Electricity Bill

HL Deb 05 June 1989 vol 508 cc656-709

House again in Committee on Clause 18.

[Amendment No. 141 not moved.]

Lord Peston moved Amendment No. 141 A: Page 15, line 13, at end insert ("and understanding of it").

The noble Lord said: This amendment is of some significance. Earlier in Committee we were discussing tariffs, and so forth. I waxed strongly about the formulae which will be used to fix tariffs, not least those fixed by the suppliers. My view was that the formulae are extremely complex and difficult to understand and that is a worrying matter.

Having argued that view to Members of the Committee, several people wrote to me pointing out that I was mistaken in assuming that the formulae were difficult to understand. They explained them to me, in every case saying that they were extremely easy and I had completely misunderstood them.

The amendment is not unrelated to that which we discussed before the break. It concerns the need for the tariff and the method of determining it to be comprehensible and adds the words "and understanding of it". I slightly regret not going a little further than adding those words. On reflection, leaving in the words "in the opinion of the supplier" is not entirely satisfactory. I should rather have said "in the opinion of the director". However, that is a mere detail. It is important to press on the Government the need not merely for publicity per se, but for people to be able to understand the formulae and why they are being charged a particular amount.

As a matter of good business practice, a rational supplier would undertake to do so; but I do not wish to rely on that entirely where the supplier in question has a monopoly. Therefore I press the point about understanding and table this amendment with a view to hearing the Minister's comments and those of other noble Lords should they find this matter interesting. I beg to move.

Lord Renton

There are so many different levels of understanding in the community, and I suppose that those who are born very clever have a reasonable opportunity of understanding even though something is gibberish. The average person may find that something which is necessarily technical may be rather difficult for him to understand. In the very nature of things, for every person of average understanding, there are a great many people with less than average understanding. The question is: whose understanding is it that the noble Lord, Lord Peston, is trying to get at?

Lord Peston

I believe that that is an interesting point but I do not believe that it is quite devastating. Of course, as a university teacher, I am well aware of the different levels of understanding or not understanding. I assume that we should have to have recourse to the notion of the average or within 10 per cent. of the average consumer or something of that nature.

This relates to certain arguments which we have had before. There is no point in giving publicity in this area except with a view to helping people to understand what is happening. I think we can agree on that. Let me hasten to add that I am not suggesting that the formulae, which even I had difficulty in understanding, should be in the publicity. However, to go back to some of the debates which we have had earlier, not least connected with rural areas, in so far as the tariff reflects costs and the supplier wishes them to be thought reasonable, I should have thought that there should be an obligation on the supplier to enable people to understand at least simple matters of that sort to do with cost and the difference between a standing charge and the cost of the current, and so on and so forth.

I am not certain that those matters are terribly difficult for most people to follow. I am fairly certain, particularly with the modern approach to these matters when we are all involved with energy efficiency and so on, that the more we can educate the public on matters of this sort, the better it will be. I do not regard my remarks as out of sympathy with the Bill. I am out of sympathy on other grounds, but I believe that this sort of amendment is within the spirit of the Bill, and is one to which the Government could give some thought. I do not press the point any more strongly than that.

Baroness Gardner of Parkes

I am not sure that there is much point in this, although I do not believe that there is any harm in it. We have always tended to take a view in Committee that unless there is a point in putting in something, then one does not want to complicate the legislation with words.

As I understand electricity now— and I believe that it will be the same in the future— the one matter in which the consumer is interested is what he will have to pay. He is not really interested in how the formula is worked out to achieve the result, but if he thinks he is paying more or less than the man next door, then he is concerned about that. He wants to see a published tariff and there is now a tariff published widely in newspapers. If I gave a list of all the local papers in which the tariff is published in the London area, then Members of the Committee will see that that is very good business for the local newspapers.

The main feature of the published tariff is that the difference is shown between someone using offpeak and standard units. The argument over a standing charge and units used is a different matter. That argument has gone on for a long time and everyone believes that it is fairer to have a standing charge because people would be disadvantaged by a change in the system. Over the years in the gas and electricity industries there have been arguments as to which is the best system, and various methods have been tried but that is a different matter.

The tariffs are published in a fairly simple way for those people who are interested to understand. However, most people are really interested in what they have to produce from their pocket at the end of the day to meet their bill. Provided that they are satisfied that the director is watching their interests and that he is the man determining the tariffs, they will not care whether he works it out using the x plus y plus z formula or the k, 1 and p formula. The erudite formula is not something of interest to people although the actual tariff is. I believe that the words are adequate on that point.

Lord Brain

I believe that this is perhaps unnecessary because publicity is not adequate if it is not understood. I suspect that one is adding words unnecessarily. I take the point that was mentioned from the Front Bench about the words: in the opinion of the supplier". Surely "adequate publicity" is a broad general term and one does not need to qualify it by the opinion of anybody. I know that that is not part of the amendment, but I wish to draw that to the attention of the Government.

Lord Sanderson of Bowden

I believe that we are in total agreement with the noble Lord, Lord Peston, that consumers should be entitled to know the basis on which their electricity tariffs have been made. Like my noble friend Lord Renton however, I believe that the amendment is unnecessary.

As the Committee will be aware, we have already placed a requirement on suppliers in subsection (2) of Clause 18 to frame their tariffs in such a way as to show the methods by which, and the principles on which they have been made as well as the prices to be charged. When the tariffs are published, if the director considers that insufficient information has been provided he will be able to use his powers under Clause 46 of the Bill to require the supplier to provide such additional information as he considers necessary. Therefore, I believe that that answers the point of the noble Lord, Lord Peston, on the words: in the opinion of the director". That is where he comes in. Or, if the information provided is not clearly set out or is not comprehensive, he will be able to remedy the situation. We feel that that is an adequate safeguard.

I am pleased to say that in many cases electricity suppliers give very comprehensive information. Perhaps I may say to my noble friend Lady Gardner that not only in her area but in others we find the standing charge very well explained; for example, in the East Midlands Electricity Board publicity when it sends out bills, and so on. I hope with that explanation of where the safeguard lies for the consumer, the understanding will be in terms which they can understand as can the noble Lord, Lord Peston, and myself.

8.15 p.m.

Lord Peston

I thank the noble Lord for his reply which I understand. I am quite sympathetic to the point of view he takes. It just seems to me— and I leave this thought with Members of the Committee— that if we are to have this new Electricity Bill which is a new departure for us altogether, that where the opportunity arises we should take advantage of the new departure and not simply say that matters are all right now.

I feel that the area of educating people in energy matters and so on is not one which we should ignore. I believe that the noble Lord is saying that I am to some extent over-egging the pudding in insisting on understanding but I do that for good reasons. However, having made my point, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Viscount Hanworth moved Amendment No. 141B: Page 15, line 16, after first ("charge") insert ("so framed as to show the methods by which and the principles on which the charge is made,").

The noble Viscount said: Many of us dislike the principle of standing charges particularly because it bears so hard on the poor who use so little electricity. One fears that arguments might be put forward (or rather one fears no arguments against might be put forward) for increasing these standing orders. This amendment simply puts into the Bill that the methods by which and the principles on which the charges are made should be stated. I beg to move.

Lord Sanderson of Bowden

Again, under the provisions of Clause 18(2), when a public electricity supplier fixes a tariff he will be required to present it so as to show the methods by which, and the principles on which, the charges making up the tariff have been made, as well as the prices to be paid. These requirements will apply to any of the charges included in the tariff whether it be the unit rate, a standing charge or any of the other types of charges covered by Clause 18(3). There is therefore no need to duplicate the requirements of subsection (2) in each specific case given in subsection (3).

The Committee will be aware that the provisions of Clause 18 are substantially the same as those which apply now to the area boards when fixing their tariffs under the Electricity Act 1947. These have resulted in the boards producing very helpful explanatory leaflets for their customers setting out the different tariffs and showing what those tariffs represent. Other boards provide this type of information on the back of the quarterly bill itself; as does the East Midlands board to which I referred. We would expect this type of practice to continue.

We have, however, introduced a new safeguard for customers in our proposals to ensure that they are kept fully informed. Condition 7 of the public electricity supply licence requires a supplier to keep the director informed of the tariffs fixed by him and the charges which make them up. Where the director considers that any of the tariffs fixed are so complex that explanatory statements are required to assist consumers, he may direct the licensee to draw up an explanatory statement which he will have to publish alongside the tariffs to which they relate. This will ensure that customers are fully aware of what they are being asked to pay for.

I hope that with that explanation and the knowledge that on the charge sheets which come out the method by which the standing charge is explained, as in some of the area boards' explanatory leaflets that I have seen, the noble Viscount will consider withdrawing his amendment.

Baroness Seear

The noble Lord said that at present it comes out in some of the area boards' leaflets. We should like to ensure that everybody who receives a bill has a clear explanation of how the standing charge has been arrived at.

Before the noble Lord replies, which I see he is graciously about to do, it is not good enough to say that because it is being done at present it will be done the same in the future. The whole point that we have been making throughout the evening is that we are moving from a public to a private enterprise way of doing things. To expect us to take it for granted that because it is being done in the public sector it will be done in the private sector, with, quite properly, different objectives is to tax our credulity rather far.

Lord Sanderson of Bowden

The noble Baroness tempts me to go down a road which seems to imply, by her way of putting it, that everything in the public sector glitters with gold and everything in the private sector does not; but I shall not. However, I should like to point out that the reason I said some electricity boards is that I have not studied every single publication of all the electricity boards. Therefore I could not say that it is the case for all. Nevertheless, I say that by the measures which are being brought forward in this Bill and by setting up the directorate under the director general who has the power to intervene I believe we are providing the safeguards necessary to carry through what the noble Baroness and I both want.

Viscount Hanworth

It seems that the principle behind this amendment has been accepted. On the other hand, one is not entirely satisfied that there is not a case for including this amendment in the Bill. Nevertheless, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 142 to 1447A not moved.]

Lord Campbell of Croy moved Amendment No. 144A: Page 15, line 27, at end insert— ("and charges for initial connection shall be in accordance with a common tariff for identical work.").

The noble Lord said: This amendment raises the question of charges for connection to a mains supply in remote areas. I have in mind, of course, northern Scotland, where difficult situations can arise. This is related to but is different from the subject that we debated on 16th May on my Amendment No. 74 to Clause 3(2). On that amendment my noble friend Lord Sanderson gave the assurances that I sought about a common domestic tariff in the area of the North of Scotland Hydro-Electric Board.

Clause 19, which we shall come to, refers to reasonable charges and gives the director some discretion. However, on reading that clause, that seems to mean what is reasonable for the supplier, and on this amendment to Clause 18 I am concerned with the consumer. I must make clear that I am not in favour of a right to a highly subsidised supply to any and every habitation. I can think of cases where a single house is miles from any main supply, in a remote glen with very difficult access. The cost in such a case could be £ 100,000 or more simply for a single connection. I am not urging extreme, extravagant proposals.

However, it must be faced that remote areas have problems of geography and distance in supply to resident and active communities. That has been recognised in the regime which has been pursued by the North of Scotland Hydro-Electric Board since its inception in the early 1940s. The latest of its schemes ended last year, but it was ended by a decision taken in 1983 because it was only a five-year scheme. That scheme was called the uneconomic rural development scheme, and a passing reference was made to it earlier this evening by the noble Lord, Lord Carter.

Other consumers in the area of that board in effect paid for assistance in special cases over that period of five years, with some subsidy. However, the conditions of that scheme were that only existing and occupied premises qualified. Further, £ 600 had to be produced by the prospective consumer and there was a limit of £ 10,000 from the board. The scheme was also supported by EC funds. It did not apply to new premises. I would be surprised if all the existing premises which need connection, and deserve it on development or serious community interest grounds, have by now been covered. Indeed, there may be new premises, perhaps essential for some desirable development in the Highlands or Islands, where a connection charge could be prohibitive in the absence of the recent scheme.

I recognise the requirement to be fair to all consumers. I can speak with confidence from my own experience for two reasons. First, I have been a resident and a consumer in the area of the North of Scotland Hydro-Electric Board for over 30 years. Secondly, for two periods I was a Minister responsible for electricity in Scotland— in the early 1960s and again in the early 1970s. I am certain that the large majority of consumers in northern Scotland are still prepared collectively, when paying their electricity bills, to make a contribution to special cases in the remote areas. Of course, the effect on each is fairly insignificant. I am one of those consumers and I quickly add that my home is not in a remote part of that area.

What I now suggest— I do not think it has previously been put forward— is that there should be a common basis for connection charges throughout the area of the board. This would mean that there would be the same charge, for example, for identical work for 100 yards of the same type of cable laid in a similar situation. It would even out the elements of distance to remote areas and of transport to the islands. An item of equipment in Orkney would cost the same as in Angus; for example, laying of 100 metres of the same type of cable. This principle would not encourage very expensive connections unless the prospective consumer regarded the project as so important that he was prepared to pay a great deal. I feel sure that the majority of consumers in north Scotland would still willingly share the expenses of such connections, as they have in the past in previous schemes.

I have not designated the north board area in this amendment though I have it in mind. I suggest that it is the most relevant area in the country as regards remote and difficult connections. Again I draw attention to the point concerning possibly hybridity that I raised on 16th May. I understand that the Government do not wish to put in the Bill a fairly arbitrary area. They can do it in an order later as subordinate legislation. But they do not wish to do so in a Bill in case it runs the risk of suddenly raising questions of hybridity and therefore taking up a huge amount of time and probably running into the next Session. If after mature consideration the Government accept in principle what I am proposing, the designation of the north of Scotland area— and any others if they were thought suitable for similar treatment— could be done by order as is proposed in regard to Clause 3.

I remind the Committee that my noble friend Lord Sanderson gave very satisfactory and welcome assurances in the debate on my amendment on 16th May which concerned the question of a common domestic tariff. I hope that the Government will consider carefully the subject that I have raised with this amendment on connection charges. If the proposal in the amendment is not acceptable, I ask the Government this evening to indicate how they visualise dealing with reasonable situations in remote areas and how they will be handled in the future. Perhaps they have an alternative in mind. At this point I beg to move the amendment.

8.30 p.m.

