Lords Sitting of 18 October 1995

Preamble
The House met at half past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Norwich.

Lord Cuckney
Sir John Graham Cuckney, Knight, having been created Baron Cuckney, of Millbank in the City of Westminster, for life—Was, in his robes, introduced between the Lord Harris of High Cross and the Baroness O'Cathain.

Lord Blyth of Rowington
Sir James Blyth, Knight, having been created Baron Blyth of Rowington, of Rowington in the County of Warwickshire, for life—Was, in his robes, introduced between the Lord Rockley and the Lord Hesketh.
Viscount Midleton Viscount Midleton—Sat first in Parliament after the death of his kinsman.

Citizen's Arrest
2.59 p.m.
Viscount Caldecote Viscount Caldecote asked Her Majesty's Government:
Whether they will clarify, and if necessary amend, the law relating to citizens who take immediate action to apprehend or prevent the escape of a person seen to have committed an offence.
The Lord Advocate (Lord Rodger of Earlsferry): My Lords, the law allows anyone to use reasonable force in effecting a lawful arrest. The principle is clear and simple and the Government have no present plans to ask Parliament to amend the law. Nonetheless, the application of the principle may give rise to difficulties in particular circumstances and my right honourable and learned friend the Attorney-General has accordingly asked the Director of Public Prosecutions to consider how further guidance to the police can best be given.
Viscount Caldecote: My Lords, I thank my noble and learned friend for that very helpful Answer. Perhaps I may suggest to him that when these investigations are being undertaken the Attorney-General should look carefully at the proposals that clearer instructions should be given to the CPS and the police so that they act more sensibly in cases of this kind.
Lord Rodger of Earlsferry: My Lords, my right honourable and learned friend the Attorney-General does indeed have in mind that the charging standards in matters of assault are revised in such a way as to give better guidance to the police so that they may know
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better when to charge and when to refer the matter to the Crown Prosecution Service for advice. That will often be the very best way of dealing with these matters.
Lord Renton: My Lords, is my noble and learned friend aware that in England and Wales—I cannot say what happens in Scotland—before the difference between felonies and misdemeanours was abolished, a citizen who saw a felony being committed had a duty under the common law to arrest the person doing it? To what extent is an obligation of that kind still part of the law, if at all?
Lord Rodger of Earlsferry: My Lords, I would not like to answer that question on an examination of the English law off the top of my head. I know that the position in Scotland is that there i 3 no duty on the citizen to take such a course. However, where people do intervene in this way the law takes a rather robust view of what is reasonable in the circumstances. I am sure that all noble Lords will agree that that is appropriate.
Lord Monson: My Lords, does not the noble and learned Lord agree that the benefit of the doubt in these matters should always be given to the householder, shopkeeper or car owner rather than to the thief and the vandal?
Lord Rodger of Earlsferry: My Lords, as a generality I think that the correct approach is to take the view that a person who is defending his property is likely to be in the right. On the other hand, your Lordships can appreciate that there may he particular circumstances. If, for example, the householder was a drugs dealer and it appeared that the whole incident arose out of his drugs dealing, a rather different attitude might be appropriate. It all depends on the circumstances in such cases.
Lord Gisborough: My Lords, is my noble and learned friend aware that we have reached the absurd situation that criminals doing wrong are simply given probation or other considerate treatment while over and over again those who apprehend criminals are often sued for hurting them? Are we not entering Cloud-cuckoo-land?
Lord Rodger of Earlsferry: My Lords, I have no doubt that there are occasions when slightly odd things occur, but your Lordships will be aware that it is often unwise to rely entirely on what one reads in the press about the facts of any particular case.

Building Industry Prospects
3.3 p.m.
Lord Dean of Beswick Lord Dean of Beswick asked Her Majesty's Government:
What plans they have to improve the prospects of the building industry so that there is an adequate provision of new housing.
The Minister of State, Department of the Environment (Earl Ferrers): My Lords, the policies which Her Majesty's Government are promoting are designed to encourage the stability of the economy. That

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will lead to the provision of new housing both for ownership and for rent, which will benefit the construction industry.
Lord Dean of Beswick: My Lords, is the Minister aware that his own department's latest figures for the three months ending in August of this year show an 8 per cent. cut compared with the corresponding three months of last year, including a substantial reduction in new house starts? Is the noble Earl also aware that Mr. Michael Quirke, the managing director of Costain Construction, is on record as observing only this week that those figures further fuel the view that unless the Government stimulate the building market, the industry will inevitably bleed to "death"? Are the Government going to let that happen or will they do something about it?
Earl Ferrers: My Lords, I am aware of the figures which the noble Lord quotes and I would not dissent from them. There is no doubt that our figures and those of the industry show that the signs of recovery have not yet been fulfilled. The noble Lord says that the Government ought to do something, but the Government cannot wave a wand and suddenly improve the state of a whole industry. The fact is that when a recession hits—and we have been hit by a very bad recession—the construction industry suffers. I remind the noble Lord that the Government subsidise housing by £18,000 million in England, which in real terms is broadly the same as the figure for 1979. I expect that the noble Lord will think that that is not a bad effort.
Lord Rippon of Hexham: My Lords, can the Minister say when the Government hope to allow local authorities to spend the capital receipts which they receive from the sale of council houses on the provision of new low-rented accommodation?
Earl Ferrers: My Lords, it would be imprudent of me to anticipate the Budget in any way whatsoever. I prefer to ask my noble friend to wait until then.
Lord Bruce of Donington: My Lords, is the Minister aware that there is an overriding shortage of housing in the United Kingdom and that much of the property that is occupied at the moment is unfit for human habitation? Therefore, there is a drastic need for an improvement in the housing programme for which the labour and materials are available and the money is in the hands of the local authorities. All that stands in its way is the Government's obstinate following of an ideology that has now become completely obsolete.
Earl Ferrers: My Lords, that is pretty strong stuff, but that is not surprising from the noble Lord, Lord Bruce. The noble Lord is being slightly unfair. The fact is that the public sector is investing in 70,000 extra social lettings in 1995–96—some are new, and some through grants to buy. That is in line with our view of what is needed, and that is what is being done. The most important thing that the Government can do is to keep the economy and prices stable. The fact is that the headline rate of inflation has been below 4 per cent. now for 39 consecutive months, which is longer than at any
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time in the past 50 years. I am sure that even the noble Lord will give the Government at least three cheers for that.
Lord Richard: My Lords, I was surprised to hear the Minister characterise that gentle question from my noble friend Lord Bruce, expressed in his usual moderate way, as "strong stuff'. However, following the point that was made by my noble friend and by the Minister's noble friend the noble Lord, Lord Rippon—we are delighted to see him back in his place—what is the Government's estimate of the amount of money which local authorities now hold as capital receipts?
Earl Ferrers: My Lords, I do not have the figure with me, but I shall find it out and let the noble Lord know.
Lord Ezra: My Lords, does the noble Earl agree that in addition to the need for new housing there is an urgent need for the refurbishment of a large number of houses which are now in disrepair, which would, after all, have the effect of making more suitable housing available? Can the noble Earl indicate whether the Government contemplate stimulating such refurbishment?
Earl Ferrers: My Lords, I said that 70,000 extra social lettings were being made; of those, 52,000 lettings will be created either by new construction or by refurbishment funded by the Housing Corporation and local authorities. A further 17,000 will be made available through cash incentives or do-it-yourself shared ownership. Therefore, although one can always say that there should be more, refurbishment is taking place.
Lord Molloy: My Lords, would the noble Earl be gracious enough to consider another important aspect of this subject? I refer to the fact that, although it may be urgently needed, we cannot have new housing or any other form of building without our building trade operatives and skilled artisans, who, as my noble friend Lord Dean suggested, need security. Without them, we could not have a proper building industry. I feel sure that the noble Earl will take that point into account.
Earl Ferrers: My Lords, I shall certainly take that into account. I quite accept that without an adequate number of skilled people we shall not get done the job which we should get done.
Lord Barnett: My Lords, do the noble Earl's moderate replies to the Question indicate that the Government have ruled out any means of stimulating the housing market?
Earl Ferrers: My Lords, I have tried to explain that we have actually done quite a lot. One comes back to the basic thing that if you want to encourage building then you have to have the economy straight. The noble Lord asks what we are doing about that. I tell him that the average monthly cost of the mortgage has dropped by no less than £130 since October 1990 because of the fiscal policies adopted by Her Majesty' s Government.
Lord Peston: My Lords, perhaps I may declare a financial interest. I currently live in a flat the value of which is less than when I paid for it. It is important to bring such matters to your Lordships' attention. Do I understand that the Government do not accept the view that a fall in interest rates in the very near future would he about the best possible way of stimulating the housing market as it always has in the past?
Earl Ferrers: My Lords, I feel so sorry for the noble Lord, Lord Peston. I am sure everyone else shares my sympathy.
Noble Lords: Oh!
Earl Ferrers: My Lords, would the noble Lord, Lord Richard, not point? It is very unseemly. I was only trying to sympathise with his colleague. If he would rather I did not, of course, I will let him stew in his own juice. The noble Lord asked a pertinent question but I am bound to reply to him in the way I replied to my noble friend Lord Rippon, whom, I agree with the noble Lord, Lord Richard, we are delighted to see back. The noble Lord must wait for the Budget to hear about these desperately important matters.
Lord Avebury: My Lords, will the Minister consider suggesting to the Government a change in the planning laws to make it easier for people to convert office blocks, of which there are tens, of thousands empty all around the country, into dwellings?
Earl Ferrers: My Lords, I am certainly prepared to consider that, but I am bound to say that I am not sure what the position over that is at the moment. I shall certainly look into it.
Baroness Farrington of Ribbleton: My Lords, does the Minister agree that there is a terrible waste of public expenditure with thousands of people qualified to work in the building industry being a drain on public expenditure because of the high cost of keeping them unemployed, and that, if the Government were to look logically and with financial prudence at the way they are spending public money, putting the building materials and those people unemployed together with the housing needs and the capital receipts would make sound economic and social sense?
Earl Ferrers: My Lords, we need to do everything we can to ensure that the housing and construction industries succeed. We would have a worse position if we had a minimum wage.
Lord Stoddart of Swindon: My Lords, may I ask the noble Earl two questions? First, are the Government seriously considering abolishing or lowering stamp duty on housing transactions? Secondly, have the Government any influence with the building societies to persuade them not to spread doom and gloom every month by announcing, sometimes with conflicting figures, that negative equity is increasing, people are in danger of being thrown out of their houses, and that house prices are falling?
Earl Ferrers: My Lords, I was just jotting down a fascinating answer to the noble Lord's second question. He will have to wait until the Budget for an answer to
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his question about stamp duty. I could not pre-empt that. He asked also whether the Government had any influence over the building societies to stop them spreading doom and gloom. All I can say is that we have a great deal of influence over a great many people but we do not seem to have too much over the party opposite. If it stopped spreading doom and gloom, we should get on very much better.

