Electricity Bill

HL Deb 05 July 1989 vol 509 cc1230-66

Consideration of amendments on Report resumed.

Lord Williams of Elvel moved Amendment No. 27: Page 3, line 22, leave out ("Subject to subsections (1) and (2) above,").

The noble Lord said: My Lords, the object of this amendment, which was discussed in Committee, is to ensure that the duty to promote competition in the generation and supply of electricity is given proper weight but does not have priority over the duty to protect the interests of consumers of electricity. It is also to ensure that the duty to promote competition in the generation and supply of electricity and the duty to secure the financial integrity of the companies cannot take priority or be used as an excuse for failing both to protect the public from dangers and to secure the establishment of a sensible machinery for promoting health and safety.

We are dealing here with the priority of the duties. As we said in Committee, it is understood that the priority of the Government is to promote competition, however that may be achieved. But it seems unreasonable, and certainly not in the best interests of consumers, that the subsidiary duties in the clause, if I may so describe them, are not given rights pari passu with the primary duties.

There has been a great deal of discussion and argument about what exactly the Bill as drafted means. I bring this matter back on Report because I was unhappy with the Government's answer in Committee. There is a serious danger that the duties which are outlined in the subsection with which we are dealing could in a number of circumstances be subservient to the primary duties set out earlier in the clause.

This subject will be familiar to noble Lords. I have to point out that we have taken further legal advice on the nature of subsection (3) as opposed to subsections (1) and (2). Our advice is that, whatever the Government may have said in Committee, in court proceedings the expression, Subject to subsections (1) and (2) above", would certainly imply that the criteria in Clause 4(3) would be subordinate to the criteria in Clause 4(2). If our legal advice is right, the concept of the protection of the consumer is damaged. I should like to argue this out again because I was not satisfied with what the Government said in Committee. I beg to move.

Lord Lloyd of Kilgerran

My Lords, as a matter of telepathy which exists between Celts, as everybody well knows, I put down exactly the same amendment as that tabled by the noble Lord, Lord Williams, and therefore my name appears on the amendment. I would put the case more strongly than the noble Lord. He talked about questions of principle in relation to those matters set out in subsection (3). He mentioned their importance. I should like strongly to support his legal approach to this matter and the advice he has been given. Subsections (1) and (2) of Clause 4 start with the words: The Secretary of State and the Director shall each have a duty to exercise the functions assigned or transferred to him putting the Secretary of State and the director as one person— by this Part in the manner which he considers is best calculated". One then looks at the matters in paragraphs (a), (b) and (c) in subsection (1) and in paragraphs (a) and (b) in subsection (2) in regard to what are his general duties. When one comes to subsection (3) there is a qualification which uses more or less the same words as those used in subsections (1) and (2) but which then adds, Subject to subsections (1) and (2)". Therefore the duties following in subsection (3) must be subordinate in some way to the general duties outlined in subsections (1) and (2).

When one reads the duties in subsection (3) one finds that they are of equal importance. Why should they be subject to any dilution, if that is the correct word, by those introductory words? With the leave of the House, perhaps I may refer to an amendment to be introduced later on by the noble Baroness, Lady Hooper. It relates to research activities. If that amendment is adopted and is inserted into Clause 3, it will be an important matter in relation to research and will justify further the removal of the introductory words, Subject to subsections (1) and (2) above".

8.15 p.m.

Baroness Hooper

My Lords, the structure of Clause 4, with some duties being made subject to others, is well precedented. The three primary duties in subsection (1) are all about protecting the interests of customers. There is an inherent logic in the fact that the subsequent provisions of the clause in effect cascade down. I can assure the House of the strength of the Government's commitment to the protection of consumers' interests, the promotion of the efficient use of electricity and the protection of public safety and the health and safety of those working in the industry. Perhaps I may quote an example of how we see the provisions working. Licence holders will be required to comply with regulations made under Clause 31 relating to safety. They will not be able to plead that the competition requirements in their licences excuse them from this obligation. Although in the terminology of the clause subsection (3) is subject to subsections (1) and (2), clearly they have to be taken together and are complementary.

Lord Williams of Elvel

My Lords, I am sorry to interrupt the noble Baroness, but she said that the subsections are complementary. However, what happens if they are in conflict?

Baroness Hooper

My Lords, the Clause 4 duty, which is to protect the public from dangers arising from the generation, transmission and supply of electricity, will apply to economic regulation, as well as to all the other functions of the Secretary of State and the director under Part I of the Bill. It will ensure that the director and the Secretary of State will bear in mind the needs of public safety at all times and therefore there will not be a conflict.

As I said, it is a well-precedented structure and we believe that it is logical for the Secretary of State and the director to have a primary duty to secure that all reasonable demands for electricity are satisfied. While the protection of consumer interests will be central to the director's duty, it has to be subject to securing that all reasonable demands for electricity are satisfied—otherwise there would be no consumers to protect.

Lord Williams of Elvel

My Lords, I apologise for interrupting the noble Baroness yet again. However, I shall not do so too often. The argument here is about Clause 4(1)(c), which lays on the Secretary of State and the director (each of them) a duty, subject to subsection (2) below, to promote competition in the generation and supply of electricity". I am advised legally that conflicts may well appear between that duty and the duty set out in subsection (3) which we are now discussing.

Baroness Hooper

My Lords, I believe that there is no single answer to this point. In any one situation a balance has to be struck between the general duties and the subsidiary duties. Consumers will in fact benefit from increased competition which will exert a downward pressure on costs, which will be passed on to the final consumer through the price control mechanism in the licensing regime.

Therefore I believe that we can reassure the noble Lord that his concerns are satisfied and that he need be in no doubt about our determination in this legislation to protect consumers; to protect the efficient use of electricity; to protect the safety of the public and those working in the industry; and, indeed, as we shall come to shortly, to be involved in the research and development. I believe that the noble Lord's concerns are in fact unfounded.

Lord Williams of Elvel

My Lords, if my concerns are unfounded, why does Section 4(2) of the Gas Act 1986 give competition and public safety equal emphasis? Why should we not in this legislation give consumer protection and competition equal emphasis?

Baroness Hooper

My Lords, as I understand it, the two precedents on which this particular provision is founded are Section 4 of the Gas Act 1986 and Section 3 of the Telecommunications Act 1984. However, having said that, I must re-emphasise that we believe, as we have said many times—indeed, it was a basic premise of the White Paper—that competition is the best protection of consumers' interests.

Lord Williams of Elvel

My Lords, we have had a short debate on this rather important subject and I do not wish to pursue the matter at this stage. However, I do not believe that there will be competition in the electricity supply industry, and I do not believe that there will be competition in the supply of electricity to domestic consumers. Therefore I do not believe that competition will in any sense be a protection of the consumer. In my view it should be for the Government to say that the protection of the consumer should rank pari passu with the other primary obligations of the Secretary of State and the director.

We have been over this ground before and no doubt we shall go over it again. However, for the moment I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 28 not moved.]

Baroness Hooper moved Amendment No. 29:

Page 3, line 34, at end insert— ("(bb) to promote research into, and the development and use of, new techniques by or on behalf of persons authorised by a licence to generate, transmit or supply electricity;").

The noble Baroness said: My Lords, I believe that in moving Amendment No. 29 we can also speak to Amendments Nos. 34 and 174. I see that some noble Lords are not in agreement with the grouping so we should perhaps clarify the position now. Initially I understood that the grouping had been agreed without Amendment No. 34. I was then led to understand that it was to include that amendment. I am not sure whether the noble Lord, Lord Ezra, wishes to comment on the matter, but in any event I am quite happy to deal with the amendments separately if that is the preferred procedure.

At any rate, perhaps I may deal with Amendment No. 29 at this point. In line with my undertaking given on 16th May in Committee, when I undertook to see whether a possible government amendment could be brought forward on Report which would acknowledge the concerns expressed on the suject, after careful consideration and indeed discussion with, among others, the movers of the amendment, we believe that we have been able to meet those concerns and make a concession in this area. It comprises two elements: a new clause and an addition to Clause 4.

The addition to Clause 4 concerns research and development into, and the use of, new techniques that pertain to the generation, transmission and supply of electricity. The effect of adding this provision to Clause 4(3) is that the Secretary of State and the director would have to take these matters into account when exercising their functions under Part I of this Bill. The most important such function concerns licensing. Thus, the addition would require the Secretary of State and the Director General of Electricity Supply to take into account applicants' R&D programmes, or their espousal of new techniques, when issuing licences. It would also provide the enabling powers if they wished to insert conditions on research and development in licences.

This addition recognises an amendment which was not moved by my noble friends Lord Stanley, Lord Monk Bretton and Lord Wise who wished to encourage, the generation of electricity by small scale generators and research into novel techniques of generating electricity". The noble Lords referred to "novel techniques", although the amendment before us refers to "new techniques". I hope, therefore, that I shall have the support of my noble friends on this amendment.

The "new techniques" in question need not directly concern the generation, transmission or supply of electricity, but they should not be too distant from these activities. Thus the amendment would cover research and development into safety or environmental aspects of the generation, transmission or supply of electricity; but it would not cover R&D into totally unrelated matters, such as the design of motor car engines. I say this by way of clarification of the interpretation of the words in the amendment, since, if one takes no account of the context, they would, I recognise, appear to cover absolutely any new techniques for anything.

The essence of the new clause is to be found in subsection (1). As I explained in Committee, under the Science and Technology Act 196:5 the Secretary of State already has the power to support research and development, and it is that Act which provides the legal vires for the Department of Energy's existing programmes of expenditure in support of research and development. The new clause takes the form of a duty on the Secretary of State to use that power for the purpose of promoting such research into the development of new techniques relating to the generation, transmission or supply of electricity as appears to him to be necessary in the national interest.