Lord Renton

I have a great deal of sympathy with my noble friend as regards this amendment. I am sure that what he is suggesting would be desirable if it were truly practical. The trouble is that it is fairly rare for the work of connecting to one house to be identical to the work of connecting to another. Premises and subsoils differ. There are obstructions and rock formations under the soil and these differ. Having said that, I believe that my noble friend has made a case which the Government should answer.

As regards the next point I wish to make, I am not blaming my noble friend Lord Campbell of Croy. Clauses 18 and 19 do not carefully and clearly separate the charges for the consumption of electricity from charges for the extension of electricity supply. It appears that Clause 18, which has the side note "Power to recover charges", is really intended to cover charges for the consumption of electricity. Clause 19 appears to cover charges for the supply of electricity in the various circumstances in which it can arise.

Therefore it was with some interest that I noted that the noble Lord, Lord Ezra, and the noble Viscount, Lord Hanworth, who have a similar but not exactly the same objective in mind, have put down amendments to Clause 19. We shall discuss them before long. I believe that the case that my noble friend has made is right in principle and I shall be interested to hear what my noble friend on the Front Bench has to say.

Lord Kirkhill

I take this opportunity to intervene briefly to say how much I support the argument which the noble Lord, Lord Campbell of Croy, has just developed. I believe that he has done so with masterly attention to detail. As some Members of the Committee will know, and as the noble Lord, Lord Sanderson, certainly knows, I have some experience in this matter, given that I was chairman of the hydro board for some four years or so. I honestly do not believe that I can add to what the noble Lord has just said, so I refrain from irrelevant additional comment.

However, I wish to remind the Committee of the remarks which the noble Baroness, Lady Seear, made but a short time ago. What I believe lies in part behind the noble Lord's argument is just a suspicion that when we move into the private sector there is at that point— and at the earlier point which he raised with his previous amendment— the hint of a lack of control. Some of us believe that control is necessary in the consumer interest.

Baroness Gardner of Parkes

I am rather concerned by this amendment. The points made by my noble friend Lord Campbell of Croy are very interesting and it may be that they are more relevant in Scotland than in general. I certainly cannot accept them as general policy.

I believe that the point made by my noble friend Lord Renton as regards how one would decide what is the same is interesting. It reminds me of the argument for equal pay for work of equal value. When I see how difficult it is to assess those cases, I believe that it will be equally impossible to compare like with like in terms of so much per number of metres that were to be laid.

The fact has to be faced that the scheme referred to in Scotland, as I understand it from this debate, has now ceased.. It was brought into being with the assistance of EC money. It was not something funded entirely by the board on its own account even at the time when it was nationalised and when it was not supposed to be a competitive private industry. It was not easy for it then.

The situation in England— I cannot speak for Scotland and I do not really speak for England, but I am giving a general picture— is that people can live in a very remote position. It is important to appreciate the present situation. If you live in a remote position, to run a cable to your home alone, and if it is the only one in that direction, will cost £ 10,000. If you agree to meet the cost, the cable will be run to your house. Within a few years someone may build a house halfway between your home and the connection point. The fee for laying the cable to the new house would be £ 5,000. The present practice is that the person who paid £ 10,000 for the original line would get a rebate of £ 5,000, or whatever is the appropriate amount according to the distance and where the take off point is.

As regards gas, where my home is in Oxfordshire there was no gas in the village. We put it to the gas board that we would like gas. The request was to the privatised gas board but I believe that the scheme was under way before it was privatised. The gas board said that if we could persuade 60 people in the village to take gas it would be installed and the cost would be, I believe, under £ 400 per house. It was quite difficult to find the 60 people. But some people were so determined to have gas that they used every argument they could to persuade others.

Eventually 60 people agreed and now the whole village has gas. There are always a few people who hold off until the last minute because they believe that they will be able to latch on to the system cheaply. In setting that price, which was a favourable price for everyone, the gas board also said that it would confirm that anybody else coming for gas afterwards would be asked to pay exactly the same amount so that there would be no advantage in playing the game until the last minute to try to get it cheaply. The electricity boards now have a fairer system. A rebate is given to the first person who has had the line laid a long distance, as others are added to it.

I had a letter from Action with Communities in Rural England which spoke of the high cost of laying on mains electricity. It wanted to see a scheme whereby a smaller number of consumers could have a supply connected for £ 500. As I explained, we were all connected to the gas supply for less than £ 500. However, there is a difference when the community wants it. If it is one isolated property, the cost of running a line can be out of all proportion. If that line is run, it is subsidised by every other consumer. For us to attempt to impose on what will be a privatised industry conditions much stricter than ever applied to the nationalised industry would not be right.

Lord Carmichael of Kelvingrove

We should be grateful to the noble Lord, Lord Campbell of Croy, for putting down this amendment which will be welcomed by people in rural areas all over Britain, particularly in Scotland. I agree with the noble Lord, Lord Renton, that "identical" would seem to be a weak point. However, in any such matter there is always a rough average over a large number of people. Things will never be identical, but there will be a rough average. It is the basis of so many measurements in sociology and areas such as work study. Everyone works differently, but there is a rough average in the way people work. Therefore the amendment is not as vague as first appears to be the case.

The noble Lord, Lord Campbell, has asked how we should solve the problem. No one can say that it is an easy problem. Electricity is vital in the modern world. We have a responsibility not so much to the man in a house way up the glen where connection would cost a vast amount of money but where it is reasonable to bring in a supply. I know places in Scotland which are not all that remote. Fairly close to Dunoon they are still using generators. If one happens to switch on one's bed light the generator starts and keeps one awake. Noble Lords on the other side of the Committee may have experienced that.

We have a rough comparison with television. Television did not come to the remote glens or to the remote islands at the same time as it came to London or to other conurbations, but it gradually spread out. More houses were able to receive television as new transmitters were put up at considerable cost. Electricity and television are both vital parts of modern life. No one objects to the fact that part of the television licence fee is used to provide transmitters to broadcast to small communities. Such communities may already have television but require perhaps the fourth channel. There is a general feeling that they should receive the full service. I hope that the Minister will take this point to heart. The noble Lord, Lord Campbell, has put forward a point which is of great importance to people all over the country.

Lord Sanderson of Bowden

We have had an interesting debate with knowledgeable contributions from noble Lords, particularly from my noble friend Lord Campbell in relation to the highlands and islands.

I understand the noble Lord's intent in bringing forward an amendment to protect consumers from being charged unduly high connection costs because of the area in which they live. That is common ground. I have to say, however, that we believe that the approach he has suggested is impractical. The cost of giving a length of cable and associated plant is unlikely to be different from one region to another. However, the same is not true— he has made this clear— of the costs of carrying out the works necessary to install that cable. Where on the one hand it may be a question of digging a trench across open ground, in another it may mean breaking a street and in yet another simply making use of a conduit already installed by a developer. Further differences are bound to arise as a result of differing labour costs from one area to another. There is also the whole question of distance.

The Government share the noble Lord's view that connection costs should be reasonable wherever the connection is made. It is for that reason that in Clause 19 specific provision is made to ensure that the supplier can recover from the consumer only the expenses reasonably incurred in providing that consumer with a connection. Where there is any dispute over the reasonableness of the costs incurred, the consumer has the right to take the matter to the director for determination under the terms of Clause 23. In this way we believe that the provisions of the Bill already meet the noble Lord's anxieties. Perhaps I may refer to the specific Scottish position.

The noble Lord, Lord Macaulay of Bragar, will no doubt tell me about a specific case. It is a long story but I shall not weary the Committee unless he wishes to raise it. The SSEB's present policy is that connection charges for isolated properties should reflect the actual costs incurred by the board in installing the supply and is therefore already in line with what is proposed in the Bill. A review by the board two years ago suggested that the total cost of connecting all of the 700 remaining occupied properties then without supply— around 0.04 per cent. of the board's total number of consumers— would run to several millions of pounds. In pursuit of its social obligations, the hydro board has operated a non-statutory uneconomic rural development programme to bring electricity to remote areas. This terminated on 31st March this year.

Under this programme a consumer could receive assistance towards connection costs from the board of up to £ 11,000, increased, as my noble friend Lady Gardner has said, in EC assisted areas by virtue of the regional development fund to almost £ 16,000 for a property which existed on 1st April 1984. Following completion of the programme, the board estimates that there are around 500 properties in the more remote areas of its district without a mains supply— around 0.09 per cent. of the board's total number of consumers. The majority of these are so remote as to render the provision of a mains supply completely uneconomic even within the terms of the programme. The occupiers of a minority of properties have declined to take up the opportunity of an assisted connection.

The board is satisfied that following completion of the uneconomic rural development programme it has achieved all that could reasonable be asked of it in meeting its existing obligations to rural consumers. The position therefore is that all reasonable steps have already been taken in Scotland to bring a mains supply to rural consumers.

The provisions of the Bill do not substantially alter the existing situation. There are of course some cases which do not fit the normal pattern. For instance, the existence of high voltage lines through any particular area would not necessarily mean that consumers located nearby would be able to take electricity from those lines. For both technical and economic reasons, supplies to consumers must take place through the hierarchy of lower voltage transmission and distribution lines and through a series of transformer stations and substations.

As I have indicated, under the terms of Clause 23 there is redress through the director as to the question of reasonable costs but I must side with my noble friend Lady Gardner of Parkes in the matter. I must therefore resist the amendment.

Lord Taylor of Gryfe

There is a substantial difference between us on the matter. The protection of the consumer which has just been quoted refers to "reasonable costs". Such reasonable costs can be very substantial. However, they are reasonable for the amount of contracting work involved. Therefore the costs will be justified. But this is a very important question: it concerns the protection of rural communities.

Those of us who have witnessed the situation in Scotland, where there is a substantial decline in rural activity in large parts of the country, see that there will be no inducement whatever for people to develop rural industries, or to expand the rural economy, if they feel that they will be faced with very high costs in order to install essential electricity.

I wonder whether the Minister can assist me on a further point. On discussing British Telecom's responsibilities, I seem to recall that we wrote into that Bill certain social obligations for the company when we privatised it. I am not sure whether we had a common tariff for installation in British Telecom. Indeed, British Telcom go to the excess and charge you for non-installation: they charge you for accepting a number which already exists. I regard that as a substantial abuse of monopoly power. However, I shall not pursue that issue at this stage. I simply ask whether there is a provision which protects the consumer so far as concerns British Telecom.

I plead with the Minister to visualise just what the implications are of saying, "All right, the consumer is protected if a reasonable charge is made." That is not what we are talking about; we are talking about protecting the rural economy and making it possible for that economy to survive.

Lord Macaulay of Bragar

I wonder whether the noble Lord, Lord Sanderson of Bowden, could clarify where he envisages the end result of all these proceedings. I say that because there is provision in Clause 23 which means that any dispute can be referred to the director by either party; but it is not a reference by both parties of mutual consent. The end result of that, according to subsection (5)(b), is that any award made by the arbiter shall be final and, In Scotland, shall be enforceable as if it were an extract registered decree arbitral bearing a warrant for execution issued by the sheriff". That could mean that some innocent abroad, in terms that he may be several miles up the glen, gets himself involved in expenses of several thousands of pounds. He may not know about such expenses because they arise as the work progresses due to unforeseen snags. The dispute is then referred to the director, who finds against the consumer, who then may be rendered bankrupt at the end of the day just for trying to install electricity into his house. That is a service which is available to 99.9 per cent. of the population.

Baroness Gardner of Parkes

I do not think that one would get involved in costs for this work without being aware of the situation. I think that one would certainly be given a price for connecting the supply well in advance. One would have the choice of either accepting it or rejecting it.

Lord Macaulay of Bragar

I think that the point was made by another noble Lord that snags can arise as the work progresses. It may be that a person is prepared to take the risk initially but during the course of the work anxieties arise as to whether he can cope with the cost. It goes even further than that because it is stated later in the Bill that the decision of the arbiter cannot be referred to the Court of Session by stated case. Therefore the consumer in Scotland is stuck with the decision of the arbiter if the supplier takes the case to the arbiter without the consumer's consent.

Lord Sanderson of Bowden

In reply to the noble Lord, Lord Taylor of Gryfe, I should like first to say that I should have thought that what this Government have done over the past few years in relation to the disadvantaged areas in Scotland is quite remarkable. Forty-three million pounds will go to the Highlands and Islands Board this year for dealing with the problems which affect that area. Therefore I do not wish to hear too much about what is done. Of course, in the case of British Telecom we have recently announced a substantial programme for the Highlands and Islands.

As regards the point raised by the noble Lord in connection with British Telecom, I should like to read the question he asked before I respond. I do not have the answer readily available, but I shall of course write to the noble Lord on the matter.

As regards the whole difficult area of what is and what is not a reasonable amount, we have often discussed this issue. Indeed, my noble friend Lord Trafford asked in a previous debate on this Bill what was fair and reasonable. Moreover, I have no doubt that we shall return to the matter when discussing subsequent amendments. I must say to the noble Lord, Lord Macaulay of Bragar, that if we have a difference of view as regards what is and what is not reasonable then the way to determine the matter is the way as disclosed under Clause 23. In answer to his point about costs— and the Western Isles case of Balallan is very clear here— I must say that it is not a question of not knowing what the costs are; it is looking at the costs in relation to what the alternatives may be. For instance, it may be that the alternative for a particular crofter is a home generator or perhaps Calor gas.

Lord Campbell of Croy

I shall start by saying that the wording of my amendment was bound to be imperfect; it was an amateur's draft which was aimed simply at making the intention clear. I am most grateful to all Members of the Committee who have taken part in this short debate. I am especially grateful for the support which I have received from my noble friend Lord Renton. Of course I agree with him that situations differ, and again my drafting is at fault because I used the word "identical".

My intention was that the equipment in the Western Isles should cost the same as equipment in some more favoured part of the mainland. However, I realise that the actual work and the difficulty of the job depends upon rocks and, if I may say so, in towns it depends on streets and buildings. That is a most difficult matter to try to register.

I am also most grateful to the noble Lord, Lord Kirkhill. He was a chairman of the North Board and was widely regarded as someone who was determined to do all he could to provide electricity in Northern Scotland in the most efficient and effective way.

