to indicate that they wished to debate the order and the licence, such a debate would, business of the House permitting, also take place during the 28 days".—[Official Report, 12/3/84; cols. 618–620.] In that instance the noble Lord, Lord Cockfield, was showing a degree of reasonableness which in the case of the Gas Bill we feel we have every right to demand. The supply of gas is in many ways much more vital than the provision of a telecommunications system. Certainly a telecommunications system does not carry the dangers that a gas supply does because we are dealing with a very different material.

I cannot see why the noble Lord is afraid of bringing the whole business under proper parliamentary control. It seems to me that the noble Lord, Lord Cockfield, was careful to adduce the arguments, and as the Committee will know the noble Lord, Lord Cockfield, could, when provoked, be very abrasive, to put the least construction upon it, but there he was agreeing to do something that is eminently reasonable.

The distinction that the noble Lord makes between the contents of a licence and the contents of an authorisation is an extremely fine one. It can do no harm at all to have the procedure which was good enough for the Government in the case of the granting of a licence applied to this Bill in regard to the granting of an authorisation. I sincerely hope that, if only to expedite business, and even after he has taken up a public position from which he may not feel able to retreat, the noble Lord will on reflection see fit to reconsider and accept the amendment.

4.30 p.m.

Lord Belstead

The noble Lord, Lord Bruce, has put forward one argument to which I think the House will want a reply. Understandably, the noble Lord has said that when dealing with matters relating to the supply of gas, the public mind is immediately drawn to the need for particular safety measures. Perhaps I may quickly say that in my understanding and experience British Gas are to be congratulated on the great care that they take in regard to safety.

Nonetheless, the noble Lord makes a perfectly valid point when he says that safety must be in the forefront of our minds when dealing with legislation connected with gas, and therefore that this is one reason why Parliament should in the future be able to approve (or not approve) by order the authorisation of a public gas supplier. But if the noble Lord cares to glance at the Bill, he will see that the code of safety, as it is called (and which in effect has been in existence since Victorian times), has been put firmly into the Bill and not into the authorisation. It forms Schedule 5 to the Bill. Therefore, if I may say so, the argument that in some way Parliament ought to have a hand in granting individual authorisations on grounds of safety falls because the main safety requirements are not in the authorisation but are in the Bill.

The reason why I am resistant to the idea of Parliament being involved in every detail of future authorisations is because I think that these amendments would lay additional burdens on both Houses and would create considerable delays in the granting of an authorisation. After all, as I have already explained, we have provided in the Bill for a full system of consultation prior to the issue of an authorisation to a public gas supplier. I like to think that we have already provided ample opportunity for Parliament to scrutinise and comment on the draft authorisation of British Gas. It was published in another place before the Second Reading of the Bill and on behalf of the Government I had a revised copy of the authorisation put into the Printed Paper Office well before the Committee stage of the Bill began.

Your Lordships have only to glance at the Marshalled List to see that we shall have many amendments during this sitting today which refer to the authorisation either directly or in some way or another. So there is enormous opportunity in your Lordships' House as there was in another place for debating matters which are proposed to be put in the authorisation.

There is the final reason, which did not appeal to the noble Lord but which nonetheless I think is a valid one: we are not talking about the Telecommunications Act. In talking about government spokesmen. I am sorry if we do not have such a good government spokesman as was my noble friend Lord Cockfield, but we are certainly not talking about the Telecommunications Act. There is this difference: in the Telecommunications Act the main legal framework for the operator's activities was contained in the licence, and that is not the case in this Bill.

At the beginning of my final remarks I gave one example: the safety provisions which will affect British Gas and affect any subsequent public gas suppliers are in fact in the Bill and not in the authorisation. It is for that reason that, though the noble Lord has been persuasive, I do not think that it would be right to have Parliament drawn into individual authorisations after this Bill becomes law.

4.35 p.m.

On Question, Whether the said amendment (No. 62) shall be agreed to?

Their Lordships divided: Contents, 85; Not-Contents, 122.

Airedale, L. Lockwood, B.
Amherst, E. Lovell-Davis, L.
Ardwick, L. McNair, L.
Aylestone, L. Mar, C.
Bacon, B. Molloy, L.
Banks, L. Morris of Grasmere, L.
Birk, B. Morton of Shuna, L.
Boston of Faversham, L. Mulley, L.
Bottomley, L. Nicol, B.
Briginshaw, L. Northfield, L.
Brockway, L. Oram, L.
Brooks of Tremorfa, L. Phillips, B.
Bruce of Donington, L. Pitt of Hampstead, L.
Burton of Coventry, B. Ponsonby of Shulbrede, L. [Teller.]
Carmichael of Kelvingrove, L.
Cledwyn of Penrhos, L. Prys-Davies, L.
Crawshaw of Aintree, L. Ritchie of Dundee, L.
David, B. [Teller.] Rochester, L.
Davies of Penrhys, L. Sainsbury, L.
Dean of Beswick, L. Seear, B.
Diamond, L. Sefton of Garston, L.
Elwyn-Jones, L. Shackleton, L.
Elystan-Morgan, L. Stallard, L.
Ennals, L. Stedman, B.
Ewart-Biggs, B. Stewart of Fulham, L.
Ezra, L. Stoddart of Swindon, L.
Fisher of Rednal, B. Strabolgi, L.
Gallacher, L. Taylor of Blackburn, L.
Galpern, L. Taylor of Mansfield, L.
Gladwyn, L. Tordoff, L.
Glenamara, L. Turner of Camden, B.
Grey, E. Underhill, L.
Hampton, L. Vernon, L.
Hatch of Lusby, L. Walston, L.
Hayter, L. Wells-Pestell, L.
Heycock, L. Whaddon, L.
Hunt, L. White, B.
John-Mackie, L. Wigoder, L.
Kilbracken, L. Williams of Elvel, L.
Kilmarnock, L. Winchilsea and Nottingham, E.
Leatherland, L.
Listowel, E. Winterbottom, L.
Llewelyn-Davies of Hastoe, B. Ypres, E.
Lloyd of Kilgerran, L.
Aldington, L. Alport, L.
Alexander of Tunis, E. Auckland, L.
Allenby of Megiddo, V. Bauer, L.
Allerton, L. Beloff, L.
Belstead, L. Lucas of Chilworth, L.
Bessborough, E. Luke, L.
Birdwood, L. McAlpine of Moffat, L.
Boyd-Carpenter, L. Macleod of Borve, B.
Brabazon of Tara, L. Mancroft, L.
Brougham and Vaux, L. Manton, L.
Butterworth, L. Margadale, L.
Caccia, L. Marsh, L.
Caithness, E. Maude of Stratford-upon-Avon, L.
Campbell of Alloway, L.
Campbell of Croy, L. Merrivale, L.
Cathcart, E. Mersey, V.
Chelmer, L. Montgomery of Alamein, V.
Clinton, L. Morris, L.
Constantine of Stanmore, L. Mottistone, L.
Cottesloe, L. Munster, E.
Cox, B. Norfolk, D.
Craigavon, V. Norrie, L.
Crawford and Balcarres, E. O'Brien of Lothbury, L.
Cullen of Ashbourne, L. Onslow, E.
Davidson, V. Orr-Ewing, L.
Denham, L. [Teller.] Pender, L.
Dilhorne, V. Peyton of Yeovil, L.
Drumalbyn, L. Porritt, L.
Dundee, E. Portland, D.
Eccles, V. Rankeillour, L.
Ellenborough, L. Reay, L.
Elliot of Harwood, B. Reigate, L.
Elton, L. Renton, L.
Faithfull, B. Richardson, L.
Ferrers, E. Rochdale, V.
Fortescue, E. Romney, E.
Fraser of Kilmorack, L. Rugby, L.
Gibson-Watt, L. St. Davids, V.
Gisborough, L. Sanderson of Bowden, L.
Glenarthur, L. Sandford, L.
Gray, L. Sandys, L.
Gray of Contin, L. Savile, L.
Gridley, L. Seebohm, L.
Grimthorpe, L. Shaughnessy, L.
Hailsham of Saint Marylebone, L. Skelmersdale, L.
Somers, L.
Harmar-Nicholls, L. Stamp, L.
Harris of High Cross, L. Stockton, E.
Harvington, L. Stodart of Leaston, L.
Hives, L. Strathspey, L.
Hooper, B. Terrington, L.
Hunter of Newington, L. Teviot, L.
Hylton-Foster, B. Thorneycroft, L.
Inglewood, L. Trenchard, V.
Kaberry, of Adel, L. Trumpington, B.
Kimball, L. Vaux of Harrowden, L.
Kitchener, E. Vivian, L.
Lauderdale, E. Ward of Witley, V.
Lawrence, L. Westbury, L.
Layton, L. Whitelaw, V.
Lloyd of Hampstead, L. Wolfson, L.
Long, V. [Teller.] Zouche of Haryngworth, L.

Resolved in the negative, and amendment disagreed to accordingly.

4.42 p.m.

Lord Diamond moved Amendment No. 62A: Page 5, line 6, at end insert ("in accordance with the provision contained in Schedule (Standing Charges) to this Act.")

The noble Lord said: I understand that it will be for the convenience of the Committee if we discuss at the same time Amendment No. 84B; that is to say, a new schedule. What we are talking about is a matter of common interest on which I do not think there is much dispute among many members of the Committee; namely, the importance of protecting the consumer in particular in relation to standing charges. A private monopoly is being created and obviously more has to be done to protect the consumer because he will be at greater risk than with a nationalized corporation, with all the protections that are available through Ministers, the two Houses of Parliament, and so on.

One sees on the Marshalled List a number of amendments seeking to add protection for the consumer. There is a particular responsibility on those of us who wish to add to the protection of the consumer where standing charges are concerned, because they fall most heavily on those in the bottom income groups. They use their gas supply least, and so their charges per therm are less important to them than the standing charge. They pay more than we do per therm consumed overall, because the standing charges are based that way and form a large part of a small consumer's bill. In protecting the consumer, it is particularly important that we should protect those most affected by the standing charges.

That is why it is proposed in Amendment No. 84B that: The supplier shall ensure that from 1st April 1987 the standing charges payable by tariff customers in any relevant year do not exceed the standing charges payable by such customers in the first relevant year as increased by the percentage increase in the Retail Price Index from 1st April 1987". It is a proposal to limit the increase in standing charges to the amount of the increase in the RPI.

I feel that so far that is fairly common ground in all parts of the Committee. The difference arises here. I suspect that the Government will say—I do not wish to put words in the noble Lord's mouth—"We have taken the point on board and we have a provision in the proposed authorisation covering it". There is a provision: Condition 4 on standing charges in the proposed authorisation. That shows that the Government are at one with those of us who believe that standing charges are particularly sensitive and therefore particular protection is required. There are two answers to the suggestion that the matter is satisfactorily dealt with by leaving it as it is in the authorisation. The first is that the words in the authorisation are inadequate and the second is that having something in the authorisation is not the same as having it in statute.

Let me deal with the first and read Condition 4, "Standing charges", in the proposed authorisation. I underline the word "proposed". The provision may be in the final authorisation, but, as I think happened with British Telecom, it may be found convenient to make certain alterations. At all events, it is a proposed authorisation and not part of the Bill. It states: The supplier shall use its best endeavours to secure that … the standing charges payable by tariff customers … do not exceed the standing charges … as increased by the percentage increase in the Retail Price Index". There is no great difference on method or measurement. The question is how the consumer will get the extra protection needed because of the extra pressures in favour of the shareholder and against the consumer as a result of privatisation. The extra protection will not be secured by talking about a supplier using "its best endeavours". I have no doubt that best endeavours have been used hitherto, and we want more than that. We want a clear assurance that the standing charges will not be increased by more than the increase in the RPI.