Professor Rotblat: Nobel Peace Prize
3.15 p.m.
Lord Jenkins of Putney Lord Jenkins of Putney asked Her Majesty's Government:
Whether they will carry out proposals A, B, C and D, under the heading "Towards a Nuclear Weapon Free World" on pages 62 and 63 of the Pugwash Report entitled Does Britain Need Nuclear Weapons as a mark of esteem towards Professor Rotblat and his colleagues on their award of the Nobel Peace Prize.
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, we congratulate Professor Rotblat on his award. We do not believe that his proposals represent a realistic approach to nuclear arms control. We do not consider that his project for nuclear disarmament would be consistent with our national security requirements, or those of NATO.
Lord Jenkins of Putney: My Lords, is the Minister aware that she has just thrown away the chance of winning the next general election? Is she further aware that there is now, for the first time, internationally and nationally a real tide towards nuclear disarmament? That is particularly taking place in the South Pacific, and one can now pick out pretty easily the countries which are pro nuclear weapons. This country is one of that decreasing number. I am therefore, in a way, not too sorry, but I wish only that the Front Bench in another place of the party I represent were a little more eager to seize the opportunity which is before it, and I hope that it will take it.
Baroness Chalker of Wallasey: My Lords, I see that the noble Lord is another gloom and doom merchant today. If I were to agree with him, or, indeed, with Professor Rotblat, who is an eminent scientist, and who has contributed a great deal to our understanding of nuclear physics, I should not merely be in disagreement with my own Front Bench but with the noble Lord's Front Bench. I noticed two weeks ago that Dr. John Reid, an Opposition defence spokesman in another place, said that calls to scrap Trident, something for which the noble Lord has called, were "pious slogans". He went on to say on an anti-Trident Motion that it was pretty useless,
"because it is one-sided disarmament and by definition it places us outside world moves towards de-escalation".
This Government are working for nuclear disarmament and a comprehensive test ban treaty. We are playing a major role in that. Following the noble Lord's advice, he will be in conflict with his own Front Bench and he will certainly be going against common sense.
Lord Beloff: My Lords, does my noble friend agree that the Pugwash conferences were methods by which Soviet propaganda against our nuclear deterrent was disseminated? They never at any time suggested the reduction or abolition of nuclear weapons by the Soviet Union itself. The idea that they should share a peace prize is one of the oddest things that has happened during a very odd period of politics.
Baroness Chalker of Wallasey: My Lords, I cannot but agree with my noble friend. What has been extremely interesting is that, while we have been working away for the comprehensive test ban treaty, others seem not to have been working in the same direction. We are already reducing the number of our deterrents to take into account new minimum security requirements. It is important that we set priorities for reductions which reflect the levels of arms that we and others hold. But I have to say, in agreement with my noble friend, that we shall be realistic and we shall work for a comprehensive test ban treaty. Frankly, I cannot see that following the ideas of the Pugwash conference will advance that, but our work certainly will.
Lord Mayhew: My Lords, was not the Minister perhaps going a little far in joining in the vigorous condemnation of the Pugwash organisation by the noble Lord, Lord Beloff? Does she agree that, on balance, unlike the campaign for nuclear disarmament, the Pugwash organisation probably made a positive contribution during the Cold War? What progress have we made towards agreement on a text?
Baroness Chalker of Wallasey: My Lords, I thought that I had made it clear in the answer to the first supplementary question that we recognise that Professor Rotblat has been a distinguished scientist with a long record of applying science to public affairs. While we share the goal of nuclear disarmament, for which he has fought, we cannot agree with the means that he proposes or with the time-scale that his arguments imply. If I am critical of the Pugwash conferences that have been taking place since 1957 it is perhaps because they do not seem to have made much progress in that time as they have not been based on a realistic assessment of the situation. That is why I am not critical of Professor Rotblat, as I said previously. We want nuclear disarmament which is sustainable and to make it sustainable we must have all the countries involved in a meaningful way.
Lord Campbell of Alloway: My Lords, will the test ban treaty which the Government propose to support have in it effective and enforceable verification provisions? If not, will the Government ascribe to it?
Baroness Chalker of Wallasey: My Lords, we have always said that a comprehensive test ban treaty must be enforceable; that means that it must be able to be monitored. I agree wholeheartedly, with my noble friend.
Lord Monkswell: My Lords, the House will have been interested to hear the Minister's supplementary answer in which she mentioned that the Government were working towards comprehensive nuclear disarmament and not one-sided nuclear disarmament. Perhaps I may press the Minister a little further on that
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point. During last week's Conservative Party Conference the Secretary of State for Defence appeared to suggest in his speech that the Conservative Government, with him as Minister of Defence, would hang on to nuclear weapons forever. May we have clarification of the Government's policy in that regard?
Baroness Chalker of Wallasey: My Lords, not for the first time, the best answer that I can give to the noble Lord is to go back and read the speech again.
Lord Jenkins of Putney: My Lords, I must be allowed to correct a couple of mistakes that have been made—
Noble Lords: Question!
Earl Ferrers: My Lords, perhaps the noble Lord will be kind enough to resume his seat. If he could be sufficiently ingenious to state his facts by way of a question that would be acceptable.
Lord Jenkins of Putney: My Lords, I shall study the noble Earl's reply.

Cheesemaking: EC Regulations
3.23 p.m.
Lord Peyton of Yeovil Lord Peyton of Yeovil asked Her Majesty's Government:
Whether they will ascertain the views of the French Government as to the reasonableness of European Community regulations governing farmhouse cheeses, and whether it is their intention strictly to enforce them or seek their amendment.
Lord Lucas: My Lords, derogations from the EC milk hygiene directive for traditional dairy products, including farmhouse cheeses, are currently under discussion in Brussels. We will seek to establish the views of the French authorities in the course of those discussions. In the meantime, makers of traditional dairy products may follow their present practices.
Lord Peyton of Yeovil: My Lords, I thank my noble friend for that Answer, which was very welcome. Will he consider the plight of Mr. Errington, a Lanarkshire farmer who has had his product confiscated and condemned and who has been put to huge expense in defending his livelihood—and all that because of a supposition that bacteria which are probably present in most, if not all, farmhouse cheeses might some day, although they have not yet, cause someone a problem? Does my noble friend agree that the action of the environmental health authority amounts to overzealous bullying?
Lord Lucas: My Lords, I do not wish to comment on this ongoing case. The regulations under which Mr. Errington has been brought to book, or taken to task, have been in existence for a long time. They are the old environmental health regulations. Current instructions to environmental health officers emphasise the need to act at all times making common sense a priority, taking

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action only as is necessary to safeguard public health and not paying undue regard to the minutiae of the regulations.
Lord Carter: My Lords, does the Minister agree with the statement of the British cheese producer quoted in the Guardian in April who said:
"I have just returned from Normandy and the range of cheeses was fantastic. I wager they have never been analysed in their lives—heaven help the French cheese industry if the Clydeside Environmental Health Department were ever let loose!"?
Lord Lucas: My Lords, I doubt that the Clydeside Environmental Health Department would ever be inflicted on the French since they are unlikely to have a Labour Government. Of course French cheeses are tested; the French indulge in an extensive range of testing for listeria. It is a matter of great concern to them and their cheese producers. I assure the noble Lord that the French are taking the listeria problem every bit as seriously as we are.
Lord Hooson: My Lords, would it not be a good idea if the Government were to consult the French Government and take their advice on setting up an administrative court for Europe whereby such regulations could be challenged? If the French model were followed, the court would be allowed to look at whether the regulations were properly advised on and also at their merits. In France' if the court believes a regulation to be unreasonable it can quash it. Would it not be sensible to have a similar court available for Europe?
Lord Lucas: My Lords, what a fascinating idea. I shall draw it to the attention of my colleagues.
Lord Peston: My Lords, will the Minister confirm that this matter is not to do with the European Community but with our own regulations? Secondly, will he be good enough to ask his noble friend Lord Peyton whether Mr. Errington could get in touch with me in my role as chairman of your Lordships' Refreshment Department because ever since I heard of the case I have been keen that some of the cheese should be available to your Lordships? I do not believe that our lives would be placed at risk and it would be a good supportive gesture if people of our age showed how good the cheese is and how safe it is to eat.
Lord Lucas: My Lords, I entirely agree with the noble Lord. In fact, I ate some Lanark Blue today.
The Countess of Mar: My Lords, in order to put the matter into some kind of proportion, will the Minister give the annual average mortality and morbidity rates from listeria in cheese during the past five years?
Lord Lucas: My Lords, I do not have the exact figures. They are not high but they are a great deal higher in France.
Lord Ewing of Kirkford: My Lords, for the sake of the accuracy of the record, may I be permitted to advise the Minister that in Clydeside we build ships—and we can do with more orders from the Government? The cheese is made in Clydesdale and not in Clydeside.
Lord Lucas: My Lords, I stand educated. I had always thought that Clydesdale was a type of horse.
Lord Pearson of Rannoch: My Lords, is my noble friend aware that the sheriff at the ruinous hearing through which the Clydesdale hygiene police are dragging the hapless Mr. Errington said only last Friday that he thought they were guilty of harassment in the way in which they are conducting the procedure? Does my noble friend accept that there is some doubt as to his assurance whether Mr. Errington's problems come from the United Kingdom requirements as opposed to the latest EC directive on the subject which deals specifically with the matter of listeria? Could he finally comment on the assurance given to your Lordships' House on 23rd February this year by my noble friend Lord Howe, who said:
"The Government are confident that British cheesemakers, irrespective of size, will not be adversely affected by the new rules"?—[Official Report, 23/2/95; col. 1247.]
How can that be so?
Lord Lucas: My Lords, to deal with the last matter first, it will be so because we shall ensure that it will be so. The French are just as concerned that their French cheesemakers should be looked after as are the Dutch. A sensible conclusion will be reached to the negotiations currently under way in Brussels.
As regards the earlier matter, I can confirm that the new EC regulations do not currently apply to any of the specialist cheesemakers in the UK. We have a derogation for them until the current negotiations in Brussels are concluded.

Gas Bill
3.30 p.m.
Report received.
Clause 1 [General duties under 1986 Act]:
The Earl of Cranbrook The Earl of Cranbrook moved Amendment No. 1:
Page 1, line 21, at end insert—
("(d) to contribute to the objectives of sustainable development").
The noble Earl said: My Lords, there has been an exceptionally long time between the Committee and Report stages of the Bill. That has given us a long interval for reflection. It has not been an eventless time. Among the material events which I wish to bring to your Lordships' consideration are the publication of the report by the, Select Committee on Sustainable Development of this House and the commendably prompt reply to that report by the Government which was published last week. By what I say today, I do not wish in any way to pre-empt the debate on that report, which is to take place next week on 26th October.
Perhaps I may refer your Lordships to the remarks I made in Committee, to be found in Hansard at cols. 346 and 347 on 22nd June, which, in order to be as brief as possible, I do not intend to repeat. I was concerned on that occasion and on other occasions, that some noble Lords were still uncertain about the meaning of the term "sustainable development". The original core definition

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sprang from the World Commission on Environment and Development whose report was published in 1987. In that, sustainable development was defined as:
"Development that meets the needs of the present without compromising the ability of future generations to meet their own needs".
It may be that we need an up-dated version. Yesterday I attended a conference at which I heard an official repeat the Government's up-dated refinement of that concept. That is important in terms of our considerations today. It is the hottest off-the-press that I can possibly get hold of since, as I say, I heard it yesterday. The objectives of sustainable development were defined as:
"To achieve economic development to secure higher standards of living now, and for future generations; to protect and enhance the environment now, and for future generations".
I should be most grateful to my noble and learned friend on the Front Bench if he will confirm that this is a current government definition to which we can work and which is well understood across the whole of government.
I hope also that, in the course of his reply, my noble and learned friend will confirm the Government's undoubted commitment to sustainable development. My own view is that it is a very explicit and strong commitment.
Perhaps I may outline briefly the grounds for that. First, I should mention the international commitments that have been entered into on behalf of the nation. Your Lordships will all be aware of the United Nations Conference on Environment and Development at Rio in 1992 where the Prime Minister committed our nation to Agenda 21, the global process for implementing sustainable development. On the same occasion, again on behalf of the United Kingdom, the Prime Minister also signed the Framework Convention on Climate Change. Both of those are extremely important in relation to this afternoon's consideration of the Gas Bill.
Secondly, within the European Union there is legislation and commitment to which the United Kingdom adheres. The famous European Union treaty of 1993, commonly called the Maastricht Treaty, includes among the objectives of the Union:
"to promote economic and social progress which is balanced and sustainable".
That same treaty also amended Article 2 of the Treaty of Rome to redefine its objectives as:
"sustainable and non-inflationary growth respecting the environment".
That is what we are talking about in terms of sustainable development.
The Government have adhered also to the Fifth Action Programme of the Community which is entitled Towards Sustainability. That was approved by a resolution of the Council, at which, of course, the United Kingdom was represented, in February 1993.
Thirdly, on the domestic front, the national commitment to sustainable development was reaffirmed in the 1994 White Paper, Cm No. 2426 and the United Kingdom programme on climate change, commonly called CCP, was described in Cm No. 2427, both of
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which appeared in January 1994. Again, the Prime Minister indicated his firm support in an introductory foreword to each of those documents.
That is where I see the Government standing. I hope that my noble and learned friend will confirm that there is resolute determination to work towards the objective of sustainable development, which is shared right across the country and across all parties.
I mentioned events that were important which have occurred between Committee and Report stages of the Bill. I should refer your Lordships to the origins of my own anxiety about these matters which I outlined in Committee. At that time, I told the Committee that I had gained perceptions on those issues as chairman of a small working group of the Round Table on Sustainable Development. There was a further meeting of the Round Table on 25th September. The minutes are public documents and are available publicly from the Secretariat in the Department of the Environment. Paragraphs 22 and 24 of that meeting are relevant and will indicate to your Lordships the strong support given by the Round Table and its two co-chairmen, one of whom is Mr. John Gummer, the Secretary of State for the Environment, the other being Professor Sir Richard Southwood.
Among other important events that have occurred between Committee and Report stages, I referred your Lordships to the publication of the report by your Lordships' Select Committee on Sustainable Development. In particular, I draw attention to paragraph 4.62 which contains the comment in emboldened type:
"Privatisation has put in place a different legal and institutional framework which, together with aspects of the Government's thinking, requires a new approach to the implementation of at least a part of the Climate Change Programme. The decision to hand considerable discretionary powers to the utility regulators, without previously clarifying their role in relation to national environmental policy, is an issue that needs to be addressed".
That issue has been addressed very briefly but inadequately in the Government's reply, since it takes the Electricity Act as a model. Surely we should look forward beyond a past event. We should look at where we stand now on the issue of sustainability. Secondly, the Government's reply refers to the requirement for the regulator to take account of the "physical environment". In Committee, we deleted the word "physical" on a proposal from my noble and learned friend's predecessor on the Front Bench.
Paragraphs 4.60 to 4.66 are important in the Select Committee's report. They touched on the Government's Climate Change Programme and mentioned that that is:
"arguably the most advanced and articulate part of the Government's sustainable development strategy, the principal measures of which were designed to accelerate the rate of investment in improved energy efficiency".
I now comment on the amendments. It is clear from what I said that the objectives of sustainable development have a strong economic and social content. Therefore, they are directly relevant to the role of the director as already defined in the Bill. In respect of a non-renewable resource such as gas the objectives of sustainable development are not to prevent its use but to promote its wise use and probably to extend its