To my noble friend Lady Gardner of Parkes I should say that I tried to make it clear that I was not in favour of extravagant schemes. I referred to the fact that the European Community made a contribution to the five-year scheme which has now just come to an end. I think that the North of Scotland Hydro-Electric Board was absolutely right— no doubt supported by the Scottish Office— to make use of the funds which were available. Indeed, a number of connections have no doubt been made as a result of the contribution which came from the EC. I am grateful for the comparisons with other parts of Britain made by noble friend. She was able to do so because of her great knowledge of the industry.

My noble friend Lord Sanderson of Bowden did not surprise me when he said in his reply that he could not accept the amendment as it appears on the Marshalled List. When dealing with remote areas of the mainland, I draw the Committee's attention to northern Sutherland and Wester Ross. These are places where electricity can be a great boon, but it is sometimes difficult to bring electricity to such areas.

I should especially like to draw attention to the island groups. The word "rural" has been used in this debate. However, let us remember that when the Western Isles and Shetland are considered there are many miles of sea between them and the mainland. That means a substantial sea or air journey with equipment or men when connections have to be made. There is genuine anxiety in northern Scotland about connection charges with the change in legislation, and the fact that the previous schemes are coming to an end.

My noble friend Lord Sanderson referred to Clause 23. I hope that the Government, and everyone else who will be concerned with the Bill when it becomes an Act, recognise that although the North of Scotland Hydro-Electric Board did a great deal until March this year with the existing schemes, in the future consideration may have to be given, not to extravagent schemes, but to simple straightforward schemes where some help is needed for the common good in the area.

Lord Sanderson of Bowden

Before my noble friend decides what he wants to do with the amendment, perhaps I may point to the close co-operation that has recently taken place. My right honourable friend the Secretary of State for Scotland has announced co-operation between British Telecom and the Highlands and Islands Development Board in an imaginative scheme which will spend a great deal of money helping telecommunications in that area. I am sure that if my noble friend understands that that is the Government's view on such matters he will understand that if electricity becomes a problem in the future, as he envisages it might, we shall look at similar schemes.

9 p.m.

Lord Campbell of Croy

I thank my noble friend for that intervention. I have been at home during the past week, and I have been bombarded by papers from British Telecom telling me about the new scheme for northern Scotland. So far as I have been able to read it, it seems that it will be helpful for the area. If the Government are prepared in due course to take a similar view of the new supply of electricity in the area after the North Board, that is a good sign. At this point, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 18 agreed to.

Clause 19 [Power to recover expenditure]:

Viscount Hanworth moved Amendment No. 145: Page 15, line 32, at end insert ("having regard to the desirability of making an electricity supply available to all domestic consumers who require it").

The noble Viscount said: I am sure that we all want anyone who wishes to have a supply of electricity to be able to obtain it where it is practical. All the amendment does is to stress the desirability of giving a supply when it is possible. I beg to move.

Lord Sanderson of Bowden

Our proposals are designed to give consumers the same right to request the provision of a supply on reasonable terms. As I understand the amendment, the proposals amount to a requirement that all requests to supply domestic premises from the mains must be met, regardless of the cost to the supplier. That takes no account of the efficiency or otherwise of that approach. It may be that the use of alternative means would be both cheaper and more efficient in terms of energy use.

The proposal also leaves open the case where there is a request for a supply to domestic premises, and the person requesting the supply is unwilling to meet, for whatever reason, the costs reasonably and properly attributable to providing the supply. It would appear that, in those circumstances, the connection should still be made, presumably leaving other consumers to bear the excess costs involved. As the Committee will understand, it would be consumers and not the shareholders who would do that.

What we have proposed in the Bill represents a fair approach for all. The person requesting the supply will be guaranteed the offer of a supply on reasonable terms. He will also be aware of the costs of meeting his request. Where he believes that the quoted cost is unreasonable, he will be able to refer to the director for a ruling on the point. In this way the consumer will be in a position to make an informed judgment on the most appropriate way of obtaining a supply of electricty.

I do not believe that the amendment is sensible in terms of the general protection of consumers, or will necessarily ensure that the most efficient and economic way of obtaining a supply is adopted. Having heard what I said, I hope that the noble Viscount will withdraw the amendment.

Viscount Hanworth

I must make the point that I do not believe that the Minister's advisers can possibly have read the amendment. It says no more than "the desirability of. Nearly everything the Minister said was irrelevant to the amendment: nevertheless, I beg leave to withdraw it.

Amendment, by leave, withdrawn.

Lord Peston moved Amendment No. 145A: Page .16, line 9, after ("value") insert ("calculated on the basis of a reasonable discount factor").

The noble Lord said: In speaking to the amendment, I should like to say a few general words about Clause 19. The clause seems to be about two matters. The first relates to solving what is called the "free-rider" problem; namely, once one person has incurred the high cost of obtaining a supply, the marginal costs to the next person can be low. That is essentially the point made earlier by the noble Baroness, Lady Gardner of Parkes. The clause seeks to solve the "free-rider" problem, although, as economists are aware, it is insoluble. The clause makes some effort in that direction.

The clause is also about the general cost of connection. The amendment we have just debated relates to cases where the cost of connection is high. What one means by the cost of connection being high seems to be that it is a large capital sum. What puzzles me about the clause is why there is no reference to converting the capital sum into an annual charge. I shall take simple numbers, which are not right because of compound interest. If it costs £ 10,000 to connect a property where the connection will last 50 years, one could calculate that the annual charge could be £ 200 for depreciation, plus the interest on the £ 10,000, which is what the amendment is about, which for the average sum outstanding at, let us say, 10 per cent. discount, would be £ 500 a year. Instead of saying that connecting up will cost £ 10,000, one could say, "If you want to be connected up, it will cost you £ 700 a year". Much of that calculation depends upon having an appropriate discount rate and an estimate of the length of life of the connection.

I make the point immediately, as I do on almost all my interventions, that I am ignorant about this subject. For all I know, electricity boards are already offering this service as an annual charge rather than as a capital sum. However, Having listened to the debates on Scotland and rural areas, all I can say is that it did not sound like that.

If I am right that these companies, certainly when they are in the private sector, ought to be encouraged to deal with the matter in a different way, then I repeat the point that central to the whole economics of this is the rate of interest which the companies will use. In terms of the precise wording, what one is using the interest rate for is to capitalise current expenditure. But interest rates have exactly the opposite role: they can also— if I may use a word that does not exist— "currentise" capital expenditure or annualise current capital expenditure.

All that leads to the conclusion that the interest rate is of enormous importance here. What interests those of us on this side of the Committee is whether or not there ought at least to be some statement on the face of the Bill about what the interest rate should be. That arose earlier when we were discussing the pricing formula and again the interest rate was mentioned.

We have therefore put down the amendment in order to give the Government some chance of clarifying the whole capital current or amortised aspect of this sort of thing. One possible answer— and I should be interested to know whether or not the noble Lord is about to give it to the question as to what the relevant interest rate will be— is the marginal cost of capital to a private enterprise of this kind, bearing in mind the risk that it is taking. If that were to be the case, we should be talking about a rather high rate of interest. Alternatively, it might be the Treasury discount rate. In my days at the Treasury that was a relatively low number, although nationalised industries still used to baulk at the idea of having to meet such rates of return.

I think I have said enough to indicate the area in which we should like to hear the comments of the noble Lord. I conclude by saying that I accept that the amendment is rather technical and one does not necessarily require answers immediately to all the points one has made. I beg to move.

Baroness Gardner of Parkes

I find it a very interesting suggestion that there could be an annual charge. It is something which probably a lot of the boards would like to look at. So far as I know, none is using it at present.

When I bought a house in Cornwall I found myself saddled in this way with an annual charge for water connection which had been taken on by the previous owner. If we are to have something like this, it will be very important that successors in title to a property know that they will have this continuing charge. I feel that the whole idea is very interesting and I too am anxious to hear the Minister's reply.

Lord Sanderson of Bowden

I thank the noble Lord, Lord Peston, for enlarging a little on his amendment. As I understand it, his intention in proposing it is to ensure that the consumer is not overcharged as a result of an allowance for capitalised maintenance in the connection charges which has been calculated on an unfair basis.

We believe that the amendment is unnecessary. Under the terms of Clause 19 the supplier is entitled to recover only the reasonable expenses incurred in making a connection. Where those expenses include an allowance for the capitalised value of any expenses for future maintenance of electric line or plant supplied, then the reasonableness criterion will apply equally to that charge also. Thus if the supplier were to use an unreasonable discount rate in calculating the amount due, the charge would be inadmissible to the extent that it was unreasonable.

I looked in the dictionary to see what the word "reasonable" meant and it seems to be, "conformity to what is fairly to be expected". If a consumer believes that the charge he is being asked to pay for connection is unreasonable on any ground then he will have the right to take any dispute over the matter to the director for determination under Clause 23, as we have already discussed. That would of course include cases where the consumer believed that the allowance for the capitalised value of maintenance expenses was unreasonable.

I shall look very carefully at the more technical expressions that were used by the noble Lord, Lord Peston. If there is any other light that I wish to shine on him in relation to trying to explain the point, then I shall write to him.

Lord Peston

I thank the noble Lord. However, it is not I who require to have light shined on me, it is the Bill, if the noble Lord will forgive that slight quip. I thank him very much for his answer. The only point I would make on "reasonableness" is that, after all, we are discussing a Bill where the economics are the essence. In a way, "reasonableness" is not known to economists other than in concepts like, "what is reasonable is what the market will bear". Unfortunately that is not "reasonable" as it would be thought of by some consumers. In other words, "reasonable" is not so simple a matter.

I do not blame the noble Lord. Obviously it is not how one writes "reasonable" into a Bill: I appreciate that. On the other hand, I am concerned about where the decision about what is reasonable will come from. I assume that what he is saying— and I do not press this now— is that "reasonable" will certainly be considered by the director. Without seeking to insult his great profession, I hope this will not be a matter that is determined largely by the courts. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment /No. 146 not moved.]

Clause 19 agreed to.

Clause 20 [Power to require security]:

[Amendment No. 147 not moved.]

9.15 p.m.

Viscount Hanworth moved Amendment No. 147A: Page 16, line 41, leave out subsection (4) and insert— ("(4) For the purposes of subsection (l)(a) above, reasonable and sufficient security shall be deemed given where—

1. (a) it is reasonably practical in all the circumstances (including in particular the risk or loss or damage) for the supplier to provide such a meter; or
2. (b) where a direct payment is made to the supplier under regulation 35 of the Social Security (Claims and Payments) Regulations 1987 (deductions from income support and other benefits and direct payments to third parties); or
3. (c) the person requiring the supply is prepared to enter an agreement to pay the estimated costs by means of a weekly or monthly instalment plan, the payment to be adjusted on an annual basis to reflect actual consumption.

(5) In subsection (l)(a) above, "security" means any arrangement in consequence of which a public electricity supplier may be assured of payment of money due to him and shall include a deposit given to such supplier or guarantee or charge (whether legal or equitable) in favour of such supplier. (6) Any dispute arising from subsections (4) and (5) above between a public electricity supplier and a person giving or wishing to give security shall be determined by the Director as though it were a dispute falling to be determined under section 21 below.").

The noble Viscount said: Clause 20(4) of the Bill states: A public electricity supplier shall not be entitled to require security in pursance of subsection (l)(a) above if—

1. (a) the person requiring the supply is prepared to take the supply through a pre-payment meter; and
2. (b) it is reasonably practicable in all the circumstances (including in particular the risk of loss or damage) for the supplier to provide such a meter".

I feel that that provision is rather restrictive. There are many other types of security which could reasonably be given, so why not list them? That is precisely what this amendment endeavours to do. I beg to move.

Lord Sanderson of Bowden

I am grateful to the noble Viscount for being so succinct in proposing the amendment. I have looked quite closely at it, and I am now a little clearer as regards its underlying intent.

While it is perfectly right that the Bill should place an obligation on the public electricity supplier to provide a supply when requested to do so, this has to be counterbalanced by a right to recover any charges due for providing that supply. Where there is a delay in recovery of charges, as is the case where supplies are taken on credit, then it is reasonable that the supplier should be allowed to require reasonable security for charges due. That is what Clause 20 permits.

Of course, where the consumer pays for his supply in advance of the supply, as in the case where a prepayment meter is fitted, then there can be no doubt about receiving the sums due. In such cases no security could be reasonably required. That is the purpose of the current Clause 20(4). This provision does not, by the way, define the meter itself as security, as the amendment attempts to.

The amendment suggests that where some form of payment arrangement has been entered into, this too gives security. Clearly, it does not. Any payment arrangement, whether direct deduction or voluntary payment, which is intended to recoup average charges over a given period cannot guarantee that at any point within that period all the outstanding charges will have been covered. This is particularly self-evident in the case of a fuel like electricity where winter usage could be considerably higher than in summer. It may therefore be perfectly reasonable for some additional security to be required in such cases. It is for this reason that both the proposals in subsections (4)(b) and (4)(c) of the amendment and in subsection (5) are not acceptable.

We believe the proposal in subsection (6) is unnecessary. Clause 23 already makes clear that its provisions apply to the whole of Clause 20. It is indeed this fact that provides the necessary protection to consumers. In any case where security is required, the consumer will have the right both to dispute it and to seek an independent determination from the director of that dispute. The powers of the director in this respect allow him to determine both the form of any security which would be reasonable and the amount. It is open to the director to determine that no security is reasonable or that some form of guarantee is sufficient, or, indeed, that some other approach to security would suffice in a given case. Where a payment agreement of some form exists, this will clearly be a relevant factor which the director will take into account.

I hope I have shown that the consumers' interests in the matter of security are already protected in the Bill. I hope that on reflection, and having listened to what I have said, the noble Viscount will be prepared to withdraw the amendment.

Viscount Hanworth

I am not entirely satisfied with the explanation the Minister has given because in other walks of life there are many means of giving security, or what is thought to be adequate security. However, I do not appear to have convinced the Minister, so I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 20 agreed to.

Clause 21 [Additional terms of supply]:

Lord Renton moved Amendment No. 148: Page 17, line 7, leave out ("economic").

The noble Lord said: I beg to move the amendment standing in the name of my noble friend Lord Peyton of Yeovil. The word "economic" seems to be quite unnecessary. I invite the attention of the Committee to the context in which it is used. Clause 21(b) states: any terms restricting any liability of the supplier for economic loss resulting from negligence".

