Lords Sitting of 5 June 1986

Preamble
The House met at three of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Carlisle.

European Air Fares
Baroness Burton of Coventry: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make a statement on the recent decision of the European Court of Justice that government control of air fares within the EC was illegal; and whether it has been possible for the Commission to make progress in their detailed preparation of possible court cases against member states in view of the cancellation of the meeting of the Council of Transport Ministers due to have been held on 5th May.
Viscount Davidson: My Lords, while the recent decision of the European Court of Justice in the French tariffs cases helpfully confirms that the competition rules of the treaty apply to air transport, it does not suggest that government approval procedures for air fares are illegal. I understand that the Commission is awaiting the outcome of the 18th June Transport Council before deciding what further steps it may wish to take.
Baroness Burton of Coventry: My Lords, I know that the Minister wishes to help, and I do not doubt the good faith of the Government on this matter. However, concerning the Answer that he has just given, is he aware that I have a Question down for 26th June, and that perhaps with that Question we may get a definition of the decision referred to? Referring to the Question on the Order Paper today, does the Minister realise that I asked him whether any further progress had been made in the detailed preparation of possible court cases, of which we were told originally on 23rd January? Can the Minister enlighten us on that point?
Viscount Davidson: My Lords, I appreciate the fact that the noble Baroness, Lady Burton, is trying to help the Government in this matter, and in turn I shall do my best to help the noble Baroness. What the Commission said was that unless there was satisfactory progress in the council by June, it would itself take steps to apply the competition rules of the treaty. We must therefore await the outcome of the 18th June council. We shall of course do what we can to speed up things, but, as I say, it is for the Commission to decide what steps it may wish to take.
Lord Bruce of Donington: My Lords, in view of the fact that many of the member states obey the Commission rulings as and when it suits them will the noble Viscount give the House an assurance that the
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rights of the United Kingdom are thoroughly protected?
Viscount Davidson: My Lords, I can certainly give that assurance.
Baroness Burton of Coventry: My Lords, I am obliged to the Minister for his reply. It shows what one can do by a little co-operation. May I ask the noble Viscount whether he is aware that Mr. Spicer, at a recent conference in Manchester, said that if real competition in European air services could not be achieved by negotiation, the United Kingdom would be compelled to take the matter to the European Court? In view of his answer may we assume that after 1st July, when we have assumed the presidency of the EC, matters will then move speedily?
Viscount Davidson: My Lords, I am hopeful that when we assume the presidency matters will proceed even faster than they are going at the moment. We already have liberal bilateral agreements with the Netherlands, Belgium, Luxembourg, West Germany and Switzerland, and we are continuing our efforts to secure similar arrangements with other countries. We have not been standing absolutely still.
Lord Broxbourne: My Lords, reverting to the question of the noble Lord on the Front Bench opposite, would my noble friend the Minister agree that while the rights of this country are of course of supreme importance they do not include, or embrace, any violations of the rule of law?
Viscount Davidson: My Lords, I should like to say that that is outside the scope of the Question.
Lord Underhill: My Lords, the noble Viscount referred to the important meeting to be held, I think he said, later this month, following which the Government will decide their own actions. Can we be assured that a Statement will be made on this important issue?
Viscount Davidson: My Lords, I understand that a Statement will be made after the council meeting on 18th June.
Lord Bruce of Donington: My Lords, will the noble Viscount inform his noble friend Lord Broxbourne that he may have his rights under Article 177 of the European treaty, and have his own case stated?
Viscount Davidson: My Lords, I do not think I need to; he has just been informed.

Public Libraries: Newspapers
3.10 p.m.
Lord Harris of Greenwich: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is their reaction to the decision of a number of local authorities to withdraw newspapers published by News International from public libraries.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, my right honourable friend the Minister for the Arts has already made it clear in another place that the Government see no justification for this action. He has received complaints about 14 library authorities. He has now written to the authorities concerned to ask them whether the complaints are true and, if so, how they reconcile their action with their duties under the Public Libraries and Museums Act 1964. He will consider what further action to take in the light of their replies.
Lord Harris of Greenwich: My Lords, I thank the noble Lord for that reply. May I ask him first how many of the local authorities have yet replied? Secondly, is he aware that the Minister has substantial powers under the Public Libraries Act 1964, in Sections 1 and 10, and that it is disappointing to some of us that those powers have not been exercised as yet? Finally, is the noble Lord aware that this type of totalitarian behaviour by local authorities in taking newspapers out of public libraries because they dislike the proprietor of the newspapers is wholly unworthy of people involved in local government administration in this country?
Lord Belstead: My Lords, I think replies have been received from about three of the local authorities concerned. My understanding is that two of the 14 authorities have made clear that this position does not apply to them, and I think that is encouraging. The noble Lord asked whether there were powers under Sections 1 and 10 of the 1964 Act which enable the Government to move in this matter. As I said in my original reply, my right honourable friend has written to library authorities about this matter, and I think that we should consider the position when the replies have been received. With regard to the third point that the noble Lord made, I entirely agree with him.
Lord Boyd-Carpenter: My Lords, can my noble friend make it clear that in the unhappy event of an unsatisfactory answer from authorities which are behaving as badly as this his right honourable friend has powers to act, or, if he has not powers to act, will take them?
Lord Belstead: My Lords, there is a power to act. It is, as the noble Lord, Lord Harris, said, under Section 10 of the 1964 Act.
Lord Brockway: My Lords, is the Minister aware that although personally I have switched from The Times to the Daily Telegraph, many of us are in favour of these papers being placed in public libraries? But in regard to the Morning Star, which is excluded from many libraries, does he not agree that there should be the same right to read it in public libraries, even though we differ from its views?
Lord Belstead: My Lords, I hope that the choice of reading of the noble Lord, Lord Brockway, does not mean that he is veering dangerously to the Right. The noble Lord's second point is a very important one. Perhaps I may say on behalf of the Government that we deplore any attempt to ban from public libraries
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particular books or newspapers for which there is a demand.
Baroness David: My Lords, is the Minister aware of the position of the Labour Party on this matter? The local government committee of the National Executive Committee of the Labour Party sent out an advice note to local authorities in February. It was sent to all Labour groups and affiliated trade unions and it said that keeping the papers from public libraries was undesirable censorship.
Lord Belstead: My Lords, I think we welcome the news which the noble Baroness has given in that question.
Lord Harris of Greenwich: My Lords, will the noble Lord, Lord Belstead, join the rest of the House in expressing the hope that the 14 Labour-controlled councils which have been involved in this practice will listen to what their own national executive has to say?
Lord Belstead: I do, my Lords.

Stoke Garden Festival
3.15 p.m.
Baroness Lane-Fox: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether it is intended that the National Garden Festival at Stoke-on-Trent should attract tourists to that area and whether the site is to become a permanent feature.
Lord Skelmersdale: My Lords, the festival organisers have worked closely with regional and national tourist agencies to ensure that the festival becomes the main feature in Staffordshire's tourist calendar of 1986, and hope to attract up to 4 million visitors. On closure in October, it is intended that one-third of the site will remain as permanent open space for public use, retaining some of the features of the festival.
Baroness Lane-Fox: My Lords, in thanking my noble friend the Minister for that pleasing reply, may I ask him how he thinks it will be best for the remains of the beautiful garden to be used to attract both tourists and jobs?
Lord Skelmersdale: My Lords, the festival site extends for 180 acres, that is 73 hectares. It is intended that the site will be given over some one-third to public open space, a further third to housing and a further third again to commercial development.
Lord Orr-Ewing: My Lords, can my noble friend say how many jobs have been created by this desirable activity? In view of the very popular and somewhat overcrowded Chelsea Flower Show, on the understanding that already a quarter of a million people have already attended this festival, is there not something to be said for repeating this idea again in

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other parts of the country during the summer? It would bea supreme attraction not only for local people but to overseas visitors who look to England for the gardens and what they produce.
Lord Skelmersdale: My Lords, as a professional horticulturalist, I most certainly understand and welcome the last part of my noble friend's supplementary. So far as his substantive question goes, during construction there were about 500 people on site at any given time and there are now on site some 13,000 people, including 1,000 Manpower Services Commission operatives involved with the operations of the festival.
The Stoke garden festival will be succeeded by one in Glasgow in 1988, Gateshead in 1990 and Wales in 1992.

Bee Stocks: Winter Losses
3.18 p.m.
Lord Gisborough: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what was the effect of the hard winter on the British bee stock, particularly in the North of England.
Lord Belstead: My Lords, preliminary reports show losses averaging some 40–50 per cent. in England as a whole but there are regional variations. Losses were highest in the North of England averaging 50–60 per cent. The Ministry of Agriculture, Fisheries and Food is continuing to monitor the position.
Lord Gisborough: My Lords, I thank my noble friend for that reply. Have the Government any plans to aid the recovery of the national beehive? Secondly, is it their intention to relax or to maintain the rules relating to the import of queens and bees?
Lord Belstead: My Lords, we do not have any plans to relax import controls. So far as the impact of bee losses on pollination of crops is concerned, I am advised that the reports for the prospects of flowering and fruit set of top fruit crops are excellent. At present it is unlikely that pollination may be inadequate because of the losses that have been suffered in the bee stocks.
Lord Dean of Beswick: My Lords, is the Minister not aware that in the North of England there is evidence at hand to show that for some beekeepers whole colonies of bees have been wiped out and that these people are facing bankruptcy? Will the Minister cast his mind back to two or three winters ago when, because of severe snow falls, farmers in various parts of the country received Government assistance to save them from such bankruptcy? Could this type of financial assistance for people who are facing financial ruin be extended as suggested by the noble Lord who put the Question on the Order Paper?
Lord Belstead: My Lords, I very much sympathise with those who have suffered losses in their bee colonies. But I would say to the noble Lord, Lord Dean of Beswick, that the financial assistance which was given last winter was given to those whose livelihoods were most seriously affected and who we thought could not continue in the livestock sector unless a special package of aid on a very limited basis was provided; and that was a once-and-for-all emergency.
Lord Cledwyn of Penrhos: My Lords, is the noble Lord aware that the beekeepers of Britain deserve the utmost support? There is no great publicity or parliamentary lobby of beekeepers. Nevertheless, they are, and have been for 2,000 years, an esential part of life in this country. Would the noble Lord say whether he or his right honourable friend have met representatives of the Society of Beekeepers in Britain and what case they have made? Is he aware that it is true that some of these beekeepers are on the verge of insolvency as the result of the winter described by his noble friend?
Lord Belstead: My Lords, I have not met beekeepers in their professional association. I have, however, replied to a very large number of letters from beekeepers and members of another place making representations.
Lord Alport: My Lords, may I ask my noble friend whether it is possible for beekeepers to insure against a natural disaster of this sort and, if it is so, how many of them do so?
Lord Belstead: My Lords, I do not know the answer to that supplementary question. I apologise. I will find out and write to my noble friend.
Baroness Nicol: My Lords, have the Government any plans to help beekeepers with the price of sugar for their winter feeding? I understand that they are having to pay £400 a ton, which is the EC price, whereas the world price for sugar is £150 a ton. Is there any way in which they can be helped during the winter months?
Lord Belstead: My Lords, cheap sugar would not have repaired the losses in the bee colonies. We do not have any such plans.
Lord Morris: My Lords, is my noble friend aware that of all the honey consumed in the United Kingdom over 70 per cent. is imported from abroad, as is the case in Europe itself, and that his own experts, considerable experts in his own department, are of the opinion that this is partly the result of the fact that we have no national bee-products policy or, indeed, a bee policy?
Lord Belstead: My Lords, I think, that, uncharacteristically, my noble friend is being a little less than fair. The Ministry of Agriculture provides a free diagnostic service and advice to beekeepers in this country and we make sure that bee health is preserved by very strict import controls, which means individual scrutiny of any imports coming in, being carried out again by Ministry of Agriculture officials. We really do

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quite a lot for this particular sector of the agriculture and horticulture industry.
Lord Bruce of Donington: My Lords, could the noble Lord inform the House whether there is a special title and item in the EC budget in relation to aid to beekeepers? I know that there was for some time during the period that I was there and that most of it seemed to go to Bavaria. Would the noble Lord find out whether there is now such an item and, if so, whether some of it might be diverted to the United Kingdom in view of the fact that the United Kingdom pays for most of anyway?
Lord Belstead: My Lords, I shall certainly have a look at the relevant regulations.
Lord Gisborough: My Lords, is my noble friend aware that in 1985 we exported £2 million worth of honey compared with importing £12 million worth? Would he consider encouraging greater production after the recovery of the stock and perhaps ask his noble friend the Secretary of State for Employment whether he would get the MSC to teach youngsters how to keep bees and help them to set up their own small industries?
Lord Belstead: My Lords, I think that my noble friend is on to a good point; but pouring Government money into assisting rural industry is something which we need to look at and I shall certainly look carefully at what my noble friend is saying on this particular point.
Lord Diamond: My Lords, could the noble Lord also let us know what the effect of the hard winter has been on the British native birds? Before he answers that this is not the same Question, may I say to him that I have always understood that there is quite a relationship between the bees and the birds.
Lord Belstead: My Lords, nonetheless, it is another Question.

Business
Lord Denham: My Lords, it may be for the convenience of the House if I announce that the Committee stage of the Gas Bill will adjourn at approximately 7 p.m. for approximately one hour and that during this adjournment the Education (Assisted Places) (Amendment) Regulations 1986 and the Second Reading of the Health Service Joint Consultative Committees (Access to Information) Bill will be taken.
Drainage Rates (Disabled Persons) Bill
Read a third time, and passed.

Gas Bill
3.25 p.m.
Lord Belstead: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Belstead.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair].
Schedule 5 [Public gas supply code]:
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 103A:
Page 79, line 37, at end insert—
("Energy service safety

(1) The supplier shall provide an effective and continuously attended service for the receipt by telephone, of reports of escapes of gas supplied, or believed to be supplied, by the supplier. Effective arrangements shall also be made for the receipt at the suppliers points of contact during their normal working hours of such reports made in person. The supplier shall, by appropriate means secure that adequate publicity is given to the ways it can be contacted for the purpose of reporting such escapes.

(2) The public gas supplier shall make safe all escapes of gas whether by cutting the supply of gas or otherwise, free of charge. Where repairs are associated with a supply of gas, the first half hour of work associated with that repair shall be free of charge.").

The noble Lord said: I beg to move Amendment No. 103A standing in my name and in that of my noble friend Lord Bruce of Donington. This amendment comes from the authorisation itself. However, it has been altered in two significant ways. First, it separates own gas leaks from third-party gas leaks, but it also goes further. The authorisation says that leaks shall be made good but allows solely for the cut-off and make-safe provisions. The amendment allows for both to be carried out. It seeks to prevent what is apparently becoming a practice in the BGC—deferred repairs; that is, putting off the actual repair work until a more suitable time. That may very well be when men are not on call-out or overtime, and therefore it is of course cheaper. While at the moment strict criteria is applied—for example, looking at the distance to residential property, or the density of population and the like—simply making safe could slip into being a general pattern of deferred repair.
As a matter of current practice the BGC provides that the first half hour of repairs associated with leaks is carried out free of charge. That is something which consumers enjoy at the present time and it is necessary to ensure that this facility remains and does not disappear under privatisation. That is why we believe it should be a statutory duty on the BGC to maintain and, if possible, improve the status quo. It is not sufficient to leave it to the authorisation.
The experience of British Telecom again provides a warning on this in relation to its treatment of 999 repairs and the repair service provided to district health authorities. While no costs are available for the abolition of this form of free service, it is known that district health authorities have to find an additional £12 million per annum to maintain the standard of repair work from BT which, previously to privatisation, they enjoyed for nothing.
I hope that this amendment will commend itself to the Committee. It is an important amendment. It is a matter relating to safety and will carry on the present practice of the BGC of carrying out the first half hour's work (that is, safety work) free of charge. I beg to move.
The Minister of State, Scottish Office (Lord Gray of Contin): I am grateful to the noble Lord, Lord Stoddart, for tabling this amendment because it gives us an opportunity to talk about the very important subject of safety. In this Bill we are strengthening the whole gas safety regime by bringing it into line with the general requirements of health and safety legislation. This means that the Health and Safety Executive can enforce those requirements with the wide range of powers available under the Health and Safety at Work etc. Act 1974. Among other matters, this provides for the possibility of prohibition orders and custodial sentences for their breach. Indeed, specific obligations are being tightened: the maximum response time for reported leaks of gas is being halved, and the obligation on British Gas to make safe reported leaks is being extended for the first time to the customer's side of the meter.
British Gas have an extremely good safety record and fully recognise their obligations to their 16 million customers and the public in general. They have made clear publicly, and to their employees, that safety will continue to be a priority after privatisation and will continue to be fundamental to the future success of their company, and I am sure they will recognise it will be in their own best commercial interests to honour that commitment. They have a very strong interest, after all, in promoting gas as a safe fuel, and in this spirit have also made it clear that they will continue to provide the first half-hour of work associated with a repair free of charge.
Our basic approach to the question of which obligation should be placed on a public gas supplier directly by the Bill and which should be imposed through the authorisation has been to place those obligations which will apply to all public gas suppliers in the Bill, and those which may need to vary according to the circumstances of a particular case in the public gas supplier's authorisation. This is the approach which we have accepted in relation to gas escapes. Paragraphs 13 and 14 of Schedule 5 to the Bill impose obligations which will apply to all public gas suppliers. Under paragraph 13 a public gas supplier is subject to a criminal offence if he fails to prevent his own gas from escaping within 12 hours of being informed of that escape. It is clear from paragraph 13 that the public gas supplier must so prevent the gas from escaping without charge. That, then, is the basic obligation on all public gas suppliers in relation to escapes of their own gas.
It is, of course, implicit in paragraph 13 that the public gas supplier must maintain an effective service for the receipt of complaints so as to enable him to fulfil his obligation to prevent the escape. But we do not consider it to be appropriate to specify the precise nature of the emergency service that should be provided in the Bill itself because we consider that this must be a matter for the authorisation, so that there is sufficient flexibility to tailor the obligations that are imposed to the circumstances of a particular public gas supplier, to the needs of the customers which he supplies and to the time at which the authorisation is to be granted. What is appropriate now in relation to emergency services may not be what is needed in 25 or 50 years' time.
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I cannot therefore accept the noble Lord's amendment. But there is yet another reason why the amendment is unacceptable, and that concerns the obligation that the amendment would place on a public gas supplier not only to prevent the gas from escaping free of charge (which is, as I have explained, the effect of paragraph 13 as it is presently drafted, and which Condition 11 of the draft British Gas authorisation requires British Gas to make clear to its customers) but also to carry out 30 minutes' repair work free of charge. We can see no justification whatsoever in imposing such an obligation on a public gas supplier. While British Gas do at present carry out 30 minutes of repair work free of charge, and have publicly stated that they will continue to do so, we do not consider that the statutory obligation on a public gas supplier should be to do more than to prevent the gas from escaping. Thereafter it is a matter for the consumer to make such arrangements as he considers appropriate to have any necessary repair made, which may of course involve the public gas supplier or any other competent gas fitter, as the customer thinks fit.
I hope the rather lengthy explanation that I have given will satisfy the noble Lord. Having given my reasons for not being able to accept the amendment, perhaps I can persuade him to withdraw it.
Lord Ezra: I find it difficult to understand why the Government should, neither in the Bill itself nor in the proposed authorisation, put in place what the existing British Gas Corporation are doing and are saying that they wish to continue to do. They have shown the way for good practice by undertaking this extra half-hour of repair work without charge. Why do the Government feel that this excellent example should not be enshrined either in the legislation or in the authorisation?
Lord Gray of Contin: I tried to deal with that very point which the noble Lord, Lord Ezra, has raised in my concluding remarks. I explained the intention of the British Gas Corporation—which will be by far and away the largest supplier of gas and which in the eye and the mind of the public will still be the principal distributor of gas—but we do not consider it necessary and we do not believe there is any real justification for imposing such an obligation on any public gas supplier. We believe that in the case of the statutory obligation it is not reasonable to write this into the legislation. It is of course in the best interests of any gas supplier to ensure safety, and indeed the British Gas Corporation have publicly stated that after privatisation they will carry on just as before. But we do not believe it is necessary to write it into the legislation itself.
Lord Bruce of Donington: Before the noble Lord sits down, would he mind answering a question? He said that it is not the present intention of British Gas to do anything other than what they are doing now. Will the noble Lord therefore give a Government guarantee, particularly since there is to be privatisation, that the board of directors of British Gas plc will remain there in perpetuity?
Lord Gray of Contin: I think the noble Lord is very well aware that I simply could not give any such

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guarantee: of course not. However, I would remind the noble Lord, with his experience of private sector companies, that he would perhaps be the first to acknowledge that a private sector company which is worth its salt will always adopt the methods which are likely to bring it the greatest success; and in the distribution of gas the private sector company which does not observe the very highest safety standards is unlikely to prove popular with the public.
Baroness Burton of Coventry: May I ask the Minister (who I thought spoke very clearly and simply about this, and so the fault must be mine) one question? When he was talking about this I thought he said it would be up to the consumer to make what arrangements he or she thought necessary in the event of the gas supply failing or escaping. Does his answer mean that the consumer will have to pay for that?
Lord Gray of Contin: Perhaps I could go over that part of the answer which I originally gave and which I think covers this point. I said that we saw no justification in imposing such an obligation on a public gas supplier. I went on to say that while British Gas at present carry out 30 minutes of repair work free of charge and have publicly stated they will continue to do so, we do not consider that the statutory obligation on a public gas supplier should be to do more than prevent gas from escaping. That certainly is a statutory obligation. Therefore it must be a matter for the consumer to make such arrangements as he considers appropriate to have any necessary repair made, which of course may involve the public gas supplier or any other competent gas fitter, as the customer thinks fit.
My answer to the noble Baroness—and I fully recognise her very great concern for the consumer—would be to say that the consumer might be responsible for repairs to his own appliances, but as far as work on the supply itself is concerned it must be done by British Gas, who will have control of the distribution system. So far as the question of payment is concerned, this reverts to the provision for the first 30 minutes of work being free. Thereafter it may be that the consumer would be required to pay a contribution towards what might have to be done.
Baroness Burton of Coventry: I was asking why the consumers should have to pay anything. It is nothing to do with them; it is either the equipment or the supply that is wrong, so why should the consumer be expected to foot any part of the subsequent bill?
Lord Gray of Contin: I do not think that it is necessarily the case that the consumer should be completely relieved of any responsibility. It may not, in fact, be the actual supply which is contributing to the leakage. The first 30 minutes of free work will enable the British Gas Corporation to determine what is the cause of the trouble. If it is something to do with the distribution system, which is their responsibility, then the consumer would not be expected to pay. But it could conceivably be something which is not directly related to the distribution system.
Baroness Burton of Coventry: All of us who are householders, and who have people coming to make
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repairs, know that the first half-hour of work may well be free, as the Minister has said. It is what comes after that that is the trouble, and I cannot see why a consumer should have to pay for something which is not his fault. That is the point I am trying to make.
Lord Gray of Contin: If I may first deal with the point made about an appliance, this may be something which is far removed from British Gas and something with which they have had nothing at all to do. They are obliged to carry out work free of charge to make safe a gas escape. This work must be done free of charge, whether it takes 30 minutes or longer, if it is directly connected with the distribution system for which British Gas have responsibility. Work on the supply must be done free of charge by British Gas.
It is only work on the consumer's own appliances for which payment must be required. If British Gas have supplied a particular appliance and that appliance is the cause of a gas leak, presumably in the early stages that will be under guarantee in any case. But so far as the supply is concerned, it would be quite unrealistic to hold British Gas responsible in perpetuity for appliances. If the problem is to do with the actual supply system for which British Gas are responsible, that is one thing. If it is to do with any appliance which was supplied by British Gas, obviously that cannot be the responsibility of British Gas for ever and ever.
Baroness Burton of Coventry: Am I to understand from what the Minister has said that, if the fault is in the appliance which is owned by the consumer, then the consumer may have to pay? If that is so, I quite understand. But what I want to know is whether, if the fault arises from something other than the actual appliance, the consumer is still liable to have to pay.
Lord Gray of Contin: No, the consumer is not liable to have to pay if the problem is in the distribution system. If it arises from an appliance or something relating to an appliance, then obviously at a certain time that would become the responsibility of the consumer, just as it is with anything else which is bought from British Gas or from any other supplier. I am most grateful to the noble Baroness because I think, as she so often does, she has helped me in my case by highlighting just how difficult and in appropriate it would actually be to write into the legislation what this amendment seeks to do.
3.45 p.m.
Baroness Burton of Coventry: I thank the noble Lord for his patience and I hope mutual self-help will make progress later on.
Lord Jacques: May I put this specific question to the Minister: Let us assume that the fault is nothing to do with an appliance or with general distribution, but rather with a leak in a pipe under the floor of a house. In that case, presumably, the gas supplier has a duty to stop the leak and to do half an hour's free work to repair it. But after that, is it the responsibility of the householder?
Lord Gray of Contin: Yes; the noble Lord is correct.
Baroness Fisher of Rednal: The smell of gas escaping in Ronan Point must have been in several flats. One presumes that it would have taken much longer than half an hour to find where it was escaping and where it was to be turned off.
Lord Gray of Contin: I should have thought that in an example such as the noble Baroness has given, if that situation was occurring in more than one flat, and if the first leak was repaired and the smell of gas had not been removed, then another flat would have been examined and then another and another. Of course, that is a different exercise each time. Ultimately, if the work within the flat was of a nature that required more than half an hour's work, then the responsibility would not be the corporation's.
Lord Diamond: I am bound to say that I do not find the Minister's answers for the present provision in the Bill at all satisfactory. What is proposed in this amendment, among other things, is that certain-activities shall be free of charge. I hope we can avoid the confusion concerning the point at which the supplier becomes responsible and the point at which the problem relates to the apparatus and so on.
Here we have a provision for making safe all escapes of gas free of charge. Everybody recognises that that is a sensible public duty. The avoidance of it could lead to loss of life. At the moment the gas supplier, British Gas Corporation, recognises and carries out that duty free of charge. The noble Lord, in replying to the request that this should be incorporated into the statute, says that it would not be appropriate to put this responsibility into the statute. He referred to this as an imposition. Is it an imposition to say by statute that what you are doing is right? Is it an imposition to say that what you are doing and what you have said you propose to continue doing is right? I just do not understand the use of the word "imposition" in those circumstances. It is right that this practice should continue. It should continue in the interest of public safety, and therefore it is right that it should be put into the Bill.
I must say, once more, that I get very impatient at the idea that the purpose of the Committee is to give power to a Minister to do what he likes, in a licence or in an ancillary document over which your Lordships' House will have no further control whatsoever. The House must stand up to its own responsibilities and say whether it thinks that this protection of human life should be provided free of charge. I think it should. The present gas corporation thinks it should. It is therefore appropriate that it should be in the statute and I hope your Lordships accept that view.
Lord Gray of Contin: I feel that the noble Lord is using rather emotive language here—
A noble Lord: Not at all.
Lord Gray of Contin: Yes, indeed he is. In this respect, nobody is more concerned about the protection of human life than the Government, and the suggestion that the Government are casting this aside as something which is of little importance is totally wrong. In my earlier remarks, I pointed out that
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in this Bill the Government are strengthening the whole gas safety regime and bringing it into line with the general requirements of the health and safety legislation. To suggest otherwise is simply to turn a blind eye to the actual facts of what is happening.
We have extended the obligation, which at present covers only British Gas's own pipes, to all escapes whether they are British Gas's pipes or the customer's. The obligation in the Bill is to deal with escapes absolutely free and I am pleased, therefore, to say that the Government fully agree with the noble Lord that it should be in the statute. But what the noble Lord is suggesting in this amendment is going much further than that, and I really cannot understand why the noble Lord or his noble friends are so anxious to include these requirements in the Bill.
Lord Diamond: The noble Lord said—and, if I may say so, I think he was in error—that the Bill provides for this work to be done free. Can he, rather than just relying on generalities in words, point out to me where in this Bill it says that it shall be provided free of charge?
Lord Gray of Contin: What I said was that the obligation in the Bill is to deal with escapes of gas in the distribution system free.
Lord Sefton of Garston: I think that the Minister has been poorly briefed on this point. There are two ways of dealing with a leak and may I, after about 35 years' experience in fitting gas cookers and so on, point out that if there is a responsibility on the part of the new gas authority to deal with a leak, that may merely consist of turning off the gas at the point of entry to the property? What some noble Lords are wondering about is the cost of repairing the pipes that occasion the leak. Is it true to say that the only obligation put upon the new authority is to turn off the gas, if there is a leak on the customer's side of the meter? If that is so, why cannot somebody in the realms of government advise the Minister properly?
Lord Gray of Contin: The obligation in paragraph 13 of Schedule 5 must be carried out free. It is a statutory obligation which must be dealt with, without the supplier making any charge.
Lord Diamond: What I asked some time ago is: where does it say that? We all understand that the licence says it is free; we all understand that the present practice is to provide the service free and we all understand, therefore, that to put it in a statute is by no means an imposition, because it is being done already and is accepted as a responsible attitude and in the best interests of a commercial organisation. So I am repeating to the noble Lord the Minister that either he has to admit that the Bill does not give authority for this service to be provided free, or to show us where in the Bill we can see the words "free of charge".
Lord Gray of Contin: The provisions of the Bill are carried forward virtually unchanged from the 1972 Act. No reference is made there to the extent to which charges arise. However, where a statutory obligation arises, that is to prevent escapes. It may be the simple

1099
operation of making safe and no charge will be made. The service must be performed at the supplier's expense. So it most certainly is free.
Lord Sefton of Garston: All that means, in other words, is that the gas board have to turn off the gas. May I ask a question arising from something the Minister said earlier, because I am rather concerned about the way he so blithely threw the responsibility for having no amendment at all on to the fact that the present gas authority have said that they will continue certain practices, and the Minister relied on that as an argument. Will he tell me, and the public generally, where it is in the Bill that he relies upon a future body, British Gas plc, to carry out any promises or commitments made by the present organisation? The real truth is that there cannot possibly be any.
Lord Gray of Contin: With the greatest respect to the noble Lord, he is not correct. When a statutory obligation is placed on a body, that body cannot charge for the carrying out of the obligation. This is implicit in the interpretation of any statutory duty. This is implicit—
Lord Sefton of Garston: I am sorry, but that is not what the Minister said earlier. The Minister was dealing specifically with the fact that work would be carried out on the consumer's premises for half an hour free of charge, which is done now. If one notifies the gas board now that there is a leak, they will go to the consumer's premises and, if they are occupied by somebody who is evidently poor or elderly, and only a small amount of repair is needed on the premises to the consumer's fittings, the gas board will carry it out free of charge.
I am glad to see that the Minister agrees with me, because he went on to say that the gas board gave him an assurance—I do not know who it was in British Gas who gave that assurance; perhaps he would like to tell us—that that same practice will be carried out under the new arrangement. This means that what the gas board have said is that, purely gratis and as a favour, they will carry out some repairs on the consumer's premises free of charge. I am not talking about turning off the gas. Anybody can turn off gas.
The Minister then went on to say that, because he had had that assurance, there was no requirement for the amendment in the Bill. Will he tell me where there is an assurance in the Bill, or how he intends to see that an assurance is given, that British Gas plc will carry out any obligations accepted by British Gas at the moment?
Lord Gray of Contin: I have tried to make this as plain as I can, but I am afraid the noble Lord is not correct. When a statutory obligation is placed on a body, that body cannot charge for the carrying out of the obligation. That statutory obligation is carried forward. I have explained already that the requirements of the 1972 Act—if the noble Lord will listen to me for a moment instead of his Front Bench—
Lord Stoddart of Swindon: He is getting more sense from there.
Lord Gray of Contin: From here, yes. The 1972 Act has been carried forward and, therefore, anybody who supplies gas has to comply with those obligations. When a statutory obligation is placed on a body, it simply cannot charge for it. It is a statutory obligation. I am not going back to the question of the half-hour. That is a separate point altogether and I have already answered the noble Baroness. But may I just repeat for the benefit of the noble Lord that work on the distribution system must be done free by British Gas. It is only work on its own appliances for which there may be payment. Indeed, even on those appliances in the early days—the days of guarantee—the payment would be avoided, but thereafter that would not continue forever.
4 p.m.
Lord Diamond: I am afraid that we are by no means out of the wood. First of all, perhaps I may direct the noble Lord to the Bill itself, because he has some hesitation in referring to it. We are talking about paragraph 13 and the prevention of escapes of gas. The last line of sub-paragraph (1), to which I draw his attention, states:
"(whether by cutting off the supply of gas to any premises"—
to which the noble Lord has just referred—
"or otherwise)".
So we are talking about more than just going along—as the noble Lord said, any fool can do that—to turn off the main tap.
The Minister has come along with a new proposition. He no longer maintains that the statement "free of charge" is incorporated in the Bill—which is the whole purpose of this amendment. He no longer maintains that it is incorporated explicitly in the Bill. What he now says is that it is implicit. The noble Lord would have to talk to me for a long time before he could persuade me that that was so. He is saying that it is implicit in the Bill because any body which has a statutory obligation has to carry out that obligation free of charge. I wish that were even 1 per cent. true.
For example, one of the obligations in the Bill is to supply gas. There is a statutory obligation in the Bill on the gas supplier to supply gas. Is the noble Lord the Minister seriously suggesting that because it has to supply gas, it has to supply it free of charge? Of course it has not. The Minister is being misinformed, and therefore we come back to what we were talking about. We do not want anything that is implicit. We want something that is explicit. We want a plain statement saying that what is right, what is the present practice, what is intended to be continued, should be in the statute.
Lord Stoddart of Swindon: We now see the difficulty of making progress with the Bill. The debate which we have just had shows quie clearly that noble Lords are concerned about very relevant matters. The noble Lord the Minister has not been able to satisfy the very relevant and real questions which have been put. The noble Lord tried very hard—I appreciate that—to satisfy this side of the Committee and perhaps his own side as well, but he has not satisfied them. There is no question about that; he has not satisfied them.

