HL Deb 05 March 1992 vol 536 cc1012-42

5.14 p.m.

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Reay)

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

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

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD AYLESTONE in the Chair.]

Clause 1 [Standards of performance]:

Lord Hacking moved Amendment No. 1: Page 2, line 2, at beginning insert ("Subject to, and only in accordance with the provisions of this Act referred to in, section 27BB below,").

The noble Lord said: In moving this amendment I intend also to address the Committee on Amendments Nos. 3, 15, 18 and 26. Amendment No. 16, which appears in the Marshalled List under my name, is not my amendment but that of the noble Lord, Lord Williams of Elvel. Before I address the Committee on the content of these amendments I have a practical question which I wish to raise with the Minister. As the Committee knows, we have set aside today, Thursday 5th March, for the Committee stage of the Bill and Monday, 9th March, has also been set aside for the second day of Committee.

My practical question is this. Can the Government tell us that they will leave sufficient time in this Parliament for the Bill to reach the statute book? I ask this question as a simple Cross-Bencher. I am not privy to the political talk of the great parties. I have heard some mention of the proposed dissolution of Parliament and that rests at the behest of Government. Judging by the long list of amendments,I believe about 128, which we have to consider, will all our labours of Thursday come to naught? Before we go further I shall be very grateful if the Minister can give us some assurance.

Lord Reay

I can assure the noble Lord that we have every intention of seeing this Bill on to the statute book.

Lord Hacking

I shall leave the Minister's answer as he puts it. On the second day of Committee I may come back to this matter because it is of some concern. For example, I note that the Report stage has been laid down in the provisional timetable for Tuesday, 24th March. If we are to follow the normal period between each stage of the Bill, there is some worry whether it will reach the statute book or whether the House will have proper time to consider its complicated provisions.

My amendments are addressed to the standards of performance—very much part of the Citizen's Charter—which are proposed in this Bill and which are new to the telecommunications industry. I have no quarrel in the public interest that these standards of performance should be introduced, although their need should diminish as the industry becomes more truly competitive. The question is how the standards of performance—individual or overall—should be implemented.

In this Bill the Government have proposed a separate regulatory regime which could have an enormous impact on those providing, for example, telecommunication services. Thus far the telecommunications industry has been largely regulated under the Telecommunications Act 1984 by a system of granting licences by the Secretary of State or the Director General of Telecommunications. Thereafter, as contained in Sections 12 to 15 of the Telecommunications Act 1984, there is a carefully balanced regime for the modification of licences by the Director General of Telecommunications in which, first, the licence holder negotiates with the director general on any proposed changes to the licence and, secondly, in cases of dispute reference is to be made to the Monopolies and Mergers Commission.

While few references have been made to the MMC, it is a sensible system of checks and balances. Unfortunately, these new standards of performance are not being brought into the licensing regime which I have described to the Committee but under a separate regulatory scheme which is set out in the Bill. I urge on the Committee that that is a mistake for several reasons.

First, it places too much power in the hands of the regulator who is to be just about judge and jury in the proposed new Section 27A(6)—that is, unless the amendments of the noble and learned Lord, Lord Brightman, commend themselves to the Committee. Secondly, it deprives both industry and the public of the benefit of MMC references. Thirdly, it sets up a regime which does not have a system of checks and balances as does the regulation by the licensing scheme.

There are other ways of regulating the regulators —which is what these amendments are about. The noble Baroness, Lady Gardner of Parkes, who does not appear to be present at the moment, has tabled a rather novel amendment proposing parliamentary scrutiny by a joint committee of both Houses. There is also the instrument of the judicial review, which I anticipate the noble and learned Lord, Lord Brightman, will explain to the Committee. As drafted, that will place the court in a very difficult position.

In summary, these amendments—and the crucial one is Amendment No. 26—will bring the new standard of performance into the existing licensing regime so that there will be one regulatory scheme instead of two. For the reasons I have advanced, I commend these amendments to the Committee.

Perhaps I may say one word about the drafting of my amendments. I am sure that deficiencies will be shown in the drafting. However, it is the principle that I am seeking and not the exact wording of my amendment. I beg to move.

Lord Williams of Elvel

The noble Lord, Lord Hacking, has quite rightly drawn the attention of the Committee to an important point in his series of amendments; that a different system of regulation is proposed in the Bill from the system which exists in the Telecommunications Act. He has made a valiant effort to try not only to point this out but to offer a possible course to rectify the problem. He also put his finger on what seems to us to be the really important considerations that we mentioned at Second Reading. First, the whole question of the regulator being regulated and of who is in charge of the regulator; and, secondly, the question of how does anyone know whether the judgments of the regulator are properly fair and properly balanced. Unless the regulator gives some sort of reason for what he is doing it is very difficult for anyone to make that judgment.

I shall be interested to hear the Government's response to the noble Lord, Lord Hacking. It seems to me that in his first amendment he has struck something of a blow at the philosophy of the Bill.

Lord Reay

Amendments Nos. 1, 3, 15, 18 and 26, taken together, would have the effect of ensuring that the power we are giving the Director General of Telecommunications in this Bill to make regulations setting guaranteed standards of service for individuals and to determine overall standards of performance to be achieved by designated telecommunications operators, could only be exercised as if the making of such regulations and the determination of such standards were equivalent to the making of modifications to the conditions of the licence granted to the designated operator under Section 7 of the Telecommunications Act 1984.

These amendments would therefore have the effect of making Sections 12 to 15 of the Telecommunications Act apply to the making of regulations prescribing guaranteed service standards and the determination of overall performance standards. These sections ensure that the director general may only make modifications to the conditions of the licence with the consent of the licence holder. If the licence holder does not consent to any modifications proposed by the director general, the director may make a reference to the Monopolies and Mergers Commission. If the MMC then concludes that there are factors operating against the public interest which could be remedied by modifications to the licence, the director general is required to make such modifications to the licence as appear to him to be requisite. The amendments proposed by the noble Lord would therefore ensure that the director general could only make regulations prescribing guaranteed standards or determine overall performance standards with the consent of the designated operator or, in the absence of such consent, following a reference to the MMC and an adverse MMC finding.

I do not believe that the setting of guaranteed or overall standards should be dependent upon the agreement of the designated operator. This is effectively the position under existing legislation, where standards for designated telecommunications operators may be set voluntarily or as a condition of the licence.

The purpose of giving the director general statutory powers to set guaranteed and overall standards, as we are doing in this Bill, is to ensure that the consumer receives a better quality of service. The director general has a general duty to promote the interests of consumers. He should therefore be able to set whatever standards he believes, following his consultations, are necessary and appropriate in the light of this and his other general duties. These should, of course, be realistic and take into account the views of the designated operator. For this reason the Bill requires the director general to consult the designated operator on standards.

Designated operators may, however, only be prepared to consent to guaranteed and overall standards which could easily be achieved. It is likely therefore that standards which required the operator's agreement would often be lower than those which the director general may set under Clause 1 of this Bill. Moreover, under the amendments proposed, if the designated operator refused to agree to some or any of the regulations or overall standards proposed by the director general the only course of action open to the director would be a reference to the MMC. This would, I believe, be a highly unwieldy and bureaucratic approach to the setting of standards.

The noble Lord, Lord Williams of Elvel, asked about the accountability of regulators. It is our view that the regulators are already accountable. They operate within a statutory framework and they are required to make an annual report to the Secretary of State. That report must be presented to Parliament. They are also subject to the scrutiny of the appropriate Select Committee and their decisions can be subject to judicial review. The National Audit Office, which reports to the Public Accounts Committee, has oversight of financial and value for money aspects of the regulators and the decisions of the regulators are frequently the subject of press and public debate, which helps keep them on their toes.

For the reasons I have given I ask the noble Lord, not to press his amendment.

Lord Hacking

I am a little puzzled by the Minister's reply. We find common ground in that he agrees—though he did not expressly say so in his speech to the Committee—that a new regulatory scheme is being set up in the Bill which runs alongside the existing regulatory scheme under the licensing procedure set out in Sections 12 to 15.