The proposed conditions are inadequate and are too weakly worded. Moreover, they are, as I keep indicating, proposed conditions. They are not conditions that are in the Bill. We seek to give statutory increased protection of the required amount to those who are in particular affected by standing charges—that is to say, all the lower income groups who have to use gas. It is no answer for the Government to say that it is the same thing. Of course, it is not the same thing. The noble Lord the Minister reminded us only on the last amendment that where you have something as important as safety you do not leave it to the proposed authorisation alone. You put it in the Bill so as to give it statutory backing. That is what is done with regard to safety.

As all your Lordships who have read the proceedings in another place will know, there was discussion about the supply of back-up gas. I do not need to describe to such a knowledgeable audience what back-up gas is. I am however going to suggest to all your Lordships who know about back-up gas that it is not as important as protecting the consumer. Back-up gas affects one or two individuals. Protecting the consumer affects 16 million. Protecting the poorer section of the community affects, I imagine, something like 8 million, to whom standing charges are a very relevant proportion of their bills. Back-up gas was provided for only in the authorisation. However, as a result of arguments put forward in another place, it was transferred to the Bill and now has statutory protection. I am therefore suggesting that inasmuch as important issues of this kind have either been in the Bill from the beginning or have been moved into the Bill to provide statutory protection, protecting the consumer—giving a modicum of additional protection that he will undoubtedly need once the supply of gas is privatised—should be put in the statute in the words of my amendment. I beg to move.

Lord Ezra

I rise to support my noble friend Lord Diamond in the amendment that he has proposed. I should like to suggest to the Committee that this is one of the most sensitive issues in this very important Bill. There must be grave concern in the country about the impact of the transfer when a very large enterprise, which is a monopoly in the public sector, becomes a monopoly in the private sector. The Government have gone some way towards recognising this through the various provisions they have made for safeguarding the public. An essential provision, however, is to safeguard the individual consumer of gas over the prices to be charged for the supply of gas. There is a formula on the tariff price. But, so far as the standing charge is concerned, the "best endeavours" clause does not really go far enough, as my noble friend has indicated.

I do not know why the Government should resist giving up "best endeavours" and laying down once and for all that the standing charge shall not rise in any one year by more than the retail price index. As my noble friend has pointed out, the latitude that is given by the "best endeavours" clause could mean that the poorest users of gas ended up paying most per them because their standing charge goes up at a greater rate than their overall consumption of gas would justify. That seems to us, on social grounds, on grounds of equity and fairness and on grounds of reassurance to the public, to indicate that this amendment should be given serious consideration by the Government in order to ensure that the public are satisfied that, following due deliberation in this House, we have taken their interests into account.

Baroness Burton of Coventry

I should like to support the amendment, particularly from the viewpoint of elderly people. We have heard a great deal during the past terrible winter about elderly people and their problems. I am sure that the Minister will know that elderly people use less gas than most of us because of its cost. The standing charges form, therefore, a high proportion of what they have to pay. I wonder, however, whether the Minister is aware that there are real fears among elderly people and among the organisations that cater for them that, under a privatised British Gas, standing charges may increase disproportionately in future years. Many elderly people will therefore have greater difficulty still in paying their bills.

There hs been reference already to Condition 4 of the authorisation. I have noted the reply given in the debate in Standing Committee in another place that gas suppliers should use their best endeavours to see that standing charges do not rise disproportionately. Most of us who for a long time have sat in one House or the other, are not impressed by "best endeavours" whoever the Minister and whatever the party in power. For "best endeavours" are not a firm commitment. I should like very much to support the amendment. I hope that the Government will feel able to write into the Bill what my noble friend Lord Diamond asks.

5 p.m.

Lord Stoddart of Swindon

I also should like to support the amendment, although noble Lords will note that there is a further amendment, Amendment No. 93A, in my name and that of my noble friend Lord Bruce of Donington, under Clause 14 which mentions that a gas supplier may make a standing charge. Our amendment goes rather further than the amendment of the noble Lord, Lord Diamond. In certain circumstances, we seek to see that the standing charge is actually reduced. However, we shall no doubt come to that amendment later. I wish to express my support for the amendment now before the Committee, Amendment No. 62A, and also Amendment No. 84B.

Reference has been made to the phrase "best endeavours". It is a great sounding phrase. I suppose that the Opposition would claim that they have been using their best endeavours to make progress on the Bill. The Government apparently do not agree. Certainly, the noble Lord, Lord Boyd-Carpenter, does not agree, because he said so earlier. It is, however, our opinion that we have used our best endeavours to make progress. There is disagreement about that. There will be a disagreement about the best endeavours of the gas supplier to limit increases in the standing charges payable by tariff customers to the rise in the retail price index. I feel sure that on the basis of our experience of discussions of the Bill so far, noble Lords opposite will agree that the phrase "best endeavours" simply is not good enough.

The noble Baroness, Lady Burton, mentioned the fear that, following privatisation, standing charges would be increased disproportionately. There is a very real danger that this could happen. That is the easy way of putting up gas prices. That is the way which has a great deal of attraction. It is a straight charge which is passed on to people.

I have to tell the noble Lord that the only reason why standing charges have not increased to a greater degree than they have over the past few years is parliamentary pressure in the House of Commons. Had he represented a constituency—as my noble friends Lord Diamond, Lady Burton, Lord Bruce of Donington, and I have—he would know that one issue which over the last few years has made the pensioners' association see red is that relating to standing charges. I have had people in my "surgery" blaming me—I do not know why they should do so, because I was on their side. They have attended meetings in the House of Commons and have pressurised every single Member of that House to the extent that Members on all sides there have been forced to ensure that the gas and electricity boards—and British Telecom when it was nationalised—limited the amount of the standing charge.

Once British Gas is privatised the parliamentary pressure will not be there. We have been trying to write into the Bill some role for Parliament, but the noble Lord opposite has resisted every attempt we have made, and will undoubtedly resist any further attempts that we make. There will therefore be no parliamentary pressure. That is why it is important that this item, limiting standing charges, is written into the Bill. The pensioners, the low paid, the most disadvantaged in our society, are entitled to expect this consideration from this Chamber, which has a great care for individuals. I have learned since I have been here that noble Lords have a great care for people. We can be proud that we have. I believe it will be expected that this Chamber will safeguard the interests of those people I have mentioned. I hope, therefore, that if the noble Lord will not accept this amendment—and I sincerely hope that he will—noble Lords, in their usual caring way, will vote for it and pass it into law.

Lord Campbell of Alloway

The noble Lord, Lord Stoddart of Swindon, said that the best endeavours are not good enough. In certain circumstances they are not good enough. One circumstance concerns Amendment No. 84ZB, after Clause 9, relating to special services for supply to the elderly and infirm. It is proposed in that amendment that the provision should have legal effect in a code of practice. The issue was introduced by the noble Baroness, Lady Burton of Coventry. There is a distinction between special services for the infirm and the elderly and standing charges. If one dissects the problem it is different; but I thought it right at this stage, as I propose to move Amendment No. 84ZB in due course, to say with regard to special services that best endeavours assuredly would not be good enough.

Lord Belstead

All the noble Lords who have spoken in support of this amendment have explained their concern that there should be proper control over the standing charge so that there is no possibility of unfairness. The Government share the view of noble Lords. It is for this reason that the draft authorisation for British Gas which has been made public includes provisions for controlling standing charges.

I rather felt that the noble Lord, Lord Ezra, and the noble Baroness, Lady Burton, had overlooked that there are two safeguards provided on standing charges. The first is that standing charges fall within the general control of prices under the price formula set out in Condition 3. The noble Lord, Lord Stoddart, made a reference to this in his remarks. Under this formula British Gas will have a clear and strong incentive to reduce the costs within their control and customers will benefit from improved efficiency through the efficiency factor which is called X. There will therefore be a proper incentive on British Gas to keep the costs associated with the standing charge as low as possible because standing charges come within the price formula. That is one safeguard.

There is in addition an important question as to how the total ought to be recovered between the standing charge and the rate per therm which underlaid much of what the noble Lord, Lord Diamond, said in his opening remarks. In order to prevent unreasonable increases in standing charges, the Government believe that there should be a further control to ensure that the standing charges rise no faster than general inflation. Therefore, as the noble Lord, Lord Diamond, quite correctly recorded, Condition 4 of the draft authorisation sets out such an obligation and the amendment of the noble Lord seeks to do the same. As the noble Lord, Lord Diamond, said, so far is common ground.

However, there were then two criticisms which came from noble Lords. The first was that the amendment is seeking to put the obligation in the Bill, whereas at the moment the obligations about the standing charge rising no faster than the rate of inflation is in the authorisation.

Lord Diamond

It is in the proposed authorisation.

Lord Belstead

Yes. The Government have put a condition in the authorisation. I believe that this is the right place for it. It is true that it is a proposed authorisation but it is subject to exhaustive parliamentary discussion. It is quite clear that once Parliament has finished discussing the authorisation then Parliament can be assured that that is what the authorisation will look like.

Do not let us forget that there is then a mechanism which has been put in the Bill, between Clauses 23 and 27, to make it clear that one cannot change the authorisation without using the mechanisms which are in the Bill. Let us be quite clear on this point: the authorisation cannot be fiddled about with once we have it. Once we have it we can only change it by going back to the Bill.

Perhaps I may say on this first criticism that we on this side of the Chamber believe that it would be very undesirable to freeze in the statute a provision about how fast the standing charge can be changed. We believe that if it is in the authorisation, steps can be taken to modify it to meet changing circumstances, if necessary to impose a tighter control on the standing charge. I cannot at this point resist saying that I do not think the present management of British Gas needs a very great deal of encouragement on this point. On 18th April the announcement was made that standing charges will be reduced by £1 a quarter for some 15 million credit customers. That shows the attitude of the management of British Gas to this issue.

That was the first criticism. I shall deal with the second criticism and then give way to the noble Lord, Lord Ezra. The second criticism which your Lordships have made is that the drafting of the condition in the authorisation uses the words, "best endeavours". Before I deal with that matter, perhaps I should give way to the noble Lord, Lord Ezra.

Lord Ezra

Throughout the debates that we have had on this Bill so far, none of us has criticised the present management of British Gas. We think that it has done a marvellous job. However, we are here concerned with a Bill which is looking forward 25 years. That alters the whole complexion of the situation. We have to legislate for that period ahead irrespective of the very successful way in which the present managers of British Gas have run the enterprise.

Lord Stoddart of Swindon

On the same point, I should like to say that in relation to Condition No. 3 of the authorisation dealing with price control, there is only certainty that that price control will last for five years—not 25 years.

Lord Belstead

That is a somewhat different matter. Both of the points which noble Lords have made are reasonable points, but the one which the noble Lord, Lord Ezra, put to me is directly and wholly relevant. I should now like to prove to noble Lords opposite that I have tried to listen.

The Government explained in another place—and, indeed, my noble friend Lord Campbell of Alloway referred to this matter in his brief intervention—that we believe that the words "best endeavours" place a strong legal obligation on British Gas. However, Members of the Committee opposite are suspicious of the use of the words "best endeavours". I accept that it would be possible to frame our obligation in a more direct way. Bearing in mind as the noble Lord, Lord Ezra, has said that we are providing, through our debates on this Bill and on the authorisation, for many years ahead, I should like to give a commitment as regards this particular amendment; namely, that the Government will respond to what has been said on this particular point by bringing forward to noble Lords ahead of the Report stage a revised draft Condition No. 4 for the authorisation, which will omit the words "best endeavours".

However, as regards the first criticism which noble Lords have levelled, I believe that, for the reasons which I have endeavoured to give, it ought to be in the authorisation and not in the Bill.

Lord Diamond

Those of us on these Benches are undoubtedly grateful to the noble Lord the Minister for the consideration which he has given to the arguments which have been put forward and for his understanding of what lay behind our arguments. It is certainly encouraging to know—assisted by the intervention of one of the noble Lord's own distinguished supporters (not only a distinguished supporter, but a distinguished lawyer as well)—that the words which we find inadequate will be reconsidered and removed at a later stage.

