Gas Bill

HL Deb 28 June 1995 vol 565 cc781-821

4.51 p.m.

House again in Committee on Schedule 2.

Lord Inglewood moved Amendment No. 72:

Page 21, line 30, after ("premises") insert (", or to any premises previously owned or occupied by him").

The noble Lord said: I hope that I shall not be considered to be introducing too much bathos into proceedings if I ask the Committee to focus its mind on gas meters again. In moving Amendment No. 72, I wish also to speak to Amendments Nos. 76, 77 and 78. Amendments Nos. 72 and 77 provide that a supplier has the right to cut off a consumer for default on payments for gas at premises previously occupied by the consumer. Where consumers move around leaving debts unpaid, they should not be able to expect the same gas supplier to take them on without the debt being paid and without the ultimate sanction of disconnection remaining available. Where the customer changes premises and gas supplier, the rules for allowing disconnection in respect of assigned debt will apply as if the customer had changed supplier at existing premises.

Amendments Nos. 76 and 78 are purely technical. A supplier has the right to cut off premises only where he is a relevant supplier. However, it is possible in a competitive market that a consumer may have more than one supplier in order to take advantage of the most competitive rates for supplying him at different times of the day or year.

That may be unusual, but it is a possibility we need to provide for. In such cases, we do not consider a supplier's right to cut off should be restricted by the fact that there is another "relevant supplier" at the premises. Amendments Nos. 76 and 78 clarify the point. I beg to move.

On Question, amendment agreed to.

Baroness David moved Amendment No. 73:

Page 21, line 32, at end insert ("and fails to reach agreement with the supplier about arrangements to pay any arrears").

The noble Baroness said: In moving Amendment No. 73 I wish also to speak to Amendments Nos. 74 and 75. I should like to say at the beginning that British Gas has maintained high standards of customer service and a safe and reliable gas supply and has ensured that older and disabled members of the community receive specialist advice and help in using gas appliances. The company has also developed a fair and reasonable code for dealing with customers who fall into debt. That is what the amendments are about.

The rapid decline in the number of customers disconnected for reasons of debt clearly indicates that the range of payment arrangements and account management options available are sufficient to ensure that physical disconnection from the supply is no longer necessary. British Gas currently distinguishes between those who will not pay and those who cannot pay. This distinction also features in the draft standard licence condition 19 proposed by the DTI.

In those circumstances, it is strange that the gas code should fail altogether to reflect the alternatives to disconnection. So the three amendments attempt to provide alternatives or safeguards. The first, Amendment No. 73, inserts at the end of sub-paragraph (1) (b) in paragraph 7: and fails to reach agreement with the supplier about arrangements to pay any arrears". In the same place, Amendment No. 74 adds: the consumer refuses to accept a prepayment meter". The third amendment, Amendment No. 75, adds: This paragraph does not apply to consumers who arc disabled or aged 60 years or over".

All those I hope the Minister would be prepared to accept. The old are particularly vulnerable; they need protection from the cold. They arc unable very often to move about quickly to get warm, and they are naturally anxious about having a continuing supply. No doubt the gas supplies the heating as well as the hot water. We need these precautions in the Bill to safeguard people and to keep up the good practice of British Gas. I hope very much that the Minister will look well on the amendments. I beg to move.

Lord Boyd-Carpenter

I am a little surprised by Amendment No. 75 which excludes application of the paragraph not only to disabled people—for which there is an argument—hut to everyone over 60. I am perhaps biased in not regarding 60 as an age of great debility and weakness. A large proportion of people in their 60s do full-time work and are well remunerated for it. Therefore, if it is desired to make special provision for the disabled, where there is an argument, I suggest that selecting also to he bracketed with them all those—fit or not—of 60 and over is a mistake. The amendment therefore goes too far in any event.

Lord Peston

The general ground has been admirably covered by my noble friend. I say to the noble Lord, Lord Boyd-Carpenter, that there is an argument to be made about when we regard old age as beginning. The Bill recognised from the outset that 60 is the relevant age. I am over 60 and I do not feel all that much older than when I was considerably under 60, so I take the noble Lord's point. He is clearly older than me and shows no sign of going into decline.

Lord Boyd-Carpenter

I am glad that the noble Lord does not feel that he is in need of particular care.

Lord Peston

The point I make is that the drafters clearly believe in all other parts of the Bill that 60 is the important age. Therefore, it is not for the likes of us to go against the Government on such a matter.

I suppose that the argument for the age of 60 which is worth hearing in mind is that we are discussing the conditions under which someone may be cut off. I could put up some kind of case for arguing that someone over 60 who is behind with payments may have good reasons for it. It could hardly be fecklessness or something similar. I take the noble Lord's point that there could be an argument about the matter.

On the question of the age, the Minister can perhaps comment. When it was discussed in another place, the Minister accepted the argument about the age of 60 possibly rising when the common retirement age becomes 65. On 16th May, in Standing Committee A in another place, the Minister said at col. 208 that in accepting the argument the Government would themselves introduce an appropriate amendment, so far as I understand it, at the Commons Report stage. My reading of the matter is that that simply has not happened; we have not had an amendment on the same topic in this House. I rise not to add anything to the arguments of my noble friend Lady David, but to ask what has happened to that ministerial commitment on the part of the Government to introduce an amendment. Is the noble Lord able to answer that question now? If he is unable to answer now, there are one or two caring amendments which will arise during the course of today when he may wish to take the opportunity to do so. The Minister in the other place used the words, "We shall introduce an amendment." So there can be no doubt about what was said.

5 p.m.

Lord Ezra

I support the broad thrust of these amendments, so ably introduced by the noble Baroness, Lady David. The amendment that has been moved raises one of the important issues in the Bill. At Second Reading a number of us expressed concern that as a result of the changes in the Bill those who are disadvantaged—I do not want to go into the argument about whether or not 60 year-olds can afford to pay—should he treated at least as well, and as considerately, as they are under the British Gas regime. That is what the argument is all about. If we can he assured by the Government that it is their intention that that will he so and that there is adequate provision—perhaps strengthened by accepting these amendments or in other ways—a number of us would he satisfied.

Lord Airedale

In relation to Amendment No. 74, I believe a mistake arises. If the amendment is accepted it will produce a new sub-paragraph (c) following (a) and (b). Sub-paragraphs (a) and (b) are linked together by the word "and". A demand is made and, if the consumer does not pay, he can be cut off. The words of the proposed new sub-paragraph stand alone at present: the consumer refuses to accept a prepayment meter". As matters stand a consumer can be cut off by refusing to accept a prepayment meter irrespective of whether he has refused to pay his bill. I do not think that that is the intention. I think that the word "and" is needed to link the proposed new sub-paragraph with the two that precede it.

Lord Inglewood

I am most grateful for noble Lords' interventions on these amendments. I must say at the outset that I am sympathetic to the intention behind Amendments Nos. 73 and 74. As to the point made by the noble Lord, Lord Airedale, about Amendment No. 74, I hasten to say that it is an amendment for which I am not responsible. I am sure that we, and those who are responsible for it, will look most closely at the point raised to see whether the wording poses the kind of difficulties that the noble Lord anticipates. I am reliably assured that he is very often right in these matters.

The amendments are intended to ensure that before a customer is cut off for defaulting on payments, consideration should have been given by the supplier to reaching an agreement with the customer either to install a prepayment meter or to pay by instalments. These matters are already dealt with in draft standard condition 19 of suppliers' licences. This provides that a supplier indeed has to offer arrangements to a customer who is in genuine difficulty, including offering a prepayment meter or a payment plan which must in each case take into account the customer's circumstances. Condition 19 also reiterates that the supplier cannot cut off supplies unless he has complied with those arrangements. The concerns behind the amendments seem to us already to have been met.

I turn to Amendment No. 75. We understand the concerns. We recognise the importance of protecting pensioners against being cut off in winter. The point was debated previously in Committee at some length. That is why standard condition 20 of the draft supply licence prohibits such disconnections in genuine cases. I hope that this will help to reassure the noble Lord, Lord Ezra. It is an advance on the present position whereby British Gas offers protection only on a voluntary basis.

However, we believe that it would he wrong to extend this provision to year-round protection. Ultimately, gas has to he paid for. If we were to abolish the right to disconnect pensioners, we should find that we had abolished the ability of such people to receive gas on credit. Suppliers would insist on a prepayment meter unless the pensioners concerned had sufficient assets to make a court action worthwhile.

I heard the remarks of my noble friend Lord Boyd-Carpenter and the noble Lord, Lord Peston. Not being 60 yet, it makes me feel much more relaxed about that prospect as it comes daily closer. The noble Lord. Lord Peston, raised a point about pensionable age. I am sure the noble Lord is familiar with the definition of pensionable age contained in paragraph 49 of Schedule 3 on page 61 of the Bill. I hope that the definition in sub-paragraph (3) (2B) will help the noble Lord.

We believe that it would not be appropriate to extend the winter disconnection protection to disabled people. Its purpose is to protect those who are at risk from cold. Many disabled people are young or middle-aged and are in good physical condition apart from their disability. I hope that this will provide reassurance for the Benches opposite and will explain some of our thinking on the matter.

Lord Peston

I am not certain which page the noble Lord asked me to look at in relation to the schedule.

Lord Inglewood

I referred to page 61.

Lord Peston

I shall look at that definition. However, the fact remains that the Minister made a remark in the other place, "We shall introduce an amendment", that can only be read as a definite commitment. I am merely asking a rather simple question: where is it? It cannot be an amendment if it is already in the Bill. I am referring to Standing Committee A.

Lord Inglewood

This is the Bill as it came to this House from the other place. It is possible that a change has been made since the Committee stage.

Lord Boyd-Carpenter

My noble friend referred to pensionable age. But of course for men, 60 is not pensionable age; it is 65. Parliament has already passed legislation under which, over the years, the pensionable age for women is to move from 60 to 65. So, for men already, and for women in respect of what is already in legislation for the future, 60 would in any event be wrong.

Lord Inglewood

I am most grateful to my noble friend Lord Boyd-Carpenter. If it would be helpful to the Committee, I will read out the relevant section of Schedule 3: A person is of pensionable age for the purposes of this Part if (a) he has attained pensionable age (within the meaning given by the rules in paragraph 1 of Schedule 4 to the Pensions Act 1995; or (b) in the case of a man born before 6th April 1955, he is the same age as a woman who has attained pensionable age (within the meaning so given)". I believe that that covers the point my noble friend raises.

To return to the point raised by the noble Lord, Lord Peston, the Bill that we are discussing is of course the Bill as amended by a Commons Committee.

Lord Peston

Perhaps I may mention one other point that I did not intend to raise under these amendments, but later. The noble Lord used again the argument that he used last Thursday; namely, that there are protections in the draft standard conditions of gas suppliers' licences. He is right. At least, there is wording that corresponds. I meant to ask the noble Lord then, as I intended to ask him later today: is he able to make a statement about the statutory basis of the licence conditions? In what sense are they the same as if the material appeared in the Bill? Is it the same; or is there a difference? In other words, do the conditions in the licences have the strengths of statute in exactly the same way as if they were in the Bill? I meant to ask the Minister that in relation to other amendments. We can probably clear up many matters of this kind if he is able to make a definitive statement.

Baroness David

Perhaps I may follow up that question. I gathered, certainly from the briefing that I received, that the licence conditions are not reflected in the gas code. I wonder if the Minister can comment.

Lord Inglewood

Perhaps I may begin by replying to the point made by the noble Lord, Lord Peston. The point about the conditions is that from the point of view of the person affected by them, they have the same standing as anything that is on the face of the Bill. They provide the consumer with exactly the same protection as though they were written on the face of the Bill. I should like to return to and confirm the point made by the noble Baroness.

Lord Ezra

Is it not a fact that the licences can he altered by the director general or the Secretary of State without coming back for parliamentary scrutiny?

Lord Inglewood

The noble Lord is right about that. We shall be debating the point later this afternoon. The way in which the licences may be altered is such that they provide a considerable degree of parliamentary scrutiny of what is involved.

Baroness David

I thank all those who have spoken about these amendments. Clearly the noble Lord, Lord Airedale, is right. Something needs to be done to Amendment No. 74 to get it to fit in with the Bill as it stands. There seems to be little doubt about some matters. I should like to reflect on them and on what the Minister and other Members of the Committee have said. There is still the question about age and the disabled. Although some disabled people can move around quite fast, many of them cannot do so. They can feel the cold very much indeed. I should like to think about the matter. For the time being, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 74 and 75 not moved.]