The word "economic" is quite unnecessary in any event. There is one curious view that it would be a contradiction in terms to say "economic loss".

Lord Williams of Elvel

I support the amendment. The debate which the noble Lord, Lord Renton, has started was a debate that I had intended to introduce on clause stand part. I am very glad that the noble Lord has introduced it in relation to this amendment.

I wonder whether the Government really know what they are doing in this clause. They are saying that a public electricity supplier may require someone to whom it supplies electricity to assent to any terms restricting any liability of the supplier for economic loss resulting from negligence which it is reasonable in all the circumstances for that person to be required to accept". That is a very odd concept.

I could go to the noble Lord, Lord Sanderson, and say, "I will supply you with electricity, and if there is any negligence on my part and any loss, economic or otherwise— or whatever all this means— you have to accept it, it is not my fault". For those of us who are dependent on electricity for our domestic well-being, this is an odd clause. I wonder whether the noble Lord can help us with respect to the Government's intentions in this matter.

Baroness Gardner of Parkes

This may seem to be an unusual clause in terms of what the noble Lord, Lord Williams, referred to as his domestic well-being, but it is enormously important to the electricity industry in these days when someone can set up a business which is run by computer in the middle of nowhere. If for some reason the cable to that computer is cut and there is insufficient back-up, a significant loss of information could result. People with such computers could claim unlimited sums from any area board or supplier of electricity. The provision is not included to cover instances where your toaster will not toast and you have to use the open fire; it is intended to cover the implications of the use of modern technology where people work at distances remote from offices.

Lord Williams of Elvel

I should have thought that it was perfectly possible for the computer expert living in the sticks and running his computer to insure against that. That is what insurance is for. I am thinking about the poor domestic consumer who is required to sign all sorts of papers which he does not necessarily understand saying that he cannot claim against the area board or privatised public electricity supplier in the event of loss. I believe that that is the point which the noble Lord, Lord Renton, raised. We are not after the big company.

Lord Renton

The noble Lord, Lord Williams, with great aplomb, has widened the debate into a discussion on clause stand part whereas I was merely dealing with the simplest possible drafting point of the unnecessary use of the word "economic".

Lord Sanderson of Bowden

Clause 21(2)(b) was introduced in recognition of the fact that in a few instances the loss of a supply of electricity for a very short period of time could result in substantial economic loss without there being any accompanying physical loss. The economic loss in such cases would well exceed the actual value of the supply lost.

Lord Williams of Elvel

Can the noble Lord define "physical loss" for us?

Lord Sanderson of Bowden

Presumably that means according to the capital equipment that would be lost.

Lord Williams of Elvel

The noble Lord used the words "physical loss". I asked him to define them.

Lord Sanderson of Bowden

That is as I understand it.

Lord Williams of Elvel

If the noble Lord does not understand the words that he is using, perhaps he would let us know. However, he has used the words and perhaps he would let us know what he means by them.

Lord Sanderson of Bowden

My understanding is that "physical loss" means loss of equipment. The economic loss in such cases could well exceed the actual value of the supply lost. With the increased reliance on computers in a great many aspects of modern business, this is of growing concern, as I am sure the noble Lord will know from his past experience. As the noble Lord has asked me what I mean by physical loss, I shall elaborate on what I have said. It is damage to property. That is exactly what I said about capital equipment.

The Government take the view that it would be unreasonable to place on the public electricity suppliers, and through them the generality of consumers, the burden of acting as the insurers for those consumers who are sensitive in this way to a very short duration of loss of supply— perhaps even only for a second or less. In light of that, the current provision has been introduced to allow the supplier to limit his liability for economic loss where this is reasonable. Where a consumer disputes the reasonableness of any terms imposed under this condition, he has the right to seek a determination of the matter from the director general under Clause 23.

The noble Lord, Lord Renton, has proposed that the suppliers' rights in this matter should be extended to cover any loss. While we believe that for the particular circumstances I have mentioned it is appropriate that the public electricity suppliers should be enabled to limit their liability for economic loss, we do not accept that they should be able to go further. On the contrary, it is right that the industry should take responsibility for its own actions.

While I feel sure that the noble Lord has in mind only liability for physical loss, I should point out that his amendment would also enable suppliers to limit their liability for personal injury and death. As the Committee will be aware, Parliament has already accepted the principle that there should be no right to limit liability where death or injury result from negligence on someone's part. This is clearly stated in Section 2 of the Unfair Contract Terms Act 1977.

This amendment seeks to limit the protection for consumers under the Bill. I hope that with this explanation my noble friend will understand the meaning behind the clause.

Lord Renton

My noble friend's reply has opened all sorts of vistas about rules relating to damages awarded by the courts. These are cases which will come before the courts. I can only speak with regard to the courts in England, which would lean against what is known as remoteness of damage; indirect damages do not directly result from the liability of the supplier. Far from enlarging the concept of the damages which could be obtained, I should have thought that my amendment would limit them by cutting out the word "economic" so that it would simply be the actual pecuniary loss suffered resulting from negligence.

This is a matter which may not have been thought through when this was drafted. Certainly the reply which we have received, very interesting though it is, surprises me immensely.

In the circumstances I am prepared to withdraw the amendment. Indeed, it might be just as well to do so, so that we can consider the application of this word when we come to the Report stage. I hope that meanwhile my noble friend will obtain legal advice as to the rules applied by the courts for assessing damages north and south of the Border. I beg to leave to withdrawn the amendment.

Amendment, by leave, withdrawn,.

Clause 21 agreed to.

Clause 22 [Special agreements with respect to supply]:

Lord Williams of Elvel moved Amendment No. 149: Page 17, line 12, after ("may") insert (", unless he requires supply for domestic purposes,").

The noble Lord said: The purpose of this amendment is to prevent public electricity suppliers from using special agreements, which are outlined in this clause, to circumvent the protections in the Bill for domestic consumers. Clause 22 is obviously concerned with the largest commercial consumers requiring over 10 megawatts. Clause 22(1)(a), however, gives a power to the public electricity supplier to enter into special agreements in other circumstances.

This may be quite proper and correct if it is confined to commercial customers— say, those who require supply up to 7 megawatts or whatever number of megawatts one may wish to name. But it also opens up the problem of what I believe are known as Busby agreements. These are special agreements entered into by suppliers whereby they agree not to disconnect the supply in exchange for certain obligations which go rather beyond the boundaries permitted by the existing supply code. Such agreements were challenged unsuccessfully in the divisional court in a case Regina v. Midlands Electricity Board ex parte Busby. That is why they got the name Busby agreements.

I am advised that these agreements are now extensively used by boards to impose agreements on consumers, making them effectively the insurers of the safety of the meter and its contents. In effect consumers are offered a choice between no supply and the terms of the special agreement. I am sure that there is no difference between these Benches and the Government on this matter. It is a loophole which appears to us and our advisers to be in this clause. I beg to move.

9.30 p.m.

Lord Sanderson of Bowden

I am grateful to the noble Lord for the explanation of his proposed amendment. I was not quite certain what lay behind it before he spoke but now I am clearer.

The provision of Clause 22(1)(a) which he is seeking to amend does not require anyone to enter into a special agreement but rather gives them the opportunity to do so if both they and the public electricity supplier wish to do so. While I accept that it may be a little unlikely that a great many domestic consumers would wish to enter into such agreements, I do not understand why the noble Lord wishes to prevent them doing so if they choose. One of the main features of the privatisation exercise is to seek to improve consumer choice as to the manner in which they obtain electricity.

If the noble Lord is concerned that suppliers might somehow coerce domestic consumers into entering into special agreements— and I think that this is what lies behind his point— I must tell him that the Bill already contains specific provisions to prevent this happening. The supplier can only insist upon a special agreement if the criteria set out in Clause 22(1)(b) are met. If the consumer disputes that that is the case, then he has the right to ask the director to determine that dispute under the provisions of Clause 23. The director's decision on such matters will be final and binding.

I shall look much more closely into what he has described as Busby agreements and again, if I find anything in them which is not covered by the explanation that I have given as a redress against such situations, I shall consider carefully what has to be done.

Baroness Gardner of Parkes

When he looks into this matter, will my noble friend consider whether it could be the case if this amendment were accepted that it would preclude, say, a group of people in domestic premises who wanted to use a combined heat and power arrangement for incineration of rubbish from making a special agreement with the electricity supplier? It might well militate against the domestic consumer, and perhaps he could look also at that aspect.

Lord Williams of Elvel

I am most grateful to the noble Lord. If I may say so, I think that he must look at the question of Busby agreements. As we know there is the problem of a monopoly supply. We all agree that the area boards or the public electricity suppliers will be monopoly suppliers and the noble Lord must look at their relationship with the consumer. The major problem concerns how far a monopoly supplier can coerce a consumer who requires electricity into entering into a special agreement. It is a delicate balance and I hope that the noble Lord will consider carefully what we have said.

Lord Sanderson of Bowden

Before the noble Lord decides what to do with his amendment, perhaps I can elaborate a little on the Busby contracts. The point made about the Busby contract is covered by the licence condition No. 13, which would require the public electricity supplier to seek the director's approval for any form of application which includes a requirement for the consumer to give the supplier rights which are only available by agreement as a condition of supply. However, I shall look more closely to see whether there is anything else that I need to say about it.

Lord Williams of Elvel

I am most grateful. The licences are not part of the statute and can be varied at any time. I shall be most grateful if the noble Lord will consider the point that I have made. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Earl of Dundee moved Amendment No. 150: Page 17, line 17, leave out ("or such other wattage as the Secretary of State may by order specify").

The noble Earl said: In moving Amendment No. 150, which also appears in the name of my noble friend Lord Peyton, I should like to speak also to Amendments Nos. 151 and 176 and to government Amendments Nos. 174, 175, 178, 184, 185 and 187 to Clauses 34 and 35 and Schedule 9. These are all technical amendments designed to achieve a similar objective.

Lord Williams of Elvel

I am sorry to interrupt the noble Earl. He has announced a series of groupings which are completely strange to me.

Lord Renton

The list is rather odd. As I understand it, my noble friend is moving Amendment No. 150, which is on the list of groupings with Amendment No. 151 only. But it is refreshing to find that we may dispose of so many other amendments at the same time, especially at this late hour. However, perhaps my noble friend could speak very slowly so that we can tick them off and understand what is happening.

The Earl of Dundee

Perhaps I may help the noble Lord. I appreciate the apparent difficulty that we are in. What I propose to do may not conform with what we have on the list of groupings. However, there are three closely linked themes which I propose to address. If I were to continue, the noble Lord could come back to me if he were unhappy.

Lord Williams of Elvel

I am not accepting the situation. These groupings are carefully thought out through the usual channels. We spend a long time trying to determine what are proper groupings. From the Opposition's point of view I am simply not having the Government Front Bench rising and announcing a group of which we have not been advised.

The Earl of Lauderdale

Can we have the list announced slowly so that we can tick them off?

Lord Williams of Elvel

I am not accepting it.

The Earl of Dundee

The noble Lord, Lord Williams, is perfectly entitled to keep to what we have in the original list of groupings. Therefore if he would prefer to do that, I shall oblige and we shall do so. I shall address Amendments Nos. 150 and 151A.

Lord Williams of Elvel

Amendments Nos. 150 and 151.

The Earl of Dundee

I move Amendment No. 150 and speak to Amendment No. 151. They refer to Clause 22(1). These amendments remove an ambiguity which we believe would have followed from the existing wording of the Bill. To give an example, let us suppose that the Government wish to alter the threshold above which a special agreement should be entered into; for example, to X megawatts. If an order specifying the figure of X megawatts were made under Bill as drafted, it would result in legislation which said that a special agreement has to be entered into under Clause 22 in any case where the maximum power to be provided exceeds 10 megawatts or X megawatts. This would clearly be ambiguous, and the proposed amendment is therefore designed to remove the possibility of the ambiguity arising. Under the wording as proposed in the amendment any order revising the 10-megawatt figure would result in legislation specifying only a single relevant figure in place of the 10-megawatt figure.

The amendments to Clauses 34 and 35 and Schedule 9 achieve the same objective in relation to these provisions. Exactly the same considerations apply as I have already mentioned. I beg to move.

The Deputy Chairman of Committees (Lord Ampthill)

The noble Lord has also spoken to Amendment No. 151. I should remind the Committee that if Amendment No. 151 is agreed to, I shall be unable to call Amendment No. 151 A.

Lord Williams of Elvel

I believe that the reason for the grouping of Amendments Nos. 150 and 151 was to allow the noble Lord, Lord Peyton, had he been in his place, to speak to the amendment to which he put his name. I understand that the noble Earl may also be speaking to the series which is grouped under Amendment No. 151A, to which the noble Lord, Lord Peyton, did not put his name.

As the noble Lord, Lord Peyton, is not in his place I am perfectly happy that the noble Earl should continue, but I believe that he should have given some notice that this would happen.

I do not believe that there is any great problem on the amendments. They are of no great substance, and we shall not oppose them. I just wanted to make sure that the procedure of the Committee was right.

The Earl of Dundee

I should make it clear, in the absence of my noble friend Lord Peyton, that I am moving both these amendments on behalf of the Government. I intend to approve Amendment No. 150, but I am opposing Amendment No. 151.

Lord Williams of Elvel

Is the noble Earl moving the amendment or not?

The Earl of Dundee

I am moving Amendment No. 150.

On Question, amendment agreed to.

[Amendment No. 150A not moved.]

Lord Williams of Elvel moved Amendment No. 151: Page 17, line 21, leave out subsection (2).

On Question, amendment negatived.

The Earl of Dundee moved Amendment No. 151 A: Page 17, line 21, leave out from beginning to ("shall") in line 22 and insert ("The Secretary of State' may by order provide that subsection (1) above shall have effect as if for the wattage mentioned in paragraph (b) there were substituted such other wattage as may be specified in the order; but before making such an order, he").

The noble Earl said: I have already given the substance of Amendment No. 151A. As I said in my earlier remarks, Amendment No. 150 is not only linked with Amendment No. 151A. but also with Amendments Nos. 174, 175, 178, 184, 185 and 187 to Clauses 34 and 35 and Schedule 9. I beg to move.