To discharge that duty the Secretary of State will need to know what the industry is doing. Subsections (2) and (3) are therefore concerned with the provision of information by licensees to the Secretary of State. They enable the Secretary of State to serve a notice on a licence holder, or anyone authorised by an exemption to generate or supply electricity, to require that person to furnish such information about that person's business as may be specified in the notice. It may appear to noble Lords that this is an extraordinarily wide power that could, for example, be used to require information about absolutely any aspect of the business in question; but I can assure your Lordships that this is not so: as a matter of law, subsection (3) must be construed in the context of the clause as a whole, and that means by reference to the duty on the Secretary of State in subsection (1). In that context, therefore, the information-gathering power in subsections (2) and (3) can relate only to research and development that is relevant to the generation, transmission or supply of electricity.

Subsection (4) of the new clause then deals with the confidentiality of information so provided and enforcement. Taking confidentiality first, much of the information to which the information-gathering power would apply would be commercially sensitive, and it is therefore right that there should be provisions to ensure that it is properly safeguarded.

Turning now to enforcement, subsection (4) applies for the purposes of this clause subsections (7), (8) and (9) of Clause 97. They provide that any person who deliberately fails to comply with a notice requiring information about his R&D activities, who knowingly furnishes false information about those activities or who breaches the confidentiality requirements shall be guilty of an offence.

The new clause will ensure in an explicit and unambiguous way that after privatisation there will be a clearly defined long-stop responsibility for ensuring that R&D which is essential in the national interest is carried out. It will do that by providing statutory underpinning to the present informal arrangements by which National Power and Power Gen, the two main successor power generating companies, will continue to co-operate with ACORD so that the latter can advise the Secretary of State whether there are any research and development gaps which it is essential he should fill in the national interest. It would then require the Secretary of State to fill those gaps if it appeared to him that they should be filled in the national interest.

In Committee various concerns about research and development were expressed and I believe that the new clause meets those new concernes. However, by providing the Secretary of State with an associated information gathering power, by providing for the confidentiality of the information so provided, and by providing for enforcement arrangements, it does so in what in technical terms I hope is a somewhat more satisfactory manner. I beg to move.

8.30 p.m.

Lord Williams of Elvel

My Lords, perhaps I may first ask the noble Lord, Lord Ezra, whether we are discussing his Amendment No. 34 in this group.

Lord Ezra

I am glad that we can discuss it, because if the noble Lord were to move Amendment No. 34 we would probably go over the same ground again. I therefore speak to Amendments Nos. 29 and 174, which is the new clause to which the Minister referred.

In general it seems to us that the Government have moved three-quarters of the way along the path that the noble Lord, Lord Sherfield, outlined when he moved his amendment in Committee. I am not sure that they have moved the whole way. I was reassured when the Minister said, towards the end of her introduction, that the Secretary of State had an obligation under the new clause: if there were any gaps in research and development that the privatised companies did not fill, he had an obligation to fill those gaps. If that is the case, the Government have moved, technically I am sure, in the right direction and probably philosophically in the direction that we would wish. I would have hoped that the Government might have laid upon the Secretary of State an overall duty—

Baroness Gardner of Parkes

My Lords, perhaps I may seek clarification. I thought that the noble Lord mentioned Amendment No. 174 when he spoke of the amendment of the noble Lord, Lord Ezra.

Lord Williams of Elvel

My Lords, I asked the noble Lord, Lord Ezra, about Amendment No. 34.

Viscount Hanworth

It is mine actually.

Lord Williams of Elvel

I am sorry. It is the amendment tabled by the noble Viscount, Lord Hanworth. We are speaking to a grouping which consists of government Amendment No. 29, Amendment No. 34 tabled by the noble Viscount, Lord Hanworth and government Amendment No. 174.

I believe that I have said all that I need to say for the moment on this amendment. I am sure that the noble Viscount, Lord Hanworth, and the noble Lord, Lord Ezra, will wish to intervene. We have gone some way towards rationality by ensuring that the Government are the last resort to ensure that research and development in the industry is carried out in a proper manner. Until I hear clarification after the debate, I am not sure whether we have gone the whole way.

Viscount Hanworth

My Lords, I thank the Minister for moving the amendment. Of course I would not think of moving Amendment No. 34. However, I think, unkindly, one might ask, bearing in mind how important future research is and that under privatisation long-term research is not likely to be given the priority that it should be, why the Government did not take that point on board when drafting the Bill. One is left with the impression that the Bill, like so many other Bills that come before us, has not been properly considered, and it should have been.

Lord Nelson of Stafford

My Lords, I too support the amendment. It fills an important gap in the duties being imposed on the Secretary of State. Concerns have been expressed on all sides of the House about the need to ensure that there is an adequate long-term research programme to maintain security of supply of economic power in the years ahead. Your Lordships' Select Committee on Science and Technology took a keen interest in the subject and pressed strongly for the Government to look at it.

I thank my noble friend for the trouble that she has taken in bringing forward Amendments Nos. 29 and 174. If we take the two together, they meet the requirement that we had in mind and impose a duty upon the Secretary of State to ensure that an adequate programme of research is undertaken through one source or another. We must take the two together and I am glad we are doing so. I very much welcome this and commend the amendments to your Lordships.

There is one small point which puzzles me about the wording. It is not quite clear from the wording whether the last part of Amendment No. 29 relates to the first part, namely: to promote research into, and the development and use of, new techiques … to generate, transmit or supply electricity or whether it is to promote research on new techniques by or on behalf of persons authorised by a licence to generate, transmit or supply electricity". It seems to me that it could be interpreted both ways.

On the other hand, Amendment No. 174 is quite clear when it refers to, such development of, new techniques relating to the generation, transmission or supply of electricity". The matter is clarified in the subsequent amendment. Although there may be need for a little redrafting, I commend the amendment and I thank my noble friend the Minister for putting it forward.

Lord Peston

My Lords, I apologise to the noble Baroness. I missed her opening sentence. However, I heard the rest of what she had to say. I have a few questions to add to those of my noble friend Lord Williams of Elvel unless they were dealt with in the opening remarks of the noble Baroness.

To use my noble friend's remark when referring to the Secretary of State essentially as being the researcher of last resort, do the Government agree that what they would most like is for the relevant research to be done by the industry? In other words, the reason for the fallback powers, we hope, is very much a fallback position. We want to see that the industry carries out the appropriate research, if possible. The noble Baroness used the word "promote" and I wish to ask whether "promote" means trying to persuade the industry to do the relevant research, only to step in subsequently. That is the main question I wish to ask.

My comment—and I do not say this in a mean spirit—is that I prefer the amendment of the noble Viscount, Lord Hanworth, and the noble Lord, Lord Ezra, because it is rather more explicit as to what the research might be. I agree that it is perhaps late in the Bill but the noble Baroness might wish to examine Amendment No. 34 at least with a view to asking herself and the Government asking themselves whether what appears under (a), (b) and (c) would not improve the Government's own amendment. I take it that those are largely the areas in which they would like the research to take place. However, I would find it more reassuring if I saw these areas on the face of the Bill. I do not think there can be anything between us on the areas of research in respect of efficiency in a general sense, new techniques, and with regard to the environment and so on.

The noble Lord, Lord Ezra, and the noble Viscount, Lord Hanworth, will make up their own minds on whether to press the amendment. I would find it more attractive if the Government could find a way of using their form of words. I do not wish to be churlish. I accept, as the noble Lord, Lord Nelson, and others have said, that the Government have moved in the right direction as regards research.

8.45 p.m.

Lord Lloyd of Kilgerran

My Lords, I wish to endorse what the noble Lord, Lord Nelson of Stafford, has said. He has great experience in research matters and I also feel, as the Minister said, that the new clause covers most of 1 he concerns of the people involved in research.

I wish to ask the Minister for one point of clarification. That is on the scope of the words, and the development and use of, new techniques". The Prime Minister has indicated more than once, particularly in the foreword to the Green Paper of 1985 entitled Innovation and Intellectual Property that in this country we are very good at research but there is often a lacuna in relation to marketing. We all know about it. The Prime Minister said that it is essential, when research is undertaken, to consider whether the research can be protected and how it can be exploited internationally for the creation of wealth for the benefit of UK industry.

With the leave of the House I wish to refer to two small amendments in my name, Amendments Nos. 120 and 164. Amendment No. 120 suggests that the words in Amendment No. 29, the development and use of new techniques should include the development of intellectual property, for several purposes, mainly to protect the research but also to exploit it for the purposes of creating wealth for the country.

Amendment No. 164 is a definition of the word "property". Throughout the Bill it is not clear what is meant by "property". The matter was raised previously and the noble Lord, Lord Sanderson of Bowden, kindly wrote to me. Amendment No. 164 suggests that the word "property" in the definition clause should include "intellectual property". This is a practical matter. It is well known that we are very successful in a great deal of research in this country. But it is not marketed properly. The main way in which to market it is through the ability to understand what is meant by "intellectual property" and to use, as subtly as one can, the rights given to a person in intellectual property; that is to say, a person's rights under patents, trade marks, know-how, copyright, and designs. I wonder whether even at this late hour the Minister is able to consider assuring the House that, the development and use of, new techniques", will include the use and development of intellectual property rights.

Baroness Hooper

My Lords, perhaps first of all I may deal with Amendment No. 34 and, in doing so, respond to some of the questions raised in the course of the debate. I wish to say how delighted I am that so many of your Lordships have felt able to give a welcome to this effort on the Government's part to meet the concerns expressed at the Committee stage.