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My noble friends are absolutely right in saying that all that the Bill and condition 11 of the authorisation do is to put a duty on the gas supplier to cut off the supply of gas, whether it be by simply turning a lever or perhaps making a temporary repair to a pipe or other fixture—perhaps a meter—concerned with the supply of gas. That is all. That is the only obligation. What we are seeking to do is to continue, and continue in law, the obligation which British Gas itself has accepted to perform a half-hour's work, if it is necessary, to repair a gas leak.
I should have thought that the Minister would have seen the point we are making. It is all very well for him to say that British Gas has said, "We will continue this practice". The present British Gas Corporation would expect to continue that practice, but there is no certainty that its successors will wish to continue it. Indeed, if profits were falling and shares were falling on the Stock Exchange and the new British Gas plc wanted to increase profits by reducing costs, this might be one of the items on which it would wish to save by removing the practice. What we are seeking to ensure is that it cannot be removed because it is in the statute and Parliament has said that it shall remain.
We are talking about safety. We are talking about the safety of people. Although it may sound far-fetched, it could very well be that poor people who feared that they might be faced with some expense would do nothing if they occasionally smelled a leak of gas. But they should do something about it. This half-hour's free repair service is an encouragement to people to report gas leaks which may be very dangerous, even though the consumer—the member of the public—does not realise it. There is a real reason of public safety why this practice should be continued and why it should be written into the statute so that nobody can discontinue it after British Gas is privatised.
The amendment also states:
"The supplier shall provide an effective and continuously attended service for the receipt by telephone of reports of escapes of gas".
That is not in the Bill, but it is in the amendment. In the interests of public safety I hope that Members of the Committee have listened to this debate and that they see how serious a matter this is and realise that it would be sensible and safe—much safer—to write the provisions in the Bill by voting for this amendment. I fear that I really must press the amendment, in spite of the courteous patient manner in which the noble Lord dealt with it; That I appreciate. We are not satisfied with his replies, though that perhaps is not his fault. In the light of the fact that he is not able to make any concession I fear that I must press the amendment to a Division and ask noble Lords from all sides of the Committee to support it.
Baroness Macleod of Borve: Before the noble Lord sits down perhaps I may, briefly, put forward a suggestion. Members on all sides of the Committee are worried about the safety of gas; otherwise we would not be here this afternoon. We are, so far as I can make out, at rather an impasse. It is very difficult. The Minister has to decide and, indeed, the Secretary of State has to decide whether this provision should or
1102
should not be in the Bill. Before we ask the Committee to divide I should like to ask my noble friend the Minister whether he will take this away and let us have a considered opinion at Report stage.
Lord Stoddart of Swindon: That is a very useful suggestion and I appreciate it, coming from where it does. Perhaps I may ask the noble Lord whether he is prepared to respond now to the reasonable suggestion of the noble Baroness. Perhaps the noble Lord wishes to say something before I press the matter to a Division.
Lord Gray of Contin: There is really little more that I can say. I can but reiterate that it is only where specific provision is made for payment that such payment is allowed. So I think that the point about payment is clearly dealt with.
So far as concerns writing the requirement into the Bill, this is a straightforward amendment, and I am sure that my noble friend Lady Macleod is aware of that. I shall do something that I do not normally do, out of deference to the very great knowledge that my noble friend Lady Macleod has of the subject, and because of the interest she has always taken in it. I shall do so totally without commitment. If the noble Lord is prepared to withdraw his amendment, then I shall take further advice. I do not feel that the Committee would expect me to do more, but I am prepared to do what I have said, if that is the Committee's wish.
Lord Stoddart of Swindon: Frankly, I really do not think that that is good enough. The noble Lord has made no concession to the arguments that have been put from this side of the Committee—no concession whatsoever. If he had done so, then it would have been right to withdraw the amendment. However, the noble Lord made no concession to us at all. He said that his undertaking was totally without commitment. Perhaps he should have committed himself rather further than that to examining the matter seriously. Perhaps he should have said that he would at least try to do something with the authorisation, if not make an amendment to the Bill. I fear therefore that I shall have to press this matter to a Division.
4.11 p.m.
On Question, Whether the said amendment (No. 103A) shall be agreed to?
On Question, their Lordships divided: Contents, 92; Not-Contents, 101.

DIVISION NO. 1

CONTENTS

Airedale, L.

Crawshaw of Aintree, L.

Ardwick, L.

David, B. [Teller.]

Aylestone, L.

Dean of Beswick, L.

Banks, L.

Denington, B.

Beswick, L.

Diamond, L.

Birk, B.

Dowding, L.

Boston of Faversham, L.

Ennals, L.

Bottomley, L.

Ewart-Biggs, B.

Brockway, L.

Ezra, L.

Bruce of Donington, L.

Fisher of Rednal, B.

Burton of Coventry, B.

Foot, L.

Caradon, L.

Gallacher, L.

Carmichael of Kelvingrove, L.

Galpern, L.

1103

Graham of Edmonton, L.

Phillips, B.

Grey, E.

Ponsonby of Shulbrede, L. [Teller.]

Hampton, L.

Hanworth, V.

Rathcreedan, L.

Harris of Greenwich, L.

Rea, L.

Hatch of Lusby, L.

Rhodes, L.

Hayter, L.

Richardson, L.

Hirshfield, L.

Ritchie of Dundee, L.

Hughes, L.

Rochester, L.

Hunt, L.

Sainsbury, L.

Ilchester, E.

Seear, B.

Jacques, L.

Sefton of Garston, L.

Jeger, B.

Shepherd, L.

John-Mackie, L.

Somers, L.

Kilmarnock, L.

Stallard, L.

Kirkhill, L.

Stedman, B.

Lawrence, L.

Stewart of Fulham, L.

Leatherland, L.

Stoddart of Swindon, L.

Leathers, V.

Strabolgi, L.

Listowel, E.

Taylor of Gryfe, L.

Llewelyn-Davies of Hastoe, B.

Tordoff, L.

Lloyd of Kilgerran, L.

Underhill, L.

Lockwood, B.

Wallace of Coslany, L.

Lovat, L.

Walston, L.

Lovell-Davis, L.

Wells-Pestell, L.

McNair, L.

Whaddon, L.

Mar, C.

White, B.

Mayhew, L.

Wigoder, L.

Meston, L.

Williams of Elvel, L.

Monson, L.

Wilson of Langside, L.

Morris of Grasmere, L.

Winstanley, L.

Morton of Shuna, L.

Winterbottom, L.

Nicol, B.

Wise, L.

Oram, L.

NOT-CONTENTS

Aldington, L.

Glenarthur, L.

Auckland, L.

Gray of Contin, L.

Beaverbrook, L.

Gridley, L.

Belhaven and Stenton, L.

Haig, E.

Beloff, L.

Hardinge of Penshurst, L.

Belstead, L.

Hemphill, L.

Bessborough, E.

Hives, L.

Boyd-Carpenter, L.

Hooper, B.

Brabazon of Tara, L.

Hylton-Foster, B.

Brougham and Vaux, L.

Killearn, L.

Broxbourne, L.

Kimball, L.

Bruce-Gardyne, L.

Kinnaird, L.

Butterworth, L.

Kinnoull, E.

Cameron of Lochbroom, L.

Kitchener, E.

Carnegy of Lour, B.

Lane-Fox, B.

Chelmer, L.

Layton, L.

Coleraine, L.

Long, V. (Teller.]

Colville of Culross, V.

McFadzean, L.

Cottesloe, L.

Mancroft, L.

Cowley, E.

Margadale, L.

Cox, B.

Marley, L.

Craigavon, V.

Marsh, L.

Cross, V.

Melville, V.

Cullen of Ashbourne, L.

Mersey, V.

Davidson, V.

Mills, V.

De Freyne, L.

Milverton, L.

De La Warr, E.

Molson, L.

Denham, L. [Teller.]

Morris, L.

Derwent, L.

Moyne, L.

Dilhorne, V.

Norfolk, D.

Dormer, L.

Nugent of Guildford, L.

Drumalbyn, L.

Orkney, E.

Dundee, E.

Orr-Ewing, L.

Eccles, V.

Pender, L.

Ellenborough, L.

Peyton of Yeovil, L.

Elles, B.

Plummer of St Marylebone, L.

Elliot of Harwood, B.

Elton, L.

Porritt, L.

Erne, E.

Portland, D.

Faithfull, B.

Rankeillour, L.

Fortescue, E.

Romney, E.

Fraser of Kilmorack, L.

St. Davids, V.

Gainford, L.

Sanderson of Bowden, L.

Gardner of Parkes, B.

Sempill, Ly.

Glanusk, L.

Skelmersdale, L.

1104

Strathspey, L.

Vivian, L.

Swansea, L.

Ward of Witley, V.

Trefgarne, L.

Whitelaw, V.

Trumpington, B.

Wolfson, L.

Vaux of Harrowden, L.

Young of Graffham, L.

Vickers, B.

Zouche of Haryngworth, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.19 p.m.
Lord Diamond Lord Diamond moved Amendment No. 103B:
Page 79, line 41, after ("shall") insert ("at his own expense").
The noble Lord said: I propose to move Amendment No. 103B, if only because in the list of groupings it was not grouped with Amendment No. 103A but with Amendments Nos. 103C, 103D and 103E. Therefore, I give mouth to the usual phrase and say that I believe it would be for the convenience of the Committee if Amendments Nos. 103C, 103D and 103E were to be considered at the same time.
As to Amendment No. 103B, this is a simple insertion of the words: "at his own expense". I hope that it is not necessary for me to cover all the ground again and that the Minister will simply say that he will take away the amendment and look at it. That is a reasonable request. There is considerable doubt as to the correct interpretation of the Bill as it now stands. There is a clear desire on all sides of the Committee that safety should not be impeded in any way by the thought of charges. If I may say so, I should like to add one small point in that connection. It is not within my own experience but I gather that many people are afraid of asking for assistance, not only because of the charge but because there is a minimum charge—which is often substantial—for sending a man out in the first place. I gather from many housewives that that is a real deterrent.
If there is less than half an hour's work in rectifying a fault—and I can well believe that is the average case—it represents the difference between a substantial minimum charge for sending out a man and doing it for nothing. A substantial minimum charge could be a real deterrent in the mind of a consumer. The last thing we want is any reason why someone smelling gas should not immediately notify the authorities with the assurance that if it is purely connected with gas escaping, and something incidental to it, it would be put right with no charge on a consumer's very limited budget which has no place for repairs of this kind.
In view of that, I hope the Minister will agree to my request with regard to Amendment No. 103B. I do not ask for a commitment, just an undertaking that he will look at it. We have the highest regard for the Minister and for his integrity. If he says that he will look at the amendment, we know that he will and that he will take whatever action may be necessary before Report stage.
Amendment No. 103C proposes to leave out "twelve" and insert "six". This will amend Schedule 5, paragraph 13(2), on page 80 of the Bill, which reads:
"If a public gas supplier fails within twelve hours from being so informed effectually to prevent the gas from escaping, he shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale".
We certainly accept that it should be a criminal offence. The amendment relates to the words "twelve hours".
The present situation, as I understand it, is that originally a period of 24 hours was put into statute form. That has been reduced to 12 hours. So far, so good. But the evidence of the Minister himself in another place was that the British Gas Corporation acts currently well within that limit. In practice, action is at present taken in around two hours. Therefore, I do not see that there is much advantage in, so to speak, relaxing the limit and putting in 12 hours when one knows that on average the time taken is two hours. In those circumstances, I should have thought that six hours is giving ample latitude for possible difficulties that one has not envisaged. In a statute one must allow a certain flexibility.
That is the reason why we suggest not two hours, which is in fact the time taken, but six hours, which is a reasonable latitude; but we would hope the minimum time would continue to apply. In any event, there is an escape clause in the sense that the Bill refers to it being as soon as "reasonably practicable" so one could really put in two hours and rely on the "reasonably practicable" defence in case it took over two hours. However, I do not suggest even that. I cannot see therefore why the suggestion of six hours should not by anything other than welcome.
Amendment No. 103E covers the same point. I therefore beg to move Amendment No. 103B.
Baroness Burton of Coventry: I support the amendment proposed by my noble friend Lord Diamond. I hope the Minister realises that the high charges which have to be made to bring out skilled men to do a job are a real deterrent to householders. I fully appreciate that the skill has to be paid for; but in such cases it may well deter the less well-off sections of the community from sending for a skilled worker when necessary. With those few words, I hope that the Minister will consider the matter further.
Lord Bruce-Gardyne: I must confess that I am particularly concerned about what the noble Lord, Lord Diamond, said in supporting Amendment No. 103B. I thought that, in essence, this argument had been settled on the previous Division. I find it extraordinary that the noble Lord should continue to persist with the argument that the supplier should deal with these problems at his own expense. To my mind that is absolutely typical of so much so-called consumer legislation which assumes that a corporation can take on to its expenses something entirely unconnected with the expenses charged to the generality of consumers.
What one is arguing about in all these instances is not whether the consumer shall pay—the consumer will of course pay one way or another—but whether a particular consumer should pay or whether the generality of consumers should pay. That is the only distinction and that is the only area where expense arises. To my mind what the noble Lord proposes again on this amendment is far too sweeping. It is not inconceivable that an individual consumer will have caused and be logically responsible for the escape of gas to which he is at risk.
I freely confess to the Committee that recently I chopped down a tree which hit an electrical
1106
connection and plunged a village into darkness. The electricity board had to repair the damage and restore the supply. The noble Lord will insist that the generality of customers should have to pay for that through the additional expense which would have to be carried on their bills rather than that I should pay. That seems to me to be entirely illogical. The noble Lord wishes to intervene?
Lord Diamond: I was merely going to ask the noble Lord whether, when he went to the relevant authority, he said, "I am sorry, I cannot tell a lie. It was my fault"?
Lord Bruce-Gardyne: In fact I did. I accepted full responsibility, as of course it was. The point is that if this amendment were to be carried, that would not arise. If I had caused a gas leak it would nevertheless not invalidate the fact that the responsibility for the cost of repairing that leak would fall upon the gas corporation. The noble Lord says that it should be "at his own expense". What it means is that it is at the expense of the generality of consumers. To my mind that is a classic example of where so-called consumer legislation lands consumers with the bills to pay.
4.30 p.m.
Lord Stoddart of Swindon: I do not really know why the noble Lord, Lord Bruce-Gardyne, intervened. Bearing in mind the felling of the tree across high tension lines, his act could in fact have resulted in a charge of criminal negligence. However, let us not go into his private business, although he told us about it.
The noble Lord does not seem to realise that gas is a very volatile and dangerous substance and that a leak in one person's premises can cause disaster which affects not only those premises but the premises of others as well. As the noble Lord, Lord Diamond, explained, that is why we think it is necessary to have this sort of amendment, which will encourage people to report gas leaks and give them the assurance that if they do so they will not be faced with high hills. That is the objective of the amendment, because gas is a difficult and dangerous substance. We all know that the consumer will in general pay in the end, but we have put down this amendment for the protection of all consumers. I do wish the noble Lord would see that point. If he does see it, perhaps he will vote with us for the proper protection of the public after the Gas Corporation is privatised.
I do not want to delay the Committee for very long because we have a great deal to do in a very short time today, but I myself have put down Amendment No. 103D, which I can deal with briefly. It proposes to leave out "twelve" and to insert "two". We have put down this amendment because of the distribution code of practice of the existing British Gas Corporation which, in response to a report of a leakage, says:
"Within normal working hours the supervisor shall dispatch a distribution team to the site as soon as possible but certainly to arrive not later than one hour after receiving the message Having dispatched the team, the supervisor shall attend the site as soon as possible, normally within two hours".
That is the existing practice. That is why we have put down an amendment with a time period of two hours. Perhaps the noble Lord will explain why he is proposing a period of 12 hours instead of the requirement of two hours which already exists.
Lord Chelmer: Can the noble Lord tell us what is the current statutory requirement in terms of hours?
Lord Sanderson of Bowden: I think that this question of the statutory requirement, which as I understand it is being reduced from 24 hours to 12 hours, is perhaps a point that should be brought out. What is much more important and seems to have been written into this Bill is something which was not written into the Bill of 1972. It is contained in the very helpful notes to which the noble Lord, Lord Diamond, has referred on previous occasions in explaining this Bill, and is that the obligation to deal with escapes has for the first time been extended to the customer's side of the meter. That is a most important provision.
Lord Gray of Contin: I think we have had a short but useful debate on this subject. The noble Lord, Lord Diamond, said that he hoped I would take the amendment away and consider it, and I find myself feeling a little inhibited. Throughout the course of this Bill I have been accused of being intransigent and of not being prepared to take points away for consideration, but the first time that I offer to do this I have the offer thrown back in my face. So I am hardly in the mood for taking away amendments. Nevertheless, I can assure the noble Lord that in my reply I shall consider very carefully what he and others have said.
First of all, perhaps I may answer the question that was raised by my noble friend, who asked what was the statutory position regarding hours. At the moment the period is 24 hours.
Amendment No. 103B, which was moved by the noble Lord, Lord Diamond, and to which the noble Baroness, Lady Burton, also subscribed, would require a public gas supplier to prevent any escapes at his own expense. For one brief moment I must return to the point which I made many times during our earlier discussion on Amendment No. 103A; namely, that it is an accepted principle in law that, where a statutory obligation is created, the person on whom the obligation falls must foot the bill unless specific provision is made for recovery of costs.
There is no such payment provision in paragraph 13; hence the duty must be fulfilled free. Therefore, I suggest to the Committee that no expression of this point is therefore necessary in the Bill. However, we have made clear in Condition 11 of British Gas's draft authorisation that making safe will be free of charge, though customers may be liable for the cost of repairs associated with an escape. I explained that point a little earlier also.
Lord Diamond: I am sorry to interrupt the Minister but can he explain, when there is already a statutory obligation upon the gas supplier to carry out this duty free of charge, why the Government have found it necessary in the authorisation to use the very words that we are seeking to put in the Bill? If it is so clear, why does it have to be put in the authorisation?
Lord Gray of Contin: Because the authorisation is something which is prepared and given to any company which will supply gas, but it is not in statute. It still has very full effect but it is not actually written
1108
in statute. I could put the question back to the noble Lord or comment on what he has said: if it is in the authorisation, then it is not necessary to have it in statute.
Lord Diamond: I apologise, but the noble Lord has said that it is not necessary at all because there is a statutory obligation upon the public gas supplier to carry out this duty free of charge. It is a statutory obligation: it is not necessary to mention it. If it is not necessary to mention it at all, why is it in the authorisation?
Lord Gray of Contin: With great respect to the noble Lord, I think we are getting into the semantics of the problem. If it is not necessary to mention it at all, it is not necessary to have it as an amendment. However, when I gave way to the noble Lord I was pointing out that under Condition 11 of British Gas's draft authorisation making safe will be free of charge, though customers may be liable for the cost of repairs associated with an escape. This is only fair, given that one of the improvements that we have effected in the Bill is to extend the obligation to prevent escapes to the customer's side of the meter—this was commented on by my noble friend Lord Sanderson—as an escape may equally arise from a defective appliance as from a defective pipe.
Amendments Nos. 103C, 103D and 103E, which were spoken to by both the noble Lords, Lord Diamond and Lord Stoddart, seek to reduce the response time for preventing escapes. First, I should comment again that the Government have already halved the response time as expressed in the 1972 Gas Act from 24 hours to 12 hours, but it is necessary to bear in mind that in sub-paragraph (2) it is tied to the commission of a criminal offence if that condition is not met.
I recognise that the target response time of British Gas is two hours, which the noble Lord, Lord Diamond, pointed out, but I do not think that it would be appropriate to adopt that period where a criminal offence is concerned, or even the period of six hours, as suggested. I think that we have moved a long way forward by reducing the period from 24 hours to 12 hours. I readily acknowledge the superb achievement of British Gas in having an average response time of two hours. That is very good indeed. But where we are creating a criminal offence, I think that it is probably wiser at this stage to have a reasonable overlap, and that is what we have achieved.
In view of those remarks, I do not think that noble Lords have made the case for the amendment. I wonder whether on this occasion the noble Lord will consider withdrawing it.
Lord Ezra: In regard to Amendment No. 103B, are we right in understanding that according to the Minister the wording means quite clearly that there will be no charge? If that is so, we must accept his interpretation. I would only say that I think that it is a bit hard to expect the average consumer of gas to be a constitutional lawyer and to understand that, even though a statute does not say so, in fact the service will be rendered without charge.
Lord Gray of Contin: I refer the noble Lord to Condition 11 of the authorisation which deals with emergency services. Paragraph 1, line 7, states that the supplier shall by appropriate means secure that adequate publicity is given of the ways in which it can he contacted for the purpose of reporting such escapes. I think that was the point about which he was anxious.
Lord Ezra: I was asking why the average person reading the Bill would suppose that the provision meant that the service referred to would be rendered free of charge.
Lord Gray of Contin: With the greatest respect to the noble Lord, I do not think that the average consumer would be reading the Bill. It is entirely up to the supplier to make sure that he conforms with the requirement of his authorisation in order to publicise the methods that can be used to contact him. I am not suggesting that people will not read the Bill, but the sort of people who will read it will be informed people connected with the industry or with various concerned associations. With respect, I doubt whether the example that the noble Lord chose is a good one.
Lord Ezra: Those people would be unlike us, because we did not understand the provision to mean that.
4.45 p.m.
Lord Diamond: My noble friend is the late chairman of the coal board. I mean "late" in the sense of ex-chairman, or, if members of the Committee would prefer it, in the sense that he has just participated, as most of us have, in an all night sitting. I am saying that he has that experience with the coal board. If somebody as closely associated with the fuel industry was not automatically aware of the new interpretation which the noble Lord seeks to put on that provision, it is not surprising that others are in the same difficulty: and I was not aware of it and still do not accept it.
I am not talking about the average consumer reading the Bill. The average consumer who is in difficulty goes to the consumers' council or the local citizens' advice bureau and says: "I have had a bill for so-and-so. What do I do about it?". The noble Baroness, Lady Macleod, must have had endless experience of such occasions. We have received letters from various citizens' advice bureaux to say that they have that very problem. It is to them that reference is made, and they or their legal advisers must know exactly how to answer. They cannot consult a Silk as to what is the implicit responsibility of a statutory supplier when there is no mention in the Bill which gives him those exclusive rights that the service has to be supplied free.
I am bound to say to the Minister that I do not understand why, when there is all that difficulty on all sides of the Committee, that he should take up the most extraordinary attitude and say that he is not prepared to take the amendment away to look at it between now and Report stage. That is a minimum request which I am bound to put to him again. It cannot hurt at all.
Even if by Report stage he is able to write me a letter saying that there can be no doubt that that is the
1110
interpretation to be placed on the paragraph, we shall still certainly be moving an amendment saying: "For the sake of removal of doubt it is hereby stated", and then write it out clearly. We think that any citizens' advice bureau secretary or anyone concerned with a consumer council ought to be able immediately to refer to a statement in statute which makes it absolutely clear what answer is to be given to a complainant who asks: "What do I do about this bill that I have just had? I thought that the service was to be provided free of charge".
I am not saying what I propose to do at the moment with this amendment. I am asking the Minister whether he will be good enough to take what is the normal attitude at Committee stage and say, if he likes, "I think that everybody else is wrong and I am right, but nevertheless I shall take the amendment away, consider it between now and Report and do whatever is necessary or drop a line to the noble Lords, Lord Diamond, Lord Stoddart, and others who are interested". I cannot see why he should not do that. I appeal to him, before we reach a decision on the amendment, to be good enough to do that.
Lord Gray of Contin: No. On this occasion I am not prepared to take this back. We have had a useful debate. I think that I have won the arguments. I do not think that the noble Lord or his friends have put forward sufficiently strong arguments to make me either accept the amendment or to do as I offered to do last time, to no avail. It was thrown back in my face when I generously offered to take the amendment away.
Lord Stoddart of Swindon: Will the noble Lord—
Lord Gray of Contin: No, not at the moment. Let me just finish what I have to say. I do not feel that the arguments are strong enough for me to do that. In my ministerial career I have specifically avoided giving such assurances unless I felt that I could genuinely do so. When I give such an assurance, I genuinely take the matter back and look seriously at it to see whether I can accommodate the noble Lords who have raised the matter. I shall not devalue the practice that I have followed for many years. I offered to do it last time but it was rejected. I do not feel that the case is strong enough for me this time to take the proposal back.
Lord Stoddart of Swindon: I am sorry that the noble Lord should feel that his offer to consider the last amendment without commitment was thrown back in his face. It most certainly was not. I had to make a quick decision, and I hope that I rejected, if that is the right word, his offer courteously and explained the reasons why I felt that it did not go far enough and that I had to press the matter to the vote. I hope that he is not using, and will not use, that to refuse to accede to the reasonable request of the noble Lord, Lord Diamond, to have another look at the matter. It was not my intention, and it was not in my manner, to throw his offer back in his face.
Lord Gray of Contin: Let me make it absolutely clear that I meant nothing personal to the noble Lord, Lord Stoddart, with whom I have done battle on many occasions and for whom I have the highest respect.

1111
did not allow that to prejudice my decision. I shall conclude by saying what I said earlier. It is easy—and nobody knows this better that the noble Lord, Lord Diamond, who for many years was a Minister in another place—to stand at the Dispatch Box and say, "Oh yes, I will take this back and have a look at it", in the knowledge that one can do nothing about it. I do not do that. If I agree to take something back, I genuinely feel that I may be able to do something about it; I genuinely believe that the arguments put to me have merited that. With the greatest respect to the noble Lord, who is very persuasive on many occasions, on this occasion he has not convinced me. If he insists on pressing the amendment, I must ask my noble friends to reject it.
Lord Diamond: I hope that I have made it clear to the noble Lord that I do not desire to go endlessly down the route of dividing the Committee; I desire to make progress on the Bill. I desire to enable the noble Lord the Minister to give us some indication as to whether we shall see some improvement in the Bill at its final stage. We have a long, long way to go. We are only halfway through the Committee stage. We have the Report stage and Third Reading to come.
I hope that I am not to take it that the normal attitude of the noble Lord the Minister is that he will say in response to a request, when there are clear doubts in many parts of the House—the vote last time showed that—that he will refuse to look at matters, without any commitment. I understand the responsible attitude that a Minister must take of not yielding to temporary pressure and getting himself into difficulty at a future stage in the Bill. I understand that well. That is why I gave him what I thought would be a hand which he would take, when I said that on Report we would table an amendment saying, "For the sake of the removal of doubt, it is hereby declared". That hurts nobody. It merely puts in what the noble Lord the Minister says is the fact. I should have thought that as a minimum he would have said. "I am prepared to take this back and see whether it would be helpful to put in such a declaratory statement". It is frequently put into legislation when a legal officer takes a particular view. Of course, here, we are under the disability that we have no such legal adviser as a Member of this place whose function it is to give legal advice to us of a non-party nature.
It is therefore only reasonable that there should be put into the Bill a declaratory statement of that kind, where there is reasonable doubt, for the sake of removing that reasonable doubt. For the last time I say to the noble Lord the Minister, is he prepared, without any commitment to take back this amendment and see whether such a declaratory statement might remove doubt?
4.54 p.m.
On Question, Whether the said amendment (No. 103B) shall be agreed to?
Their Lordships divided: Contents, 82; Not-Contents, 102.