The Deputy Chairman of Committees

If I may say so, the noble Earl should address himself to the amendments to which he is speaking because he has not conformed to the numbers on the Marshalled List.

The Earl of Dundee

Quite so. I beg to move Amendment No. 151A.

On Question, amendment agreed to.

Lord Williams of Elvel moved Amendment No. 152: Page 17, line 32, after ("who") insert ("having required a public electricity supplier to give a supply of electricity by notice under section 16(2) above").

The noble Lord said: The purpose of the amendment is to clarify who a tariff customer is. Oddly enough, although the Bill makes detailed arrangements over most aspects of supply, nowhere does it state quite clearly who is to pay for it. Schedule 6(1) states that a public electricity supplier may recover charges from a tariff consumer. Clause 22 defines a tariff customer as being a person who is supplied with electricity. The question in law and in practice is: who is supplied with electricity? The most obvious answer is contained in this amendment.

The practice of boards is to treat anyone resident in a house as being the person supplied with electricity. In other words, if you use electricity you are supplied with it and therefore you should pay for it. That is perfectly reasonable if someone living in a house requires electricity and receives a supply. However, problems arise when people move, squat and so forth and do not request that supply of electricity.

The object of the amendment is to clarify who is the tariff customer. I accept that it may be defective and impossible to incorporate in the Bill as it stands. However, I believe that it points to a gap which exists in the Bill. I beg to move.

9.45 p.m.

Lord Renton

I find this a somewhat confusing clause and I believe that the amendment would add enormously to the confusion. Subsection (4) states: 'tariff customer' means a person who is supplied with electricity by a public electricity supplier otherwise than in pursuance of such an agreement as is mentioned in subsection (1) above". That means the ordinary customer. Therefore, for this purpose it does not include someone who has required a supply and entered into an agreement under subsection (1). It means all other people; in other words, the ordinary tariff customers. If I am wrong, no doubt my noble friends on the Front Bench will explain why. But that is how I read the provision.

If we accept the amendment, instead of being the ordinary customer, the tariff customer will be limited to the person who has required an electricity supplier to give a supply of electricity by notice under Clause 16(2). Therefore, it would limit the operation of that definition perhaps in a way that the noble Lord, Lord Williams, does not intend. I do not see the Government accepting it, but all Members of the Committee would appreciate an explanation of a "tariff customer".

Baroness Gardner of Parkes

I understand that a tariff customer is a person receiving a supply of electricity. The noble Lord, Lord Williams, was slightly off the track in saying that anyone in a place which has electricity could be responsible. That is not so because it is the person who has signed the agreement with the supplying authority.

The wording of his amendment may cause a degree of confusion. Someone could say, "I have not required you to supply it. I have not given the notice under Section 16". Admittedly all the area boards are keen to get customers in the door and signed up. Bad debts are now a big problem because people may move into a flat and take over someone else's supply. Now the policy is to disconnect and reconnect to the new occupier. The squatters referred to by the noble Lord are usually good at getting electricity supplies connected and are most expert. That is no longer a major problem for the boards. It is a fact that someone has to be responsible for the supply. I do not believe that the way in which this amendment is worded is helpful. All the conditions are already set out in Clause 16(2), and I do not think that they need repetition here. The wording may allow someone to escape on the grounds that as they had not received it, they could not be classified as a tariff customer.

Lord Sanderson of Bowden

I find myself in a certain amount of difficulty because I believe that the amendment of the noble Lord, Lord Williams, might help to clarify the position and I shall take it away. However, I must say to my noble friends that they have put doubts in my mind as to whether there is a subtle point which I have not recognised in the wording of this amendment.

Perhaps the noble Lord may be content to withdraw his amendment. I know that having looked at it, it would need redrafting. However, I make a commitment to come back on this particular point, having studied what my noble friends have said. I hope that the noble Lord will consider withdrawing his amendment at this stage.

Lord Williams of Elvel

I am most grateful to the noble Lord for his answer. I hope that he will not be deflected by the noble Lord, Lord Renton, and the noble Baroness, Lady Gardner of Parkes. We look forward to seeing what the Government produce on Report. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 22 agreed to.

Clause 23 [Determination of disputes]:

Lord Williams of Elvel moved Amendment No. 152A: Page 17, line 35, leave out ("arising under sections 16 to 22 above").

The noble Lord said: Clause 23 deals with the determination of disputes, and the director general will have stronger powers than the existing consumer councils to make determinations in some types of disputes between the industry and its customers with decisions being binding on the supplier.

That is welcome. I do not wish to challenge that. I believe that that is an excellent construction. However, we are slightly concerned that the clause as drafted is rather too restricted. The Consumers' Association survey suggests that the director's powers in that respect should cover not just the narrow points but the widest range of services. Those could and perhaps should include losses incurred because of supply interruptions, questions of voltage fluctuation, and indeed possibly disputes about accounts. We also feel that they should cover disconnection for non-payment and the terms under which reconnections are made, which is a point on which we touched briefly in the last amendment.

This is a relatively simple and probing amendment. I should be grateful if the noble Lord can give his views. I beg to move.

The Deputy Chairman of Committees

I should remind the Committee that if it should be agreed to, I shall be unable to call Amendment No. 152AB.

Lord Sanderson of Bowden

I am pleased that the noble Lord recognised the major contribution made to consumer rights by Clause 23. For the first time there will be a right for an independent determination of disputes over the terms and conditions to be applied to the provision of the supply of electricity. I assume from his remarks that the intention of the amendment is to make any disputes arising from the provisions of the Bill the subject of determination under Clause 23 rather than any dispute whatever.

The latter would clearly be a nonsense. However, we do not accept the amendment. The noble Lord cited a number of examples of cases where he believes that the determination procedures of Clause 23 should apply; in particular, those arising under the provisions of Schedule 6. However, there are already provisions in that schedule which make certain actions criminal offences. It is clearly inappropriate for the director to become involved in such cases. Other provisions provide their own remedy without the need for the involvement of the director under Clause 23; for example, in those cases where the supplier disconnects the consumer when he has no statutory right to do so. What is at issue is not a dispute over terms but rather the question of whether the obligation to supply under Clause 16 is being complied with. This is a matter which the director has the power to deal with under the enforcement procedure set out in Clauses 25 to 27.

The provisions in Clause 23 ensure that where there is a dispute over the terms on which a supply is provided there is a right to independent determination of that dispute. It also provides powers for the director to ensure, in appropriate circumstances, that a supply can be given while the dispute is determined. It would be wholly inappropriate to weaken them by extending the area covered into fields where other forms of protection are already provided, diluting the amount of effort the director can give to those cases where the determination procedure is appropriate.

I hope that with that explanation the noble Lord, Lord Williams of Elvel, will understand the Government's position and why we are resisting this amendment.

Lord Williams of Elvel

I am grateful to the noble Lord, Lord Sanderson, for his reply. I accept that it would be widening the procedure for determination of disputes into an area which he might not wish to accept and which the Government might worry about. However, I wonder whether the Government have thought through the extent to which the director can operate in areas outside what I regard as the narrow area which is covered by Clause 23. Nevertheless, having said that, I shall have to read what the noble Lord said and consult advisers to see whether we wish to return to this point at a later stage. I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Ezra moved Amendment No.l52AB: Page 17, line 35, after ("above") insert ("or any genuine dispute about the amount of electricity supplied").

The noble Lord said: This amendment also relates to Clause 23. It specifically refers to, any genuine dispute about the amount of electricity supplied".

It is in line with the amendment proposed by the noble Lord, Lord Williams, though more specific. It is specific because it is felt that there could be a number of disputes arising from a genuine feeling that meters have not worked properly; that there has been a malfunctioning; or that somehow or other the supply has bypassed the meter, which of course would be a dispute on the part of the supplier. We feel that this area of dispute, which must be widespread, should be specifically referred to in this clause. I beg to move.

Baroness Gardner of Parkes

I wonder whether people understand the way in which this system works now. There is a code of practice but there is also a way that this is practised. First, there is an assessment, as any meter has a certain limit of accuracy. It is the policy of all boards to settle with customers wherever possible. For example, if a person claims to have been overcharged for electricity, the meter is tested in its existing position. If the meter is found to be faulty— by that I do not mean that the person has tampered with it, because as the Committee will know there is a black museum full of the different ways of making meters work to favour the consumer rather than the board— the area board will always settle with the customer.

On the other hand, if the meter is proved to be correct but the customer still claims that he has been incorrectly charged and that there is a fault in the meter, the matter can be referred to a special independent testing station. If the meter is then found to be faulty, in theory the customer could be asked to pay for the cost of the additional special test but in practice the area boards meet the full cost of testing. If it is found that the customer is wrong and that there is no fault in the meter, the customer must pay the bill but no interest is charged on the money outstanding, and, as I said, there is no charge of costs to the customer. There is therefore a very satisfactory existing method with this independent means of assessment. I believe that the customer who is concerned about his meter has a very good means of protection.

10 p.m.

Lord Macaulay of Bragar

I suggest to the Committee that the last two amendments show the clause to be very badly drafted. It might be a better idea for the Government to take the whole clause away and for subsections (1) and (2) to be seriously considered with a view to redrafting them. I may not be speaking precisely to the amendments proposed, but what puzzles me are the tenses used in subsection (1). It reads: Any dispute arising under sections 16 to 22 above between a public electricity supplier and a person requiring a supply of electricity". In any common use of language that does not include a person who has received a supply of electricity. Taking it to its logical— perhaps illogical— conclusion, if there is a dispute at that stage with a person who has not received a supply of electricity, the supplier can refer the matter in dispute (which is presumably a financial one) to the director. He then delivers a judgment which is equivalent to a decree against the consumer.

If my view of the matter is correct, it means that the consumer may find a decree against him for something that he has not received. The matter becomes even more confused and convoluted if we refer to Clause 19(1), because there we have the past tense: Where any electric line or electrical plant is provided by a public electricity supplier in pursuance of section 16(1) above, the supplier may require any expenses reasonably incurred"— not reasonably estimated— in providing it to be defrayed", which means that the expense has already been incurred by the supplier. That would not be covered by Clause 23(1) as it presently stands because there has been no supply within the terms of that subsection. When we refer to Clause 22(1) we return to the present tense: a person who requires a supply of electricity". So the overall view taken by the noble Lord, Lord Sanderson, that anything from Clause 16 to Clause 22 can happily be resolved by the director in terms of Clause 23(1) is, if I may say so with the greatest respect, entirely misconceived.

As regards Clause 23(2), the matter becomes even more confused. Under that subsection the dispute does not go to the director because he can only give directions. Yet in Clause 23(2) the supply is already in position, because it reads: Where any dispute arising under sections 16 to 22 above between a public electricity supplier and a person requiring a supply of electricity to continue to be given". That means that he has already been supplied, but the dispute cannot go to the arbiter in terms of Clause 23(1). To put the matter shortly, Clause 23 is a drafting shambles and it should be taken back again to the drawing board.

Lord Sanderson of Bowden

Far be it from me to argue with a distinguished lawyer from north of the Border. I would rather read closely his "may'Y'shall be", "wishes" and so on. If the draftsmen have arrived at a situation where they have got it wrong and the noble Lord has got it right, I shall be the first to congratulate him and to write to him on the subject. I prefer to look very closely at what he has said and the way in which he put it in order to see whether there have been errors. I am not admitting to them. I shall look at the matter closely to see whether we have the correct tenses in the right places and that we are dealing with the subject correctly.

I shall now deal with the substance of the amendment which the noble Lord, Lord Ezra, has brought before us. The amount of electricity supplied will be of interest primarily where the charges levied are dependent on the amount of electricity supplied. In such cases the Bill provides that a meter must be used for determining the quantity of electricity supplied. Where there is a dispute over the amount of electricity supplied, there are two main ways in which this can arise; namely, where the meter is inaccurate or where the reading taken is incorrect. In cases where there is a dispute over the accuracy of a meter, the normal first step would be for the supplier, with the agreement of the consumer, to fit a check meter whose readings would then be compared with those of the main meter used. The supplier would indeed have the right to install such a meter and could obtain entry for that purpose. If it should prove necessary, however, paragraph 7 of Schedule 7 to the Bill also provides for independent determination of the accuracy of the meter by the meter examiners appointed by the director. In this way the Bill already ensures that a mechanism exists for determining disputes over the amount of electricity supplied.

The second case of dispute is likely to be one over the charges being levied in respect of the amount supplied, and by implication, rather than directly, over the amount of electricity supplied. This kind of dispute can arise in a number of ways; for example, there may be a dispute over whether there has already been a partial payment made, or whether the amount of electricity charged at each of a number of tariff rates to be used is correct. Such disputes can concern matters both of fact and of law, and we do not believe that it is appropriate for the director to determine them. This is best left to the courts where there is already ample precedent in determining disputes of this nature.

In either of the cases I have described, so long as such a dispute continues, and in the absence of any independent determination for one party or the other either by the courts or as a consequence of a report on the meter by the meter examiners, the supplier would not be permitted to disconnect. Should he do so, then this would be an enforcement matter under the terms of Clauses 25 to 27 of the Bill. In such cases, it would be for the director to determine whether there is still a genuine dispute in considering whether to use his powers.

To recapitulate briefly, the Bill already provides proper provision for independent determination of disputes over the amount of electricity supplied resulting from disputes over the accuracy of the meter. There is already a long-established procedure of the courts for resolving cases of dispute over debt and the Bill prohibits disconnection where there is a genuine dispute over the amount of any debt. In view of what I have said, I hope that the noble Lord will consider carefully what he wishes to do with his amendment.

Lord Ezra

I am grateful to the noble Lord for that detailed explanation and also to the noble Baroness, Lady Gardner of Parkes. I should like to read carefully what they have both said. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 152B to 152H not moved.]

Clause 23 agreed to.

Clause 24 agreed to.

Schedule 6 [The public electricity supply code]:

Baroness Seear moved Amendment No. 152J: Page 92, line 18, after ("electricity") insert ("otherwise than through a pre-payment meter").