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availability across generations, if possible, so that efficiency in use must be a most important element among those objectives.
As it was the conclusion of the working group to the Round Table to which I referred, including those most closely involved—that is to say, the generators and distributors of energy, including gas on that occasion, who had joined the group for the day—that market forces would not of themselves promote efficiency, it is clear that some intervention by someone will be needed. It seems to me perfectly clear in the context of the Bill, and in the context of the regime that has been established, that that person is the regulator and that that duty falls on the regulator.
If it is my noble and learned friend's opinion that the duty towards the environment which is already in the Bill clearly implies a duty to promote efficiency in the use of gas and that that duty clearly falls on the regulator, I hope that he will say so. I believe that could go some way towards resolving the issue. It is important that such things should be said because we know that what is said on these occasions is increasingly referred to in future circumstances.
I now refer to my amendments specifically. I have given considerable thought to the words that I have used in the amendments. I believe that I have achieved a much more realistic and acceptable form of words which I hope that my noble and learned friend will find is entirely in accordance with his own thinking. First, the amendments would require the director to contribute towards sustainability, rather than being in any way bound to secure its achievement, which is clearly something beyond the director's means. Secondly, rather than attempt to find a definition of "sustainable development" to write directly into the Bill, I learnt a great deal by listening to, participating in and reading what occurred during the debate on what is now the environment Act. Therefore, I have put in a form of words which follows the same line as that taken within that Act; that is to say, in exercising the duty to contribute towards sustainability, the director will follow guidance provided by the Secretary of State and will not of course himself attempt to define that duty.
I suppose that the amendment that I am moving formally is Amendment No. 1. I link it with Amendments Nos. 2, 5 and 10. I do not link it with Amendment No. 4 because that was my attempt to be a grammarian and I believe that it is grammatically unnecessary. It refers to a word "and" which could perfectly well stay in place unperturbed by anything that might happen this afternoon. I do not intend to move Amendment No. 4 as I believe it to be superfluous.
Clearly I have tabled almost exactly the same amendments in two possible positions. Again, I would be most grateful for comment from my noble and learned friend on the Front Bench. I consider that this is a primary duty which should appear in the position in which I have placed it in Amendment No. 1, but it is possible that it can or should be placed further on in the Bill as a subsidiary duty, as in Amendment No. 5. I beg to move.
Lord Skelmersdale: My Lords, even if I were not an adviser to British Gas I would be torn by the amendments. On the one hand, as my noble friend Lord Cranbrook said, sustainable development is an important objective and one which we should all support. However, the question is: who should actually do it on any particular occasion? Is it really, as the amendments suggest, a matter for the gas regulator? A regulator's primary duties under the Bill are to ensure that people get gas, to promote competition and to ensure financial viability of the companies supplying and transporting it. I suggest that a duty to promote sustainable development sits very uneasily with these. Much of the contribution that I made in earlier debates on the Bill centred around regulatory discretion. I believe that there is quite simply too much and that the Bill has extended those powers still further.
In my view, the regulatory structure cannot support such a wide-ranging power to determine possible policy issues. That is surely a matter for the Government. Indeed, my noble friend highlighted what governments both here and overseas are doing in that respect. Such a power would inevitably add to the uncertainty that already exists in the energy market.
It is not beyond the wit of man to imagine a situation where a company has invested to enter the market and the market is then changed by a regulatory decision in the name of a personal interpretation of sustainable development. There would be little chance to appeal, even if the reasoning behind the situation were known. That cannot be right. However, I see that we shall be discussing that matter in relation to a later amendment. What is even more perplexing is that that duty would apply to the gas industry and not to other fuels. It could lead to restrictions on gas but leave competing fuels such as oil, which is even more polluting—in fact considerably more polluting—untouched.
I support other amendments that the Government have brought forward to widen the environmental scope of the Bill. However, this proposal would be going a little too far especially—and I give my answer to my noble friend's question—in view of Clause 1(2)(b) where it is quite clear that the Secretary of State and the director shall have a duty:
"to promote efficiency and economy on the part of persons authorised … to carry on any activities, and the efficient use of gas conveyed through pipes".
I believe that that was one of the things that my noble friend requested. I hope that my noble and learned friend the Minister will, first, confirm what I have said; secondly, agree with me; and, finally, say what else the Government intend as a matter of policy in terms of the efficient use of gas.
3.45 p.m.
Viscount Caldecote: My Lords, I should like to support the amendment moved by my noble kinsman. I have no doubt—indeed, I am sure that we all agree—that we have a most important responsibility to future generations to maintain the environment and sustainable development. My noble kinsman made a very strong

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case for the amendment both to honour our international agreements and to look after the benefits of future generations in this country.
I believe that there is a very real danger—perhaps this was emphasised and brought out by my noble friend Lord Skelmersdale—that privatisation, successful as it has been, produces intense pressure for cost cutting and short-term profit-making in an increasingly competitive scene. That occurs sometimes at the expense of sustainable development and the environment. I therefore strongly support the amendment.
Lord Peston: My Lords, before dealing with the substantial amendment, I thought that it might be useful if I were to say a word or two about interests. Your Lordships may wish to know that I am not a paid consultant of British Gas and, indeed, have never been a paid consultant of British Gas. Therefore, I do not and did not have anything to declare. However, I was, but am no longer, a non-executive director of a firm of which British Gas was a client, although I did not advise that company.
On 29th March 1994 (at col. 1062 of Hansard) I intervened to make some remarks on the Government's then forthcoming plans for extending competition; indeed, the matter that we are debating today. Last week I was asked by a journalist whether I ought to have mentioned at that time in 1994 an indirect relationship with British Gas. My reply, off the cuff, was "Maybe". Having now looked at what I actually said at the time, I believe that my answer should have been simply, "No, I had nothing to declare". Without wishing to appear holier than thou, I am confident that, like all noble Lords, I acted ethically, and I shall continue to do so.
I turn now to the amendment. I am in some difficulty in that respect because I am totally in agreement with the noble Earl about the importance of sustainable development. However, I am also in agreement with the view of the noble Viscount, Lord Caldecote, that there is always a danger that the pressures of competitive business enterprise cause one to neglect some of those matters. It is important that we bear that in mind. My problem is the following. Perhaps in due course I will express it interrogatively. Although we support these objectives, is this a Bill in which we ought to start on this, so to speak? Is there anything special about gas that requires us to say, "This is where we put it into legislation"? I suppose that the answer to that is that this is the only Bill we have before us. If we want to include this measure somewhere, for the moment this is where we have to put it. I suppose that the noble Earl, Lord Cranbrook, could say that this is a fairly innocuous amendment anyway.
I am torn on this matter. If the Minister were to say "Yes" to his noble friend, I would not then want to say "No". However, my position is that I would rather see all of this incorporated in a more general form of legislation than start to deal with different bits of legislation. I find it hard to be what I would regard as sensible but supportive. I am not 100 per cent. persuaded that this is the best place for the measure but equally, wearing my economist's hat, I am not against it. I am trying to have it both ways as usual.
Lord Ezra: My Lords, I wish to support the amendments spoken to by the noble Earl, as indeed I did in Committee. He has raised an important issue and we should seize every opportunity of emphasising it. The noble Lord, Lord Peston, has raised a perfectly valid question. Are we right to introduce this provision in specific items of legislation rather than more generally? I do not know whether in the near future we will have any vehicle for a more general treatment of the subject. I therefore feel strongly that we should seize the present opportunity rather than wait for some uncertain future opportunity.
Furthermore, I was much impressed with what the noble Earl had to say about the need to conserve and to use as efficiently as possible valuable natural resources, and gas is certainly one of those. I also agreed with the noble Viscount, Lord Caldecote, when he said that, while we are all generally in favour of competition, not least from these Benches, nonetheless the sudden change from a monopoly situation, in which a tradition of caring for the consumer has been inherent in the way in which gas has been supplied, to a competitive situation could well lead to cutting corners and seeking to increase margins, perhaps in conflict with these wider social considerations. Therefore I think that in a Bill of this sort affecting such a basic issue it is perfectly proper that the reference to sustainable development should be introduced in the way in which the noble Earl has suggested.
Lord Bruce of Donington: My Lords, I have no particular technical interest in this Bill except that, it being a Bill and ultimately becoming an Act, it will be the responsibility of the Secretary of State to be accountable to Parliament for its conduct. Your Lordships will be aware that, within a different context altogether, there has been some discussion recently in another place as to the responsibility of a Secretary of State for policy on the one hand or for operations on the other. I would like to be clear in my own mind, because it is not clear from the Bill, who will be responsible to Parliament for the proper carrying out of the provisions of the Bill. Clause 1 of the Bill before your Lordships states,
"The Secretary of State and the Director shall each have a duty to exercise the functions assigned to him by or under this Part in the manner which he considers is best calculated".
I have searched through the Bill and I cannot find the delineation of duties in any particular regard specifically directed towards the Secretary of State on the one hand or the director on the other. Amendment No. 2 that has been so ably spoken to by the noble Earl, Lord Cranbrook, mixes up the two. Amendment No. 2 states,
"In so far as subsection (1)(d) above affects the Director, in performing … he shall have regard to guidance from the Secretary of State".
What happens if the Secretary of State gives the wrong guidance to the director? How will the delineation of responsibility be established between them? These are not extreme matters involving the rather graver matters implicit in the Prison Service, but they are matters of some significance. I would like to know just how we are going to delineate specifically the responsibilities of the Secretary of State for which he can be called to