The question which we have to consider is this. Having met us on one point only, what should we invite the Committee to do on the second point? The second point is that in accordance with the precedent which has been set by the Government, there should be a transfer of an important undertaking from a proposed condition in a proposed authorisation to a statute which is subject to consideration by both Houses of Parliament.

I am very tempted to say that the noble Lord has not gone far enough. I think that that would represent our considered view. However, we must have time to consider the situation. Therefore, what I am saying to the noble Lord is that we are very grateful to him for meeting us halfway; half a loaf in these circumstances is better than no loaf at all. Indeed, I believe that this is the first crumb of comfort that has come from the Government Benches.

Lord Belstead

No, it is not.

Lord Diamond

All right, it is the second crumb; I do not want to be unjust. We are grateful for that reconsideration; but we must make it absolutely clear that when we come to the Report stage we shall have to think very carefully indeed about whether the extra protection to which all of us referred is adequately provided for in what the noble Lord proposes. Does the noble Lord wish to comment?

Lord Stoddart of Swindon

I do not know whether the noble Lord will withdraw his amendment. However, I agree with him that the offer of a concession has to be considered. Of course, the noble Lord, Lord Diamond, will realise that I am left with Amendment No. 93A, which goes a bit further. I wonder if, through the noble Lord, Lord Diamond, I could ask whether the Minister would go a bit further and say that in his consideration he will also take into account the points which are made in Amendment No. 93A. If he were able to say that, it may help us to proceed faster with the Bill beecause I may not then need to move that amendment.

5.15 p.m.

Lord Belstead

I have to confess that I have discovered that the brief in front of me for Amendment No. 93A has the word "Resist" written on it at the top. However, I am sure that when I come to that particular amendment I could put the situation in rather more parliamentary language for the noble Lord.

I am sure the noble Lord will not think that I am being unfriendly when I say that noble Lords opposite must decide how they want to deal with the matter. If the noble Lord really would like to speak to Amendment No. 93A as part of these amendments, then I shall do my very best to give a considered reply. However, if, as I understand the noble Lord, he would prefer to leave Amendment No. 93A, then I had better not push off into the rapids of that particular amendment.

Lord Bruce of Donington

I should like to ask the noble Lord a question. Is he aware that by most courteously and considerately offering to change the proposed—and I emphasise the word "proposed" advisedly—authorisation and to eliminate that part of it concerned with "best endeavours", all he is doing is reducing it to a form that is already in Amendment No. 84B? In other words, the case for Amendment No. 84B in terms of the elimination of "best endeavours" fully justifies the wording of Amendment No. 84B. The only difference between us now, on the assumption that the words "best endeavours" are eliminated, is whether the provision should be in the authorisation or whether it should be in the Bill. There is now no difference in principle between us.

Let me take the noble Lord back to his previous argument when he said that the great advantage of not having the authorisation itself subject to the detailed scrutiny of both Houses, under the method that I suggested in Amendment No. 62, was that the Bill—the legislation—contained the whole guts of the matter. By his own statement he has agreed that this is an important matter. Having agreed the principle of the abandonment of "best endeavours", why does he now resist incorporating it in the Bill itself?

The noble Lord also submits the conflicting arguments that somehow it is all taken care of in the price formula, the detailed consideration of which will have to wait for a later amendment or indeed when we come to the actual clause itself. If it is automatically taken care of in the formula itself, why all the hoo-ha about it? Is it not the fact that the formula itself is so loose? One of the reasons why the City is so enamoured of the Bill is the flexibility in regard to charging that is in the formula itself. The noble Lord has referred to the X factor. He could spend two hours explaining his views on what the X factor ought to be, but he will not get any further because nobody can tell him what it is. He does not even know it himself. But in the City they are under no illusions. The Daily Telegraph of 29th May says this referring to Sir Denis Rooke: Sir Denis has so far won the major privatisation battles with an accommodating energy secretary, Mr. Walker. He will be operating under a relaxed regulatory regime, and a not excessively demanding price restraint formula". The views of the Daily Telegraph—which is not normally the house organ of the Opposition—for once coincide with our own, as indeed will emerge when we examine the formula itself. The only way in which we can safeguard the standing charges is not by having them in the regulation but by having them in the Bill, and the noble Lord should recognise that.

Lord Diamond

It only falls to me to say once more that we are grateful to the Minister, but the more one considers it the more one realises that perhaps I was being over generous in saying that he has given us half a loaf. The expression "a crumb" is a better evaluation of the size. However, we shall look carefully at this and await what the noble Lord has to put on the Marshalled List at Report stage. In the meantime, I seek leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 63 and 63ZA not moved.]

Baroness Macleod of Borve moved Amendment No. 63A:

Page 5, line 24, at end insert— ("( ) Before granting an authorisation, the Secretary of State shall require any public gas supplier, following consultations with the Director and the Council, to prepare codes of practice specifying—

  1. (a) the nature of service available to tariff customers in relation to gas supplied by the supplier;
  2. (b) the conditions attached to the payment of gas bills including guidance to domestic customers if they have difficulty in paying; and
  3. (c) the provision of special services for elderly and disabled persons and any public gas supplier shall arrange for the publication of such codes of practice in such form and such manner as the Director may consider appropriate.

( ) The Director and the Council shall collect information on, and keep under review, all matters relating to such codes of practice under subsection (5) above with respect to which the functions of the Director or the Council are exercisable.").

The noble Baroness said: The noble Lord, Lord Diamond, said that he was happy with a few crumbs. I intend to get the loaf, after perhaps some persuasion, from my noble friend the Minister. The proposed authorisation also concerns codes of practice. Today I hope to speak briefly to Amendment 63A which deals with codes of practice for tariff customers in their paying of gas bills, but also includes guidance for domestic tariff customers. In the authorisation, Condition 12 mentions in the code of practice the parts I am concerned about in this amendment. Therefore, I propose to deal only with paragraph (c) in the amendment which deals with the elderly and disabled.

Other noble Lords have paid tribute to the care that at the moment British Gas gives to customers in our society in the elderly and disabled class. They provide special services and facilities, and give free safety checks on gas appliances and installations. They also provide a range of special controls for those with stiff joints—in other words, rheumatism and arthritis. They also give Braille or studded controls on some gas fires, cookers, and central heating for blind and partially-sighted customers. They will also move a gas meter for easier access. This is all done free, or for a nominal charge.

The purpose of my amendment is to put these obligations into the codes of practice which will be within the proposed authorisation. We all know that British Gas do it now; but as some noble Lords have said—and I think that the noble Lord, Lord Ezra, in particular told us this, and we are cognisant of it—other people some 25 or perhaps even 50 years in the future dealing with British Gas may not be so thorough in their help to the elderly and disabled.

I should like to ensure that these facilities are continued. I feel that this part of the wording after paragraphs (a) and (b), which are already in the codes of practice of the authorisation, should be in the Bill. Knowing, as my noble friend the Minister does so well, the needs of the elderly and disabled, I hope that he will agree to this amendment. I beg to move.

Viscount Hanworth

I am sure we would all agree on the importance of seeing that the elderly are protected and given the facilities which they now have and will require. Perhaps the Minister will tell us once again that this is covered in the Bill. But there is another point. The noble Lord, Lord Campbell of Alloway, has tabled Amendment No. 84ZB, which is intended to achieve the same result.

For various reasons the noble Lord believes that his amendment is stronger, more useful, and has more legal consequence than the present amendment under consideration. I do not want to comment on that point. No doubt the noble Lord will do so himself. What matters to us is that we should achieve at least one of these amendments. Perhaps the Minister would indicate which he is going to accept.

Lord Campbell of Alloway

I support the spirit of paragraph (c), to which my noble friend Lady Macleod of Borve has spoken, and so indeed does the noble Lord, Lord Henderson of Brompton, who asked me to say that he supports the spirit of it. This having been said, I have to say to the Committee with respect and reluctance that the amendment generally, and also paragraph (c), are open to a series of objections. I am grateful to the noble Viscount, Lord Hanworth, who withdrew his support from this amendment on the Fourth Marshalled List and proposes to support Amendment No. 84ZB.

Without in any way anticipating the amendment which I propose to move in due course, it is only right that I should give the Committee the reasoned objections to this amendment, because if your Lordships are with me on the objections that will save time when we consider Amendment 84ZB on its own merits. I am in total agreement with the noble Viscount when he says that something along these lines for the elderly and infirm must indeed be done. The question is, what?

The first, and serious, objection to this amendment now before the Committee is that nothing at all is said about the status of the code of practice: this notwithstanding that since the debate in your Lordships' House on 15th January of this year your Lordships have ever since insisted on clarity in this regard. Is the intention that the code should have any legal efficacy or that it should have none? If it is the intention that it is to have none, then I say roundly that that is not good enough for the elderly and the infirm. It is not an appropriate provision. That is one of the points taken in Amendment No. 84ZB.

5.30 p.m.

However, if it is to have legal efficacy then it is not appropriate, your Lordships may well think, for paragraphs (a) or (b). It is not appropriate for services generally, for tariff customers or for guidance to domestic consumers to have a code of practice with legal efficacy. Indeed, as regards paragraphs (a) and (b) the Committee may think that it is much to be doubted whether a code of practice is appropriate at all and whether mere publication of information is all that is requisite.

The next objection is that the amendment as it stands would appear to envisage a code of practice covering paragraphs (a), (b) and (c), which is a mere code of guidance with no legal effect at all, and this as a prerequisite to the grant of authorisation under Clause 8 of the Bill which is granted by the Secretary of State. Apart from the concept of the gas supplier preparing the code being cumbersome, it is, with the utmost respect, ill-conceived and warps the whole structure of Clause 7. The gas supplier has to consult the director and the council, but there appears to be no control under this amendment as to what is to be specified in paragraphs (a), (b) and (c)—or only as to form and manner of publication, but, as the Committee will observe from looking at the wording closely, nothing as to content.

It is within the province, your Lordships may well think, of the Secretary of State, in consultation with the director and the council, to prepare a code of general application—not the gas supplier. It is not within the province of the gas supplier. It is within the province of the Secretary of State, and it is for him not only to prepare it but to lay it before Parliament for approval, whether it is a code of guidance giving no legal effect—as was the case under Section 118 of the Mental Health Act—or whether it is to have legal affect. These matters are for decision on the subsequent amendment. But the point of objection to this amendment is that it is not within the province of the Gas Council; it is within the province of the Secretary of State to prepare the code and to lay it before Parliament.

Of course, the amendment in spirit is, as I have said before, wholly acceptable because it evinces proper concern for the elderly and the infirm. In that sense it is welcome, but for the reasons I have sought to give, if they commend themselves to the Committee—it is a matter for your Lordships entirely—I would respectfully suggest it should not be supported.

Lord Sanderson of Bowden

I should like to support the noble Baroness, Lady Macleod of Borve, in her moving of this amendment. It has been said many times in this Chamber that we look very carefully at the needs of those who are disadvantaged; the elderly and disabled come into that category. I look forward to hearing what the Minister has to say on subsection (5)(c) which deals with elderly and disabled persons.

I am not a lawyer, and I am looking for a loaf as well in this amendment. I believe that we are right to consider the situation over the next 25 years, as has been pointed out by the noble Lord, Lord Ezra. We know at present that the British Gas Corporation looks after the elderly, the disadvantaged and the disabled very well indeed. What I propose to see is that when this corporation is privatised the conditions which are applicable now are continued. I hope that not only will we see this written into the proposed authorisation but perhaps on to the face of the Bill.

Baroness Fisher of Rednal

I should like to emphasise paragraph (b) in Amendment No. 63A, which the noble Baroness said was quite obvious to everybody. I feel that under the present codes the elderly have a lot of safeguards and all of us hope that those will be continued, as does the noble Baroness who is asking for this to be included in the Bill. We know that the elderly are protected from disconnection during the winter months. But other people are included in the amendment who are not elderly. These are the poorer consumers in the country. Very often they become the poorer consumers through a marriage breakdown. There are many people these days who are heavily in debt not only with rent arrears and gas arrears, but with all kinds of arrears. Everybody who has dealings with the unemployed finds that this is a problem.