The Deputy Chairman of Committees (Lord Ampthill)

Amendments Nos. 76 to 78 have been spoken to by the noble Lord and Amendments Nos. 79 and 80 have been spoken to by the noble Earl.

Lord Inglewood moved Amendments Nos. 76 to 80:

Page 21, line 41, leave out ("no other gas supplier has become a relevant supplier, the supplier") and insert ("the supplier is a relevant supplier, he").

Page 21, line 43, after second ("the") insert ("consumer's").

Page 21, leave out lines 47 and 48 and insert: ("(a) the supplier is not a relevant supplier but another supplier ("the new supplier") is such a supplier; and").

Page 22, leave out lines 5 to 7 and insert ("The powers conferred by sub-paragraphs (3) and (4) above").

Page 22, line 10, leave out sub-paragraph (6).

On Question, amendments agreed to.

The Deputy Chairman of Committees

As Amendment No. 80 has been agreed to, I am unable to call Amendment No. 81.

[Amendment No. 81 not moved.]

Lord Inglewood moved Amendment No. 8 1 A:

Page 22, line 20, after ("time") insert ("("the relevant time")").

The noble Lord said: In moving this amendment I shall speak also to Amendments Nos. 81 B, 8IC, 82 and 156. These are technical amendments which relate to paragraph 8 of Schedule 2. That paragraph provides for there to be a "deemed contract" between a supplier and a customer, where the consumer takes gas without a contract being in place. That could happen, for example, where there is a change of occupant at premises and nobody informs the relevant supplier.

Amendment No. 81B specifies that where someone takes gas and the premises in question are not supplied by any gas supplier, that person is deemed to have contracted with the "appropriate gas supplier". The new sub-paragraph (2) covers the cases covered by the original sub-paragraph, but it is in general terms and would deal, for example, with cases in which there had been theft of gas.

Amendment No. 81 B provides that the "appropriate supplier" for this purpose is the supplier who last supplied the premises; or, where that supplier's licence has been revoked or restricted at the licensee's request, is the successor supplier.

Amendments Nos. 81A and 81B define the "relevant time" at which the deemed contract starts as that at which the supplier begins to supply gas to the consumer or the consumer begins to take gas.

Amendment No. 81C provides that the supplier's deemed contract scheme may provide for the determination of the amount of gas to be treated as supplied in such cases before the meter is read. It is essential that if the amount of gas taken is unknown, there should be some means of estimating it for the purposes of a deemed contract. However, it is appropriate to afford customers protection and standard conditions 4(8) and 5(4) of the draft conditions of the supplier's licence restrict how such deeming may be undertaken. I beg to move.

Lord Clinton-Davis

I should like to comment on the amendments in general. Some of them are technical and others are less technical. I have only just received today some Notes on Clauses. That may be my fault because I was away last week. I want the Minister to understand that we have had very little time to appreciate the technicalities and to obtain advice on them. In those circumstances, we reserve our right to come back on Report if we have any problems with them. It is quite possible that problems will not arise. I am sure that the noble Earl will recognise the problem. I just wanted to make the position quite clear at this stage.

Earl Ferrers

I absolutely understand the noble Lord's point. I am conscious of the fact that he did not receive the details earlier than today, which I should have liked, had it been possible. I am sure he will realise that some amendments were necessarily tabled rather late and therefore we could not give the full account of these amendments until then. I understand that the noble Lord would like time to consider them and that is perfectly reasonable.

Lord Clinton-Davis

I am grateful to the noble Earl for his understanding.

On Question, amendment agreed to.

Lord Inglewood moved Amendments Nos. 81 B and 81C:

Page 22, line 22, leave out sub-paragraph (2) and insert:

("(2) Where—

1. (a) the owner or occupier of any premises takes a supply of gas conveyed to those premises by a public gas transporter:
2. (b) that supply is not made by a gas supplier, or by a person authorised to make it by an exemption granted under section 6A of this Act or an exception contained in Schedule 2A to this Act: and
3. (c) a supply of gas so conveyed has been previously been made by a gas supplier,

the owner or occupier shall be deemed to have contracted with the appropriate supplier for the supply of gas as from the time ("the relevant time") when he began to take such a supply; but nothing in this sub-paragraph shall be taken to afford a defence in any criminal proceedings.

(2A) In sub-paragraph (2) above "the appropriate supplier" means—

1. (a) the gas supplier who previously supplied gas to the premises or, if more than one, the gas supplier who last supplied gas to the premises; or
2. (b) where that supplier's licence has been assigned generally, or has been assigned so far as relating to the premises, the person to whom the licence was so assigned; or
3. (c) where that supplier's licence has been revoked on his application, or has been so restricted on his application as to exclude the premises, the gas supplier with whom that supplier made arrangements for securing continuity of supply to the premises.").

Page 22, line 46, at end insert: ("() The terms and conditions so determined may include terms and conditions for enabling the gas supplier to determine, in any case where the meter is not read immediately before the relevant time, the number of therms or kilowatt hours which are to be treated as supplied to the consumer, or taken by the owner or occupier of the premises, during the period beginning with the relevant time and ending with—

1. (a) the time when the meter is first read after the relevant time: or
2. (b) the time when the supplier ceases to supply gas to the consumer, or the owner or occupier ceases to take a supply of gas,

whichever is the earlier.").

On Question, amendments agreed to.

Lord Inglewood moved Amendments Nos. 82 and 83:

Page 22, line 48, after second ("cases") insert (", or for different areas,").

Page 23, line 24, leave out (". until the matter has been remedied but no longer.").

On Question, amendments agreed to.

5.15 p.m.

Lord Inglewood moved Amendment No. 84:

Page 23. line 42, after ("above") insert ("(a)").

The noble Lord said: In moving this amendment I shall speak also to Amendments Nos. 85, 93, 156H and 156J.

I am conscious that the points made by the noble Lord, Lord Clinton-Davis, about the previous group of amendments to which I spoke may equally well apply here. I hope that it will help the Committee to have a brief resumé of what is involved.

Amendments Nos. 84 and 85 clarify that if a person unlawfully reconnects a supply of gas to premises that have been disconnected, the transporter or supplier, as appropriate, has the right again to disconnect them. That reflects a provision in Schedule 5 to the Gas Act 1986, which was not initially carried across to the new Bill.

Although the power to cut off again in the event of an unlawful reconnection is implicit in many cases, it may not be so in all cases and so explicit provision is required.

Amendment No. 93 inserts a new paragraph in Schedule 2, which gives a transporter or a supplier a right of entry to consumers' premises to check whether a disconnected supply has been reconnected without the "relevant consent". The "relevant consent" is the consent of the transporter who disconnected the premises or of the supplier who cut off the premises or of a supplier who is or is about to become the relevant gas supplier for the premises.

It is important that companies have the right to enter premises to check that the supply has not been illegally reconnected—for example, where they have disconnected as a result of a theft of gas or non-payment. In the past, that has been done under the power to inspect gas fittings. But for the sake of clarity, we consider it appropriate to provide an explicit power in this case.

In addition, Amendments Nos. 156H and 156J are consequential on Amendment No. 93. I beg to move.

On Question, amendment agreed to.

Lord Inglewood moved Amendment No. 85:

Page 23, line 44, at end insert ("and (b) the transporter or supplier may again disconnect the premises or, as the case may be, cut off the supply.").

On Question, amendment agreed to.

Lord Inglewood moved Amendment No. 86:

Page 24, line 24, at beginning insert ("Subject to sub-paragraph (1A) below,").

The noble Lord said: In moving this amendment I shall speak also to Amendment No. 87. These amendments are also technical amendments to Schedule 2. I shall willingly explain them to the Committee if it would be helpful.

The amendments are inserted to correct an omission in paragraph 12 of Schedule 2, which was inserted on Report in another place. The paragraph places a duty on anyone who completely disconnects a meter to inform the owner and provides that failure to do so is to be an offence. The duty is designed to facilitate the return of meters to their owners and to help avoid them going missing and becoming available for fraud.

The amendments simply provide that this duty to notify the owner does not apply to cases in which the meter has only been disconnected temporarily, for example, for a meter examination or test or to reposition or mend it. I beg to move.

Lord Clinton-Davis

Perhaps I may intervene very briefly. An offence is envisaged which is liable on summary conviction to a level 2 fine. Will the noble Lord offer a rationale for that particular point? Why does it come in that particular category?

Lord Inglewood

It was argued that that was the appropriate level at which to set it.

Lord Clinton-Davis

That does not offer a rationale. Perhaps the Minister, with a hit of help while I go on talking, could explain further. It is important that he does not simply make an assertion. These things must he justified. There must he some point in a level 2 fine. The Minister says that it is the most appropriate level. but how are we to know? Consequently, the Minister should explain that position, though I do not know how long I can go on expatiating on this point. Help appears to be at hand. Perhaps the Minister can now respond to the point which I made deliberately slowly.

Lord Inglewood

I am extremely grateful to the noble Lord, Lord Clinton-Davis, for comprehensively explaining his concerns, enabling me to provide a thorough response. This is the same level of offence as found elsewhere in the schedule covering obligations which do not imply possible dishonesty.

Lord Clinton-Davis

I thank the Minister for that full reply, which was better than the first one he gave.

On Question, amendment agreed to.

Lord Inglewood moved Amendment No. 87:

Page 24, line 27, at end insert: ("(1A) This paragraph does not apply where the meter—

1. (a) is disconnected for the purposes of an examination under section 17 of this Act or an inspection under paragraph 3(5) above; or
2. (b) is disconnected for a particular purpose (whether repair or repositioning of the meter, detection of a gas leak or otherwise) and is intended to be reconnected.").

On Question, amendment agreed to.

Lord Inglewood moved Amendment No. 87A:

Page 24, line 40, at end insert: ("(2) The cost of any work carried out in accordance with sub-paragraph (1) above shall be defrayed as follows—

1. (a) if the work was made necessary by any intentional act or culpable negligence of the consumer and the transporter so requires, by the consumer;
2. (b) in any other case, by the transporter.").

The noble Lord said: Amendment No. 87A sets out how the costs of maintaining and repairing service pipes—something which the public gas transporter has a duty to do—are to be met. It will mean that the transporter will have to meet those costs and not the individual customer. The only exception will be where the work was made necessary by the intentional act or culpable negligence of the customer, in which case the amendment rightly requires the customer to pay if the transporter so requires. I beg to move.

On Question, amendment agreed to.

Lord Inglewood moved Amendments Nos. 88 and 89:

Page 25, leave out lines 31 and 32.

Page 25. line 42, at end insert:

("No obligation to restore supply where consumer in default

— (1) This paragraph applies where—

1. (a) a consumer's premises have been disconnected by a public gas transporter in pursuance of paragraph 2(2) (a), 3(2) (a), 5(4), 9(2), 15(5) or 16 above: or
2. (b) a supply of gas to a consumer's premises has been cut off by a gas supplier in pursuance of paragraph 2(2) (b), 3(2) (b), 5(4), 7(3) or 9(2) above.

(2) The transporter or supplier shall not he under any obligation to reconnect the consumer's premises or. as the case may be. resume the supply of gas to the consumer's premises until the consumer—

1. (a) has made good the default, or remedied the matter, in consequence of which the premises were disconnected or the supply was cut off; and
2. (b) has paid the reasonable expenses of disconnecting and reconnecting the premises or, as the case may be, of cutting off the supply and restoring the supply.").

The noble Lord said: These amendments were spoken to with Amendment No. 70. With the leave of the Committee I shall move them en bloc. I beg to move.

On Question, amendments agreed to.

Lord Haskel moved Amendment No. 90:

Page 26, line 39, after ("him") insert ("or another transporter").

The noble Lord said: In moving Amendment No. 90, with the permission of the Committee I shall speak also to Amendment No. 91. Both amendments deal with notification of escapes of gas.

Under the present proposals, if there is an escape of gas the transporter will only carry out simple repairs or make appliances safe by turning them off or disconnecting them. It is then the job of the gas supplier to come along and put the equipment into working order. The amendment seeks to allow the transporter to carry out repairs in cases of hardship, where there are elderly people, sick people, or people with children.