I thought I heard the Minister state—but I did not have my pencil ready when he mentioned this—that the procedure through the MMC was an unwieldy and undemocratic process. If I did hear correctly I am further puzzled. The matter can be tested quite simply. The licensing regulatory scheme has been in existence for some six years now. Can the Minister point to any occasion when the system has not worked; when the Director General of Telecommunications has been unnecessarily restrained? At the end of the day the granting of a licence is in his power and the power of the Secretary of State.

If the Minister could identify instances where the regulatory scheme under the 1984 Act has not worked and has presented significant difficulties to the director general, I should find it much easier to withdraw my amendment.

Lord Reay

I did not say that the 1984 Act had not worked. I said that in cases where it is a question of setting standards, if the designated operator refuses to agree to some or any of the regulations which the director general proposes and the only course of action open to the director is a reference to the MMC, then we consider that to be an unwieldy method of setting standards.

Lord Hacking

I am in a further difficulty in deciding whether or not to withdraw my amendment because I do not know whether the House is to have an opportunity to consider the matter at Report stage and at Third Reading when I can have another attempt to table an amendment to deal with the problem. If the Minister could help me on that, I would feel more comfortable about withdrawing the amendment. If I am faced, as all noble Lords may be faced, with no opportunity to discuss these matters at the next appropriate stages of the Bill—Report and Third Reading—I am in some difficulty.

5.30 p.m.

Lord Reay

As in the case of the passage of any other Bill, if the noble Lord wishes to put down an amendment on Report he will have the opportunity to do so.

Lord Hacking

The question is whether there will be a Report stage. I have pressed the Minister as far as I can at this stage. I withdraw the amendment very much on the basis that there will be another opportunity at Report stage to consider the matter. On that basis, and on that basis alone, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Williams of Elvel moved Amendment No. 2: Page 2, line 2, leave out ("may") and insert ("shall").

The noble Lord said: This amendment stands in my name and that of my noble friend Lord Desai. It may be for the convenience of the Committee if I speak also to Amendments Nos. 6, 8, 9, 17 and 39. All these amendments are designed to give more strength to the Bill. I said at Second Reading that it would be our purpose in Committee to try to make the Bill rather tougher than it is at the moment. As I go through the amendments, noble Lords will recognise many similarities between them. In fact in certain cases the words are exactly the same.

Amendment No. 2 relates to the director making regulations prescribing standards of performance in individual cases. As presently drafted there is in the Bill an enabling power for the director to make regulations. We would like to see the director being required to make regulations. We are often faced with what is essentially enabling legislation. I do not think it will be enough for the Minister to say, as I am sure he will, that the director will use this power. It is up to Parliament to instruct the director to use the power that Parliament is giving. That is the thrust of Amendment No. 2.

Amendment No. 6 is designed to make sure that the director does what Parliament wishes him to do. Amendment No. 8 deals with the director's ability to prescribe circumstances on exemptions. We are unhappy about the whole process of the director being allowed to give exemptions without any apparent reference back to the Secretary of State or indeed to Parliament.

Amendment No. 9 varies that slightly in the sense that he can prescribe circumstances, which may vary from time to time". I recognise that Amendments Nos. 8 and 9 lack a certain consistency one between another, but I wanted to treat them together for the purpose of grouping. We do not want to take too long over the Committee stage of the Bill. I hope that the Committee will bear with me on that.

I shall not go through the remaining amendments because they all have the same purpose. They seek to replace "may" with "shall". The amendments seek to ensure that the Director General of Telecommunications does do what Parliament wants him to do and that he does it in a way that cannot grant exemptions without referring to higher authority. I beg to move.

Lord Reay

The effect of Amendments Nos. 2, 6 and 17 would be to place the following duties on the Director General of Telecommunications instead of giving him enabling powers as the Bill currently proposes: first, a requirement to make regulations prescribing guaranteed service standards to be achieved in individual cases; secondly, a requirement to prescribe certain matters in those regulations including the circumstances in which the designated operator is to inform persons of their rights, the standards of performance to be achieved in all cases and the circumstances in which the designated operator is to be exempted from requirements under the regulations; and, thirdly, a requirement to set overall performance standards and to arrange for publication of those standards.

There are two important reasons why we believe it would not be appropriate to place such requirements on the Director General of Telecommunications or the other regulators. The first is that it may not he necessary in all cases to make regulations prescribing guaranteed standards of service or to determine overall standards of performance. For example, a designated operator may agree to voluntary individual standards or may agree guaranteed service standards as a condition of the licence. Alternatively, the director could decide, in the light of his consultation with designated operators and representative bodies, that existing standards of performance were adequate. The Bill should not prejudge the outcome of the director's consultations by placing an absolute requirement on him to set standards.

The evidence to date suggests that a failure on the part of the Director General of Telecommunications or the other regulators to set guaranteed or overall standards is unlikely to be a problem. The regulators clearly attach importance to individual standards. Offer and Ofwat, which already have statutory powers, have set individual standards. Under pressure from Oftel, BT has voluntarily agreed to individual standards and Ofgas has agreed individual standards with British Gas as a condition of the licence. The regulators also attach importance to good overall performance and will set standards if these are required. Offer has already set overall performance standards.

Secondly, we believe it is important to protect the regulators' independence. The Government should not tell them how to do their job. The regulators all have a general duty to promote the interests of consumers and it should be for them to decide what regulations are required to satisfy this and their other general duties. This is why Clause 1 of the Bill gives them enabling powers to make regulations setting guaranteed standards and to determine overall standards instead of setting out detailed requirements.

Perhaps I may turn now to Amendment No. 8. Clause 1 allows the director to exempt a designated operator from provisions relating to guaranteed standards and compensation. The amendment would remove that power. We must leave the director flexibility to tailor the regulations appropriately to the circumstances and the particular standards that he may set and to amend the details where it proves necessary. The Director General of Electricity Supply, for example, has included in the exceptions which he has made to the circumstances in which standards must be met, such things as extreme weather and action by third parties which might make meeting the standards impracticable.

This amendment would unduly restrict the director's freedom of action. If he was required, as could be the consequence of this amendment, to impose stricter liability for failure to meet a standard than he thought appropriate for a particular case, he could be inhibited from setting that standard, to the detriment of customers.

Amendment No. 9 would have no practical effect. It reiterates that which is inherent within this clause; that the director general, having made these regulations, will review them, and the service standards arising from them, as appropriate. Given his general statutory duty to promote consumer interests, he is unlikely to leave the regulations untouched when it becomes clear to him that they no longer meet current needs.

Because it is superfluous in effect, the amendment would cast doubt on other areas of the Bill which had the same effect but did not include the relevant phrase. Therefore it would produce a worse drafted Bill.

I turn now to Amendment No. 39. It seeks to compel the Secretary of State to make regulations making provision for billing disputes to be referred to the director general, instead of enabling him to do so as the Bill currently proposes. The Bill will give the Secretary of State powers, for all the utility services, to make regulations allowing billing disputes to be referred to the director general for determination.

Disputes over bills are a particular cause of concern in telecommunications, where customers do not have meters in their homes and may have difficulty knowing how much they have spent using the telephone. Where there is a dispute, past consumption is a less reliable guide to the likely accuracy of a bill than in the case of, for example, gas and electricity. Because of the particular difficulties which exist for telecommunications, we intend to make regulations allowing Oftel to determine billing disputes after the Bill is enacted. There is no need, therefore, to compel the Secretary of State to make regulations allowing billing disputes to be referred to the Director General of Telecommunications because we intend in any case to make such regulations.

However, we have no plans at present to trigger those powers for gas, electricity or water, where disputes over bills do not raise the same problems, although I should add that we will keep the situation under review. For that reason, we believe that it would be wrong to include in the Bill a requirement on, rather than an enabling power for, the Secretary of State to make regulations in respect of billing disputes for telecommunications. We have chosen instead to adopt a consistent approach throughout the Bill across all four utilities in respect of billing disputes. That will ensure that the flexibility exists for the Secretary of State to make regulations allowing the director general to resolve billing disputes where there is a clear need for such powers for that utility, but will not compel him to do so where these powers are not necessary. For those reasons, we cannot support the amendment.