DIVISION NO. 2

CONTENTS

Airedale, L.

Kagan, L.

Ardwick, L.

Kilmarnock, L.

Aylestone, L.

Kirkhill, L.

Banks, L.

Lawrence, L.

Birk, B.

Leatherland, L.

Boston of Faversham, L.

Llewelyn-Davies of Hastoe, B.

Bottomley, L.

Lloyd of Kilgerran, L. [Teller.]

Brockway, L.

Bruce of Donington, L.

Lockwood, B.

Burton of Coventry, B.

Lovell-Davis, L.

Caradon, L.

McNair, L.

Carmichael of Kelvingrove, L.

Monson, L.

Cledwyn of Penrhos, L.

Morton of Shuna, L.

Crawshaw of Aintree, L.

Nicol, B.

David, B.

Oram, L.

Dean of Beswick, L.

Phillips, B.

Denington, B.

Ponsonby of Shulbrede, L.

Diamond, L.

Rea, L.

Dowding, L.

Ritchie of Dundee, L.

Elwyn-Jones, L.

Rochester, L.

Ennals, L.

Seear, B.

Ewart-Biggs, B.

Sefton of Garston, L.

Ezra, L.

Stallard, L.

Falkender, B.

Stamp, L.

Fisher of Rednal, B.

Stedman, B. [Teller.]

Foot L.

Stewart of Fulham, L.

Gallacher, L.

Stoddart of Swindon, L.

Galpern, L.

Strabolgi, L.

Graham of Edmonton, L.

Taylor of Gryfe, L.

Grey E.

Tordoff, L.

Hampton, L.

Underhill, L.

Hanworth, V.

Wallace of Coslany, L.

Hatch of Lusby, L.

Walston, L.

Hayter, L.

Wells-Pestell, L.

Hirshfield, L.

Whaddon, L.

Houghton of Sowerby, L.

White, B.

Howie of Troon, L.

Wigoder, L.

Hughes, L.

Williams of Elvel, L.

Hunt, L.

Wilson of Langside, L.

Jacques, L.

Winchilsea and Nottingham, E.

Jeger, B.

John-Mackie, L.

Wise, L.

NOT-CONTENTS

Aldington, L.

Faithfull, B.

Beaverbrook, L.

Fortescue, E.

Belhaven and Stenton, L.

Fraser of Kilmorack, L.

Beloff, L.

Gainford, L.

Belstead, L.

Gardner of Parkes, B.

Bessborough, E.

Glanusk, L.

Brabazon of Tara, L.

Glenarthur, L.

Brougham and Vaux, L.

Gray of Contin, L.

Broxbourne, L.

Gridley, L.

Bruce-Gardyne, L.

Haig, E.

Butterworth, L.

Hardinge of Penshurst, L.

Cameron of Lochbroom, L.

Harris of High Cross, L.

Carnegy of Lour, B.

Hives, L.

Chelmer, L.

Hooper, B.

Clinton, L.

Hylton-Foster, B.

Coleraine, L.

Killearn, L.

Colville of Culross, V.

Kimball, L.

Colwyn, L.

Kinnaird, L.

Cottesloe, L.

Kitchener, E.

Cowley, E.

Lane-Fox, B.

Craigavon, V.

Lauderdale, E.

Cullen of Ashbourne, L.

Layton, L.

Davidson, V.

Long, V. ([Teller.]

De La Warr, E.

Macleod of Borve, B.

Denham, L. [Teller.]

Mancroft, L.

Derwent, L.

Margadale, L.

Dilhorne, V.

Marley, L.

Dormer, L.

Marsh, L.

Drumalbyn, L.

Massereene and Ferrard, V.

Eccles, V.

Maude of Stratford-upon-Avon, L.

Ellenborough, L.

Elliott of Morpeth, L.

Merrivale, L.

Erne, E.

Mersey, V.

1113

Milverton, L.

Sanderson of Bowden, L.

Molson, L.

Sempill, Ly.

Monk Bretton, L.

Shannon, E.

Morris, L.

Shaughnessy, L.

Moyne, L.

Skelmersdale, L.

Orkney, E.

Somers, L.

Orr-Ewing, L.

Strathspey, L.

Pender, L.

Swansea, L.

Peyton of Yeovil, L.

Teviot, L.

Plummer of St Marylebone, L.

Trefgarne, L.

Trumpington, B.

Porritt, L.

Vaux of Harrowden, L.

Portland, D.

Vickers, B.

Rankeillour, L.

Vivian, L.

Renton, L.

Ward of Witley, V.

Richardson, L.

Westbury, L.

Romney, E.

Whitelaw, V.

St. Aldwyn, E.

Wolfson, L.

St. Davids, V.

Young of Graffham, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.2 p.m.
[Amendments Nos. 103C, 103D and 103E not moved.]
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 103F:
Page 80, line 24, leave out paragraph 14 and insert—
("14. Where an escape of gas reported to the supplier relates to gas supplied by another gas supplier authorised under the Act, the supplier shall act as if he had supplied the gas. The supplier will be able to recover the cost of such emergency repairs either—

(a) by standing agreement with the other supplier, or

(b) by charging that other supplier per call-out.")

The noble Lord said: I have to move this amendment; that is certain. It is, in fact, a very important amendment. I am afraid that it is necessary to read out the present paragraph 14 of Schedule 5. It says,
"It shall be the duty of a public gas supplier to take such steps as are necessary to ensure that, if he is informed of an escape of gas that he is not required by paragraph 13 above to prevent, he passes the information on. as soon as reasonably practicable—

(a) to the person who appears to the public gas supplier to be responsible (whether under that paragraph or otherwise) for preventing the escape; or

(b) in the case of an escape occurring in the authorised area of another public gas supplier, to that other public gas supplier".

The amendment reads:
"Where an escape of gas reported to the supplier relates to gas supplied by another gas supplier authorised under the Act, the supplier shall act as if he had supplied the gas. The supplier will be able to recover the cost of such emergency repairs either—

(a) by standing agreement with the other supplier, or

(b) by charging that other supplier per call-out".

I have already said that the amendment is a most important one. Because of that, we believe that the Government should seriously consider accepting it. I have explained that Schedule 5 to the Bill allows British Gas to accept reports of gas leaks other than in respect of its own system. In itself, that is a sensible provision. However, if British Gas is informed of a gas leak in some other supplier's installation, all that British Gas is required to do is to inform the other supplier that such a leak of gas has been reported to it. That might be adequate if we were talking about a defective vacuum cleaner. But we are not. Gas is a highly volatile substance, dangerous in any uncontrolled environment. Any leak of gas should be dealt with immediately. That is the point that I want to make.
The amendment seeks to provide that any supplier receiving a report of a gas leak in another supplier's installation should be under a statutory duty to repair that leak and to recover the cost of the work if he has not previously made a standing arrangement in accordance with the amendment. This means that public safety is given absolute priority. If necessary, where there is no mutual agreement, the haggling about money can take place later.
The amendment also provides protection for British Gas. It is almost inevitable that members of the public observing a gas escape will report it to British Gas rather than to the owner of the installation who is unlikely in any event to be readily identifiable by ordinary members of the public. Certainly, if the leak is not attended to, and especially if there is an explosion, British Gas will almost certainly incur the odium although it will have carried out its duty in accordance with the authorisation and with the Bill as it now stands.
The amendment, I believe, is also sensible in practical terms since British Gas has facilities for dealing with gas escapes virtually throughout the country. I believe that this is a necessary and essential amendment in the interests of safety. I hope that it has the support of the Committee and that the Minister will accept it.
Lord Gray of Contin: The amendment is the proposed new paragraph 14 put forward by the noble Lords, Lord Stoddart and Lord Gallacher. It would require a public gas supplier to prevent any escape of gas reported to him whether or not he was the supplier, although he would be able to recover the costs. Paragraph 14 of the schedule is a new provision. It recognises that in the future gas may be supplied by another company but that British Gas will remain by far the most familiar company in the mind of the public so that any escape might be reported to it.
I am sure that British Gas, with its experience, can be relied upon in these circumstances to take whatever steps are appropriate. In terms of resources it will be by far the best equipped to deal with escapes, but it would not be appropriate to tie British Gas's hands now in establishing whatever arrangements seem best between itself and any third party in the future. We have already effected significant improvements in the Bill in respect of the escapes provision and we do not feel that it would be necessary to change what we have in mind and incorporate this amendment.
I cannot agree that it would be sensible to require British Gas to deal with other companies' escapes. In order to deal with escapes safely a supplier will need both knowledge and control of the situation: knowledge of where pipes are and the way they operate, and control so as not to cause problems at other parts of the supply system. British Gas will have neither in the case of other companies' pipes. It would not therefore be safe to oblige it to deal with all escapes.
I do not think that this amendment improves the Bill. I clearly recognise and acknowledge the concern of noble Lords to ensure that safety is of the highest, but I am not persuaded that accepting this amendment would do anything to improve the safety provisions

1115
which we have in mind. Therefore I must ask the noble Lord to withdraw his amendment.
Lord Stoddart of Swindon: I do not know that I can withdraw the amendment. The noble Lord was very reasonable in his reply. But we have to remember that some of the new gas suppliers may have an odd installation here and there. One may have Shell (U.K.) Ltd. for example, or the small oil company, supplying over 2 million therms of gas to a specific firm, factory or installation. It may well be, therefore, that they will not have the facilities on hand to deal with such a leak. Under the existing Schedule 5, paragraph 14, all that British Gas has to do is to tell them. It may take the company quite a long time to get to the installation. While they are getting there a dangerous situation may be arising. It would clearly be sensible for British Gas—if it received that report and there was to be a delay—to have the power and authority to repair that gas leak in the interests of public safety and then charge the other firm an appropriate charge for making the equipment safe.
That seems to me to be eminently reasonable. In practice, if this amendment were carried British Gas may make arrangements with these other gas suppliers. This provision would certainly encourage them to do so and would encourage the other gas suppliers to enter into agreements with them that British Gas should repair leaks should they occur.
I think that it is a sensible and reasonable amendment. Obviously, I must ask the noble Lord whether he wishes to say anything more or, in the light of what I have said and the mutual concern for the safety of the public, whether he would like to have another look at this between now and Report stage. I think that it is probably worth looking at.
5.13 p.m.
On Question, Whether the said amendment (No. 103F) shall be agreed to?
Their Lordships divided: Contents, 75; Not-Contents, 95.

DIVISION NO. 3

CONTENTS

Airedale, L.

Gallacher, L.

Ardwick, L.

Galpern, L.

Aylestone, L.

Graham of Edmonton, L.

Banks, L.

Grey, E.

Birk, B.

Hanworth, V.

Boston of Faversham, L.

Hatch of Lusby, L.

Bottomley, L.

Hirshfield, L.

Bruce of Donington, L.

Houghton of Sowerby, L.

Burton of Coventry, B.

Howie of Troon, L.

Carmichael of Kelvingrove, L.

Hughes, L.

Cledwyn of Penrhos, L.

Hunt, L.

Crawshaw of Aintree, L.

Jacques, L.

David, B. [Teller.]

Jeger, B.

Dean of Beswick, L.

John-Mackie, L.

Denington, B.

Kagan, L.

Denning, L.

Kilmarnock, L.

Diamond, L.

Kirkhill, L.

Elwyn-Jones, L.

Llewelyn-Davies of Hastoe, B.

Ennals, L.

Lloyd of Kilgerran, L.

Ewart-Biggs, B.

Lockwood, B.

Ezra, L.

Longford, E.

Falkender, B.

Lovell-Davis, L.

Foot, L.

McNair, L.

1116

Mayhew, L.

Stewart of Fulham, L.

Monson, L.

Stoddart of Swindon, L.

Morton of Shuna, L.

Strabolgi, L.

Mulley, L.

Taylor of Gryfe, L.

Nicol, B.

Tordoff, L.

Oram, L.

Underhill, L.

Phillips, B.

Wallace of Coslany, L.

Pitt of Hampstead, L.

Walston, L.

Ponsonby of Shulbrede, L. [Teller.]

Wells-Pestell, L.

Whaddon, L.

Ritchie of Dundee, L.

White, B.

Rochester, L.

Williams of Elvel, L.

Sefton of Garston, L.

Wilson of Langside, L.

Stallard, L.

Winchilsea and Nottingham, E.

Stamp, L.

E. Stedman, B.

NOT-CONTENTS

Auckland, L.

Lane-Fox, B.

Beaverbrook, L.

Lauderdale, E.

Belhaven and Stenton, L.

Layton, L.

Beloff, L.

Long, V. [Teller.]

Belstead, L.

Macleod of Borve, B.

Bessborough, E.

Mancroft, L.

Brabazon of Tara, L.

Margadale, L.

Brougham and Vaux, L.

Marley, L.

Broxbourne, L.

Marsh, L.

Bruce-Gardyne, L.

Massereene and Ferrard, V.

Butterworth, L.

Maude of Stratford-upon-Avon, L.

Cameron of Lochbroom, L.

Carnegy of Lour, B.

Merrivale, L.

Clinton, L.

Mersey, V.

Coleraine, L.

Milverton, L.

Colville of Culross, V.

Molson, L.

Colwyn, L.

Monk Bretton, L.

Cottesloe, L.

Morris, L.

Cowley, E.

Mottistone, L.

Craigavon, V.

Moyne, L.

Cranbrook, E.

Orkney, E.

Cross, V.

Orr-Ewing, L.

Cullen of Ashbourne, L.

Pender, L.

Davidson, V.

Peyton of Yeovil, L.

De La Warr, E.

Plummer of St Marylebone, L.

Denham, L. [Teller.]

Derwent, L.

Portland, D.

Dilhorne, V.

Rankeillour, L.

Dormer, L.

Renton, L.

Drumalbyn, L.

Romney, E.

Eccles, V.

St. Aldwyn, E.

Eden of Winton, L.

St. Davids, V.

Elliott of Morpeth, L.

Sanderson of Bowden, L.

Elton, L.

Sempill, Ly.

Faithfull, B.

Shannon, E.

Fortescue, E.

Shaughnessy, L.

Fraser of Kilmorack, L.

Skelmersdale, L.

Gainford, L.

Somers, L.

Gardner of Parkes, B.

Strathspey, L.

Glanusk, L.

Swansea, L.

Gray of Contin, L.

Teviot, L.

Haig, E.

Trumpington, B.

Hardinge of Penshurst, L.

Vaux of Harrowden, L.

Harris of High Cross, L.

Vickers, B.

Hives, L.

Vivian, L.

Hooper, B.

Ward of Witley, V.

Hylton-Foster, B.

Whitelaw, V.

Kimball, L.

Wolfson, L.

Kitchener, E.

Resolved in the negative, and amendment disagreed to accordingly.
5.23 p.m.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 103G:
Page 80, line 34, at end insert—
("Maintenance of pipelines and installations

.—(1) The gas supplier shall ensure that all pipelines and installations associated with the transmission of gas shall be maintained in a safe condition. He shall be obliged to expend such

1117
monies as are necessary to achieve that objective. In any event, the supplier shall need to make application to the Director should he wish to expend less in real terms than that amount which is expended on the day that this Act came into force.

(2) On receipt of that application the Director shall seek the comments and approval of the Health and Safety Executive.")

The noble Lord said: I beg to move Amendment No. 103G standing in my name and that of my noble friend Lord Williams of Elvel. This amendment reflects the concern that we have on the operation of the price formula. The reducing X factor could mean that a risk analysis is made in order to see what may be put off in the matter of maintenance and replacement to reduce other costs. Of course the X factor relates to other costs in the authorisation.
The British Gas Corporation has a splendid record of mains replacement, having implemented the programme and replacement recommended by the King Report, and in fact it did it ahead of him. In the last 10 years the British Gas Corporation has relaid some 14,866 miles of mains and laid 17,475 miles of new mains; that is a great achievement. I think all noble Lords would wish to recognise that achievement. In 1984–85 there was a 233 per cent. increase in mains relaid over 1975–76. Since we have been talking about safety, that of course is good for safety and shows what happens when an industry is under public ownership.
On the other side, 1984–85 saw 10 per cent. fewer miles of mains relaid over the previous year. While there is a forward planning programme of relaying, the price formula could quite easily interrupt that particular programme; hence this amendment which follows the recommendation of the Health and Safety Executive in its report following the Putney gas explosion.
The Health and Safety Executive said that BGC, or its successor company, should be obliged to maintain mains replacement expenditure in real price terms and he obliged to justify any decrease. It did this because of the state of not only the mains but also the roadways covering the mains. While BGC would doubtless get around to looking at mains of the type at Putney, it could do that only if it planned a programme which was to go ahead. We talked about the pressure on the X factor of the price formula, and there is no doubt that this could be a worry.
In the light of the HSE's recommendations I think that this amendment should form part of the statute so that there is no doubt in the mind of the privatised British Gas that it had the obligation to maintain in proper order its pipelines and installations. I beg to move.
Lord Sanderson of Bowden: On this subject I wonder whether we are going a little further than perhaps we should in telling the future company how to go about its business. After all, so far as protection of the consumer and maintenance and so on is concerned, everything reverts to the vital Clause 4. If I read it aright, in particular subsection (2), the protections given in regard to maintenance and the furtherance of a good system are surely inherent in that clause. It would therefore be up to the Secretary of State and the director in particular to ensure what the
1118
noble Lord, Lord Stoddart, is getting at as a result of what is written into that clause itself.
Lord Gray of Contin: We realise the concern to which gas explosions such as that which occurred in Putney give rise. The publication of the Health and Safety Executive's recent report into the Rutherglen, Glasgow, explosion underlines that concern, which is fully shared by the Government. As a safety matter responsibility in this area falls to the Health and Safety Commission and the Executive.
British Gas has an ongoing mains replacement programme. In 1984–85, for instance, nearly, 2,000 miles of pipe were relaid at a cost of half a million pounds. British Gas fully recognises its obligations to its 16 million customers and to the public at large. As we made clear in debating an earlier amendment, it is essential to its commercial future to maintain public confidence in the safety of gas.
Following the Putney explosion British Gas undertook to set up its mains replacement programme in line with the recommendations in the Health and Safety Executive's report. The Health and Safety Executive is already pursuing the implementation of its recommendations and will do so with the successor company as it would with British Gas.
Under the Health and Safety at Work Act, the Health and Safety Executive can take whatever steps it considers appropriate to secure public safety and is not bound by considerations relating to maintaining expenditure in real terms. If, for example, the HSE considers specific work is necessary on grounds of public safety, British Gas is required to spend the necessary money, subject to a reasonable practical test. The existing legislation is therefore a considerable advance on what is proposed in the amendment.
We believe that the record of British Gas speaks for itself and that its commitment and the provisions of existing legislation are able to secure what noble Lords are seeking to achieve. The point which the noble Lord, Lord Stoddart, raised with the X factor highlights what my noble friend said on Tuesday night/Wednesday morning, about the absolute necessity to get the X factor right both in the interests of the British Gas Corporation and the consumer. I do not think that the noble Lord fully appreciated that what we are doing in the Bill in itself goes even further than his amendment. In those circumstances I wonder whether he would be prepared to withdraw his amendment.
5.30 p.m.
Lord Howie of Troon: Before my noble friend replies to the Minister I should like to support him in this amendment, but I wonder for an instant what he means by "real terms" here when he talks about the value of the expenditure. I hope that he will not measure in this instance "real terms" merely in relation to the retail price index but would bear in mind such guidelines as the Baxter indices of construction costs, which are somewhat different from the retail price index and much more apposite to this amendment.
Lord Gray of Contin: I think that question was directed to the noble Lord, Lord Stoddart, not to me.
Lord Stoddart of Swindon: I think so too. I am obliged to my noble friend for drawing our attention to this important matter. It is quite true that the retail price index does not necessarily reflect the costs of re-laying pipes. Those costs and costs related to them may go up far more steeply than the elements in the retail price index, which include items such as tobacco and house mortgages which at the moment are coming down. I appreciate that point and it is one which should have consideration.
I have listened to what the noble Lord, Lord Gray, has said. In this case it would be as well if I read carefully what he said because I think he has convinced me that it may very well be that the matters we are concerned about are covered in the Bill. On that basis and on the basis that we can bring something else forward at Report stage, I shall be prepared to withdraw the amendment and I beg leave to do so.
Amendment, by leave, withdrawn.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 104:
Page 82, line 9, at end insert—
("Requirement to hold a recognised qualification
17A. It shall be an offence for any person to attempt to rectify faults, to install appliances, or to tamper by way of inspection or other deed with service pipes (whether or not belonging to the supplier) appliances or other fittings unless he is properly qualified by a recognised qualification.").
The noble Lord said: This amendment stands in my name and that of my noble friend Lord Gallacher. There are two aspects of safety attributable to the use of non-qualified labour: first, gas leaks, which we have discussed at fair length this afternoon and, secondly, flue defects. All of us will have heard some horror stories not only about gas leaks but the way appliances are installed and the tragic deaths which have been caused because gas appliances have not been properly ventilated and no proper provision made for the escape of flue gas. There is much evidence of cowboy installers leaving appliances which either leak or fail to combust correctly, leading to gas leaks and explosions. Bad fitting or no flue installation leads to a build-up of carbon monoxide and, subsequently, asphyxiation. Many coroners' reports, as the Committee will know, have been made on this aspect, including that of a West Midlands coroner who offered a reward for the identification of a cowboy installer who caused several deaths among the immigrant community by failing to provide effective flues to appliances. That is what our amendment seeks to deal with.
There is no doubt about this. We have seen programmes on the television and we have seen incidents in our own experience which have led to these tragic accidents. It is essential that people who install gas appliances or deal with gas in any way should be qualified. That is why we are seeking in this amendment a requirement that people who carry out this work should hold a recognised qualification. For example, no qualified engineer would install or leave appliances in the way that I have outlined. But cowboy engineers or fitters, or whatever they are (they are not really fitters at all, they are simply cowboys) go to people's homes; they persuade old people, and sometimes young people who do not know any better, that they can do the job more cheaply. They are
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allowed into the house to interfere with gas fittings and gas appliances. They leave after having taken their money and that person's life may then be at risk from an explosion. That is what we are concerned about.
The amendment is essentially concerned with life and death situations. It would be callous and irresponsible for us not to feel very strongly about this matter and I hope therefore that in this instance the noble Lord will feel able to accept the amendment. I beg to move.
Lord Howie of Troon: I hope that the Minister will feel able to accept this amendment, which is clearly extremely sensible. But I am not sure whether my noble friend on the Front Bench has gone far enough. This is something to which we might return at a later stage in the Bill. When he says "a recognised qualification" the amendment might be greatly strengthened if it were to state by whom it must be recognised. If the amendment were accepted it might be good if we added later a phrase such as "recognised by the Engineering Council" or "a recognised qualification such as a City and Guilds certificate" or something a shade more specific than the amendment as it stands. The principle is admirable and ought to be supported, but it would be strengthened if it were later made more specific than it is.
Lord Gray of Contin: I am grateful to take this opportunity of debating this point with the noble Lord, Lord Stoddart. I am glad he put this amendment down because it gives us an opportunity to talk about an important element of safety.
I should like first of all to remind noble Lords that matters of gas safety are the responsibility of the Secretary of State for Employment, but we are all committed to ensuring that standards of safety in the gas industry are maintained or improved following privatisation. During the preparation of the Bill, we had extensive and detailed discussions with the Health and Safety Executive and the Department of Employment on guidelines set out by the Health and Safety Commission in order to explore fully what changes needed to be made to the existing provisions. These are reflected in the Bill.
Noble Lords are of course aware of the Health and Safety Commission's consultation document on an Approved Code of Practice on Standards of Training for Gas Installers. We do not want to explore that in detail now since it forms the subject of separate amendments to be debated under Clause 18. However, I should just say that we believe that what is proposed will go a long way to fostering improved standards of training for the purpose of installation and servicing work.
The amendment seeks to create an offence of carrying out any work of servicing or installation without a recognised qualification. It is not made clear what the penalty for such an offence would be. Let me say first that BGC themselves have an extremely comprehensive training programme for their fitters and engineers, leading—and this to some extent, takes up the point made by the noble Lord, Lord Howie of Troon—to City and Guilds certification. Employees of members of the Confederation of Registered Gas Installers are also required to be trained to appropriate

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standards. BGC and CORGI jointly cover approximately 60 per cent. of the installation market, so the proportion with which we are concerned is a minority, if quite a substantial one. But all installers, like the public at large, are subject to the requirements of the Gas Safety (Installation and Use) Regulations of 1984. Regulation 3 specifically states that,
'no person shall carry out any work in relation to a gas fitting unless he is competent to do so,"
and requires employers to ensure that their employees are competent and that the provisions of the regulations as a whole are complied with. The Approved Code of Practice will seek to define standards of competence.
It is important that everyone associated with gas supplies should be aware of the safety regulations—suppliers, installers and consumers alike. Under the new safety regime established under Clause 18 of the Bill, breaches of the Gas Safety Regulation will attract penalties under health and safety legislation, which provides for custodial sentences in certain circumstances. We shall have the opportunity for further debate of these matters under Clause 18.
We believe that the provisions of primary and subordinate legislation supported by HSE's important new initiative will combine to achieve what the noble Lords are seeking in their amendment. I hope that they will not consider me in any way discourteous or condescending when I say that I really believe that what they seek in their amendment is likely to be achieved by the Bill. But I share their concern on this matter. It is one of which there is certainly no difference in any part of the Committee. In view of what I have said, I wonder if the noble Lord might be prepared to withdraw his amendment. He can read carefully what I have said and if he feels that we are not going as far as he would wish he will have another opportunity to reconsider the matter.
5.45 p.m.
Lord Stoddart of Swindon: I should like to thank my noble friend Lord Howie of Troon. I think he has raised a relevant point. It is one which perhaps we ought to consider between now and Report stage. Also, I listened very carefully to what the noble Lord, Lord Gray of Contin, said in relation to this amendment. I shall probably need to read what he said and particularly so in relation to the existing regulations requiring people who undertake gas installations to be competent. "Competent" to do so is rather different from being "qualified" to do so.
As it happens, I think that I am competent to fit a gas appliance. I believe that I am competent to fit a gas fire or even a gas cooker, for example, but I am certainly not qualified to do so; and, because I think I am competent that should not give me the right to put my family's safety at risk and certainly not the right to put somebody else's family and property at risk. That is really what we are talking about—that we need people not merely to be competent. Competence is a term which has a different connotation in different situations. What we need and what we are seeking to do by this amendment and others is to ensure that they are properly qualified, that they have been trained to a proper and recognised standard. I think that is
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somewhat different. I think it would be as well if I looked at what the noble Lord has said. We can come back to this matter at Report.
Lord Howie of Troon: Before my noble friend sits down, would he reflect that my reference to the Engineering Council bore in mind the fact that the qualifications which they recognise depend on academic attainment, on competence and on training? I think that is exactly the kind of thing he is looking for.
Lord Stoddart of Swindon: That is absolutely right. I am exactly in tune with my noble friend. As I say, we shall have the opportunity to come back to this matter at Report stage but before pressing the matter further I should like to read what the Minister has said. That I shall do and in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 105:
Page 82, line 31, at end insert—
("( ) No officer shall be authorised by the public gas supplier unless that officer holds an appropriate recognized qualification.").
The noble Lord said: I beg to move Amendment No. 105, which stands in my name and in that of my noble friend Lord Gallacher. I think it would be convenient if, with this amendment, we took Amendments Nos. 108 and 111. Now we come back to qualifications. The effect of Amendment No. 105 is to ensure that any officer authorised by the public gas supplier to enter premises to work on gas supply equipment is properly qualified. As I have already noted, failure to ensure adequate qualification will have serious implications for both the officer and the consumer.
Under Section 2(2)(c) of the Health and Safety at Work etc. Act, the employer is obliged to ensure such provision of such information, instruction, training and supervision as is necessary to ensure as far as is reasonably practicable the health and safety at work of his employees. It is especially important that those who are involved in working with such a dangerous material as gas should be fully trained. Here we come back to the suggestion of my noble friend Lord Howie of Troon. They should be adequately trained and qualified so that they will not cause themselves harm; but the amendment also seeks to ensure that the work performed is of sufficiently expert a standard to make its safety for the consumer certain.
We really must be concerned about the consumer. We really must be concerned about the people whose houses are to be entered and appliances maintained.
I want to remind the Committee once again of the horror stories we have heard about badly-fitted gas appliances. I have remembered now what I should have remembered when I spoke to the last amendment. It concerns an item which was shown in the programme "That's Life", where a number of tragic deaths had taken place because gas appliances had been installed in bathrooms without, in many cases, a flue being installed with the gas appliance. The result was a build-up of carbon monoxide, which

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caused deaths. That is the sort of thing we are trying to avoid by this series of amendments, and I look forward to hearing what the Minister has to say.
Lord Gray of Contin: I am grateful to the noble Lord, Lord Stoddart of Swindon, for taking these three amendments together. They have a common theme; that is, the standard of training of officers authorised to enter premises, whether for the purpose of disconnection on safety grounds or otherwise. That standard of training is very important indeed.
As I explained in the debate on an earlier amendment, safety, including standards of safety training, is the responsibility of the Health and Safety Commission and its executive. But of course both British Gas and the Government are fully committed to maintaining safety standards. I am glad to be able to reassure noble Lords that all British Gas service engineers undergo full technical training; those personnel exercising powers of entry are fully competent to exercise these powers by virtue of training and experience.
There was an interesting point which was made, and perhaps I may refer back to it. The noble Lord, Lord Howie of Troon, I think, made the point during the debate on the last amendment, and I appreciate the interest which the noble Lord takes in this subject and his desire to ensure that people are qualified. However, I would make just one point. The noble Lord is perfectly right in saying that there is a difference between being competent and being qualified. However, I believe that "qualified" denotes a higher standard than the mere holding of a paper qualification and that the regulations are right to specify this. I do not suggest that a qualification is not a highly desirable achievement, but I would rather put it the other way round. It does not always follow that in every sphere the person who does not have a qualification is necessarily inferior to the person who does. I would relate this particularly to tradesmen.
The point I wish to make is that it would be a great pity if somebody who had spent a great part of his life in a trade, practising what he had been taught although perhaps not the holder of a piece of paper, should be debarred from pursuing his work further simply because of a regulation. I realise that I have gone off at a tangent, but the noble Lord, Lord Howie of Troon, raised this issue. I think it is a valid point and is worth airing while we are discussing this subject. I will willingly give way to the noble Lord.
Lord Howie of Troon: I do not think it was me who raised that point. I could be thoroughly demolished on it, but I think it was my noble friend on the Front Bench who raised it. If I am to be demolished as a surrogate for him, I am perfectly willing to suffer that fate, but in fact it was not me. I am an innocent bystander in this particular encounter between the two Front Benches.
My view is a very simple one. I respect totally that kind of qualification which is based upon competence and experience, and, as a chartered engineer, I have never stepped back from that view. However, my major point is that, whatever qualifications we think are appropriate, they should be some kind of amalgam
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of theory, practice, training and experience. That is true of the whole engineering business, at whatever level—the artisan level, the technician level or the chartered engineer level. The principle is the same, although the weight which may be put on the various elements may be different. I realise I am now making a speech rather than what started out to be an intervention. I shall draw it to a close.
Lord Gray of Contin: I am grateful to the noble Lord. Certainly my remark was not in any way meant to provoke either the noble Lord himself or his noble friend on the Front Bench. The point had been raised, and I thought it was during his intervention and that it was worth commenting upon. I apologise to the noble Lord.
It is of course a requirement of health and safety legislation that employees should be provided with information, instruction, training and supervision. Section 2 of the Health and Safety at Work Act 1974 lays this down. Employers also have a duty to conduct their undertakings in such a way that the public are not put at risk. That is contained in Section 3 of the same Act. Paragraph 18(2) of Schedule 5 and subsection (6) of Clause 18 of the Bill both make clear that officers exercising powers of entry,
"may be accompanied by such persons as may be necessary or expedient for the purpose for which entry is made".
Thus, any specific skills not possessed by the officer concerned can and will be provided for in practice. I do not think there is really anything between us on the level of competence and qualification which we seek to achieve.
Amendment No. 11 requires similar qualifications from officers authorised by the Secretary of State in respect of supplies other than those by public gas suppliers. The expectation would of course be that emergency arrangements, including a right of access, would be included in any contract between supplier and customer. Indeed that is one of the main reasons for enabling safety conditions to be attached to supply authorisations under Clause 8. The arrangements provided for in Clause 8 are therefore very much a backstop. We intend that, as at present, Health and Safety Executive inspectors will be authorised by the Secretary of State for this purpose. Apart from their own expertise, as is provided for in the regulations, they are advised to take appropriate experts with them.
I hope the explanation which I have given in reply to the amendments dealt with by the noble Lord, Lord Stoddart of Swindon, will satisfy him and I trust that, following those comments of mine, he might be prepared to withdraw his amendment.
Lord Stoddart of Swindon: I should like first to thank the noble Lord, Lord Howie of Troon, for his interesting intervention in this part of the Bill and also for acting as a surrogate for my demolition. In fact, the intervention had the effect of doing a counter-demolition job on the Minister, so we are both demolished now! I appreciate what the noble Lord, Lord Gray of Contin, has said, but I do not really know that I am satisfied. I am not at all sure that I agree with the arguments he used with regard to competence and qualification.