If other transporters are in the market and the wrong transporter turns up to an emergency, as the Bill is presently drafted the wrong transporter cannot fix the leak and must wait until the correct transporter turns up and takes over. As most of these jobs require a lot of travelling time, it seems sensible to allow more complicated repairs to be carried out by the engineers on the spot, particularly in the case of people who are elderly, sick or who have children. It smacks of the old days of demarcation and, more importantly, it saves a second visit. People waste a great deal of time waiting at home for the gas engineer to come, and that too would be avoided. I beg to move.

Lord Boyd-Carpenter

The amendment faces difficulties on the age question. In this case it refers to people of "pensionable age". Though the noble Lord did not mention it, that differs for men and women. For men it is 65 and for women it is still 60, though over the years it will slowly move to 65. If we are to legislate and give serious protection and privilege to people on the basis of age, I suggest that we do so at the same age for both men and women.

Lord Skelmersdale

We have had an interesting afternoon so far, or at least I have. We have established a clear split on the official Opposition Front Bench, at least as far as the payment of gas bills is concerned. My noble friend Lord Ferrers and the noble Lord, Lord Ezra, formed an interesting comity of view in deciding that I am untrainable, while so far being unable to agree on anything else. But the night is young and we shall see.

In relation to Amendment No. 91, it is clear that the first person on the scene to halt a gas escape is the most important, for safety reasons. But let us assume that the gas escape is due to some malfunctioning of a gas cooker or boiler. In that case the transporter may not be properly trained to cope with the situation. He would certainly he trained to cut off the gas but in that situation it would be up to another person—probably the supplier or someone contracted-out out by the supplier of gas—to mend the fault. Though I see the need in those circumstances for that operation to be carried out as quickly as possible, the transporter is not necessarily the right person to do it.

Lord Ezra

I support the amendment because it ties in with a point I raised at Second Reading; namely, my understanding is that in the case of British Gas, when there is an escape of gas and the fault can relatively easily be put right, the person who deals with the escape also puts the matter right. If there is a possible long delay between cutting off the gas and getting hold of a supplier or a maintenance firm—perhaps over a weekend—hardship may be caused to the consumer.

I should like to see the provision as an omnibus clause rather than just applying to disabled and elderly people. But if it is to be limited to disabled and elderly people, so be it. There is a strong case and once again we should have regard to what happens now. Is it a fact, as I believe it is, that British Gas can carry out these operations on the spot? If so, let us continue that service.

Lord Peston

Perhaps I may intervene for a moment to say, first, to the noble Lord, Lord Skelmersdale, that there is a real split because I think he would make an excellent gas meter reader.

The main point which troubles me—perhaps the Minister can address himself to this question—follows on from what was said by the noble Lord, Lord Ezra. We do not want there to be any disincentive for a consumer to report a possible leak or anything else which may give rise to an emergency. If the customer believes that if he rings the gas company someone will come and cut off the supply and say, "It is up to you" or "It will take time to sort this out", the customer may err on the side of risk.

As the noble Lord, Lord Ezra, said, it may be a Friday evening and the consumer does not want to spend the weekend without a cooker or central heating. Therefore he may well take the kind of risk that one does not want him to take. The noble Lord, Lord Ezra, is quite right and echoes what was said by the noble Lord, Lord Boyd-Carpenter. It is nothing much to do with people who are elderly and disabled; it is a general question to which we must address ourselves.

Speaking as someone who strongly supported the competition elements of this Bill, as the Minister is well aware, I believe it would be absurd to move into a state of affairs where, British Gas having set a high standard, the market led consumers to take risks simply because they could not afford to be without gas. Undoubtedly the Minister's advisers must have addressed themselves to this matter and perhaps he can share his thoughts on it with us.

5.30 p.m.

Lord Inglewood

I am most grateful for the various remarks that noble Lords have made in this important area. I should like to deal with the two amendments together. I hope that by the time I reach the end of my remarks I will have covered all the points that have been raised.

As we have explained on a whole variety of occasions, the Government give the highest priority to matters of safety. Therefore I welcome this debate as to the obligations on a public gas transporter to take steps to avert danger where he suspects an escape. Perhaps 1 may ask Members of the Committee, in response to the remarks of the noble Lord. Lord Peston, to think back to the debate we had on the previous Committee day about the emergency number, which was important in terms of clarifying what people do when they suspect there is a problem of this kind.

In the context of Amendment No. 90, it is important, I think, to distinguish the obligation to make safe from the power to do so. Our position is that it is appropriate for the power to make safe, and the associated rights of entry, to he granted on a non-exclusive basis. That means that a public gas transporter is empowered to respond to any emergency involving his gas, or in his area, even if another transporter could also deal with the matter. It would be wrong if staff who were already on the site for some reason were unable to intervene. That touches on a point that was raised in our debate.

Where we draw the line is in having overlapping obligations. It seems to us that this could lead to confusion as to who is responsible, or to several public gas transporters feeling obliged to dispatch teams to the same incident. It could well be the case that the valves on one transporter's system might be different from those on another transporter's system. It could be that the transporter whose system it was not and whose personnel were unfamiliar with it might feel in the circumstances that they had better keep off. I am advised that at the outset it is likely that most transporters will subcontract this function to British Gas and so it may well be that in reality it is not a problem.

I shall now turn to the points made in respect of Amendment No. 91. Before going into the main body of my comments, perhaps I may allude to the remarks of my noble friend Lord Boyd-Carpenter. We are providing a definition of "pensionable age" for the purposes of the Bill which is the same for men and women. The age will initially be 60. When the pension age for women is raised to 65 the Bill provides that "pensionable age" as defined will also rise to 65.

We have a good deal of sympathy for the concerns behind Amendment No. 91. That is why, in standard condition 13 of the draft conditions for public gas transporters' licences, public gas transporters are required to undertake appropriate minor appliance repairs in the course of fixing a leak, so long as they can he done within half an hour and with inexpensive parts. This service must he provided free of charge to all customers, and will allow the majority of leaks to he effectively repaired on the spot at no charge. I hope that meets the point addressed by the noble Lord, Lord Ezra.

To go further would increase costs significantly for public gas transporters, for very little benefit. There is a large difference between providing a service focused on fixing leaks and one focused on complex appliance repairs. My noble friend Lord Skelmersdale made the point that the skills are different and the equipment needed is different. He indicated the degree of expertise and skill he has in this regard, which must encourage him in his thoughts on these matters. The electronic controls on a gas boiler arc something very different from what one might describe as the ordinary plumbing type gas activities involving turning off the supply if there is a serious leak. For public gas transporters to he obliged to provide a full appliance service capability would increase their costs and mean that people would end up paying more for gas.

Beyond the quick fixes which can he readily done as part of an emergency service, the responsibility for arranging for appliance repairs must rest with the consumer. In such circumstances, it is right that the consumer, who is going to pay for the work, should have a choice as to who carries it out. The repair and installation of gas central heating and appliances is a competitive market and will not be the monopoly preserve of British Gas, or in the future, of any other public gas transporter. I hope that I have helped to explain the position and give reassurance.

Lord Boyd-Carpenter

Will my noble friend explain a little more about pensionable age? As I understood him, there is somewhere a provision under which pensionable age will be defined as 60 although for half the population it is 65 anyhow and it will remain that for some years while the age gradually moves up under the legislation which we have already passed. It seems a somewhat misleading use of the expression "pensionable age" when at the start it applies to half the population who arc not pensionable and then gradually increases to cover the whole lot.

Lord Inglewood

I do not know whether my noble friend heard me clearly when I mentioned this earlier. The place at which he ought to look is Schedule 3(3) (2B), where a definition of "pensionable age" is given for this part of the Bill.

Lord Boyd-Carpenter

My noble friend has been kind enough to refer me to the definition. But the definition is itself an inaccurate statement because that is not for half the population of pensionable age.

Lord Inglewood

As my noble friend knows a great deal better than I do, having so much more experience in these matters, one defines these matters, and if there is a difficulty one defines them by reference to a particular definition that is contained in the Bill. Here is the definition we have for this part of the Bill.

Lord Merlyn-Rees

Perhaps the Minister can help me on one point. I came into the Chamber to listen to this debate because for many decades as an inner city Member of Parliament I was brought into the problems that arose as a result of gas supply. Increasingly over the years those problems were dealt with very well by British Gas and any problems I had in my home were dealt with very well. Therefore, I was not surprised when the Minister said that under the new system it is very likely that much of the work would be contracted to British Gas. That answered 99 per cent. of my concerns about this.

However, what will happen if by the nature of the area. or by the nature of the number of people who are chosen to take supplies from the new supplier, the work is not so subcontracted? I would he very content with British Gas looking after it. What safeguards are there that the new supplier will deal with it as well as British Gas has dealt with it?

Lord Inglewood

The crucial point is that the procedures which are to be put in place in these circumstances are conditions of the licence. Transporters will not get the licence unless they meet the standard. I hope that I have answered the noble Lord's question.

Lord Haskel

The finer points of difference between "obligation" and "power" would be lost on someone who was anxious to get his cooker or heater working, particularly if there were children in the house and there were people on the premises who could fix it or some advice could be obtained over the telephone as to how to fix it. To me it smacks of some of the old demarcation disputes which we used to have in the 1950s and 1960s. I understand that it is difficult for the Bill to place this obligation on the gas supplier but I feel that it is not a very satisfactory situation. We shall probably have to come back to this at Report. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 91 not moved.]

Lord Inglewood moved Amendment No. 92:

Page 27, line 28, leave out ("supplied") and insert ("conveyed to the premises").

The noble Lord said: Amendment No. 92 concerns a drafting point. It simply secures that the wording of paragraph 20(1) of Schedule 2 conforms with the wording elsewhere in the schedule and the Bill, which refers to a transporter "conveying" gas and a supplier "supplying" gas. Paragraph 20(1) relates to a public gas transporter's rights of entry to a consumer's premises. It says that one purpose for which the transporter has such a right is to ascertain the quantity of gas supplied. For consistency of drafting, that should read, gas "conveyed to the premises". I beg to move.

On Question, amendment agreed to.

Lord Inglewood moved Amendment No. 93:

Page 28, line 23, at end insert:

("Entry following discontinuance of supply

21 A.—(1) This paragraph applies where a consumer's premises have been disconnected by a public gas transporter, or a supply of gas to a consumer's premises has been cut off by a gas supplier, otherwise than in the exercise of a power conferred by—

1. (a) paragraph 17, 18 or 19 above;
2. (b) regulations under section 18(2) or 18A(1) of this Act; or
3. (c) regulations under section 15 of the Health and Safety at Work etc. Act 1974 (health and safety regulations).

(2) Any officer authorised by the public gas transporter or gas supplier, after 24 hours' notice to the occupier, or to the owner of the premises if they arc unoccupied. may at all reasonable times, on production of some duly authenticated document showing his authority, enter the premises for the purpose of ascertaining whether the premises have been reconnected, or the supply has been restored, without the relevant consent.

(3) In this paragraph "the relevant consent" has the same meaning as in paragraph 10 above; and sub-paragraph (3) of paragraph 21 above applies for the purposes of this paragraph as it applies for the purposes of that paragraph.").

On Question, amendment agreed to.

The Principal Deputy Chairman of Committees (Lord Tordoff)

It Amendment No. 94 is carried, I shall he unable to introduce Amendment No. 95.

Lord Peston moved Amendment No. 94:

Page 29, line 25, leave out paragraph 25.

The noble Lord said: I referred to paragraph 25 of this schedule rather flippantly in my Second Reading speech, but having referred to it, I felt that I had to go into the matter and seek expert legal advice. The paragraph is very strange. It replaces paragraph 19 of Schedule 5 to the Gas Act 1986, which I know is the regular reading of all Members of the Committee.

There are two matters which interest me. One is that the wording has changed and I cannot find any rationale for that. Secondly, and much more seriously, having tried to get some legal advice, I do not understand what the paragraph is doing here anyway. I have asked lawyers—we are here discussing distress and bankruptcy in England and Wales, but as Members of the Committee arc aware, in Scotland one always refers to it as poinding and sequestration of the estate—and their legal advice is that one cannot distrain on something that the bankrupt does not own. Therefore, I am advised that this paragraph either has some really deep meaning which escapes everyone, or it is completely irrelevant.