Lord Airedale

I think that I can see a difference between the first of these linked amendments and the subsequent amendments. At the beginning, there seems to be a choice between the director making regulations and achieving his purpose in some other way. But, then, we reach a point where it has been decided to proceed by making regulations. Parliament does not have to leave it to the Minister to make regulations; indeed, Parliament may have decided to deal with the matter by primary legislation. If Parliament leaves it to the Minister to make regulations, it is perfectly entitled to direct by the word "shall" what the regulations are to contain, just as if Parliament itself had legislated without leaving it to the Minister to make regulations.

Baroness Oppenheim-Barnes

My noble friend the Minister has made some extremely interesting statements about proposed future regulations with regard to billing disputes. There are further amendments to deal with the matter. It is an area of great anxiety because consumers do not have meters. However, I am not quite sure as to how such regulations could work or how such disputes could he resolved, unless consumers are to be given access to metering information. I wonder whether my noble friend can make it clear whether that is likely to happen. His response might alter one's view on later amendments.

5.45 p.m.

Lord Reay

Perhaps I may reiterate what I said with regard to the amendment on billing disputes. We do not wish in the case of telecommunications to compel the Secretary of State to make regulations allowing billing disputes to be referred to the director general because we intend to make such regulations. Therefore, we believe that it would be wrong to include in the Bill a requirement for the Secretary of State to make regulations in respect of billing disputes. On the contrary, we believe that there should be an enabling power such as we now have in the Bill. That is why we have chosen to adopt throughout the Bill a consistent approach which will apply to all four utilities. With regard to the question asked by my noble friend Lady Oppenheim-Barnes, I can tell her that the director general can demand information from the operator in order to satisfy himself that the meter has accurately recorded the usage.

Lord Williams of Elvel

I am grateful to the Minister for a number of interesting remarks—that is, not just about billing disputes but also about the nature of agreements that might be made. It was my understanding that the point about the legislation was that the director, especially in the case of telecommunications, would make regulations. Where there are agreed voluntary standards, can the Minister explain the status of such standards? After all, we know the status of a regulation. If someone offends against a regulation, that is a clear offence. But, if someone offends against a voluntary standard, I do not see how that standard can be enforceable in any respect. I am open to persuasion from the Minister. Perhaps when further information is available to him he can let me know the position as regards the status.

In the meantime, I should like to emphasise the fact that we do not wish to tell the director how to do his job. That is not the point of the amendments. However, I should like to take up a point raised by the noble Lord, Lord Airedale, that once Parliament has said that the director "may" do something, it is perfectly entitled to say that, if he does do so, then he "shall" do it in a certain form. That is the point of the exemption amendment. I very much hope that the Minister will be able to help me as regards the status of voluntary standards which he described in his reply.

Lord Reay

My understanding is that there is a great usefulness in being able to reach voluntary agreements but that, in fact, they do not have any legal status.

Lord Williams of Elvel

I thought that the whole point of the legislation was to ensure that standards of performance did have legal status. If they do not have legal status, what is the point? In other words, if there is a voluntary agreement, what is the point of legislation?

Lord Reay

The point is that the director can take the power.

Lord Williams of Elvel

Therefore, what we are saying is that there will be a voluntary standard until it is broken, but that when it is broken the director will make regulations. Is that what the Minister is saying?

Lord Reay

There is no reason to assume that it will ever be broken.

Lord Williams of Elvel

But it is not enforceable. We have now discovered that a voluntary standard is not enforceable. Therefore, if it is broken there is no remedy; in other words, there is no remedy under the legislation which we hope will be enacted. It is only after the director has made regulations to seal off that particular loophole, so that the standard becomes statutory rather than voluntary, that there is a remedy.

Lord Reay

If the operator does not comply with standards voluntarily agreed, then it will be open to the director to set standards in regulations with which the operator will have to comply.

Lord Williams of Elvel

The Minister and I understand each other perfectly well. In my view, there is clearly a problem about a voluntary standard. Of course, I agree that it may never be broken; but, if it is broken only once, then clearly the director has the right to make his own regulations. However, at the point at which it is broken—that is, at that one time —there is no redress. That is the point that I am making. That is why I should prefer to see all standards being enforced by law.

Nevertheless, we have had an interesting exchange. The Minister has been kind enough to give the Committee a certain amount of information which think will prove to be quite useful as we progress through the Committee stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees (Lord Aylestone)

I should remind the Committee that, if Amendment No. 3 is agreed to, I cannot call Amendments Nos. 4 and 5.

Lord Hacking had given notice of his intention to move Amendment No. 3: Page 2, leave out lines 7 to 14.

The noble Lord said: I have already addressed Members of the Committee on the amendment. However, I still have an anxiety and it is one that I have expressed to the Minister. On the provisional list for the future Business of the House —or, perhaps, it may be described euphemistically as a "very provisional list"—is a date for the Report stage of the Bill of Tuesday 24th March. Can the Minister say whether the Bill will be considered on Report in this place on that date? If that is not the position, can he tell us what is?

Viscount Astor

Perhaps I can help the noble Lord. He will always have an opportunity to table amendments for Report stage.

Lord Hacking

That does not answer the question. Will the House be able to consider the Bill on Report on Tuesday 24th March, as is set out in the provisional business of the House?

Viscount Astor

That is a matter for the usual channels. At the moment Report stage has a day.

Lord Hacking

But I am not part of the usual channels. At this stage I shall not press my amendment, but I shall certainly press my concern.

[Amendment No. 3 not moved.]

Lord Williams of Elvel moved Amendment No. 4: Page 2, line 12, leave out ("appearing to the Director to be").

The noble Lord said: In speaking to this amendment, which has been tabled also by my noble friend Lord Desai, it may be for the convenience of the Committee if I speak also to Amendments Nos. 7, 19, 31, 42, 43, 82, 105 and 110.

All those amendments have the same purpose. It is to ensure that the bodies or persons who are consulted are consulted in their own right, not simply because someone such as a director or a Secretary of State deems them to be people who should be consulted. To be able to decide who will be consulted on any particular regulations that one is going to make oneself seems not dissimilar to choosing one's own umpire.

There are perfectly good, satisfactory, objective means for deciding who are persons or bodies representative of persons likely to be affected by the regulations and I see no reason why the director should not have a role in deciding who those persons or bodies should be. But the expression, appearing to the director to be", specifically gives a director the right to reject bodies or persons that he considers on his own authority—on his own say-so, without reference to anybody—are not representative. I find that a somewhat difficult concept because, as I have said, those bodies are generally well established and well recognised.

I should be grateful if the Minister could explain the Government's thinking behind that expression. All of the other amendments in this series to which I am speaking have, I think, the same point that either the director or the Secretary of State seems to be the person who decides whom he shall consult. I shall be grateful if the Minister can explain the Government's thinking on this. I beg to move.

Lord Reay

Perhaps I may speak first to Amendments Nos. 4, 19 and 82. These amendments would prevent the director general from judging whom he considers to be representative of customers likely to be affected by the standards of performance he sets.

The clauses as they stand place a duty on the director general to consult with the utility and those persons or bodies whom he feels are likely to be representative of those affected by the regulations he will set. If the director general is left without any discretion in this matter, he would be required to consult every single body or organisation which might conceivably be representative of those likely to be affected. In practice, the director general could never be certain of achieving such comprehensive consultation—not least because such bodies and organisations do not remain constant. The director general would therefore be at risk of judicial review.

Amendment No. 7 would prevent the director general from coming to his own view as to the manner and frequency with which customers should be informed of the standards of service they can expect to receive. The expression "in the Director's opinion" merely reflects the expression "in his opinion" earlier in the clause; that is in line 5 on page 2. Both expressions are merely intended to ensure that the director has a discretion when making any regulations under new Section 27A to set what standards he considers appropriate. We believe that the director should be free to come to his own judgement as to the level of service standards which is suitable.

Amendment No. 31 would take away from the director general the choice of how he publishes the information he has collected. Instead, that choice would be dictated to him by the Secretary of State. It is not clear what benefit there would be from involving the Secretary of State in decisions about the form and manner of publication of the information. These are relatively minor matters which the director general is fully competent to decide. If the Secretary of State expressed views on the form of publication, no doubt the director general would have regard to them. The amendment therefore would reduce the independence of the director general. Given their general support for the concept of an independent telecommunications regulator, I hope that the noble Lord and his noble friends will not press the amendment.