We neither wish nor intend to derogate from the clear responsibilty for security of supply which the Bill places on the supply companies. We do not wish to give the privatised electricity companies an undesirable signal that they need not concern themselves with research in these areas.

The government amendments have been carefully drafted so as not to compromise either of these points. As I explained previously and as was accepted earlier by the noble Lord, Lord Williams, the essence of the Government's amendment would be to place on the Secretary of State a long-stop responsibility for ensuring that the research and development that is essential in the national interest is carried out, as the noble Viscount accepted.

By contrast, the effect of Amendment No. 34 is that it would impose the main responsibility on the Secretary of State and we wish to ensure that the industry carries out its part in all this. To that extent, as regards the request by the noble Lord, Lord Peston, that we should examine the words of Amendment No. 34 for use in the government amendment, we believe it is not necessary because subsection (1) of the new clause is already widely drafted. As I explained, it refers to the new techniques relating to the generation, transmission or supply of electricity. It does not, in other words, concern only research on these matters. Therefore, the new techniques need not directly concern the generation, transmission or supply of electricity. However, they should not be too distant from these activities. In the context of the question, what does the word "promote" mean, I should say that it means both to encourage other people to carry out research, and/or to commission research.

I shall now turn to the somewhat unexpected consideration of Amendments Nos. 129 and 164. I understand that it is agreeable to the House to discuss these amendments at this stage. I should say to the noble Lord, Lord Lloyd of Kilgerran, that intellectual property rights are essentially private matters, whereas the new duty on the Secretary of State in relation to research and development is essentially related to the national interest. To extend the duty in the new clause, or indeed the new research and development duty on the Secretary of State and the director in Clause 4 in the way envisaged by the noble Lord's amendments, would be to widen them beyond recognition. It would confuse the distinction between purely commercial matters and the Secretary of State's entirely proper longstop responsibilities in the national interest, in precisely the way the Government have been so anxious to avoid. I hope the noble Lord will understand when I say we feel that we cannot accept the amendments to which he referred. I hope I have covered all the queries that were raised.

Baroness Seear

My Lords, perhaps I am being extremely stupid, but I cannot see that simply adding the words "includes intellectual property rights" changes the situation in any way. That merely slightly expands and explains what is meant. How does it make such a fundamental change? I am not at all clear on that matter. Will the noble Baroness clarify it a little more? Perhaps I am at fault, but I do not understand what was said.

Baroness Hooper

My Lords, I had hoped that I had made it clear that the duties of the Secretary of State in this matter are longstop duties in the national interest. I hoped also that I had made it clear that intellectual property rights are essentially private matters, and therefore do not come into that category.

Lord Lloyd of Kilgerran

My Lords, is the noble Baroness suggesting that the marketing of intellectual property rights is not in the national interest?

Baroness Hooper

No, my Lords. However, I should say that they are internal matters and, in that sense, private matters. However, if I may consider this particular matter again, I shall write to the noble Lord and perhaps clarify anything that seems to be outstanding.

Lord Lloyd of Kilgerran

My Lords, I am very much obliged to the noble Baroness.

Viscount Hanworth

My Lords, we have talked about Amendment No. 34. Amendment No. 29, which we are in fact discussing, goes a long way to meeting the point that research and development is vital. However, it does not spell out at all the direction in which this should go. As it stands, the provision is a pious hope. I am afraid I have to say that, having considered Amendment No. 34, I am not satisfied with the reasons given for this research. I think that under paragraph (a) in the proposed new clause we should talk about generating electricity as cheaply as possible. Paragraphs (b) and (c) could also usefully be reworded.

However, the Government's amendment is simply nothing more than a pious hope. I hope that the Government will consider saying exactly what they mean so that we get this research, because otherwise in a private enterprise research will be carried out on a short-term basis. We really ought to spell out how we want this research to be carried out.

Lord Nelson of Stafford

My Lords, looking at this proposal by the Government, it seems to me that the points raised under Amendment No. 34—

The Earl of Dundee

My Lords, I am sorry to interrupt my noble friend, but I must remind him that as we are on Report one can speak only once.

On Question, amendment agreed to.

Lord Peston moved Amendment No. 30:

Page 3, line 34, at end insert— ("(bb) to set standards of performance and to ensure that customers are compensated for failure to meet those standards").

The noble Lord said: My Lords, earlier when I was much aggrieved that the noble Lord, Lord Sanderson, accepted the amendment of the noble Lord, Lord Peyton, and not mine, I said to myself that a moment would come when I moved an amendment which the noble Lord would be only too delighted to accept in order to secure a degree of evenhandedness in those moving amendments. It seems to me, particularly having considered Amendment No. 29, that Amendment No. 30 should commend itself to noble Lords along the same lines. Amendment No. 30 also derives from the words at the beginning of the clause which state that: The Secretary of State and the Director shall each have a duty".

We have just discussed that they should each have the duty to promote research and other matters. With respect to the noble Viscount, Lord Hanworth, I personally did not read that remotely as a pious hope. I read it as a very definite duty. That is why I felt able to support it. However, given that the Government have decided, in our view quite rightly, to articulate this aspect of the behaviour of the director and the Secretary of State, it seems to me that it is just as compelling to articulate this further aspect of the behaviour of the director and the Secretary of State.

My whole reading of the Bill is that the Secretary of State and the director have an implicit duty to set standards of performance along these lines. I and my noble friend Lord Williams of Elvel feel that this matter is a very good example of where making the duty explicit can only help to achieve the ends we all require, which is that this industry should achieve appropriate standards of performance, but that the consumer should be compensated if it fails. Therefore, I commend this particular amendment most strongly to your Lordships. I believe it will very much help in reassuring people and in making the Bill rather more attractive to those who are currently considering it. I beg to move.

Baroness Gardner of Parkes

My Lords, the industry, as noble Lords may already know, has already agreed to standards of service and penalty payments for domestic premises. However, I think the industry feels that commercial customers should be able to pursue their own remedies without such assistance where the industry has been negligent. On the whole, this amendment is one that I cannot support.

9 p.m.

The Earl of Dundee

My Lords, Clause 41 of the Bill already provides for a new system of guaranteed standards whereby domestic customers will have the right to be compensated if their local electricity supply company does not meet certain standards of performance laid down by the director.

The director will put this scheme in place by making regulations, with the consent of the Secretary of State, prescribing the standards of performance which he believes the public electricity suppliers should meet in the electricity supply services which they provide to their domestic customers.

The regulations will also set the level of compensation which customers will receive if the companies fail to meet those standards. They may also cover how public electricity suppliers are to inform customers of their rights and the circumstances in which it would be unreasonable to penalise a supplier for events beyond his control; for example, freak weather conditions.

The noble Lord's amendment attempts to make the Secretary of State and the director equally responsible for setting standards of performance. The amendment as drafted would not work in so far as it applies to the Secretary of State, since Clause 41 gives powers to the director, not the Secretary of State, to make the regulations. That apart, I believe that this job should be one for the director and for him alone. He will be ideally placed to make regulations concerning the standards of performance. He will be in a position, through the Office of Electricity Regulation and the advice of the consumers' committees, to assess the particular circumstances of the various supply companies and take account of regional variations if necessary. Of course, as the Bill makes clear, the director must in any case seek the approval of the Secretary of State before making his regulations.

Under our proposals Clause 42 will also enable the director to determine standards of overall performance which is his opinion should be achieved by public electricity suppliers. Those standards will in effect be statutory performance indicators of how well the supply companies are living up to their responsibilities in dealing with the consumers.

The overall standards in Clause 42 will cover those aspects of performance where awards of compensation to individual consumers provided for in Clause 41 would not be appropriate or practical. Such overall standards might include, for example, the expectation that the supply companies would deal with 100 per cent. of certain types of written inquiry within a set number of days. It will be for the director, after consultation with suppliers and consumer representatives, to determine what the standards should be and the targets at which the companies should be aiming. He will also have a duty under Clause 43 to collect and publish information on their performance against the standards.

The provisions in Clause 42 will provide a strong incentive, additional to the companies' natural desire to avoid paying compensation for breaches of individual standards, for the supply companies to keep up their overall standards. It would clearly be very damaging for a supply company's repeated poor performance continually to be made public in this way.

I should also remind your Lordships that the companies are already under an obligation to do their best to achieve the standards set. Condition 17 of the public electricity supply licence will require the companies to conduct their business in the manner they consider to be best calculated to achieve the standards. If they fail to comply with that condition, the whole panoply of enforcement procedures available to the director will apply. For example, under Clause 27 he can order them to comply. In extreme cases, under Clause 24 the director could refer the company to the MMC in order to amend the licence in an appropriate manner.

Therefore, the Bill already provides a framework for compensation to be paid where standards of performance have not been met. I hope that in the light of what I have said the noble Lord will feel able to withdraw the amendment.

Lord Peston

My Lords, I thank the noble Earl. I am not a little disappointed at his reply. I am perfectly well aware of what appears in other parts of the Bill. My intention was to follow in the spirit of what I thought we were doing in respect of this part of the Bill in relation to the general duties of the Secretary of State and the director. Later in the Bill that is spelt out in more detail. It was my judgment, and still is, that, since we were adding the duty to promote research, to specify the general duty with regard to standards of performance at this point would make matters clearer and more reassuring. This section of the Bill seemed a suitable place to put it.

However, having done my best to improve the Bill, if the noble Earl refuses to be helped there is not much that I can do about it. Having tried to make my contribution, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Ezra moved Amendment No. 31:

Page 3, line 34, at end insert— ("( ) to promote activities connected with the supply to any premises of heat produced in association with electricity and steam produced from and air and water heated by such heat.").