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The fact of the matter is that if one has a qualification—and I well understand the position of people who have worked in an industry for a long time and have worked on appliances, and so on—that qualification does show that the person concerned has followed a proper and organised course of training and at the end of it has shown that he is competent to do the particular work involved. So—
Lord Howie of Troon: May I assist my noble friend at this point? The Minister spoke about paper qualifications as though they were mere things. I think he has perhaps forgotten or overlooked for the moment, and temporarily, I am sure, the fact that within the engineering industry qualifications are, on the whole, based on peer judgment, which means that a person in the engineering business is judged by other engineers to be competent to do engineering. The piece of paper merely certifies that this is so.
6 p.m.
Lord Whaddon: I am impressed, as the whole Committee no doubt is, by the competence shown by my noble friend Lord Howie and his peers in the engineering profession, but I ask him to bear in mind that the Ark was built by amateurs: the "Titanic" was built by qualified engineers.
Lord Howie of Troon: The "Titanic" actually sailed longer than the Ark!
Lord Ezra: We seem to be trying to prevent the noble Lord, Lord Stoddart, from finishing what he was going to say. But I shall like to say, upon the question of competence and qualifications, that we should be very careful where safety is concerned. I have had some experience in the mining industry and I may say that where safety in mines was concerned, for any person having any responsibilities in that connection experience was of course vital. The qualifications were laid down by law.
Lord Stoddart of Swindon: That has been a most interesting side debate and I suppose most of us would have preferred to be in the Ark rather than the "Titanic". That was a very well-made point, if I may say so.
Getting back to the question of qualifications, I think the noble Lord, Lord Howie of Troon, is absolutely right. Qualifications do not necessarily have to be paper qualifications, although in general one would expect that even where there is a peer judgment there will be some form of certification, and I think that is a very important thing. However, it is necessary for us to ensure that people who are dealing with gas as a substance, and with appliances to which gas is connected, have been properly and thoroughly trained and that they have a complete understanding of what the substance is and of what they are doing with appliances. As I said earlier, many of us think that we are competent to do many things, but when it comes to it, perhaps we are not as competent as we thought. In most cases that will not matter, but in the case of gas, where people's lives and property are very much at risk, it is essential.
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There is one other point I should like to raise. We are not simply talking about British Gas. We are talking about any gas supplier, and although British Gas undoubtedly will have (and indeed I know, they have) a proper training programme which will ensure that their people are qualified as well as being competent to deal with gas appliances and gas installations, other undertakers and other suppliers may not be in that category and it may very well be that they will employ contractors to do their work. Indeed, those contractors may themselves employ sub-contractors who are not necessarily properly qualified. Under the Government's own policy—and I would not like to say they are doctrinaire about this, because we have heard a lot about doctrine in this debate during Committee stage—their whole ethos is to encourage private employment or self-employment. In encouraging self-employment, it may very well be that there will be a greater number of unqualified and perhaps even incompetent people who will be employed to undertake work on gas fittings and installations. I hope the noble Lord will bear that in mind.
We have had an interesting debate here. I do not want to press these amendments because I know that the Minister is just as concerned about safety as I and every other Member of your Lordships' House. What I should like him to do is to give an undertaking that he will read the debates which we have had about safety and perhaps communicate with me, or even say that he may wish to come back with amendments himself on Report stage. If he could say that to me, it would be very much easier for me, and perhaps he could intervene now to say whether he is prepared to look at the debate.
Lord Gray of Contin: I give the noble Lord my absolute assurance that I shall certainly read all the debates we have had on these safety clauses, and if I were to find that the legislation was defective in any way I should take advice about it. More than that I do not think he would expect me to say at this moment.
Lord Stoddart of Swindon: I thank the noble Lord for that. He shall read and consider and we shall read and consider and we shall have the opportunity to come back at Report stage. Therefore I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 106 had been withdrawn from the Marshalled List.]
Lord Gallacher Lord Gallacher moved Amendment No. 106A:
Page 82, line 46, at end insert—
("Services to consumers.

.—(1) The public gas supplier shall maintain in every area a point of contact for the consumer which shall sell appliances and offer services to customers including payment of bills, advice on installation and servicing of appliances, and advice on general energy matters as well as the use of gas.

(2) The public gas supplier will offer advice on the purchase, installation and use of appliances; positioning of gas meters; servicing and safety checks and pass word schemes for the protection of the blind, free of chrge to elderly and registered handicapped people.

(3) The point of contact shall be available for lodging of complaints on all matters connected with gas whether or not arising directly from gas supply.

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The point of contact shall keep a record of all complaints received.
(4) At the point of contact the supplier shall use his best endeavours to resolve complaints. If he is unable to do so he shall refer the matter to the local Trading Standards Officer. If the Trading Standards Officer is unable to resolve such complaints, he shall forward the complaint to the Gas Consumers' Council. Both the supplier and the Trading Standards Officer shall forward any relevant documents together with the complaint to the Council. At all times the consumder will be kept informed.").

The noble Lord said: Amendment No. 106A is concerned with service to consumers and it seeks, in effect, to oblige the public gas supplier to maintain in every area a point of contact for the consumer. That point of contact would, of course, normally be the present gas showrooms, but not necessarily and not exclusively so. It would be possible, for example, if a showroom were not available or if it was held to be uneconomic, for the public gas supplier to make arrangements to take space in another store or shop and to make that his point of contact, but in the main I think we are thinking in terms of the 800 showrooms currently operated by the British Gas Corporation.
The consumer regards the gas showroom as his point of contact with British Gas and at the present time those showrooms provide a wide variety of services to consumers, well beyond the normal function of selling appliances. Some indication of the range of services currently provided is set out quite clearly in the first subsection of Amendment No. 106A. For example, the paying of bills is a very valuable service to British Gas, because it enables payment to be made promptly and also it sometimes avoids the cost to the consumer of remitting bills by other means.
At the gas showrooms or other point of contact advice is available on the installation and servicing of appliances, the conclusion of maintenance agreements and various other functions of that kind. Also, we envisage the point of contact as a place where advice on general energy matters can be obtained. The Government gave an undertaking at an earlier stage to look at energy advice and conservation as part of the possible changes to the Bill at a later stage, so I think that to make provision for that at the point of contact would be very useful indeed.
In addition, the whole range of advice on purchases is covered and, more importantly, advice to the disadvantaged about the facilities available to them, whether they be blind, elderly or registered handicapped persons. This is not a range of services that can be provided anywhere else. Organisations like the Citizens' Advice Bureaux, which do excellent work in this regard, would in the normal way direct people with queries of that sort to the gas showroom, where they know that expert and impartial advice is available free of charge.
The maintenance of points of contact also has the advantage that, if work is commissioned from British Gas plc, it will be undertaken, as has already been pointed out by the Minister, by fully qualified people. To that extent, it will go some way to avoiding problems arising from the employment of less well qualified people undertaking functions which require skill, and certainly, at all times, some attention to the safety aspect.
We also envisage the point of contact giving a facility which is currently not really there and is not necessary at the present time; that is to say, it will give gas users generally a place where they can lodge complaints on all matters connected with gas, whether or not they arise directly from gas supply. At the moment, this facility is not necessary because the British Gas Corporation has a very well developed system of consumer machinery, including area committees, regional bodies and a national body through which all unsatisfied complaints can eventually be filtered; that is to say, if a customer complains to a gas board and gets no satisfaction, or is dissatisfied with the way in which the complaint is treated, it can be referred by the customer to the area committee. In turn, if the area committee is unable to resolve the matter or feels that it raises a major issue, the regional committee can be brought in and, indeed, even the national body can, from time to time, take up points with British Gas arising originally from local complaints.
We see the point of contact which we are suggesting in this amendment as being a valuable place for the customer to undertake to make complaints, particularly as this other machinery about which I have spoken will no longer exist, because the Government so far appear fairly firmly committed to a single body, the Gas Consumers Council, as being the sole body responsible for protecting consumers after privatisation.
We go further and suggest a method whereby complaints might be dealt with at the point of contact; that is to say, if the parties are unable to resolve the matter amicably between them, they will, in effect, call in the local trading standards officer and he will attempt to resolve such disputes. If he is unsuccessful, then the complaint can be sent to the Gas Consumers' Council with the documentation prepared by the trading standards officer, a copy of the complaint being kept by the consumer and, at all times, the consumer being kept well informed.
The Committee may ask: why should this be necessary? In my experience of complaints of this kind, particularly if they are to be handled only at national level, it will become very important indeed that the documentation relating to the complaint should be properly prepared and should be available in factual form, so that the work of the national body is not hamstrung, first, by the volume of complaints it receives and, more importantly, by the state of the complaints when they reach the national parties.
We have all had experience in life of taking up complaints, sometimes from very indignant people, which on examination are not found to accord with the facts as given verbally. Consequently, if the matter goes before any body charged with the responsibility of dealing with those complaints, there can be a very great difference of opinion as between the parties as to what actually happened, when it happened, what was said, etc.
So we see this function as being important for the protection of consumers, and indeed as helping considerably the work of the Gas Consumers Council. As I say, it would continue a service which the British Gas Corporation has traditionally given. To that

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extent, it would ensure that after privatisation the ordinary customer would see British Gas as very much the organisation which had served people well in the past and which was well equipped to serve them equally well in the future.
Another point which has not been mentioned is the question of spare parts. The British Gas Corporation has a very good record of maintaining spare parts in respect of appliances that it sells for quite a long period of years after it sells them, so that a customer is not so disadvantaged by being unable to acquire a spare part that he or she has to indulge in the purchase of a new and very expensive replacement, when a small expenditure on a vital spare part would obviate the necessity for a large sum of money having to be found so soon in the life of the asset.
Therefore, I think there is a strong case here for a sympathetic consideration of the matter. The Bill appears to restrict to some extent the role of the gas business by the way in which it is currently defined. Therefore, I think that to ask the Government to consider recognising points of contact, as outlined in Amendment No. 106A, is fair and reasonable and I hope that we can expect a sympathetic response from the Minister. I beg to move.
6.15 p.m.
Lord Belstead: The noble Lord, Lord Gallacher, is seeking in this amendment to maintain in every area a point of contact for the consumer, and it is on this basic point that the noble Lord made most of his speech. It is clear that British Gas will very much wish to go on selling appliances and they have already given an undertaking that showrooms will continue to offer a full range of services covering all of the matters to which the noble Lord has referred in his amendment.
The Committee will recall that British Gas's draft authorisation will require the preparation of codes of practice on the services available to tariff customers and on the payment of bills—a matter to which the noble Lord, Lord Gallacher, particularly referred. There will therefore be a strong incentive to British Gas, when it is privatised, to develop services and to make available to customers as much information as possible.
The second subsection of this amendment is a little more complicated in that it deals with several things. It is of course a normal part of the activities of retailers of goods of whatever description to advise customers on the most suitable item to meet their needs and tastes, which is the first bit of the second subsection. I realise that particular considerations arise in relation to the use and installation of gas appliances; but so far as concerns safety, let us be clear that the requirements are fully set out in the Gas Safety (Installation and Use) Regulations 1984 which are administered by the Health and Safety Executive.
If I may just say a brief word about the positioning of gas meters, which is specifically referred to in the amendment, this, again, is dealt with in the 1984 regulations. Members of the Committee who have been involved with this Bill will recall that British Gas is offering full servicing of facilities and an inexpensive five-point safety check to all customers. Regarding
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elderly and disabled people, may I just repeat the reassurance which was given earlier: British Gas will continue to offer free safety checks to the elderly and disabled, and current arrangements for the protection of blind customers will also be continued.
As to the third subsection of this amendment, this is where the noble Lord seeks to make showrooms the point of contact for complaints. All I can say here is that I realise it is normal practice for customers to seek satisfaction from the supplier, and no doubt showrooms will continue to receive complaints just as they do now. They are, after all, the public face of the industry and certainly under a privatised system this will be very much in the mind of British Gas.
That leads me to the last paragraph of the amendment which is about the resolving of complaints. I shall say just two things here. First of all, the amendment says that,
"the supplier shall use his best endeavours to resolve complaints",
an expression which I rather thought did not find favour on the other side of the Committee. We agonised over it some days ago and eventually, with regard to standing charges, the Government agreed to take the words "best endeavours" out of the Bill, and I thought noble Lords seemed rather pleased. However, the words are in the amendment and I shall not dwell on that. I shall simply say that we have provided in the Bill already comprehensive arrangements for the director and the Gas Consumers Council to deal with a full range of complaints. Indeed as the Committee will remember, Clause 33 was specifically put into the Bill in another place to ensure that the Gas Consumers Council can investigate any complaint relating to appliances. That will be on a local basis, not on a national basis as the noble Lord, Lord Gallacher seems to think.
The other point to make on subparagraph (4) is that I do not think it is necessary to require a trading standards officer to act as an intermediary. Trading standard officers have a role under consumer safety law in monitoring appliance standards, and they keep a record of all complaints reported to them. We would expect them to co-operate with the Gas Consumers Council in any matter where there is a shared interest.
In essence, in reply to this quite detailed amendment, I am saying that I very much share the thoughts which are behind the amendment but that I am confident that as a commercially oriented organisation British Gas will develop and maintain its services to customers, and let us not tie it up in red tape. As to the handling of complaints, we have established in the Bill a fully comprehensive range of powers for the new Gas Consumers Council. I hope that noble Lords opposite will feel that I have said enough to assure the Committee that all the points in the amendment are fully covered and that they will feel able to withdraw it.
Lord Diamond: I want to speak for one minute only to add my support to the amendment and to respond to the interesting comment made by the noble Lord the Minister about using "best endeavours" to resolve complaints. I am bound to make this comment because what he referred to was an amendment of mine about standing charges.

1131
Where one person has power within his own control to make a decision you do not need the words "best endeavours". But where two people are involved in resolving complaints, you cannot say for certain that you can control the understanding and feelings of the other fellow but you can do the best possible and use your "best endeavours". I think that the words are very helpful in this context.
Lord Bruce of Donington: I am sorry that the noble Lord has not seen fit to take on board this amendment. Throughout this debate, not only today but on previous days, it has been noticeable—indeed, it is odd and somewhat ironic—that the Government when asked to incorporate certain safeguards and measures into the statute itself have sought desperately to reassure the Committee and the public that the new plc will do as well as the existing corporation. It is a very odd commentary for a Government who are seeking to put a corporation under private ownership and private control to have all the time to use the nationalised undertaking's excellent record to ensure, to undertake and to plead that the new plc will do as well as the undertaking that has been privatised. It is a comment on the bankruptcy of the whole of the Government's approach to the matter. All they can offer is that the new plc will continue the best practices of the undertaking that they are seeking to transfer.
That is a purely general point. We are on to the particular. What we have tried to indicate to the noble Lord is that it has been the practice of the corporation in the past not to rely on the various consumer councils or machinery or external means of complaint to bring to the attention of the corporation the various difficulties which from time to time consumers—gas consumers—must meet. They have always been able to go along—indeed, many have done so—to their local gas showrooms not merely to buy appliances or to pay bills but, if they get into difficulties, to go along to their local point of contact.
This is a very healthy aspect of managerial efficiency. If you are running a concern, particularly a large corporation of this kind, it is vital if the management is to arrive at the correct short-, medium- and long-term management decisions, for it to have a continued input of information as to what is happening in the world outside among its consumers. In this your local gas showrooms have played a most important part. The noble Lord has once again given us the assurance that the practice will go on. He has not said it is going to be improved, although privatisation is supposed to improve everything, but he has given the assurance that it will continue.
There are difficulties because, as the noble Lord well knows, the reason why it has not been necessary to incorporate such safeguards as are incorporated in this amendment is precisely because the corporation was a public corporation, responsible to the public, responsive to parliamentary question and inquiry and responsive to such representations as were made either at the top, or were made up through the various points of contact, or in some cases, as we have heard, through the consumer councils themselves.
All we have heard is that it is quite unnecessary to have a safeguard of this kind because the policy will
1132
continue. We need to be reminded sometimes that times are changing and that under privatisation new pressures will be brought to bear. I have in front of me at the moment the publication by Wood Mackenzie & Co. Ltd. which acts for the Government in advertising the virtues of British Gas, "The largest ever equity holding". Let us see what Wood Mackenzie says about the future policy in relation to gas showrooms. I refer to page 45. The company points out that there are only 800 British Gas showrooms throughout the United Kingdom. Then it states:
"The main use for the showrooms is the payment of domestic accounts. They handle over £800 million a year in cash and about as much again in cheques. Additionally 8 million visits are made to the outlets every year to buy gas savings stamps and some 6 million visits to make general service inquiries. About 3 million visits relate to appliance sales".
6.30 p.m.
Let us for a moment contemplate the 6 million general service inquiries, which are the very matters to which parts of the amendment refer. What does the report continue to say about the future existence of the showrooms? It states:
"British Gas has promoted British-made appliances to the benefit of domestic manufacturers. There is, however, growing competition from imported appliances. Consequently, the showrooms' market share is likely to come under pressure. It is most unlikely that the showrooms would make profits if their sole activity was the retailing of appliances. Similarly, by the company's own admission, the showrooms would not be commercially viable were the retailing function to be removed".
The report goes on—and this is the point:
"Further shrinkage of the 800 strong chain is possible as competitive pressure on the retail activity may build and more domestic gas users might be persuaded to use other methods of account settlement. At the same time it must be expected that there will be a continuing background of some turnover and changes. It is normal practice that the effectiveness of the showrooms is regularly reviewed and that some may, as a result, be closed or re-sited. Equally new showrooms may be opened".
So commercial pressures are to apply.
The noble Lord cannot say that the board of directors of British Gas plc will remain the same. It does not lie within his bailiwick what decisions may be made by British Gas plc after one or two years, particularly under the pressure of its institutional shareholders, who will want profits, and some of whom will want capital gains. The Minister cannot say that commercial short-term and medium-term considerations will not outweigh the public interest. The Minister cannot possibly do that.
In view of the fact that the public interest and the national interest are no longer the specific concern of the new plc we are trying to ensure that proper provision is made. Unhappily, we now have to do that by statute because British Gas will no longer be open to public pressure. We have to do it in the form of an amendment to the Bill. We are very sorry that the Government cannot accept it. Unless the noble Lord is prepared to give the Committee an indication that the matter will be radically reconsidered, we will have no alternative but to press the amendment to a Division.
Lord Belstead: I will make one comment in reply to the noble Lord. I understand why noble Lords opposite and the noble Lord, Lord Bruce, finally have laid very great stress on the importance of showrooms.

1133
Indeed, their concern is the basis of the amendment. But when the noble Lord quotes from the Wood Mackenzie report, he might be a little more comprehensive. If he would care to glance at page 8 of the report, there he will see the kind of balanced and wise statement that I believe he would be the first to applaud. These are the words:
"The significance of the gas showrooms is not in the profits they make but in the overall support they provide to the domestic gas business and the fact that they are the public face of the BGC and its main link with its customers".
I make no secret of the fact that I know that British Gas has been in the position where it felt that it had to close an uneconomic showroom. On the other hand, as all Members of the Committee will know, it has taken opportunities to open profitable new outlets. I suggest to the Committee that it would be wrong to require British Gas to keep open unprofitable outlets. That would require cross-subsidy by gas consumers and would put British Gas at a competitive disadvantage in relation to other gas appliance retailers. It is right for us to remember that British Gas, operating entirely commercially in the future, will have it very much in mind that its showrooms are its public face. I know that it will place importance on the preservation of showrooms where it is right to do so.
Lord Ezra: The issue raised here is a matter of very great importance. The fact is that we are here talking about the 16 million consumers of gas who have over the years been used to having somewhere to which they could go to pay their bills, to see the newest appliances, or to obtain advice. To do that by any other means would impose difficulty and a degree of uncertainty on the customers.
The Government have, throughout consideration of the amendments proposed to Schedule 5, repeatedly said that there is no need for them to be accepted because assurances have been received from the existing British Gas Corporation, but it is difficult to accept that those assurances would necessarily be honoured by any successor organisation. If it is recognised that it is necessary to have a point of contact in each area, I fail to see why that cannot be said. The amendment does not suggest that those points of contact should be unprofitable. It does not even lay down what they should consist of. Surely it must be recognised as being an exceptional situation, in which we are talking about one organisation supplying 16 million consumers with a particular product of which it will in practice be the sole supplier for that particular market.
Lord Gallacher: I thank the Minister for his reply and for those parts of it that have given some measure of reassurance; namely, that gas showrooms will continue to operate, and that they will be allowed to perform the services that they currently do. It may have been even more reassuring had the Minister not mentioned the trend that showrooms were closing but that new showrooms were opening in other centres. My advice is that there are at the present time 800 showrooms, whereas in 1980–81 there were 900 showrooms. That represents a fairly substantial reduction during a period when the gas industry has
1134
been expanding very rapidly for a variety of reasons. That trend reinforces the point made by the amendment as to the importance of a point of contact.
The Minister had rather less to say about the resolution of complaints. When proposing the amendment I thought that I had developed a fairly substantial argument that if one is going to rely simply on a gas consumers council—a national body—it will require some local machinery, if not regional machinery, to process complaints so they will arrive before the national body in a form that will allow it to adjudicate fairly—fairly, that is, to British Gas plc and certainly to the customer who has complained in the first instance.
The Minister said that machinery would continue to exist, but to the best of my knowledge, and having listened carefully to all that has been said so far in that connection in our consideration of the Bill, the only concession that the Government appear to have made is that there is to be an officer of the council operating in the existing regions of British Gas, no doubt with a supporting staff. He will certainly be an employee of the consumers council, but whether he will be fully equipped and able to deal with the volume of complaints that he will receive, or even to resolve them—which is very important—is questionable. It is one matter having a complaint put before an impartial committee, but it is another matter having it resolved by someone who, although the servant of that committee, is still a paid servant. I am not certain that that is an entirely satisfactory arrangement for what is to be the new private monopoly of British Gas plc.
The attempt to involve trading standards officers is fully justified. I have some experience of the fact that the Office of Fair Trading, which also comes into the Bill, is very disappointed that it has been unable so far to persuade a single retailer in the land to establish a code of conduct for dealing with customer complaints. The reasons for this are numerous. There are many traders who say, "Our name is a good enough assurance. We are not concluding any sort of agreement on a trade association basis with the Office of Fair Trading because that would identify us with traders with whom we do not wish to be associated".
The whole basis of the Office of Fair Trading's codes of conduct, whether for retailers or for anyone else, is that there should be provision in them for a form of arbitration, and the chosen route of the Office of Fair Trading is ultimately to bring arbitration before the Institute of Arbitrators. I have no objection to that, but it seems to me to be fairly expensive. Indeed, where it is provided for in existing codes of conduct it usually requires the parties who are going before the Institute of Arbitrators to pay substantial deposits so that frivolous complaints are not referred to professional people.
Therefore, in suggesting that local trading standards officers might perform this role we are attempting to break new ground and to give British Gas plc a pioneering role in an area where, as I say, the Office of Fair Trading feels that the consumer is in need of protection. If the Minister had been more encouraging about these aspects of the amendment, it might have been possible for us to say that we would reflect on what he had said and, if necessary, come back at a later

1135
stage. However, in the light of what the Minister said I feel that I have no alternative but to test the opinion of the Committee.
6.41 p.m.
On Question, Whether the said amendment (No. 106A) shall be agreed to?
Their Lordships divided: Contents, 66; Not-Contents, 84.

DIVISION NO. 4

CONTENTS

Airedale, L.

John-Mackie, L.

Ardwick, L.

Kirkhill, L.

Attlee, E.

Llewelyn-Davies of Hastoe, B.

Aylestone, L.

Lloyd of Kilgerran, L.

Birk, B.

Lockwood, B.

Boston of Faversham, L.

Longford, E.

Bottomley, L.

Lovell-Davis, L.

Broadbridge, L.

McIntosh of Haringey, L.

Brockway, L.

McNair, L.

Bruce of Donington, L.

Molloy, L.

Burton of Coventry, B.

Morton of Shuna, L.

Carmichael of Kelvingrove, L.

Mulley, L.

Cledwyn of Penrhos, L.

Nicol, B.

Crawshaw of Aintree, L.

Oram, L.

David, B.

Ponsonby of Shulbrede, L. [Teller.]

Dean of Beswick, L.

Denington, B.

Ritchie of Dundee, L.

Diamond, L.

Rochester, L.

Donoughue, L.

Seear, B.

Elwyn-Jones, L.

Sefton of Garston, L.

Ennals, L.

Stallard, L.

Ewart-Biggs, B.

Stedman, B.

Ezra, L.

Stewart of Fulham, L.

Falkender, B.

Stoddart of Swindon, L.

Gallacher, L.

Strabolgi, L.

Graham of Edmonton, L. [Teller.]

Tordoff, L.

Underhill, L.

Grey, E.

Walston, L.

Hanworth, V.

Wells-Pestell, L.

Houghton of Sowerby, L.

Whaddon, L.

Howie of Troon, L.

White, B.

Hughes, L.

Williams of Elvel, L.

Jacques, L.

Wilson of Langside, L.

Jeger, B.

Ypres, E.

NOT-CONTENTS

Arran, E.

Faithfull, B.

Beloff, L.

Ferrers, E.

Belstead, L.

Glanusk, L.

Bessborough, E.

Gray of Contin, L.

Birdwood, L.

Greenway, L.

Brabazon of Tara, L.

Haig, E.

Brougham and Vaux, L.

Hardinge of Penshurst, L.

Broxbourne, L.

Harris of High Cross, L.

Bruce-Gardyne, L.

Hives, L.

Buckinghamshire, E.

Hooper, B.

Cameron of Lochbroom, L.

Hylton-Foster, B.

Campbell of Alloway, L.

Kitchener, E.

Carnegy of Lour, B.

Lane-Fox, B.

Coleraine, L.

Lawrence, L.

Colville of Culross, V.

Layton, L.

Cottesloe, L.

Lindsey and Abingdon, E.

Craigavon, V.

Long, V. [Teller.]

Craigmyle, L.

Lothian, M.

Cranbrook, E.

Macleod of Borve, B.

Cross, V.

Mancroft, L.

Davidson, V.

Margadale, L.

De La Warr, E.

Marley, L.

Denham, L. [Teller.]

Massereene and Ferrard, V.

Derwent, L.

Maude of Stratford-upon-Avon, L.

Dilhorne, V.

Eccles, V.

Merrivale, L.

Eden of Winton, L.

Mersey, V.

Elliott of Morpeth, L.

Molson, L.

Elton, L.

Monk Bretton, L.

1136

Monson, L.

St. Aldwyn, E.

Mottistone, L.

Sanderson of Bowden, L.

Mountevans, L.

Skelmersdale, L.

Moyola, L.

Strathclyde, L.

Munster, E.

Swansea, L.

Nelson of Stafford, L.

Swinfen, L.

Orkney, E.

Trefgarne, L.

Orr-Ewing, L.