The noble Baroness said: I should like to speak at the same time to Amendment No. 153A. These two amendments are an attempt to deal with the important and sensitive issue of disconnection, a matter which has caused a great deal of hardship, anxiety and trouble in the past. We fully recognise that electricity has to be paid for. There is no question of suggesting that people should use electricity and then be able to get out of paying for it. That is not the intention. The intention of the amendments is to find a way in which disconnection can be avoided while at the same time ensuring that the suppliers can get the money that they ought, and need, to get.

In other circumstances and on previous occasions it has been argued that there should be an attempt to distinguish between people who could pay but will not and people who are not in a position to pay. It is our contention that that is not a very profitable approach; it is extremely difficult and time consuming to distinguish between people who are in a position to pay but will not do so and those who are finding it most difficult so to do.

The approach whereby time is spent in disconnecting people, the bad blood which is generated, the inevitable mistakes which are made and the problem of borderline cases— that is, people who may be considered as unable to pay or who with a little more effort could be made to pay— does not get one anywhere. The proposal put forward in the amendments would, I think, solve the problem or at least get as near to solving it as possible.

We suggest that, in a situation where a person has not been paying and where, as things are at present, that person would run the risk, if not the certainty, of disconnection, instead of such disconnection a prepayment meter should be installed. In that way the person could no longer continue not to pay. To be deprived of electricity is a very serious matter. After all, in a great many households it is the only means of lighting, of hot water, of cooking and of heating. Therefore it is an extremely serious matter to cut off that supply.

One recognises also that some people have played upon the fact that disconnection is such a serious matter. They have managed to have a continuation of the service without paying just because of the seriousness of the problems which arise if disconnection follows. If the Government would seriously consider the proposal to install a prepayment meter instead of the present system, there would not be the continual piling up of debts for electricity. It would also mean that the existing debt could be dealt with, because that is an accumulation which could be discussed and for which a paying-off process could be introduced.

It is important to remember that once this meter has been installed the debt will not be incurred again because prepayment means what it says— prepayment. We believe that this is a way in which both legitimate interests can be served. Of course the supplier needs to be paid, but this would avoid all the social and administrative problems involved in disconnection and subsequent reconnection. It would also avoid the kind of crises which may result.

I should say that the amendment has the full support of the National Consumer Council. Indeed, it originated from the council, which has given a great deal of thought to the matter. It seems to us to be a most practical approach towards overcoming what is a very difficult social and economic problem. I beg to move.

Lord Dean of Beswick

I rise to support the amendment so ably moved by the noble Baroness, Lady Seear. I think that she has covered the main principles involved. However, those of us who have had a long experience of dealing with the public and the question of electricity and cut-offs know of the appalling tragedies which sometimes result. In most cases, it is families with children who are involved.

Having been a member of a local authority and also a member of another place, I must say that many of the cases with which I dealt— because they involved inner-city areas which I represented— involved this problem. For instance, the Manchester area, where I served on the city council and near where I now live, historically has a high percentage of electricity cut-offs because of the problems in the area.

The case put forward for the installation of prepayment meters is an excellent one. Those of us who can recall the time when we had gas and electricity meters in the house, and when that was the only method of payment, know that it was far more efficient and easy to operate than the present system, where most people pay by means of a bill, which means that people are in debt for a quarter, even though they may pay on time, because they have already used the electricity. However, the amendment would ensure that people paid for electricity as they used it.

We must consider the results of a considerable increase in the number of disconnections. They would probably be in the most deprived areas; namely, the inner city areas. Who would care for the families with children where the electricity had been cut off and all sustenance had been removed? As the noble Baroness, Lady Seear, said, it is the only main service other than water that goes into the house. It gives the family hot water and a means of cooking. Without it, the family would lose two of the main elements to sustain life.

If that happened, on whom would the social burden of those families fall? It would either be for the DSS to provide an increased payment or for the local authority social service department to help. I do not want to go too far down this road, but we are all aware that local authorities have nothing like the resources for social services that they had. That would mean that they could not pick up the bill. If they did, it might be reflected in the amount of community charge or poll tax that an area would have to find to deal with the problem.

The amendment relates to an involved subject which we could debate for a considerable time. A number of issues could be brought forward. As I said, the noble Baroness, Lady Seear, has made out a first-class, undeniable case for the amendment. From these Benches, we support the amendment.

10.15 p.m.

Baroness Gardner of Parkes

I listened carefully to the noble Baroness, Lady Seear, when she moved the amendment, and to the noble Lord, Lord Dean of Beswick, when he supported it. I have every sympathy with the idea that we do not want to see anyone disconnected from the electricity supply. I understand the hardship involved. I believe that they underestimate how many people play the game of brinkmanship. The noble Baroness said that she knows that some people try to avoid paying. The threat of disconnection is a valuable weapon. If the threat of disconnection were removed, we would have many more problems. There would be people who would never pay.

In the London Electricity Board area, 200,000 people a year receive a notice warning of possible disconnection. There is a good code of practice. All types of arrangements are offered. Every consideration is given to people who come forward and say that they are willing to try to pay through a prepayment meter and also gradually to repay some of the debt. If people come forward and say that they have no money and that times are bad, again help is given. An additional charge is made on the prepayment meter, or the budget meter, which is a new method, to help people to clear the debt. There are 200,000 possible disconnections, but the number disconnected in a year is 14,000. My maths is bad, but if one takes 14,000 from 200,000 one will see how many people are influenced by the threat of disconnection to meet the board and reach some agreement about payment. They do not pay up. Many cannot do that. They make arrangements to pay in the future and to repay the debts.

Baroness Seear

I am sorry to interrupt the noble Baroness, but does she agree that the prepayment meter would ultimately obliterate the problem? There would be a backlog of people who have not paid, but once prepayment meters are installed the problem would not arise. It is surely better to see that the need for disconnection does not arise by putting in the prepayment meter than to keep the penalty hanging over people's heads, and then, as the noble Baroness said, not be able to get the money out of them. Surely prevention is better than cure.

Baroness Gardner of Parkes

I think that the noble Baroness should appreciate that the prepayment meters— or budget meters, as they are now— have a special key which will operate the meter only, so that it cannot be used as currency nor can it be sold to anyone else. If the DSS gives someone the money for so many pounds-worth of electricity, it can only be used on that person's electricity; the key cannot be sold off for anything else on the way home. So it is a genuine way of giving people their electricity.

Those meters are now offered to everyone threatened with disconnection. They are installed as a first priority in all such cases. However, the boards need contact with those customers to ask them what arrangements they are prepared to make about the past. The boards cannot afford just to write off the bad debts of several millions of pounds. I think it has gone down from £ 7 million to £ 6 million; but there are millions of pounds every year of bad debts in the London area.

Now unless the customer can produce security to prove that he will be able to meet his bills, every new customer will be offered a budget meter. In every case the code of practice offers the meters. I understand that the amendment would remove the right of the boards to disconnect or even to threaten disconnection. If that is the case, then customers can call the boards' bluff and the whole 200,000 will make no arrangements whatsoever to meet any arrears.

As the noble Baroness says, eventually when everyone who is a financial risk is on a system where the prepaid key has to be used, certainly the bad debts will be gone. But we have seen that it is a slow process. The production of these meters is not like lightning; it takes time to get the conversion. But the meters are becoming accepted in society.

When I was in court recently a man came before us. He was asked what he was doing out at night, and he said that he was off to recharge. his key at the local electricity board, as one does outside the premises. I thought, "Well, that's interesting. It just shows how to this man it has become a perfectly normal part of his life." One can put £ 99 worth of electricity on to the one key or one can put £ 1 worth on to it. People have this availability and it is a marvellous answer.

However, to take it as the only answer and remove the power of disconnection would be to make it less effective, because that is the first contact and the way in which the boards get the person with an existing supply to come and reach agreement about what can be done over past arrears.

Furthermore, all the other customers have to bear the loss of however many millions of pounds it is. It may be that some of those customers helping to bear the loss are themselves very poor poeple. They can ill-afford to pay more for their electricity because they are helping others who are perhaps not as lacking in funds but are shrewder and more calculating. The DSS can and does pay electricity bills directly to the electricity board in cases where there is a genuine social benefit entitlement. So again that removes a lot of people. The idea of the prepayment meters is excellent; but to remove the threat of possible disconnection is to take away one of the most important arguments that the boards now have.

Lord Sanderson of Bowden

I understand the very strong feelings expressed by the noble Baroness, Lady Seear, and also the noble Lord, Lord Dean of Beswick, on this matter. The main thrust of the amendments is that a supply should always be provided, albeit on the basis of payment in advance, to someone who owes money for supplies already received rather than their being disconnected. If we look first at the second amendment, this would allow the supplier to fit a prepayment meter immediately a debt in respect of electricity charges arose. It would also provide that, irrespective of the circumstances in which a debt arose, the consumer could only be disconnected if it were not possible to fit a prepayment meter. The first point to note about the amendment is that the consumer's consent will not be required for a prepayment meter to be fitted; the supplier could install one unilaterally. We believe that amounts to a serious invasion of the consumer's privacy and would impose a solution on him or her based simply on the argument that Parliament knows his interests better than he does himself. And yet, this would be the only avenue available to the supplier to ensure that he received the money he is due, as he would be unable to disconnect if a prepayment meter could be fitted unless the consumer agreed to be disconnected.

The second point to note is that the amendment does not say how the original debt is to be recovered. My noble friend Lady Gardner of Parkes spoke at considerable length on that point. It has been argued that the amendments would not preclude the agreement of a prepayment arrangement for recovery of the debt. But, as future supplies will be protected, there will be little incentive to the consumer to enter into such an agreement. This will be particularly true of those who have chosen not to pay rather than those who have real difficulty in making payment. That is the very point with which the noble Baroness, Lady Seear, opened her remarks, and with which I agree. It is a matter of those who will not pay and those who cannot pay. We all face a very difficult problem here.

I appreciate that the Committee is concerned with those who are unable to pay, rather than those who simply refuse to pay. We, too, are concerned about those who are unable to pay, and I will come shortly to the measures we have proposed to help them. However, it is incumbent on the Government and on this Committee to take the wider view into consideration also and to protect the interests of all consumers.

We recognise that there are consumers who have real difficulty in meeting their bills because of their particular circumstances at a given time. The noble Lord, Lord Dean of Beswick, mentioned that point. We share the view that disconnection should be avoided in such cases whenever possible, and so does the industry. That is why it instituted the voluntary code of practice that it operates at present. This states quite clearly that a consumer will not be disconnected if he enters into and keeps to a payment arrangement to cover both future charges and recovery of debt. It also states that disconnection will not take place if it is safe and practical to install a prepayment meter.

We fully recognise the value of this approach in reducing unnecessary disconnections. That is why we have made it a condition of the public electricity supplier's licence that he should produce such a code in consultation with the relevant consumer committee and agree it with the director. We have, of course, gone further than that. My right honourable friend the Secretary of State for Energy said in Committee in another place that we would be introducing a further condition into the public electricity supply licence along the lines of that agreed for the British Gas authorisation by Mr. McKinnon and British Gas. I am pleased to tell the Committee that we have today laid in the Library of the House copies of that condition.

This condition requires the public electricity supplier to prepare, in consultation with the relevant consumer committee, methods for dealing with consumers in default. These must include methods for distinguishing those who find difficulty in meeting their obligation to pay for electricity, either through misfortune or inability to cope with electricity supplied for domestic use on credit terms. For such consumers the methods adopted must cover taking the consumer's means and ability to comply into account when making payment arrangements, and provide for a prepayment meter to be installed where safe and practical to do so, if the payment arrangement is not complied with.

These two licence conditions represent a substantial degree of protection for those consumers who have genuine difficulty in meeting their bills. They provide that, for such consumers, the safety net of a prepayment meter will be available as a last resort if one can be fitted and if the consumer accepts it. We believe this approach provides the best combination of consumer choice and protection, and meets all the aims of the proposed amendment while avoiding the difficulties it creates. I can do no better than my noble friend Lady Gardner of Parkes, who pointed out some of those difficulties.

We share the concern of the noble Baroness and other noble Lords as regards those who have genuine difficulty in meeting their commitments. We have accordingly taken steps which will enable their supplies to be continued on reasonable terms in the light of their circumstances. These give the consumer a free say in discussing with the supplier the method best suited in each case, while still allowing the safety net of the prepayment meter should the consumer need it and want it. I understand the point of view of the National Consumer Council as regards those who may not understand meters and get into trouble as a result. I have to say, however, that in the end it must be for the consumer to take the decision on what action he, or she, will take. He has an obligation to pay for electricity supplied to him and if, despite all opportunities given to discuss any problems, he does not come forward, then it must be assumed that he no longer wishes a supply.

The noble Baroness, when moving the amendment, said that debt can be dealt with. Yes, but it is a very difficult problem to deal with. While we have not accepted the terms of the amendment, we have gone some way towards recognising the problem, and the fact that it is difficult to differentiate between those who will not pay and those who cannot pay does not, in our view, mean that the effort should not be made.

I hope that, with that explanation and once she has studied the terms of the document laid in the Library today, the noble Baroness will understand why the Government are resisting her amendment.

10.30 p.m.

Baroness Seear

I am naturally very disappointed with the reply from the Minister. I do not think that he has fully appreciated the point that we have made. His response came under two heads. The first was his resistance to the idea that people should be required to have prepayment meters. I think that he said that it was an interference with liberty or privacy if such meters were imposed. But it is perfectly reasonable for a supplier to make such a requirement. I can see no objection to saying that if people have not paid and do not pay their bills they must have a different system of payment and that system will be the prepayment meter. I do not accept the noble Lord's suggestion that that is an infringement of people's right to pay or not to pay.

The noble Lord has also not accepted the point that it is both costly and inefficient to try to make a distinction between people who can pay and will not and people who are unable to pay. That is bound to be a very subjective judgment. It takes a great deal of time; it stirs up bad blood. Undoubtedly in a number of cases the decision will be made on the toss of a coin because often it will be very hard to decide whether a person is inadequate or is deliberately trying to avoid paying.

I fully accept that the money has to be collected, although I am sure that there are cases now in which the money is never collected. Every effort should be made to collect the money. It is a debt, like any other debt. Surely there are other methods. Debts for other items are dealt with in a variety of ways. Debtors who have not paid their electricity bills are debtors just as in any other area. They can be taken to court for non-payment of their debt.