Often a marriage breaks down through debts. It can happen that there are two quarters of gas owing. The wife is left with three children in a deprived position, she is unable to pay and the gas could easily be turned off. These people do not have the protection that the elderly have unless one operates a code of practice. If we look at the figures of disconnections, last year nearly 36,000 people in this country were disconnected from the gas supply. That was an increase of 5.5 per cent. on the previous year.

The payment of gas bills is a very serious problem for many people as well as the elderly and the disabled who need other provisions. It is for that reason that I support the noble Baroness, Lady Macleod, in her amendment and my noble friend Lord Stoddart of Swindon because the codes that are suggested are more comprehensive.

Lord Stoddart of Swindon

We are in a bit of difficulty here, are we not? The noble Lord, Lord Campbell of Alloway, has referred to his own amendment, which in respect of people who receive state benefits by reason of age or infirmity is drawn very tightly indeed. It puts a legal obligation upon the gas supplier to ensure that duties are carried out. As I read it, it ensures that the code can be enforced through the courts. That is quite a different matter and a different amendment from that of the noble Baroness, Lady Macleod, to which I have also put my name. I think that what the noble Baroness is seeking to achieve—indeed, she told us what she was seeking to achieve and I agree with it—is to have written into the Bill a code of practice about which there can be absolutely no doubt and over which the director and the council have had some control and some input.

In Condition 12 of the authorisation there is a reference to a code of practice for tariff gas supplies and payment of bills: but in paragraph 2 it is provided that: The Supplier shall consult the Gas Consumers' Council and the Director about the presentation of each such Code"— not about its contents: only about the presentation. That is what Condition 12 of the proposed authorisation says.

What the noble Baroness seeks to do is to write into the Bill that there shall be consultation with and an input from the director and the council regarding these matters in paragraphs (a) (b) and (c)—is the House on fire? There seems to be some smoke or something coming from over there. It is steam, is it? Well. I hope it is not coming from me. Ah, it is hot air, is it? I sincerely hope that it is not that. However. I take it that the House is in no danger and that we may cam on.

The noble Baroness. Lady Macleod, is seeking to write this consultative procedure into the Bill. Undoubtedly, the matters raised in (a), (b) and (c) are very important indeed. Certainly on (c) I agree with her about, the provision of special services for elderly and disabled persons". They must be protected, but, similarly, the general public is entitled to know what sort of service it is to get. Also, as my noble friend Lady Fisher has remarked, it is necessary to protect poor people in the matter of payments of bills, because they not only need assistance but need guidance as well.

So far as I can see, there is absolutely no reason why the Minister should not accept the amendment moved by the noble Baroness and also the amendment which is to be moved by the noble Lord, Lord Campbell of Alloway. I see absolutely no reason why the two cannot go together, but perhaps the Minister or even the noble Lord, Lord Campbell of Alloway, himself might explain to me why the two matters should not be written into the Bill.

Lord Campbell of Alloway

Paragraph (c) in this amendment would tread on the toes of Amendment 84BZ. You could not really run—as I see it, whether it is for me or against me, but objectively—paragraph (c) of this amendment in tandem with my amendment.

Lord Ezra

Is the noble Lord, Lord Campbell of Alloway, telling us that (a) and (b) are still valid, because I think that those who are listening intently to this debate and who are anxious to help those in difficult circumstances would like to make good use of these two very valuable amendments. The best thing that could happen would be for them to be reconciled. As I understand it, paragraphs (a) and (b) are valid in their own right, but (c) needs to be reconciled with the amendment of the noble Lord, Lord Campbell of Alloway.

Lord Campbell of Alloway

Subject to this. It is a matter for your Lordships' decision whether (a) and/or (b) ought to be subject to the code of practice, or merely to a code of guidance.

Lord Stoddart of Swindon

Am I correct in thinking that if we pass Amendment No. 63A it would be possible, at a later stage of the Bill, for the noble Lord, Lord Campbell of Alloway, then to move an amendment which would make (c) specifically enforceable in the courts, or, at that stage, to break up the amendment and make it suitable to his own amendment?

Lord Campbell of Alloway

I will not waste time. I could not do so, I am afraid, even if I wished to. It would not make sense.

5.45 p.m.

Lord Belstead

Paragraphs (a) and (b) of the amendment of my noble friend Lady Macleod, Amendment No. 63A, cover very much the same ground as paragraphs 1(a) and 1(b) of Condition 12 of the authorisation which is proposed for British Gas which deal with the nature of the gas supply service and the payment of bills, including guidance to customers who have difficulty in paying. The condition also covers consultation with the director and the consumers' council. Both the director and the council have to be consulted before publication of the codes can come forward.

I am saying this because the noble Baroness, Lady Fisher, made her speech about paragraph (b) of this amendment, and others of your Lordships have joined in and have said that they attach importance—the noble Lord, Lord Ezra, did so in particular—to both paragraphs (a) and (b) even though my noble friend Lady Macleod has confined her speech to moving paragraph (c) of the amendment and saying—

Baroness Macleod of Borve

It seemed to me that (a) and (b) were already in the codes of practice which is part of the authorisation. As I understand it from British Gas, with whom I have talked, no authorisation will be given to anybody unless they also accept the codes of practice.

Lord Belstead

I am grateful to my noble friend. If I may say so, I was not putting it as well as that. My noble friend has put it much better than I did. It is for the reason she has mentioned that my noble friend did not speak to (a) and (b). Nonetheless, for the reason which my noble friend has just given, I think it can reasonably be said that the authorisation in Condition 12 is directly in line with what this amendment is seeking to achieve in paragraphs (a) and (b).

Lord Stoddart of Swindon

Is the noble Lord—

Lord Belstead

I have not yet started to answer my noble friend, but by all means intervene.

Lord Stoddart of Swindon

It is a point of clarification. The authorisation which I have says that the supplier shall consult the Gas Consumers' Council and the director about the presentation of each such code—not about the content of the code. As I understand the amendment of the noble Baroness, Lady Macleod, that would have the effect of giving them the right to be consulted about the content of the codes of practice. Therefore, there is a distinct difference. Will the noble Lord confirm that I have the right authorisation? Perhaps I have one that is out of date. Has it been altered without my knowledge.

Lord Belstead

It has been made clear in another place that the authorisation text has been published in draft—and, indeed, we have referred to this earlier this afternoon. I can understand the noble Lord, Lord Stoddart, feeling that the obligation here is not as clear as it ought to be because of the words "about the presentation of [the] code" being used. Therefore, I am perfectly willing to take away that particular wording with a view to bringing forward a clearer text, so far as that is concerned, before the Report stage.

May I turn to paragraph (c), which is really the pith and kernel of this debate, which concerns the wish—as put forward in the amendment of my noble friend—to see that publication of codes of practice for special services for elderly and disabled persons by any public gas supplier shall be in such form and such manner as the director may consider appropriate. I would stress that the Bill already provides the power for the Secretary of State to include conditions in the authorisation concerning the supply of gas to elderly and disabled consumers by virtue of the general wording of Clause 7 as it is drafted. Indeed, I was grateful to my noble friend Lady Macleod, speaking from her great experience of the gas industry from the time when she was the first chairman of the Gas Consumers Council, for mentioning some of the very valuable facilities and services which British Gas provide already for elderly and disabled people.

What I have just said about Clause 7 already being a vehicle which could provide for special services for the elderly and the disabled is obviously not going to please your Lordships. Nor will it please my noble friend, because she has put down this amendment and wants something specially put into the authorisation for the elderly and disabled. Therefore I should like first of all to say, in response to my noble friend, that I can see the desirability of clarifying Condition 12 of the authorisation, in order to ensure specifically that proper steps are taken to publicise the special services for the elderly and the disabled. I should like to say to both the noble Lord, Lord Stoddart, and my noble friend Lady Macleod that I am ready to take away the wording of Condition 12, with the intention of including a provision for ensuring that services for the elderly and disabled are effectively publicised. We would make such a change to Condition 12 by bringing back a proposal to this effect.

The only difficulty with that undertaking is that already I am set on a course of which my noble friend Lord Campbell of Alloway does not approve. My noble friend Lord Campbell has various criticisms of this amendment but he was particularly critical of the fact that the Secretary of State is really entirely omitted from Amendment No. 63A. My noble friend said that if one looked ahead to his Amendment No. 84ZB, one would find that there shall be a code which will be written by the Secretary of State.

I wonder whether I might make a response to my noble friend Lady Macleod, keeping my noble friend Lord Campbell of Alloway very much in mind, by saying this. I think that in addition to the undertaking I have given to my noble friend and to the noble Lord, Lord Stoddart, on Amendment No. 63A, it is necessary to underpin what I said by making a special mention in the Bill of the position of the elderly and the disabled.

The Government believe that the right way to do this would be to draw the attention of the Secretary of State and the Director to the particular position of elderly and disabled people and their special requirements. That could be done by examining the duties set out in Clause 4 for the Secretary of State and the Director, which guide their actions under the Bill, and doing this with a view to preparing an appropriate amendment to bring foward at the Report stage, which we would put into Clause 4. I hope that my noble friend Lady Macleod and of course the noble Lord, Lord Stoddart, would feel that the Government are making a really valid response to their amendment by saying that we will make a change to the authorisation and also put something into Clause 4 of the Bill. However, I realise that my noble friend Lord Campbell will not agree with that.

Although we are in a difficult position, it may not in fact be quite as difficult as it might seem, because I hope that my noble friend Lady Macleod will not feel that she needs to press her amendment as it stands. If that is the case, we can wait and debate the amendment of my noble friend Lord Campbell when we come to it later, In the meantime my assurance stands. The Government would be very ready, unless your Lordships feel that there should be a change of course (having debated Amendment No. 84ZB) to make a change to the authorisation to the kind that I have put forward and also to bring forward an amendment to Clause 4 of the Bill so that we shall have something on the face of the Bill; namely, another duty to guide my right honourable friend and the director.

Lord Diamond

Before the noble Baroness decides what she wants to do about this amendment, I should like to say how very much we on these Benches appreciate what the Minister has just said and particularly his understanding that producing something to be put in the statute will have a very important effect on our thinking. We are very grateful to him; and of course if the noble Baroness wants to pursue the matter, I always support her whatever she does, but I hope that she might feel, as I do, that the Minister has gone a very long way indeed on this issue.

Lord Stoddart of Swindon

Before the noble Baroness speaks—I think this will be helpful to her —may I say, as a signatory to the amendment, that what the noble Lord has said is very valuable indeed, not only in respect of the promise he has given on the wording of the authorisation but, very significantly I think, his promise to come forward with an amendment to Clause 4 to make the position absolutely clear in respect of the infirm, the elderly and the disabled. That is a very valuable point and we shall obviously be interested to see what happens in the future; but if the noble Baroness wishes not to proceed with her amendment, I should be quite happy.