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account by Parliament and those for which he is not responsible. I must apologise for having introduced this question of principle, but perhaps it might be convenient for the noble and learned Lord to clarify it at this time.
Lord Cochrane of Cults: My Lords, I am sorry to disagree with the noble Earl but he went through a large number of possible definitions of sustainable development, each one of which confused me more, and I dare say other noble Lords. The only point where I felt he touched upon a true grain of fact was when he said—if I heard him correctly—that no development is in the ultimate sustainable. I believe, if I can remember back to school certificate days, that used to be called entropy; that is, that energy went permanently down hill. Gas, inherently, is an extractive industry. We cannot sustain development in gas indefinitely; we can prolong it only by wise use, as other noble Lords have said. By using it wisely we will make the position better for our grandchildren and our grandchildren's grandchildren but eventually the day will come when there is no gas. There is no possibility of any fermentation process—which, as far as I can make out, is the only alternative source of gas—achieving what would be necessary. Therefore the noble Earl has put forward an idea that is worthy but which is incapable of definition and does not, as other noble Lords have said, sit happily in the Bill. For that reason I must tell my noble friend that, although I admire his objective, it is, alas, not achievable.
The Minister of State, Department of Trade and Industry (Lord Fraser of Carmyllie): My Lords, I begin by commenting on what the noble Lord, Lord Peston, had to say. No doubt your Lordships' House is grateful to him for his observations but in my personal opinion that was quite unnecessary. I do not believe any of us thought he had acted with any impropriety in the smallest degree. I am grateful to my noble friend Lord Cranbrook for taking the trouble to keep me informed of the development of his thinking over the summer on this important question. I certainly recognise the concepts used by him in describing sustainable development. However, it is one which seems to me to be broad and he will recall that in his preface to the White Paper the Prime Minister commented that,
"sustainable development is difficult to define. But the goal of sustainable development can guide future policy".
I clearly agree with that. That is a policy which is followed across government. We must build environmental concerns into all our policy in the same way as we must take account of costs in the pursuit of environmental objectives. The ideas of sustainable development can indeed be an important guide to the Government in forming their policy.
As regards the way in which the Bill is structured, we have given weight to the principles of sustainable development in framing our proposals. In particular we have maintained the director's duties in respect of the efficient use of gas and provided new duties in respect of the environment. As my noble friend Lord Skelmersdale pointed out, those are to be found in what will be new Section 4(2)(b). We have placed a licence obligation upon all suppliers to provide energy efficiency advice and, perhaps more importantly, we
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have structured the regulatory regime in a way which will allow the forces of the market to be harnessed in the cause of energy efficiency. All of those measures will contribute towards achieving the aims of sustainable development.
However, in trying to extend the principles of sustainable development to being a statutory duty of the director the matter is more difficult. The difficulties arise because of the very broad nature of the director's powers and the very wide-ranging meaning which the phrase "sustainable development" might have. In short, we appear to be stuck upon the horns of an unresolvable dilemma. If the regulator were allowed to put his own interpretation on "sustainable development" it would create, in our view, an unacceptable risk that he could use the phrase to pursue a wide range of political and social objectives. That could create problems of accountability and could also lead to uncertainty in the industry.
Agenda 21, which will be familiar to those who followed the debate on sustainable development, was adopted at the Rio Summit and contains a full discussion of sustainable development. It runs to no fewer than 470 pages, and if the director were in effect authorised to pick and choose from a document of that size it is not difficult to see what difficulties might emerge.
There is a further problem. My noble friend Lord Cranbrook has suggested that we might define sustainable development by reference to guidance from Ministers. As he pointed out, that is the approach used in the case of the Environment Agency. However, that approach would unacceptably cut across the independence of the regulator in this context. The whole purpose of the regulatory regime which has been set up for the privatised industries is that political interference by Ministers should be prevented by appointing independent regulators with clearly defined statutory duties. To include that broad set of highly desirable goals seems to us to introduce an unacceptable degree of obscurity, important as they are.
To allow those duties in effect to be varied by Ministers would run contrary to the principle that we have been trying to establish; namely, that the regulator should be independent and should not be subjected on a day-by-day basis to interference by Ministers. While the noble Lord, Lord Bruce of Donington, may not entirely agree with me, it is our conclusion that it was the constant political interference with industries which was one of the principal difficulties which arose in the old days of nationalisation. It is our view that a duty in relation to sustainable development defined by Ministers would upset the integrity of the regulatory system.
I hope that my noble friend will appreciate why we continue to have anxieties about introducing this duty in this particular context. However, I hope that I have reassured him that his commitment to the concept of sustainable development is widely shared. The Government certainly support it and we believe, as he does, that it is a concept that should inform policy on a far wider basis than simply the matter that is covered by the Bill. On that basis, I invite my noble friend to withdraw his amendment, although I appreciate that he may wish to reflect on what I have said.
4 p.m.
The Earl of Cranbrook: My Lords, before I comment on my noble and learned friend's remarks, I should like to refute absolutely the suggestion of my noble friend Lord Skelmersdale, which was put rather more tentatively by the noble Lord, Lord Peston, that we should hesitate to legislate to make things better and to move forward. Where on earth would we be if we took that line on everything? The opportunity for legislative initiative would disappear altogether. I refute the suggestion. The fact that consideration of the objectives of sustainable development was not among the duties given to the regulators of water or electricity is totally irrelevant. The debate has moved forward. As I explained, we are in a new arena and in a new time frame. I believe that we have to look forward.
I am reassured by my noble and learned friend's comment that the duty to promote efficiency is firmly placed upon the regulator.
The political issue is twofold. First, my interest in the matter arose from the clear statement that market forces would not of themselves produce tendencies towards efficiency and that those two considerations are totally separate. The second political issue is that, in a nationalised industry, policies of this nature can be promulgated through the administrative system. Once industries have been denationalised, government policy has to be imposed through the regulator. I recognise that one man's national policy guidance is another man's political interference. However, we are left with the dilemma that once an industry is privatised and is thereby freed from the shackles of perpetual government interference, there has to be regulation in order to bring considerations of national policy to bear. Those were the two key anxieties that prompted me to bring the matter forward.
My noble and learned friend will recognise that it is not fair to say that, under the amendments that I propose, the regulator would be free to put forward his own interpretation and to pick and choose. I believe that the model provided by the Environment Agency is the right model because it allows the infiltration of national policy guidance in the way I outlined.
I shall take the opportunity to think again. I am grateful to all Members of the House who contributed to this short debate. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Ezra Lord Ezra moved Amendment No. 3:
Page 1, line 26, leave out paragraph (a).
The noble Lord said: My Lords, in moving Amendment No. 3, I shall speak also to Amendment No. 8, which is in the name of the noble Lord, Lord Clinton-Davis, and myself.
The purpose of the amendments is to ensure that in performing the general duties laid down in the Bill the Secretary of State and the director shall have an obligation to exercise those functions in a manner which they consider best calculated to protect the interests of consumers of gas. Particular reference is made to those who are disabled or of pensionable age.
At the Committee stage on 22nd June I moved a differently worded amendment to emphasise the importance of protecting the interests of consumers of gas. That was opposed by the noble Earl, Lord Ferrers, who spoke on behalf of the Government, and voted against in a Division.
Amendment No. 8 is of a different order. It lays down that the Secretary of State and the director shall consider the interests of consumers in performing their other functions. I very much hope that in this revised form the Government will be able to accept the amendment. I should have thought that the Government would have little difficulty in doing so. During previous debates on the Bill both the Secretary of State in another place and the noble Earl, Lord Ferrers, in this House stressed the importance of protecting consumers' interests. Indeed the Bill does so, in many ways, particularly in regard to those who are disabled, of pensionable age or have difficulty in paying. The intention seems to be that the long-established procedures of British Gas in those regards should be continued under the new market arrangements. The amendments that I propose are consistent with those clear intentions.
The wording in the Bill as it now stands in Clause I is very similar to the wording in Section 4 of the Gas Act 1986. However, the context is entirely different. Then British Gas was the sole public gas supplier. It was widely assumed that the procedures then in operation would continue. In regard to the domestic market of 18 million households the emphasis right up to the present has been on social obligation, customer service, safety and security of supply and a special concern for those who are disadvantaged. With the opening up of the domestic market, which is the purpose of the present Bill, the old values are likely to be replaced by the new values of competitiveness, profitability, shareholder value and growth. These are likely to become relatively more important, as indeed the noble Viscount, Lord Caldecote, mentioned in connection with the previous amendments.
That would be all right if we were talking about an ordinary commodity for which you could shop around in the supermarket. But this is no ordinary commodity. It is the primary source of domestic heating for the vast majority of households in this country. There is no knowing how competitiveness within the gas sector will work out so far as concerns individual households, so special safeguards are required.
At Standing Committee in another place the Minister, on being questioned about why safeguarding the consumers' interests was not regarded as a primary duty, said:
"If the primary duty"—
of supply—

"did not exist, the secondary duty—
of safeguarding consumers' interests—
"could not be delivered. Assuming that the primary duty exists and that therefore the secondary duty is being delivered, the regulator would have to weigh them up. She would have no reason to give higher priority to the primary rather than the secondary duty".
I find that somewhat complex reasoning. If, according to the Minister, there is no reason to give higher priority to the primary rather than the secondary duty, it is totally unclear why the distinction should be made in the wording of the Bill.
There are broader reasons for giving a higher priority to consumer safeguards than are given in the Bill. There is a growing suspicion of the privatised utilities. There has, in the view of the public, been too much of a swing away from consumers and towards other stakeholders, in particular shareholders. There is a growing feeling of uncertainty and resentment. I believe it is necessary to recognise that the public need some reassurance. This amendment would go some way to providing that reassurance and is consistent, as I have already indicated, with other provisions made in the Bill to safeguard particular aspects of consumers' interests. There is undoubtedly the fear that the development of competition could be accompanied—I do not say that it will be—by a lowering of standards. It must surely be a prime objective of this legislation to make sure that that does not occur. Requiring the Secretary of State and the director to consider how the interests of consumers of gas can best be protected under the new arrangements seems to be an important step in that direction. I beg to move.
Lord Clinton-Davis: My Lords, I support the amendment ably moved by the noble Lord. He has put forward a number of extremely salient points which cannot be divorced from the general expressions of concern—indeed, resentment—about certain actions affecting public utilities which have been expressed in recent months. Those expressions make it encumbent on the Government to address the issues that are set out in these two amendments.
The Government got themselves into an awful mess when referring to primary and secondary obligations when the matter was in another place. It is all very well to say, as the Government do, that this obligation towards consumers' interests is implicit. Unfortunately, they might have got away with that had it not been for the interventions of the Minister with responsibility in this area, Mr. Eggar. Unquestionably, he referred to this categorisation of interests: that primary interest was not that of the consumers; secondary obligations were the consumer interests.
How does one square talk of primary and secondary interests with the assertion made more or less at the same time that those are duties which can run alongside each other? That is what the noble Lord, Lord Ezra, seeks to recognise. However, because the matter was allowed to be confused by the Minister elsewhere, we now have to ensure that the public are not confused about it. I should have thought that the drafting before the House is consistent with what the Government have expressed, albeit in confusing terms as their purposes, their objectives.
I believe that what was said by my noble friend Lord Peston when we debated these matters in Committee is right: the consumer must be seen to come first. I hope that when the Minister replies to the debate he will recognise that that is not an unworthy objective. It is one which the Government should have no difficulty in
760
accepting in principle. I find it incomprehensible that the matter was not addressed at a much earlier stage in the Bill.
However, I look forward to the Minister saying that this is an amendment which the Government are now able to accept both in principle and intent. The wording may be slightly wrong, but what we want to hear from the Minister is an acceptance in principle of what we state: that there is a need, because of the circumstances to which the noble Lord, Lord Ezra, and I have alluded, for ensuring that the confusion that has arisen is cleared up—and cleared up along the lines of the amendment.
4.15 p.m.
Lord Fraser of Carmyllie: My Lords, the noble Lord, Lord Ezra, has made much of the interests of the consumer being of the highest importance. I entirely agree with that. What concerns me is that the provisions of the clause that we propose achieve that objective in a balanced and tested way. However, I fear that the way in which the noble Lord puts it disrupts that balance.
It may be a little difficult if one considers these duties in terms of primary and secondary duties rather than in the context of ensuring that there is a supply of gas. That is the way in which we understand the clause to be framed.
The first duty—let me leave out "primary"; it is potentially confusing—is to secure so far as it is economical to meet them, all reasonable demands in Great Britain for gas conveyed through pipes and to ensure that all reasonable demands are met. That may not mention the word "consumer". But there is no doubt that the duty is to protect an important consumer interest; namely, to ensure that gas is available to meet demands. That seems a very obvious consumer interest.
The second duty is in essence to secure that licence holders can finance their business. Again, there may be no mention of the consumer, but that duty has two impacts on the director, both of benefit to the consumer. The first concerns who is licensed. The director has to consider whether they are able to finance their business. She must see evidence of reasonable financial soundness. That clearly is equally of importance to consumers.
The second impact of that duty concerns the licensee's terms of trading. That is at the heart of the regulatory system. In performing those further duties—to promote low prices and improve service—the director must do that subject to ensuring that companies are able to finance the licensed business. In our view, it would not be in the interests of consumers if the director were to pursue what might be described as "consumer objectives"—narrowly defined—so aggressively that companies went out of business. It is not her duty to prop up inefficient companies, but she should not drive suppliers out of business by setting targets that they are unable to meet.
The third duty is to secure effective competition. Again, our clear view is that that is a benefit to consumers by providing them with choice and the opportunity of lower prices. As the noble Lord will