Baroness Gardner of Parkes

Perhaps the noble Baroness will allow me to intervene. Is she aware of the enormous debt owed to local authorities in London for housing? The authorities have tried to recover those debts through the courts, and it is a very expensive and ineffective method of doing so.

Baroness Seear

Both the noble Baroness and the Minister have made our case. Every time they open their mouths they show that the present system, with the threat of disconnection, simply is not working. It is both an expensive and an inefficient way of getting the money in.

Baroness Gardner of Parkes

I did not refer to electricity but to people in local authority housing.

Baroness Seear

The noble Baroness also said in her previous speech that a very great deal of money was owed for electricity which it had not been possible to recover. I am saying that she and the Minister, out of their own mouths, have shown that the existing system is not working and they do not know how to make it work. This amendment puts forward, on the suggestion of people who are very close to this problem, an alternative. It leaves a backlog of debts to be collected but it prevents further debts being incurred. That, surely, is something. One will not get all the debts in, I am sure, but equally by working away at it some of the backlog will be got in. The important point is that no future debt will be incurred. That is surely what matters.

However, at this time of night, not knowing what is lingering in the Library, I have not the slightest intention of pursuing this amendment. I shall come back to it at a later stage. I beg leave to withdraw the amendment.

Amendment, by leavejwithdrawn.

Lord Dean of Beswick moved Amendment No. 153: Page 92, line 22, leave out ("15 working") and insert ("28").

The noble Lord said: This amendment concerns the same subject as the previous amendment. I listened with care to what the noble Baroness, Lady Gardner of Parkes, said regarding prepayment meters. I almost thought that she made a case for the installation of them. The only thing about which she was not satisfied was the speed with which they could be introduced. I also almost thought that a case was being made in principle for writing off existing debts and starting to use the meters immediately. In the last two or three years the Government have proved their capacity to write off debts of privatised industry totalling billions of pounds to suit people at the top end of the financial scale. These amendments deal with people at the bottom of the social scale.

I think the Minister will appreciate that it is very difficult to pick up the full meaning of the document placed in the Library at this time of night or at any other time of day. I imagine that it is a rather detailed document.

Although the next batch of amendments are not linked, I should like to refer to them. They are Amendments Nos. 153, 154, 155 and 155A. They deal with the same subject, but different aspects of it. The Minister will obviously have taken these amendments on board in advance. I should like to ask him whether he thinks the reference in these amendments will be contained in the document, or whether there will be no reference at all to them. The Minister is suggesting that we should proceed.

The purpose of Amendment No. 153 is to require that electricity customers who are in difficulties or in deliberate default should be treated no more harshly than customers of British Gas. The Gas Act 1986, Schedule 5, paragraph 7(5), does not permit notice of disconnection to occur for 28 days after a demand for payment has been issued. It is unreasonable and unacceptable that this Bill proposes that electricity customers should be more harshly treated and be given only three weeks— that is, 15 working days— instead of four weeks to pay. With second-class post deliveries taking anything up to five or seven days, a four-week period is fairer to the consumer, while not unduly damaging the cash flow for the public electricity supplier.

It is interesting to contrast the wording of the Bill in relation to defaulting customers with the provisions made in the draft Public Electricity Supply Licence, Schedule 2, paragraph 1(b), for the payment by public electricity suppliers of fees due to the Secretary of State under Condition 24 of their licences. In these circumstances, before the companies are cut off or their licences are revoked they are allowed at least 30 days to pay and must receive one reminder that payment is overdue.

In the House of Commons Standing Committee debate on this issue, which concerned an amendment to change the relevant notice period to 30 working days, the Secretary of State for Energy, Mr. Parkinson, was able to claim that this did not equate to the Gas Act conditions. This amendment, on the other hand, cannot be criticised on that count. Mr. Parkinson also claimed that there were substantial differences in billing arrangements in the two industries which justifies a discrepancy. This point was immediately challenged by MPs and indeed seems not to apply except in some Scottish instances and for some commercial and industrial customers who in general are not the obvious intended target beneficiaries of the Bill's public electricity supply. I beg to move.

Lord Renton

This amendment raises a very short point and it is a good point. I do not know why it could not have been expressed in about half a minute. The point is this: in the previous discussion, as my noble friend on the Front Bench said, it was revealed that 15 working days is quite unrealistic and 28 working days is much nearer the point. Some people have to go into hospital and those who live alone perhaps do not have anybody left behind in their flat to pay the bills; or perhaps somebody may have to go abroad on business. People sometimes even go abroad on holiday. I went away for five weeks to New Zealand earlier this year and I was terrified that when I got back I would find that my supplies had been cut off because I had made no arrangements for somebody else to pay my bills. So 15 working days is quite absurd. Let us have 28 days.

Baroness Gardner of Parkes

I wish to speak briefly on that one point about the number of days specified. I think the points that have been made might be perfectly legitimate as regards the domestic customer, but of course a tariff customer referred to under this section could be a large commercial customer and the amount involved could be very large. Indeed, such customers are billed monthly.

When I was discussing this matter with a member of the board, I understood that if the period were changed to 28 days one would be giving those customers two full months' credit. I thought they were explaining that there was already a period of credit prior to the start of the 15 days. Perhaps that point could be clarified at a later stage.

Certainly in the type of instances that have been pointed out by the noble Lord, Lord Renton, one could either effect a direct debit arrangement with the authority for that one month before leaving in which case his account woud have been debited and there would have been no risk or, as he said, he could have arranged for someone else to pay the amount. But I think that there is some sympathy with domestic customers and there is a definite code of practice for domestic customers. However, a large industrial user of electricity could take this period on as a way of obtaining an extra month's free credit at the expense of the authority, and it then becomes a different commercial proposition.

Baroness Seear

We are constantly referred to the codes of practice and the good sense of the authorities; but that is not good enough. We want such matters written on to the face of the Act. We do not want to have to rely on non-enforceable codes of practice and on the assumption that officials in these organisations will behave sensibly. No doubt the great majority of them will do so, but half the time the law is about having to deal with the small minority of people who do not behave sensibly and decently. That is why we want this on the face of the Bill.

Lord Sanderson of Bowden

I understand full well that the purpose of this amendment is to extend the period allowed to customers to pay their bills, and the noble Lord, Lord Renton, made his point about that. In responding to the debate I draw the Committee's attention to the fact that the provisions of paragraph 1(5) of Schedule 6 already represent a considerable improvement on the existing statutory provisions which were provided in the 1947 Electricity Act. When nationalisation took place, the electricity industry made no statutory requirements on boards as regards the period of notice that they must give before disconnectng any consumer. As the noble Baroness said, the electricity consumer has had to rely on the common sense or good will of the boards in this matter up to now, and he has had no statutory rights whatsoever.

This Government have therefore gone some way to improving the position of the consumer through the provisions that we are now debating. Of course it is important to stress that the period of 15 working days represents a statutory minimum. There is nothing in this part of the schedule or any other part of the Bill to prevent a supplier giving longer periods of notice, but the new companies must take into account the circumstances of their market.

Looking just at England and Wales for a moment, the number of those receiving monthly and quarterly bills is 166,000 and 20. 2 million respectively; but a better idea of the relative effects of the two groups is obtained from considering revenues. Those customers who are billed monthly account for some 30 per cent. of total area board revenues, as my noble friend Lady Gardner of Parkes said. Clearly such customers have the potential to give rise to a considerable debt problem in a short period. The effects of this will be felt by all consumers. It is clearly right that in setting the minimum period which must be allowed for payments of bills the existence of those monthly billed customers must be taken into account. Otherwise, the ordinary consumer could suffer cost penalties.

Some noble Lords have compared these provisions with the 1986 Gas Act. Indeed the noble Lord, Lord Dean of Beswick, said so when he moved the amendment. The two industries have different practices when it comes to billing. For gas quarterly billing of tariff customers is almost universal. For electricity both monthly and quarterly billing are used, whereas in the south of Scotland there is a bi-montlhy billing. The proposals in this Bill and the provisions of the Gas Act reflect that difference.

We felt it right to make the period of payment for electricity bills 15 working days for the reasons that I have explained. I should of course stress the word "working" since it means in practice that a minimum of 19 to 21 calendar days must elapse, and, where holidays intervene, rather more. Noble Lords who have business intersts may care to reflect on whether they would regard it as satisfactory if their customers were given a statutory right not to pay the bills due for a period of 28 days. The Committee will understand that it is difficult to arrive at the right number of days that should by statute be the minimum. As a Government we feel that we have gone some way to improving the situation. However, in the light of what has been said, and at this late hour, I would request that the Committee allow me to take this matter away to consider it again in the light of what my noble friends and the noble Lord, Lord Dean of Beswick, have said.

Without commitment— I cannot give a commitment— I may well return to this at a later stage of the Bill.

10.45 p.m.

Lord Dean of Beswick

I am grateful to the Minister for that sympathetic reply. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 153A to 157 not moved.]

Schedule 6 agreed to.

Clause 25 [Orders for securing compliance]:

[Amendments Nos. 157A to 157J not moved.]

Clause 25 agreed to.

Clause 26 agreed to.

Clause 27 [Validity and effect of orders]:

[Amendment No. 157K not moved.]

Clause 27 agreed to.

Clause 28 [Power to require information etc.]:

[Amendments Nos. 157L and 157M not moved.]

Clause 28 agreed to.

Clause 29 [Regulations relating to supply and safety]:

[Amendments Nos. 157N and 157P not moved.]

Lord Ezra moved Amendment No. 158: Page 23, line 27, at end insert ("providing the Secretary of State has consulted with the Director and the appropriate consumer's committee, and makes a statement to Parliament, giving notice of his intention to grant a relief from obligation.").

The noble Lord said: It is about time that somebody moved an amendment, so I shall oblige.

This is quite an important amendment, because regulations under Clause 29(2) permit, persons authorised by a licence to supply electricity

to be relieved of the, obligation to supply in such cases as may be prescribed".

That is pretty wide ranging, and the object of the amendment is to limit this power by regulation. The proposition therefore is to add the words: providing the Secretary of State has consulted with the Director and the appropriate consumers' committee, and makes a statement to Parliament, giving notice of his intention to grant a relief from obligation".

The relief is, after all, a fundamental one. It is a relief to do that which the licence enjoins the person to do. Being so serious it seems to us to be right that it should be qualified in the manner proposed. I beg to move.

Lord Renton

The making of a statement to Parliament is quite a palaver. We do not have an unlimited number of statements made to Parliament by Ministers. But if the noble Lord, Lord Ezra, has in mind merely, for example, the Answer to a Written Question, then that would be a different matter. However, I should have thought that it would be unusual to have this sort of consultation. If anyone feels that the Secretary of State has acted in a way in which he should not have done, the right thing is to raise the matter in Parliament in the usual way. There are various ways of doing that. One is by means of a Question for Oral Answer. I should not have expected my noble friends on the Front Bench to accept this worthy amendment.

The Earl of Dundee

I am grateful to the noble Lord, Lord Ezra. I appreciate his concern that any relief granted from an obligation to supply should always be kept to a minimum.

This is not a new provision. It already exists in the Energy Act 1983, under which the current regulations setting out the standards to be observed on safety and quality of supply— the Electricity Supply Regulations 1988— were made. These regulations provide for a number of circumstances— all relating to safety— where an electricity board would be relieved of its obligation to supply.

It may be helpful if I briefly run through the relevant provisions. Regulation 27 provides that no supplier shall be compelled to commence, or to continue to give a supply to a consumer unless he is satisfied that the consumer's installation will not provide a danger or cause interference with the supplier's system or with the supply to others.

Regulation 28 permits a supplier to discontinue a supply without giving notice in an emergency in the interests of safety, and to discontinue a supply after giving notice to the consumer where a consumer has not taken action necessary to prevent interference with other supplies. This regulation also makes provision regarding disputes between consumer and supplier over a discontinuance of supply, and provides that a supplier may not disconnect more than that portion of the installation than is necessary.

Regulation 32 requires an electricity board to maintain a supply except where testing is necessary, in which case two days' notice is necessary, or where an inevitable accident of force majeure makes it impossible to do so. Regulation 35 requires details to be provided to the Secretary of State of interruptions to supply in specified circumstances.

In setting out these requirements, I have sought to demonstrate that the types of circumstances provided by the supply regulations to give relief from the obligation to supply are cases where it would be impractical to enter into the type of consultation process that the noble Lords would wish to see introduced. The very nature of the regulations in dealing with safety matters dictates that action be taken as quickly as possible to prevent danger or to protect the public from injury. We simply cannot introduce any procedure which might endanger life. I should stress that the Bill allows relief from the supply obligation only in prescribed circumstances. Parliament therefore has the powers to approve the circumstances which are set out in the regulations and if necessary to pray against any proposed changes.

The current electricity supply regulations were compiled after an extensive process of consultation with the industry and a wide range of interested bodies and they command widespread respect. Any change to the regulations could only be made by statutory instrument and the opportunity therefore exists to debate and propose changes.

I believe that at present they represent the right balance between ensuring continuity of supply and protecting the safety of the public. The noble Lord's amendment could severely hamper these objectives and in the light of the explanation I have given, I invite him to withdraw it.

Lord Peston

I intervene in case I misunderstood the noble Earl. Although this issue is concerned with safety and so forth, the general ability of any customer to complain to the director about anything still holds. In other words, if the customer believes that the decision to supply is unreasonable, he can still go through the complete set of procedures in connection with the director. He can say, "Although you have acted, I still wish to complain to say that you have acted incorrectly and you must put it right again". Can the noble Earl confirm that that side of the issue still holds?

The Earl of Dundee

I am grateful to the noble Lord for introducing that matter and I confirm that the provision still holds.

Lord Ezra

I listened with care to what the noble Earl said and I should like to study it. The object of my amendment was not to impede anything connected with safety. That could have been stated as an exception because, clearly, one must move quickly in those circumstances.

However, I should like to read what the noble Earl has said and if necessary come back to the matter. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 159 to 160A not moved.]

Clause 29 agreed to.

Clause 30 [Electrical inspectors]:

[Amendments Nos. 160B to 160D not moved.]

Clause 30 agreed to.