The effect of Amendments Nos. 42, 43, 105 and 110 would be greatly to increase the scale of consultation which the Secretary of State would be obliged to undertake before making regulations about billing disputes. Instead of being obliged to consult representatives of those likely to be affected by the regulations, the Secretary of State would be obliged to consult all those likely to be affected. In practice, for telecommunications that would probably mean all of BT's customers; that is to say, 26 million people. Although Amendment No. 42 allows the Secretary of State to consult, in a manner that appears … to be reasonable and appropriate", this would not significantly alleviate the burden of the statutory obligation as he would still be under a duty to consult the same number of people. This consultation requirement, enshrined in statute, would be extremely onerous to comply with. Compared with consulting representatives, the quality of the resulting regulations would not justify the vast extra cost and effort required in consulting 26 million people.

If a representative body when consulted under these requirements felt that further research was desirable, then the Secretary of State would consider its recommendation and doubtless act upon it if it was in the interests of consumers to do so. In any case, the Bill as drafted does not prevent the Secretary of State from consulting individual customers directly. For the reasons that I have described, it would be unnecessarily burdensome to oblige him to do so.

I hope that the noble Lord will not press his amendment.

Lord Williams of Elvel

I am grateful to the Minister for his response, but perhaps he can give me guidance on two matters. First, will the director in each case across the utilities be publishing from time to time a list of persons or bodies that appear to him to be representative of persons likely to be affected by the regulations so that we all know who is on his list and who is not on his list? Secondly, on the form of the report, if the report is to be submitted to Parliament, would it not be sensible for the Secretary of State to be able to say in what form he would like that report? After all, it would be the Secretary of State who would be responding to parliamentary questions on the matter, as I understand it. Perhaps the Minister will confirm that.

Lord Reay

The question of whether a list of the representative bodies would be published would be for the director to decide. I believe that I have deployed my arguments already on the issue of the involvement of the Secretary of State in the publication of information.

Lord Airedale

At least the merit in leaving in the words, appearing to the Director to be", is that there may be a case where an organisation that should have been consulted might, by mere inadvertence, not apply to be consulted yet it still will be consulted because it is the duty of the director to consult that body because it appears to him to be a worthy body to consult.

Lord Williams of Elvel

I think that we have gone far enough on this group. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Williams of Elvel moved Amendment No. 5: Page 2, line 14, after ("regulations") insert: ("; and (c) after undertaking such empirical research into the views of customers likely to be affected by the regulations as the Director-General thinks fit.").

The noble Lord said: In moving this amendment, which is tabled also by my noble friend Lord Desai, perhaps it will be for the convenience of the Committee if I speak also to Amendments Nos. 20, 83, 89 and 108.

In general, as I think the Committee knows, we welcome the Bill's provision for consultation with interested parties when setting performance standards. We join forces with the Government on that.

However, as I said on Second Reading, we seek some reassurance that that consultation will be interpreted by the regulators as consultation with individual consumers—perhaps through survey work —in addition to consultation with the various representative bodies. In our view such research is crucial if performance standards are to suit the service users rather than the service providers.

I happen to believe that Amendment No. 5, and other amendments with similar wording which go right through the Bill, are in line with the principle underlying the Citizen's Charter, and so the Government should find it acceptable. So far as I remember, the White Paper said that people affected by services should be consulted. The amendment would achieve that aim. How that is done is up to the individual regulators in the individual utility. There are different methods. For instance, I understand that Ofwat already does some survey work on various aspects of the service provided by water and sewerage operators. We believe that that is a good example that should be followed by other operators.

This series of amendments was foreshadowed by me on Second Reading. I hope that the Government will feel that they are in the spirit not just of the Bill but of their own Citizen's Charter and will feel able at least to look at them sympathetically. I beg to move.

6 p.m.

Lord Reay

The amendments would require the directors general to conduct research into the views of individual customers when setting standards of performance in addition to the requirement that customer representative bodies be consulted. The new provisions of Clauses 1 and 11 bring the Telecommunications Act 1984 and the Gas Act 1986 into line with the Electricity Act 1989 by placing a requirement on the directors general to consult widely before setting performance standards. They clearly state that consultation should be undertaken with persons or bodies of persons likely to be affected by the performance standards to be set for each utility. That must presumably include taking account of customer concerns.

If a customer representative body when consulted under those requirements felt that wider research was desirable, that recommendation would be considered by the directors general and I am sure be acted upon if it was in the interests of customers as a whole to do so. The directors general can also consult directly with individual customers as well as representative bodies if they see the need to do so but it would be burdensome to require them to do so in all cases. On the face of it, if such a requirement was in statute, the directors general would need to discharge it fully to ensure that the standards set would not be ultra Tires.

It is important that the views of customers are fully known. We have tried to ensure that the Bill strikes the right balance by requiring a certain level of consultation while leaving the directors general with the discretion to decide what is appropriate in particular circumstances. Nevertheless, the noble Lord has made some good points. I accept the principle of what he said about the need for research into customers' views to be conducted. If he will withdraw the amendment, I shall take it back and consider it with a view to coming up with some proposals of our own at the next stage.

Lord Williams of Elvel

I am most grateful to the Minister. With that assurance, I beg leave to withdraw Amendment No. 5, and I shall not be moving the other amendments in the group.

Amendment, by leave, withdrawn.

[Amendments Nos. 6 to 9 not moved.]

Lord Swinfen moved Amendment No. 10: Page 2, line 25, at end insert: ("(d) prescribe standards having particular relevance to customers who are elderly or disabled or have low incomes.").

The noble Lord said: I shall speak also to Amendments Nos. 84, 114 and 116. The purpose of this group of amendments is to enable each of the regulators to require that standards of performance to be met by the suppliers in individual cases are relevant to the needs of the most vulnerable consumers and particularly those who may experience difficulty in paying for supplies. Such standards could include, for example, procedures to be followed prior to disconnection, information to be supplied to customers in debt offering a choice of payment methods to low income consumers and access to token supply points for coinless prepayment meters.

The nature of the performance standards currently envisaged under the Bill largely concern matters such as the keeping of appointments and the restoration of supply after the reporting of a fault. Important as those are to customers who might otherwise suffer the costs and inconvenience of broken appointments and unreasonable delays, those standards do nothing to address the problems which are repeatedly raised by clients of the CAB. Overwhelmingly, those problems are associated with low income and relate to difficulty in paying for the utilities or dealing with the threat or actuality of disconnection.

The aim of this group of amendments is to enable and encourage regulators to ensure that performance standards which they set for the utility companies address the needs of all consumers, including in particular those who are vulnerable to debt and disconnection because of their difficulties in paying for supply and those who are disabled or elderly. Without the protection of performance standards which are specifically targeted at their needs, that group of consumers is at risk of being treated by the utility companies as an expensive nuisance rather than as valued customers who deserve the better standards of service envisaged by the Citizen's Charter.

There is, in theory, a range of payment methods available to customers who have difficulty in coping with quarterly credit or get into debt through paying for fuel. They include, for example, arrangements to pay off arrears in cash instalments, fuel-direct arrangements with the DSS, involving weekly reductions from income support, coin-operated prepayment meters, and, increasingly nowadays, coinless prepayment meters operated by tokens, cards or keys which can be calibrated to collect arrears as well as paying for current consumption. Different methods will suit different customers. Some, for example, find coinless prepayment meters to be of considerable assistance with budgeting, while others, especially those with restricted mobility or living some distance from token supply points, will find them extremely inconvenient, if not impossible, to operate.

There is, however, evidence that customers at risk of debt and disconnection are under pressure from some fuel companies to adopt a particular method of payment preferred by the supplier rather than being given a choice of all available methods. Sometimes it is only after intervention by someone in support of the consumer that the customer's choice is taken into account. A CAB in Cumbria has advised that Norweb has stopped accepting direct payments from the DSS for customers who are in receipt of income support. It will now install only card meters and expects the arrears to be cleared within 12 months. I understand that a similar policy is operated by Seeboard in the South-East of England.