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know, prices have fallen further in the competitive industrial gas market than in the monopoly domestic market that exists at present.
In essence, there is nothing between us. We believe that the consumer should be put first, and that we have done that. We have done it with a set of duties aimed at ensuring that there is a viable competitive market meeting consumer demands. Then we set out more detailed consumer protection duties in the clause. They are necessary, subject to the first requirement that there should be a viable competitive market. I hope that the noble Lord will be satisfied that we are not confused about the way in which it is set out, but will realise that the way in which it is arranged will ultimately be in the best interests of the consumer.
Lord Ezra: My Lords, I thank the noble and learned Lord for that explanation, which is similar to the one given to me by his noble colleague at an earlier stage. However, I am still concerned about it. The Minister has set out logically that we must have a supply; that we must ensure that people handling the supply are financially viable; that we must ensure that there is effective competition; but also that the interests of consumers are safeguarded in all that. There is a clear distinction in the wording of the Bill on page 1 between the first three objectives, which are grouped under a single heading in subsection (1), and the relegation of the consumers' interests to a secondary position. What Mr. Eggar said in another place is difficult to follow: that in the event the regulator would probably consider everything in subsections (2) and (1) on a par. However, that is not what the Bill says and people will go by the Bill.
If the Government were to move a little and cut out the phrase in subsection (2),
"Subject to subsection (1) above",
and simply continue with (d),
"to protect the interests of consumers",
so that there was a certain logical progression, much of the concern of those who favour putting greater emphasis on consumers would be removed. The difficulty is with the emphasis and clear distinction between the protection of the interests of consumers on the one hand and all the matters contained in Clause 4(1) on the other. I consider the promotion of,
"efficiency and economy on the part of persons authorised"
to be of equal importance. I should like to see all those points listed in one series. I do not necessarily suggest that the interests of the consumer should come first. I should like to see that, but there is a certain logic in ensuring that there is a supply; that it is properly handled; that it is financially viable; that there is competition; and that the interests of consumers are protected. I can see nothing wrong with doing that.
I should like to know whether the noble and learned Lord would be prepared to reflect on that and perhaps bring forward an amendment at the next stage which would achieve those objects. It would remove the feeling of apprehension that somehow the protection of the interests of consumers is regarded as being of secondary importance. The Government have denied
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that. Let them demonstrate that denial by making a change in the wording. I ask the Minister to address that point.
Lord Fraser of Carmyllie: My Lords, with the leave of the House, perhaps I may reply. There is still confusion between us. I do not accept that we have in any sense relegated the consumer duties in the way that the noble Lord continues to insist. However, if he would accept that I will make no commitment on the matter, I shall look again at the way in which the clause is framed. Having addressed an argument to him in which I indicated that I do not believe there is relegation of consumer interests, he will appreciate that I cannot offer a commitment at this stage.
Lord Ezra: My Lords, if the noble and learned Lord is prepared to reconsider the point and come forward with a suggestion at the next stage, I shall be happy to withdraw the amendment. I look forward with great interest to what I am sure will be a helpful proposal at Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 4 and 5 not moved.]
The Earl of Cranbrook The Earl of Cranbrook moved Amendment No. 6:
Page 2, line 18, after ("of") insert ("—
(i)").
The noble Earl said: My Lords, Amendment No. 6 proposes, together with Amendment No. 7, to add the words:
"the use of gas conveyed through pipes",
as one of the duties of the regulator. It will be one of the points that the regulator will have to take into account. The debate which we have just held emphasises the importance of gas to consumers. I was not aware of it but the noble Lord, Lord Ezra, told us a moment ago that the majority of British households depend upon burning gas for heating, warmth and probably cooking. The net effect is that it is the consumer who burns the gas.
In my previous comments on an earlier amendment, I referred to the importance of the Government's climate change programme. A key element of it is the control and management of emissions of carbon dioxide. Burning gas produces carbon dioxide. Thus, around the country hundreds, thousands and, no doubt, millions of consumers contribute to national carbon dioxide emissions by burning gas, by using the product delivered to them by pipes. That is what we are talking about. Undoubtedly, it has a powerful environmental impact in contributing towards the carbon dioxide load in the atmosphere.
My basic argument has not changed. Any source of carbon dioxide in the country needs to be managed. Efficiency is one way in which emissions can be abated and there are many others. Therefore, I come up against the problem which concerns me: how does the national policy and the national strategy for the control of carbon dioxide emissions feed through to the millions of us who consume gas in our own houses, in order to keep ourselves warm, cook our food and have warm baths? How do we feed that through, if not through the regulator? If the regulator is already given the duty to

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take account of the effects on the environment of activities connected with the conveyance of gas through pipes, he merely has a duty to have regard to the effects on the environment of the laying of the pipelines and related activities. These are undoubtedly important environmental concerns, but the primary environmental concern must be the use of gas by consumers. I hope I have made that point. I strove to make it earlier and the reply which I received (at col. 442 of Hansard for 22nd June 1995) from the Minister on the Front Bench at the time was simply:
"I am not keen on that".
I genuinely believe that the topic deserves fuller discussion and that the policies for which my noble and learned friend is now responsible need to be laid out for the benefit of those who will read this debate in Hansard. I very much hope that my noble and learned friend will say that he has no problem in accepting the amendment. If not, I hope that he will make it clear that somehow or other this important issue is already covered. I beg to move.
4.30 p.m.
Lord Fraser of Carmyllie: My Lords, I am grateful to my noble friend for raising the question of whether the director's duties should extend to the effect on the environment of the use of gas. While my response may be summed up by saying that I am not keen on what my noble friend proposes, I hope nevertheless that I shall extend to him the courtesy of a considered argument.
My first point is this. The principal issue in this area is the efficient use of gas. The director already has a duty under the Bill to promote the efficient use of gas conveyed through pipes. It is an important duty; and it is on the basis of that duty that licences contain provisions designed to promote energy efficiency in the gas market.
These include not only the requirement on suppliers to provide energy efficiency advice, but reforms designed to harness the power of the market in favour of energy efficiency by providing incentives to suppliers to compete in what might be called "warmth solutions" rather than simply therms of gas. We therefore feel that it is difficult to know what a duty in respect of the environmental impact of gas use could add which is not already covered by that efficiency duty.
It might perhaps extend to giving the director a duty to seek to raise prices in order to reduce consumption. But it appears to us that decisions of that nature ought to be for government, through the instrument of taxation, and not for the independent regulator. As my noble friend will appreciate, raising taxes for that purpose is not an approach which immediately attracts widespread public support.
The other difficulty that we have with a duty of this nature is that one ought not to look at the environmental impact of burning gas in so far as it goes beyond the questions of efficient usage without considering the alternatives. Most competing fields, as I am sure my noble friend will acknowledge, have significantly greater impacts on the environment because gas is a low carbon fuel which contains virtually no sulphur and does not create noxious products if burnt properly.
764
A duty for the gas regulator to look at the environmental impact of burning gas alone would, we believe, have a distorting effect on the director's judgment. Looking at the environmental impacts of all fuels strays dangerously into territory that ought to be occupied by Ministers.
Our conclusion therefore is that what ought to be done in this area is achieved by the director's duty in respect of the efficient use of gas. A duty in respect of the impact of the use of gas on the environment would add little; where it might add anything further, it would risk straying into areas which are either very wide or politically very sensitive.
The Earl of Cranbrook: My Lords, I am grateful for that explanation. My immediate reaction is that the amendment I proposed would clarify the driving force behind efficiency in an extremely valuable way, and would focus public attention and gain merit by remaining there. However, again I shall read my noble and learned friend's remarks very carefully. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 7 and 8 not moved.]
Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 9:
Page 2, line 26, at end insert ("chronically sick,").
The noble and learned Lord said: My Lords, in speaking to this amendment I shall speak also to Amendments Nos. 21 and 27.
This group of amendments is in response to a point made by my noble friend Lord Boyd-Carpenter in Committee in a debate on an amendment moved by the noble Baroness, Lady David. The noble Lord suggested that we needed to look again at whether the Bill's definition of those who are "disabled or of pensionable age" as requiring special consideration and special services needed to be expanded to encompass those who had suffered very severe and prolonged illness.
Having looked at this point, we accept that the term "disabled" will not cover all the chronically sick, but that there may be cases in which the chronically sick require special services from gas suppliers in a similar manner to disabled persons or those of pensionable age. We will review the social conditions of the licence to see where these cases may be and take into account the views of the Gas Consumers Council. Amendments Nos. 9, 21 and 27 would therefore add references throughout the Bill to the "chronically sick", in addition to disabled people and pensioners. I hope that my noble friend will approve of that set of amendments.
Lord Peston: My Lords, I congratulate the Minister. In responding to the wishes of his noble friend, and to my noble friend Lady David, I believe that he will have pleased all noble Lords. This is as good an example of the meeting of minds in relation to this Bill as we have had. I thank him very much for that.
Lord Boyd-Carpenter: My Lords, I am much obliged to my noble and learned friend for what he said. I shall be interested to know the outcome of the review that he was good enough to promise. I say at once that I feel some gratitude to the Government for their

765
response and for the flexibility that they have shown. I hope that before long it may be indicated to this House what the Government propose to do.
On Question, amendment agreed to.
[Amendment No. 10 not moved.]
The Earl of Cranbrook The Earl of Cranbrook moved Amendment No. 11:
Page 2, line 29, leave out ("1(2)") and insert ("1").
The noble Earl said: My Lords, perhaps I need briefly to explain this amendment. It concerns the definition of "the environment" for which I argued in Committee (col. 449 of Hansard). In Committee, on a proposal from the Government, we removed the word "physical" from the definition of "environment".
My previous argument is reinforced by the fact that if we now confine the definition of the environment simply to this sub-paragraph of Clause 1(2), we in fact restrict it to a definition of the physical environment. So we end up where we were before we removed "physical". I sincerely hope that there was a genuine meeting of minds between my noble friend Lord Ferrers and myself previously on the removal of the word "physical" from the definition of the environment, since we need to have concern for the whole environment, including its living elements. On 2nd June (col. 450), my noble friend Lord Ferrers said that he would take the matter away and consider it. I hope that my noble and learned friend has been able to give it that consideration. Perhaps I may be congratulated on shortening the Bill by the removal of a couple of parentheses and the figure 2! I beg to move.
Lord Fraser of Carmyllie: My Lords, an apology is due to my noble friend in that we have overlooked this point. While we were considering his concerns on sustainable development, there was an incorrect assumption that he no longer wished to pursue this point.
However, I accept that the director's environmental duty should extend appropriately to the impact on wildlife. Although in practice that impact is likely to be limited, I agree that there is no reason to exclude it.
Not for the first time will my noble friend have heard a Minister at this Dispatch Box say that there is some indication that his drafting is incorrect. I wonder whether he will be kind enough to withdraw his amendment. I shall then ask officials to consider urgently with parliamentary counsel whether the matter is sufficiently covered. If it is not, we will ensure that an appropriate amendment is ready at Third Reading.
The Earl of Cranbrook: My Lords, I am grateful to my noble and learned friend. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 12:
After Clause 2, insert the following new clause—

Gas Bill

  MATTERS TO BE TAKEN INTO ACCOUNT BY DIRECTOR IN EXERCISING POWERS TO CONTROL GAS PRICES
  (" .—(1) The Secretary of State shall from time to time issue guidance to the Director as to the matters he is to take into account in exercising any powers specified in the conditions of a licence
  766
  granted under section 7 or 7A of the 1986 Act to limit, vary or otherwise control the charges set by a licence holder for the supply, transportation or shipping of gas.
  (2) Guidance under subsection (1) above shall include as one of the matters to be taken into account by the Director a reference to the extent to which the remuneration of the executive and non-executive directors of a company which holds such a licence reflects the performance of that company during the year preceding the year to which the remuneration in question relates.
  (3) In subsection (2) above—
  "remuneration" includes any salaries, fees, benefits in kind or share options; and "performance" includes increased efficiency in the carrying on of the activities to which the licence relates and improvements in the standard of service to consumers.").
  The noble Lord said: My Lords, in moving this amendment it may be for the convenience of the House if we also consider Amendment No. 30. The two are very strongly interrelated.
  The purpose of Amendment No. 12 is to enable the Secretary of State to issue guidance to the director in taking into account certain matters affecting his powers in controlling gas prices, including the question of remuneration of executive and non-executive directors of companies holding licences in so far as that reflects the performance of the company, notably in relation to questions of efficiency and improvements in standards of service to the consumer. Amendment No. 30 is designed to introduce transparency in relation to the remuneration of such directors, including fees, benefits in kind and share options as well as salaries.
  The amendments were raised by me in principle during Second Reading, and there can be no doubt that they continue to have resonance. Unfortunately, Sir Cedric Brown and his colleagues in the gas industry hardly covered themselves with glory. His recognition of that is implicit from the fact that—if reports are accurate—he is waiving his rights to a bonus scheme which could have enriched him by a further £2 million or thereabouts.
  Over and over again in the public utilities senior executives have become millionaires because of over-generous salary and share option packages. That has given rise to considerable resentment, not simply on these Benches and Labour Benches elsewhere, but throughout the country. Many Conservatives have expressed grave reservations about what has happened. The Prime Minister has hardly been enthusiastic in regard to the conduct of those individuals. Not only has it brought discredit on them, but it is also a dreadful example of bad management and management practice.
  I found it strange that when the noble Earl, Lord Ferrers, was dealing with the matter at Second Reading, he seemed to feel that the genuine anxieties broached at the annual general meeting by individual shareholders could be brushed aside. The number of members attending that meeting and the ferocity of their attack was almost unprecedented, yet those attacks were brusquely, insensitively and unreasonably brushed aside by Mr. Giordano and Mr Brown.
  They were individual shareholders. Most—I concede not all—had no political axe to grind. They were questioning the propriety of what happened and why it had happened so furtively. That is the reason for Amendment No. 30, which seeks to introduce