Trumpington, B.

Pender, L.

Vaux of Harrowden, L.

Peyton of Yeovil, L.

Vickers, B.

Portland, D.

Vivian, L.

Rankeillour, L.

Ward of Witley, V.

Renton, L.

Wolfson, L.

Renwick, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.49 p.m.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 106B:
Page 82, line 46, at end insert—
("Supply of back-up gas
. A public gas supplier may reach an agreement with a third party supplier to make available gas where that third party supplier's gas is temporarily not available. In reaching such an agreement, the public gas supplier may make such charges as are necessary for purchase and storage of such gas; in reaching such an agreement the public gas supplier must ensure that his obligations under section 9(1) and section 10(1) of the Act are fulfilled. Nothing in the foregoing shall permit the public gas supplier to make good the supply of third party gas if the contract with the third party is for an interruptible supply of gas.
Nothing in the foregoing shall oblige the public gas supplier to reach such an agreement with a third party gas supplier.").
The noble Lord said: This amendment seeks to address itself to the obligations of the public gas supplier in the supply of back-up gas. It is perhaps unfortunate that we have been unable to discuss the authorisation in great detail. We have tried on a number of occasions to put all or part of the authorisation into the Bill, but that has been rejected by the Government in this Committee, and we must accept that. Nevertheless, this amendment seeks to correct what we feel is a defect in the authorisation and we can do it only by moving an amendment to the Bill.
The draft authorisation as it stands compels the public gas supplier to make available supplies of backup gas should a third party supplier not be able to make good his supply. It seems to us that that obligation is very one-sided. This amendment makes the negotiations much more even-handed between the public gas supplier and the third party supplier, including the provision that British Gas (if that is the public gas supplier in question) can refuse to reach agreements if its own commercial and statutory obligations could thereby be harmed. In other words, we are seeking to put the price and the relative negotiating strengths of the third party supplier and British Gas back into the market in the same way as other major purchasers of goods and services are in the market; and British Gas, as a major supplier, should be in the market.
However, there is one important qualification, which we introduce into this amendment, and that is that if the contract is for an interruptible supply of gas then British Gas should not be permitted to make up the shortfall. This seems to us to be a sound energy policy principle.
Though the amendment is perhaps rather long, it is addressed to a particular point in the authorisation, and if the noble Lord the Minister could assure us that the authorisation itself will be looked at in the light of our amendment, we shall be perfectly satisfied. However, it seems important to make sure that the negotiations between the public gas supplier and third party suppliers when back-up gas is required should be even-handed and not one-sided, as they appear at present in the draft authorisation. I beg to move.
Lord Belstead: I am glad to discuss for a moment with the noble Lord the common carriage provisions to which we now come, and indeed in this case backup gas. After hearing the last few words of the noble Lord, Lord Williams of Elvel, it occurs to me that Members opposite may have overlooked the amendments which the Government introduced into Clause 19(4)(a)(iv) in another place to enable the director to give directions as to the supply of back-up gas. What happened was that we had Condition 10 in the authorisation which, as the noble Lord is obviously well aware, sets out an obligation for British Gas to supply such gas on reasonable terms.
The Select Committee in their report questioned whether the condition fully made clear that the director could set such terms, and the Government finally decided that the best solution would be to put directly into the Bill a provision which allows the director to set terms for supplies of back-up gas alongside the other common carriage provisions. We therefore added to the directions that may be given to public gas suppliers under Clause 19 the direction:
"for regulating the terms on which the supplier will supply gas to the applicant".
In doing this we wanted to make clear that such supplies should not put at risk those customers who had already contracted with British Gas for normal supplies of gas or those with statutory rights for supplies under the Bill. We therefore extended the provisions achieving this—in the case of common carriage under Clause 19(3) of the Bill—to cover the circumstances of back-up supplies of gas. This amendment covers the same ground but does not impose any requirements in relation to back-up supplies.
With respect, I do not think that is right. The Government believe that the provisions to encourage competition in the gas industry ought to be strengthened, and I feel that we have done this when we talk about directions being set to the terms for supplies for back-up gas.
The noble Lord, Lord Williams, said that the amendment deals with interruptible contracts in the sense that back-up supplies should not be permitted in order to meet the needs of an interruptible contract entered into by a third party. I doubt very much whether we ought to fetter the director's freedom to determine what is most sensible in the light of the circumstance of any case which comes before him. In particular it is not possible to predict what kind of contracts any third party supplier would have with his customers, but all of them are likely to have some force majeure provision to deal with interruption in some
1138
circumstances and hence the contract could be described as interruptible.
Whatever the detailed provisions for interruption, I very much doubt whether we ought to prevent backup supplies being allowed to have some hand in helping supplies which are interruptible, and the Government do not really like that part of the amendment at all. I hope that the noble Lord will feel that the part of Clause 19 to which I have directed his attention goes down the same road as the amendment that he has put forward. In that case he may feel that we are on the same wavelength for this particular amendment.
Lord Williams of Elvel: I am grateful to the noble Lord the Minister for his reply. As he says, it is certainly true that we are on the same wavelength. I think that the problem that we have in the Bill as drafted is that the director will once again be involved in yet another negotiation. These events happen—they are bound to happen—at very short notice. There will be an interruption of the gas supply by a third party supplier at times that we cannot predict and, as we are legislating for the long term, we shall never be able to predict.
We fully understand that there has to be some sort of deal between the public gas supplier and the third party supplier. Our problem is that the director then becomes involved. We have a three-way negotiation (if I can put it that way) between the public gas supplier, the director who is the final arbiter on this matter, and the third party supplier who has failed to supply the gas. I accept what the Minister says and maybe the Government feel it is desirable; I simply question yet again whether the director is being overloaded with responsibilities. Having said that, I accept that the Government obviously have a reasonable point about interruptible supplies of gas and I do not think that we shall wish to press that particular point. We wanted to put it on the record and to hear the Government's view. In the light of what the noble Lord has said and in the light of my comments on his remarks we shall not press this amendment, but I hope that he will bear in mind that on this side we are very anxious that the director should not be overloaded with all sorts of responsibilities which will involve him and his staff in exceedingly complex negotiations exceedingly quickly. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 106C not moved.]
Schedule 5 agreed to.
Lord Brabazon of Tara: I think that we have reached a suitable moment to adjourn the Committee for dinner and, in moving that the House do now resume, I propose that we should not return to the Committee stage on this Bill until eight o'clock. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Education (Assisted Places) (Amendment) Regulations 1986
7 p.m.
Baroness Hooper Baroness Hooper rose to move, That the draft regulations laid before the House on 21st May be approved. [24th Report from the Joint Committee.]
The noble Baroness said: My Lords, these draft regulations amend certain provisions in the regulations governing the detailed operation of the assisted places scheme. The scheme was established for the purpose of widening the educational opportunities available to children from less well-off families. Now in its fifth year, the scheme is running smoothly and successfully and, apart from the provision to amend the parental income scale, which is done on an annual basis, these draft amending regulations are mostly of a procedural rather than a substantive nature.
Draft Regulations 1 and 2 are concerned with nomenclature and I have no need to trouble your Lordships with comment upon them. Regulation 3 has two effects. It inserts a missing preposition in Regulation 21 of the principal regulations which escaped our scrutiny last year. More notably, it increases the period allowed to the respective Secretaries of State to respond to requests from the participating schools for increases in their fees. At present the schools must give the Secretary of State one month's notice of intended fee increases and the Secretary of State has only seven days in which to query the increase. Administratively, the response time has proved too short and so the amendment extends the period to 14 days.
Regulation 4 is put forward to close a legal loophole which was brought to our attention by a few of the participating schools. The principal regulations are designed essentially to treat the assisted placeholder's current family as the family unit for the purposes of assessing income and therefore the appropriate level of fee remission in individual cases. However, the principal regulations do not at present cover the circumstances whereby an unmarried mother subsequently marries a man who is not the father of the child. Regulation 4 amends this anomaly and allows that husband's income to be taken into account in determining eligibility for, and level of assistance under, the scheme. I am sure this is sensible, since it places all family units on the same footing.
Regulation 4(2) is also an addition to the definition of "parent" for the purposes of the scheme which takes account of the new legal definition of "custodian" introduced under sections of the Children Act 1975 which were implemented earlier this year. The principal APS regulations are being amended so that children who are the subject of custodianship orders and their legal custodians are placed on exactly the same footing as adopted children and their adoptive parents.
Regulation 5, which covers the rules for assessing income, permits allowances paid by local authorities to the family of an assisted pupil to be ignored when fee remission is calculated. I am sure that your Lordships will welcome this. Regulation 5 also updates the relevant income tax legislation in the existing regulations.
Finally, Regulation 6 provides for the appropriate updating of the income scale used for assessing the amount of parents' contributions towards the fees. Those parents with relevant incomes below £6,806 will qualify for full remission of fees. Your Lordships may be interested to know that in the current school year over 39 per cent. of all assisted pupils enjoyed full fee remission. This is, I believe, a firm indication that the scheme is attracting in large measure those pupils for whom it was intended whose families are at the lower end of the income scale.
I have described briefly the purpose of each of the proposed amendments. If noble Lords require further clarification on any point I shall seek to answer them in closing. My Lords, I beg to move.
Moved, That the draft regulations laid before the House on 21st May be approved. [24th Report from the Joint Committee.]—(Baroness Hooper.)
Lord McIntosh of Haringey: My Lords, the House must be grateful to the Minister for her lucid introduction of these amendments. As she says, they are largely procedural rather than substantive, but of course they are a further step along a road of which we on these Benches profoundly disapprove.
The assisted places scheme was originally introduced following the Education Act 1980, and after considerable pressure, particularly in this House, a number of qualifications and restrictions were placed on the scheme. After six years almost all of those restrictions have been removed, and every time an amendment comes before Parliament for consideration further restrictions and safeguards are removed from the scheme and the scheme is encouraged to go further in stripping our state schools of the academically most able pupils.
We consider these regulations at a time when we have a new Secretary of State for Education. He has been in his job for less than a month and, if he is to turn around the deep public suspicion of the Government's education policy, he has to show rapidly that his concern is for the public education system. I suggest to the House that these regulations and the continuation and expansion of the assisted places scheme are no way to show that concern. On the contrary, they show that the Government are continuing in their ideological support for the private education system—I shall not call it the independent sector—as against the interests of the whole community and of our virtually universal state education system.
In detail the new regulations cannot be deeply faulted. It is plainly reasonable for there to be a suitable administrative time for the Secretary of State to consider proposed increases in fees, and it is certainly reasonable that the anomaly about the family unit on which the income is calculated should be made more rational. I query the proposal for the increase in the baseline income for the calculation of fees. We appear to have an increase of 7 per cent. when inflation has risen by less than 5 per cent. Surely it cannot be right that the increase should exceed the retail price index.
The great socialist thinker, R. H. Tawney, said that that which the wise parent would wish for his own

1141
child the state should wish for all children. This is a denial of that fundamental principle. It is spending public money on a privileged sector and in doing so taking away from the state schools the full range of academic ability that they can effectively use. On those grounds we are opposed to the fundamental scheme to which the regulations make amendment. Nevertheless, in following the convention of the House we shall not seek to oppose the regulations.
Lord Ritchie of Dundee: My Lords, from these Benches I should like to thank the Minister for her clear exposition of the regulations. The substantial change is in the table contained in Regulation 6 with the updating of the bands of income. I too should like to draw attention to the fact that they are between 6 and 7 per cent. which seems to us to be on the generous side. It is presumably intended to be in line with the increased average earning rate rather than the rate of inflation, but this does not seem to us to be the right time to be generous, even to that comparatively small extent, in a venture that affects less than 1 per cent. of children in the maintained sector.
The latest HMI report published last month shows that parents are making substantial contributions towards the cost of educational visits and the purchase of computers, audio-visual equipment, library and reference books, PE and games equipment, school minibuses, musical instruments, textbooks and reprographic equipment. More notably, parental contributions have been used to an increased extent to improve school premises, for example, the rewiring of an entire first floor, not to mention much redecoration. Parents have also been giving much personal help with activities such as reading, library work and cookery. Your Lordships will probably realise that that has varied greatly according to the socio-economic status of the cachment area so that schools in well-to-do areas have fared much better than schools in deprived areas. Social differences have thus become accentuated.
With the assisted places scheme we have the absurd situation of the state subsidising the private sector while parents subsidise the state. There is something wrong there. Surely this would have been a time to consider whether a rather generous gesture towards those benefiting from the assisted places scheme was not inappropriate.
Our basic objections to the scheme remain as before. We feel that it undermines the state system which is in desperate need of assistance both in material resources and morale building. It is, in effect, saying to parents, "Look, if you want a better option for your child than the run-down state system, we shall finance it." The scheme devalues the state system and those who are in it—children and teachers.
We feel that the scheme accentuates social and academic differences when really we should be doing what we can to diminish them. I have spoken before in the House of the effect on the children who remain in a class when others are taken out of it. It is disastrous. There is a sudden, total collapse of confidence. I cannot help but feel that that tends to happen in schools. We feel that it is a particularly inappropriate time to be making generous gestures towards a small section of the school population.
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I should like to ask the Minister some questions. Can she give us any idea of the estimated number of children likely to benefit from the scheme in 1986–87? Secondly, can she give us an idea of the net cost of the scheme in 1985–86? When I say "net cost" I mean the cost over and above the capitation costs of educating the same children to secondary age in the maintained sector. Thirdly, can she give us any information as to the socio-economic groups which are benefiting from the scheme? I took on board the figure of 39 per cent. that she gave us as coming from the lowest income band. One wonders whether the scheme is reaching the type of families that it was originally intended to reach—that is to say, disadvantaged, deprived or working class people—or is it mainly reaching those who would probably, by hook or by crook and by scraping the barrel, have educated their children privately anyhow? If the noble Baroness will be kind enough to tell me what she can about those matters. I should be grateful.
Baroness Hooper: My Lords, I regret the fact that neither the noble Lord, Lord McIntosh of Haringey, nor the noble Lord, Lord Ritchie of Dundee, felt able to congratulate the Government on the success of the scheme, as it is plainly achieving its objective by opening up the best independent schools to children who almost certainly would not otherwise have been able to look at them as an option. I feel that can only be to the advantage of those children and the nation.
Lord McIntosh of Haringey: My Lords, how does the noble Baroness define "best" when she talks about those schools?
Baroness Hooper: My Lords, as the scheme opens up the option to all, it must include the best. I shall endeavour to respond to the detailed questions asked by the two noble Lords. The increase is in line with the increase in average earnings, as the noble Lord, Lord Ritchie of Dundee, suggested. The noble Lord, Lord McIntosh, suggested that the regulations were expanding the scheme. I am not sure how he figures that as there are currently no resources available for any expansion of the scheme. If additional resources were available, more assisted places would obviously be a happy option, but there would also be many competing claims.
I am not sure that I can precisely quote the figures for 1986–87. All that I can tell the noble Lord, Lord Ritchie, is that there are now over 21,000 pupils benefiting from the assisted places scheme of whom nearly 47 per cent. come from families whose gross combined income is less than £7,300 a year. The scale for determining the amount of fee remission is intentionally a stiff one and only those families with incomes currently below £6,376—as I said in my introduction that is the figure which is being increased—qualify for completely free places.
We believe that the scheme reaches the targeted families that it intended to reach. We therefore feel that the scheme is a great success. If I have not answered all the points raised by the noble Lords. I hope that I may be permitted, after looking at Hansard, to follow up any of the queries in writing.
Lord Ritchie of Dundee: My Lords, the only question I should be interested in the answer to is the net overall cost of the scheme. I hope that the noble Baroness understands what I mean.
Baroness Hooper: My Lords, I understand what the noble Lord means but I cannot give him the exact figure now. I hope to be able to do so.
On Question, Motion agreed to.

Health Service Joint Consultative Committees (Access to Information) Bill
7.17 p.m.
Baroness Carnegy of Lour: My Lords, I beg to move that the Bill be now read a second time.
The Bill was, in the first instance, promoted in another place by my honourable friend the Member for Peterborough, Dr. Mawhinney. When he joined the Government, he handed over the Bill into the capable hands of my honourable friend the Member for Hornchurch, Mr. Robin Squire. That was highly appropriate as the Bill is, in effect, an extension of the Local Government (Access to Information) Act 1985 which Mr. Squire had also introduced into another place and which your Lordships will remember passing through this House last Session.
The principle of that Act, which came into force on 1st April this year, is that, in general, local authority council, committee and sub-committee meetings must be open to the public and the press, and there must be access for the public to agendas, reports, minutes, and background papers relating to such meetings.
This Bill provides for similarly improved public access to the meetings of joint consultative committees of health and local authorities in England and Wales, and likewise to related reports, minutes and other documents. In moving the Third Reading in another place, my honourable friend paid tribute to the assistance he had received in his work on the Bill from the Community Rights Project and the Freedom of Information Campaign.
Joint consultative committees are statutory bodies set up under the National Health Service Act 1977. They consist of nominated local government councillors and district health authority members, representatives of family practitioner committees and of local voluntary organisations. Their purpose is to advise local and health authorities and family practitioner committees on how they can best cooperate on services which overlap or are of mutual concern—services, for example, for the mentally handicapped, the mentally ill, the elderly and the physically disabled. They also give advice on the spending of joint finance, estimated to have amounted during the last 10 years to some £506 million and during the last year alone to £110·4 million. Joint consultative committees are an important mechanism for the creation of effective and cost-effective coordination of services and the avoidance of duplication of effort. Their work, their decisions and, indeed, their very existence are in many places unknown to the public—and that cannot be good.
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This Bill was originally drafted as an extension to the Local Government (Access to Information) Act 1985. That approach was found to be flawed and the Bill as it now stands relates directly, as does the 1985 Act, to the parent Local Government Act 1972 covering England and Wales. Clause 1 simply provides definitions. Clause 2 contains the main substance of the Bill. It provides for the extension of Sections 100A to 100D of the 1972 Act so that they apply not only to local government councils but also to joint consultative committees. This clause also provides appropriately modified definitions of offices where papers are available, the officials who have the particular duty to make them available, and the premises where information is displayed. Subsections (2) and (3) of Clause 2 state how Sections 100H and 100I(2) of the 1972 Act must be interpreted in the case of joint committees. Subsection (4) adds a new item of exempt information to Schedule 12A to the 1972 Act which lists a number of areas of information that must remain confidential. The new items relate to information about individuals' physical and mental health, and information about individual doctors, dentists, opticians, and pharmacists and their employees.
Clause 3 requires joint consultative committees to maintain registers with details of their members, a summary of the public's right of access, and where these must be made available. Clause 4 is self-explanatory. It states that the Bill applies only to England and Wales. It was not possible to apply it to Scotland because the joint local authority and health board liaison committees there are of a different nature and not susceptible to the same kind of legislation.
The Bill aims to increase access by the public to only a small area of local decision making. But it is an area in which the public are deeply interested and in which more openness can only increase public understanding of the problems and possibilities and so can only strengthen the work of joint consultative committees. I hope that your Lordships will give the Bill a fair wind and a swift passage through the House. I beg to move.
Moved, That the Bill be now read a second time.—(Baroness Carnegy of Lour.)
7.23 p.m.
Earl Grey: My Lords, we on these Benches welcome the Bill which extends the Local Government (Access to Information) Act of last Session to health service joint consultative committees. Any extension of public access to the meetings of these committees, including the provision of agendas, minutes and background papers, must be very good news for all those, especially in my party, who have campaigned long and hard for more openness in government at all levels. It is little wonder that the public are hardly aware of the existence of these committees, let alone their functions. We hope that the Bill will go some way to make their work better known to the general public and thus increase their accountability.
There is just one small matter which I should like to raise at this point, although I accept that it is outside the immediate scope of the Bill. Community health councils were set up in 1973, before joint consultative committees, to consider matters relating to the

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operation of the health service within their districts and to give advice to area health authorities on such matters; in other words, to act as a consumer watchdog for the health service. Under the Public Bodies (Admission to Meetings) Act 1960 their meetings are open to the public but their committees are not.
Some community health councils open committees to the public, but some do not. Similarly, the amount of publicity given to the place and time of community health council meetings varies substantially. This makes it difficult for campaigners to take part in debates on local matters of concern. I wonder whether the Government will consider, in the light of the Bill, amending the regulations governing community health councils along these lines.
7.26 p.m.
Lord Ennals: My Lords, I should like warmly to congratulate the noble Baroness on introducting the Bill and on the manner in which she did so. On reading the report of the Second Reading in another place it is interesting to note that the mover of the Bill did not indicate its purpose at all. I believe that the House and those who read our reports will greatly appreciate the clarity with which the noble Baroness presented the Bill this evening. I welcome it totally. I can perhaps give two main reasons for doing so. First, there is the general principle of greater openness, to which the noble Earl, Lord Grey, referred. In society as a whole there is an increasing feeling that we have too much secrecy and that the public are not sufficiently involved. Any step such as this that can be taken which enables the public to know what is going on and so enable them to participate more effectively is to be welcomed.
I was glad to hear the noble Baroness refer to the freedom of information campaign. I strongly support that campaign and hope that we shall eventually have a freedom of information Bill. I accept that this is only one step in that direction. But any step is to be encouraged, particularly since there are still some—I am not thinking especially of people at national level or at local level, though there are some at both—who want to hang on to secrecy. They prefer that business should be done behind closed doors, neither reported nor observed, nor open to comment and criticism afterwards.
I was glad to read the statement made in another place by the Parliamentary Under-Secretary of State for Social Services Mr. Ray Whitney, who said, at col. 1247 of Hansard of 31st January:
"We would welcome a greater public awareness of the existence and functions of those bodies, and would like to see their proceedings as open as possible. We feel that the degree of public accountability which such openness would entail would help strengthen the committees and emphasise the importance of their role in successful joint planning that we all seek".
That was, I thought, a good statement. And since I spend more time criticising statements made in another place by DHSS Ministers, I am happy to record my warm appreciation of that one.
The second point that I wish to make concerns the increasing importance of joint planning by district health authorities, social service departments of local authorities, family practitioner committees, as the
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noble Baroness mentioned, and, in some cases, housing committees, together with voluntary organisations, again mentioned by the noble Baroness. As we move towards more effective community care—we have still a long way to go—we know perfectly well that it will come only as a result of effective joint planning between health authorities and the other services in the community. That is why I added housing as well as social service departments.
The noble Baroness mentioned community care and joint financing in particular. Naturally I have a very special interest in this, as it was when I was Secretary of State that the principle of joint financing was accepted and begun. It started in a small way and it has grown. It has grown under this Government as it grew under the previous Government. I am happy to welcome a matter on which we all agree.
I also welcomed the Statement made by the Parliamentary Under-Secretary of State in another place when he referred to the joint planning report on progress in partnership. He said that its establishment was promoted largely by widespread feeling that over the country as a whole services were better matched to needs of users and delivered more cost effectively if all the opportunities for joint planning of services had been taken. I should like to emphasise that very much indeed.
I think that we still have a long way to go. Sometimes relations between health authorities, sections of local authorities and voluntary organisations are still inadequate. The presence of the public and the press, and the availability of the documentation to the public and the press, is likely to improve their performance.
Last night in welcoming another modest Bill affecting the welfare of children in care I said I hoped that this would not stand in the way of major comprehensive legislation on child care provision, and was assured by the Minister, the noble Baroness, Lady Trumpington, that the fact that we were making progress in a small field would not hold us up from making progress in a large field. I should like to say the same in relation to this Bill. It is a modest but important step forward in public access, public involvement and the greater availability of information in what is a relatively narrow but important field of joint consultation committees. I hope that this again will not hinder the Government's consideration of a wider Bill on freedom of information. I regret that the Government of which I was proud to be a Member did not implement proposals for a freedom of information Bill. I was strongly in favour of it and wished that they had had a little more courage and had done so. As a party we are committed to do so when we are returned to power.
At this stage I hope that the Government will now consider that this is the right direction in which to go and that we ought to have more openness, more availability of information and more access for the public, which will lead to more involvement of the public. In a totally bipartisan spirit I warmly welcome the Bill before us. I congratulate the noble Baroness, Lady Carnegy of Lour, upon the way in which she has presented it to the House.
7.34 p.m.
Baroness Hooper: My Lords, I too am happy to respond to the speech of my noble friend Lady Carnegy of Lour. I should like to congratulate her on a most clear and interesting introduction of the purpose of this Bill.
In view of the Government's support, both for the principle of the Bill in its original form and for the specific amendments made to it in Committee in another place, it will come as no surprise to your Lordships when I say that we have no intention of doing anything to impede the Bill's progress. Now that the Local Government (Access to Information) Act 1985 has taken effect, meetings and documents of local authorities, their committees and their subcommittees are, as has been said, generally speaking open to the public. This Bill will confer the same degree of openness on the meetings and documents of joint consultative committees.
The committees have an important task to perform. The Government, like the noble Lord, Lord Ennals—and I am happy that we are having such an agreeable evening—are firmly committed to a community care policy aimed at meeting the needs of individuals and helping them to live as normal a life as they can. But the needs of individuals often straddle the boundaries between services supplied by the different statutory authorities. A close working partnership between authorities, and with the voluntary sector, is therefore important in meeting the needs of individuals in the most appropriate and cost-effective way. Joint consultative committees are the means provided by statute for promoting partnership. Their task is to advise the authorities represented on them—district health authorities, local authorities and family practitioner committees—in carrying out their duty to collaborate in serving the community.
Making these committees open to the public is a move which the Government welcome. Before this Bill was presented under its original title we were already planning to encourage health and local authorities to make joint consultative committee meetings open. We are also going to advise them that in any event the minutes of meetings and information on the progress of matters discussed should be made freely available to the press and the public.
The noble Earl, Lord Grey, raised a query which, as he said, comes outside the scope of this Bill. He asked whether the regulations governing community health councils could be amended to provide for meetings of committees of those councils to be open to the public. I can respond by saying that the Government will consider the suggestion of the noble Earl, when a suitable opportunity arises. This is because a greater awareness by the public of the way in which local health and social services are organised, the boundaries between them and the opportunities and problems of achieving better integrated services should be of mutual benefit. Better joint planning of services is something we all want. Joint consultative committees have a crucial part to play in securing it and the Bill if enacted will mean their having to play it more in the open than has been the case so far. In the hope that this will help to stimulate a better performance all round the Government support the
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Bill, I commend it to your Lordships' House and wish it a speedy passage.
Baroness Carnegy of Lour: My Lords, I should like to thank noble Lords on all sides of the House for the welcome that they have given to this Bill. The noble Earl, Lord Grey, welcomed the Bill. He made the suggestion which my noble friend on the Front Bench has just mentioned that community health councils should be open to the public. As the noble Earl himself said this is outside the scope of this Bill but it is interesting that the Government are clearly warmly disposed towards such a notion. From his deep knowledge of the health service the noble Lord, Lord Ennals, spoke of the importance of these joint consultative committees. By implication, he spoke of how important it is that they should be open to the public and that the public should be aware of what goes on in them.
The widening of the issue to other areas is another subject. I note with interest that my noble friend on the Front Bench sounded as though she were kindly disposed to looking at other areas of the health service. I think that freedom of information in local areas and in national areas are two rather different subjects. Doubtless the second of those is another subject for another day.
I thank my noble friend Lady Hooper for her encouragement and for saying that the Government will do nothing to impede the passage of this Bill. I hope that it will very soon reach the statute book.
On Question, Bill read a second time, and committed to a Committee of the Whole House.
Viscount Long: My Lords, I beg to move that the House do now adjourn during pleasure until eight o'clock.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.38 to 8 p.m.]

Gas Bill
House again in Committee.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 106D:
After Schedule 5, insert the following new Schedule:
("DEFINITION OF THE GAS SUPPLY BUSINESS
1. The Gas Supply Business means the procurement, treatment, storage, transmission and distribution by the supplier of gas for sale and safe delivery through pipes to customers in Great Britain and the conveyance of gas for third-party suppliers and in this paragraph—
"procurement" means the acquisition of gas by the supplier from other persons and the taking into the Transmission System of gas produced or manufactured by the supplier;
"treatment" means the cleansing, odorisation, heating, cooling, compression, decompression, liquefaction and conversion to gaseous state of gas and any other operation necessary to transmit gas safely through pipes to customers or to render it suitable for consumption;
"storage" means all storage of gas after its procurement by the supplier including, after procurement, its storage by the supplier in offshore installations;
"transmission and distribution" means the conveyance, including the provision and installation of meters and associated controls, of gas belonging either to the supplier or to other persons;
"Transmission System" means the facilities used by the supplier for the conveyance of gas in a gaseous state, including the storage of gas in the course of its conveyance, either within Great Britain or between any of the supplier's offshore gas storage installations and its first place of receipt onshore Great Britain, including facilities for the conveyance of gas in a liquid state or for its conversion into a gaseous state.
2. For the avoidance of doubt there shall be included in the Gas Supply Business if, and to the extent that, they are undertaken by the supplier for the purpose of such business, the following activities namely—

(i) the design, procurement, installation, testing, commissioning, maintenance, repair, replacement and operation of any plant and machinery, including pipework and transport;

(ii) research and development;

(iii) commercial and administrative functions including—

planning;

purchasing and stores;

marketing and promotion of gas;

selling;

accounting and finance;

personnel management;

any other general management and administrative activities to the extent that they are undertaken by the supplier for the purpose of the Gas Supply Business.

(iv) installation of gas appliances or supplies (from the outlet of the meter on the customer's premises) or work undertaken under the terms of a repair, maintenance or installation contract with gas customers, including safety checks and emergency and all other work related to the supplier's safety obligations and in pursuance of its statutory safety duties;

(v) exploration for and production or manufacture of gas;

(vi) consultancy exclusively related to the requirements of gas supply in Great Britain.").

The noble Lord said: I beg to move Amendment No. 106D standing in my name and that of my noble friend Lord Williams of Elvel. It is to insert the new schedule. I shall not read through the schedule. That would take rather a long time and we have to make great progress between now and 11 o'clock if we are to reach a stage of the Bill which will enable us to complete it next Wednesday.
Nevertheless, the amendment is of some importance and if the Committee will look briefly at the schedule they will see that it comprises Annexe A of the authorisation plus those matters in the authorisation in Condition 3 of Annexe A to the authorisation which are excluded from what is termed to be the "Gas Supply Business", and I had better read those out. Condition 3 of Annexe A says this:
"For the avoidance of doubt there shall not be included in the Gas Supply Business the following activities, namely—

(i) installation of gas appliances or supplies (from the outlet of the meter on the customer's premises) or work undertaken under the terms of a repair, maintenance or installation contract with gas customers, except for safety checks and emergency and all other work related to the Supplier's safety obligations and in pursuance of its statutory safety duties;

(ii) trading in gas appliances;

(iii) exploration for and production or manufacture of gas;

(iv) consultancy unless solely related to the requirements of gas supplied in Great Britain."