The paragraph states that the gas meters or gas fittings which are owned by the public gas transporter or supplier cannot he subject to distress. My legal advice is that they cannot be subject to distress just as nothing else in the place which is not owned by the person in question can he. I simply raise the matter, having stumbled into this area hoping for an explanation on the finer points of the law. As Members of the Committee will know, I assume that since the Gas Act includes something similar there has to be something here. I shall not be surprised if there are early gas Acts which go back to the 19th century where all this started off. In my ignorant, humble and naive way of looking at it, the matter looks ridiculous. I beg to move.

Lord Inglewood

As the noble Lord, Lord Peston, points out, this paragraph is to do with bankruptcy and similar matters and, incidentally, landlord and tenant law. Paragraph 25 of the schedule, as has been explained, prevents meters, including meters owned by the consumer, from being seized by the bailiffs. That is necessary because if the meter is seized and taken away, the consumer, the gas supplier, or any other parties, will have no evidence of the quantity of gas consumed at the premises. If the meter is owned by the supplier or the public gas transporter, as the noble Lord intimated, he might have views on having his property removed.

In reality, it may he that the risks of bailiffs and others carting off the gas meters are considered small, but in practice it would still he undesirable and we want to put it beyond peradventure. The provision which has existed in gas legislation for many years needs to he retained.

Lord Clinton-Davis

The reality here is rather different from that theoretical explanation. If every bailiff worthy of his or her name recognises that a gas meter in these circumstances does not belong to the customer, he is not going to take it. But here we have something which is absolutely superfluous to requirements. If one has a bogus bailiff engaged in a distress process, it might he totally different. This provision is superfluous to requirements.

Lord Skelmersdale

I am about to demonstrate my "untrainability" as a lawyer. It seems to me that this paragraph covers only a gas meter which is actually marked or impressed. It is therefore clearly identified as being owned by a public gas transporter or supplier. But one assumes that there are other meters which are not so clearly marked and identified. In those cases it seems to me that this paragraph applies in a negative fashion and that the meter is deemed to be the property of the gas consumer and therefore could be subject to distraint.

5.45 p.m.

Lord Peston

I do not want to delay the Committee. It is simply my desire to rid the law of ridiculous paragraphs. The fact remains that earlier today the noble Earl, Lord Ferrers, announced that there was not a single meter owned, so far as he knows, by an ordinary householder. I asked him that question and he said that there are not any. Therefore, the problem does not arise in the first place.

One has to ask what this is all about. I am certain that somewhere deep in Victorian history there must have been a point to all this. All that has happened is that the computer in the department which simply churns out these paragraphs feels that it might as well keep this matter going because no one has told it not to. In fact, this matter covers a case which is already met by the law of distress, bankruptcy and poinding. The fact is that the bailiff cannot distrain against something which the person does not own, That is the point I am trying to make and, so far as I can see, that it is the end of it.

I accept the point made by the noble Lord, Lord Inglewood, about "peradventure" and all that. The fact is that in my judgment the law should never be absurd. Here it looks as though we have an absurd carryover of something that made sense 100 years ago.

Lord Boyd-Carpenter

The paragraph is absurd. It puts a case where it could not possibly be sound law that the apparatus should be taken away on distress when it does not belong to the person concerned. I agree entirely with what has been said by the noble Lord opposite. This is absolute nonsense.

Lord Skelmersdale

Since I sat down I have been reflecting on the matter. It occurs to me that in the case of a holiday home complex there would be sub-metering going on. In other words, the owner of the complex would pay the gas bill and the individual hirer of the accommodation for a week or a fortnight, or whatever it is, would pay the runner of the complex for the gas consumed during the period of occupation. In those circumstances, I believe most definitely that the sub-meters would belong to the owner or runner of the complex and not to the gas company.

Lord Airedale

In view of what has been said, will the Minister take this matter back and have another look at it?

Lord Clinton-Davis

The noble Lord, Lord Skelmersdale. is a trainee meter reader anyway and is not to he taken too seriously. If it is irrelevant, as has been suggested, will the noble Lord think about the matter again''

Lord Inglewood

I am extremely grateful for the comments and help of all Members of the Committee. I am advised that this measure is necessary. However, my advisers have not had the benefit of your Lordships' comments. We shall reflect on the points made and consider them carefully. In any event I am anxious to include our Amendment No. 95.

Lord Peston

Following the noble Lord's logic, the thing connected to the service pipe is rather important. Several other meters lying around might he fairly relevant. It is always dangerous when someone like me ventures into the finer points of law and that I fully accept. I am glad that the noble Lord's officials will look at it; there are other matters of greater priority which, I hope, will also be studied. I am indebted to the noble Lord. Perhaps he will say more in due course about the matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Inglewood moved Amendment No. 95:

Page 29, line 25, after ("meter") insert ("which is connected to a service pipe").

The noble Lord said: This amendment deals with an error made in translating the provisions of the 1986 legislation to which the noble Lord, Lord Peston, has just alluded. I beg to move.

On Question, amendment agreed to.

Lord Peston moved Amendment No. 96:

Page 29, line 37, at end insert:

("Duties of relevant gas shipper or supplier in relation to gas fittings

.—(1) It shall be the duty of any relevant gas shipper or supplier to make arrangements for the supply of spare parts for, or replacements of, any gas fitting or appliance of a type approved under Regulations made under this Act or under any other enactment.

(2) The Secretary of State shall—

1. (a) make Regulations specifying the nature and extent of the obligations imposed by subsection (1) above upon relevant gas shippers or suppliers; and
2. (b) monitor the carrying out of those obligations, which may he modified or added to in further Regulations.

(3) Regulations made under subsection (2) above shall he made by statutory instrument which shall he subject to annulment in pursuance of a Resolution of either House of Parliament.").

The noble Lord said: This amendment was introduced in another place by my honourable friend the Member for Newham, South. I thought that we ought to go over the ground of this amendment again because it helps us to clarify what will happen in the new competitive market. I am delighted to move the amendment here because Newham, South is in East London which is where my own territorial title comes from and that, plus the fact that fl will buy me a cup of coffee in East London, leads me to have a sense of duty to that part of the world from which the gas industry hailed in the first place.

The question of the supply of spare parts in a competitive market involves some interesting economics. When it had its monopoly, British Gas clearly ran a policy of making sure that it carried spare parts on a large but, one hopes, an optimal scale. On the whole, both when it was a nationalised industry and subsequently, that policy worked pretty well. Clearly, a sensible organisation will continuously scrutinise its policies on such things. It was a characteristic of British industry that it held far too much stock of spare parts and had far too much capital locked up in that. It is one of the benefits of industry being more concerned with efficiency that it now has a more efficient approach to the holding of stock.

However, when we move away from a monopoly market to a competitive market, the question arises: will the suppliers take the provision of parts seriously? Will we not merely lose the great stock depots that British Gas used to have with not a lot replacing them? Nowadays, in the market-oriented economy, people tend to abide by the almost religious principle that "the market will provide". However, noble Lords must know that in all sorts of areas the market does not provide. Anybody whose computer is not working will discover enormous delays as they chase around trying to find the spare parts. Indeed, you are often told, "It's all obsolete now. What you really need is a new £1,000 computer"— as opposed to just a 5p spare part! That is the advice on spare parts in some areas of the market economy. However, one could argue that in most cases it does not matter. If my PC at home is not working, I am irritated but my life does not collapse. Failures of various other pieces of equipment similarly cause only irritation, but the issue is more important when it comes to gas because we are talking about what is usually a person's principal source of heat and cooking.

The failure to provide spare parts or to take any responsibility for that can be disadvantageous to consumers. I thought that the Minister in another place took a rather frivolous view of the matter by more or less saying that he is confident that the market will provide. What I find so interesting about this is that as a result of this legislation we shall not have a "market" in the Adam Smith sense of that word; we shall have something which should be called "regulated" or "ordered competition". Therefore, I think that there are good grounds for the Secretary of State taking a direct interest. That is why I thought that I should air these thoughts to the Committee. We need to understand where we are going.

I agree that the market will not fail us totally. Some suppliers will take seriously the question of providing supplies of spare parts. However, I believe that it has been necessary to place on the record my fears about this matter and my suggestion that there is a role here for the Secretary of State. I certainly think that the problem is serious enough for us to warrant a more logical and thought-out response than that given in the other place. I beg to move.

Lord Inglewood

The noble Lord, Lord Peston, is a distinguished economist and is a great deal more experienced in these matters than I am; but I am a bit concerned lest his general grasp on the principles of economics may momentarily have let him down when he put his name to this amendment.

The noble Lord is, I fear, confusing two different markets by suggesting that suppliers and shippers of gas should he obliged to enter the already competitive markets of appliance manufacture, spare parts and repairs. That is rather like saying a baker should he obliged to sell bread-knives or combine harvesters or even false teeth, or that a newsagent should sell spectacles. The trouble is that they might not be very good at it, and the practice could lead to inefficiency. If only opticians were allowed to sell newspapers, we would all have a longer walk to get a paper in the morning.

The amendment could inadvertently damage competition for another reason. It creates a risk of unquantifiable costs which would be imposed on market entrants by administrative action. That is likely to deter market entrants, who may feel that the risks are lower elsewhere. This could simply put at risk the prize of self-sustaining and effective competition.

Further, there has been a competitive market in the servicing and repair of gas appliances for years. I believe that that point meets many of the anxieties of the noble Lord, Lord Peston, who was concerned lest there would not be a proper market. However, we already have a market in that area. It is for the management of companies that are active in this sector to find the most efficient and effective manner to distribute parts to meet their customers' needs, and they have been doing just that. We do not see that there is any need for regulatory intervention.

The noble Lord referred to great depots in connection with Newham. However, in the modern world, the business practice of having great depots has fallen out of custom because, increasingly, just-in-time deliveries are superseding that way of managing one's business.

Finally, there is nothing to stop a gas supplier or shipper entering this market quite independently of other obligations if that is what they wish to do. I hope that that explains our thinking and that it will answer the noble Lord's worries.

Lord Peston

I am indebted to the noble Lord. We could argue for quite some time about the optimum size of a storage depot for gas parts. I probably think that it should be larger than others think should he the case. However, what has also happened in the modern market economy is that the consumer has borne costs which were earlier borne by firms. Firms used to regard making parts available as one of their obligations, hut they do not accept that obligation to the same degree as used to be the case.

Before seeking leave to withdraw the amendment, perhaps I may ask the noble Lord about my original argument, which is that the practice to which I have referred is what British Gas used to do. British Gas used to make sure that spare parts are available. Does the noble Lord at least agree that that was the case and that British Gas took seriously the whole question of spare parts for appliances although it was principally a gas supplier? Was not that the case when it was a monopoly?

Lord Inglewood

The noble Lord has almost answered his own question. When British Gas was a monopoly, it had to take such matters seriously because there was no alternative. We believe that the privatisation of the industry and subsequently the introduction of competition is a better way of providing both an improved and a cheaper service for the customer.

Lord Peston

That is helpful, but as I have said many times if we are to have a private sector, I should prefer there to be competition rather than a monopoly. However, I recognise that when you abandon a monopoly, one or two things might be lost—and this is one example. I am extremely interested in this experiment, but it might lead to a deterioration in service with regard to spare parts. The noble Lord says that he hopes that it will not; but I thought that someone should point out that some of the things that a monopoly does—only some, because I am a great believer in getting rid of monopolies—can be helpful to consumers.

The point of the amendment is to try to keep an eye on that market—perhaps the director will do this—to ensure that consumers do not suffer and are not told, "I am sorry that you have no cooking facilities this week, but it is none of our business if the spare parts are not available. Why not buy a new cooker?" That is what happens with computers. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 2, as amended, agreed to.

6 p.m.

Schedule 3 [Other amendments of Part 1 of 1986 Act]:

Lord Clinton-Davis moved Amendment No. 96A:

Page 30, line 35, after ("consumers") insert ("after consultation with the Council").

The noble Lord said: Consultation is, in our view, something which, contrary perhaps to the Government's view, should be enshrined as a principle in an Act of Parliament, and, in particular, consultations in this context with the Gas Consumers Council, because that is the council referred to. It becomes especially clear when we recount just one instance, and that is the Railways Act 1993. There was supposed to be consultation, for example, over the Fort William line. That should have been the subject of consultation. It was not. That exemplifies the concern that many of us expressed when that Bill was going through the House: that specific consultation should be enshrined in that Act. It was not, and the Government let themselves down by not ensuring that consultation should take place. They are paying a price for that, as indeed are railway interests.