Baroness Macleod of Borve

I am most grateful to the noble Lord, Lord Stoddart, for what he has just said and also to the noble Lord, Lord Diamond. I am particularly grateful, naturally, to my noble friend the Minister. I shall take it that the loaf is now in the oven. We hope that it will be baked and that when he comes back with an amendment to Clause 4 we shall be ready and willing to eat the loaf. I should like to say how grateful I am to the Minister for the help that he has given to us in what I personally—and I think also other Members of the Committee—feel is a very important part of this Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Williams of Elvel moved Amendment No. 63B:

Page 5, line 34, leave out subsection (6) and insert— (" (6) The Secretary of State may at any time revoke an authorisation under this section by 30 days' notice in writing given to the supplier at its registered or principal office in any of the following circumstances—

  1. (a) if the supplier agrees in writing with the Secretary of State that the authorisation should be revoked;
  2. 749
  3. (b) if any amount payable under Condition 14 of this authorisation is unpaid 30 days after it becomes due and remains unpaid for a period of 14 days after the Secretary of State notifies the supplier that the amount is overdue such notification not to be given earlier than the sixteenth day after the day on which the amount payable became due;
  4. (c) if the supplier fails to comply with a final order (within the meaning of section 28 of the Act) or a provisional order (within the meaning of that section) which has been confirmed under that section and such failure is not rectified to the satisfaction of the Secretary of State within 3 months after the Secretary of State has given notice in writing of such failure to the supplier provided that no notice under this paragraph shall be given by the Secretary of State before the expiration of the period within which an application under section 30 of the Act could be made questioning the validity of the final or provisional order or before any such application, if made, is finally adjudicated upon;
  5. (d) if the supplier fails to comply with any order made by the Secretary of State under section 56, 73, 74 or 89 of the Fair Trading Act 1973 or section 10 of the Competition Act 1980 which relates to the gas supply business;
  6. (e) if the supplier ceases to carry on its business as a public gas supplier;
  7. (f) if the supplier, being a company formed and registered under the Companies Act 1985,—
    1. (i) is unable to pay its debts (with the meaning of section 518 of the Companies Act 1985, but subject to paragraph 2 below) or makes any agreement with its creditors generally for the composition of its debts;
    2. (ii) has a receiver of the whole or any material part of its assets or undertaking appointed;
    3. (iii) passes any resolution for winding up other than a resolution previously approved in writing by the Secretary of State; or
    4. (iv) becomes subject to an order by the High Court for winding up.

(6A) For the purposes of subsection (6)(f)(i) above, section 518(1)(a) of the Companies Act 1985 shall have effect as if for "£750– there was substituted"£250,000" or such higher figure as the Director may from time to time determine and the said section 518(1)(a) shall not apply if the demand therein referred to is being contested in good faith by the supplier with recourse to all appropriate measures and procedures or if the demand is satisfied prior to the expiry of the notice given to the supplier by the Secretary of State. (6B) Unless the authorisation is revoked, it shall continue in force for a period of 25 years in the first instance and thereafter in further periods of 25 years unless the Secretary of State gives at least 10 years' notice of revocation, that to be in writing.")

The noble Lord said: In moving this amendment, I am trying to build on the remarks made by the Minister in connection with the previous amendment. In the concession I think that he was making he indicated that he would be prepared to see two changes: one in the authorisation and the other on the face of the Bill. Here we come, if I might put it like this, to the narrow divide between what is in the authorisation and what is on the face of the Bill because, as we shall see when we come to later amendments to be moved by Members on this side, we believe there are certain aspects in the proposed authorisation that should be on the face of the Bill. I am encouraged by what the Minister has just said about one particular aspect that he may agree with that particular position. There are certain things which should be in the Bill and not merely confined to the authorisation.

This amendment, No. 63B, refers to Schedule 2 of the proposed authorisation which the Government have produced and which, as the Committee are aware, is still in draft. It deals with the circumstances in which an authorisation may be revoked. Clearly, when a gas supplier undertakes the provision of gas, he needs appropriate protection. He needs it because he will have to invest sums of money. He will have to develop a long-term strategy for the development of his business and he cannot be taken by surprise in any respect by a Secretary of State revoking the authorisation.

The terms under which the authorisation can be revoked at the moment are only in the draft authorisation, and Clause 7(6) reads: An authorisation under this section shall be in writing and, unless previously revoked in accordance with any term in that behalf contained in the authorisation,". So we are really in a slightly circular position where the authorisation can be revoked so long as it is in the terms of the authorisation.

There seem to me to be two problems involved. The first is that the security is not there for gas suppliers on the face of the Bill but it is contained in the draft authorisation which will become an authorisation as and when we get to that point.

The second problem is slightly more serious and goes to the point in which, as I think the Minister will be aware, I myself am interested, which is the term of reference of the Monopolies and Mergers Commission when it considers references either from the director, where it is referred specifically to Clause 4 in the public interest, or as clause 27, to which the Minister referred when he was talking about modifications, to orders made by the Secretary of State under the Fair Trading Act 1973 or the Competition Act 1980.

The terms of reference for the Monopolies and Mergers Commission when it is dealing with references under the Fair Trading Act 1973 or the Competition Act 1980 are wholly different, if I may say so, from the terms of reference under which the Monopolies and Mergers Commission will be delaying when it has a reference from the director on modification of the reference where the public interest criteria apply and they are referred to Clause 4.

Let me give the Committee one example. Suppose that a gas supplier has an authorisation and that that authorised supplier then decides to merge with another supplier. Suppose that merger becomes the object of a merger reference under Section 73(1) of the Fair Trading Act and the Secretary of State is entitled to make an order on report on that merger reference. The Monopolies and Mergers Commission, in making their recommendation, will be guided by the criteria of Section 84 of the Fair Trading Act and the Secretary of State will be entitled to make an order under that Act. That order will be carried through under the provisions of the Bill as it is presently drafted.

I suspect that here we have a certain illogicality in the Government position which we on this side of the Committee would like to see cleared up. I make no bones about it. We would like to see (and we will be moving amendments later to this effect) the Section 84 criteria of the Fair Trading Act applied to all references to the Monopolies and Mergers Commission of public gas suppliers, whether by the director under the present Bill or by the Secretary of State under the Fair Trading Act 1973 or the Competition Act 1980. However, that is not the case in the Bill as presently drafted. We will come back to that, but I believe there is a point which the Minister might wish to concentrate upon.

We have chosen the question of revocation of the authorisation as an example or as a probing amendment, if you like, to see whether there is any flexibility in the Government's mind on all or part of the authorisation being on the face of the Bill; whether there might be amendments that the Government would consider (as the Minister considered previously referring to the authorisation rather more specifically on the face of the Bill in tightening up the authorisation itself) or whether indeed the Monopolies and Mergers Commission under its terms of reference is not liable to be somewhat schizophrenic in looking on different occasions at the same organisation using different public interest criteria. I think that the Minister might finally address himself to the specific question of whether the gas supplier should not somewhere on the face of the Bill have an assurance that the revocation is a matter which is not solely concerned with the authorisation but is a matter of statute. If it is to be done, it should be done in accordance with a statutory authority.

I have raised a number of what I am afraid are rather technical points on this amendment. I say again that this is in the nature of a probing amendment because it raises a number of points, and I am sorry if I have burdened the Minister. I beg to move.

Lord Belstead

This amendment seeks to insert Schedule 2 of the revocation terms for an authorisation into the Bill. I can see that because Clause 7 specifies how a public gas supplier's authorisation should be issued it may seem appropriate to provide the terms under which an authorisation, once issued, can be revoked. However, the Government, both in drafting the Bill and also in drawing up the authorisation, do not believe that the same applies to revocation of an authorisation.

Whereas there are certain procedures (for instance, publication, the giving of reasons, the right to make objections and the duty to consider any representations or objections) which clearly ought to apply to the granting of an authorisation to any public gas supplier and therefore ought to be in the Bill, I think, if I may say so, we are in a rather different scene when we come to withdrawing an authorisation, because the supplier does not want to go on, is not fit to go on, or for whatever reason. Of course, the amendment deals with those reasons because the amendment takes out the provisions from the authorisation and endeavours to put it in the Bill. The terms of the revocation provisions included in the authorisation and, as I say, repeated in this amendment are designed for the authorisation to be issued to British Gas. There is no possible way of telling at this stage what revocation terms might be appropriate for a future authorisation that might be issued to other public gas suppliers.

I ask the Committee to bear in mind the considerations that must apply when framing legislation in that it really must be flexible enough to cope with whatever situation might develop. It must be right that legislation should not be so encumbered with detail of this kind that it could be rendered ineffective or even irrelevant in a future situation. Legislation, after all, is supposed to apply, and not to apply only to one particular case. I think we could be coming near to the danger of such legislation applying to one particular case—namely, the removing of an authorisation from British Gas—and trying to apply that to possible authorisations in the future.

Having said that, it is the case that the noble Lord, Lord Williams, indeed put to me some technical points which I did not find entirely easy, but there are two things that I would like to say to him. The first is that my advice is that the provisions for revocation of the authorisation are not conditions of the authorisation but terms of the authorisation. The points which the noble Lord, Lord Williams, made concerning the modification of authorisation conditions under Clauses 23 to 27 are therefore, on my advice, not relevant to this particular amendment.

If the noble Lord disagrees with me on that particular point, or feels that some of the detailed points he put to me nonetheless override what I have just said (which is my single reply to his many technical points), I shall gladly give way to the noble Lord. If he wishes to repeat one or two of them, I give him an undertaking that I shall take this matter away and look at it with care. I shall of course do that anyway, but I am giving an open invitation to the noble Lord to expand if he feels he needs to do so, because I do know that this is a matter which the noble Lord feels very seriously about and I think it is important that I listen carefully to the noble Lord before we leave this Chamber.

Lord Williams of Elvel

I am grateful to the noble Lord and I shall respond straight away. It really does not need a great deal of expansion. The terms of the proposals for procedures for modification of the authorisation are such that the Secretary of State may modify the authorisation in a manner that could facilitate revocation over and above the text that is at present in the authorisation.

Let me give an example. To come back to two gas suppliers who are authorised and who decide to merge—this is the simplest example, but I could give more complicated examples—let us suppose that there is a reference under the Fair Trading Act to the Monopolies and Mergers Commission. The commission assess that reference under the Section 84 criteria of the Fair Trading Act, which have nothing to do with Clause 4 of this Bill. They decide, for reasons to do with Section 84 of the Fair Trading Act, that the merger is against the public interest as so defined. The Secretary of State is empowered under Clause 27 to make an order modifying the authorisation. The authorisation can be modified in whatever way the Monopolies and Mergers Commission recommend under their Section 84 criteria, and it is not difficult to imagine circumstances in which such a modification could give rise to a possible revocation of the authorisation as a result of that reference and that subsequent order.

I have tried to give the Minister a fairly simple example of what might happen; but there is a much more complicated example that one could go into where under the Competition Act 1980, or the Fair Trading Act 1973, a reference is made on monopoly grounds to the Monopolies and Mergers Commission, and again the Section 84 criteria would apply. So you have a different set of criteria which would apply and the authorisation could be modified accordingly.

I do not want to go on with other examples because I hope that I have given the noble Lord enough to chew on for the moment—if I may put it like that—to see whether he can resolve what seems to me to be an illogicality there and, really, to introduce the discussion which we are to have at a later stage about whether the authorisation, in whole or in part, should be either itself on the face of the Bill or should be referred to in greater detail on the face of the Bill.

Lord Belstead

I gave an undertaking to the noble Lord that if he came back to me I would look carefully at what he said. If the noble Lord feels it within him not to press the amendment, I shall do my best to look with care at what he has said and I will undertake to write to him.

Lord Diamond

Perhaps I may say that I understand from what the Minister has been good enough to say that he will consider the whole position including, as it were, the transfer of this condition from the authorisation into the statute itself, to which we on these Benches attach great importance, as I think does the noble Lord, Lord Williams, also.

Lord Williams of Elvel

In the light of what the noble Lord has said, and also in the light of the comments of the noble Lord, Lord Diamond, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 64 not moved.]

Lord Bruce of Donington moved Amendment No. 65: Page 5, line 42, after ("State") insert ("or to Parliament").

The noble Lord said: All this amendment seeks to do is to make a small alteration to paragraph (a) of subsection (7) on page 5. Subsection (7) of Clause 7 states: An authorisation under this section may include— (a) such conditions relating to the supply of gas, or requiring information to be furnished to the Director or published, as appear to the Secretary of State"— and after that we seek to insert the words "or to Parliament". The paragraph then continues, to be requisite or expedient having regard to the duties imposed by section 4 above". I have already argued the whole desirability of having Parliament involved and I do not feel that I need to elaborate it. I sincerely trust that in this instance the noble Lord will see fit to accept the amendment. I beg to move.

6.15 p.m.