Another aspect of the lack of choice for low income consumers arises where customers who do not have bank accounts have no means of making payments in cash without incurring an extra charge. According to research done by the Policy Studies Institute in 1990 one person in five in Britain and 25 per cent. of pensioners do not have bank or building society accounts. The problem arises especially with water companies. While some make suitable provision for customers who wish to pay in cash, others are failing to do so.

I learned from a citizens advice bureau in Wiltshire of the case of a pensioner who used to pay her water bills in monthly cash instalments at a local bank. She was able to do this free of charge because her water company banked there. When the bank closed, the client had nowhere to pay her water bill without incurring an extra charge. Paying the bill at the local post office would cost 70p for each instalment and travelling to the appropriate bank in the nearest town would cost her £2.75 in bus fares.

A further major problem with payment methods for some consumers, especially elderly and disabled people, concerns the availability of tokens, cards and keys for coinless pre-payment meters. These serve as a payment method for a growing number of consumers. Currently, over 1.25 million households use them for their electricity supplies, while approximately 200,000 gas customers pay by this method. That is expected within the next five years to rise to over 1 million, with the development of new metering technology. These meters are popular with the fuel companies because they ensure that the supply is paid for in advance, while any arrears are collected at the same time through calibration of the meter.

While those methods are also popular with many consumers, others will have been under pressure to accept them as the only alternative to disconnection. They will then be faced with the inconvenience, and possibly additional costs, of having to travel to obtain keys or tokens in order to ensure a continuing fuel supply. I could continue for some time with such examples but do not wish to weary your Lordships. I therefore beg to move.

Lord Allen of Abbeydale

I was glad to put my name to this amendment and I should like to say a few words in its support. I can be brief as the case has been well made by the noble Lord, Lord Swinfen. As he explained, it is the first of a series of amendments covering the various utilities and aimed at protecting some of the more vulnerable members of society. It seems to me that the amendments are entirely consistent with the Government's community care policy which aims at ensuring that these people lead as normal lives as possible. In particular, wherever it can be managed, the policy is that they should continue to live in the community rather than go into institutions. It is also to be remembered that many of the disabled are not only poor but incur extra expense with which the rest of us are not involved.

Amendment No. 10 is concerned with telephones, possession of which gives access to friends and support services and can make all the difference to an individual's life. I realise that there are specific problems, in particular over deposits, which are dealt with in later amendments. I am also conscious of the powers of local authorities to help under the Chronically Sick and Disabled Persons Act 1970, although these powers are being increasingly narrowly interpreted.

It seems to me that there ought to be a general requirement on the lines of the amendment, and in a sense it is an entirely logical development of the provision which already exists in Section 3 of the Telecommunications Act 1984 which puts a duty on the Secretary of State and the director to exercise their functions so as: to promote the interests of consumers, purchasers and other users … (including, in particular, those who are disabled or of pensionable age)". Without the protection of performance standards specifically directed at their needs, as the noble Lord said, covering such matters as the availability of payment options, I fear that these people are likely to look on the brave new world of the Citizen's Charter as something beyond their reach.

6.15 p.m.

Lord Ezra

I too am pleased to support the amendment. Since I put my name to it together with the noble Lord, Lord Williams of Elvel, and the other two noble Lords who have spoken, it is clear that it has cross-party support.

The position of the elderly, the disabled and those on low incomes is difficult. Indebtedness is unfortunately widespread. I have had personal experience of how difficult it is because some months ago I chaired a working party concerned with debt advisory services. Many people in debt unfortunately owe not just to one quarter but have multiple debts. If they are pressed by utility companies supplying them with essential services to settle their debts, they could well be placed in a prejudicial position in the settlement of their other debts.

It is therefore important that the position of these people should be safeguarded by standards laid down by the regulator in each of these cases. I very much hope, therefore, that the amendments, or something similar, will be accepted by the Government. As the noble Lord, Lord Allen of Abbeydale, said, in the case of the Telecommunications Act, this provision runs parallel to and develops what is already in the legislation.

Lord Williams of Elvel

I too wish to support the amendment moved by the noble Lord, Lord Swinfen. There are multiple examples from citizens advice bureaux of people getting into difficulties through debt, as the noble Lord, Lord Ezra, said, or simply because they are disconnected without understanding what is going on, or because they are disadvantaged in some way. They may be old, disabled or simply poor.

I believe that the standards which are set should take account of the disadvantaged in our society. As the noble Lord said, this is a cross-party amendment and I hope very much that the Government will feel able to support and accept it.

Lord Reay

The effect of these amendments would be to make the guaranteed service standards legislation for all four utilities specify that standards may be set which have particular relevance to the elderly, disabled and those on low incomes.

Under the privatisation Acts, all four directors general and the relevant Secretaries of State are already under a general duty to consider the needs of the disabled and those of pensionable age. These general duties apply when particular statutory functions are being exercised. In exercising their statutory functions the Secretary of State and the director general must therefore take into account, in particular, the interests of those who are disabled or of pensionable age.

In compliance with those general duties, the electricity supply licence, the gas authorisation and BT's licence have all been drawn up to include specific provisions which take account of the needs of the disabled and those of pensionable age. So, for example, under the electricity supply licence, the supplier is required to provide special modifications for appliances and meters for the disabled, to give advice to the elderly and disabled on the use of electricity and to draw up and publish a code of practice on special services which will be made available. The Director General is able to order a review of the code of practice if he thinks fit. Given that these general duties exist and have been complied with in the licences I mentioned, there is nothing in this amendment which would add to the position of the elderly and the disabled.

The amendment also seeks to include those on low incomes. Depending on how this group is defined, it could be large. The amendment does not indicate how those people should be defined. This could involve means testing or applying some criterion relating to the national average wage, or perhaps inviting people to register in some way. However, I do not really think that it is a practicable proposal.

In any case, as I said at the beginning, the amendments would not require the directors general to set standards for the elderly, the disabled and those on low incomes. Their effect is simply that the directors general may do so. But under this Bill the directors general can already set standards for any groups they choose, so that in effect the amendments would give the directors general no greater powers than they will already receive under the Bill. I sympathise with my noble friend's desire to draw attention to the needs of special interest groups but I do not think these amendments are the right way to go about it.

Lord Ezra

The noble Lord has implied that existing legislation already satisfies a large part of the requirements implied in this amendment. However, a large number of cases can be cited—information received by the citizens advice bureaux shows that this is the case—which show that there is a great deal of hardship among customers in the category we are discussing. That applies to the four utilities that are involved in this matter.

There is another matter that puzzles me. There is little in this Bill which is not already implied in the basic legislation. I understood that the purpose of the Bill was to extend the basic legislation and to spell out more clearly and more effectively the rights of the various categories of customer. If that were not the purpose of the Bill, why are we spending our time on it? If that is the purpose of the Bill, surely one category we should be concerned with is disadvantaged people.

Lord Reay

What I was trying to make clear was that under existing legislation the directors general are already under a duty to consider the needs of the disabled and the elderly. That was stated when the licences were drawn up. At the same time in this Bill there is a general requirement which enables the directors general to set standards for any groups which they choose. This group of amendments would not add to any of the powers of the directors general which they may require to provide for the groups which the noble Lord has in mind.

Baroness Gardner of Parkes

Is it not a problem that British Telecom does not have a code of practice whereas all the other utilities do? I understand that the regulator already has a power in this respect that he does not choose to use. At a later stage we shall move an amendment to regulate the regulators. Surely this matter could be tackled in that way. My noble friend the Minister was quite right to say the amendment could not cover low income groups. I have served on an electricity board and I realise that we are not dealing with a social service. A code of practice should not determine whether people can or cannot pay their bills. However, the unreasonable disconnection of any service is a different matter entirely. It is terribly important for an elderly or disabled person to have a telephone. Gas and electricity are of course important to everyone. But as regards a telephone, a low income person at least has the option of using a public telephone. That may not be possible for an elderly or disabled person and for the latter two categories the telephone may be a lifeline. However, I believe a better way to tackle this matter is by means of regulating the regulators.