It is not right that we should look merely to the courts to preserve an interest here by way of judicial review. It is something that can be inserted simply into the Bill, and that is the purpose of the amendment. The amendment, not unnaturally, is supported by the Gas Consumers Council. One has to ask why. It is supported by it because it is not confident that it will he consulted by Ofgas. Ofgas does not seem to regard the Gas Consumers Council as flavour of the month. It is unfortunate that that should be the case, because the Gas Consumers Council's role is self-evidently important so far as concerns the protection of consumers.

Ofgas has certain other interests, hut so long as there is that suspicion, the best way of ensuring that it disappears is to make provision in the Bill to that effect, and that is what we arc seeking to do. It is right that we should insist that when the director considers it appropriate to assign a licence or modify the conditions, the circumstances in which the director decides to do that should he expressed clearly. The Gas Consumers Council, not unnaturally, wants to have assurances that it will he consulted as part of the process leading to assignment.

If there is concern as to why it is the Gas Consumers Council which is referred to in the provision, it is just that there is already effective liaison among the various other bodies, such as the National Consumer Council, the Consumers' Association, Age Concern, NACAB and the Gas Consumers Council. Under the umbrella of the Gas Consumers Council, that matter can he dealt with adequately. There should not be any problems in that regard. The responses given by the Minister of State in another place were ineffective and merely a device to avoid doing that which we and the Gas Consumers Council believe is absolutely essential. I hope the Minister will be rather more forthcoming in his reply today. I beg to move.

Lord Ezra

I support the amendment so effectively moved by the noble Lord, Lord Clinton-Davis. We are talking about protecting consumers' interests. The Gas Consumers Council exists. It is recognised as playing a major role in all these affairs. The amendment is appropriate and desirable. I hope that the Government will agree with it.

Earl Ferrers

I understand the concern felt by the noble Lord, Lord Clinton-Davis, about looking after consumers' needs and the need for consultation. We must guard also the words of his noble friend Lord Peston who said that we must be careful not to have unnecessary words in the statute.

It is true that the provisions on the assignment of licences do not provide for a general statutory consultation which applies in respect of other licence modifications. That follows the precedent of the Railways Act 1993. It reflects two particular distinguishing features. The first is the limited scope that the director general has to impose conditions which must be incidental to, or consequential on, the assignment, or which relate to protecting the interests of consumers.

The second feature is a more practical one. It is that there may well be a need to fit in with merger timescales, and a widespread formal statutory consultation could make that more difficult. I am bound to tell the Committee that our view is that no change to the legislation itself is needed. My right honourable friend the Minister for Industry and Energy said in Committee in another place that the director would obviously wish to consult as widely as is practicable in the circumstances. He also said that he would expect the director normally to consult the Gas Consumers Council as a matter of practice. That is rather different from saying that the director should have a statutory obligation to do so.

The assignment of a licence would not normally he an opportunity to make other than technical changes to the conditions. Consultation with the Gas Consumers Council is something which should he welcome, if practicable, but it is not something which should he essential in all cases. We should he reluctant to place an absolute duty on the director to consult the Gas Consumers Council on every occasion. That is why I fear that the addition of the words in the amendment would be an imposition, because in the majority of cases I should have thought that there is likely to be consultation.

Lord Clinton-Davis

I am disappointed by that reply, because I had expected much more from the Minister. It is unfortunate that he should have cited in support of his case the Railways Act 1993—the very area where consultation has already fallen down, and fallen down in a demonstrably bad way because of the instance that I gave. So it strengthens our view that this is an area which should be covered by consultation. I fear that nothing the Minister has just said causes us to retract anything that we have already indicated. So I fear that on this issue we should take the opinion of the Committee.

6.7 p.m.

On Question, Whether the said amendment (No. 96A) shall be agreed to?

Their Lordships divided: Contents, 86; Not-Contents, 113.

Division No. 1
CONTENTS
Airedale, L.	Judd, L.
Archer of Sandwell, L.	Kintore, E.
Ashley of Stoke, L.	Lester of Herne Hill, L.
Beaumont of Whitley, L.	Lovell-Davis, L.
Birk, B.	McCarthy, L.
Broadbridge, L.	McIntosh of Haringey, L.
Brooks of Tremorfa, L.	McNair, L.
Bruce of Donington, L.	Mallalieu, B.
Carmichael of Kelvingrove, L.	Mar and Kellie, E.
Carter, L.	Mason of Barnsley, L.
Cledwyn of Penrhos, L.	Mayhew, L.
Clinton-Davis, L.	Merlyn-Rees, L.
Cocks of Hartcliffe, L.	Milner of Leeds, L.
Dean of Beswick, L. [Teller.]	Mishcon, L.
Donaldson of Kingsbridge, L.	Molloy, L.
Dormand of Easington, L.	Monkswell, L.
Dubs, L.	Murray of Epping Forest, L.
Eatwell, L.	Ogmore, L.
Elis-Thomas, L.	Peston, L.
Ezra, L.	Plant of Highfield, L.
Farrington of Ribbleton, B.	Prys-Davies, L.
Fisher of Rednal, B.	Redesdale, L.
Gallacher, L.	Richard, L.
Geraint, L.	Ritchie of Dundee, L.
Gladwin of Clee, L. [Teller.]	Robson of Kiddington, B.
Glenamara, L.	Rodgers of Quarry Bank, L.
Graham of Edmonton, L.	Russell, E.
Greene of Harrow Weald, L.	Sefton of Garston, L.
Grey, E.	Shepherd, L.
Halsbury, E.	Stoddart of Swindon, L.
Harris of Greenwich, L.	Strabolgi, L.
Haskel, L.	Tenby, V.
Holme of Cheltenham, L.	Tope, L.
Houghton of Sowerby, L.	Tordoff. L.
Howie of Troon, L.	Turner of Camden, B.
Hughes, L.	Wallace of Coslany, L.
Hylton, L.	Walpole, L.
Irvine of Lairg, L.	Whaddon, L.
Jacques, L.	White, B.
Jay, L.	Wigoder, L.
Jeger, B.	Williams of Elvel, L.
Jenkins of Hillhead, L.	Williams of Mostyn, L.
Jenkins of Putney, L.	Winchilsea and Nottingham, E.

NOT-COTNTENTS
Addison, V.	Jeffreys, L.
Allenby of Megiddo, V.	Jenkin of Roding, L.
Ampthill, L.	Killearn, L.
Annaly, L.	Kimball, L.
Archer of Weston-Super-Mare, L.	King of Wartnaby, L.
	Lane of Horsell, L.
Ashbourne, L.	Lindsay, E.
Astor, V.	Lindsey and Abingdon, E.
Astor of Hever, L.	Long, V. [Teller.]
Balfour, E.	Lucas, L.
Beloff, L.	Lucas of Chilworth, L.
Blaker, L.	Lyell, L.
Blatch, B.	McColl of Dulwich, L.
Blyth, L.	Macleod of Borve, B.
Boardman, L.	Malmesbury, E.
Boyd-Carpenter, L.	Massereene and Ferrard, V.
Brabazon of Tara, L.	Mersey, V.
Bridgeman, V.	Miller of Hendon, B
Brookeborough, V.	Milverton, L.
Brougham and Vaux, L.	Montrose, D.
Cadman, L.	Mountevans, L.
Caithness, E.	Moyne, L.
Carnegy of Lour, B.	Northesk, E.
Carr of Hadley, L.	O'Cathain, B.
Chalker of Wallasey, B.	Onslow, E.
Charteris of Amisfield, L.	Orkney, E.
Chesham, L.	Oxfuird, V.
Clanwilliam, E.	Park of Monmouth, B.
Clark of Kempston, L.	Pender, L.
Cochrane of Cults, L.	Rankeillour, L.
Colwyn, L.	Reay, L.
Craigavon, V.	Renton, L.
Cranborne, V. [Lord Privy Seal]	Renwick, L.
	Rodger of Earlsferry, L.
Crathorne, L.	Saltoun of Abernethy, Ly.
Cross, V.	Seccombe, B.
Cullen of Ashbourne, L.	Shrewsbury, E.
Cumberlege, B.	Skelmersdale, L.
Davidson, V.	Skidelsky, L.
Denham, L.	Stewartby, L.
Dilhorne, V.	Strange, B.
Dixon-Smith, L.	Strathclyde, L.
Dundonald, E.	Strathcona and Mount Royal, L.
Elton, L.
Ferrers, E.	Sudeley, L.
Flather, B.	Tebbit, L.
Gisborough, L.	Terrington, L
Greenway, L.	Thomas of Gwydir, L.
Harlech, L.	Trefgarne, L.
Harmar-Nicholls, L.	Trumpington, B. [Teller.]
Harrowby, E.	Tugendhat, L.
Hemphill, L.	Vivian, L.
Henley, L.	Westmorland, E.
Hesketh, L.	Whitelaw, V.
Holderness, L.	Wigram, L.
HolmPatrick, L.	Willoughby de Broke, L.
Howe, E.	Wise, L.
Inglewood, L.	Wynford, L.

On Question, amendment agreed to.

6.16 p.m.

Earl Ferrers moved Amendment No. 96B:

Page 30, line 37, at end insert: ("and in the case of an assignment other than a general assignment, modification conditions may make as respects so much of the licence as is proposed to he retained by the assignor provision different from that made as respects so much of the licence as is proposed to he assigned").

The noble Earl said: In moving Amendment No. 96B, I shall speak also to Amendment No. 96C. These are drafting amendments which clarify an existing provision. I beg to move.

Earl Ferrers moved Amendment No. 96C:

Page 31, leave out lines 18 to 20.

Lord Haskel moved Amendment No. 97:

Page 31, leave out lines 36 and 37 and insert: ("(a) to establish and maintain an efficient and economical system for the conveyance of gas by—

1. (i) using his existing pipe-line system within the area;
2. (ii) identifying and linking with the pipe-line systems of other public gas transporters within the area; and
3. (iii) subject to section 20 below, constructing new pipe-lines;").

The noble Lord said: In moving Amendment No. 96C, I shall speak also to Amendment No. 110. The amendments are grouped with Amendment No. 111, which stands in the name of the Minister. I am not sure whether I am the right person to speak to it.

The provisions in Amendments Nos. 97 and 110 were brought to our attention by the Country Landowners' Association. That may give some comfort to Members of the Committee opposite. It is unusual for the Labour Party to support amendments from that source but they relate to a sensible environmental matter.

The purpose of Amendment No. 97 is to restrict the proliferation of new pipes where pipelines already exist and there is capacity within them for the conveyancing of gas to meet the needs of other gas suppliers and gas shippers. For existing or new capacity to be used only in part is wasteful, expensive and, to a considerable extent where the new works affect the environment and farming, it is disruptive.

Each transporter does not need to have a complete system under his control. He should contribute as necessary to an integrated system for the shipping of gas and link up with other tranporters where necessary. The creation of a separate system will require investment, cause environmental harm and, through the duplication, conflict with the principles of sustainability, to which the Government subscribe.

In another place, the Government stated that they were drafting regulations for an environmental impact assessment in such cases. Has that been done? I beg to move.

Earl Ferrers

The noble Lord, Lord Haskel, said that he would speak to Amendments Nos. 97 and 110 but that he did not feel that he ought to speak to Amendment No. 111. He is very modest. I should have been entirely happy had he done so. However, as he did not do so I shall do so myself.

The noble Lord said that the amendments were suggested by the Country Landowners' Association, which he thought might he of interest to some Members of the Committee on this side of the Chamber. Perhaps I should declare an interest, and also do so on behalf of my noble friend Lord Inglewood, as we both happen to be members of the Country Landowners' Association.

However, as the noble Lord will see, that has not had too much influence on my views on the amendment, so I cannot be accused of being biased in favour of an association of which I happen to he a member.

The duty on public gas transporters to develop and maintain an efficient and economical system for the conveyance of gas is carried forward (with consequential changes) from the 1986 Act. To specify certain ways in which that duty is to be performed could detract from, rather than improve, its effectiveness. We propose to enhance the duty for a public gas transporter to consult when he is proposing to construct a pipeline in another public gas transporter's authorised area. That is set out in Amendment No. 111. There are already regulatory powers to force interconnection between the pipelines of public gas transporters in certain specific cases. Those are in Section 21 of the 1986 Act.