Lord Molloy

I just want to say very briefly that when we welcomed very much the original Bill very many years ago, it was thought right and proper that this great industry should be the property of the nation, so the British people became the shareholders and Parliament became the board of directors. But as time went on one became somewhat apprehensive as to whether it would be easy to question through Parliament what these great industries were doing. Very often we discovered that the words were not clear enough. Sometimes they referred to a Minister; but a Minister is not Parliament. Therefore, I believe that this simple amendment is very important.

What it means is that if for a few years this industry is taken away from the British public and given to private individuals—whether it be returned to the British public or not—it must ultimately be the responsibility of Parliament to examine precisely what is happening; whether it be complaints, whether it be new ideas or whatever it may be. Such a massive industry, whether publicly or privately owned, must always be answerable at some stage to the British people. But that cannot be done thoroughly if it is merely left to the Secretary of State.

If Members of this House or of another place try to ask questions, they will be told: "This matter is being dealt with by the chairman of the company and the Minister of State involved. It has nothing to do with Parliament". We have heard that argument before and I do not believe we should take that risk. That is why I wholly support this simple little amendment.

Clause 4 is extremely important and I do not believe we should leave it that all these matters can be discussed just by the chairman of the new company and a Minister. We must make very sure that the words of the Bill make it possible for anybody to approach Parliament at any time. Therefore we should include the words "or to Parliament" because in the end Parliament should be the final deciding authority.

Lord Belstead

We are on a point here which has to do with whether Parliament should insert conditions in an authorisation given to a public gas supplier after British Gas have their authorisation. It is a comparatively narrow point, but I agree that it is an important one.

There are two points that I should like to offer to your Lordships in comment. First, I really do not think that this amendment would be very easy to work. It is not clear to me how it would work in practice; whether Parliament would be included in the general round of consultations provided under subsections (4) and (5) of Clause 7; whether we would be expecting either or both Houses to devote valuable time to debating at length the nitty-gritty of each condition in an authorisation. I doubt whether that is practical.

Secondly, Parliament is in no way being by-passed. We are spending literally hours of time in this Chamber, and there was a very thorough going through of the Bill at all stages in another place, so that Parliament can lay down what the procedures ought to be before an authorisation can be given to a public gas supplier, how the public gas supplier ought to be regulated and how it should conduct itself. As I endeavoured to say on behalf of the Government earlier on this afternoon, Clause 7 has the very particular merit that at the moment Parliament is agreeing that Clause 7 shall provide that there will be full provision for public consultation. I do not think that we should add to the burden of Parliament's work by asking Parliament to insert conditions into an authorisation. That is what the amendment would do. I do not think it is right.

Lord Bruce of Donington

I am sorry that the noble Lord has found it necessary to respond in that fashion. When discussing an earlier amendment we dealt with the circumstances under which objections could be lodged and in which consultations could take place, as though those had the slightest relevance to the supervision of Parliament. The noble Lord refers to the onerous burdens of Parliament. I can think of times and occasions when the time of this Chamber has been wasted wholesale on complete trivia as compared with matters of importance of this kind. I venture to suggest that noble Lords would not resent in any way having this burden of serious consideration placed upon them; nor would the other place, if it is anything like the other place that I used to know, resent having itself interposed between the Secretary of State and the authorisation in order that it might be successfully monitored. I do not think those horses will run.

The noble Lord has one point. He correctly says that if you insert the words "or to Parliament" you are not at the same time inserting in the Bill the practical provisions by means of which this issue could in fact be considered separately by either House. There I think he has a point. We may have to return to the same question at the Report stage with a view to making it more explicit.

I was rather hopeful on this occasion that the noble Lord would say, "We accept the whole principle of your amendment that Parliament ought to be involved in this and that Parliament ought to be able to insist on certain conditions if it so desired no matter who the Secretary of State might be". Secretaries of State in the department vary from time to time. They come and they go. There are shuffles and there are reshuffles. Parliament tends on the whole to remain, even though its complexion will probably change within a comparatively short time. Parliament by and large endures. Indeed, I was expecting the noble Lord to say, "Well, I agree with it and I shall see that measures are brought forward on Report to make it a more practical proposition than the mere insertion of the words contained in the amendment convey at the present time".

The noble Lord has not seen fit to do that. In the interests of time I am not prepared to press the matter to a Division because I accept the noble Lord's criticism in regard to the practical aspect of the wording. I do, however, give him notice that we shall return to this question at the Report stage and we shall put in far more practical wording. On that basis, I ask the leave of the Committee to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Ezra moved Amendment No. 66: Page 6, line 5, leave out ("and").

The noble Lord said: The purpose of Amendments Nos. 66 and 67 is to require the public gas supplier to encourage the efficient use by consumers of gas supplied through pipes, and so on. We have touched on this issue before in these deliberations. On that occasion the noble Lord, Lord Belstead, said that we would be better advised to come back to it under this clause, which we now do. I hope that as a result of our following his recommendation he will harken sympathetically to our amendments.

The issue of the efficient use of energy is not in dispute. The Secretary of State for Energy has initiated and vigorously pursued throughout the country a campaign which has had support from all parties in order to achieve considerable improvements in the efficiency with which we use energy. I may say from my personal experience that the energy industry has been very responsive to that campaign.

We know of the efforts made by the gas industry, which is the subject of this Bill, in promoting the efficient use of gas by its users. I can speak with considerable knowledge of the coal industry up to 1982 when I left it. Up to that point we were vigorously pursuing with consumers the stimulus of the efficient use of our product, and I have no doubt at all that that has been continued since.

Recently a number of my colleagues and I met the chairman of the Electricity Council, Mr. Philip Jones, who made it very clear that one of the council's objectives in promoting the sale of electricity is to ensure that it is used as efficiently as possible. Nor have the oil companies been slow in this regard. A number of them have set up special subsidiaries to promote efficiency in use.

So it seems to us that this amendment recognises and confirms a fait accompli. It puts on the public supplier of gas an obligation which up to date all energy suppliers have willingly accepted as part of their marketing campaign. When this was debated in another place I believe it was said by the Government that this would be an unfair obligation to impose on the supplier of gas in a privatised sense as it was not an obligation placed on the other industries. But there is nothing to stop that being done generally. The industries and the country at large would welcome such an obligation—such a desirable objective.

Therefore, I very much hope that, having been kind enough to say that it would be more appropriate to raise this point at this stage, the noble Lord will be prepared to accept this amendment and indeed to welcome it as being very much in line with Government policy. I beg to move.

Lord Seebohm

I added my name to this amendment because I have seen recently such an enormous expenditure on advertising by British Gas on television and elsewhere. The public gas supplier will be in a rather difficult position if in order to maximise profits it has to say, "Use our gas, but not too much". This amendment will perhaps balance the arguments that we are making so strongly about economy in energy. It does no harm and calls to the attention of everybody that efficiency must be borne in mind all the time.

Lord Sanderson of Bowden

One matter concerns me in this amendment. I fully agree with the first part and I hope that the Minister when he replies will deal with the provision, conditions requiring the public gas supplier to encourage the efficient use by consumers of gas supplied through pipes, by means of advocacy, advice …". I welcome that and I hope that the Government might consider adding the words in the amendment moved by the noble Lord, Lord Ezra.

Where I think I part company with him is in the very last phrase: and, where economic, the provision of loans for energy efficiency investments". I have always thought that loans have to be paid for by somebody, and frankly I think that that person ought to be the taxpayer and not the customer of British Gas. Loans should indeed be used, perhaps with electricity, to help energy conservation; perhaps with gas; and perhaps with other forms of energy. But I do not believe that it is something that should be put on to the backs of the new British Gas plc.

6.30 p.m.

Lord Stoddart of Swindon

I support these two amendments. They are very important amendments indeed. We should remind ourselves that the House of Commons Select Committee on Energy paid great attention to energy efficiency, and it is worth reading out what was said in paragraphs 65 and 67 of its first report. Paragraph 65 stated: In our earlier Report on the Development and Depletion of the United Kingdom's Gas Resources, we underlined the connection between energy efficiency and resource depletion and suggested that the 'national case for promoting energy efficiency must … be one of the determining principles in setting the statutory framework for the regulatory authority which will control the new private-sector corporation'. We were encouraged by the view expressed by the Director General of the Energy Efficiency Office that it was 'quite inconceivable' that the energy efficiency would not be 'built into' the consideration of the regulatory authority". In paragraph 67, the committee recommended that: A general obligation be placed upon public gas suppliers to promote the efficient use of gas supplied through pipes". There we have it. After due and proper consideration, the Select Committee on Energy in another place came to the conclusion that energy efficiency should be a paramount consideration and ought to be written into the Bill.

It has been said, and it will be said again, and I am going to say it now, that gas is a precious resource. It is finite and therefore it should be conserved. It can be conserved in all sorts of ways but the prime duty in relation to conservation must be with the gas supplier. British Gas has adopted a number of means of informing its customers about energy efficiency. For example, I believe that the present gas corporation will not install a central heating system unless the loft is properly insulated. Certainly it was my own experience when I had central heating installed that the corporation would not install it unless the house was properly insulated. That is what we are talking about; that is energy efficiency.

There is nothing to say that a privatised gas corporation will do the same. It may be in its short-term interests and in the short-term interests of its shareholders to sell as much gas as it can in the shortest period of time. In that respect, I am reminded of what I call the Reading cemetery syndrome. The Reading cemetery syndrome goes something like this. There was in Reading a private cemetery owned by a private company that sold graves. It sold graves for many years—over 150 years, as a matter of fact, until suddenly there was no room left. But the cemetery had to be maintained because by law cemeteries have to be maintained. That duty was placed upon the local authority. So what happened was that the Reading cemetery company had taken all the profits out of Reading cemetery and when there were no further profits to be made the poor old public had to come in and pick up the bill for maintaining the cemetery.

What frightens me is that the privatised gas company will use all the cheap North Sea gas, and when gas has to be produced by other means—perhaps from coal gasification, which will be an expensive process, or by importing it—then it will be handed back to the public, who will then have to pay through the nose. That is what I mean by the Reading cemetery syndrome, and I do not want that to happen in relation to gas supplies.

As I have said, there should be a duty upon the director, upon the Government, and upon all concerned to see to it that the new privatised organisation conserves our natural and national resources to their best ability. I will not go into any further details but I support the amendment, and I sincerely hope that the Minister will accept it or will at least say how he proposes to deal with what we consider to be a very serious problem.

Lord Belstead

This important amendment is about putting into the authorisation for British Gas a requirement that the supplier should encourage the efficient use of gas by consumers. I have to say to the noble Lord, Lord Ezra, that I realise that he has been absolutely consistent in this matter throughout the proceedings on this Bill. We come once again to a subject that the noble Lord and others have spoken about before.

We ought to remember that British Gas already produces a good deal of information, guidance and advice on efficiency of gas use. Indeed, it has every incentive to do so. Keen competition with other fuels and with electricity ensures that. For instance, in today's smaller, more highly-insulated housing. the running cost advantages of gas are reduced and it faces intensive competition from electricity.

Perhaps I may deal with the second half of the amendment, where it is proposed that there should be the provision of loans in order to encourage energy efficiency. I am sorry, but the Government do not agree with that suggestion. There are already many sources of loans available for home improvements. My noble friend Lord Sanderson of Bowden put his finger on the real difficulty, which is that if British Gas were to offer loans at below commercial rates, then the money would have to come from somewhere and there would probably need to be cross-subsidisation from the tariffs paid by other consumers in order to achieve that.

Lord Stoddart of Swindon

The amendment does not make mention of a cheaper rate.

Lord Belstead

I come now to the main part of the amendment, which is all the first half of the amendment. Noble Lords are not arguing in this amendment that the Bill itself should refer to energy efficiency. I assume that that is because we already have a reference to energy efficiency in Clause 4, where there is a duty laid on the Secretary of State and the director to exercise their functions in a way best calculated to promote the efficient use of gas supplied through pipes. The amendment would permit, not require, the Secretary of State to include conditions in a public gas supplier's authorisation requiring the supplier to encourage the efficient use of gas by consumers.