The noble Lord said: My Lords, Amendment No. 31 could, if your Lordships agree, conveniently be taken in conjunction with Amendments Nos. 118 and 119. All the amendments refer to combined heat and power. That may not emerge from the rather convoluted wording of the amendment, but I am told that that is the way it has to be represented in the Bill.

Noble Lords may recall that I moved an amendment on combined heat and power at Committee stage and that, because of the massive contribution of combined heat and power to the increased efficiency of power stations and to benefiting the environment, I pressed very hard for this form of energy to come within the non-fossil fuel arrangements. However, in view of the lack of support from the noble Baroness, I withdrew the amendment but said that I would come back to the matter.

In the meantime my noble friend Lord Hanworth and I have had correspondence with the noble Baroness. We asked that combined heat and power should at least be mentioned in the Bill, which hitherto it has not been. As a result she very kindly put forward Amendment No. 118. However, that amendment, as your Lordships will see, simply lays down that the director shall record development in this connection and do no more. Quite honestly, I feel that that does not go far enough.

I should like to remind your Lordships that under the Energy Act 1983 very strong support was given to combined heat and power schemes. Section 19 of that Act states: It shall be the duty of every Electricity Board to adopt and support schemes—

1. (a) For the combined production of heat and electricity, and
2. (b) For the use of heat produced in combination with electricity, or incidentally from its generation, for the heating of buildings or for other useful purposes".

That was a very precise and specific commitment which was placed on the electricity boards, which will soon become the distribution companies.

So I believe that in this legislation there should at the very least be rather more than an obligation on the part of the director to record developments in that field. It is for that reason that, in addition to welcoming the amendment proposed by the noble Baroness, I should like to propose Amendment No. 31, whose aim is to promote activities connected with the supply of premises by combined heat and power. We have accepted an amendment to promote research. There are other objectives that must be promoted. This proposal is on all fours with that intention. I therefore beg to move.

Lord Peston

My Lords, I shall intervene briefly in this matter. It seems to me that, on more than one occasion, the noble Lord, Lord Ezra, has made an overwhelming case for taking much more seriously than we have done the general activity called combined heat and power. Certainly, as a result of listening to the noble Lord and doing a certain amount of reading, I—who started on the Bill both rather ignorant about CHP and thinking that it was something rather far out—am now convinced that this is one of the matter of the greatest importance for the electricity industry. It does not solve all our problems, but, clearly, in so far as we are strongly committed to efficiency and, equally, are all trying to take due account of environmental problems and other such matters, this is at least something that needs promotion. I suppose the relevant word is "promotion".

Again, when we consider a major Act of Parliament, not to take the chance of making quite explicit the promotion of matters of this sort under the general duties of the Secretary of State and the director—that applies notably to the director, but it is not a trivial matter for the Secretary of State either—would be to miss a great opportunity. I strongly support the noble Lord, Lord Ezra, on this matter.

I am in some slight difficulty because we seem to have developed a new habit of discussing amendments that are not even remotely likely to be considered today, so I am not yet entirely ready to say what I shall have to say on the amendment of the noble Baroness. I hope that she will forgive me for that. We shall deal with that amendment later. In the meantime, I wish to support Amendment No.31.

Viscount Hanworth

My Lords, I know that the noble Baroness has moved in some direction to help on this point, but I still cannot understand why it cannot be spelt out much more clearly. We have had the arguments before and they are centred around energy efficiency and the need to help or promote CHP schemes. I still cannot understand why the Government simply do not go all out in the Bill to say so.

The arguments that we have heard are almost irrelevant and of no weight whatsoever. Perhaps the noble Baroness will try once more to convince us of the reasons why the Government cannot support the proposal in the way they should. We should not forget that they have, I believe, given 1.5 million for large city schemes.

We shall now land up with much smaller power stations. If they use gas turbines, it is so easy to use the waste heat from them, but there is the problem of digging up the city streets and providing mains and so on. The matter therefore needs some help from the director in order to promote it—"promote" is the word that I should like to use—but, for some extraordinary reason, the Government hold back

9.15 p.m.

Baroness Hooper

My Lords, I fully agree with the noble Lord, Lord Ezra, that heat and steam co-generated with electricity is an important potential source of energy which should be utilised as far as possible. I should point out that this Government have done more than any other to promote energy efficiency in all its forms. As the noble Viscount, Lord Hanworth, has reminded us, the Department of Energy has funded an extensive programme in the field of combined heat and power to seek to establish the potential for CHP both on a city-wide and a local basis. As we have been reminded, too, we are, in bringing forward Amendments Nos. 116 and 118 to Clause 48 of the Bill, specifically drawing attention to combined heat and power.

I should like to point out with regard to Amendment No. 31 that our privatisation proposals are specifically designed to encourage competition in generation and to ensure that all economic sources of electricity supply will have fair access to the market. So all generators, including CHP operators, will have fair and equal access to the transmission and distribution systems after privatisation. The new transmission company will have every incentive to promote competition in generation. We shall also ensure through licence conditions that terms for the use of the grid will be transparent, thereby allowing first-time generators to compete on art equal footing with the two major generators being created from the CEGB.

Furthermore, after privatisation the supply companies will be under an obligation to purchase their electricity supplies from the most economic source. This will be overseen by the Director General of Electricity Supply, who will also have powers to investigate anti-competitive practices, such as predatory pricing, and these will also be subject to general competition law.

The whole framework that is being created is therefore designed to encourage new competitive sources of electricity to enter the market. With the savings represented by the more efficient use of fuel, we believe that CHP operators—and I know that this is the argument put forward by the noble Lord, Lord Ezra—should be well placed to take advantage of these new opportunities.

We have in addition looked carefully at the legislative framework within which CHP plant has to operate. Here, too, we have been anxious to dispose of any administrative obstacles which may be in the way of CHP developments. In particular, CHP operators have complained—indeed with some justification in the past—that they are at a disadvantage compared with the electricity boards over the laying of heat mains, for example. The boards, as public utilities, have the powers to break streets in order to lay electricity cables and, where necessary, heat mains for the distribution of hot water. Up to now these powers have not been available to independent CHP operators. However, under Clause 11(3) of the Bill, CHP operators may now have the same powers to break streets as are currently being enjoyed by the utilities.

Further, the purpose of our proposals in Amendments Nos. 116 and 118, to which I am happy to refer although, like the noble Lord, Lord Peston, I was taken a little by surprise, is to ensure that, in carrying out his functions to keep under review the carrying on both in Great Britain and elsewhere of activities connected with the generation, transmission and supply of electricity, the director also keeps under review in particular activities connected with the supply to any premises of heat produced in association with electricity and steam produced from air and water heated by such heat; or, in plainer English perhaps, combined heat and power. I hope that, when we come to them, the House will be able to welcome those amendments, which, as the noble Viscount has indicated, are a step in the right direction.

Taken together, I believe that our proposals go to considerable lengths, both in terms of promoting competition and of overcoming legislative obstacles, to improve the position and ensure that CHP operators have every opportunity to bring forward economic schemes. However, as I said at a previous stage when discussing this subject, we do not believe that it is the role of government to subsidise uneconomic schemes. If there is a place for combined heat and power schemes we feel that they should and will be capable of paying their own way. The test of any successful CHP scheme must therefore be its ability to attract private sector finance. To do that, a scheme must be able to compete effectively with other forms of electricity generation, space heating and heating for industrial processes.

The noble Lord, Lord Ezra, specifically asked why the "adopt and support" provisions of the Energy Act 1983 were not being continued. I must point out that the duty placed on electricity boards by Section 19 of the Energy Act 1983 was framed in very different circumstances from those which will apply in the privatised industry. The 1983 Act sought to create new market opportunities within an industry which was still totally dominated by the CEGB and its close relationship with the area boards. Given the absence of effective competition and the monopoly position enjoyed by the CEGB, it was felt necessary to place the boards under a direct duty to consider proposals for this important and energy efficient alternative source of generation. It was also felt necessary, again to counter-balance the dominance of the CEGB, to require boards to adopt and to support all such viable schemes. As I have already tried to explain, our privatisation proposals are designed to overcome the obstacles to CHP development at source.

The generating industry is being restructured to promote real competition and the area boards' successors will be under an obligation to purchase the most economic supply of electricity and not just to do business with their old favourites. The dominance of the CEGB will go and there will be strong commercial incentives on area boards' successors to purchase their power competitively.

With these radical changes to the structure of the industry, we believe that it would be inappropriate to continue a duty which was conceived as a spur to a monolithic monopoly in order to encourage competition. Circumstances have changed for the better and it would be wrong to look to remedies that have outlived their usefulness.

In the light of my explanations, I trust that the movers of the amendment will feel able to take solace from the government amendments which are to come and will withdraw the amendment.

Viscount Hanworth

My Lords, before the noble Baroness sits down, perhaps I may ask her three questions. First, when she considers financial viability, will she consider it over the life of any CHP project? Secondly, will she make comparisons with the success that has occurred overseas? Thirdly, will she give some bias towards energy efficiency, which is so important in our future, and not just to present economic financial viability?

Baroness Hooper

My Lords, with the leave of the House, I believe that to some extent I have already responded to those concerns. At the outset of my remarks on this amendment I said that we believed this Government have done more for energy efficiency than any other. We have broken new ground in the Bill on energy efficiency in imposing duties on the Secretary of State and the director to take energy efficiency into account. We therefore expect energy efficiency to take its rightful place in all the considerations that have to concern us.