In addition, as my noble friend Lord Inglewood said on 22nd June, regulations are being brought forward which would require an environmental impact assessment to he carried out before pipes above a certain size can he built; and standard condition 6 of the public gas transporter licence puts in place procedures to deal with the routing of high pressure pipelines. The necessary steps in these important areas are therefore dealt with.

Commercial pressures will in themselves ensure that pipelines will not be built unless there is a need for them. Laying a pipe is, after all, an expensive business, and a public gas transporter will not make money out of his pipe unless shippers and suppliers use it to get gas to customers. A public gas transporter will therefore have to ensure that there is a real need for a pipeline before he proceeds to lay one.

In reviewing price controls, the Director General of Gas Supply may well take a dim view of pipelines built by public gas transporters but which were not properly utilised without a reasonable excuse. No further involvement by the director is called for.

As for the proposal in Amendment No. 110 to insert a new Section 20, I should explain that Section 20 in the 1986 Act was designed to address the problem of a public gas supplier who sized his pipelines too small to carry gas for other people. Public gas transporters, who make their money from carrying gas for others, will never have an incentive to act in that way. That is why Section 20 serves no useful purpose in the new regime and is to he repealed.

Amendment No. 111 has been drafted in response to concern expressed by some people hoping to become independent public gas transporters about the need for transporters to co-operate where pipes may he laid, for instance, in the same street. It will oblige a public gas transporter wishing to lay pipelines in the authorised area of another public gas transporter, to consult the incumbent about the precise location of the pipes.

I believe that that is reasonable, and I hope that it meets the concerns of the noble Lord, Lord Haskel. I hope that he will consider that that is the best way forward.

Lord Haskel

I thank the Minister for that response. 1 was not sure from his response whether the regulations covering environmental impact assessment are or are not in place.

Earl Ferrers

They are being brought forward.

Lord Haskel

I thank the Minister for that information. When they are available we shall consider them.

I thank the Minister for pointing out that his Amendment No. 111 covers some of the points raised in my amendment. Bearing that in mind, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Ezra moved Amendment No. 97A:

Page 31, line 41, at end insert ("; and

1. (c) subject to paragraph (a) above and safety requirements, to minimise charges for connections to that system; and
2. (d) to provide on request to the Director and to the Council in pursuance of a representation under section 32 of this Act, a statement as to the costs to him to comply with any reasonable request in paragraph (b) above.").

The noble Lord said: Amendment No. 97A deals with the charges that can he made for gas connections. It would follow on from Section 9(1) (b) on page 31 of the Bill, which includes among the powers and duties of public gas transporters that, so far as it is economical to do so, they should comply with any reasonable request to connect their system to any premises. That does not go far enough because it is obviously necessary that such connections should be made at minimal cost. The amendment therefore makes that point.

The gas transporter should not be in a position to charge prohibitively if, for whatever reason, he did not want to make a connection. That has been known to happen. We need an assurance that connections will be made at minimal cost and that the cost of such connections will be kept down as far as possible. Furthermore, it is desirable that the details of those costs should be made known to the regulator and to the Gas Consumers Council if required.

I am sure that the Committee will agree that with a natural product as important as gas, which brings benefits to millions in this country, those who are unfortunate enough to live in areas not yet connected should be given every opportunity for connection and that they should not be inhibited from being connected by charges which could, in certain circumstances, be unjustified.

Therefore, the purpose of the amendment is to ensure that there will be a duty to provide connections at minimal charges and that that would, if necessary, have to be demonstrated to the regulator and to the Gas Consumers Council. I beg to move.

Lord Clinton-Davis

I rise to support the amendment ably moved by the noble Lord, Lord Ezra. We believe that it is conducive to the interests of consumers that the two elements that he seeks to introduce into the Bill should be properly regarded statutorily. In my judgment, the noble Lord is right to recognise that some consumers, particularly those living in remote areas where there may be no great attraction in installing gas supplies, may well be vulnerable to high charges. Consequently, a provision requiring minimal cost to be one of the considerations, and above all transparency, should be invoked and included in the Bill.

My landlord and tenant law is very rusty these days. But in the recesses of my mind, I believe that a landlord who imposes service charges in respect of services carried out on behalf of tenants is required to offer that degree of transparency we are now contemplating in relation to this Bill. Certainly, so far as I can recall, a tenant is entitled to details of the service charges. I cannot recall whether that information should come from the landlord in the first instance or whether it is made available on request. However, the principle is clear. It should be clear here as well. This is a serious omission from the Bill. I hope that the Minister will say that there is absolutely no reason why the omission should not be rectified.

6.30 p.m.

Earl Ferrers

The noble Lord, Lord Clinton-Davis, almost always asks for the impossible and I would love to grant him the impossible. However, when I explain the position to him, I believe that he will realise that my natural desire to assist him is there, even though I cannot actually accept the proposal of the noble Lord, Lord Ezra. I understand and share the desire that the costs of making connections to new customers should be as low as possible. I agree that the principles upon which the connection charges are made should be, as the noble Lord, Lord Clinton-Davis, said, clear and transparent. However, I believe that that is already provided for in the Bill, in the licences and, indeed, in the 1986 Act.

Lord Clinton-Davis

Where?

Earl Ferrers

As always, the noble Lord is a trifle impatient. Had the noble Lord contained himself for half a moment longer, I would have told him. The revised section of the 1986 Act, which is set out in paragraph 4 of Schedule 3 to the Bill, provides that the costs of making a connection to premises within 23 metres of a relevant main should be defrayed by the person requiring a connection. The phraseology "defraying of costs" means that the costs only can be defrayed. It does not allow for a profit margin by the public gas transporter.

That obligation on the consumer to pay the costs of the pipe is further qualified by draft standard condition 4 of the public gas transporter's licence, which provides for the first 30 feet of pipe in the highway to be free of charge. That reflects the position in existing legislation but under the Bill we propose that it should be in the licence because it may not be appropriate in every case.

Beyond the statutory connection regime the transporter is still obliged to comply with any reasonable and economic requirement for a connection, although in this case a reasonable profit margin may be charged. However, the customer still has the option of making his own connection, and that option will itself put a downward pressure on what the transporter might charge.

In any event it is proposed that connection charges should be subject to regulation although certain exceptions may be approved by the director for new villages. Standard condition 4 of the draft transporter's licence provides that the transporter must prepare and publish a statement of the principles upon which charges will be made for making connections.

As for a requirement to make estimates of costs in particular cases available to the director and the Gas Consumers Council, both the director and the council already have the power to require any information which they need to help them deal with complaints. That power is set out in conditions 11 and 12 of the public gas transporter licence.

I believe that the points I have made should satisfy the noble Lord, Lord Ezra, and the noble Lord, Lord Clinton-Davis, that the concerns they have—and quite rightly—are already met in the Bill and that therefore the prices charged will be kept within bounds, are subject to certain regulations and, indeed, are transparent.

Lord Ezra

I thank the noble Earl for that detailed explanation. From the noble Earl's response, and after studying the part of the Bill to which he referred, it seems to me that anyone who wants a connection within 23 metres is thoroughly covered. In some other respects, I believe that the distance of 30 feet was mentioned. However, in those cases which exceed the minimal distance, it seems, as far as I understand it, to he up for grabs and that any charge can be made, any profit margin can be put in, and, if the potential consumer was not satisfied, then it would he up to him to make his own connection. Am I right in supposing that that is the situation and that, therefore, there is no transparency and no obligation to minimise cost over and above the 23 metres quoted in the Bill?

Earl Ferrers

The noble Lord, Lord Ezra, is fairly near to being correct. However, I am not so sure that the inflexion that he put upon the position is quite right. The fact is that within 23 metres the costs of making a connection to a main can be defrayed by the person who requires the connection. The first 30 feet of a pipe in the highway must be free of charge.

However, to take an absurd example, if the pipe were a quarter of a mile away, the individual concerned would get a quotation and if that quotation (which would, of course, include an element of profit) were too great or unreasonable, then he could obtain his own quotation from an independent supplier. He could run his own pipe down to the transporter's pipe and there would just he a connection charge. Therefore, the choice would be the consumer's; he could either use the services of the transporter or use the services of his own contractor.

Lord Ezra

I thank the Minister for his further explanation. However, I find the situation slightly disconcerting. I believe that the intending consumer would find it very difficult to start looking around and obtaining tenders from companies that lay pipes and have such tender documents prepared. Indeed, he could be involved in considerable expense. It seems to me that it would he very much simpler if the minimal cost obligation and the transparency obligation mentioned in the amendments were to be accepted. That would set people's minds at rest rather than forcing them, if they felt that they were being charged unduly high prices, to set themselves up as a sort of commercial organisation and put out tenders to a number of pipe laying companies at considerable cost, difficulty and delay. I do not see why individual consumers—I am not talking about firms or large enterprises—should he put to that trouble through lack of the simple assurances that we have requested. Has the Minister any further comments to make?

Earl Ferrers

I am not sure that I am able to comment very much more. In the normal course of events, there will he occasions when the transporter will he able to provide the pipe and make the appropriate charges which I have explained. However, if there are longer connections, they will he subject to the licence conditions and to the requirement to agree to any economic request. I do not believe that to be unreasonable. If longer lengths of pipe are required, it is possible for people to obtain other quotations. That is the point of having competition. As I said, I do not believe that that is unreasonable.

Lord Ezra

I find the Minister's response rather difficult to accept. However, I should like to consider the matter most carefully and return to it, if need he, on Report. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 98 not moved.]

Lord Haskel moved Amendment No. 99:

Page 32. line 4, at end insert:

("Duties in respect of the disabled and pensioners.

9A.—(1) It shall be the duty of the transporter to provide special services to assist with safe use of gas appliances and fittings in the cases of consumers who are disabled or of pensionable age.

(2) It shall be the duty of the transporter to keep a register of consumers who are disabled or above pensionable age who may require assistance with the safe use of gas.

(3) It shall be the duty of the transporter, where a gas appliance has developed a fault that is known to he or could he life threatening. to mount a programme in conjunction with the manufacturer to inspect and rectify these appliances in all the consumers' property within their area."")

The noble Lord said: The purpose of the amendment is to try to keep some central control of safety services and apply continuity in order to look after those vulnerable customers who qualify for special services. As consumers will he able to purchase their gas from many different suppliers and change from time to time, the only way to ensure that there is an accurate register of customers who require such special services is for the transporter to keep the record and for him to supply those special services.

When British Gas was an integrated company, it had the resources to trace all the rogue appliances of any particular type and make them safe or repair them. Neither the gas suppliers nor Corgi will have the ability to do that; only the transporter will have sufficient manpower and resources to undertake that task. It is important that that ability is maintained. The amendment would ensure that the task is carried out. I beg to move.

Lord Boyd-Carpenter

This amendment, like the ones we discussed a little time ago, is based on the use of the test of pensionable age. Once again I must make clear the self-evident point that it is odd that there should he different ages for men and women—65 for men, whereas on the other hand for a woman, for the time being, it is 60, although that will gradually disappear under the operation of the Pensions Bill which this Chamber carried a little time ago. I feel rather strongly that to use pensionable age as the criterion or test of whether help should he given is a mistake. It will produce anomalies of every sort and kind and I hope that it will not he persisted in.

Lord Skelmersdale

I am confused by this amendment for a rather different reason because in the Bill—I do not have the references immediately to hand but I am sure that my noble friend Lord Ferrers will he able to help us with that—the transporter is responsible for safety in the broadest sense and the supplier has to give free safety checks to disabled people and to pensioners. I do not quite see how they can do this without maintaining some sort of record. That said, the third subsection of the amendment is rather different. To me it is overburdensome—I think that is probably the word—because it suggests that if there is a fault identified anywhere in the country the transporter has, to mount a programme in conjunction with the manufacturer to inspect and rectify these appliances in all the consumers' property within their area". The area in this particular case could easily be countrywide, could it not?

Lord Cochrane of Cults

I rise to oppose the amendment of the noble Lord, Lord Haskel, for the following reasons. Taking subsection (3) of the amendment first, what it is really suggesting is a very bureaucratic method of product recall. The Committee will remember that washing machines, irons, even cars of every sort, are occasionally subject to manufacturers' recall and there is a great deal of advertising in that regard. Regarding gas appliances, there is no reason to depart from that well-established and well-understood system. It may surprise a few Members of the Committee to learn that I am a pensioner. I note that subsection (2) of the amendment proposes that it is not the duty of the transporter to keep a register of consumers of pensionable age who require assistance, but rather of those who may require assistance. If I looked more doddery or were disconnected, would I get on to the list? I believe that the noble Lord, with the best of intentions, is proposing to set up a bureaucratic monster for which there is no present need.