  767
  transparency into the whole situation. Those shareholders felt that they were entitled to make those criticisms.
  When we came to discuss these matters it was as though the expressions of anxiety uttered by the Prime Minister had never been said at all. We heard a defence of Mr. Brown and his colleagues which was almost unqualified. I do not believe that that was the correct way to respond to the situation which had arisen.
  It is not a question of it being the politics of envy, which is the usual assertion made when one raises issues of this kind; it is the politics of resentment felt by millions of people. It is incomprehensible that the British Gas directors—and others, though we are discussing British Gas today—can award themselves vast share options amounting to millions of pounds (wholly disproportionate awards, in my view) in relation to the provision of an industry which is giving an essential service.
  Therefore it is not a question of it being the politics of envy and I know that the Minister will not resort to that argument. We are hoping that the Minister will have some comment to make on the situation. I am not proposing to divide the House. We said at Second Reading that we would return to this issue. The amendments are designed to give the Government the opportunity to express their grave reservations about what has happened.
  In fairness to Mr. Brown, he said that he will waive the rights to which he is entitled, and I believe that too is something of an admission. One can only hope that the regulator will have something to say about these matters in the future. I look forward with interest to hearing the Government's view. I can assure the Minister that it is not just the concern of the Opposition; it is a widespread anxiety and one of which the Government should take full note. I beg to move.
  4.45 p.m.
  Lord Fraser of Carmyllie: My Lords, I am grateful to the noble Lord for advancing his argument in that measured fashion. However, the amendments on the question of remuneration of directors in the gas industry are inappropriate for specific reasons, which I shall try to set out, and also for the more general reason that I do not believe that this Bill is the place in which to consider matters relating to executive pay. As the noble Lord clearly knows, executive pay is being considered more widely in relation to the Greenbury Committee's report and it is proper that it is addressed in such a fashion rather than in the context of a single industry in isolation.
  Amendment No. 12 is contrary to one of the key principles of the regulatory system. The independence of the regulator has removed political interference from the management of utility businesses. The amendment would reintroduce political control over the management of the gas industry and take us back to the running of an industry on the basis of political rather than economic factors.
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  There is no valid reason to relate price caps to board pay. The system of regulation works on the basis that, in a monopoly industry, the regulator protects consumers by regulating the price charged rather than costs. That way the industry is given the greatest possible incentive to improve its efficiency. When periodically setting the price control, the regulator looks at all the company's costs and potential efficiency improvements. Executive salaries, as a cost, are a factor in that assessment, but only a small one in relation to the company's total costs. Like any other cost considered in the review, if the regulator believed that the costs were in excess of those which an efficient company would incur, she would be able to take that into account.
  As with other companies, the actual salaries paid to executives are a matter for the shareholders to take an interest in. I do not wish to indicate in any way that those shareholders' interests should be brushed aside. As we have seen, the shareholders of British Gas have taken an interest and the board responded. If the regulator were to involve herself in the justification of pay awards to individual executives, it would require her—I hope on reflection the noble Lord will agree—to participate too closely in the management of the company. That could risk prejudicing her independence.
  In relation to Amendment No. 30 and its valid purpose of requiring a greater degree of transparency, the noble Lord's anxieties have already been largely met by the Stock Exchange's response to the recommendations of the Greenbury Committee report, to which I referred. The Stock Exchange recently amended its rules to require full and comprehensive disclosure of the remuneration packages, including salary, share options, fees and so forth, of directors of publicly listed companies. I hope that that change will meet the anxieties expressed by the noble Lord in tabling Amendment No. 30. I hope also that I have explained why the Government do not feel that the amendments should be made to the Bill.
  Lord Clinton-Davis: My Lords, I thank the Minister for that measured reply, which I think was a better reply than the one I received last time. I am always suspicious about the "not the right vehicle" argument. The vehicular argument is always over-used. I have done it myself. It is very convenient. The Minister will appreciate that I thought it appropriate that we should express some concern about what has happened. I understood that the Minister would not accept the amendment and that is why I did not intend to call a Division on the matter. However, when he says that the Government want to achieve the independence of the regulator, I hope that that will be exemplified rather more overtly than seems to have been understood by the Home Secretary in relation to prisons.
  It is also not satisfactory simply to say that this is only a very small element in relation to costs. The cost was expressed to be about 1p. by the Minister dealing with the matter in another place. That does not address the issue at all. It is not a question of how large a benefit consumers would have received if they had had some compensation for what had happened. It is a question of

  769
  addressing the whole issue of outrage which has occurred. The Minister has still not done that but he has expressed his views in very modulated terms.
  On the question of transparency, I accept that the Minister is right about that and that the Stock Exchange has suggested that there should be strong guidelines to deal with the matter. We shall have to look with care in the future as to what the experience is. However, having regard to what has been said, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 5 [Licensing of public gas transporters]:
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 13:
  Page 5, line 49, after ("effect") insert—
  ("(a)")
  The noble and learned Lord said: My Lords, in moving Amendment No. 13 perhaps I may speak also to Amendments No. 14 and 15. This is the first group of a rather large number of technical government amendments which I need to move today. If I describe them from time to time as technical or drafting amendments I hope that that view will be accepted. However, if any noble Lord wishes me to elaborate on any of them, now or at a later date, I threaten that I shall do so. But I believe that they are essentially technical amendments. That is certainly the case with Amendments Nos. 13, 14 and 15. I beg to move.
  On Question, amendment agreed to.
  Lord Peston: My Lords, perhaps I may reassure not only the Minister but your Lordships generally that I tried to plough through some of the amendments and I entirely accept that they are technical. I beg him not to go through each one of them in great detail. If he insists, and writes to me, I give him my word that I shall read everything. However, I do not think that any of your Lordships would regard it as remotely discourteous on the part of the Minister if he were simply to say on these technical amendments, "I beg to move".
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 14 and 15:
  Page 5, line 50, after ("licence;") insert—

  ("(b) in the case of a licence under subsection (2)(a) above, as if it were also a licence under subsection (2)(b) above and any pipe-line system specified in the direction were specified in the licence; or

  (c) in the case of a licence under subsection (2)(b) above, as if it were also a licence under subsection (2)(a) above and any area specified in the direction were specified in the licence,").

  Page 6, line 12, leave out from ("months") to ("within") in line 14 and insert ("or, in the case of an extension, such shorter time as may be prescribed)").
  On Question, amendments agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie. moved Amendments Nos. 16 to 18:
  Page 6, line 48, after ("10(2)") insert ("or (3)").
  Page 7, leave out lines 15 to 18 and insert (" 'relevant main' has the same meaning as in section 10 below and").
  Page 7, leave out lines 26 to 30 and insert—
  770
  ("(11) Any reference in this Part (however expressed) to activities authorised by a licence under this section shall be construed without regard to any exception contained in Schedule 2A to this Act.").
  The noble and learned Lord said: My Lords, these amendments are similarly technical. I beg to move.
  On Question, amendments agreed to.
  Clause 6 [Licensing of gas suppliers and gas shippers]:
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 19:
  Page 8, line 17, at end insert—
  ("(4A) Subsection (4) above shall not apply in relation to a licence under subsection (1) above which authorises only the supply to premises of gas which has been conveyed to the premises otherwise than by a public gas transporter.").
  The noble and learned Lord said: My Lords, in moving Amendment No. 19 perhaps I may speak also to Amendments Nos. 28 and 29. These are technical amendments to disapply the requirement to include the standard conditions in a supply licence. I beg to move.
  On Question, amendment agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 20:
  Page 8, line 37, leave out ("an undue proportion of").
  The noble and learned Lord said: My Lords, this amendment is in response to a point which was raised by the noble Lord, Lord Peston, at the Committee stage. Although we gave no formal commitment to look at the point, we wanted to reflect on it.
  The provision in question is in Clause 6 of the Bill. It currently says that the director shall not grant licences if he thinks that the description or area of the licence has been so framed as artificially to exclude an undue proportion of premises likely to be owned or occupied by persons who are disabled or pensioners or likely to default on bills. The noble Lord objected to the words "an undue proportion". He argued that suppliers should never be allowed deliberately to choose licence areas which excluded these vulnerable groups, whether or not "an undue proportion" were excluded. We accept the validity of what he said and I invite your Lordships to delete the words.
  Lord Peston: My Lords, I wish to thank the noble and learned Lord. This is another example—it is not the only one—of the constructive spirit in which all noble Lords have approached the Bill. I thank the noble and learned Lord for what I take to be a sensible amendment to the Bill and I warmly support it.
  On Question, amendment agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 21:
  Page 8, line 38, after ("are") insert ("chronically sick,").
  On Question, amendment agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 22:
  Page 9, line 7, at end insert—
  ("and in that subsection 'contract' does not include any contract which, by virtue of paragraph 8 of Schedule 2B to this Act, is deemed to have been made").
  On Question, amendment agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 23:
  Page 9, line 14, leave out ("subsection (10) above to the carrying on of') and insert ("this Part (however expressed) to").
  The noble and learned Lord said: My Lords, in moving Amendment No. 18 I intended to speak to Amendment No. 23. I think that I may not have been heard. I beg to move.
  On Question, amendment agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 24 to 26:
  Page 9, line 37, after first ("Act") insert ("—
  (a)").
  Page 9, line 37, at end insert—
  ("(b) treated as so granted by virtue of a scheme made under paragraph 15 of Schedule 5 to this Act, or
  (c) treated as so granted by virtue of paragraph 16 of that Schedule.").
  Page 10, line 11, at end insert—
  ("( ) An order under this section may—

  (a) provide for anything falling to be determined under the order to be determined by the Director; and

  (b) make such supplementary or incidental provision as the Secretary of State considers necessary or expedient.").

  On Question, amendments agreed to.
  Clause 7 [Licences: general]:
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 27:
  Page 10, line 46, after ("are") insert ("chronically sick,").
  On Question, amendment agreed to.
  Clause 8 [Standard conditions of licences]:
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 28 and 29:
  Page 12, line 31, leave out ("subsection (2)") and insert ("subsections (1A) and (2)").
  Page 12, line 41, at end insert—
  ("(1A) Subsection (1) above shall not apply in relation to a licence under section 7A(1) above which authorises only the supply to premises of gas which has been conveyed to the premises otherwise than by a public gas transporter.").
  The noble and learned Lord said: My Lords, in moving Amendment No. 19 I spoke also to Amendments Nos. 28 and 29. I beg to move.
  On Question, amendments agreed to.
  [Amendment No. 30 not moved.]
  Clause 11 [Amendments of Part III of 1986 Act]:
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 31:
  Page 15, line 25, leave out ("'public gas transporter' and 'public gas supplier"') and insert ("and 'public gas transporter"').
  The noble and learned Lord said: My Lords, in moving Amendment No. 31 perhaps I may speak also to Amendments Nos. 32, 43 to 45, 179 and 181. These are technical amendments to ensure that the network code, which will set out the rates for the use by other gas companies of British Gas's pipeline system, is not caught by the Restrictive Trade Practices Act if it comes into force before the appointed day. I beg to move.
  On Question, amendment agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 32:
  Page 15, line 27, leave out subsection (5) and insert—
  ("(5) Subsection (7) of that section shall cease to have effect.").
  On Question, amendment agreed to.
  5 p.m.
  Baroness Nicol Baroness Nicol moved Amendment No. 33:
  After Clause 11, insert the following new clause—

  COMPENSATION FOR DAMAGE OR LOSS CAUSED BY PUBLIC GAS SUPPLIERS' CONSTRUCTION WORK
  (" . In Paragraph 1(3) of Schedule 4 to the 1986 Act (Power of Public Gas Supplies to break up streets, bridges etc.), after the second "shall" there shall inserted "as promptly as possible", and after "any" there shall be inserted "loss caused or".").
  The noble Baroness said: My Lords, I am afraid that I cannot emulate the speed with which the previous few amendments have been moved. I hope that the spirit of harmony will continue throughout. The purpose of the amendment is to enable businesses to claim compensation for damage or loss caused to them by gas transporters' construction work. I first raised this amendment at Committee stage. The Minister then at the Dispatch Box said that he would consider what had been said because there was a considerable amount of support for the amendment. I tabled it again on 19th July as a reminder in case it should be overlooked. Nevertheless, it has taken nearly three months for the Government to bring forth their own amendment on this subject, despite many letters from interested organisations, which means that there has been little time to discuss the government amendment. I shall return to that in a moment.
  My amendment has been supported by the British Retail Consortium, the Country Landowners' Association, the National Farmers Union, the Forum of Private Business, the Association of British Chambers of Commerce, the Association of Convenience Stores and many individual businesses as well as many Members of your Lordships' House.
  At Committee stage I did not give illustrations of need because we were dealing with the business very late at night. I do not propose to keep your Lordships very long on the matter. However, there are two illustrations which I must give because they bear a little on the possible regulations which the Government may produce. These have been given to me by the Association of Convenience Stores. They are real cases which have happened this year. A Mr. Beacall, with a store of 1,900 square feet, had his trade affected by gas works outside his shop from 23rd January to 17th March this year. Over the period his loss of income can clearly be demonstrated to be of the order of £14,500. His annual turnover was just over £500,000, so he would not be able to claim under the British Gas proposal, which the Government have favoured in the past.
  A Mr. Holborn, running a newsagents and general store family business in Redhill, relies heavily on passing trade. British Gas closed the road in which his shop is situated for six weeks in June this year. During that time his weekly takings fell from £48,000 to £43,250, pushing his business into the red. Since he