Clause 31 agreed to.

Schedule 7 [Use etc. of electricity meters]:

Lord Ezra moved Amendment No. 161: Page 96, line 12, after ("supplier") insert ("in agreement with the customer").

The noble Lord said: This is a simple amendment. Although this may already be implied, it is intended to make absolutely sure that in this case the customer is in agreement. I beg to move.

Lord Glenarthur

I believe that the amendment is an unnecessary addition, despite the noble Lord's wish to see the matter put beyond doubt.

Under the terms of paragraph 1 of Schedule 7, where a meter is to be used to ascertain the quantity of electricity supplied, it has to be an appropriate meter. "Appropriate" in this context is defined in sub-paragraph (5) as being particularly suited to use for the supply in question, having reference to the terms on which the supply is to be provided. Finally, provision is made that where there is any dispute over matters arising under paragraph 1 these can be referred to the director for determination under Clause 23.

The effect of these provisions is to give very clear rights to the consumer in respect of the type of meter to be used. If one takes the example of a prepayment meter, in the first instance the consumer would be able to request an appropriate tariff when asking for supply under Clause 16. If that is refused, he can take the matter to the director for determination under Clause 23. If a prepayment tariff has been agreed, the supplier will be required to provide an appropriate prepayment meter, and again, if the meter proposed were considered to be inappropriate by the consumer, he has the right to seek a determination by the director. Similar considerations apply in respect of other types of tariffs and meters. I hope that provides the assurance sought by the noble Lord.

Lord Ezra

I am grateful to the noble Lord for that assurance. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

11 p.m.

The Earl of Dundee moved Amendment No. 161 A: Page 96, line 17, at end insert— ("(3A) The electricity supplier may require the replacement of any meter provided and installed in accordance with sub-paragraphs (2) and (3) above where its replacement—

1. (a) is necessary to secure compliance with this Schedule or any regulations made under it; or
2. (b) is otherwise reasonable in all circumstances;

and any replacement meter shall be provided and installed in accordance with those sub-paragraphs.").

The noble Earl said: I speak also to Amendments Nos. 164A and 165A. These amendments are concerned simply with clarification in drafting. I beg to move.

On Question, amendment agreed to.

[Amendment No. 162 not moved.]

Lord Carter moved Amendment No. 163: Page 96, line 42, at beginning insert— ("2.— (1) Where a customer of an electricity supplier is disabled and is to be charged for his supply wholly or partly by reference to a meter, the meter shall be installed on the customer's premises in a position determined in consultation with the disabled person. (2) The supplier shall make particular arrangements, where necessary, to reposition meters and provide special controls and adaptations for electrical appliances and meters. (3) If the customer is unable, because of disability, to take his supply through an appropriate meter, the supplier shall make alternative arrangements to supply electricity. (4) The supplier shall promote the interests of consumers who are disabled in respect of the prices charged for and the quality and variety of electricity services and apparatus provided. (5) The supplier shall have regard to the information needs of disabled customers.").

The noble Lord said: I should like to speak also to Amendment No. 164.I appreciate the hour, but this is the last amendment with which we shall be dealing this evening. However, these amendments are important in the interests of disabled people Paragraph 2(1) is self-explanatory and concerns the need for adequate forethought and planning when installing and designing meters. If the privatisation of electricity results in substantially more prepayment or coin meters, it is vital that those meters are designed and positioned so that disabled consumers can use them.

At present Schedule 7 to the Electricity Bill states: The meter shall be installed on the customer's premises in a position determined by the electricity supplier".

The first part of the amendment, if passed, would ensure that if a meter were installed in a household with a disabled occupant the disabled person would be consulted about the most suitable place to position the meter. Ensuring that the meter is installed in an accessible place initially saves the need to reposition the meter later and is less costly. The disability organisations are concerned that Schedule 7 as currently drafted still leaves too much discretion with the supplier.

When the issue was raised in Committee in another place the Government spokesman said: The intention of the Bill and, I expect, of the suppliers is to take account of the needs of disabled people".

That does not really go far enough as no specific indication is given as to how that is to be done.

One can appreciate that meters need to be placed at the appropriate height because a wheelchair user may be unable to reach a prepayment or coin meter if it is installed at a height that an able-bodied person would find suitable. Equally, someone with arthritis may have difficulty bending down and would require a meter installed at an appropriate height. A recent OPCS survey on disabled people identified arthritis as the most common cause of disability.

The second part of the amendment would allow the supplier to make special adaptations to equipment and to reposition meters. Provision in other privatisation Acts has led to a wide range of specialist equipment being available. The best examples of that are BT aids to disabled customers, which enable a wide range of telecommunication equipment to be designed for disabled people. Other examples are the special extended handles available for gas prepayment meters and arrangements for clock controls on gas central heating to be brailled. There are four different types of handles for gas cookers and there are also free gas safety checks for elderly and disabled people.

The third part of the amendment concerns disabled people who because of disability are unable to use a prepayment meter; for example, limbless disabled people. Schedule 7, paragraph 1(4) states: If the customer refuses… to take his supply through an appropriate meter provided… the supplier may refuse to give or may discontinue the supply.

An assurance is needed that this will not mean disconnection for the disabled people who are unable to use prepayment meters, and that ought to be written into the Bill.

Sub-paragraph (4) of the amendment, dealing with special equipment, is not intended to introduce a dual pricing system but to ensure that disabled people do not face additional charges simply on account of their disability. This was raised in Committee in another place and the Minister said: We do not believe that it is appropriate for the cost of such modifications to fall on the supplier and ultimately on other customers. In such instances the correct source of aid is through the social security system.

The disability organisations do not accept that. In other areas the cost of making equipment and services accessible is borne by the supplier and not by the disabled person; for example, brailled bank statements, accessible toilets on British Rail trains, accessible taxis, British Airways skychair, and so on. Additionally, not all disabled people are on social security but many have low incomes, as the OPCS survey revealed.

Finally, sub-paragraph (5) of the amendment explores the need for provision in the Bill to ensure that disabled people are aware of all the facilities that are available to them. It is vital that information is published in braille or on tape and not merely in printed form. For example, if a leaflet is produced giving information about adapted meters it must be in such a form that the people at whom it is aimed can benefit from it.

All five parts of the amendment, if accepted, would cost very little but would do a great deal to help people with disabilities. I beg to move.

Lord Renton

As a patron of the Greater London Association for the Disabled, I am naturally favourably disposed towards both of these amendments. It is right that we should legislate to cover the position of disabled people in regard to meters. However, I must confess that I prefer Amendment No. 164 in the name of the noble Lord, Lord Ezra, to that which has been moved by the noble Lord, Lord Carter.

I say that for this reason. Amendment No. 164 really says almost all of what needs to be said. It omits sub-paragraph (4) of Amendment No. 163 and I must confess that, although I am so much in favour of disabled people, I regard sub-paragraph (4) as not relevant and, indeed, impracticable. It is not the function of suppliers to provide all the apparatus that we use for electricity. In fact, most of it they do not supply. I have never heard— one would love to hear of it but I do not think it is practical— a suggestion that disabled people should be accorded special charges for their electricity. Therefore, I do not consider sub-paragraph (4) to be right. I must confess that I do not understand sub-paragraph (5). I hope we receive a sympathetic reply from my noble friend on the Front Bench but I really prefer Amendment No. 164.

Baroness Gardner of Parkes

I must apologise for not being present for a moment as I had to get a photocopy done before the machine closed down. I wish to comment briefly that I understood that there was already a condition in the licence which enabled the boards to discriminate in favour of assisting disabled people.

Lord Glenarthur

I certainly share the concern that the noble Lord, Lord Carter, has expressed to ensure that the needs of the disabled are taken account of in the privatisation exercise. It is for that reason as the noble Lord, Lord Carter, suggested, that the Secretary of State and the director general are given a specific duty under Clause 3 of the Bill. The noble Lord feels that that is not sufficient; but I believe I can show that it follows very much the course that my noble friend Lady Gardner of Parkes has pointed out.

There is a special condition, Condition 16, which is entitled: The provision of services for persons who are of pensionable age or disabled. I believe that goes a long way to meet the point that my noble friend makes. It requires the public electricity supplier to produce a code of practice on the provision of services to the elderly and disabled and agree its terms with the director. This would cover just the kind of matters that the noble Lord has set out; namely, the provision of special controls and adaptors for electical appliances and meters (including prepayment meters) and the repositioning of meters. It would also cover giving advice on electricity use.

As regards the particular point which the noble Lord raised about the refusal to supply other than by the appropriate meter— for example, the insistence of a prepayment meter— a prepayment meter would only be appropriate if a prepayment tariff was used. If the supplier sought to insist on such a tariff, the consumer would have the right to dispute the matter and seek a determination from the director under Clause 23. We believe that the provisions that I have described already do much of what the noble Lord seeks to do in the amendment. In some cases the general provisions of the Bill also have effect. In the case of the positioning of meters, for example, if the consumer disputes the reasonableness of the position proposed by the supplier, he has the right to seek a determination of that dispute from the director under Clause 23. Similarly, if there is no appropriate meter, then it would be open to the consumer to seek some special agreement in respect of their supplies under Clause 22.

I agree that some aspects of this amendment are not covered by the proposed amendment. But, like my noble friend Lord Renton, I do not believe that it would necessarily be right that they should be or that particularly the supplier should be required to promote the interests of the disabled in respect of tariffs. I understand the force that lies behind that argument; but where the disabled have difficulty in paying their bills through lack of resources it will not come as a surprise to the noble Lord if I repeat what was said in another place; namely, that it was a matter for the social security system and not the electricity industry and its customers.

I believe that many of the elements that the noble Lord seeks to fit into the Bill are covered by the Bill itself and perhaps particularly by the licence which I am sure the noble Lord will have studied. Were they not, we believe it would be inappropriate to make the kind of amendment which the noble Lord seeks. I hope that he will feel that the Bill as it stands, with the licence, goes a long way to meeting his anxieties.

Lord Williams of Elvel

Does the noble Lord not recognise again that the licence is not a statutory instrument? The licence can be modified and varied.

Lord Glenarthur

That is an argument that is fairly familiar. I seem to remember that it cropped up during the course of the Telecommunications Bill and one or two others. It has also cropped up as regards this Bill a number of times as well. The fact is that licence conditions are not statutory instruments in the way the noble Lord wishes they were. Nevertheless, I have no doubt whatsoever that if the provisions of the licence are not met or followed, a great deal of concern will be raised about it. The fact is that under the determination of disputes procedure which can be undertaken under Clause 23, there is a right for people to actually seek the kind of redress that they are looking for.

Lord Carter

I am extremely grateful to the noble Lord for his reply. I was aware of Condition 16 of the draft licence. The disability organisations have been concerned that these measures would not go far enough. I hope that we now have it on the record. It was obviously in the nature of a probing amendment. I am sure the Minister realised that. I shall read with care what he has said as, I am sure, will the organisations which briefed me. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Seear moved Amendment No. 164: Page 97, line 27, at end insert— ("No additional charge shall be made if an appropriate or modified meter is required because a consumer is disabled.").

The noble Baroness said: This amendment is based on much of the argument that we have just heard in connection with the previous amendment; but it is much briefer and much more specific. It asks for a great deal less. Nevertheless we believe that it would be valuable to have this on the face of the Bill. The amendment is self-explanatory. It simply safeguards the financial position if specially modified equipment is put into the house of a disabled person. I beg to move.

Lord Glenarthur

I certainly understand the motives that lie behind the amendment. Despite that, I do not think that it is any more appropriate. It is also a little curious to see the amendment in the place that it is as the substance of the provision into which it is to be introduced is not concerned with charging for meters at all. Be that as it may, the amendment proposes that a disabled consumer should not be charged more for a meter which has had to be specially modified to account for his disability than it would have cost him to be supplied with the unmodified meter. The point that stems from this is the one focused on earlier by the noble Lord, Lord Carter, which is that someone else would have to bear the cost. In practice this would be the supplier and through him the generality of his customers. The social security system is designed to meet the requirements of people who find themselves in this predicament. We are concerned, but the Bill as drafted already takes account of the interest which the noble Baroness advocates.

Lord Carter

Where in the social security system can the help be obtained?

Lord Glenarthur

I cannot give chapter and verse on which element. There is a raft of available help under the social security system to meet this kind of concern. I shall certainly try to find out for the noble Lord.

Baroness Seear

I am not surprised but I am none the less disappointed by the noble Lord's reply. He is being extremely doctrinaire in saying that people can go to the social services to get the money that they need. He said that if the adjustment was made, the cost would fall on the other customers. The additional cost for the other customers would be absolutely minuscule. It would be a great reassurance to many disabled people to have this on the face of the Bill. However, at this time of night I do not propose to press it further. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Earl of Dundee moved Amendment No. 164A: Page 100, line 40, leave out paragraph 10 and insert— ("10.— (1) A customer of an electricity supplier shall at all times, at his own expense, keep any meter belonging to him in proper order for correctly registering the quantity of electricity supplied to him; and in default of his doing so the supplier may discontinue the supply of electricity through that meter. (2) An electricity supplier shall at all times, at his own expense, keep any meter let for hire or lent by him to any customer in proper order for correctly registering the quantity of electricity supplied and, in the case of prepayment meters, for operating properly on receipt of the necessary payment. (3) An electricity supplier shall have power to remove, inspect and re-instal any meter by which the quantity of electricity supplied by him to a customer is registered, and shall, while any such meter is removed, fix a substituted meter on the premises; and the cost of removing, inspecting and re-installing a meter and of fixing a substituted meter shall be defrayed by the supplier. (4) Sub-paragraphs (2) and (3) above are without prejudice to any remedy the supplier may have against the customer for failure to take proper care of the meter.").

The noble Earl said: This amendment has already been spoken to. I beg to move.

On Question, amendment agreed to.

[Amendment No. 165 not moved.]

The Earl of Dundee moved Amendment No. 165 A: Page 101, line 42, at end insert— (" "prescribed" means prescribed by regulations;").

The noble Earl said: This amendment has already been spoken to. I beg to move.

On Question, amendment agreed to.

Schedule 7, as amended, agreed to.

The Earl of Dundee

I beg to move that the House do now resume.

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

House resumed.