LORDS AMENDMENT (Hansard, 25 July 1989)

§ Lord Sanderson of Bowden

My Lords, I beg to move that the House do not insist on their Amendment No. 3 to which the Commons have disagreed, and do agree with the Commons in their Amendment No. 4 proposed in lieu thereof.

The noble Lord, Lord Shepherd, who moved Amendment No. 3, recognised when he did so that his amendment might not be correctly drafted. As was made clear when we discussed the amendment, it appeared to the Government that the difficulties with the amendment went deeper than the question of drafting. And since then the Energy Select Committee has recognised that the amendment is technically deficient.

But it was clear from remarks made by the noble Earl, Lord Lauderdale, the noble Lords, Lord Kearton and Lord Peyton, and the noble Viscount, Lord Hanworth, during discussion of the noble Lord's amendment that your Lordships felt that the Government should do more to promote the efficient use of electricity, even though the Bill as it stood already contained many important provisions to encourage the efficient use of electricity.

1338 For the first time it established a regulator with a statutory duty to promote the efficient use of electricity. Clause 3 of the Bill gives the Secretary of State and the director a duty to promote efficiency and economy on the part of person; licensed to supply or transmit electricity. It gives the Secretary of State and the director a duty to promote the efficient use of electricity by customers.

The Government's proposals also provided for public electricity suppliers to be required by their licence to provide guidance to their customers about the efficient use of electricity. Condition 18 of the draft public electricity supply licence published in January required each licensee to provide, within three months of his licence coming into force, information on the efficient use of electricity in a form approved by the director.

These are important and significant provisions for the promotion of the efficient use of electricity. I am now pleased to be able to say that the Government have done very much more, following the spirit of what the noble Lord, Lord Shepherd, was looking for. First, they have given the director, through Commons amendments, the power to set standards for public electricity suppliers to achieve in promoting the efficient use of electricity and for the standards to be published. The consequential amendments to Clause 40 enable the director to require suppliers to produce evidence about how well they are doing in relation to specific standards laid down by the director. The director will thus be able to monitor what the suppliers are doing.

The director will also have powers to ensure that the standards are met. Condition 17 of the draft public electricity supply licence will be expanded to require the licensee to conduct his business in a manner he considers best calculated to meet them. If he fails to act in this way, the director has clear and effective powers under the Bill to enforce the licence condition. And if the director thought further action was needed under Clause 40 he could go to the Monopolies and Mergers Commission to amend the licence. It is in this way that we have sought to meet the spirit of the noble Lord's amendment. Like the intention of the amendment, what we are proposing will enable the director to require the public electricity suppliers to produce evidence to him showing how they are promoting the efficient use of electricity. And like that amendment, it will give the director power if a supplier fails to take appropriate action. But because it does so within the framework of the Bill and the draft public electricity supply licence, it will be effective and will ensure that suppliers really do promote the efficient use of electricity.

The Government have also decided to require licensees to introduce a comprehensive code of practice on energy efficiency. I am sure that this is well known to the noble Lord. The code of practice will be a major step forward. For the first time suppliers will be required to give their customers a comprehensive service related to the efficient use of electricity and guidance over a wide range. There will be a licence condition which suppliers will be required to meet, just as they are required to meet all the other licence conditions.

1339 I should like to make one final point. I have emphasised what an important role the director will have in promoting efficient use of electricity. I should like to make clear that co-operation between the director and the Department of Energy's Efficiency Office will be close, both at national and regional levels. I know that your Lordships have a high regard for the Energy Efficiency Office. That was made perfectly clear when this matter was debated. Your Lordships will know that the office has a great deal of experience to offer as regards the scope for improved energy efficiency, how consumers can be guided, and how energy management should be tackled.

I have tried to explain how the Government have recognised your Lordships' concerns and how we should do even more to promote the efficient use of electricity. I have also tried to explain how we have sought to meet in a workable and effective manner the spirit of the noble Lord's amendment. I beg to move.