Lord Reay

My noble friend raises some questions which go wider than this amendment. However, I agree with her comments about the difficulties of including low income groups within these amendments. As I have said, British Telecom's licence has been drawn up to include specific provisions to take account of the needs of the disabled and those of pensionable age. British Telecom has a code of practice and there is a whole list of services and special provisions which it makes available for the elderly and the disabled. There is, for example, a support line scheme which offers half price rental and a certain number of free calls. There is a talking braille service, large print bills for the visually handicapped and other measures. A considerable amount is done by British Telecom to help certain categories of people.

Lord Swinfen

I start by thanking all Members of the Committee from all around the Chamber who have supported me on this amendment. The Minister said that the directors general had a general duty already in this regard, as did the Secretary of State. That may be so but at the present time that duty is not satisfactorily exercised, particularly with regard to people who have difficulty in paying their bills. That is an extremely important matter for both elderly and disabled people. Members of both those groups often have considerable difficulty in earning an income. They may be on fixed incomes. Sometimes they are on reducing incomes as a result of inflation.

I agree with some of the comments made about the difficulties of making provision for people on low incomes. However, we might be able to refine this amendment at a later stage to make it apply to people who are on income support and limit the number of people to whom it applies in that way. I wish to read what my noble friend has said. I may well return at a later stage of the Bill with similar amendments. In the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 11 not moved.]

6.30 p.m.

Lord Brightman moved Amendment No. 12: Page 2, line 43, at end insert: ("( ) The Director or other person making an order under subsection (6) above shall state the reasons for his determination.").

The noble and learned Lord said: In moving Amendment No. 12 I wish to speak also to Amendments Nos. 35, 44 and 56. The purpose of these amendments is to require arbitrators—I shall call them that—to give reasons for their decisions when they determine a dispute. There are four areas of dispute which may be referred to arbitrators under the terms of Part I of the Bill. These are disputes with regard to standards of performance, disputes with regard to alleged discrimination, disputes with regard to telephone bills and disputes with regard to pre-telephone connection deposits.

In the case of performance standards, disputes may be referred to and determined by the director general, or what the Bill refers to as a prescribed person. I believe that that means in effect a nominee of the director. In the other three cases of discrimination, bills and deposits, the dispute may be referred to the director or an arbitrator appointed by him. That seems to me to be very much the same thing. But in none of those cases does the Bill place on the director, nominee or arbitrator any express duty to give reasons for his decision.

It must be absolutely infuriating to a person lodging a complaint to have his complaint rejected without any reasons being given. That point was raised on Second Reading. The Government said in response that regulators: must give reasons for their decisions, otherwise they run the risk of being judicially reviewed".—[Official Report 14/2/92; col. 959.] With great respect, I do not think that that is an adequate response. Judicial review is an expensive process in the High Court, the cost of which will run well into five figures according to information that I have been given. What customer who is involved, for example, in a billing dispute that involves an amount of £ 1,000 will be mad enough to bring proceedings for judicial review at a possible cost of £5,000? Surely the right answer is to spell out in the Bill, in two lines, an obligation to give reasons. It is not satisfactory merely to surmise that the arbitrator is likely to give reasons.

I now turn briefly to the amendments themselves. The first amendment relates to performance standards. If noble Lords glance at line 35 of page 2 of the Bill they will see that it reads: Any dispute arising under this section or regulations made under this section … may be referred to the Director … and on such a reference, shall be determined by order made … by the Director; or … by such other person as may be prescribed".

Amendment No. 12 proposes that that wording should be followed by a subsection reading: The Director or other person making an order under subsection (6) above shall state the reasons for his determination".

I can deal with the other amendments very briefly. Discrimination disputes are dealt with on page 6 of the Bill in very much the same way. Amendment No. 35 adds the words: The Director, arbitrator or arbiter making an order under subsection (3) above shall state the reasons for his determination".

In the case of billing disputes Amendment No. 44 adds to page 7 of the Bill the words: The Director, arbitrator or arbiter making a determination under subsection (4) shall state the reasons for his determination".

Lastly, in the case of deposit disputes, the same scenario applies. Amendment No. 56 adds the words: The Director, arbitrator or arbiter giving a direction under subsection (3) above shall state the reasons for his determination".

Amendment No. 47 in the names of the noble Lord, Lord Williams of Elvel, and others seeks to introduce the Tribunals and Inquiries Act 1971. I support that amendment. If it were accepted by the Government it would render the amendments which I have suggested to your Lordships unnecessary.

According to the groupings list I ought to speak also to Amendments Nos. 13 and 14, 36 and 37, 45 and 46 and 57 and 58. All of those pairs of amendments are the same. They raise the question of whether there should be a right of appeal against the decision of the director or arbitrator on a question of law. The amendments propose a right of appeal only on a question of law and not on a question of fact. If the director or arbitrator gets the law wrong, there is a strong case for saying that the complainant should have some opportunity to correct the error. I have not sought to specify the court or tribunal to which the appeal might be made. I suggest that that might be left to regulations to be made by the Secretary of State.

I can deal with the terms of the amendments briefly. Amendment No. 13 reads: The Secretary of State shall by regulations make provision for an appeal on a question of law against an order under subsection (6) above".

The change proposed is exactly the same in the case of discrimination disputes (Amendment No. 36), billing disputes (Amendment No. 46) and deposit disputes (Amendment No. 57). A consequential amendment in each case deletes the word "final" from the relevant clause of the Bill. I shall give one example in relation to performance standards. Subsection (8) on page 3 reads: An order under subsection (6) above shall be final and shall be enforcible". If your Lordships accepted that there should be an appeal on a question of law then it would be inappropriate to leave the word "final" in the Bill. Therefore, with Amendments Nos. 37, 45 and 58 I seek to delete the word "final".

Again, if your Lordships accept Amendment No. 47 in the name of the noble Lord, Lord Williams of Elvel, introducing in the Tribunals and Inquiries Act 1971, that will also take on board the question of appeal. I beg to move.

Lord Williams of Elvel

I should like to support the noble and learned Lord in his amendments and thank him for his comments about Amendment No. 47. I shall of course speak to the same grouping as the noble and learned Lord.

The problems which the noble and learned Lord addressed—whether reasons should be given and whether appeals should be allowed—are fundamental to the Bill. We agree with the noble and learned Lord that to have a regulator or director making a final decision and giving no reason for his final decision is not an acceptable procedure.

The noble and learned Lord seeks to remedy that problem with Amendments Nos. 12, 13 and 14, which are reflected in other parts of the Bill dealing with other utilities. As he quite rightly pointed out, we have put forward Amendment No. 47 which would introduce the Tribunals and Inquiries Act, under which a tribunal listed as a statutory tribunal is required to give reasons unless it comes within one of the exceptions in the Act. We propose that the Director General of Telecommunications should be incorporated under that procedure. I should add that there is an appeal mechanism for tribunals under the Tribunals and Inquiries Act to the High Court on a point of law, as the noble and learned Lord pointed out.

I understand that the DTI has been approached by the Council on Tribunals and discussions may be in course. At least that was the case when the Bill was in another place. I hope very much that the Minister will be able to tell us where those discussions have reached and, if they have come to a dead end, whether the Government will in turn accept the amendments put forward by the noble and learned Lord because, as I said, the position as set out in the Bill is hardly tolerable.

Lady Saltoun of Abernethy

I should like to add just one or two points to the remarks of the noble and learned Lord, Lord Brightman, and the noble Lord, Lord Williams of Elvel, about giving reasons for a decision. If the complaint is against British Telecom and the director does not give reasons for the decision, it is very difficult for British Telecom to do anything about putting right the complaint in other cases. The right of appeal cuts both ways. It may be to the advantage of British Telecom to be able to appeal against a decision in favour of a very unsatisfactory customer just as much as it is in the interests of an aggrieved customer to be able to appeal against a decision in favour of arrogant and intolerable behaviour by British Telecom.