  773
  could not claim compensation, that left him struggling to pay off an overdraft on a very small profit margin. He is still trying to do that.
  Government Amendment No. 151 appears to accept the principle of compensation, for which I am grateful. But it leaves many questions to be answered. Subparagraph (4) states "if' the regulation is made. Why cannot we have a firm commitment to regulate? Is it that the Government have still not made up their mind despite the promising beginning to this amendment? Why cannot we have a timetable if there are to be regulations? Can we be given some idea of when those regulations are likely to be brought forward? Will there be a ceiling on the size or the turnover of the businesses which can claim? The British Gas proposal of £500,000, which I have already mentioned, would be much too low. Many vulnerable businesses would fall outside that threshold, and that would include many farms. We need to have a little more information from the Government on that proposal. Is that what they intend to put in regulations?
  There can be no justification for private gas companies making extra profit at the expense of other private companies. I find it very difficult to understand why the Government fail to see that point, as they have done on other occasions. What is the purpose of subparagraph (5) in the second part of the amendment? It would seem to remove all possibility of future adjustments if the regulations were found to be ineffective. It appears to require the unanimous consent of all gas transporters before changes can be made. Is that how the Government see it and is that their intention? I await the Minister's answers with interest before deciding what action to take on my amendment. We shall need to look very carefully at what the Minister says. I beg to move.
  Lord Stanley of Alderley: My Lords, I have added my name to the amendment of the noble Baroness, having read the Committee stage report of her amendment and having found the Government's reply inadequate. It would be wasting your Lordships' time to restate all those reasons. However, her amendment mirrors many of the problems that your Lordships discussed and voted on affirmatively during the passage of the Coal Bill in relation to CROs. Eventually the Government accepted that in principle. This particular point was referred to obliquely by the noble Lord, Lord Peston, at Committee stage.
  However, I am pleased that the Government have now come forward with their amendment, even at a very late stage, as the noble Baroness has said, to solve the problem by means of regulation. I thank and congratulate the noble Baroness on persisting so strongly through the summer months to get the Government to do so. I believe that I and many of your Lordships dislike government by regulation. I would much prefer to see the amendment on the face of the Bill.
  As the noble Baroness said, the Government have given no time or date as to when this regulation might come about; for that matter, it might never appear. An assurance from my noble and learned friend would be
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  very welcome, if not vital. Furthermore, the Government have given little indication as to what the regulation might state. Not least, I ask for an assurance from my noble and learned friend that there will be no ceiling on the turnover of the business. That again is a point made by the noble Baroness. In the past it has been mooted at £500,000.
  I believe that the noble Baroness was too charitable about subparagraph (5), which I dislike intensely. I do not know what she intends to do. I believe that she is still thinking about it this evening. If these assurances cannot be given by my noble and learned friend—and I fully understand that he may not be able to do so tonight—I wish to preserve my position, as I believe the noble Baroness does, to press him to do so at Third Reading.
  Baroness Gardner of Parkes: My Lords, I support this amendment. I have known people whose businesses have gone bankrupt simply because potential customers could not gain access. I am thinking of a woman who for years ran a small Australian gift shop off the Strand. I believe that it was the water board which closed the road and there was no access for customers for a considerable time. The poor woman is now desperately ill and her future has gone. Indeed, customers were convinced that she had closed the business and gone. People gave up trying to reach her and that situation continued for something like two years.
  There is a very genuine case for compensation. Clearly, one would have to prove that there had been losses. There would be no question of people getting money for nothing. A claim would have to be clearly quantified and assessable, so there would be no doubt on that point.
  As regards government Amendments Nos. 150 and 151, I find the use of the word "if' quite extraordinary. I cannot see the real merit in the use of that word. If we simply had "to the extent" that would be iffy enough. To use the word "if' makes for a very strange piece of legislation. All these points have been made and I do not wish to take up time. I strongly support this amendment.
  The Earl of Harrowby: My Lords, I supported my noble friend on the Coal Bill. I am delighted to say that I support him again on this issue. Enough has been said about the detail of the subject. I hope that my noble and learned friend the Minister will take note of the feeling on both sides of the House.
  Lord Skelmersdale: My Lords, I caused some surprise when I supported the noble Baroness in Committee. I still have some sympathy. As regards what I said at the Committee stage, on balance, this matter has much wider application than just to the gas industry. I believe that the Government's amendment is probably right. What is disguised in the Government's amendment—and to this we should have an answer—is the use of the word "if'. I understand the comments which have been made on this perhaps rogue word. I include also the words,
  "and to the extent that regulations made by the Secretary of State so provide"
  and so on. Regulations under what? Will they be regulations under the new Section 4 of the Gas Act, or will they be under the street works legislation or something else? That is very germane to the argument.
  The Earl of Caithness: My Lords, I thank my noble and learned friend on the Front Bench for bringing forward the government amendment. Clearly, he listened to the concerns that we all expressed in Committee. Although there are undoubtedly anxieties about the proposed government amendment, I look forward to hearing what my noble and learned friend Lord Fraser has to say and thank him for having moved forward between the last stage and this stage of the Bill's progress.
  Lord Peston: My Lords, I should like to make just a few remarks. First, my noble friend Lady Nicol is entirely right about the principle, which is that the privatised utilities should not be in a position to impose costs on other private enterprises just because they were once nationalised industries. That is the central theoretical proposition which must guide all of us.
  Secondly, as the noble Lord, Lord Skelmersdale, pointed out, this question does not arise only in relation to British Gas. The problem arises with all the former nationalised utilities, but we are dealing with gas today. My judgment is that everything revolves around the meaning of the government amendment and what will happen in practice. The noble Earl, Lord Caithness, made that point very clearly.
  If we get the regulations, I think that sub-paragraph (4) will be fine. My noble friend's concern is whether we shall have those regulations. I hope that when I sit down in a moment the noble and learned Lord, Lord Fraser of Carmyllie, will say that, although we shall not get the regulations this very minute, we shall certainly get them. I must advise my noble friend that I do not have any difficulty with sub-paragraph (5) because, assuming that we get suitable regulations under the provisions of sub-paragraph (4), sub-paragraph (5) is minor in that it states that having got a set of good regulations, it should take a good deal to change them. Perhaps the Minister will tell me whether my interpretation is correct. That is why I am less worried about sub-paragraph (5), but I want to be told that we shall get the regulations under the provisions of sub-paragraph (4) along the lines that my noble friend has suggested. I think that that is the beginning and the end of it and I look forward to hearing what the Minister has to say.
  Lord Boyd-Carpenter: My Lords, as has been said, this issue arises in respect of all the former nationalised industries. It is therefore important that the Government should make clear at this stage and on this Bill their attitude to the whole matter.
  5.15 p.m.
  Lord Fraser of Carmyllie: My Lords, I hope that I can do just that in responding to the amendment tabled by the noble Baroness and in indicating where I stand on the Government's amendments.
  The question of compensation in respect of street works is a complicated issue with both practical and theoretical considerations. These mean that it would not be appropriate, despite the anomalous case of the water industry, to provide an unqualified obligation to pay compensation.
  776
  Businesses do not have a legal right to a given level of passing trade. For example, if a competing shop opens and takes many of the customers away causing the original shop severe losses, there is no right to take action against the competing shop for the damage done. There are many factors which affect the level of passing trade which a business might have, including the taking of planning decisions which may affect the character of the neighbourhood and it would clearly be a wrong principle for compensation to be available as a general rule.
  In the more particular case of street works, the generally accepted principle is that all users of a street must accept the risk of delays or disruption caused by other lawful users of the street. There is no right to claim compensation from the other members of a traffic jam, or from local authorities which close a road to resurface it, or when—this could be most damaging of all—the traffic management in a road is changed in a manner in which affects passing trade.
  That does not mean that street works should be executed with no thought as to the inconvenience for other users of the street. The New Roads and Street Works Act 1991 regulates in some detail the manner in which street works are to be undertaken. This includes obligations to provide advance notice of planned works to the street authority and to abide by any requirements imposed by that authority; to secure that any part of the street which is open or obstructed is adequately guarded and lit; and to carry on and complete the works, and the reinstatement of the street, with all such despatch as is reasonably practicable.
  Additional standards relating to the carrying out of street works have been agreed between British Gas and Ofgas. These include providing an alternative safe route if the footway is obstructed and ensuring that there is pedestrian access to all premises while work is in progress.
  There is also the question of cost. Any requirement on public gas transporters to pay compensation in large amounts would inevitably find its way back through charges to the customer. That is because it is necessary to consider the costs of a utility in setting its price control. The Government are not convinced of the need for a general transfer of money from gas consumers to business in this way.
  I have taken some time to make those general points because it is important that they are placed on the record. However, I should say that the Government have decided to review the position, especially as regards small businesses, where the costs arising from prolonged street works by utilities could fall very heavily. Clearly, a number of my noble friends are aware of particular circumstances where that has happened. Our conclusion is that, notwithstanding the position in logic as I have outlined it, some change to deal with exceptional cases is required.
  For that reason, the Government welcomed the voluntary compensation scheme proposed by British Gas this May. That scheme represented, in our view, a fair and reasonable balance between the interests of the various parties. The scheme has, however, been criticised on the basis that public gas transporters other

  777
  than British Gas are not bound by it, and that payments were a matter of sympathetic consideration rather than a strict obligation to pay in the appropriate circumstances.
  We believe that those concerns have some weight. Therefore, I invite the noble Baroness to withdraw her amendment on the basis that I propose to move Amendments Nos. 150 and 151 which empower the Secretary of State to make regulations in this area.
  I understand your Lordships' concern about the use of the word "if'. Perhaps I may make this statement: it would be our intention to frame the regulations to replicate, as closely as may be, the provisions of the British Gas scheme, but on a compulsory basis and applicable to all public gas transporters. I hope that that indication is broad enough, but if your Lordships remain uncomfortable, I shall look at the provisions again to see whether the word "if' could be removed. I believe that it is, in effect, technical given the undertaking that I have given at the Dispatch Box, but if it would reassure your Lordships I shall certainly consider doing so at a later stage. At this stage, I should like to be able to move my amendments so that there can be a clear understanding of what we have in mind. That will allow interested parties to reflect upon the matter before we return to this on Third Reading.
  I was asked specifically about when the regulations would be made. We expect to make them by the appointed day, when the new regime comes into effect. We shall be consulting on the regulations. We want to see whether we can usefully discuss the regulations with the relevant associations before they are made. However, I believe that it will be appreciated that if we are to ensure that they can come into effect by the appointed day, that does not allow for the most leisurely period of consultation.
  I hope that what I have said is sufficient to satisfy my noble friend, the noble Baroness and those on the Opposition Benches. I apologise for the fact that there has not been a great deal of time for those who are interested in this matter to consider the government amendment. Nevertheless, I hope that the noble Baroness will withdraw her amendment. If necessary, we can return to this on Third Reading.
  Baroness Nicol: My Lords, before the noble and learned Lord sits down, he did not deal with the question about sub-paragraph (5). May we hear a little about the Government's thinking on that?
  Lord Fraser of Carmyllie: My Lords, I think that it relates in large measure to the timetable and drafting arrangements. We proposed a very broad regulation-making power and did not include all the full details in the amendment. Having adopted that approach, it was considered that this was the appropriate way forward. The noble Baroness may wish to reflect upon that matter, and if she wishes to communicate with me before Third Reading I shall be happy to discuss it with her.
  Baroness Nicol: My Lords, I am grateful to the Minister for his full answer, which I will have to consider in detail.
  778
  As to the question of the costs to the consumer, if the businesses about which we speak fail there will be costs to the consumer by another route. Many consumers will pay not only the financial costs of the businesses that are affected but possibly the social costs of losing them. I do not believe it is relevant to compare the difficulties caused by fair competition with the difficulties caused by road works. Any business worth its salt can meet fair competition by various means open to it, but it cannot do anything about road works.
  I am encouraged by the Minister's attitude, and I shall study carefully what he has said. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 12 [Acquisition of rights to use gas processing facilities]:
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 34 to 38:
  Page 16, line 28, after ("facility") insert ("or any associate of his").
  Page 16, line 31, after ("who") insert ("is not such an associate and").
  Page 17, line 10, at end insert—
  ("( ) Section 22 of the 1986 Act (effect of directions) shall apply in relation to any directions under this section as it applies in relation to any directions under section 19 or 21(1) of that Act; and in subsection (4) of that section as applied by this subsection, the reference to the Director shall be construed as a reference to the Secretary of State.").
  Page 17, line 12, leave out ("has the same meaning as in") and insert ("means any substance which is or (if it were in a gaseous state) would be gas within the meaning of').
  Page 17, line 33, at end insert—
  ("( ) For the purposes of this section a person is an associate of the owner of a gas processing facility if—

  (a) both of them are companies; and

  (b) one of the companies has control of the other, or both are under the control of the same person or persons;

  and subsections (2) to (5) of section 416 of the Income and Corporation Taxes Act 1988 shall apply for the purposes of paragraph (b) above as they apply for the purposes of Part XI of that Act.").
  The noble and learned Lord said: My Lords, after that interesting debate, we turn to a series of technical amendments. I beg to move Amendments Nos. 34 to 38 en bloc.
  On Question, amendments agreed to.
  Clause 16 [Minor and consequential amendment]:
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 39:
  Page 18, line 20, leave out from first ("in") to ("as') in line 21 and insert—
  ("(a) any Act passed before the appointed day which is not a public general Act; or
  (b) any subordinate legislation (within the meaning of the Interpretation Act 1978) made before that day,").
  The noble and learned Lord said: My Lords, this is also a technical amendment. I beg to move.
  On Question, amendment agreed to.
  Clause 17 [Transitional provisions, savings and repeals]:
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 40 to 42:
  Page 18, line 28, leave out ("section") and insert ("sections").
  Page 18, line 29, at end insert—
  ("(1A) In that Schedule, unless the context otherwise requires, expressions which are also used in the 1986 Act have the same meanings as in that Act.").
  Page 18, line 29, at end insert—
  ("(1B) The Secretary of State may by order make such other transitional provisions and savings as appear to him necessary or expedient.
  (1C) An order under subsection (1B) above shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.").
  The noble and learned Lord said: My Lords, I beg to move Amendments Nos. 40 to 42 en bloc.
  On Question, amendments agreed to.
  Clause 18 [Short title, commencement and extent]:
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 43 to 45:
  Page 18, line 33, leave out from ("except") to ("shall") in line 34 and insert—

  ("(a) this section;

  (b) sections 8(2), 11(1) to (5), 12 and 13;

  (c) section 17(1) and (1A) and Schedule 5; and

  (d) so far as relating to the repeal of section 62(7) of the 1986 Act, section 17(2) and Schedule 6,").