On financial viability, we believe that by providing equal footing, by removing the obstacles, and because we believe—as indeed do the noble Viscount, the noble Lord, Lord Ezra, and others—that CHP systems are intrinsically more efficient and therefore should be more cost efficient, such a system will prove itself, given the removal of the obstacles to which I have referred. Obviously, in looking at experience overseas we take these factors into account, and the different factors that apply in some of the overseas areas where CHP systems have been more developed.

Lord Ezra

My Lords, I cannot hide my disappointment at that response, however kindly the words were uttered. I am very sorry that the Government are not giving CHP a greater push and greater support. The word "promote" means simply to stimulate and to encourage. I find it very surprising that the Government are not even prepared to say that they wish to stimulate and encourage a process which will almost double the effective efficiency of power stations, where it can be appropriately introduced, and which will enormously add to the environmental benefits.

What can be more environmentally attractive from the point of view of energy than transmitting hot water in pipes underground? What conceivable harmful environmental effect could that have? On the contrary, it has very beneficial environmental effects, because the more this otherwise wasted heat is conveyed underground in pipes, the less generation there will have to be in newly-built power stations which will have an adverse impact on the atmosphere.

In the light of these circumstances, I find it most extraordinary that the Government are not even prepared to say that the director should encourage and stimulate the development. As I made clear in the remarks that I uttered at Committee stage, the reason why there has not been more development of CHP in this country is that there is considerable initial capital expenditure. It takes a number of years before the benefits can be realised. The reason that it has been developed more on the Continent is that the process has received government support there. They are now reaping the benefit because the money has been paid back and the rest is pure benefit. Sooner or later we shall have to come to terms with the whole environmental question associated with energy.

Here we have at our disposal a means of going a long way towards solving the environmental question associated with energy. I would have been tempted to have asked the opinion of the House, except that this is a late hour, and so I shall ask the House for leave to withdraw the amendment, but I shall come back to it at the next stage.

Amendment, by leave, withdrawn.

Lord Carter moved Amendment No. 32:

Page 3, line 39, at end insert— ("(3A) In performing his duty under subsection (3)(a)(i) above, the Secretary of State or the Director shall take into account in particular the protection of the interests of consumers of electricity in rural areas.").

The noble Lord said: My Lords, this amendment has already been spoken to. I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 33 and 34 not moved.]

Clause 5 [Prohibition on unlicensed supply etc.]:

Lord Peston moved Amendment No. 35: Page 4, line 5, after ("electricity") insert ("in Great Britain").

The noble Lord said: My Lords, with the permission of your Lordships I should like to speak also to Amendment No. 36. The purpose of the amendment again is to try to get some clarification of precisely what the section means. What overall this part of the Bill is about is licensing and making it clear that someone cannot generate, transmit or supply without a licence unless that person is given an exemption. An exemption is the alternative. Someone cannot just—as at least one noble Baroness was under the impression could be done—announce that he is going to construct a generating station to compete with existing people. One can do nothing without a licence, as I read the Bill, unless one has an exemption, which is another kind of permission.

I remind noble Lords that this is not competition in any sense in which those of us who have spent our lives studying the market mechanism would use the term. "Competition" means that I decide to enter this line of business and I simply do so and compete. This is not competition.

The key matter which the amendment seeks to clarify—and I hope that we can sort it out fairly quickly—is in what sense there is a prohibition. I should like a final reassurance that the transmission or supply of electricity generated in another country—obviously we have in mind the EC—will not require a licence. How could it? It is none of our business to issue licences to people producing electricity in, say, France. Also, that there will be no question of any guilt of an offence, not merely in respect of the generator but also the transmitter or supplier. That is the main purpose of the amendment.

I fully accept the fact that I have no expertise in drafting or in the law. I can only say that my reading of the words—and noble Lords may think that it is foolhardy of me to rely merely on the words—appears to suggest that a French power station without a British licence would in some peculiar sense be guilty of an offence. I can see nothing in the words that tells me that that is not so.

I ask only for an explanation from those who are much more expert than I on legal matters as to whether the clause is satisfactory, in the sense that it does the job that the Government want it to do. To say the least, it would not be attractive if the Government were to discover that their drafting of a clause put them in certain difficulties, especially bearing in mind that, curiously enough, electricity has become internationally traded.

That is the purpose of the amendment. I am sorry to raise a matter of such technicality at this late hour, but I do not believe that it is entirely trivial.

9.30 p.m.

Lord Ezra

My Lords, the noble Lord, Lord Peston, is right to raise these issues because we form part of the European Community. We are moving into the single market and preparing for 1992. Electricity is being traded internationally more and more. England and Wales, which are the subject of the Bill, are linked with Scotland on the one hand and with France on the other. Through that French link we could be connected with electricity produced anywhere else on the Continent. I believe that the issue needs to be clarified.

The Earl of Dundee

My Lords, I am grateful to the noble Lords, Lord Peston and Lord Ezra. I believe that one of the concerns of the noble Lord, Lord Peston, is to ensure that Clause 5 of the Bill does not in some way prevent the importation of electricity from, say, France or any other country. I assure your Lordships that in no way does the clause prevent the importation of electricity. After Committee we wrote to the noble Lord, Lord Peston, about the matter.

It is our intention that those persons generating, transmitting or supplying electricity in Great Britain should be required to hold a licence or exemption. We cannot legislate for or regulate activities which are taking place in other countries and that is not our intention.

Overseas generators will not need to hold a generation licence or exemption. Those supplying electricity to premises in Great Britain who may purchase electricity from overseas generators will need to hold a supply licence or exemption. Those transmitting electricity in Great Britain will need a licence from wherever the electricity that they are transmitting originated.

I should also say to your Lordships that the Government plan to make use of the power conferred by Clause 6 to exempt certain classes or groups of operator from the requirement to hold a licence. Our present plans are to exempt those who generate little, generate for on-site consumption or export less than 50 megawatts to the public supply system. We shall be formally consulting the operators concerned on those criteria and will listen carefully to their views before drawing up the necessary order.

Lord Peston

My Lords, I thank the noble Earl for his answer and the uncovenanted extra answer about exemptions. I found that particularly interesting and helpful. Of course, I wanted the noble Earl to be on record as saying what he has just said. I am indebted to him for saying what he thinks the clause means. I am still rather puzzled that Clause 5(1)(a) does not get into difficulties in terms of overseas purchase but I must accept that, if that is his advice which he has now given me, then that is so. It does not read like that to me but I am glad that he had made this statement. I am particularly grateful for his additional, remarks on how the Government propose to use the exemptions, which had puzzled me. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 36 and 37 not moved.]

Clause 7 [Licences authorising supply etc.]:

The Earl of Dundee moved Amendment No. 38: Page 6, line 3, leave out first ("the") and insert ("any").

The noble Earl said: My Lords, I shall speak also to Amendment No. 175. These amendments clarify the procedures for second tier supply licensing. The Bill requires the granting of a second tier supply licence to be notified to the public electricity supplier in whose authorised area the premises to be supplied may be located. The first amendment recognises that the premises to be supplied may not all fall into the area of a single PES.

The amendment thus provides for any PES affected by such a licence to be notified of the granting of that licence. This is designed to help each public electricity supplier concerned to judge the degree to which he will face competition from second tier suppliers.

The second amendment, Amendment No. 175, provides for the premises which are to be supplied under a second tier licence to be described in any suitable way. It is designed to ensure that the licensing procedures may operate in a practical and sensible way.

Clause 7(2) at present allows a person to seek, and be granted, a licence to supply such premises or descriptions of premises as are specified in the licence. This would allow an applicant to seek a licence to supply certain types of premises, whether within a specified area or more generally. The licence might, for example, refer to premises used for residential or industrial purposes; or those at which a given level of maximum electrical demand is to be supplied.

Equally, it might make sense for a licence to be couched in terms of supply to specific consumers or descriptions of consumer; for example, the premises owned or occupied by, say, a bank or banks with multiple retail outlets. In those circumstances, it would clearly be more practical and less administratively cumbersome to define the licence in terms of the consumer or consumer groups concerned. The amendment makes it clear that the types of description I have given as examples would be in accordance with the requirements of the Bill for licensing purposes. I beg to move.

On Question, amendment agreed to.

Clause 8 [Conditions of licences: general]:

[Amendment No. 39 not moved.]

Lord Sanderson of Bowden moved Amendment No. 40:

Page 6, line 49, leave out from ("specified") to ("the") in line 2 on page 7 and insert— ("(c) to refer for determination by the Director such questions arising under the licence as are specified in the licence or are of a description so specified; and (d) to refer for approval by the Director such things falling to be done under the licence, and such contracts or agreements made before the grant of").

The noble Lord said: My Lords, this amendment remodels subsection (3) of Clause 8 and expands the scope of conditions which the Secretary of State or the director may include in electricity licences granted under the Bill. The purpose of the amendment is to ensure that the Secretary of State or the DGES can specify in a licence condition certain contracts or agreements as requiring DGES approval, whether entered into before or after the licence is granted.

Paragraph (c), as amended, would allow licence conditions to require the licence holder to refer for determination by the director questions as specified in the licence. Paragaph (d) would allow things falling to be done under the licence, and such contracts or agreements as are specified in the licence and made before the licence is granted, to be referred for approval by the director. This latter expansion of the provisions will cater for pre-existing contracts. What we have in mind is, for example, the restructuring contracts which the successor companies in Scotland will inherit.

Such contracts will play a central role in the operation of the privatised industry in Scotland and it is considered essential that they should be referred to the DGES for his approval. It is equally important to ensure that agreements between the companies to amend these contracts or to enter into completely new contracts are also covered. The requirement to obtain the approval of the director before entering into such agreements or future contracts is already covered by paragraph (b) of subsection (3), the text of which remains as it is in the Bill. In assessing any contracts or agreements under the licence the DGES will of course take into account his duties under the Bill.