I will, if I may, respond positively to that part of the amendment. I recognise the strength of feeling on that subject expressed more than once in your Lordships' House, and I am prepared on behalf of the Government to consider a condition to be imposed on British Gas, as part of its authorisation, to require it to provide information and advice to its customers about the efficient use of gas. I believe that that would be an effective means of promoting energy efficiency; that it would be consistent with the Government's overall approach that decisions on improving the way in which energy is used are best taken by consumers at the end of the day, in the light of full information about the possibilities. I would propose to bring forward an appropriate condition before Report stage. On that basis, I hope the Committee will feel that I am offering at least three-quarters of a loaf and that the noble Lord may feel able to withdraw the amendment.

Lord Ezra

I should like to thank the noble Lord very much for that concession. Naturally we would like to look at the words very carefully; I hope that they would go a bit further than merely saying "provide information". I hope they would include the words "encourage, by various means, the efficient use of energy", and that it would not merely be a passive proposal. In the hope that it would be of a positive nature, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 67 not moved.]

Lord Diamond moved Amendment No. 68:

Page 6, line 12, at end insert— ("and ( ) conditions requiring the public gas supplier to publish, annually, audited accounts showing separately the profits arising from sales of gas subject to maximum price regulation, which accounts shall be certified by the Director as showing the real costs and revenues ascribable to those activities of the supplier,").

The noble Lord said: I realise that this is putting in a very, very short form what is a fairly complicated issue, but we shall be very happy indeed if the Minister feels able to continue on this excellent course which he has started of undertaking to consider before Report stage which parts, if not the whole, of a proposal of this kind he is prepared to put before the House when we come to consider matters on Report.

What I had better do first is to distinguish what the proposal is here from the existing condition in the proposed authorisation. Putting the essence of it shortly—and not quoting because there is no part which I can quote shortly—the proposed condition provides that there shall be a separate statement of the profit arising out of the gas business, on the assumption that the gas supplier has other businesses in addition to purely that of the supply of gas.

That is all right as far as it goes, but it does not go far enough. We are proposing here that there shall be shown separately the profits arising from sales of gas subject to maximum price regulation. That is the part that matters. Where you have a private monopoly, where you have a vast number of people who are compelled to take gas from this one source only, we are suggesting that it is right that the public should know what profit is being made on that activity. It is not sufficient that the public should know what profit is being made on the total gas supply activity of the public supplier. He will supply a lot of contract customers who take vast quantities at prices negotiated and agreed in contract form. That is where the individual can look after himself up to a point; and the large business can negotiate and will be helped in a variety of ways which we shall be coming to later on, to know what, as it were, the going price, the market price, is.

We are talking here about those people—16-odd million of them—who have no alternative whatever but to go to the one shop for the article they must have, namely, the supply of gas which, as we know, is subject to a maximum price regulation.

Therefore, we attach great importance to this provision. That the accounts should be audited is a normal provision which I do not suppose causes the Government any problems at all. That they should show separately the profit is, as I have explained, a necessary condition and that the account should be certified by the director as showing the real costs and revenues ascribable to those activities is not a belt and braces issue; it is two people doing their respective complementary parts of a whole job. The auditor's job is quite distinguishable from that of a director who is in touch daily with the industry, is aware of a whole host of activities going on which together constitute supplying gas to customers who are subject to a maximum price regulation. The director alone will be able to satisfy himself completely as to the real cost and revenues ascribable. The auditor will be dealing with an entirely different aspect and setting out what is a fair and reasonable statement at the end of the day.

So these two complement one another and are a necessary addition to one another in order to have, at the end of the day, a wholly reliable statement showing what has been the outcome of the consumption of gas by a vast number of people, who, as I say, can only go to that one shop to buy what they urgently need. I beg to move.

Lord Bruce of Donington

We on this side would like to support the amendment that has been moved by the noble Lord, Lord Diamond. When the successor company takes over—and the successor company will be the company to whom the authorisation is issued—it will be an ordinary limited company, a "plc". Therefore, the obligation placed upon it under the Companies Act (Sections 227 and 229 of the Companies Acts have been referred to) is merely to produce those accounts together with the notes on them that are at the moment contained in pages 28, 29, 30 and 31 of the accounts, together with the auditor's certificate. These are indeed the accounts for which any "plc" is responsible simply under the provisions of the Companies Acts: a profit and loss account, a balance sheet, a consolidation taking place where there are subsidiaries and, of course, a statement of the flow of funds; sources and application of funds accompanied by an auditors' report. I shall not, for the moment, deal with the whole basis of accounting because that will probably form the subject of a separate amendment and will need very careful consideration.

I now turn to the accounts that have been published by the Gas Corporation as a corporation responsible to Parliament and the public. No formal discipline was laid upon them to produce the accounts and the supplementary information contained with the accounts that they have in fact produced over these many years. But they have produced an enormous amount of data which an ordinary public limited company, an ordinary plc, is under no obligation to produce. I refer, for example, to the performance ratios set out on page 24 of the accounts for 1984–85. These give the financial performance ratios, ratios based on therms sold, ratios based on employees and ratios based on domestic tariffs. Those are just some of the particulars that have been given.

In addition to the notes on the accounts, to which the professional accountants are normally constrained by reason of their adherence to a standard accounting practice, a series of other statistics are also provided. All of these are of considerable importance, including a 10-year financial summary on page 50, a summary of the profit and loss account for the past 10 years, the cost structure over the past 10 years, a summary of capital and cash reserves over the 10 years and, on page 52, statistics for the industry 1975–76 to 1984–85.

All of those items have been provided to the public by the corporation precisely because it was conscious of its responsibility as a public corporation to the nation as a whole, as distinct from the normal confinement of the interests of an ordinary plc to its shareholders and to its requirements under statute. We are most anxious that this valuable statistical material shall not be lost and that it will continue on the same basis after the corporation is privatised, on the basis that even though its responsibility is to its shareholders the public nevertheless retains an interest in this privatised monopoly.

The amendment moved by the noble Lord, Lord Diamond, goes some way towards this and there will be later amendments which specify it in greater detail. In that sense, if the noble Lord, Lord Diamond, will forgive me, this is, in a way, a paving amendment to later, far more detailed amendments which I shall venture to lay before the Committee. Quite clearly it is not sufficient that these matters are just left within the authorisation itself; they go right to the roots of it.

Perhaps I may use this opportunity, since we are talking about accounts, to point out that, oddly enough, we are discussing the position of the British Gas Corporation, and the desirability or otherwise of it being privatised, with only the accounts for 1984–85 in front of us. The accounts for 1985–86 are already available in draft and in the same way that the noble Lord presented us with a provisional or proposed authorisation he could have presented the Committee with a copy of the draft accounts, subject to audit, so that we could consider the affairs of the corporation on a much more up-to-date basis. However, for some obscure reason the accounts will not become available until 22nd or 29th July, so the Printed Paper Office informed me today.

In the meantime, it would be useful to know why the Government have not circulated the report already made by Wood Mackenzie which incorporates the results as they see them up to 1985–86. These are matters to which, as a matter of courtesy, we hoped the noble Lord would have given some attention so that the Committee could consider the whole affairs of the corporation under the new successor company in a far more modern context. It should have been possible to produce the accounts in draft, at any rate, for the Committee and, indeed, for another place.

To return to the amendments proposed by the noble Lord, Lord Diamond, we consider that there should be a positive response—unless, of course, the Government are in return to be provided with sums that they can dole out as tax concessions before the general election and are prepared to let the matter rest as it is. I trust that that is not the case and I therefore hope that the Government will consent to this amendment being incorporated into the Bill.

Lord Sandys

We have listened to some criticism from the noble Lord, Lord Bruce of Donington, which was not justified had he looked in detail at the proceedings of Standing Committee F. On 17th March this year that Committee gave very detailed consideration to this amendment and in his reply my right honourable friend Mr. Alick Buchanan-Smith said in referring to this precise point, if I may quote it to the Committee as it is very relevant: Therefore, given the way in which the provisions of the long-term gas purchasers' contracts have developed over the past 20 years, there is a particular difficulty in the apportionment and proper identification of the costs which relate on the one hand to maintaining peak supply needs and on the other those which relate to meeting the base load."—[Official Report, Commons, Standing Committee F, 17/3/86; col. 132.] There is a difficulty here. This is a very serious problem, to which my honourable friend has referred. I do not believe that, even given the Wood Mackenzie report, it is going to be possible to go very much further than that because, of course, the tariff and the non-tariff contracts pass through the same pipe.

Lord Brabazon of Tara

I fully understand the concern of the noble Lord, Lord Diamond, that information should be produced about the parts of the business rather than gas supply as a whole and specifically that a distinction be made between tariff customers and contract customers. However, any requirement to publish audited profit figures relating to sales of particular categories of gas must be compatible with the nature of the business.

As explained in another place in response to a similar amendment moved there by the chairman of the Select Committee on Energy, the nature of the gas supply business means that it is not possible to associate in a rigorous way specific costs with individual sectors of the market. My noble friend Lord Sandys has just reminded us of that. Not only do tariff and non-tariff sales have the same pipes, but the same emergency, gas purchasing and general services. There are serious technical difficulties in apportioning those costs which relate to meeting peak supply in the middle of the winter when the supply system is running flat out and those which relate to meeting demand at normal times. That is a significant factor because tariff customers have a higher relative demand in the winter than industry. Indeed, interruptible contracts to industry, where the gas supply can be temporarily stopped during the peak demand period, have a key role to play in balancing supply and demand.

British Gas's long-term gas purchase contracts contain a range of provisions as to time of supply and have developed over the past 20 years to reflect changing market circumstances. As a result, there is no simple relationship between a particular kind of demand and costs. Allocating the cost of meeting specific demands can therefore be done in any one of a variety of ways. The choice would materially affect the accounts.

The objective accuracy of separate profit figures for the price-regulated sector of the market is not sufficient for the authorisation to require audited published accounts. The aim behind the amendment, though understandable, is simply not in line with the realities of the business. Although this is the position as regards full audited accounts, the director will be able to exercise his own judgment in this area. I should point out to the noble Lord, Lord Bruce, that Condition 2 of the authorisation already goes further than the Companies Act requirements.

Lord Bruce of Donington

Very little.

7 p.m.

Lord Brabazon of Tara

The noble Lord says "very little"; but it does nevertheless. The noble Lord paid tribute to the extent of the information published by British Gas in its annual report—and I join him in congratulating them on the standards of their financial reporting—but I am sure he will agree that these accounts do not include the information that is called for under the amendment. This, of course, as I have explained, is because they could not be produced on a fully reliable basis.

The noble Lord also asked about the current accounts of British Gas—the accounts for the year that has just finished—and of course they will be published in the normal manner when they have been finalised. As regards the Wood Mackenzie report, I am most surprised that the noble Lord has not managed to find a copy of it. If other noble Lords would like the report to be made available, I shall do my best to ensure that copies are put in the Library of the House. However, I must point out that it is a report that has been produced by an independent firm of stockbrokers and it is really not within my gift to be able to arrange that. However, I shall certainly do my best.

From the start the director will be able to use his powers to call for all the necessary information covering the tariff market. He will therefore have access to information about the possible bases on which costs and revenue can be related to the price-regulated sector of the market. The Bill also gives the director discretion to publish information that he considers appropriate, and, of course, there are procedures set out in the Bill which enable the authorisation to be modified. On this basis I believe that the regulatory arrangements set out in the Bill and draft authorisation fully deal with the important need to ensure that proper accounts are drawn up and published.

As I said a moment or two ago, a similar amendment was proposed in another place by the chairman of the Select Committee on Energy. Having heard the argument put forward on that occasion by the Minister, he withdrew the amendment, and I hope that, after the explanation that I have given to your Lordships this evening, the noble Lord, Lord Diamond, may feel able to do the same.