What we have sought to do is to put the whole definition of "Gas Supply Business" into the Bill and to add in those matters which are excluded in Annexe
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A. I find it strange, and no doubt the Minister will give the reasons when he replies, that some important parts of what is recognised to be the integrated gas business should be specifically excluded. These are installations of appliances, exploration for gas, together with everything else that goes into the transmission and distribution of gas.
Restricting the gas industry in the way suggested by the Government only restricts the gas industry to a purchasing and transmission agency, and thereby gives the lie to their protestations that the industry will continue on an integrated basis. The provision in the authorisation implies that the gas industry may well be broken up. That seems to be the implication.
The case for including installations itself comes from the Government in that they have always said that it made commercial sense for the privatised British Gas Corporation to be safety conscious, yet if the corporation are to have no control over safety then that boast is rather hollow. Using CORGI, or whatever replaces it, is not an adequate substitute. In addition, as was pointed out when we discussed Amendment No. 36B, the installation and contracting work is used to make the safety work less costly as the same staff is used. Separating them out from the gas business therefore simply puts even more pressure on the X factor without any compensatory income from elsewhere.
Including the exploration and production of gas is again a logical part of the gas business. It enables BGC to bargain with producers, for the benefit of consumers, through their knowledge of the field. It also ensures that the public gas supplier can extend the supplies of gas available so that consumers will be able to continue to use gas. I simply do not understand why those exclusions are there, but rather than take up the time of the Committee in further elaboration I shall sit down and listen to what the noble Lord, Lord Belstead, has to say when he replies.
Lord Belstead: The noble Lord, Lord Stoddart, hazarded certain guesses at the beginning of his remarks about why the draft authorisation in Annex A contains the definition that it does of "Gas Supply Business". We attach considerable importance to ensuring that gas supply is properly accounted for, and that those accounts are audited and published; and to prepare proper accounts there needs to be complete clarity over the details of exactly what should be included in the accounts and what should not. It is for this reason that there is a definition for accounting purposes at Annex A of the authorisation.
May I turn to one particular point that the noble Lord made, and about which he expressed concern, that in an integrated business certain things were left out which the amendment has put in. Although British Gas operates as an integrated business and is being privatised as a whole, that does not rule out having separate accounts for the separate business areas. The gas supply business should surely include those areas closely connected with the sale of gas through pipes, and we have therefore included safety work.
In the area of installation and contracting British Gas is competing with other gas retailers and fitters. The separate nature of these areas is already

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recognised by British Gas in its current report and accounts which separate it out from gas supply. Indeed the noble Lord will remember that separate accounting was one of the points covered in an MMC report and that British Gas changed its accounting procedures in response.
The amendment seeks to include these areas by changing paragraph 3 of Annex A of the authorisation. The amendment would also include exploration and production in the gas supply business; therefore, I would suggest, further obscuring the financial results of that business. There is nothing sinister in the way that we have drawn Annex A. It is simply that for accounting purposes we believe that the annex correctly defines the business of supplying gas. It is for that reason that I would hope that we can leave Annex A as it is.
Lord Stoddart of Swindon: I thank the noble Lord for that explanation. If of course Annex A is used merely to define how the accounts can, or may, be prepared and what is shown in the accounts and how those accounts may be divided, then that is one thing. But is there not a danger that Annex A could be used for the breakup of British Gas? Would it not be possible to say that it was implicit in the authorisation that British Gas should split itself up into various component parts and therefore into separate businesses? That is what we are afraid of; and is it not implicit in this annex?
Lord Belstead: I shall just respond to that point put by the noble Lord. On many occasions noble Lords opposite have suggested that the authorisation is a draft authorisation and is not directly part of the legislation, although there are mechanisms for changing the authorisation which are in the legislation. I say that because as I am talking about something that is not in the legislation what I say on the Floor of the Committee on behalf of the Government on this occasion perhaps is of some weight. The Government say that the definition of Annex A is only for the purpose of separate accounting. I give the noble Lord that assurance, and I give the assurance that there is no intention behind Annex A to break up the company. Indeed, in preparing and presenting the legislation, the Government have always said that we believe that the break-up of the British Gas Corporation would not be in the interests of consumers.
Lord Stoddart of Swindon: It is difficult to know quite what to make of that; but there was a categorical assurance. I shall want to read very carefuly what the noble Lord has said. It may be that this is something to which we shall want to return if we are still not satisfied with the very positive statement that he has made. Therefore in the interests of making progress I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 16 agreed to.
Clause 17 agreed to.
Clause 18 [Safety regulations]:
[Amendments Nos. 107 and 108 not moved.]
Lord Bruce of Donington Lord Bruce of Donington moved Amendment No. 109:
Page 19, line 34, at end insert—
("( ) Nothing in the foregoing shall allow any authorised officer to enter premises without a warrant from the appropriate court unless it is for the purposes of this section.").
The noble Lord said: In relation to subsection (4) the amendment reads:
"Nothing in the foregoing shall allow any authorised officer to enter premises without a warrant from the appropriate court unless it is for the purposes of this section.".
The purport of that subsection should be obvious enough to the Government, and I sincerely trust that they will accept it.
Lord Belstead: The noble Lord has identified a very important aspect of the rights of entry powers. I can almost come to accept it. I am glad to be able to say that I believe the noble Lord's point is fully covered in the legislation. The fact is that the protection that the noble Lord is seeking in this amendment is already provided in the Rights of Entry (Gas and Electricity Boards) Act 1954, and Section 1 of that Act provides that no right of entry to which that Act applies shall be exercisable in respect of any premises except with the consent given by or on behalf of the occupier of those premises under the authority by a warrant granted by a justice of the peace under Section 2 of the Act or in an emergency. Clause 18(8) specifically applies that 1954 Act to any right of entry regulations to be made under this Bill. I am sorry it is a little complicated, but I think I can honestly say that the noble Lord's point is fully covered.
Lord Bruce of Donington: I am obliged to the noble Lord for his explanation, and I have pleasure in asking the Committee to withdraw the amendment.
Amendment, by leave, withdrawn.
8.15 p.m.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 110:
Page 20, line 7, at end insert—
("( ) The Director shall ensure that officers operating under this section shall be trained to standards in accordance with Schedule (Standards of Training of Officers and Gas Installers) to this Act.").
The noble Lord said: This amendment stands in my name and in the name of my noble friend Lord Williams of Elvel. It may be for the convenience of the Committee if, with this amendment, we take Amendment No. 144X. We are back to safety. The Committee are concerned with and have shown their concern for safety. Clause 18 gives the Secretary of State the right to make regulations of a sweeping nature empowering any officer authorised by a relevant authority to enter premises to inspect, test and deal with gas pipes and fittings where there is likely to be a danger to life or property. Clearly this is a necessary and vital power that should be available to him.
We are concerned, however, to ensure that where such powers are exercised, the person (or persons) given access to property is not only properly

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authorised but properly trained as well. I have no doubt that the gas corporation at present ensures that all its employees engaged on this sort of work are properly trained, perhaps to the standards set out in the schedule. It will also no doubt, as far as it is able, try to ensure that the private contractors it employs engage employees who are properly trained. However, the position may change when British Gas is privatised. Certainly there will be pressure to reduce costs in the interests of profit, and the temptation will always be there to cut corners on safety and safety training, and to employ the cheapest private contractors who may not invariably insist on the highest safety qualifications from those they employ.
Our amendment, if accepted, would go a long way to ensure the maintenance of high safety standards and would provide the assurances to which the public are entitled where their property is entered for the purpose of dealing with potentially dangerous gaspipes and fittings. In these days gas installations do not simply involve attaching a gas cooker to a gas pipe. There are all sorts of sophisticated mechanisms for the control of many appliances. All of them have implications for safety. Gas fitters these days need to have knowledge not only of screwing pipes together but of electricity, electrical fittings, electronics, the chemistry and physical properties of gas, the construction of buildings and even aspects of the law.
That is why we are proposing in the schedule comprehensive standards of training. These standards have the support of a host of organisations, incidentally, including the CBI the TUC, local authorities, the Health and Safety Executive, CORGI, the Institution of Gas Engineers, the gas corportion and many more. These organisations, as the Minister will know, produced a draft code of practice in September 1985 and the proposed schedule would write into statute the standards aimed at by the code.
I feel sure that the whole Committee has read the proposed schedule closely and I shall not therefore take up time by going through it in detail. But briefly it seeks to define gas installers; to provide that gas installations should be installed only by properly trained installers who can demonstrate their competence, and to ensure that training is of a high standard.
The schedule lays down the range of matters in which installers should be trained and be competent and it provides that they should have proper knowledge in, and recognition of, dangerous situations and also the law and codes of practice. An important provision concerns updating and refresher courses—every five years, we propose—and this kind of provision really is essential in these days of fast-changing technology. The Committee will realise that there has been much concern over gas safety and there is certainly no room in the industry for the cowboy installer or the untrained or the not-properly-trained installer.
Gas is a substance too dangerous to be left to amateurs or the get-rich-quick cowboy, and there are too many people at risk to allow slick operators to con the gullible into allowing incompetent people to interfere with gas installations and appliances. Therefore, I hope that this amendment will receive a
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sympathetic response from the noble Lord and that the Committee will give it their support. I beg to move.
Lord Belstead: Amendment No. 110, which the noble Lord is moving, has attached to it Amendment No. 144X. As the noble Lord, Lord Stoddart, has explained, that really incorporates entirely the new draft of the approved code of practice on standards of training in safe gas installation which the Health and Safety Commission have formulated. I am very ready to give a sympathetic response because the code has been produced in response to a request from employment Ministers to the Health and Safety Commission. The noble Lord has explained the main aspects of the code I would only add that failure by any installer to comply with the code's provisions may be used in criminal proceedings as evidence that the installer has failed to discharge his duties under the Health and Safety at Work Act unless he can prove that he has complied with those duties in some other way.
Should this schedule become part of the Bill by an acceptance of Amendment No. 144X? There are three things that I should like to say. First, I think that it really is not appropriate for the terms of this code to be amendable only by statute or for it to apply only to persons exercisng powers given by Clause 18 rather than to all gas installers. Secondly, I hope that the Committee would agree that the code should hay e the legal force conferred by being approved under the Health and Safety at Work Act.
Thirdly—and I think this is a very serious point—the code is out for consultation at the present time. We would be expecting some 70 interested parties who are being directly consulted on the code to give views at any time up to 15th August. I really do not think that one could write into the Bill a code which is out for consultation in that way. The Government are sympathetic to this amendment even though, for the three reasons that I have given, I feel that I cannot accept the amendment.
Lord Stoddart of Swindon: I appreciate very much what the noble Lord has said. I even appreciate the difficulty of writing it into statute because it may, be difficult to amend when it is out of date. There is certainly the difficulty that it has not yet been agreed. I had not realised that it was still out for consultation and that the consultation procedure would not be complete until August. That is an added difficulty. Therefore, I say now that I shall withdraw this amendment but I wonder whether the noble Lord can help a little more.
I wonder whether he can say that consideration will be given to including the code (or some reference to the necessity for authorised suppliers 'to work within that code) to be put within the authorisation document itself at an appropriate time; as that document is amendable and is amendable very easily by agreement. It would be useful if he could give me some indication, perhaps even at this stage, that that is something which could be done.
Lord Belstead: I should like to look at that point. As the noble Lord is aware, and as I recorded, the code of practice will give guidance required under the Health

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and Safety at Work Act for gas installers, and that of course is going to give it legal force. Really, one could almost be saying that to put it in the authorisation is of lesser effect. But may I look at the point that the noble Lord has put to me?
Lord Stoddart of Swindon: I thank the noble Lord for that assurance, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 111 not moved.]
Clause 18 agreed to.
Clause 19 [Acquisition of rights to use pipe-lines]:
Lord Diamond Lord Diamond moved Amendment No. 111A:
Page 21, line 18, after ("Director") insert ("shall give, whenever he considers that competition in the supply of gas through pipes will hereby be facilitated, and in all other cases").
The noble Lord said: I rise, somewhat breathless at the speed with which we are rushing through this Part of the Bill, to move Amendment No. 111A. We are now dealing with Clause 19 which is headed, "Use by other persons of pipe-lines belonging to public gas suppliers". At this point in the clause, it states that directions may be given where the director is satisfied,
"that the giving of directions … would not prejudice the conveyance by the pipe-line of the quantities of gas which the public gas supplier requires".
The relevant line which we are seeking to amend is the last line of subsection (3), where it says:
"the Director may give such directions to the supplier".
The amendment is a small one but it is an important one in emphasis. As the words of the amendment show, this is an attempt to increase, however slightly, the possibility of competition in the supply of gas through this Part of the Bill. It is going to be very difficult, as we all know, to bring reality to what is claimed to be one of the purposes of this whole legislation; namely, facilitating competition.
It is going to be very difficult, if not impossible, to do that; but here, at all events, is a slight attempt to improve it. The amendment proposes that where the director,
"considers that competition in the supply of gas through pipes will thereby be facilitated",
he shall give directions;
"and in all other cases",
he may (as the clause is at present drafted) give such directions.
We think that there may be a slight benefit to competition and if the director is satisfied that that might be the case, we think his position should be strengthened so that, instead of saying that he may give such directions, we put upon him the compulsion of giving such directions. We have several times made the point that the director is in far too weak a position by virtue of the way the Bill is drafted to achieve what should be achieved. In this case, we do not wish to limit his flexibility and his independence but wish to give him the strength to enable him to say, "Yes, I am satisfied in this case that competition in the supply of gas will be facilitated and therefore I am compelled to give such directions". I beg to move.
Lord Whaddon: This surely is an amendment that noble Lords on the Government side must support. Noble Lords on this side of the Committee have expressed concern many times regarding the extreme monopoly being handed to a private company. We remain very worried about this and its effects on the public. The attempt here to introduce even a small amount of real competition must surely appeal to noble Lords on the Government Benches. After all, they have accused my noble friends on this side of being dogmatic in opposing privatisation. They cannot use that argument now. We are going along with noble Lords on that side in what they have frequently declared to be their beliefs in the benefits of competition. This amendment will, in a tiny way, increase the pressure of competition. I beg the noble Lord to accept this very sensible but small amendment.
8.30 p.m.
Lord Harris of High Cross: I do not think there can be any possible objection to inserting these words, which simply spell out that the function of the director is to maintain and enforce competition. The only objection would be that it adds two lines to an already over-long Bill. But since I have coming up an amendment which would remove a couple of subsections, I shall gladly support the addition of these two lines, to which I cannot see any objection on the Government's side, in the hope that I might get some support later in respect of a rather longer passage when the time comes.
Lord Belstead: The noble Lord, Lord Diamond, has certainly got a point here and when the noble Lord, Lord Whaddon, said from the same Benches that he felt it moved in the direction the Government wish to move in, in respect of Clause 19, the noble Lord, too, had a point. It is the case that this amendment would require the director to give such directions if he considers that competition in gas supplied through pipes would be facilitated thereby; and this is what we are trying to do in these common carriage provisions.
However, there is a difficulty, which is this. If I may say so, it is arguable that the point is already covered because of the duty contained in Clause 4(2)(d), which is laid on the director and the Secretary of State to enable persons to compete effectively in the supply of gas through pipes—except of course that the director has to bear in mind his other duties when he is operating Clause 19 and those other duties under Clause 4 might be of a conflicting nature. I am therefore saying that the difficulty I see with this amendment is that it seeks to require the director to give directions under Clause 19, regardless of his other duties. We believe that in conforming with all his duties under Clause 19 the director has to be left with some discretion; and if this amendment were to be made, that discretion would be removed.
Lord Diamond: I am grateful for the sympathetic and understanding response of the Minister. Did I gather him to say that if it were made quite specific and clear in the wording of the amendment that this was not to be deemed to be in any way in conflict with the director's other duties, the Government would look

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upon it with more sympathy? Of course, it is the purpose of the Committee stage to discover to what extent the Government are sympathetic towards what one is proposing. If that were the case, we could produce at Report stage an amendment which omitted the less desirable parts of the present amendment, or indeed the Minister himself might prefer to take the course of using his own words, which I am sure would be more appropriate than my own humble effort.
Lord Belstead: The solution which the noble Lord, Lord Diamond, has put to me would overcome the criticism I have ventured to make, which is that this amendment would remove discretion which the Government believe is not only desirable but indeed necessary if the director is to conform to his Clause 4 duties.
However, it would not overcome the difficulty that the amendment would then still be left as being possibly unnecessary because of the Clause 4 duties. Nonetheless, I do not want to dampen the noble Lord's enthusiasm, and if he cared to bring forward an amendment, of course we would look at it. On the other hand, perhaps the noble Lord would care to have a discussion between now and the Report stage, in which case I would gladly meet him for that purpose.
Lord Diamond: Who could do other than welcome the co-operative way in which the Minister is behaving in respect of this very modest amendment? I am grateful to him and will certainly avail myself of the opportunity to discuss with him any possible difficulties. In the circumstances, I beg the Committee's leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Diamond Lord Diamond moved Amendment No. 111 B:
Page 21. line 37, at end insert—
("(vi) for securing to the applicant the right to sell to the public gas supplier, for so long as the applicant has the right to have the specified quantities of gas conveyed in the manner referred to in subsection (a) (i) hereof, gas up to an amount not exceeding 20 per cent. of such quantities").
The noble Lord said: I beg to move Amendment No. 111B, which seeks to insert at the end of line 37 on page 21 the following words which, for my own convenience, I had better read out:
("(vi) for securing to the applicant the right to sell to the public gas supplier, for so long as the applicant has the right to have the specified quantities of gas conveyed in the manner referred to in subsection (a) (i) hereof, gas up to an amount not exceeding 20 per cent. of such quantities").
We are now dealing with a rather special situation—a situation in which there would be a possibility of a gas supplier getting hold of a rather inexpensive source of gas and being able to compete as a result of his low cost price. The only circumstances in which one could imagine that happening would be those in which he would acquire a complete field and would have to contract to dispose of the whole of the gas coming from that field.
It is not always possible to match demand and supply in such a precise way where you are dealing
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with a field of gas the volume of which may be approximately known but not precisely known. Therefore, you need what is already provided in the Bill at line 35:
"for securing to the applicant the right to have a pipe-line of his connected to the pipe-line by the supplier".
The purpose of the amendment, again, is to facilitate competition. I have tried to indicate very briefly indeed the circumstances in which competition might arise. In order for that to be a practical proposition it would be necessary for the applicant to have the right to sell to the public gas supplier a quantity of gas up to a certain amount; in other words, any surplus gas is left within the field if he cannot use it up precisely. Where else can he sell it, except to the public gas supplier? Here is a method of matching what is otherwise very difficult to match—demand and supply—by a competitive supplier. If we make these conditions possible, we are making possible a measure—a small measure, admittedly—of competition in an area where it is extremely difficult to find some sort of competition. We cannot lay down two lots of pipes side by side; we all understand that. Therefore, the possibility of real competition in the new privatised gas industry is going to be very limited indeed.
So far I have talked about making it possible for the applicant, by matching demand and supply, to have a chance to compete. He can do that only by selling his surplus left-over gas to the only customer he can find; namely, the public gas supplier. I now talk about balancing that with regard to the public gas supplier himself. Therefore, the amendment goes on to say,
"gas up to an amount not exceeding 20 per cent. of such quantities."
There is no magic about 20 per cent. It could easily have been a different figure; but that is my suggestion for providing a figure which might be a protection to the public gas supplier. I suggest that this formula is the correct one; namely, that if there is to be a protection in this way it must be based on a proportion of the gas carried in the way that this clause contemplates. There is no need to discuss prices or other terms because they are provided for in later subsections of this clause.
Here is a chance to make a small amount of competition possible by enabling a potential competitor who has found a cheap source of supply to compete in the supply of gas. All it requires us to do is to carry out what is provided for in the terms of the amendment; namely, the right to sell specified quantities of gas up to an amount not exceeding 20 per cent. of the quantities that I have mentioned. I hope I have made clear the purpose of the amendment and the method of achieving this small addition to competition. I beg to move.
Lord Belstead: For the reasons given by the noble Lord, Lord Diamond, in the first half of his introductory remarks, the Government have sought an assurance from British Gas that they will not discriminate against producers on the United Kingdom continental shelf offering gas in the circumstances which the noble Lord has outlined. I am able to say to the Committee that British Gas have confirmed that they will not disciminate but will

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consider any offers of such gas on their merits; namely, the price and all other terms and conditions of the proposed supply and the context of its total requirement for new gas supply from time to time. I am therefore saying that an assurance has been given by British Gas about non-discrimination in this very important area which the noble Lord, Lord Diamond, has raised.
There is more to it than that, however. The second part of the noble Lord's introductory remarks concerned achieving a balance, and what the amendment does is to go beyond the assurance which has been given by British Gas in that the amendment permits the director to issue directions to British Gas requiring them to buy up to 20 per cent. of the gas which it is conveying for others. We are resistant in the Government, as I think the noble Lord knows, to having the director involved by right in the purchase of gas, and indeed representatives of the oil companies made clear to the Select Committee in another place that they would not welcome the involvement of the director in gas purchasing. I do not believe, therefore, that it would be helpful to the oil industry or to potential purchasers of gas in direct deals to introduce this kind of provision.
Experience in the United States has shown just how counter-productive regulatory interference in gas production can be, with the sorry tale of low prices throughout the 1970s leading to massive shortfalls in supplies. I think we could be going some way down the road to following that example if we accept the amendment.
If I may come back to the beginning of the matter, I entirely agree with the first half of the noble Lord's remarks about the needs of the supplier who has sold a bulk of gas and wants to make sure he can get rid of the residue. I should like to think that the assurance that has been given by British Gas in this matter adequately covers that aspect of the case.
8.45 p.m.
Baroness Seear: Some of us on these Benches are rather concerned at the frequency with which the Minister says, to reassure us, that the gas corporation has given assurances. However, the board in five years' time may be made up of totally different people. An assurance is not binding and has no standing in the future. We find it difficult to feel that this answers issues of the kind for which we feel some legal protection is required. What strength can one attach to an assurance? I am not questioning the good faith of the people giving it at the moment; but, in the nature of things, those people will not be there in the future. The assurance then may be worth no more than the paper it is written upon.
Lord Belstead: This is a question, as it so often is, of balance. Here there is the danger, as the Government see it, that if one agrees to the principle of British Gas being able to issue directions to British Gas to require them to buy quantities of gas up to 20 per cent. of the gas which it is conveying for others, of agreeing to the director becoming involved in the purchase of gas. So
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far as concerns the Government, that is a matter of principle which we really do not like, and we have reason to believe from the deliberations and the evidence collected by the Select Committee that other people do not like it, either. However, the noble Baroness reasonably says to me that the word "assurance" passes my lips rather too often. I am advised that in this case the assurance given by British Gas can be backed up by competition law. If the corporation was not to fulfil the position which it has promised to take up, then the Office of Fair Trading could step in to take take remedial action.
Baroness Seear: That is some reassurance, which we are glad to have on the record.
Lord Diamond: Again one is bound to be grateful to the Minister for having considered the matter so carefully and being, if I may say so, sympathetic to the approach taken in this amendment. I should like to deal with the difficult part first, and I expected that the Government would find it difficult. It is the principle which has become a matter of religious belief so far as the Government are concerned, which is that you must not allow the director to go beyond a certain point. I know that this has been continually referred to in debates in another place. The view is that you somehow contaminate his proper duties if you allow him to go into what would be, in the Government's view, the improper duties of having some controlling interest in the supply of gas. I repeat that I am not an expert in this matter. I doubt if there is anyone in this Committee who is more ignorant of what a gas field looks like than I am. Nevertheless, we have to deal with these principles as best we can, and I have found it very difficult, in reading carefully everything that has been said in another place on this issue, to understand why the Government seem to be so totally wedded to this concept. I can well understand that those who are engaged in producing and selling gas should say to the Government, "We do not like interference". They would, would they not? I would be surprised if they gave any other answer. Of course they would not like to have the director concerned in their commercial freedom. But I do not regard that as a conclusive argument. Therefore, I hope that the Minister will think a little more about that side of it.
I know that I cannot make any progress against that tonight. I realise that that would be a breach of a principle which the Government have treated as a hallowed principle up to this point. Nevertheless, it is very difficult for me to be persuaded by it. If my noble friend Lord Ezra, who knows a million times more than I do about this, will tell me he is persuaded, then I shall realise that, as usual, I am wrong. But at the moment I am not persuaded and may have to come back to that part.
As to the other part, the noble Lord the Minister has been good enough to say that we are really pursuing the same objective and that it may be the case that the Bill already provides for this, but that, in any event, he looks upon it with sympathy. In those circumstances, what I must do is to repeat my gratitude to the Minister, say that I shall be very precise in reading in

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Hansard what the noble Lord has said, and come back again at Report stage with something which I hope will then be completely acceptable. In those circumstances, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord Harris of High Cross Lord Harris of High Cross moved Amendment No. 112:
Page 22, line 1, leave out subsections (5) and (6).
The noble Lord said: I beg to move the omission of subsections (5) and (6) of Clause 19 as unduly fettering the discretion of the regulator. I especially invite a sympathetic response from the Minister, because I have been somewhat inhibited in moving some earlier amendments by a constitutional disinclination to talk in my sleep. I commend this amendment also as something of a novelty, because where many of the proposed amendments might at least be thought to hamstring the proposed British Gas, or even to obstruct its commercial operation, this amendment simply seeks to check possible abuses of power in the sovereign interests of the consumer.
The problem here arises because the Government, it is thought in deference to that formidable axis of Sir Denis Rooke and the Secretary of State, have failed to separate the gas trunk pipelines as a common carrier of bulk supplies, which could have been done technically feasibly by vesting them in a public company or, for that matter, in a private regulated company. Instead there are elaborate provisions for competing suppliers to be given the right to use Sir Denis's pipeline and the whole question is: on what terms will this access be forthcoming?
It is quite clear that this proposed integrated monopoly could set its charges too high, thereby seriously impeding or distorting competition from independent suppliers. The regulator therefore has the indispensable task of seeing that British Gas does not so abuse its enormous power. The objection to subsections (5) and (6) is that they improperly restrict the judgment of the Director of Ofgas in deciding the fair terms of access to the trunk pipelines. The effect of this amendment would simply be to permit the director to assess the terms on which gas is carried and to do so on the single-minded criterion of his general duty to promote competition.
If British Gas is to be regulated by an independent watchdog of the stature of Professor Carsberg of Oftel, he does not need all this gobbledygook in subsections (5) and (6). He will know the facts, he will know the costs, he can obtain information and he can work out for himself whether Sir Denis's terms are consistent with fair competition.
I am encouraged because the Minister has just said, in resisting Amendment No. 111A, that the director must have some important discretion. We can surmise that these subsections were inserted, like, I am afraid, so much else in this Bill, to suit the convenience of the present chairman of British Gas. That may be an important object for the Secretary of State to uphold, but it need not bother this Committee too much and
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its seems to me that we should have no hesitation in removing these unnecessary trimmings to serve the best interests of the consumer. I beg to move.
Lord Belstead: I appreciate that the noble lord, Lord Harris of High Cross, is seeking to remove the new principle which we have included in the Bill to guide the director in setting common carriage charges to put into practice, in effect, the recommendation of the Select Committee on Energy in paragraph 47 of their report, that charges may in some circumstances be related only to short-run marginal costs.
The noble Lord gave his views as to why these two subsections were put into Clause 19 and perhaps I ought to give the Government's views as to why Clause 19 looks as it does. In giving to the director the task of settling charges for such use by third parties of British Gas and any other public gas supplier's systems. the Government believed it would be right to set out some firm guidance, which was not necessary when the provisions were administered by my right honourable friend. The guidance which we have included is to the effect that third parties should pay enough to cover an appropriate proportion of the costs incurred by British Gas in administering, maintaining and operating its pipeline system, and an appropriate proportion of the return achieved by British Gas on the capital value of that system (including the return which it will use ultimately to replace the system; that is, to cover depreciation). The appropriate proportion should, as the clause makes clear, be set so as to take proper account of the use by the third party of the British Gas system and any capital payments made under Clauses 20 and 21 for specific alteration to the system.
I hope that that does not sound like gobbledygook. It is, I think, based on a very simple principle, that third parties should have access to British Gas's pipeline system on the same terms as British Gas itself. This will provide a fundamental equality between British Gas and the third party which will allow them to compete on equal terms—and it is this equality, of treatment for which we are aiming and which the noble Lord, Lord Harris, with whom I so often agree, is in this case trying to do away with. I hope that I have explained the reasons why I do not like the amendment; indeed, fundamentally, the Government do not like it.
Lord Diamond: I wonder whether I may trouble the Minister for a little more information. I follow the reasons which the noble Lord has given for seeking to remove these two subsections and I follow the Minister's explanation of what is involved in them. The Minister said this means that the third party would be on equal terms with a public gas supplier in supplying gas as to the cost of carriage. What I want to ask him, if he can answer, is this. By the time you have included all these costs, charges, proportion of depreciation and all the rest of it, are you making it commercially impossible for the would-be competitor to compete?
I do not know what is involved. The difference between what the noble Lord, Lord Harris of High Cross, has in mind and what would result from a strict