This is a sensible amendment which reflects the Government's concern to ensure that the director has a role in relation to such contracts entered into between the two Scottish utilities. This part of the Bill of course applies to Great Britain. It is possible that this provision may be required in the future in England and Wales. I beg to move.

Baroness Carnegy of Lour

My Lords, I am not sure whether this is an appropriate moment to raise this matter with my noble friend. At an earlier stage of our proceedings my noble friend Lord Campbell of Croy asked about the headquarters of the North Board. Has my noble friend anything to report in that connection?

Lord Sanderson of Bowden

My Lords, with the leave of the House, I am happy to respond to my noble friend. It may be helpful if in this context I make a short statement which fulfils the undertaking I gave on 19th June that I would have discussions with the chairman of the North of Scotland Hydro-Electric Board about the location of the board's headquarters and that I would return to the matter on Report.

I have had a useful meeting with the chairman of the board, who has followed the debate in the House with interest. The subject is not a new one. As recently as 1985 the Monopolies and Mergers Commission addressed the issue in its report on the efficiency and costs of the hydro board. The report recorded that the MMC had not observed any serious inefficiencies arising from the separation of activities in different locations, particularly in Edinburgh and Aberdeen. It also recorded that no problems had been identified which would justify the substantial cost and other penalties of moving the head office. Nevertheless, it suggested that the board should undertake periodic reviews to ensure that the structure remained appropriate in changing conditions

It is against that background that my discussions with Mr. Joughin, the chairman, have taken place. The board considers that it would be appropriate for the new north company's flotation prospectus to make reference to the headquarters. It has agreed to record in the prospectus the fact that the company's staff is split evenly between the headquarters building in Edinburgh and other locations within its licence area. It has also agreed that the prospectus will record that the company will keep the location of its headquarters building under review with the intention of maximising benefits to shareholders and customers. These arrangements will ensure that the issue is not lost sight of as the company moves into the private sector. The board will also ensure that responsibility rests properly with the company for any decisions affecting its headquarters.

I regard this as an entirely satisfactory outcome to my discussions and to the debate on this matter on 19th June. I hope that my noble friend will understand the situation and be able to convey that message to my noble friend Lord Campbell of Croy who is unable to be here.

On Question, amendment agreed to.

Schedule 4 [Other powers etc. of licence holders]:

9.45 p.m.

[Amendments Nos. 41 to 45 not moved.]

Lord Sanderson of Bowden moved Amendment No. 46: Page 84, line 32, at beginning insert ("any relevant pipe (within the meaning of Schedule 19 to the Water Act 1989) under the control of the National Rivers Authority, a water undertaker or a sewerage undertaker or, in Scotland,").

The noble Lord said: My Lords, in moving this amendment I should also like to speak to Amendments Nos. 47 to 51. This group of six amendments is concerned simply with ensuring that there is conformity between this Bill and others which are currently before Parliament. They all relate to the powers given by paragraphs 3 and 4 of Schedule 4 for electricity licence holders to alter the position of other undertakers' works where this is necessary in order for them to carry out the functions assigned to them under their licences.

The amendments have two purposes. The first is to bring the terms used for a water pipe and for those authorised to have control of such a pipe into conformity with the equivalent terms as defined in the Water Bill, which has already been considered by your Lordships. The second is to incorporate within the works which can be altered and within the list of undertakers who have reciprocal rights in respect of electricity licence holders' works, system apparatus of the operator of a driver information system and such operators. These terms are defined in the Road Traffic (Driver Licensing and Information Systems) Bill which has also been considered earlier by your Lordships.

The powers to alter works is essential to enable licence holders to provide a supply. These amendments are an improvement to the Bill. I beg to move.

On Question, amendment agreed to.

Lord Sanderson of Bowden moved Amendments Nos. 47 to 51:

Page 84, line 33, leave out ("or").

Page 84, line 36, at end insert ("; or (e) any system apparatus (within the meaning of Part II of the Road Traffic (Driver Licensing and Information Systems) Act 1989) of an operator of a driver information system who is licensed under Part II of that Act.").

Page 85, line 52, at beginning insert ("the National Rivers Authority, any water undertaker or any sewerage undertaker or, in Scotland,").

Page 85, line 52, leave out ("and").

Page 86, line I, at end insert ("; and (d) any operator of a driver information system who is licensed under Part II of the Road Traffic (Driver Licensing and Information Systems) Act 1989),").

On Question, amendment agreed to.

Lord Sanderson of Bowden moved Amendment No. 52: Page 86, line 12, at end insert—

("Protection from interference

4A.—(1) Subject to sub-paragraph (2) below, a licence holder who installs or alters, or changes the mode of operation of, any electric line or electrical plant shall take all reasonable precautions for securing that the operation of that line or plant does not interfere with the operation of any telecommunication apparatus which—

1. (a) is under the control of a person to whom the telecommunications code applies; and
2. (b) is not unusually sensitive to interference with its operation.

(2) In the case of any telecommunication apparatus which is subsequently installed or altered or whose mode of operation is subsequently changed, the duty imposed by sub-paragraph (1) above shall not apply in relation to—

1. (a) any momentary interference with its operation; or
2. (b) where it is installed in unreasonably close proximity to the electric line or electrical plant, any other interference with its operation.

(3) Sub-paragraphs (1) and (2) above shall be read as also applying in the converse case of a person to whom the telecommunications code applies who installs or alters, or changes the mode of operation of, any telecommunication apparatus, and in such a case shall have effect as if

1. (a) any reference to the licence holder were a reference to that person;
2. (b) any reference to an electric line or electrical plant were a reference to such apparatus; and
3. (c) any reference to such apparatus under the control of a person to whom that code applies were a reference to such a line or such plant under the control of a licence holder.

(4) Any difference arising under this paragraph between a licence holder and a person to whom the telecommunications code applies shall be referred to arbitration by an arbitrator or, in Scotland, arbiter appointed, in default of agreement between the parties, by the President of the Chartered Institute of Arbitrators.

(5) In this paragraph "momentary interference" means any interference of momentary duration which is not a regular occurrence (whether caused by physical contact or otherwise).").

The noble Lord said: My Lords, this is a detailed technical amendment dealing with the necessary provisions to govern the approach of the telecommunications and electricity industries to interference between their respective operations. Your Lordships will appreciate that the use by both industries of wires carrying electricity as an intrinsic part of their operations, albeit on vastly different scales in terms of signal voltage and power, gives rise to a particular risk of interaction and interference between the two networks.

The need for measures to prevent interference was recognised in legislation as long ago as 1882. Over the years the relevant statutory provisions have been further reinforced through joint agreements between the two industries. In preparing the present amendment the Government entered into long and detailed consultation with both the telecommunications and electricity industries. The provisions that it contains reflect that consultation and essentially continue the approach which had been developed by the industries under the existing legislation. I beg to move.

On Question, amendment agreed to.

[Amendment No. 53 not moved.]

Clause 13 [Modification by agreement]:

[Amendment No. 54 not moved.]

Clause 14 [Modification references to Monopolies Commission]:

[Amendments Nos. 55 and 56 not moved.]

Clause 16 [Modification following report]:

[Amendment No. 57 not moved.]

Clause 18 [Duty to supply on request]:

[Amendments Nos. 58 and 59 not moved.]

Clause 20 [Power to recover charges]:

Lord Williams of Elvel moved Amendments Nos. 60 and 61:

Page 16, line 7, leave out ("undue").

Page 16, line 8, at end insert ("particularly consumers in rural areas").

The noble Lord said: My Lords, I beg to move Amendments Nos. 60 and 61 en bloc. They were spoken to and decided on in a Division earlier today.

On Question, amendments agreed to.

Clause 24 [Special agreements with respect to supply]:

Lord Sanderson of Bowden moved Amendment No. 62: Page 18, line 16, leave out from ("who") to end of line 17 and insert ("requires a supply of electricity in pursuance of section 18(1) above and is supplied by the public electricity supplier otherwise than on the terms specified in").

The noble Lord said: My Lords, in the discussion of this clause in Committee the noble Lord, Lord Williams of Elvel, proposed an amendment to the definition that it contains of "tariff customer". I said at that time that we believed that an amendment along the lines proposed could help to clarify the position.

Lord Williams of Elvel

My Lords, may I interrupt the noble Lord? Is he speaking to Amendments Nos. 63, 64, 66, 67, 70 and 72?

Lord Sanderson of Bowden

No, I am speaking only to Amendment No. 62, which is not grouped on my list with that group of amendments, to which we shall come later.

I said at that time that we believed that an amendment along the lines proposed could help to clarify the position and I undertook to consider the point further. The amendment we are now considering achieves that clarification by specifying that, for the purposes of the Bill, a tariff customer is one who requires a supply under Clause 18(1) otherwise than on the terms specified in Clause 24(1). In other words, we are fulfilling the noble Lord's desire. I beg to move.

Lord Williams of Elvel

My Lords, I am most grateful to the noble Lord, I apologise for intervening. I think I had an earlier version of the groupings.

On Question, amendment agreed to.

Schedule 6 [The public electricity supply code]:

Lord Sanderson of Bowden moved Amendment No. 63: Page 93, line 25, leave out ("supplying and fixing") and insert ("provision").

The noble Lord said: My Lords, I should like to speak also to Amendments Nos. 64, 66, 67, 70 and 72. This group of amendments serves two purposes. It makes one substantive change to the provisions of the Bill, and also makes some changes to the drafting to ensure that there is consistency within the Bill on the terms used to describe the same point.