Lord Bruce of Donington

We on these Benches, for our part, cannot recommend to the noble Lord that he withdraw his amendment, though that decision obviously lies within his own discretion. I have listened very carefully to the observations that have been furnished to the noble Lord, and with which he has acquainted us, on the accounting aspects of this matter. The kindest way of describing his account of the impossibility of action is to use the words immortalised by the noble Lord, Lord Weinstock (for a moment I had almost forgotten the name of the managing director of GEC), who described an accountancy explanation from the Government Benches on another occasion as being "gobbledygook".

The fact of the matter, of course, is that from the accountancy standpoint, with the degree of approximation which is inevitable in all accounting assessments where one endeavours to arrive at a true and fair view, it is possible within a reasonable tolerance to ascertain and publish the information required by the amendment of the noble Lord. Both the noble Lord and I are practising accountants and we would not put down amendments of this kind frivolously, knowing that such information was impossible to ascertain. Of course it is possible. If the noble Lord's department finds any difficulty then we shall be happy to oblige, but, of course, to emulate one of our well-known stores, we never knowingly undercharge for our advice in such matters.

This raises a question of some importance. Despite the prompting that the noble Lord could undoubtedly obtain if he required, he was able to give me no comfort on the other observations that I made about the information published in the existing corporation's accounts. He was able to give no comfort about even that minimum amount of information which I willingly agree is not the information that the noble Lord requires but which is vital for our purposes. He was unable to give me that assurance that even that minimum would in fact be maintained in the future. In short, I am afraid that his answer is thoroughly unsatisfactory and if the noble Lord, Lord Diamond, proposes to carry his amendment to a Division, we shall feel compelled to give him our support on this occasion.

Lord Diamond

I should like to thank the noble Lord, the Minister, for the very full and courteous way in which he dealt with the amendment. In particular I want to thank him for agreeing with my main point, or at all events for not disagreeing with my main point. That main point related to the change of circumstances and the creation of a private monopoly where all the customers have to go to one shop; and he did not for one moment deny my main proposition that it would be helpful (albeit he says that it would be very difficult) if the public could know the results of those operations and what the price formula, the various encouragements to efficiency and so on and so forth all added up to in terms of the bills that 16½ million customers had to pay. So I hope that we are on common ground on the first point; namely, that if it were possible to do this calculation it would be very helpful in the changed circumstances. One did not need it before; one does need it now—or rather will need it in the future, assuming that privatisation takes place, which is the course that we are all compelled to contemplate. So far as concerns that point, I am delighted with the response of the Government.

I am very grateful to the noble Lord the Minister for making it clear that no less a person than the chairman of the Select Committee on Energy also thought that it was right to move an amendment of this kind in another place. As a result of the examination by that all-party Select Committee, he too came to the conclusion that this was a desirable objective. So we are all on common ground. It was an all-party committee, so I do not inquire as to which party the chairman belonged though I imagine that, as the other House is constructed, in the normal course of events, it would be a chairman from the Government side, namely, a Conservative. However, that point does not arise. Thus, the importance of the principle of the amendment is confirmed by what has occurred in another place and by the lack of contradiction by the Government.

What then do the Government say is too difficult? The Government are right in saying that is is particularly difficult for the auditor. They are right about that. It is a difficult matter for the auditor to certify. But I have two clear solutions for that difficulty. First of all, will the Government say that if we put in another amendment, leaving out the audit and merely putting in the certification by the director, they will accept it? There is nothing in what the noble Lord the Minister has said to indicate that they would do so. He did not say that if the audit were left out, we were all on common ground. I hope I am wrong, but for the moment I am assuming that he would not give me a better answer if the audit requirement were omitted.

However, as every auditor and indeed every businessman and shareholder knows, the audit requirement is not a compulsion to certify that everything is correct; it is a compulsion to certify what is found. If the auditor does not find that he can give the full, normal certificate, he limits his certificate to the things that he can find as fact and he adjusts his certificate to what he knows, or believes, is the correct statement of affairs.

If this were a part of the authorisation—and it is only authorisation that we are asking for at this stage and not incorporation in statute—there would be no difficulty in an auditor saying, "I certify so-and-so, but please see Notes 1 to 10 on so-and-so. These are conditions or further explanations". There is no ultimate difficulty, although there is a modicum of difficulty about the auditor.

The noble Lord then goes on to repeat what was apparently said in another place about the impossibility of allocating the cost properly as between what we are asking for and the rest. That does not convince me at all, I am awfully sorry. I was a practising accountant for a third of a century, running my own practice. (I am permitted to say that because I left long ago.) Time and time again one is asked to do what everyone does in the normal way of life. One has to think of a fair division and express the thought not in words but in figures. It is a different language. but that is all.

It is ridiculous to say that nobody can form a fair view of what is relevant to one activity and what is relevant to another. That cannot be said. It is possible to say that there is more than one view and that there cannot be a completely precise view. But one can turn that fair view into figures, and that happens every day of the week.

Although the figures may be such as to require an auditor to limit his certificate, nevertheless they would be extremely valuable, extremely helpful and adequate for the purpose. One is not seeking to know whether there is a profit of a halfpenny more or less out of supplying tariff customers: one is seeking a general view of whether an excessive profit has been made. If a reasonable profit has been made within, I imagine, quite a large margin, it would not matter. We are not asking for a precise ½ per cent. or 1 per cent.: we are asking for a good indication.

The Minister's brief, like another one that has already been referred to, may be headed with a large "Resist". If he has nothing further to say, I certainly want to test the feeling of the Committee.

Lord Brabazon of Tara

I should like to pick up two points that the noble Lord makes. He says that it may be possible to produce unaudited accounts, or that sort of thing. I hoped I had made it clear that the choice of bases would materially affect the accounts. The figures could be quite a long way different; it is not just a question of a halfpenny or a penny, to which the noble Lord referred. I believe that it is better to leave things as they are, with the power of the director to call for all the necessary information about the tariff market, and handle things that way.

Lord Diamond

I am awfully sorry; that is just no good. If what the noble Lord says is right, all that the director can call for is information that will not produce the answer for which we are asking. That will be no help whatsoever to the director or the customer at large. I am sorry; this is a reasonable request. It is put upon us by the fact that the Government have decided to make a private monopoly of the supply of gas to those 16½ million tariff customers. That is the change. It is the Government's desire that there should be that change. It is our desire that there should be the minimum protection of knowing whether out of that activity an excessive profit is being made.

Lord Brabazon of Tara

Let me ask the noble Lord one question. Why should it be more important after the supply becomes a privatised monopoly, as he describes it, to know the difference between the tariff and the contract customer? Why, then, at the present time should it be possible for the contract customer to subsidise the tariff customer, or the other way round? I cannot see the difference.

Lord Diamond

Yes; because the noble Lord is not addressing himself to the question to which I am addressing my mind. I am not at the moment concerned with cross-subsidisation. We shall come to that on a later amendment. We are not asking at the moment about whether the contract customer pays through the nose. Will the ordinary man in the street, who will have to buy his goods at the one shop, be taken to town? Will an excessive profit be made out of that one activity? We shall know the answer, and those 16½ million consumers will be protected, only if we know the final tally. There will be all sorts of protections en route, but it is the final tally and the profit and loss account that matter, as every noble Lord on that side of the Committee knows. It is the final figure that will count here, and I am bound to ask the Committee to support the amendment.

7.15 p.m.

On Question, Whether the said amendment (No. 68) shall be agreed to?

Their Lordships divided: Contents, 65; Not-Contents, 111.

Airedale, L. Kilmarnock, L.
Attlee, E. Lawrence, L.
Bacon, B. Llewelyn-Davies of Hastoe, B.
Brockway, L. Lockwood, B.
Brooks of Tremorfa, L. McCarthy, L.
Bruce of Donington, L. McNair, L.
Burton of Coventry, B. Mar, C.
Carmichael of Kelvingrove, L. Mayhew, L.
Cledwyn of Penrhos, L. Molloy, L.
Crawshaw of Aintree, L. [Teller.] Monson, L.
Morton of Shuna, L.
David, B. Nicol, B.
Dean of Beswick, L. Oram, L.
Diamond, L. Phillips, B.
Donoughue, L. Ponsonby of Shulbrede, L.
Elwyn-Jones, L. Rhodes, L.
Elystan-Morgan, L. Ritchie of Dundee, L.
Ennals, L. Rochester, L.
Ewart-Biggs, B. Simon, V.
Ezra, L. Stedman, B. [Teller.]
Gallacher, L. Stewart of Fulham, L.
Glenamara, L. Stoddart of Swindon, L.
Gregson, L. Taylor of Blackburn, L.
Grey, E. Taylor of Gryfe, L.
Grimond, L. Taylor of Mansfield, L.
Hanworth, V. Turner of Camden, B.
Hatch of Lusby, L. Underhill, L.
Hirshfield, L. Vernon, L.
Houghton of Sowerby, L. Walston, L.
Hunt, L. White, B.
Jeger, B. Williams of Elvel, L.
John-Mackie, L. Willis, L.
Kilbracken, L. Wilson of Langside, L.
Allenby of Megiddo, V. Bessborough, E.
Allerton, L. Bolton, L.
Arran, E. Brabazon of Tara, L.
Auckland, L. Brougham and Vaux, L.
Bauer, L. Bruce-Gardyne, L.
Belhaven and Stenton, L. Butterworth, L.
Belstead, L. Buxton of Alsa, L.
Caccia, L. McFadzean, L.
Caithness, E. Mancroft, L.
Cameron of Lochbroom, L. Margadale, L.
Campbell of Alloway, L. Massereene and Ferrard, V.
Campbell of Croy, L. Maude of Stratford-upon-Avon, L.
Chelmer, L.
Coleraine, L. Merrivale, L.
Constantine of Stanmore, L. Mersey, V.
Cork and Orrery, E. Middleton, L.
Cowley, L. Montgomery of Alamein, V.
Craigavon, V. Morris, L.
Craigmyle, L. Mottistone, L.
Cullen of Ashbourne, L. Munster, E.
Davidson, V. Norfolk, D.
Denham, L. [Teller.] Norrie, L.
Drumalbyn, L. Onslow, E.
Dulverton, L. Orkney, E.
Ellenborough, L. Pender, L.
Elliot of Harwood, B. Peyton of Yeovil, L.
Elliott of Morpeth, L. Plummer of St Marylebone, L.
Elton, L.
Faithfull, B. Rankeillour, L.
Ferrers, E. Redesdale, L.
Fraser of Kilmorack, L. Reigate, L.
Gainford, L. Renton, L.
Gardner of Parkes, B. Rochdale, V.
Glanusk, L. Romney, E.
Glenarthur, L. St. Aldwyn, E.
Gray, L. Sanderson of Bowden, L.
Gray of Contin, L. Sandford, L.
Hailsham of Saint Marylebone, L. Sandys, L.
Savile, L.
Harmar-Nicholls, L. Skelmersdale, L.
Harris of High Cross, L. Stockton, E.
Harvington, L. Stodart of Leaston, L.
Henderson of Brompton, L. Strathclyde, L.
Hives, L. Swinfen, L.
Hooper, B. Thorneycroft, L.
Hylton-Foster, B. Trenchard, V.
Inglewood, L. Trumpington, B.
Kimball, L. Ullswater, V.
Kinloss, Ly. Vaux of Harrowden, L.
Kitchener, E. Vickers, B.
Lane-Fox, B. Vivian, L.
Layton, L. Ward of Witley, V.
Lindsey and Abingdon, E. Whitelaw, V.
Long, V. [Teller.] Windlesham, L.
Lothian, M. Wise, L.
Lucas of Chilworth, L. Wolfson, L.
McAlpine of West Green, L. Zouche of Haryngworth, L.

Resolved in the negative, and amendment disagreed to accordingly.

7.25 p.m.

Lord Brabazon of Tara

We have reached, I believe, a suitable moment to adjourn the Committee stage. In moving that the House do now resume, I suggest that we do not return to the Committee stage of the Gas Bill until 8.30 p.m. I beg to move that the House do now resume.

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

House resumed.