Baroness Gardner of Parkes

I find the reference to pensionable age extraordinary because there are people who need help due to some lack of tactile ability, perhaps not even to an extent where they consider themselves disabled. There are people who suffer from Alzheimer's who are way below pensionable age. To blanket all pensioners together is illogical and I do not think that part of the amendment is right.

Earl Ferrers

My noble friend Lord Boyd-Carpenter is nothing if not persistent as regards pensionable ages and he is supported by my noble friend behind me. From the point of view of the Bill, pensionable age is described in paragraph 49 to Schedule 3 and of course there is always the difficulty of trying to include someone in a particular group because as soon as one does that everyone says, "You ought to include or exclude someone else". For the purposes of the Bill, pensionable age is described as such. I quite agree with my noble friend that there are people who are not old but who may have other kinds of difficulties or indeed disabilities. However, they are dealt with separately.

I agree with the thoughts behind the amendment of the noble Lord, Lord Haskel, but I am hound to say that I have some difficulty with the means which are suggested as the amendment would cut across the proposals which we already have in place in regard to safety which is of enormous importance. Our proposals are to put the principal obligations in respect of assisting Pensioners and disabled people on the suppliers. The draft standard conditions of gas suppliers' licences require suppliers to offer, on request and free of charge, services which include having a gas safety check once a year; providing special controls or adaptors for appliances and meters; and providing advice on the use of gas, gas appliances and other fittings. We take the view that it is for the gas supplier to carry out these duties. When they are exposed to competitive pressures, gas suppliers can be expected to seek better and more consumer-friendly ways to carry out these requirements in a way that a monopoly provider would have no incentive to do.

There is a requirement—this may surprise my noble friend Lord Skelmersdale—in Condition 17 of a gas supplier's licence for suppliers to keep a list of domestic customers who are pensioners or who are disabled and who request to be identified as such. This requirement is placed on suppliers as they are to provide special services for those customers. However, there is also a requirement that the information on the list should he passed on to the relevant public gas transporter and this is in order that the transporter can undertake the requirement in his own licence to ensure that elderly and disabled customers are not deprived of adequate heating and cooking facilities where the conveyance of gas to those premises has been disconnected for safety reasons.

The safety of gas appliances is already dealt with by a provision of the Consumer Protection Act 1987, the Gas Appliances (Safety) Regulations and by the Gas Safety (Installation and Use) Regulations. The manufacturers of gas appliances are already obliged to meet stringent conditions to ensure that these items are safe before they are sold. In practice, the present legislative and regulatory framework has proved effective in ensuring that manufacturers also respond quickly to the emergence of dangerous design faults in gas appliances. I think that the safety of these people and the concerns of the elderly and of the disabled are taken care of.

Lord Haskel

I thank the Minister for that response. We are here concerned about those who require special services and that is not entirely limited to those who are of pensionable age or who are disabled. Special services can be relevant to people who have Alzheimer's at an earlier age. As regards the comment about product recall—

Earl Ferrers

I would rather assume that if one has Alzheimer's one is disabled.

Lord Haskel

I quite agree. As I said, on the question of product recall, one person's product recall is of course another person's preventive maintenance. It seems to me that there is a difference of principle here. We feel that it is the transporters who can provide these services because they are the only people who have the facilities to do so. The suppliers may wish to supply these services hut they will not have the facilities and they will not have the ability to do it because they are naturally dealing with a much narrower area. As there is a difference of principle here I feel I ought to take the opinion of the Committee.

6.48 p.m.

On Question, Whether the said amendment (No. 99) shall be agreed to?

Their Lordships divided: Contents, 83; Not-Contents, 100.

Division No. 2
CONTENTS
Addington, L.	Jay of Paddington, B.
Airedale, L.	Jeger, B.
Archer of Sandwell, L.	Jenkins of Hillhead, L.
Beaumont of Whitley, L.	Jenkins of Putney, L.
Birk, B.	Judd, L.
Blackstone, B.	Lawrence, L.
Brooks of Tremorfa, L.	Lester of Herne Hill, L.
Bruce of Donington, L.	Lovell-Davis, L.
Carmichael of Kelvingrove, L.	McIntosh of Haringey, L.
Carter, L.	Mallalieu, B.
Cledwyn of Penrhos, L.	Mar and Kellie, E.
Clinton-Davis, L.	Masham of Ilton, B.
Darcy (de Knayth), B.	Mason of Barnsley, L.
Dean of Beswick, L.	Mayhew, L.
Diamond, L.	Merlyn-Rees, L.
Donaldson of Kingsbridge, L.	Meston, L.
Dormand of Easington, L.	Milner of Leeds, L.
Dubs, L.	Mishcon, L.
Eatwell, L.	Monkswell, L.
Ezra, L. [Teller.]	Murray of Epping Forest, L.
Falkland, V.	Ogmore, L.
Farrington of Ribbleton, B.	Peston, L.
Fisher of Rednal, B.	Plant of Highfield, L.
Gallacher, L.	Prys-Davies, L.
Geraint, L.	Redesdale, L.
Gladwin of Clee, L.	Richard, L.
Glenamara, L.	Ritchie of Dundee, L.
Graham of Edmonton, L. [Teller.]	Robson of Kiddington, B.
	Rodgers of Quarry Bank, L.
Greene of Harrow Weald, L.	Russell, E.
Grey, E.	Seear, B.
Hamwee, B.	Sefton of Garston, L.
Harris of Greenwich, L.	Stoddart of Swindon, L.
Haskel, L.	Strabolgi, L.
Hollick, L.	Tope, L.
Holme of Cheltenham, L.	Tordoff, L.
Houghton of Sowerby, L.	Turner of Camden, B.
Howie of Troon, L.	Wallace of Coslany, L.
Hughes, L.	Whaddon, L.
Hylton, L.	Wigoder, L.
Jacques, L.	Williams of Mostyn, L.
Jay, L.	Winchilsea and Nottingham, E.

NOT-CONTENTS
Allenby of Megiddo, V.	Chesham, L.
Ampthill, L.	Clanwilliam, E.
Annaly, L.	Cochrane of Cults, L.
Astor, V.	Colwyn, L.
Balfour, E.	Cranborne, V. [Lord Privy Seal.]
Birdwood, L.
Blaker, L.	Crathorne, L.
Blatch, B.	Crickhowell, L.
Blyth, L.	Cross, V.
Boardman, L.	Cullen of Ashbourne, L.
Boyd-Carpenter, L.	Cumberlege, B.
Brabazon of Tara, L.	Denham, L.
Bridgeman, V.	Dixon-Smith, L.
Brougham and Vaux, L.	Elton, L.
Cadman, L.	Ferrers, E.
Caithness, E.	Rather, B.
Carnegy of Lour, B.	Gardner of Parkes, B.
Can- of Hadley, L.	Gisborough, L.
Chalker of Wallasey, B.	Greenway, L.

Harlech, L.	Northesk, E.
Harmar-Nicholls, L.	O'Cathain, B.
Harrowby, E.	Onslow, E.
Henley, L.	Orkney, E.
Hesketh, L.	Oxfuird, V.
HolmPatrick, L.	Park of Monmouth, B.
Howe, E.	Pender, L.
Inglewood, L.	Rankeillour, L.
Jeffreys, L.	Reay, L.
Kimball, L.	Renton, L.
Kintore, E.	Rodger of Earlsferry, L.
Lane of Horsell, L.	Saltoun of Abernethy, Ly.
Lauderdale, E.	Seccombe, B.
Layton, L.	Shrewsbury, E.
Leigh, L.	Skelmersdale, L.
Lindsay, E.	Skidelsky, L.
Lindsey and Abingdon, E.	Stewartby, L.
Long, V. [Teller.]	Strange, B.
Lucas, L.	Strathclyde, L.
Lucas of Chilworth, L.	Sudeley, L.
Lyell, L.	Terrington, L.
	Teviot, L.
McColl of Dulwich, L.	Teynham, L.
Mackay of Ardbrecknish, L.	Thomas of Gwydir, L.
Macleod of Borve, B.	Trefgarne, L.
Malmesbury, E.	Trumpington, B. [Teller.]
Massereene and Ferrard, V.	Vivian, L.
Mersey, V.	Wedgwood, L.
Miller of Hendon, B.	Whitelaw, V.
Montrose, D.	Wigram, L.
Mountevans, L.	Wise, L.
Moyne, L.	Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.

6.56 p.m.

The Principal Deputy Chairman of Committees

I should inform the Committee that in the Division on Amendment No. 96A the number voting Content was 86, and not 85 as announced.

Earl Ferrers moved Amendment No. 99A:

Page 32, line 8, leave out ("This section ") and insert ("Subsection (2) below").

The noble Earl said: In moving the amendment, perhaps I may speak to Amendments Nos. 99B to 99H, 99J, 99L to 99N, 99P to 99S, 136A, 149E, 151A, and 151G to 151L.

This large group of amendments is technical. Rather than weary Members of the Committee with the detail, I hope that noble Lords will take it, so to speak, as read. I beg to move.

On Question, amendment agreed to.

Earl Ferrers moved Amendments Nos. 99B to 99J:

Page 32, line 12, leave out from beginning to ("pipe") in line 13 and insert ("or (b) could be connected to any such main by a").

Page 32, line 19, leave out ("section") and insert ("subsection").

Page 32, line 22, leave out ("and thereafter maintain the connection").

Page 32, line 24, at end insert ("and").

Page 32, line 26, leave out from ("subsection") to end of line 31 and insert ("connect the premises to the relevant main by the pipe there mentioned").

Page 32, line 35, at end insert: ("(2A) Subject to the provisions of this Part and any regulations made under those provisions, where any premises are connected (whether by virtue of subsection (2) above or otherwise), the public gas transporter shall maintain the connection until such time as it is no longer required by the owner or occupier of the premises.").

Page 32, line 37, leave out ("(2) (a) or (c)") and insert ("(2)").

Page 32, line 48, at end insert: ("(4A) Where at any time a public gas transporter connects any premises under subsection (2) (b) above—

1. (a) the pipe supplied and laid by the owner or occupier of the premises; and
2. (b) any rights of the owner or occupier which relate to the laying, maintenance, repair, alteration or removal of the pipe,

shall at that time vest in and become property or rights of the transporter.").

On Question, amendments agreed to.

[Amendment No. 99K not moved.]

Earl Ferrers moved Amendments Nos. 99L to 99N:

Page 33, line 1, leave out ("(2) (a) or (c)") and insert ("(2)").

Page 33, line 15, after ("(2)") insert ("or (2A)").

Page 33, line 16, after ("connect") insert (", or maintain the connection of,").

On Question, amendments agreed to.

Earl Ferrers moved Amendments Nos. 99P to 99S:

Page 33, line 19, after ("(2)") insert ("or (2A)").

Page 33, line 30, leave out ("service").

Page 33, line 34, leave out ("in pursuance of subsection (2) (a), (b) or (c)") and insert ("to be made or maintained in pursuance of subsection (2) or (2A)").

Page 33, leave out lines 54 and 55 and insert: ("(9) Subject to subsection (10) below, in this section, 'relevant main', in relation to a public gas transporter, means any distribution main in its authorised area which is being used for the purpose of giving a supply of gas to any premises in that area at a rate not exceeding 75,000 therms a year. (10) Any pipe which—

1. (a) vests in and becomes the property of a public gas transporter by virtue of subsection (4A) above; and
2. (b) apart from this subsection, would be a relevant main for the purposes of this section,

shall be such a main if, and only if, it has been declared to be such a main by the transporter; and a declaration under this subsection shall not be capable of being revoked."").

On Question, amendments agreed to.

Baroness Gardner of Parkes moved Amendment No. 100:

Page 33, line 55, at end insert:

("Obligation to supply

After section 10 of the 1986 Act there shall be inserted the following section—

("Obligation to supply.

10A.—(1) A gas supplier licensed to supply under section 7A above shall, on being required to do so by any potential domestic gas consumer, give and continue to give a supply of gas at a premises of which the consumer is an owner, occupier or leaseholder and which is connected by a service pipe to a relevant main.