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application of these two subsections might be small or might be large. It might be small or might be of such a size as to affect the transaction contemplated in such a way as to make it not only commercially unattractive but impossible. I am asking the Minister to say whether, if you have included all these costs, you have really made the possible competition impossible.
9 p.m.
Lord Belstead: I must confess that I thought the noble Lord was going to say, "Is it really unfair on British Gas?", which would be offering the facility for, as it were, no profit; but that is not the question the noble Lord asked me. The noble Lord has asked me about the equality of terms so far as the other supplier is concerned. I am advised that it will not be commercially impossible under our proposals for the other supplier to be able to operate on a profitable basis after the figures are worked out. Our provision will ensure a basic fairness of treatment between British Gas and the third party and we feel very strongly that we have to adhere to that principle.
Lord Diamond: Before the noble Lord, Lord Harris of High Cross, decides what he is going to do about his amendment, perhaps I may say that I am most grateful for that explanation. Of course I am anxious that there should be fairness of treatment, and if possible parity of treatment, but there are times when you have to have regard possibly to marginal costing as opposed to full costing in making a commercial activity possible and getting it off the ground. What the noble Lord has said is that he sees no real difficulty in an alternative supplier being able to supply on these terms. We shall be very interested therefore to hear what the noble Lord, Lord Harris, has to say in relation to the Minister's reply.
Lord Harris of High Cross: I do not believe it is very persuasive to say that the Director General of Gas Supply would be unable, in the absence of these piffling subsections, to enunciate, to establish and to justify some form of charging that would meet the normal requirements of parity of access between the corporation, which happens to be left with these installations, and an outside supplier. Of course the director would have to examine all aspects of the cost and the maintenance, and the depreciation and the extension of the trunk pipelines. But to suppose that he needs lecturing about appropriate proportions and how that will be decided seems to be implausible. If we had someone like Mr. Carsberg I would have complete confidence that after due inquiry, after calling for information and discussion, he would be able to produce something where this particular—I shall not say straitjacket—restriction on his discretion might give this monopoly, of which I share the apprehensions expressed throughout our long debates, an opportunity to justify a setting of charges that would on the whole, as the noble Lord, Lord Diamond, said, discourage rather than open the way to competition. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 19 agreed to.
Clause 20 [Construction of pipe-lines]:
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 113:
Page 23, line 10, leave out ("1,500,000") and insert ("10,000")
The noble Lord said: I can do this very briefly—in less than a minute I hope. I do so in the almost sure knowledge that the noble Lord must accept the amendment.
As noble Lords will realise, this amendment refers to the scale of the map which under Clause 20 has to be provided to,
"specify the points between which the proposed pipe-line is to run and be accompanied by a map (drawn to a scale not less than 1:1,500,000)".
A scale of that size would mean that you would need a magnifying glass to read any place names or anything at all on it. It is not in accordance with town planning maps which are 1:10,000—roughly one inch to the mile. People are entitled to know where these pipelines are to run. I cannot believe, as I said earlier, that the Minister will not accept this as being reasonable to the ordinary public. I beg to move.
Lord Belstead: The noble Lord, Lord Stoddart, appreciates that we were concerned in drafting to achieve a balance between a requirement which resulted in adequate information being provided with a requirement which would not be unduly or unreasonably burdensome on British Gas. We decided on the scale which is in the Bill. However, in the space of only a very short period of time the noble Lord has been so persuasive that I feel I can do no more than move fairly rapidly towards the position which he has taken up.
I therefore should like to give an undertaking that I will look into the matter further and will do my best to come to the conclusion that a larger scale map will be appropriate. I cannot say that it will be exactly the scale which the noble Lord has put in his amendment, but I give an undertaking that I shall contact the noble Lord before the next stage of the Bill, hoping to bring forward an appropriate amendment for Report stage.
Lord Stoddart of Swindon: I can only thank the noble Lord for his generous response to the amendment. I look forward to hearing from him. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Diamond Lord Diamond moved Amendment No. 1 13A:
Page 24, line 35, after ("so") insert ("to consult the local planning authority and").
The noble Lord said: Clause 20 deals with the construction of pipelines. Subsection (7) says:
"Where the Director proposes to give directions … it shall be his duty before doing so to give to any person whom he proposes to specify in the directions",
certain particulars and an opportunity of making an application.
It does not say that he should consult the local planning authority. That seems a quite obvious action that he would naturally want to take; indeed, it would

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be almost the first thought that would come into his mind. I have therefore drafted this amendment in order to give the Government an opportunity of explaining why on earth the director will not be required to do the obvious. I beg to move.
Lord Belstead: It is of course the case that British Gas as a public gas supplier will have statutory supply and other obligations. In order for it to be able to fulfil those obligations, it is necessary for British Gas to have corresponding rights and privileges.
One is its special position in relation to the laying of pipes under the general development order. I am not sure from his words whether the noble Lord is aware that it is a condition set out in the general development order that eight weeks before the commencement of operations for the laying of a high-pressure pipeline, British Gas must give notice in writing to the local planning authority of its intention to carry out that development, identifying the land under which the pipeline is to be laid.
In deciding whether or not to give a direction under Clause 20, the director must be satisfied that a demand exists and that the route will be substantially the same as that proposed by the public gas supplier. Those are similar to the requirements of the Pipe-lines Act 1962 and are simply designed to avoid the unnecessary proliferation of pipelines. For those reasons, with respect, I believe that we have enough under the general development order to achieve the objective for which the noble Lord, Lord Diamond, is aiming. I hope that he may feel the same.
Lord Diamond: I am grateful for the consideration that the Minister has given to this matter. Will he help me further by saying where the general development order is to be found in the Bill?
Lord Belstead: It is the Town and Country Planning General Development Order 1977. It is part of that.
Lord Diamond: Then it is all part of the Bill, or does not need to be part of the Bill because it is in a statute that has continuing relevance?
Lord Belstead: Yes. The noble Lord, characteristically, has got the better of me on this. I normally brief myself as to what it is that carries on the statutory relevance. I have to admit to the noble Lord that in this particular case I cannot put my finger on the provision that does carry on the statutory relevance. I believe it is simply that the GDO continues—no, I must not say that. I do not know what it is that carries on the statutory relevance. If the noble Lord will forgive me, I shall find that out and will give him the information later.
Baroness Seear: Would the Minister accept that it is most reassuring to be told by a Minister that he does not know?
Lord Brabazon of Tara: But now he does know.
Lord Belstead: By one of the marvellous ways by which Ministers suddenly do know something, I can tell the noble Lord, Lord Diamond, that the GDO is an order under the Town and Country Planning Act 1971, and that of course remains in force.
Lord Diamond: My understanding then is that it is an order, and so it may be treated as all orders may be treated, and it may be revoked—
Lord Belstead: Yes.
Lord Diamond:—without any further reference to this Bill. As I feared, therefore, one is in a less strong position than one would be if the provision were incorporated into the Bill itself. We are back in a situation that the noble Lord was good enough to recollect. We are all right as matters stand, but circumstances change.
In this particular case, the circumstances can change without the director having any control over the situation. It is a separate statute and an order under a separate statute, and the relevant Minister who has the power to revoke such an order can presumably do so, perhaps for reasons not connected with the particular cause in question. I do not really think we can say that we are very happy about the situation. Does the Minister have any further reassuring recollections to give the Committee?
Lord Belstead: Strangely enough, I have. The order is subject to parliamentary procedure under the Town and Country Planning Act 1971. Therefore, I must say that the noble Lord is right that the GDO, as it is known, is liable to change. However, where I hope the noble Lord can take encouragement is that there is a parliamentary procedure necessary in order to change it.
Lord Whaddon: I must admit that I find it less than satisfactory that on a necessary protection for the public suggested in this amendment we are told that protection is provided by another Act. That Act can be changed without the director knowing anything about it. It is distinctly unsatisfactory and I hope that the noble Lord will admit that the amendment provides a necessary protection in the public interest.
Lord Belstead: I will gladly look at the point to see whether it is necessary on the Government's side to meet the points made by the noble Lords, Lord Diamond and Lord Whaddon, but that will be without commitment.
Lord Diamond: I am grateful to the noble Lord the Minister. He has made it clear that Parliament has to be involved. If we are sure about that I agree it is a measure of protection. I hope the Minister will nevertheless agree that this exchange of views has been worthwhile. I am grateful to him for his undertaking and in those circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.15 p.m.
On Question, Whether Clause 20 shall stand part of the Bill.
Lord Diamond: At this point, when we are considering clause stand part, the Committee has an opportunity of asking questions concerning several issues arising in the clause where the meaning may not be clear and where, so far as we on these Benches are concerned, we should like greater clarification in order to be quite sure as to whether we need to take further steps on Report.
I am bound to say that it will be quite impossible for us, within the time limits imposed, to raise these questions on clause stand part, both now and in subsequent cases where I have given notice that clause stand part will be opposed. I can speak only for myself and my colleagues on these Benches but I felt that I must make it absolutely clear that the reason why I am not going to pursue any questions on this clause or, indeed, on Clause 22 stand part is because of the pressure of time in keeping to an agreed time limit.
Clause 20 agreed to.
Clause 21 [Increase of capacity etc. of pipelines]:
Viscount Hanworth Viscount Hanworth moved Amendment No. 113B:
Page 25, line 33, leave out ("may").
The noble Viscount said: This is an amendment on which we will certainly not divide. It is simple and all contained in Clause 21. The amendment covers modifications to public gas mains at the request of persons other than the supplier. The director has certain obligations in those circumstances.
As it stands the Bill states "may" and we maintain that it would be more appropriate to have the word "shall"; but by simply deleting the word "may" that objective is achieved. I am interested in finding out why the Government do not think that in the circumstances the director should exercise his authority as given under the Bill. I beg to move.
Lord Belstead: I should first like to get a technical point out of the way. The amendment would require the director to give a direction that a modification be made if competition is facilitated, whatever good reasons the public gas supplier may give when he is consulted on the application for that modification not being made. I do not think that can be right.
The clause deals with several matters and it may be that the public gas supplier will have views which he will want to put to the director. While competition is important there are other factors which the director might have to weigh against it, such as safety. Therefore surely he must be allowed some discretion to take into account what the public gas supplier has to say.
However, if I may briefly return to the substance of the amendment which the noble Viscount moved, in the same way as in Amendment No. 111B, the director already has his competition duties under
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Clause 4, which requires him (under Clause 4(2)(d)) to carry out his functions, which again include those under Clause 22, in a way which is best calculated to promote effective competition in supplies to non-tariff customers.
Therefore, I suggest that the point is essentially already covered by the Bill. However, my main reason for being concerned about the amendment is the one that I gave previously. I think that it is inevitable that in encouraging competition the director will be in a position in which he will have to weigh the desirability of competition against other factors in this particular clause.
Lord Swinfen: I do not think that when he moved the amendment the noble Viscount said that he was going to speak to any other amendment. If this amendment is carried it makes absolute nonsense of the English in the clause. He has not referred to any other amendment, and I think quite honestly that he is wasting the Committee's time.
Lord Diamond: If I may say so on behalf of my noble friend it is a very great help to those of us on this side of the Committee who carry great responsibility that my noble friend was willing to step into the breach and move the amendment. He may not have had time to see that it is proposed in the grouping of amendments that this amendment (No. 113B) should be taken with Amendment No. 113C. If he did not say so in introducing the amendment it was merely a slip of the tongue. I am sure that anybody who is as generous-hearted as the noble Lord who has just spoken—and I have good reason for saying that and I recollect it well—will not wish to pursue such a slip of the tongue.
Viscount Hanworth: I am not entirely satisfied with what the noble Lord, the Minister, has said because if "may" is deleted from that part of the amendment, one is still left with another "may" in subsection (1) above it, so one is not really tying it down. Nevertheless, I do not think it is a point that I wish to pursue, certainly not at this time of night, and therefore I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 113C not moved.]
Lord Diamond Lord Diamond moved Amendment No. 113D.
Page 25, line 43, after first ("the") insert ("marginal")
The noble Lord said: I beg to move this amendment. Page 25, line 43 is part of the section dealing with an increase of capacity of pipelines and directions under subsection (2) may be given which may:
"specify the sums or the method of determining the sums which the Director considers should be paid to the public gas supplier by the applicant for the purpose of defraying the cost of the modifications".
I quite agree that there should be fairness in dealing with both the applicant and the public gas supplier. But, as in a previous discussion that we had, the Government have thought it right to include in the Bill detailed requirements that full costs should be charged

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to the applicant—that is, depreciation, a share of capital costs and everything that might be included and which under any possible calculation should be so included. Nevertheless, in this case, where there is a small additional piece of work to be done, I think that it would not be inappropriate that the only cost to be charged should be the marginal cost of the modifications.
I know that that is perhaps an unusual thought, but it would leave the public gas supplier in no worse position than he was in before the modifications were made and it would achieve what we are all trying to do, which is to assist to a very marginal extent the service to the consumer and the possibility of competition. Therefore, I shall be interested to hear the view that the Government take of restricting the defraying of these costs to the marginal cost of the modifications. It is for that rather probing reason that I beg to move.
Lord Belstead: The provision for payment that is in Clause 21, which this amendment is probing, in fact is almost identical with the one in the Petroleum and Submarines Pipe-lines Act 1975 where an applicant makes a similar application in relation to an offshore pipe-line. I would have thought that where modifications are to be made solely for the benefit of a third party, it is really only fair that the third party should pay the full costs. In fact, in most if not in all cases the full costs and the marginal costs will be the same. Where the pipeline system is already in existence, which is the circumstance catered for in this clause, and the additions are for the benefit of the third party, marginal and full costs of modification are the same, or, if not the same, much the same. I hope that that answers the point that the noble Lord is probing.
Lord Diamond: Yes, I am grateful to the Minister; indeed it does. I had feared that the marginal and the full cost would be so different as to inhibit that activity completely. The noble Lord assures us that they will be quite similar. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 21 agreed to.
Clause 22 [Effect of directions]:
Lord Diamond Lord Diamond had given notice of his intention to move Amendment No. 113E:
Page 26, line 31, after ("19") insert ("(4)").
The noble Lord said: This is a less important amendment, and in view of the time pressure I do not propose to move it.
[Amendment No. 113E not moved.]
Clause 22 agreed to.
Clause 23 [Modification by agreement]:
Lord Stoddart of Swindon Lord Stoddart of Swindon had given notice of his intention to move Amendment No. 114:
Page 27, line 16, at end insert ("and any such representations or objections shall be the subject of a public hearing").
The noble Lord said: Again, in view of the pressure on time, the amendment is not moved.
[Amendment No. 114 not moved.]
[Amendment No. 115 not moved.]
9.30 p.m.
Lord Diamond Lord Diamond moved Amendment No. 115ZA:
Page 27, line 33, leave out ("section") and insert ("sections (Creation of area of alternative supply to tariff and non-tariff customers) and")
The noble Lord said: This is a most important amendment and requires some time to explain it. If I may deal first with the philosophical background from which the amendment stems, there are two views in your Lordships' Committee. There is the view that there should not be privatisation at all because it does not produce competition, and there is the view that there should be privatisation because it is a useful method to encourage an existing nationalised industry and a whiff of competition will be a benefit. I do not believe that we need take one view or the other view absolutely.
We on these Benches believe that it may be possible to find perhaps not a complete halfway house, but to find a method whereby an alternative supplier can supply gas to tariff customers, not in a way to destroy the integrity of the industry that the British Gas Corporation covers, but in a way to make it possible for there to be a means to compare what is being achieved by the public supplier and what could be achieved by another supplier to tariff customers as well as to non-tariff customers; but the point really concerns tariff customers.
At the moment, there is no contemplation in the Bill of any alternative supply to tariff customers. The only way that we ensure that, in my view, is to select an area and to say that for the time being the successor company, British Gas plc, whether it likes it or not, will be under compulsion to license the supply of a suitable smallish area to a licensee who will have a go at making a better job of it than British Gas plc would hitherto have done. When I say, "would hitherto have done" I am contemplating that the successor company shall have five years to settle down, not be disturbed and be able to carry on its business as an integrated whole. Only after that, as the first words say:
"Five years after the transfer date",
there would be designated an area which would be subject to this compulsory licence.
I think that I can best explain the rest of the details by referring to the different subsections of the proposed new clause. As I have already said, the clause refers to:
"Five years after the transfer date".
Of course that is subject to subsections (2) and (3), to which I shall refer. The clause continues, that we shall:
"designate an area … of gas supplied through pipes to tariff and non-tariff customers."
The next subsection states:
"Prior to such designation the Director shall consult the existing public gas suppliers in the area, the Council"—
that is to say, the consumers council—
"and the Local Authorities covering the area."
The director should consult all the relevant authorities prior to such designation and not after it. and after listening to complaints. The subsection also states:
"The designation shall be subject to the approval of the Secretary of State".
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So we have the great protection that no one can deal with this irresponsibly; the Secretary of State would have to be satisfied. But I have had the temerity to add the words:
"which approval shall not be unreasonably withheld."
Of course we could not contemplate it with the present Administration, but a future Administration may have such a dogmatic approach to privatisation that they would not consider allowing any competition of this kind, and therefore one has to say:
"which approval shall not be unreasonably withheld."
There is no difficulty about the courts translating, defining or dealing with "unreasonable" in any particular context.
The next subsection refers to the area of the chosen gas supply. It states:
"The area shall in all respects be fairly typical"
and "fairly typical" means typical in all fairness, so there we have an area which is capable of serving as a measuring rod for the efficiency of the rest of the United Kingdom. The area should be fairly small so as not to interfere unduly with the gas supplier's business. Indeed, it suggests that the area should contain no more than 2 million tariff customers out of a total of 16 million.
So the probability is that, at the end of the day, you would have an area of about 10 per cent. of the total tariff business of the public gas supplier. You would have therefore a fairly typical area, large enough to be viable and small enough so as not to interfere with the intergrated business of the successor company. Because it would he viable, judgments could be made as to comparative efficiency, comparative cost, comparative service and so on. That is the reason it has to be fairly typical. If it were not typical. so many adjustments would have to be made in the measurements and in the arguments that no conclusion could ever be reached as to the reasons why, in this particular area, costs were less and service was better, or whatever the case may be. It has therefore to be fairly typical and not too large, according to the circumstances I have described.
The next subsection says that the director, after fully consulting the bodies referred to earlier, is to,
"determine the terms of a licence or licences under which a licensee or licensees shall have the exclusive right to supply gas through pipes in place of the existing supplier or suppliers".
It is saying to the successor company, "Fine, you have had five years to settle down and to show your best paces. We are now going to insist that one small area shall have the right to compete in the sense of having your exclusive rights, but in that area only, and being able to show whether it can do better than you have done or better than you are going to do in the future in other comparable areas".
The words of the next subsection—without prejudice to the generality of the terms referred to in subsection (4)—mean that you have to have other things as well, but the important things are the starting date, the period of the licence, the method of arranging extensions of the period and the conditions under which such a licence could be revoked.
The amendment goes on to say that such a licence should be incorporated into a written agreement to be entered into between the old and the new suppliers; that is to say, the successor company, British Gas plc, would then be required to enter into an agreement setting out all these terms with the new licensee, and both would be bound by these terms and have rights and obligations to one another.
Subsection (7) says that the licensee or licensees shall be such persons who have,
"satisfied the Director of their suitability in all respects to carry out the terms of the licence".
That is very important. The subsection makes absolutely sure that the director himself is satisfied that the proposed new licensees are likely to be able to carry out responsibly everything that they should carry out in terms of financial responsibility, financial probity, technical capacity. managerial ability and all other requirements. If he is so satisfied, the licensee or licensees would be,
"such persons or bodies as … offer the highest bid in open tender in respect of an annual licence fee payable to the licensor, such fee being not less than 4 per cent. of the value as determined by the Director, of the capital investment by the licensor in the area".
In other words. the licensor, British Gas plc, would not lose out at all under this compulsory but maybe temporary licence which it is required to grant to a licensee. Of those people who are totally fitted to do this, the licensee would be the person or body who offers the highest licence fee in open tender or competition. Noble Lords can therefore imagine that British Gas plc would be receiving 6 per cent. or more for the capital invested in this area.
"In carrying out their functions under this section the Secretary of State and the Director shall at all times have regard to the need for there to be a viable area of gas supply which can serve as a comparison with the services supplied and the charges made by public gas suppliers in the rest of the United Kingdom".
That is the philosophy incorporated in that one subsection.
Subsection (9) says:
"For the sake of removal of doubt it is hereby declared that any provision of this Act affecting public gas suppliers shall have effect with regard to suppliers licensed under this section as to any other supplier".
Although, without saying so. I had assumed that would he the case, I have included the usual wording to remove doubt and to make it clear therefore that the public will be protected in every possible way under this licence as it would be under the authorisation granted in the first place by the Secretary of State to British Gas plc.
I know that is perhaps an unusual amendment. It is to deal with a very well accepted point, namely, that we would all like to see a measure of competition if we could only think of one. It is very difficult to do so when a government insist on privatising—in the way that they have done—and turning a public monopoly into a private monopoly. Nevertheless, it seems to us that along this road we might find a measure of competition—a way of having a viable area of gas supply which can serve as a comparison for the services supplied and the charges made by public gas suppliers in the rest of the United Kingdom.
That would not he direct competition, in the sense that there would be two suppliers in the same area. We
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know it is not common sense to say that one should have two lots of pipes running down the same street. That cannot be a viable proposition. But one can do the next best thing. One can create a licensed area in which a new licensee can behave in such a way as to show that the rest of the kingdom is or is not being well served. This is an amendment which is worth careful consideration. I beg to move.
9.45 p.m.
Lord Belstead: The amendment of the noble Lord, Lord Diamond, deals with the franchising of areas for gas supply for a five-year period of franchisement. It is an interesting concept but I feel that it suffers from two drawbacks. The first derives from the fact that the supply of gas is an inherently long-term business. The main physical asset of any gas utility is its network of pipes sunk into the ground, some of which have lives of 50 years or more. The main commercial assets of a utility are its gas supply contracts with gas producers which are also very long term, sometimes 20 years or more. It is difficult to see how a five-year franchise to supply could fit in with the realities of such a business. That is one difficulty. One would have to do more than tinker with the five years to overcome it.
The other difficulty that the Government see is that we do not agree that franchising gas supply to the highest bidder is likely to be the way to achieve the best and safest supply of gas to the consumer. The duties we have set out in Clause 4 to guide my right honourable friend and the director in their functions, including authorising supplies, run a great deal wider than simply obtaining the highest price, and cover the interests of consumers, safety, and a number of other important questions that we have discussed for many hours on this Bill and about which noble Lords feel deeply.
Those important questions provide the right framework for gas supply and not the short-term economic gain of the highest bidder to the seller. I do not want to make it sound as though the Government are not interested in the concept here. My mind goes back to an interesting local heating scheme that I saw, which was one of many, in Denmark some time back. But it would not be comparing like with like to say that what I saw on that occasion is the concept here. I here are great difficulties with this particular concept of franchising. I am sorry that there are because the idea is interesting. I have put forward the two main drawbacks as the Government see them.
Lord Ezra: If the noble Lord feels that the scheme as explained so clearly by my noble friend Lord Diamond contains certain difficulties, would he however be prepared to consider the principle of franchising at some later date? The whole object of this discussion is to see whether, over a period of time, some greater measure of competition can be introduced. We have already dealt with the question of the pipelines being made available to other suppliers. We are here talking about the possibility of introducing the concept of franchising the gas supply in a given area. Would the noble Lord be prepared to give some consideration to that broad concept as opposed to this detailed proposal before we come to Report?
Lord Belstead: If I may say so without appearing unfriendly, the ball is in the court of the noble Lords whose concept it is. I have tried honestly and openly to say what I think are the two drawbacks to the concept, and they are considerable drawbacks. It would be up to the noble Lords opposite to decide whether they could overcome those drawbacks in devising some alternative amendments.
Lord Diamond: I am delighted with the answer that the Minister has given, because he could not have picked on two difficulties easier to explain away. They are the easiest ones in all the subsections in the Bill. His first difficulty is that the franchise would be for a period of five years, I think he said, Why he said that I do not know, because the only reference to five years is in subsection (1), which says:
"Five years after the transfer date referred to in section 40 the Director shall, subject to … designate an area,".
I put in a protective period of five years because it is only reasonable, after all the upheaval caused by the Government and nobody else of changing from a public monopoly to a private monopoly, that the new public gas supplier needs time to settle down.
If the Minister thinks that it needs more than five years to settle down, so be it. Let it be 10 years, or whatever period he likes. That is not a major difficulty. All we are considering is that at some time, as my noble friend Lord Ezra said, there should be the possibility of franchising so as to measure service to the consumer and efficiency in production. I see no other reference to five years. Indeed, subsection (5) says:
"such licence"—
the franchise we are talking about, among other things—
"shall define the starting date, the period of the licence".
If the noble Lord says that this idea is worth considering if one has a licence for 25 years or a licence for 50 years, so be it. There is nothing in the proposed amendment which limits that freedom of thought at all. The subsection of the amendment continues:
"the method of arranging extensions of such period".
The Government think that this would be a tenable proposition worth trying out if, after X years, after the new supplier had settled down, one had a franchise for, say, 25 years (as the present one is and as the present one intended in the authorisation is) renewable for further periods of 25 years. That would surely cover any long-term aspect which very properly the Government would want to contemplate. I hope the Minister will agree that if he reads the amendment a little more closely—I admit he has not had all that much opportunity to read it because inevitably in these circumstances we have to table amendments at fairly short notice—he will come to the conclusion that there is no difficulty whatever in his first barrier to acceptance; namely, that he thinks the franchise should be for a period of longer than five years.
Secondly, he says, "We do not think that the licensee to be chosen should be chosen on the basis only that he is the highest bidder". No, he is quite
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right; neither do we and neither does the wording of the proposed amendment. Subsection (7) says that,
"The licensee or licensees"—
if such be a group of people—
"shall be such persons … as, having satisfied the Director at their suitability in all respects to carry out the terms of the licence".
So the body of people who are possible competitors for this licence can only be persons who have satisfied the director in whatever way—however awkward he wants to be, however specific he wants to be, however careful of being satisfied he wants to be—
"of their suitability in all respects".
Good heavens, that is a high enough criterion! In any respects that the Government can think of the applicants will have had to satisfy the director—be it in terms of financial stability, integrity, capacity, experience, proposed members of the board, or the articles and memorandum of the franchisee. They will have had to satisfy the director on anything that the Government care to think about and the director wants to be satisfied about. That elite body of persons who have satisfied the director in all respects will then compete with one another to offer the highest bid in open tender in respect of an annual licence fee.
If the Government think that this should not be open to public tender and they prefer to have the Secretary of State choose, I do not suppose there is anything particularly wrong with that. But we thought that the Government would prefer to adopt the more regular commercial method of going out to open tender with the highest bidder, provided that he was perfectly satisfactory in all other respects.
Those are the only two points which the Minister raised as creating great difficulties in contemplating what we believe is a major step forward in having a measure, not of competition exactly but of comparison in this field. If I may say one further word to the Government, we do not want to be starting now on a situation in which the Government privatise the supply of gas, are followed by another government which nationalise the supply of gas and are followed by another government which privatise the supply of gas. We have had all that with steel. We want now to enter into a situation in which a Government which starts legislation moving from one system to another system contemplate permanency in the new system that they are evolving.
The noble Lord himself has said that you must contemplate very long-term investment in the supply of gas. I agree. Therefore, the gas supplier has to know that he is likely to have a fairly long run if he runs his business sensibly and well. Here is a method under which we can demonstrate that the public gas supplier is carrying out his activities so well under the new arrangements, under the privatised arrangements, that there is no need to disturb those arrangements.
If you set up a franchise which acted as a fair comparison, a fair measuring rod, and you found after 10 years or 20 years that that measuring rod was showing that the public gas supplier, namely the private monopolist, was doing a good job in supplying a fair service at a fair cost and having regard to the other things in the interest of the nation, there would be no need to alter that situation. Anybody proposing an alteration of that situation would have the onus of