I shall start, if I may, with the point of substance. During discussion of Schedule 6 in Committee, the noble Lord, Lord Dean of Beswick, moved an amendment to paragraph 1(5) of the schedule. This would have had the effect of extending the period which is allowed under the Bill for the payment of charges due in respect of a supply to 28 days from the presentation of a demand for payment by the public electricity supplier. He argued that the period prescribed in the Bill was inconsistent with that allowed to gas consumers and was too short.

I explained at the time that what was provided for was a minimum period for the payment of charges. In setting such a period it is right and proper that account be taken of the billing practices within the industry—which are different from those in the gas industry—and the need to ensure that ordinary customers who pay their bills on time are protected from cost penalties as a result of bad debts. I did, however, agree to look at the points made in debate and consider the matter further.

In that earlier debate the clear feeling was expressed that the proposed minimum period could cause particular difficulties for domestic consumers if it were to be rigidly enforced. I am pleased to say that the amendments we are now considering would extend the time allowed to domestic customers to 20 working days. That is, of course, at least the equivalent of the four calendar weeks allowed by the Gas Act 1986. The 15 working day period will be retained for other customers. This approach meets the concerns which had been expressed over the position of the domestic consumer while retaining the necessary degree of protection against large debts accumulating for other customers with large demands who would generally be billed more frequently. It will, I am sure, be welcomed by your Lordships.

As I said earlier these amendments also make some changes to the drafting of paragraph 1 of Schedule 6 to ensure there is consistency of terminology within the Bill. To that end the references to fixing and installing of electric lines, electricity meters and electrical plant are changed to references to provision of such items in line with the equivalent references in Clauses 18, 21 and 22 of the Bill. Similarly where paragraph 1(4) currently refers to the charges in respect of the supply these will be spelled out in full as in the present paragraph 1(5) to avoid any ambiguity.

I commend these amendments to your Lordships both for the substantive change which they make in improving the position of domestic consumers and for the improvements they bring in the drafting of the Bill. I beg to move.

Lord Dean of Beswick

My Lords, I should like to express my appreciation for the concession announced by the Minister of an increase to 20 days. Naturally, I should have liked it to be longer, but we are grateful for the concession.

On Question, amendment agreed to.

Lord Sanderson of Bowden moved Amendment No. 64: Page 93, line 41, leave out from ("paying") to second ("the") in line 42 an insert ("all charges due from him in respect of the supply or the provision of any electricity meter, electric line or electrical plant for the purposes of the supply,").

On Question, amendment agreed to.

Baroness Seear moved Amendment No. 65: Page 93, line 43, after ("electricity") insert ("otherwise than through a pre-payment meter").

The noble Baroness said: My Lords, with the leave of the House, in moving this amendment I shall speak also to Amendment No. 68. These two amendments are very similar to amendments which were moved in Committee, but with slight alterations to meet some of the objections raised by the Government at that time. The objective is exactly the same as it was in the amendment moved in Committee: it is to make it as unlikely as possible that there will be a disconnection, having regard to the very serious problems which arise, to domestic consumers when disconnection takes place.

As I understand it, the Government had two objections to the amendments moved in Committee. One was that in the amendment moved, and in the amendment being moved now, the Government wish to distinguish between people who would not pay and people who could not pay. In our view that is a distinction which it is extremely difficult to make. It may of course be possible to make it in extreme cases at either end of the spectrum, so to speak. There are a small number of cases where no doubt it is quite easy to see that someone is deliberately trying not to pay. However, there are a great many more cases where it would be extremely difficult to determine whether in reality a person is unable to pay or is unwilling to do so. Therefore it seems to us that the bureaucracy which would go into trying to make that distinction is simply not worth the expenditure in time and money involved. Therefore we reject that objection and hope that the Government will reconsider the matter.

The Government also said that it would be an invasion of privacy if a pre-payment meter was automatically installed as an alternative to disconnection. Therefore, in the amendment we move this evening we suggest that it should always be an option to disconnection that a pre-payment meter should be installed; but it should only be an option and not an automatic process, as previously suggested in connection with the installation of a pre-payment meter instead of disconnection.

I repeat that the disadvantages of disconnection, the harm done to families, the difficulties which arise as a result of it and the cost of the whole process, make it highly desirable that it should be avoided in every possible case. In view of the changes which have been made in the amendment since a similar amendment was put forward in Committee, we hope that the Government will be able to accept it. I beg to move.

Baroness Oppenheim-Barnes

My Lords, I rise to support the case put forward by the noble Baroness, Lady Seear.

Baroness Gardner of Parkes

My Lords, I oppose this amendment because, as no doubt the noble Baroness heard me say at a previous stage of the Bill's proceedings, in the London board area there are 200,000 cases a year of people threatened with disconnection. That is because they do not wish to pay their bill, are slow about so doing or are reluctant to pay and are building up huge arrears. The actual number of disconnections is only 14,000.

If we remove the disconnection and replace it with the option suggested by the noble Baroness, is that option for the board or for the customer? I say that because the board regularly exercises an option of offering a pre-payment meter or a budget meter. If terms can be agreed for back payment of the money outstanding, to be made up over a period of time, then the board will do so. Every effort is made to help the genuine customer who is in genuine difficulties.

However, bearing in mind the difference between the 14,000 disconnections and the 200,000 potential disconnections, if you remove the sanction then you are taking away a great weapon in terms of keeping down the level of debt. The bad debt figure in the London area is now well over £6 million a year. That is £6 million which all the other consumers and customers have to pay for through their charges. It is not on to take away the board's right to disconnect by insisting on the amendment. If the noble Baroness is suggesting that the area boards should have the option, I should be happy. I interpret her remark as meaning that the consumer would have the option.

10 p.m.

Baroness Seear

My Lords, with the leave of the House, our previous amendment proposed that the meter should be installed automatically. As I understood it, it was to that proposal that the Government objected. If they were prepared to accept it, we should be pleased. We modified the amendment to meet that objection.

Baroness Gardner of Parkes

My Lords, before the noble Baroness sits down, will she clarify whose option she is talking about?

Baroness Seear

My Lords, I tried to explain to the noble Baroness that we originally wished to provide that the board could automatically impose the installation. As I understand it, it was to that proposal that the Government objected. We therefore produced this modified amendment which does not enforce that action on the person required to pay. That was because the Government were not prepared to have an automatic installation of the meter.

Lord Dean of Beswick

My Lords, the noble Baroness, Lady Seear, is right. The amendment is worthy of serious consideration. As the noble Baroness, Lady Gardner of Parkes, said, she made the same point in Committee. I do not find that the logic she expressed can be transferred into human terms. The main basis of her argument is that the threat of disconnection is better than the option of a meter. Giving people the option of a meter might well avoid 200,000 people owing money. That is the point of the exercise.

People will be able to resolve their own troubles by mutually agreeing the installation of a meter. It will give them the right to redeem their debt through the meter and then enable them, in colloquial terms, to keep their heads above water. On balance, my party favours what the noble Baroness, Lady Seear, said. It is workable and more humane and in the long-term it will be better for everyone involved. We support the noble Baroness.

Lord Sanderson of Bowden

My Lords, I listened with great care to the point made by the noble Baroness, Lady Seear, in support of the amendment. As I said on several previous amendments, I think that we have been here before. I understand that the noble Baroness's intention in moving the amendments is that the public electricity supplier will have the power to install a pre-payment meter when the customer is in debt. Underlying that is the intention to ensure that no one who is in difficulty over the payment of their bills as a result of genuine hardship should be disconnected. The electricity industry shares her desire to avoid unnecessary disconnection. There is no commercial advantage in losing custom if an arrangement can be reached for paying for future supplies and recovery of the outstanding debt.

That principle is embodied in the codes of practice which are currently operated on a voluntary basis by the electricity boards. They guarantee that if a payment arrangement covering both recovery of debt and charges for future consumption can be agreed and is kept to, then the customer in question will not be disconnected. As an alternative, it guarantees that where it is safe and practical to fit a pre-payment meter, then if the customer accepts such a meter he will not be disconnected.

The approach has already been a factor in the downward trend of disconnections. The figures for disconnection may be well known but I should like to repeat them. In England and Wales in the 12 months ending 31st May there were 74,695, the lowest since such figures started to be kept in 1976, and a fall of 13.9 per cent. on the 12-month period ending 31st May 1988. In Scotland the figures fell by more than 19 per cent. during the same period.

The Government have fully recognised the value of the approach set out in the code of practice. A condition has been included in the public electricity supply licence requiring that the holders produce such a code (in consultation with the relevant consumers' committee) and obtain the agreement of the director general to it within three months of the licence being issued.

We have also included in the public electricity supply licence a further condition on treatment of tariff customers in default along the lines of that introduced in the British Gas authorisation. This condition requires the licence holder to prepare, in consultation with the relevant consumers' committee, methods for dealing with customers in default because of misfortune or inability to cope with electricity supplies on credit. These methods have to be agreed with the director general and adopted within three months of the licence being issued. Any failure by the public electricity supplier to adopt such methods will be a matter where the director would be able to use his enforcement powers to require compliance with the licence condition.

The code of practice already provides that supply will not be disconnected where it is safe and practical to provide a prepayment meter. The new licence condition requires that the methods to be adopted must include the provision of a prepayment meter as a last resort. The difference between our proposals and those of the noble Baroness is that there is one extra ingredient necessary—that is, the agreement of the consumer. We believe that not only is it right that this agreement be obtained; its requirement is also an essential protection of the consumer's civil liberties. We take the matter very seriously. I know that the noble Baroness does too, but we slightly differ on this point.