Lord Hacking

These are very important amendments. I had hoped that, having heard the speeches in Committee, the Minister would at least have been willing to give this matter fresh consideration. The truth is that so far the Government's response has been very disappointing. At Second Reading I and other noble Lords raised the issue of giving reasons. The crucial matter is that the Bill moves the directors general of the utility companies from the role of regulators into the role of acting as adjudicators, to decide on the basis of evidence presented by the parties before them whether compensation should be paid and if so how much—that is apropos the point to which the noble and learned Lord's first amendment is directed—or to decide whether bills are proper to be paid, whether individual service standards have been met, and so on.

Following my intervention at Second Reading the Minister was kind enough to write to me. Perhaps I may read an extract from his letter which deals with the matter of reasons. He writes: We would expect the regulators to give reasons and there are no indications that they do not intend to do so". Certainly the Minister goes in the right direction in expecting the regulators to give reasons. With regard to provisions which so far have not been tested at all—for the simple reason that they have not been enacted—I am a little puzzled as to how the Minister or anybody else has any indication of how the adjudicators will respond to the question of giving reasons. The Minister's letter goes on: The decisions of the regulators are of course also subject to judicial review. A failure to give reasons is likely therefore to be grounds for judicial review". As the noble and learned Lord, Lord Brightman, said, the failure to give reasons, particularly in the frame of the role of the adjudicator, gives an uncertain basis for judicial review.

The other point to which the noble and learned Lord directed our attention was judicial review, which is a review that can take place only in the High Court. During the passage of the Courts and Legal Services Bill, we invited the Government to consider judicial review taken, for example, in the county courts. That suggestion was rejected. If judicial review takes place in the High Court, there will be all the costs of proceedings there and, as the noble and learned Lord said, it is hardly the appropriate tribunal for disputes over fairly small matters. That is why we should be grateful to him for introducing in his other amendments an appeal procedure under which disputes—the matter is left entirely open to the regulations—could be adjudicated and reviewed in circumstances in which there would be much less cost and delay than under the process of judicial review.

The position of the Government is also puzzling when one reflects on other Bills that have passed through this Chamber when this issue has arisen. I remember the passage of the Arbitration Bill in 1979. I cannot resist commenting that that was the last Bill in which I was involved which took a rather accelerated journey through this Chamber close upon the dissolution of Parliament. In that Bill a requirement was laid down for reasons to be given for arbitrators' decisions. An appeal process also was structured in the Bill to replace judicial review. One can think of many other Bills—for example, the Financial Services Bill and the Courts and Legal Services Bill—in which is put in statute a clear obligation to state reasons. If the Minister says: We would expect the regulators to give reasons", why do we not put that quite plainly on the face of the statute?

For the reasons advanced by the noble and learned Lord, other noble Lords and myself, I hope that at least in the circumstances in which this Bill goes through this Chamber the Minister will come to the Dispatch Box now and say, "Yes, I shall give consideration to these amendments".

Lord Swinfen

I should like briefly to support this group of amendments. In coming to this decision the director must have gone through the stage of having reasons. I can see absolutely no reason why those reasons should not be made public and given to the complainant. Decisions that are made in secret lead people to think that they are totally arbitrary. The whole process eventually gets out of hand, with a number of people feeling extremely aggrieved.

I feel that if my noble friend cannot accept the amendments this evening, at any rate he should say that he will bring forward his own amendments at a later stage of the Bill to achieve the same end.

Lord Ezra

As one who referred to this matter at Second Reading, I fully support the amendments. Everything is to be gained and nothing lost by increased transparency in this matter. As many noble Lords said, it is important that the reasons for decisions reached in these disputes should be made very clear so that the parties concerned can take them into account and adjust their views accordingly.

It is also necessary to have the possibility of appeal. That is all in line with what underlies the concept of the Citizen's Charter; namely, that such matters should be transparent and there should be the opportunity of an appeal when one or other party feels that the decisions reached are unfair. In the light of all that has been said and what I believe are the principles underlying the Citizen's Charter, I hope that the Government will be able to accept the amendments.

6.45 p.m.

Lord Reay

Amendments Nos. 12, 35, 44 and 56 tabled by the noble and learned Lord, Lord Brightman, would require the Director General of Telecommunications to state the reasons for his determinations on the following matters: a dispute arising under regulations setting guaranteed service standards and compensations; a dispute about undue discrimination in respect of charges; a dispute arising under regulations making provision for billing disputes to be referred to the director; and a dispute about the decision of a designated operator to require a customer to pay a deposit or about the amount the customer is required to pay.

My understanding is that current legal practice varies in respect of requiring bodies exercising a quasi-judicial role to state reasons for their determinations. I agree, however, that it is generally desirable that they should do so. I certainly believe that it is important that the Director General of Telecommunications and the other regulators should give reasons for determinations of this character, even though there is no existing statutory obligation on them to do so.

The noble Lord, Lord Hacking, was good enough to remind me of what I wrote to him on the subject when I stated that we should expect the regulators to give reasons. For example, Offer usually sets out its reasons and Oftel has said that it would normally expect to give reasons in resolving disputes under this Bill.

I have heard noble Lords from all round the Committee express the view that an amendment to this effect should be adopted. I should like to give further consideration to the matter without any kind of guarantee that I shall be able to do anything about it. However I should like to take the matter away and have another look at it.

Perhaps I may turn to Amendments Nos. 13, 36, 46 and 57. They compel the Secretary of State to make regulations to include provision for one of the parties to the dispute to appeal against the decision. The director general's decisions will in any case be subject to challenge by judicial review. The noble and learned Lord said that it would be an expensive procedure. Indeed, going to law, alas, is expensive, as many people have discovered and lamented—although usually they have not been lawyers. The noble and learned Lord is right that it would cost in the order of £5,000 to bring to judicial review. All I can say is that if the case were successful costs would be awarded against the director.

Judicial review has now developed to a point where its coverage of possible grievances is at least as wide as grounds for appeal on a question of law. I am advised that the established grounds for judicial review are illegality, which means failing to apply the law correctly; irrationality, which means coming to an unreasonable decision; and impropriety, which can include a breach of natural justice such as a failure to give reasons for the decision. The noble and learned Lord's amendments would not add to the scope of the available remedies if one of the parties objected to the director general's determination of the dispute.

Perhaps I may turn to the noble and learned Lord's third set of amendments. They remove the words "final and" where those apply to a determination by the Director General of Telecommunications. They also seek to extend the right of parties to a dispute to appeal against that determination.

We are not sure what practical effect the amendments would have. If it is the intention of the amendments to allow parties to a dispute the right to appeal to the county court against a determination made by the director general, or indeed back to the director general himself, they would not work. The removal of the stipulation that the judgement of the director general shall be final would not alter the route of appeal for either British Gas or its customers. The only appeal process available would still be judicial review in the High Court. Again, therefore, the amendments would not give customers any more right of appeal than they have under the current wording of the Bill.

I turn finally to Amendment No. 47, which stands in the name of the noble Lord, Lord Williams of Elvel and to which he spoke. The effect of the amendment would be to require the directors general to consult the Council on Tribunals when setting up dispute settlement procedures which might involve oral hearings of a tribunal-like nature.

The noble Lord referred to discussions that he hoped were continuing. I can assure him that my department is currently discussing the question of council supervision over certain adjudicative functions of the Director General of Telecommunications with Oftel and the Lord Chancellor's Department. Other departments are also considering that in respect of regulators for which they have policy responsibility. I can assure the House that the matter is being actively pursued.

There is clearly a need for the parties using a dispute settlement procedure to have confidence in it. I certainly agree with that. However, the views of the regulators and experience to date of regulatory regimes need to be carefully considered. While the Bill may seem a convenient vehicle for bringing the regulators under council supervision, I point out that the same goal can be achieved by an order made under the Tribunals and Inquiries Act 1971 by the Lord Chancellor's Department. I hope that the amendments will be withdrawn.

Lord Brightman

I am grateful to noble Lords who spoke in favour of the amendments. Perhaps I may add one comment about the reason for the deletion of the word "final". If there is a right of appeal on a question of law, then the determination appealed against cannot be final. Therefore, in order to give sense to the provision that the Secretary of State shall make regulations allowing an appeal to some court or tribunal it is necessary to take out the word "final." That does not leave it open to a party to a dispute to apply to the county court, as was suggested by the noble Lord. The jurisdiction of the county court is purely statutory. Unless the statute states that you can appeal to a county court, you cannot. My amendment does not provide for appeal to the county court.