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demonstrating that he was proposing something which could be done better than was being done at the moment.
There is therefore a very solid reason why the Government should look sympathetically at anything which is likely to demonstrate that the private monopoly is being successful. I very much doubt that they will, but that does not matter. Here is an opportunity for doing that. There are many good reasons incorporated in it and there are two difficulties which I hope that I can say fairly do not any longer exist. I hope that the Minister will give it a fair wind.
Lord Whaddon: I think that the noble Lord the Minister has been rather less than his usual generous self in his attitude to this amendment. It is ironic to sit on this side of the Committee and hear Conservative Ministers defending so keenly the very margins of a private monopoly. One would have thought that their promotion of competition and the virtues of competition over the years would have encouraged them to accept this quite modest extension of competition into the field of the new private gas world.
I should like to remind the noble Lord that in other areas where monopoly has been modified in the last decade or two we have seen some dramatic changes in the service to the public. In broadcasting, the introduction of ITV had a most beneficial effect on the service enjoyed by the public. In radio, as well, great imagination has been brought to bear by the private companies in the format of the programmes available to the public. It has really gingered up the old BBC to the advantage of everybody. In airlines, we have seen that the introduction of feeder airlines, of small, private companies on the verges of the big monopolies, has gingered up the service and tended to push down prices to the benefit of the public.
I feel that in this amendment we have a suggestion which could have a similar effect on this new giant private monopoly which the Government appear to be defending so keenly from competition. The only defence of private enterprise surely is competition, if it can be achieved. Those of us on this side are sincerely worried about the possible damage to the public of handing it over as a monopoly to a public limited company. I beg the Minister to be a little more generous towards this amendment and to see the virtues that lie in it.
The company that has been suggested as taking over a small area would have a great incentive to show innovative measures and to give a greater measure of service to the public than British Gas plc. The incentive would be there because at the end of its franchise it would certainly hope to see an extension of its area so that it would cover a larger area of Britain. It would deserve such an extension if it had shown that its service was greatly superior to that of British Gas plc.
Therefore experiments such as the noble Lord himself has referred to—area heating, novel methods of conservation, an extension of the total energy concept that we see in the United States—all these new imaginative margins of technology would be exploited by the new company, in the hope of taking over larger areas at the end of their period. I do beg the noble Lord
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to consider that there are great possible advantages to the public in such a system. I hope he will reconsider this rather mean-minded approach towards the amendment up to now.
Lord Belstead: Very briefly, there is a problem with this which I have not mentioned but which I would have thought must be obvious to all Members of the Committee; that is, the funding of such a franchise. With many financial experts here I shall not launch off into the rapids of that matter, except to say that when the noble Lord, Lord Whaddon, talks about the benefits of franchises in radio and television, of course we are there dealing with assets which are comparatively short lived and comparatively easy to dispose of, compared with the gas industry, where one would be left at the end of a franchise of whatever length with questions unanswered about what to do with the gas which has been contracted for ahead and what to do with the pipes which have already been put into the ground. Because of these difficulties we are seeking to encourage competition in the Bill through improving the common carriage provisions.
This has been an interesting exchange, but I confess that I honestly do not think the concept will work in the gas supply industry.
Lord Diamond: We are under very severe time constraint. Obviously it is not possible to expect a Minister to take on board a new idea immediately. The Government will need time to consider this. The further diffculties he mentioned I could deal with just as readily as I dealt with the earlier two. There are no problems whatever about finance where you have a franchise; no problem at all about providing the necessary finance when you have a franchise. The difficulty of knowing what to do with contracted gas at the end of the day is really of such minimal proportions that I am sorry the Minister thought lit to raise it. It is just like saying: what do you do when you transfer a business and you have a few outstanding debts? Or, what do you do when you transfer the ownership of a house and there are rates unpaid? Of course you make provision for that.
We attach considerable importance to this amendment. In privatising British Telecom, the Government provided for a measure of competition in Mercury. In this one they have provided for no measure of competition whatever. We feel very strongly about it and we feel the Government have not given themselves time to consider it with the usual care they would otherwise bring to bear.
We do not want to press this to a Division at the present time. I seems obvious to us that the lack of numbers on the other side might embarrass the Government considerably if a Division were called, and we certainly do not propose to do that. Nor do we propose to leave the matter. We shall come back to it on Report stage. I shall take advantage of what the Government have said in order to improve the situation and with that in mind I hope the Committee will give me permission to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 23 agreed to.
[Amendment No. 115ZB not moved.]
Clause 24 [Modification References to Monopolies Commission]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 1 15A:
Page 27, line 34, leave out ("may") and insert ("shall, at least every five years,")
The noble Lord said: I rise to move Amendment 115A. I shall do so briefly in light of the fact that we are running out of time. This brings us back, I am afraid, to the question of overall control of the privatised monopoly with which we are dealing. Our view is that we have taken a lot of trouble to argue with the Government about the proper method of control. We have spent a lot of time discussing the role of the director and the role of Ofgas, and the Government have—I think regrettably—rejected our amendments, and indeed the amendments moved by the noble Lords on the Alliance Benches particularly in respect of a commission to supervise the whole industry.
Therefore, it is slightly in the nature of a last ditch attempt, if I may put it like that, that I move this amendment asking that the director should be required every five years to refer the authorisation to the Monopolies and Mergers Commission. The Monopolies and Mergers Commission themselves are directed to refer back to Clause 4 in deciding whether there should be any modifications.
The object of this exercise is to make sure that every five years an independent statutory commission, such as the Monopolies and Mergers Commission, should have the opportunity of reviewing the status of the industry, where it is going, whether it is satisfactorily handled, whether the monopoly is behaving itself, whether there is any form of even tacit collusion between the privatised British Gas and the director, so that the public can see once every five years an independent assessment of what is happening.
It is a simple amendment and does not seem to me to create any particular problems for the Government; but it is one on which we feel particularly strongly because we are not happy with the relationship between the director of Ofgas and privatised British Gas. We should like to see a review every five years, and I think that although in our view the Monopolies and Mergers Commission is not the ideal body, at least it is the body specified in the Bill and it should have a chance to undertake the task. I beg to move.
Lord Belstead: The noble Lord, Lord Williams, has explained that this amendment would require a reference at least every five years to the Monopolies and Mergers Commission. It does not, in fact, make clear what particular aspect of supply to tariff customers would be the subject to the reference. But as I understand the noble Lord, it would be of a general nature to take stock of the way the monopoly, as the noble Lord said, is working—
Lord Williams of Elvel: I am grateful to the noble Lord and perhaps I can help him. It is, of course—but it is not grouped with—part and parcel of Amendment No.118 and successor amendments, and it was in that spirit that I spoke.
Lord Belstead: I follow the noble Lord and I apprehend we shall be at those amendments soonish. Looking at this amendment, my reaction is this. When all is said and done, the provisions of the Bill as a whole will mean that the director will need to keep under review the activities of a public gas supplier and to consider whether, in the interests of achieving the goals set out in Clause 4—incidentally, a matter to which we can come back again under Amendment No. 118A, including the interests of consumers and promoting gas safety—the authorisation's conditions ought to be modified. If the director comes to the conclusion that these Clause 4 goals would be better achieved by some revised provision in the authorisation, then he will, if he cannot agree a change with the supplier, make a reference to the Monopolies and Mergers Commission under Clause 24.
I know that the noble Lord, Lord Williams, feels very strongly about this. He certainly touched on this in his Second Reading speech and touched on it again earlier on, but now that we come to the correct part of the Bill the noble Lord is moving the first of the amendments which are in this area, and the one which has this particular effect of a five-year review period is the one we are debating now.
I just have to say that we feel that the right of the director to keep under review and to go to the Monopolies and Mergers Commission if at the end of the day he is not satisfied is a better way to ensure that consumers are fully protected than imposing a rigid requirement for some kind of review every five years.
May I just add one other point? I do not think that politics ought to enter into this and, certainly, the noble Lord, Lord Williams, has moved the amendment entirely objectively. The noble Lord will understand me when I say that, with the political philosophy that I hold, I really feel that this would come rather close towards piling regulation upon regulation, when what we are trying to do in this Bill is to give British Gas as much freedom as is possible within, of course, the constraints of the Clause 4 duties. It is for those reasons that I feel I cannot accept the amendment.
Lord Williams of Elvel: I fully accept the noble Lord's reply when he says that there is a political difference between us. He thinks I am piling regulation upon regulation. I am simply trying to regulate a private monopoly in the most sensible possible way. He is trying to offer freedom to a private monopoly in the least obtrusive way. I understand that there is a political difference between us.
I am afraid that I cannot accept the noble Lord's arguments. I think there is a very clear political divide. We on this side of the Committee, and certainly on these Benches, believe that every possible means should be employed to ensure that a private monopoly acts in a responsible and sensible manner if it is to be privatised. However, having said all that, and with the promise that I will come back on this matter on Report, at this stage I will not pursue this amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Lord Renton): Before calling Amendment No. 116, I have to point out that if it is agreed to I cannot call Amendment No. 117.
10.15 p.m.
Lord Harris of High Cross Lord Harris of High Cross moved Amendment No. 116:
Page 27, line 39, leave out ("to tariff customers")
The noble Lord said: I beg to move the amendment, which seeks to remedy what appears to be unfair discrimination against contract customers. This part of Clause 24 gives the director power to refer to the Monopolies and Mergers Commission a practice which may operate against the public interest, and it is a practice relating to "the supply of gas by a public gas supplier to tariff customers". I wish to remove the words "to tariff customers" and thereby to extend this protection of the consumer to all the customers of this large-scale monopoly.
As it stands at the moment the regulator can make a reference to the Monopolies and Mergers Commission only if it relates to tariff customers. He may well wish to strengthen the regulatory regime for contract customers where the scope for monopoly abuse or abitrary conduct is no less likely and no less damaging and distortionary. If he does, he would be required to go through the cumbersome, long drawn-out procedures of the Fair Trading Act. Amendment No. 116 would remove what I think is an unjustified distinction between tariff customers and contract customers so that the regulator can propose changes to the licence or a direct reference to the Monopolies and Mergers Commission on the contract market.
I understand that with regard to British Telecom, Oftel can appeal directly to the Monopolies and Mergers Commission. I see no reason why Ofgas should not have a similar power to discipline possible monopoly, abuses. If this amendment were to find favour there are consequential amendments. Amendments Nos. 127. 128 and 130, which sink or swim with it because they are necessary to give the Gas Consumers Council the power to refer relevant matters to both the Director General of Gas Supply and the Office of Fair Trading if the discretion of the director is to be extended in the way I have suggested.
It is not sufficient defence of the Bill as it stands to say that unforeseen abuses of monopoly power can in due course be dealt with by the Office of Fair Trading. We have to acknowledge that the Fair Trading Act is a slow process which may lead on in due course to a Monopolies and Mergers Commssion judgment after two or three years. If the Government accept this amendment, the prospect will be, as with the modification of the British Telecom licence, that an abuse in the contract market as well as in the tariff market could be ended within a shorter, predetermined time limit. Should such abuses be suspected it seems to me helpful that uncertainty should be removed and a judgment should be forthcoming as swiftly as possible.
I would only say—and I echo a refrain which has been heard throughout these long discussions—that this Bill already smacks too much of monopoly power. It must raise the spectre of the natural abuse of that
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power by those in charge of the monopoly. This amendment would usefully widen one small aperture of competition. It would be welcome to all except for those elevated monopoly-mongers who, I fear, have had too much of their own way in shaping this measure. I beg to move.
Viscount Hanworth: This amendment and my own amendment, Amendment No. 177, have precisely the same object in view but I must start by declaring an interest in so far as I have a connection with the EMA trade union, which is very closely connected with the electrical power industry.
The purpose of the amendment to Clause 24 is to widen the powers of the director general, in relation to references to the Monopolies and Mergers Commission, to allow him to investigate matters relating to contract gas. In the Telecommunications Act 1984, as has already been pointed out. the Director-General of Telecommunications has jurisdiction over the whole field, and it is not apparent why, at least in parallel with the Secretary of State, the Director General of Gas Supply should not be treated in the same way. That change would also mean that the director general could put forward modifications to authorisations dealing with contract gas. On present drafting, he could only do that for a modification by agreement.
There is already proposed Condition 5 dealing with contract gas. It is considered very weak as it refers only to the maximum price of gas, and the main concern of other energy providers and of other public gas suppliers is that the successor company to the British Gas Corporation might indulge in predatory pricing policies in the area of contract gas.
It is important to take into account the view of the Select Committee on Energy in another place. I quote paragraph 90 of its summary and conclusion:
"The recommendations we have made in this Report stem form an acceptance, widely shared, that where there is a monopoly, or the threat of monopoly power, there should be regulation sufficient to provide a proxy for the normal disciplines of competition We recognise that this means principally the tariff market. However, we do not believe that this market can be effectively controlled unless the regulator has powers of scrutiny and review over the whole range of British Gas's operations. As a result, in part, of the decision to privatise BGC intact, we have therefore made recommendations which extend his remit and strengthen his powers beyond the directly controlled tariff market. The same logic which led to the control of the tariff market leads, we believe, to the necesssity to offer some protection to those intermediate sized contract consumers which are in fact locked into gas consumption to almost the same extent as the domestic consumer".
What could be clearer than that? That is the recommendation of a Select Committee on which the there is a majority of Conservative Members. At no time was there any distention; all the recommendations were a unanimous decision of the Select Committee. How can the Government ignore its recommendations—in particular, that one?
The Minister in another place argued that there was sufficient competition between the different fuels to keep non-tariff gas suppliers at a competitive level. Probably large consumers could follow the market, except where a process can only use gas—but that does not apply to the smaller firms. We rely to a great extent on such smaller firms for our future industrial success and we all know from history that small acorns make large trees.

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The other argument that the Government have put forward is that action could be brought through the Monopolies and Mergers Committee. What a hope for small companies, who might receive justice long after they have gone bankrupt! It is like appealing to the European Court. I hope that the Government will consider this point. I have put forward very few amendments and this amendment, in my view, and also in the view of those who have given me a brief, is terribly important; not only for them but also for the future of this country. I beg to move.
Lord Belstead: I have listened carefully to the case put by the noble Lord, Lord Harris of High Cross, and that put by the noble Viscount, Lord Hanworth, but what troubles me is that both cases seem to be based on the assumption that there is simply a monopoly power for gas to do what it likes and that there is no competition in the energy market.
We must remember that it has today been announced that there is to be a 3½ per cent. cut in electricity prices for private consumers and a 5 per cent. cut for industrial consumers. Moreover, we are in a position, as everyone knows, where the price of oil is falling and having considerable effects on plans being made by coal and also on arrangments for pricing which need to be made by gas, and certainly the assumptions which need to be made by gas. Therefore with the greatest respect, because I always listen with great care to both noble Lords, I simply do not see how the original premise of the case can stand up. That is my first worry.
The second worry is that the noble Viscount says that he has been advised that the case for the amendment is very strong. We do not have to look very far to find that there are many people who are directly affected by the amendment and who do not agree with the case put forward. Those are people in the organisations involved as purchasers in the contract market. It is a fact that British Gas has a good relationship with its contract customers and I know that the management is determined that it should continue. That is a view which is shared by the CBI and representatives of other specialist industrial users of gas who were consulted extensively when this Bill was being prepared by my right honourable friend.
Competition is the customers' best safeguard in the industrial market. We have therefore sought to strengthen the common carriage provisions so as to provide for better opportunites for competition within gas supply, supplementing competition between fuels. In addition, the authorisation will require British Gas to publish a schedule of maximum prices for the contract sector. But at the basis of it is the fact that those with whom British Gas is contracting do not want regulation in the contract market. Those are the people whom the noble Lord and the noble Viscount are saying this amendment will protect. That is my second point.
The third and, I believe, vital point is that, to be honest, the position between what I am saying on behalf of the Government and the case put forward by the noble Lord and the noble Viscount is not as wide a gap as one might think. In the unlikely event that
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industrial customers need further protection—if competition is not working out properly or if abuse of the market position of British Gas takes place—the Office of Fair Trading will be able to take action through the Monopolies and Mergers Commission. That action will be initiated under the Competition Act 1980 or the Fair Trading Act 1973, and Clause 27 of this Bill provides that modifications can be made to the authorisation as part of an order under those Acts. Detailed regulations to prevent abuse can be extended to contract gas sales if necessary. Intermediate stages, falling short of full regulation, will of course be open to recommendation by the Monopolies and Mergers Commission.
The difference, as I understand it, between the amendment and the position I put forward in reply is that the Government believe that the Office of Fair Trading is the right body to trigger this; not Ofgas as the amendment suggests. Ofgas's experience and responsibilities will be related only to gas. In the industrial energy market behaviour by British Gas surely must be seen in the context of the operation of the wider market and here the Office of Fair Trading has, we believe, the right and wider remit.
I am sorry not to have accepted this amendment. The noble Lord, Lord Harris, has not been able to take part frequently in our proceedings and it is always valuable when he does. The noble Viscount, Lord Hanworth, has been with us all the time and has not put forward many amendments, and to my regret we have not been able to be very forthcoming except on an earlier amendment on the first day of our Committee proceedings, when we accepted the spirit of what the noble Viscount put forward. However, I have to say that, on this particular amendment, though the gap is narrow, I think it is unbridgeable.
10.30 p.m.
Viscount Hanworth: I do not believe in wasting time and so I shall simply say a few words to the noble Lord the Minister. He has of course repeated what was said in another place and he has not really addressed himself to the problem that I mentioned of the smaller firms. The larger firms can probably take care of themselves, unless of course for some technical reason they are committed to using, let us say, gas. It would be a waste of time to repeat what I said earlier. But I very much hope that the noble Lord the Minister will read what I have said and will seriously consider the problem of the smaller firms. I may come back to this question on Report.
Lord Harris of High Cross: I must just add that unlike the noble Viscount I am rather tempted to indulge in a little time-wasting because I think that the Minister's answer, though winningly delivered, is not finally persuasive. Of course there is competition between all the ways by which one might obtain heating. The point is that competition is a good deal imperfect and there are costs involved in shifting supplies from one source to another.
Secondly, the Minister said that the spokesmen for the great interests are not on our side. I am rather glad that they are not. I am not comfortable with spokesmen of large interests. I take entirely the point of the noble Viscount, Lord Hanworth, because those

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for whom the trumpets of the CBI and others sound are not those who stand most in need of this protection.
Finally, the noble Lord says that the gap is not wide because there is a procedure whereby an abuse can eventually be tracked down; but of course that is a time-consuming and long drawn out affair. We are anxious to put in the Bill some power which would really subdue or countervail the enormous authority that will be wielded by the controllers of this monopoly.
The noble Lord, Lord Taylor, asked me particularly to press this amendment and to express his regrets that he is unable to be present in the Chamber and to join us in the Lobby. For the moment I shall beg leave to withdraw the amendment.
Amendment, be leave, withdrawn.
[Amendments Nos. 117 and 118 not moved.]
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 118A:
Page 29 line 4, leave out from ("to") to end of line 6 and insert ("the criteria contained in section 84 of the Fair Trading Act 1973.")
The noble Lord said: It may be for the convenience of the Committee if I also apeak to Amendments Nos. 118B. 118C. 118D, 118E, 118F and 118G.
In the exchange on the previous amendment, the noble Lord, Lord Belstead, pointed out that under Clause 27, to which we shall come, the Secretary of State was entitled to make references to the Monopolies and Mergers Commission under subsection (2)(a):
"order on report on monopoly reference".
He also pointed out that there was a potential reference to the Monopolies and Mergers Commission on the basis of a merger (if there was a merger between the public gas supplier and others), and that an order resulting from a Monopolies and Mergers Commission investigation might result in the modification of the condition of a public gas supplier's authorisation. I think that I am not misrepresenting the noble Lord when I say that he made that point on a previous amendment.
I think that the noble Lord has a logical problem here. The director, when referring to the Monopolies and Mergers Commission under the clause that we are dealing with for a modification of the authorisation, specifies, or it is specified in the Bill as drafted, that the Monopolies and Mergers Commission has to have reference to Clause 4 of the Bill in order to determine what is in the public interest; yet if the Secretary of State makes a reference to the Monopolies and Mergers Commission under Clause 27 (that is, under the Fair Trading Act 1973) the Monopolies and Mergers Commission has to have regard to the criteria under Section 84 of the Fair Trading Act.
Therefore the Monopolies and Mergers Commission finds itself in that wholly schizophrenic position, where, if there is a reference by the director, it has to have regard to public interest as defined in Clause 4 of the Bill, and if there is a reference by the Secretary of State under the Competition Act 1980, it
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has to have regard to public interest as defined by Section 84 of the Fair Trading Act. The two definitions of public interest are of course totally different.
Our first point is that we believe that that logical nonsense should be resolved simply by applying the criteria of Section 84 of the Fair Trading Act throughout. If I may detain the Committee for just one minute, I should like to read through the main paragraphs in Section 84(1). I do not want to read through the subsidiary ones, but some are extremely important, and the Committee might wish to hear them verbatim:

"(a) of maintaining and promoting effective competition between persons supplying goods and services in the United Kingdom;

(b) of promoting the interest of consumers, purchasers and other users of goods and services in the United Kingdom in respect of the prices charged for them and in respect of their quality and the variety of goods and services supplied;

(c) of promoting, through competition, the reduction of costs and the development and use of new techniques and new products and of facilitating the entry of new competitors into existing markets".

These are exactly the subjects that we have been debating for the past hour or so. If those criteria were employed by the Monopolies and Mergers Commission in determining the public interest, under all references, whether under this Bill or under Clause 27 of this Bill as is provided under the Competition Act 1980 or the Fair Trading Act 1973, then I think we should go a very long way to having some assurance that there will be an objective view on whether those interests are in the public interest and will be promoted in the proper manner.
The noble Lord quite rightly said of a previous amendment that I moved—Amendment No. 115A—that it was perhaps half of an amendment. I think he readily perceived that what I was getting at in Amendment No. 115A and the amendments to which I am now speaking was that we should like to see a regular review of the gas industry on the basis of the Competition Act 1980, which refers in turn to the criteria in Section 84 of the Fair Trading Act. I said that seems to me to be the last ditch; but it seems to me to provide the sort of assurance that we on these Benches are looking for that this industry is going to be properly regulated and properly conducted.
I shall not go on longer. There is in my view a logical problem which the Government have between Clause 4 of the Bill and Section 84 of the Fair Trading Act and which has been demonstrated by the noble Lord in the answer that he made to the noble Lord, Lord Harris of High Cross, and the noble Viscount, Lord Hanworth, on the last amendment. There is an opportunity for the Government to provide us with a very clear adherence to what their own legislation in 1973 actually said about monopolies and fair trading.
I believe that this is an amendment which should commend itself to the Government. If it does not, I promise the noble Lord that we shall come back to this matter on Report. I beg to move.
Lord Belstead: I shall be brief in replying to this amendment. It is perhaps the most important of the group of amendments that the noble Lord, Lord Williams has moved. The Bill refers the Monopolies and Mergers Commission to the duties set out in Clause 4 to guide it in considering where the public

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interest lies when the director makes a reference, and these amendments would replace that with different powers and duties drawn from the competition legislation. For example, Amendment No. 118A would mean that instead of considering the Clause 4 duties, designed specifically for the regulation of gas suppliers, including in particular the duties as regards safety as set out in Clause 4(2) (c), the Monopolies and Mergers Commission would have regard to the duties set out in Section 84 of the Fair Trading Act 1973 which are designed for industry at large, and which the noble Lord, Lord Williams, persuasively tells me is the right way to go about things, but which, of course, is silent about safety—
Lord Williams of Elvel: May I repeat Section 84(1) (b)? It states:
"Promoting the interests of consumers, purchasers and other users of goods and services in the United Kingdom".
That is the quality, price and the safety of the product.
Lord Belstead: Not specifically—and that is one of the reasons why I do not like the amendment. I do not believe that it would truly be to the advantage of gas consumers whom we are seeking to protect in this case.
I shall allude to only three points covered by this large group of amendments. The first point is that if a problem lies outside the area of gas supply, surely the proper route to deal with it is via the normal OFT channels with the possibility of reference to the Monopolies and Mergers Commission under general competition law. I know that this is ground that we have been over already this evening, but if a problem concerns gas supply, the provisions that we have included in the Bill ensure that it can be investigated and any remedial action taken. However, I think that to mix the two kinds of reference is to confuse matters.
The second point is that in Amendment No. 118D the noble Lord proposes that the Monopolies and Mergers Commission should look into questions of the registerability of agreements under the restrictive trade practices legislation. I realise that behind the noble Lord's proposal is a belief that there will be a strengthening of the regime, but I think it would confuse matters. The Bill seeks to exclude such questions from the remit of the Monopolies and Mergers Commission because those matters are properly for the restrictive practices court to decide under the provisions of the restrictive trade practices legislation. The Bill's provisions follow exactly those of the Fair Trading Act and the Competition Act in drawing a clear line between the responsibilities of the Monopolies and Mergers Commission and those of the court.
The last point is that I am deeply concerned by Amendment No. 118E which, as I read it, would mean no protection for any commercially sensitive information supplied by a public gas supplier during a Monopolies and Mergers Commission investigation. Such information could be published at will. I find it hard to credit that that is the effect of the amendment. I may be mistaken, but if I am not, I think that it is an amendment that the Government would not be able to have anything to do with.
Lord Williams of Elvel: I shall respond to the point that the noble Lord, Lord Belstead, made on
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Amendment No. 118E. The Monopolies and Mergers Commission is of course under its own restraint in publishing commercially sensitive material, and the Secretary of State has the right under the Monopolies and Mergers Commission report to determine what is commercially sensitive. Indeed, Clause 42 sets out restrictions on the disclosure of information. I cannot believe that that is a serious point. If it is a serious point, I am sure that the Government draftsman can get round it by reasonable drafting.
I agree that the Monopolies and Mergers Commission should not publish commercially sensitive information. However, the noble Lord has not answered my major points which are—I am sorry to repeat myself—twofold. First, there is a logical problem that the Government have as between public interest as defined by Clause 4 and the public interest as defined by Section 84 of the Fair Trading Act, under which Clause 27 of this Bill will operate, if it does operate.
10.45 p.m.
Secondly, the Government have not responded to my thought that Section 84 of the Fair Trading Act was designed by a Conservative Government to provide a whole framework of control of precisely the type of private monopoly that we are talking about. I am not going to press the amendments, but I shall come back to these matters on Report. I hope that the noble Lord will read carefully what we have been saying. This may be a way out of the difficult debates earlier concerning the director, the public utilities commission and the regulation of the industry. In the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 24 agreed to.
Clause 25 [Report on modification references]:
[Amendment No. 118C not moved.]
Lord Diamond Lord Diamond moved Amendment No. 118CA:
Page 30, line 2, after ("shall") insert ("not")
The noble Lord said: There is, I believe, a printer's error in this part of the Bill: but we shall see. We were discussing on the previous clause modification references to the Monopolies Commission. Under this clause we are discussing the reports on those references. The clause makes clear that the Monopolies Commisssion shall include a variety of things in its reports. Subsection (2) states:
"Where, on a reference under section 24 above, the Monopolies Commission conclude that the public gas supplier is a party to an agreement to which the Restrictive Trade Practices Act 1976 applies"—
that is to say, the law of the land—
"the Commission, in making their report on that reference, shall exclude from their consideration the question whether the provisions of that agreement … operate, or may be expected to operate, against the public interest".
It is inconceivable to me that the Monopolies Commission is being asked to have no regard to the law of the land. It is obvious that there is an omission in the second line on page 30. The wording should be that the commission, as normally, in making its report

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on the reference, shall not exclude from its consideration the law of the land. This is especially so in an area where we are concerned with protecting the consumer when the consumer needs special protection. That is the reason for my amendment. It would be for the convenience of the Committee, I believe, if Amendment No. 118DA were to be discussed at the same time, as it is merely consequential. I beg to move.
Lord Belstead: With respect to the noble Lord, there is not a printer's error. The amendment would require the Monopolies and Mergers Commission, where it becomes aware that a public gas supplier is a party to an agreement that may be registerable under the Restrictive Trade Practices Act 1976, to consider whether the agreement is in the public interest or not. We believe that this would be misguided because the Restrictive Trade Practices Act gives the task of determining whether such agreements are in the public interest to the Restrictive Trade Practices Court. We feel that it would only serve to create confusion if the Monopolies and Mergers Commission was to investigate such a question when the task is properly for another body.
Lord Diamond: That is a very interesting answer and one which I had not appreciated. In those circumstances I shall consider very carefully what the Minister has said. In the meantime, I thank him for the explanation and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 118D and 118DA not moved.]
Lord Diamond Lord Diamond moved Amendment No. 118DB:
Page 30, line 11, at end insert (" (3A) The draft of a proposed report of the Monopolies Commission on a reference under section 24 above shall be sent to the Director 14 days prior to the making of a report under the following sub-section").
The noble Lord said: This is a simple administrative arrangement under which the director will have an opportunity of considering, and if necessary commenting on, a report before it is published. It is a normal situation with which we are all familiar in bodies of this kind. It was certainly well within my experience when I was chairman of the Royal Commission on the distribution of income and wealth. There is nothing political about this. I am sure the director would wish to be included and to have a presence in this, if the Government agree that that is so. I beg to move.
Lord Brabazon of Tara: Before I start may I ask the noble Lord whether he was also speaking during that amendment to Amendments Nos. 118DC, and 118DD, which were grouped with this amendment and I think probably should go with it? In the grouping we had also agreed that Amendments Nos. 119A, 119B, 119C and 122A would go together. However, I am happy to answer them one by one if the noble Lord would prefer me to.
Lord Diamond: Yes; I am very happy that that should be so. I have not spoken to them, but I do not
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think that matters. I had not noticed at the time that this grouping was proposed. I am very willing to accept it. I am sure I shall get the same reply whether I make a long or a short speech.
Lord Brabazon of Tara: I shall certainly try to clarify the situation in so far as we see it, and I hope to the satisfaction of noble Lords. We appreciate the concern that the director should be given time to consider a report and the need for advice to be given to the Secretary of State. But, as I say, I hope to persuade the noble Lord that the regime established in the Bill already caters for these matters.
The proposed new subsection would require the director to be sent a copy of the draft MMC report. The noble Lord also seeks to allow the director 14 days to consider the MMC's report before sending a copy to the public gas supplier and to the Secretary of State. The director will have been responsible for initiating the MMC's report and will have given evidence to them as to the need for a proposed modification. He will therefore be familiar with the subject matter. His concern will be with its conclusion and recommendations. It is not necessary for him to act immediately on receiving a report even if it contains conclusions and recommendations leading to modification action, although he will no doubt wish to act promptly to remedy any deficiency in the authorisation. But in any event the director is required under Clause 26 to give notice of proposed modifications and to allow a period of 28 days for representations or objections to be made.
The amendments also seek to require the director to advise the Secretary of State of those parts of the report on which he proposes to offer detailed advice. The director has a general duty under Clause 34 to advise the Secretary of State that in any event, since the director is required to make modifications in the circumstances outlined in Clause 26, and identified in a MMC report, he will need to publish his intention, as we have already discussed. There is no reason for him to go further than this since the Secretary of State has no role in deciding whether a modification should be made following the MMC report. I hope that with that explanation of how matters would operate the noble Lord will be happy.
Lord Diamond: I am grateful to the Minister. What he seems to be saying in general terms is that there is no need for these amendments because broadly the situation is satisfactory as it is. That may be so, and I shall read carefully what the noble Minister has said. Did the noble Lord in his reply say that there was no need for the director to be sent a report 14 days prior to the making of it in the official sense because, in the ordinary course of events, he would have an opportunity of seeing the report before it is published? That is of some importance, and I should be grateful if he would make that position clear now.
Lord Brabazon of Tara: What I said was that the director will have been responsible for initiating the report, and will have given evidence to the MMC as to the need for the proposed modification. He will therefore be familiar with the subject matter.
Lord Diamond: It is because the director is familiar with the subject matter that I thought it would be of advantage to the Monopolies Commission to let the director see the draft report before they sent it out officially and committed a howler—something which can be committed by people who have no intention of doing so at all—because they have not referred to the authority on the matter.
I thought it would be for the benefit of everybody concerned that there should be in addition to what the Minister has said this normal, courteous practice of letting the persons most interested in the report see the report before it is published; letting them have a private preview, as it were. It is a regular practice and is generally held to be beneficial. However, in the circumstances I shall consider carefully what the Minister has said, and we shall have to come back to it at Report stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 118DC, 118DD and 118E not moved.]
Clause 25 agreed to.
[Amendments Nos. 118F, 118G and 119 not moved.]
Clause 26 agreed to.
[Amendments Nos. 119A, 119B, 119C, 120 to 122 and 122A not moved.]
Clause 27 agreed to.
[Amendments Nos. 123 to 125 not moved.]
Clause 28 agreed to.
Clause 29 agreed to.
Clause 30 [Validity and effect of orders.]:
Lord Diamond: The next amendment, Amendment No. I 25ZA, is of some importance. If the Committee and, in particular, the Leader of the House think that there is any advantage in moving it I shall do so, but there is no possibility of covering it in the time available. It will make not the slightest difference, I can assure the noble Viscount the Leader of the House to the point of time at which the Committee stage is completed, so far as we on these Benches are concerned. Therefore I am not certain whether the Committee wishes me to proceed with Clause 30.
Lord Brabazon of Tara: On that basis I am most grateful to the noble Lord, Lord Diamond, and I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at one minute past eleven o'clock.