(2) It shall by the duty of the gas supplier to process all applications for a supply of gas without undue preference or undue discrimination.

(3) Subsection (1) above shall apply only where the gas supplier is licensed to supply gas to the person at the premises concerned.

(4) Subsection (1) above shall not apply if, and so long as, to do so would, in the opinion of the Director, significantly prejudice the supplier's ability to continue to supply gas to domestic consumers at premises where it already does so.

(5) Subsection (1) above shall not apply where a person requesting a supply of gas to a premises is bound by the provisions of a contract with another supplier unless that contract will either expire before the supply from the supplier is to commence or the contract is capable of being terminated.".").

The noble Baroness said: The amendment concerns the mechanism of imposing an obligation on suppliers to supply gas for those who wish to be supplied. I regret that I shall not be present to speak to Amendment No. 106. However, the noble Lord, Lord Ezra, will speak to it.

The issue is, should the obligations to supply and in Amendment No. 106 to publish, be in the licence conditions which are subject to change by the director general, with the approval of the Secretary of State, or should they remain within the Act where they are subject to change only with the agreement of Parliament. The Minister of State, when explaining why the obligations should be in the licence and not in the Bill, frequently used the word "flexibility". In the case of the obligation to supply, the Minister said that the relevant provisions are all encompassed by the standard conditions in the licence. He went on to say, "We believe strongly that we need the flexibility that would be afforded by keeping them in the licence".

I point out that the Gas Consumers Council asked me to table this amendment and the later amendments, Amendments Nos. 106 and 149. One is from the Gas Consumers Council and the other from the National Consumer Council. The single underlying object of the Bill is to benefit consumers by introducing competition into the provision of gas. There is general support for the legislation because of the likely benefits in price and standards of service. But the general good depends on the benefits being made available so far as possible to all users of gas. A consumer's opportunity to choose his supplier depends on there being an obligation on the part of that supplier to supply and on the public knowledge of the prices and other terms of supply on offer from each and every supplier in a given area. The prospect at any time in the future of the obligations being put aside is a charter for selective marketing of gas in which those less economically active or aware could be seriously disadvantaged.

Flexibility at the discretion of the Secretary of State and the director general may be attractive to their organisations and may be attractive to some potential suppliers, but so far not one realistic example has been put forward as to why such flexibility might actually be needed. Indeed, one is concerned that the need for flexibility signals an intention to put the obligations aside.

References have been made to the industrial market which is tiny by comparison with the 18 million domestic consumers. In the industrial market, consumers have welcomed the likely removal of British Gas's unilateral obligations to supply and to publish prices. But this is a sector inhabited by the professional buyer. Confusing it with the domestic market shows a misunderstanding of the gas market. The idea of 18 million consumers negotiating individually with one or more than one supplier is not realistic.

"Flexibility" may seem to be a good word, but we must be sure that it does not simply present the opportunity to remove two important obligations which are cornerstones of protection for the consumer. Such artificial flexibility is not in the interests of consumers and would be prevented by Amendments Nos. 100 and 106.

More information has been made available in the licences. The first version of the licence defined the obligation to supply as to make it available. That has now been amended and the Gas Consumers Council is pleased that the amendment uses the wording, to continue to supply gas".

However, it believes that it would be better still if the licence repeated the words of the 1986 Gas Act, to give and continue to give a supply of gas".

The first version of the licence only requires the supplier to process an application without "undue preference". An application could therefore have been processed with undue discrimination. That again has been changed and suppliers must now process applications without undue preference or undue discrimination. The Gas Consumers Council feels that progress has been made in that respect. I beg to move.

Lord Ezra

I support the amendment. In our Second Reading debate a number of us expressed anxiety about the relatively large amount that is written into licences and the relatively small amount that is written into the Bill. This is a good example of that situation. The obligation to supply must surely be fundamental in regard to such an important product as natural gas. People are entitled to have it supplied to them under fair and reasonable conditions. That should he written into the Bill.

The argument that there should be flexibility as a result of retaining in the licence the obligation to supply creates misgivings to my mind, as it did to the noble Baroness's mind. Would it be the intention of the Government or the regulator in due course to remove the obligation from licences? That would be the only meaning of the word "flexibility". It is included now, but could it be out at some future date? If so, that is a serious possible development. We would need firm assurances, and I cannot understand the case for not putting an issue as fundamental as the obligation to supply on the face of the Bill. If, nevertheless, the Government insist on keeping it in the licence then they ought to define clearly to us what they mean by "flexibility". If they mean what we think they mean, then we are justified in having serious apprehensions.

Earl Ferrers

I find it difficult to deal with this. I understand the concern of my noble friend and the noble Lord, Lord Ezra, in which there is considerable merit. At the same time, in bringing forward the Bill we must look to the future and consider the possibilities. It would be quite easy to give a concession like this because I do not believe that there is anything between us, on our present view of the market, in recognising that the obligation to supply is important. We all agree with that. However, I must resist that temptation. Although it is difficult for us now to foresee circumstances when the obligation to supply might become obsolete, none of us can totally rule out the possibility that one day gas will become like food, capable of being left wholly to the market. One goes down to the supermarket and food is important, but one chooses and buys where one wishes. It is not inconceivable that that could come in the future.

However, our main concern is a much more practical one: whether we have got the form of the obligation to supply right. It is a dilemma. If we have too tight an obligation to supply, as the Consumers' Association said, it could become a barrier to entry into the market, denying the customer the benefits of vigorous competition. On the other hand, if we have too weak an obligation, it would be ineffective. The appropriate form of the obligation could change with time or conceivably from one type of supplier to another. For example, Standard Condition 7 contains an important provision that will tackle the situation where taking on new customers could prejudice a gas supplier's ability to continue supplying his existing customers. There is, I think, agreement that there must be a provision to deal with that. In a competitive market, not all suppliers can, for example, have enough gas available to supply all 18 million consumers. But this provision might well need adjustment in the light of experience in order to avoid the risk of harm to either existing or potential future customers.

I am conscious of the concern that the obligation to supply might somehow be abolished without proper consultation or debate. That was the concern of the noble Lord, Lord Ezra. I do not believe that it is likely and we would not let it happen. The statute provides that no amendment can be made to licence conditions without a public consultation lasting for at least a month. Any variation in the standard conditions or any reference to the monopolies commission aimed at varying the standard conditions is subject to the veto of the Secretary of State. The Secretary of State should be accountable to Parliament for any use of that veto or failure to use the veto. It is inconceivable that the Secretary of State should allow the obligation to supply to be abolished behind Parliament's back.

However, for those reasons I do not believe that we could take the risk of putting ourselves in what one might describe as a legislative straitjacket, possibly putting at risk the objective of a lively and effective competitive market. We must have flexibility, with safeguards, and that is what occurs in the Bill. I am happy to reiterate that the Government consider it important, at least in the early stages of the market, that there should be published prices. That is why price schedules are provided for in draft standard condition 3 of the supply licence. That is just as binding on the suppliers as if it were in the Bill.

There is, however, a real risk that publishing prices may not work to the benefit of consumers in the longer term. In the industrial market schedules are not considered to be beneficial by many customers, as they would like to negotiate with British Gas. That wish is now to be granted with the suspension of schedules coming into effect at the end of the week. The general point here is not necessarily that all domestic consumers will want to negotiate their own prices but that in mature markets formal price schedules can tend on occasion to inhibit rather than promote competition—not least by the fact that they can encourage informal price matching.

It has been suggested that domestic consumers would be unlikely to have the time or the information to negotiate separate deals. There is no evidence for that. People may not have got used to it yet, and they may not have done it yet, but that does not mean to say that they will not want to do it in the future. People are, after all, quite used to negotiating when they buy second-hand cars or when they go to a market. Some people rather enjoy it. There is no reason why a consumer who may take, let us say, 2,000 therms of gas a year should be considered incapable of negotiating, when one who takes 3,000 therms a year is presumed to be capable. There could well come a time—I do not say that that time has arrived—when the requirement for price schedules should be removed, either for the whole domestic market or for part of it.

It is possible that customers could benefit from different forms of marketing that did not include suppliers publishing and sticking to a list of prices. I give an example for the Committee to consider. Direct Line insurance has been very successful in giving customers individual price quotations by telephone. The important point is that we do not rule out those alternatives at this stage. At present they do not happen, but it is not impossible that in the future they might. We do not know how the market will develop. It would be much better to provide the flexibility for the future. I hope that the Committee will agree.

Lord Ezra

The noble Earl's points are very important, as are all the points that he makes. However, we are primarily concerned with having an orderly transition from one sort of market to another. The developments to which he refers could, if they ever occurred, take many years to come about. In the meantime, what is needed for the 18 million consumers of gas is to be assured that certain fundamental safeguards will be preserved. One of those is the obligation to supply in areas in which suppliers have indicated their intent and for which they have licences. Another, to which we shall turn later, is the publication of prices so that consumers can see that they are being fairly treated—just as one can make up one's mind, for example, in a petrol filling station where the prices are clearly shown, and a choice can be made between the different suppliers. It is essential that those fundamental safeguards should be in the Bill. No legislation lasts for ever. If some of the changes that the noble Earl envisages were to occur in the next decade, or in two or three decades, then at some future sitting of this House the provisions could be revised. I urge the Government to consider the need for a proper and effective transfer from one form of market to another, and for clear safeguards to be indicated on the face of the Bill.

7.15 p.m.

Baroness Gardner of Parkes

I am most grateful to the noble Lord, Lord Ezra, for his support. I am very interested in what my noble friend the Minister said. He seemed a little torn in that perhaps he does think that there is in part a case for the obligation for supply to be on the face of the Bill. Certainly, as to the point made by the noble Lord, Lord Ezra, in the time that I have been in this House this is the second gas Bill that we have dealt with.

If that requirement were to be put on the face of the Bill, and the day comes, as my noble friend described, when life has changed for everyone, there can be another Bill then. We spend our lives amending legislation relating to matters that have changed over a period of time.

The point that my noble friend made about people becoming sophisticated is right. When I was on the board of a building society, it was quite remarkable how a 0.1 per cent. change in the interest rate meant millions or billions of pounds moving around in the financial world. That was quite unknown years ago. On the other hand, there are all those other people, those whom we want to protect, who write, saying, "My granny has had her account for 25 years and she has been left behind by all these changes." People have not kept up to date. As to the price strategy to which the Minister referred, people need information in order to be able to make comparisons. Even those sophisticates who, as he said, might get together in groups to organise their own gas supply will have to have a basis for comparison.

The fact that the obligation to supply was a very important feature of the previous Act leads me to think that, given the noble Earl's remarks, he may be able to think of some form of words that he could bring forward which would still retain the obligation of supply and put in the protection, and even (to use that horrid word) the flexibility that he believes is essential. Therefore, in withdrawing the amendment, I ask my noble friend to see whether the Government can find a way to get round this. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Earl Ferrers moved Amendments Nos. 101 and 102:

Page 34, line 30, after ("therms") insert ("or kilowatt hours").

Page 35, line 19, after ("therms") insert ("or kilowatt hours").

The noble Earl said: In moving these amendments I should also like to speak to Amendments Nos. 105 and 150. These are all technical amendments, bringing the Bill into line with our metrication obligations in Europe. I beg to move.

On Question, amendments agreed to.

Earl Ferrers moved Amendments Nos. 103 and 104:

Page 35, line 43, at beginning insert ("Subject to subsection (6) below,").

Page 35, line 49, at end insert: ("(6) A public gas transporter shall not be required under subsection (5) above to give any information which he could not be required to give in evidence in civil proceedings before the court; and in this subsection 'the court' means—

1. (a) in relation to England and Wales, the High Court;
2. (b) in relation to Scotland, the Court of Session.").

The noble Earl said: In moving these amendments I should also like to speak to Amendment No. 137. These amendments refine an information gathering power that was inserted rather hastily on Report in another place. I beg to move.

On Question, amendments agreed to.

Earl Ferrers moved Amendment No. 105:

Page 36, line 12, after ("therms") insert ("or kilowatt hours").

The noble Earl said: I spoke to this amendment with Amendment No. 101. I beg to move.

On Question, amendment agreed to.

Lord Inglewood

I beg to move that the House do now resume. I suggest that the Committee stage begin again at 7.50 p.m.

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

House resumed.