It is not just the Government who take that view. It has also been taken by the Director General of Gas Supply in respect of the British Gas authorisation. He has of course a statutory duty to protect the interests of consumers of gas. The proposal of the noble Baroness could result in a situation in which customers had prepayment meters forced upon them. That is my reading of the amendment she has placed before us. I believe it is totally contrary to the approach set out in the code of practice and the new licence condition. In addition, under the terms of the Bill the consumer would then be faced with paying the charges incurred in supplying and installing the meter, over and above those that might be recovered through the use of a tariff appropriate to such a meter.

It may, of course, be the intent of the noble Baroness that the costs of supply and installation of the meter should be met by a levy on other customers. If so, it would hardly be protecting the interests of such consumers, some of whom may also be experiencing difficulty in meeting their bills, to saddle them with these extra costs. We believe that the amendment would introduce an unnecessary power. It would be an unwarranted intrusion, as has been said, on the liberties of the individual. The noble Baroness mentioned the "can't pay, won't pay" issue. We believe that the objections to the necessity under the new conditions to distinguish between those customers who are in debt through genuine hardship do exist. I understand that the concern of the noble Baroness is with just such customers and that she fears that the process will be less than satisfactory. We share her concern for the less fortunate but it is incumbent on the Government and this House to protect the interests of all consumers. We should be failing in this duty were we not to take account of the possibility that there will be customers who do not pay when they are perfectly able so to do.

Another matter was raised by the noble Baroness at a previous stage and it is worth repeating on this issue. The electricity industry already makes efforts to inform customers in difficulty of arrangements that are available, in many cases drawing the code of practice to customers' attention on each bill issued. Copies of the code itself are also readily available. I know very well that the people whom the noble Baroness has in mind may not read such codes but we hope that through the advice form, citizens' advice bureaux or other places to which those customers may go the necessary information will be disseminated.

It has been suggested that public electricity suppliers should have the right to require their customers to accept prepayment meters. When a supply is requested, it is open to the supplier to specify in a notice given under Clause 18(4) that a prepayment tariff should apply. In cases where a supply is already being given on credit and the supplier determines that this is an unreasonable basis for continued supply, he can use the powers set out in Clause 19(2)(c). In both these cases, however, it is open to the consumer to seek a determination from the director under Clause 25. Once again the Bill gives the customer the opportunity to have a say in the terms of his supply.

I have to say that I have looked very closely at this particular matter. It is a question of balance. It is a question of trying to get the right balance as regards what should be done to protect those in the community who are less able than others perhaps to appreciate the difficulties that this whole matter raises. However, I have to say, much as I dislike doing it, that I think on this occasion we have to stick by the terms of the Bill as drafted. I shall, of course, consider what the noble Baroness has to say in relation to the meaning that we interpret from the amendment she has tabled. I shall also study what the noble Baroness has said in the debate this evening. With that assurance that I shall consider without commitment what has been said, I am afraid I have to say that on the present reading of the amendments I have to reject them.

Baroness Seear

My Lords, I listened with great attention to what the Minister said. It seems to me that on this occasion, as on so many previous occasions, we are told that everything is in the code of practice or that it will be incorporated into the licence. However, there are many occasions when—I think this is one of them—we want the provision not in the code of practice but on the face of the Bill. Therefore, I feel I must test the opinion of the House.

10.11 p.m.

On Question, Whether the said amendment (No. 65) shall be agreed to?

Their Lordships divided: Contents, 13; Not-Contents, 33.

DIVISION NO. 2
CONTENTS
Addington, L.	Oppenheim-Barnes, B
Airedale, L.	Peston, L.
Dean of Beswick, L. [Teller.]	Seear, B.
Hanworth, V.	Tordoff, L. [Teller.]
Hatch of Lusby, L.	Whaddon, L.
Lockwood, B.	Williams of Elvel, L.
McNair, L.

NOT-CONTENTS
Ampthill, L.	Hesketh, L.
Arran, E.	Hooper, B.
Belstead, L.	Joseph, L.
Blatch, B.	Mackay of Clashfern, L.
Borthwick, L.	Mersey, V.
Brougham and Vaux, L.	Montgomery of Alamein, V
Caithness, E.	Morris, L.
Cork and Orrery, E.	Nelson, E.
Cowley, E.	Saint Levan, L.
Craigmyle, L.	Sanderson of Bowden, L.
Davidson, V. [Teller.]	Skelmersdale, L.
Denham, L. [Teller.]	Stanley of Alderley, L.
Dundee, E.	Strathclyde, L.
Ferrers, E.	Thomas of Gwydir, L.
Gardner of Parkes, B.	Trafford, L.
Glenarthur, L.	Ullswater, V.
Henley, L.

Resolved in the negative, and amendment disagreed to accordingly.

10.18 p.m.

Lord Sanderson of Bowden moved Amendment No. 66: Page 93, line 44, leave out ("so").

The noble Lord said: My Lords, I have already spoken to Amendment No. 66. I beg to move.

On Question, amendment agreed to.

Lord Sanderson of Bowden moved Amendment No. 67: Page 94, line 1, leave out from ("not,") to first ("the") in line 5 and insert ("within the requisite period, paid all charges due from him to a public electricity supplier in respect of the supply of electricity to any premises, or the provision of any electricity meter, electric line or electrical plant for the purposes of that supply,").

The noble Lord said: My Lords, this amendment has already been spoken to. I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 68 and 69 not moved.]

Lord Sanderson of Bowden moved Amendment No. 70:

Page 94, line 9, at end insert— ("(5A) In sub-paragraph (5) above "the requisite period" means—

1. (a) in the case of premises which are used wholly or mainly for domestic purposes, the period of 20 working days after the making by the supplier of a demand in writing for payment of the charges due; and
2. (b) in the case of any other premises, the period of 15 working days after the making of such a demand.").

The noble Lord said: My Lords, this amendment has already been spoken to. I beg to move.

On Question, amendment agreed to.

Baroness Oppenheim-Barnes moved Amendment No. 71:

Page 94, line 16, at end insert— ("( ) Unless with the express agreement of the customer, pre-payment meters shall not be calibrated other than to recover the customer's liability for charges set under section 20 for the period beginning on the date the pre-payment meter was installed.").

The noble Baroness said: My Lords, I think that I can explain the amendment most swiftly by means of analogy. If a customer who has a charge account, for example, with Marks and Spencer, is in arrears with that charge account, no one stops that customer going into Marks and Spencer and buying goods for cash. When he does so, the company does not put a percentage on the price of those goods in order to retrieve part of the arrears.

I am not saying that the electricity companies should not pursue their arrears vigorously in the way that all other companies would and should do, both for the sake of the company and for consumers in general. What I am saying is that it is not correct to put consumers of electricity of a monopoly supplier in a different position—a disadvantageous position—from those throughout practically the whole of the rest of British industry. In other words, if they are willing to pay cash and to pay in advance for goods, they should not be penalised because they are in arrears by calibration of their meters, which means that they are paying off their debt. That would not be the case if they were shopping anywhere else except with a monopoly supplier. That is the logic of the amendment which I hope will commend itself to your Lordships. I beg to move.

Baroness Gardner of Parkes

My Lords, I think that the amendment perhaps misunderstands the situation. The purpose of calibrating the meter—it is always done in a sensible way—is to enable the person gradually to pay off the amount owing. The boards take a sympathetic view if an effort is made to make up the arrears. It is a way of preventing disconnection. The alternative would be that the person would have to be disconnected from the supply. I believe that it is an advantage—not a disadvantage—to the customer to have the opportunity to calibrate in that way.

As to the analogy with Marks and Spencer, a statement was made that if one has an account one can go in and pay cash. No mention was made of the fact that, if one has an account, one can be charged interest every month on the amount that one has not paid. That mounts up very quickly and it would be wrong for the interest on those amounts to be charged to a consumer unnecessarily. I believe that all boards make every effort to reach an agreement with the consumer. If accepted, the amendment would be a disadvantage to people.

Viscount Hanworth

My Lords, the amendment does not prevent agreement on how the debt is to be agreed on the meter. There is nothing to prevent that, but the amendment states that it should not be done without the agreement of the person concerned. I do not think that what we have just heard is a reasoned argument against it.

Lord Sanderson of Bowden

My Lords, I understand the purpose that my noble friend has in mind in moving the amendment. However, I happen to believe that her amendment is unnecessary.

Your Lordships will be aware that paragraph 12(2) of Schedule 7 already prohibits the recovery of charges other than those in respect of electricity supply through a prepayment meter. It is not the case, however, that the Bill provides the power for the supplier to calibrate a prepayment meter to recover amounts in excess of that due For electricity being supplied through it. In the absence of any specific power, the supplier would have no right unilaterally to calibrate the meter to recover charges for outstanding debt. I hope that the noble Viscount appreciates that point. The only sanction the Bill provides in such cases is disconnection.

In view of this, any recalibration of a meter to recover more than the charges due for electricity supplied through it without the prior consent of the consumer would be unlawful and punishable under the appropriate statutes. In the light of that explanation, I hope that my noble friend will consider withdrawing her amendment.

Baroness Oppenheim-Barnes

My Lords, I should like to consider what my noble friend the Minister has said. I think that he may have gone a long way to convince me. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Sanderson of Bowden moved Amendment No. 72:

Page 94, line 20, at end insert— ("(8) In this paragraph a reference to the provision of any electric line or item of electrical plant is a reference to the provision of such a line or item by the installation of a new one or by the modification of an existing one,").

On Question, amendment agreed to.

[Amendment No. 73 not moved.]

Clause 27 [Orders for securing compliance]:

[Amendment No. 74 not moved.]

Schedule 7 [Use etc. of electricity meters]:

[Amendment No. 75 not moved.]

The Earl of Dundee

My Lords, I beg to move that consideration on Report be now adjourned.

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