I am grateful to the Minister for saying that he will consider introducing into the Bill a provision that an arbitrator shall give reasons for his decision. I hope that he will also look at the provision which I included in my amendment for appeals to the tribunal or court considered appropriate by the Government on a question of law. I believe that both branches of the amendments deserve consideration.

In the circumstances the right course for me to adopt is to ask leave to withdraw Amendment No. 12.

Amendment, by leave, withdrawn.

[Amendments Nos. 13 to 22 not moved.]

Lord Allen of Abbeydale moved Amendment No. 23: Page 3, line 17, after ("operator") insert ("including the requirement that all telephones are capable of being coupled to hearing aids by internal means").

The noble Lord said: For millions of hearing aid wearers, the problems of access to the telephone system can be solved by the inclusion of a small device built into the telephone called an inductive coupler. In the United States now all telephones manufactured in, or imported into, the country must be fitted with such an inductive coupler. In this country we have not gone that far. The present position, as I understand it, is that all public pay phones in the UK have to have inductive couplers. They are also featured in emergency motorway telephones and telephones in lifts. However, other telephones—in hotels, restaurants, railway stations and offices—are not required to have such couplers. They are not available to the hard of hearing customer. It is the case that telephones are frequently not so equipped.

I referred to the matter briefly on Second Reading. In reply, the Minister stated that the provision about telephones in lifts and public pay phones followed a condition in BT's licence requiring it to meet reasonable requests for such telephones. That depends on what one means by "reasonable." The Minister did not state the position with regard to Mercury.

What has been done so far gives the hard of hearing only limited access, and the problems met are still widespread. The extra cost is not very great. I am told that it amounts to rather less than 50p a telephone. That is not very significant when one considers the cost nowadays of having a new telephone installed. It seems a small price to pay to give millions of hearing aid wearers equal access to the telephone system.

It must be borne in mind that if we in this country now manufacture equipment for export to the USA it will have to include an inductive coupler. Factories in Korea, Taiwan and the other far distant places from which our equipment comes—the last two telephones that I bought came from China and Hong Kong—are now having to include an inductive coupler in the products that they supply to the large American market.

As long ago as 1982 the then Minister responsible for telecommunications expressed the necessity for urgently examining the need for a mandatory requirement. Now, 10 years later, perhaps the time has come. It would be of great benefit to a large number of the hard of hearing at what I believe would be a trivial expense. I beg to move.

7 p.m.

Lord Swinfen

I support the amendment. However, I must first declare an interest. I am a hearing aid user and therefore not only would telephones fitted with an inductive coupler be of personal benefit to me but to many other Members of the Committee who also make use of a similar system in this Chamber. It is the induction loop system which can be picked up by our hearing aids. Good National Health Service hearing aids have a proper switch which turns on the system.

As regards telephones, an inductive coupler is not an expensive piece of equipment. Indeed, if all public telephones had them fitted the cost would probably be reduced because of the benefits of mass production. When considering the amendment we must bear in mind the demographic changes which are occurring in this country. During the next 20 years a large proportion of people will be over the age of retirement and therefore more likely to need hearing aids and telephones of this kind. Therefore, there is a growing market. If my noble friend the Minister is inclined to turn down the amendment he may find that in the years to come he has done himself a disservice, in addition to many thousands of other people. I strongly support the amendment.

Lord Ezra

I too support the amendment. The case put by the noble Lord, Lord Allen, in introducing it and the support given to it by the noble Lord, Lord Swinfen, are unanswerable. Undoubtedly there is now a case for taking this relatively small step. We know what has happened in the American market. We know that unfortunately most of the telephones that are available to be bought in this country originate from the Far East. The manufacturers have to include the couplers otherwise they cannot be sold on the American market. Therefore, why do we not make it an obligation that henceforth all telephones should be fitted with such couplers? That would provide a great deal of benefit to a large number of people whose numbers we ourselves may be joining sooner or later.

Lord Reay

The effect of the amendment would be that all telephones either sold or rented (whether from BT or not) would have to incorporate inductive couplers and would place the responsibility for doing so upon the designated operators. Thus, the designated operators would have to ensure that telephones sold in shops contained inductive couplers.

There are a number of conditions in BT's licence which relate to equipment for the hearing impaired. BT is required to meet all reasonable demands to make available telephones which are capable of being inductively coupled to suitable hearing aids, and telephones which incorporate sound amplification facilities. BT also has to take all reasonable steps to ensure that telephones in its call boxes have inductive couplers, and they are now all equipped in this way. I understand from British Telecom that 100 per cent. are so fitted. Similar conditions are included in Mercury's licence.

The conditions in BT's licence mean that hearing-impaired customers are guaranteed that suitable telephones are on the market and that they can make a call from any BT call box. I also understand that portable couplers are available for use with telephones that do not have integral couplers.

Plainly it is the noble Lord's intention that all telephones should be fitted with integral inductive couplers. Apart from any additional costs to the manufacturers, as there would be, this is not the right Bill to introduce such a requirement. It would not be appropriate to a Bill which deals with the setting of specific standards relating to designated operators only; that is to say, BT and Kingston upon Hull. I do not believe that it would be right to make designated operators responsible for ensuring that thousands of pieces of equipment which are on the market and which come from many sources should be equipped with inductive couplers. Indeed, I do not believe that the designated operators have any powers to do so.

Although the objective of Members of the Committee may be thoroughly worthy—and the more I listened the more I tended to agree with them—I must insist that this is not the right Bill in which to pursue it.

Lord Ezra

Is the Minister aware that if one went into a shop to buy a telephone one really would be out of one's mind if one did not buy a telephone which was authorised and approved by British Telecom? Indeed, I went into my local store and saw that virtually all the telephones on sale were authorised by British Telecom. It follows, therefore, that the operators can have an enormous influence on the kind of telephones that are put up for sale.

Lord Swinfen

Can my noble friend tell me the cost and size of a portable coupler?

Lord Reay

No, I cannot.

Lord Swinfen

I believe that my noble friend will find that they are considerably more than the cost of putting them into the telephones. The last one I heard of cost some £70 and was, in fact, much larger than the telephone.

Lord Airedale

I too have a hearing aid but I do not have to use it when using the telephone. Therefore, I do not believe that I need to declare an interest. I was sorry to hear the noble Lord, Lord Allen, say that railway stations are among the places where the special telephones do not have to be provided. In my experience railway stations are places where one most frequently needs to use the telephone. I am sorry to hear that special telephones do not have to be available there for the benefit of the deaf.

Lord Swinfen

Railway stations are most important. With all the background noise, including the almost unintelligible announcements over the loud-speaker system, anyone with a hearing aid would not be able to listen on the telephone without an induction coupler.

Lord Reay

The noble Lord, Lord Ezra, said that the approval of BT is a common feature of telephone equipment available for sale in the shops. I understand that its approval applies only for connection to the BT network. It is not the case that British Telecom would have the responsibility for ensuring that all equipment on the market is fitted with induction couplers, as would be the case if the amendment were passed. That would be restoring a situation in which British Telecom would effectively have a monopoly over the supply of equipment. There is a mass of equipment on the market that comes from many different sources. It is neither necessary nor desirable for that equipment to have British Telecom approval.

Lord Allen of Abbeydale

I am a little puzzled by the Government's reply. I should have thought that it was perfectly possible to introduce a requirement that equipment should be approved by the various operators. In my innocence I believed that the telephones that I used were approved by BT. The Government appear to be saying that the provision is a good idea and that they are well aware that legislation exists in America making the requirement mandatory. They must be well aware that if there was mass production in this country—if anything is still made in this country—the cost, which is small anyway, would come down.

Therefore the Government are saying that it is a good idea but for some reason, which at the moment I cannot follow, this is not the Bill by which to introduce it. Whether that means that one ought to introduce a separate Bill I do not know. I should like to think about the matter before the next stage of the Bill. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Viscount Astor

I beg to move that the House do now resume. In moving the Motion I suggest that the Committee stage on this Bill be resumed at 8.10 p.m.

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

House resumed.