  Page 19, line 3, leave out ("and 22") and insert (", 22 and 27B").
  Page 19, line 7, leave out ("section") and insert ("sections 62(7) and").
  The noble and learned Lord said: My Lords, in speaking to Amendment No. 31, I spoke to Amendments Nos. 43 to 45. I beg to move those amendments en bloc.
  On Question, amendments agreed to.
  Schedule 1 [Exceptions to prohibition on unlicensed activities]:
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 46:
  Page 20, line 11, at end insert—
  ("1A. Section 5(1) of this Act is not contravened by a company conveying or supplying gas to any premises occupied by a subsidiary or holding company of the company, or by a subsidiary of a holding company of the company.").
  On Question, amendment agreed to.
  Schedule 2 [The gas code]:
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 47 to 49:
  Page 21, line 36, leave out ("arranged for gas to be") and insert ("made arrangements in pursuance of which gas is").
  Page 21, line 41, after ("meter") insert—

  ("(a) the use of which does not contravene section 17 of this Act; and

  (b) which is").

  Page 22, line 37, at end insert—
  ("( ) Nothing in this paragraph shall apply in relation to any meter which, in pursuance of an agreement falling within subsection (14) of section 17 of this Act, is used for ascertaining the quantity of gas supplied to a consumer if either—

  (a) the agreement was entered into before the appointed day; or

  (b) the public gas transporter and each relevant gas shipper have agreed that the meter should be kept in proper order by a person other than the consumer.").

  The noble and learned Lord said: My Lords, I beg to move Amendments Nos. 47 to 49 en bloc.
  On Question, amendments agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 50 and 51
  Page 23, line 35, after ("of') insert ("any of').
  Page 24, line 9, after ("recover") insert ("any of').
  The noble and learned Lord said: My Lords, I beg to move Amendments Nos. 50 and 51.
  On Question, amendments agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 52 and 53:
  Page 24, line 22, after ("gas") insert ("which has been").
  Page 24, line 23, at end insert ("in pursuance of arrangements made with the transporter by a gas shipper, or by a person authorised to make the arrangements by an exemption granted under section 6A of this Act").
  The noble and learned Lord said: My Lords, I beg to move Amendments Nos. 52 and 53.
  On Question, amendments agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 54 to 56:
  Page 24, line 44, leave out ("75,000") and insert ("2,500").
  Page 24, line 47, leave out ("75,000") and insert ("2,500").
  Page 24, line 47, leave out ("2,500") and insert ("75,000").
  The noble and learned Lord said: My Lords, I beg to move Amendments Nos. 54 to 56 en bloc.
  Lord Skelmersdale: My Lords, on the face of it, the difference between 2,500 and 75,000 therms is many magnitudes. I cannot imagine that this has resulted from an oversight, which most technical amendments are designed to resolve. Perhaps the House will wish to know a fraction more than my noble friend has said on the subject.
  Lord Fraser of Carmyllie: My Lords, I am happy to oblige my noble friend. The effect of the amendments is that suppliers in the market to supply customers with 2,500 to 75,000 therms a year will have to opt in to the deemed market arrangements rather than opt out. The purpose of this is to simplify the transitional arrangements on the appointed day to allow existing suppliers to the industrial and commercial market to opt in to the new provisions for deemed contracts when they are ready to do so. Knowing my noble friend's detailed understanding of these matters, I hope that that is sufficient explanation for him.
  On Question, amendments agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 57:
  Page 25, line 31, at end insert—
  ("Supplies of gas illegally taken
  8A.—(1) Where any person takes a supply of gas which is in the course of being conveyed by a public gas transporter, the transporter shall be entitled to recover from that person the value of the gas so taken.
  (2) Where—

  (a) any person at premises which have been reconnected in contravention of paragraph 10(1) below takes a supply of gas which has been conveyed to those premises by the public gas transporter; and

  (b) the supply is taken otherwise than in pursuance of a contract made with a gas supplier, or deemed to have been made with such a supplier by virtue of paragraph 8 above or paragraph 18 of Schedule 5 to the Gas Act 1995,

  781
  the transporter shall be entitled to recover from that person the value of the gas so taken.

  (3) Each public gas transporter shall make, and from time to time revise, a scheme providing for the manner in which, and the persons by whom, the number of therms or kilowatt hours represented by a supply of gas taken in such circumstances as are mentioned in sub-paragraph (1) or (2) above is to be determined for the purposes of that sub-paragraph.
  (4) Sub-paragraphs (10) and (11) of paragraph 8 above shall apply in relation to a scheme under this paragraph as they apply in relation to a scheme under that paragraph.
  (5) In this paragraph—
  "gas supplier" includes a person authorised to supply gas by an exemption granted under section 6A of this Act or an exception contained in Schedule 2A to this Act;
  "value, in relation to any gas taken in such circumstances as are mentioned in sub-paragraph (1) or (2) above, means the amount which, if the gas had been taken in such circumstances as are mentioned in sub-paragraph (2) of paragraph 8 above, could reasonably be expected to have been payable in respect of the gas under a contract deemed to have been made by virtue of that sub-paragraph.").
  The noble and learned Lord said: My Lords, I beg to move Amendment No. 57.
  On Question, amendment agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 58:
  Page 26, line 17, leave out from ("premises") to second ("the") in line 19 and insert ("are reconnected, the consent of the public gas transporter to whose main the reconnection is made;
  (b) where the supply is restored,").
  The noble and learned Lord said: My Lords, I beg to move Amendment No. 58.
  On Question, amendment agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 59:
  Page 27, line 13, at end insert—
  ("Failure to maintain shipping arrangements
  12A.—(1) Where—

  (a) any arrangements for the conveyance of gas by a public gas transporter to a consumer's premises at a rate reasonably expected to exceed 2,500 therms a year have been made by a gas shipper, or by a person authorised to make the arrangements by an exemption granted under section 6A of this Act; and

  (b) those arrangements have ceased to operate and have not been replaced by arrangements made for the like purpose,

  the transporter may, after giving 21 days' notice to the relevant persons, disconnect the premises.
  (2) The relevant persons for the purposes of sub-paragraph (1) above are—

  (a) the occupier, or the owner of the premises if they are unoccupied; and

  (b) any gas supplier who, to the knowledge of the transporter, has contracted to supply gas to the premises.

  (3) The notice required to be given by sub-paragraphs (1) and (2)(a) above may, in the case of unoccupied premises the owner of which is unknown to the public gas transporter and cannot be ascertained after diligent inquiry, be given by affixing it upon a conspicuous part of the premises.").
  On Question, amendment agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 60:
  Page 28, line 30, after ("9(2),") insert ("10(2)(b), 12A(1),").
  The noble and learned Lord said: My Lords, I beg to move Amendment No. 60.
  On Question, amendment agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 61:
  Page 28, line 33, leave out ("5(4), 7(3)") and insert ("7(3) or (4)").
  The noble and learned Lord said: My Lords, I beg to move Amendment No. 61.
  On Question, amendment agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 62 to 64:
  Page 28, line 33, leave out ("or 9(2)") and insert (", 9(2) or I 0(2)(b)").
  Page 28, line 37, at end insert ("either is no longer an owner or occupier of the premises or").
  Page 28, line 42, at end insert—
  ("( ) In this paragraph—
  "consumer", in relation to a disconnection or cutting off under paragraph 10(2)(b) above, means—

  (a) the owner of the premises at the time when the reconnection was made, or the supply was restored, without the relevant consent if the premises were unoccupied at that time, or if that reconnection or restoration of supply was made by him or on his behalf; and

  (b) the occupier of the premises at that time in any other case;

  "relevant consent" has the same meaning as in paragraph 10 above.").
  The noble and learned Lord said: My Lords, Amendments Nos. 62 to 64 are grouped with Amendment No. 60. I beg to move.
  On Question, amendments agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 65 and 66:
  Page 31, line 33, leave out from ("supplier,") to ("may") in line 35.
  Page 31, line 40, leave out from first ("above") to end of line 41.
  The noble and learned Lord said: My Lords, I beg to move Amendments Nos. 65 and 66 en bloc.
  On Question, amendments agreed to.
  Lord Haskel Lord Haskel moved Amendment No. 67:
  Page 32, line 22, at end insert—
  ("( ) The transporter in the case of those who are disabled, of pensionable age or in other cases of urgent need is authorised to carry out repairs to gas appliances and fittings at the same time as the emergency visit; and the cost of this will be charged to the consumer.").
  The noble Lord said: My Lords, I beg to move Amendment No. 67. A similar amendment was raised in Committee. However, as this matter looks after the safety of consumers, I feel that it is important to raise it again.
  The amendment deals with the question of who gets an appliance working again after there has been an escape of gas. At present, a British Gas service engineer who attends a gas escape not only makes the escape safe but makes a permanent repair to the appliance, or a temporary repair and arrangements to have the appliance permanently repaired, or he turns it off and fixes a definite appointment to repair it. Under the new draft arrangements public gas transporters are required to undertake minor appliance repairs in the course of fixing a leak, so long as they can be done within half an hour

  783
  and with inexpensive parts. The engineer then gives the consumer a list of registered installers who can be contacted.
  The Minister must be aware that these kinds of cosy demarcation arrangements between suppliers at the expense of consumers are no longer acceptable. Today, successful businesses make every effort to satisfy their customers, even if it takes longer than half an hour. As drafted, the Bill primarily looks after the needs of the transporter by limiting liability to half an hour's work plus a few inexpensive parts. Surely, in modern business terms the Bill should ensure that priority is given to the needs of the consumer. The need of the consumer is that he or she gets the appliance working as soon as possible and with the least inconvenience. As with small businesses, the consumer wants a one-stop shop, not to be shuffled between the transporter, supplier or installer.
  The effect of this on safety was raised in Committee by my noble friend Lord Peston. Unless there is a firm commitment to get appliances working again with the minimum delay and inconvenience, people may hesitate to report gas leaks in case their appliances are out of order for some time. Perhaps the Minister would wish to use this opportunity to reassure the House of his department's commitment to consumer safety.
  In Committee, the Minister said (Hansard Col. 793) that it is important to distinguish between the obligation to make safe and the power to do so. That ignores the consumer's convenience. Many of us on this side of the House feel that the amendment should apply to all gas consumers, but, in order to appeal to the Minister's compassion, the amendment has been limited to those more vulnerable members of society, including the chronically sick. I beg to move.
  5.30 p.m.
  Lord Ezra: My Lords, I support what the noble Lord has just said. I well recall the debate that we had on this issue in Committee. This seems to be an instance when the new arrangements go back on what already exists. Under the present arrangements, as the noble Lord has pointed out, when a gas leak has to be dealt with not only is the leak stopped but any necessary repairs are done and urgent action is taken to ensure that the gas supply is reconnected as soon as possible.
  Under the new arrangements, the consumer could well be left in the lurch. The leak could admittedly be dealt with, but then, particularly if it were in winter, and particularly if it happened to be at a weekend, the consumer would have to trawl through a list of plumbers dealing with these matters and it could be some days before the appliances were working again.
  It is to be hoped that the amendment will be considered seriously from that point of view. We are all in favour of opening up the domestic market. What we are wholly against is that the services which are to be rendered to customers in that opened-up market might be noticeably worse in some respects than they are at present.
  Lord Swinfen: My Lords, I support the amendment. Many of those whom the amendment seeks to help will he living on their own. They will be elderly disabled
  784
  who will need heating. They may he unable to find the relevant contractor to help them in a hurry. With society as it is today, many people who live on their own do not have relatives nearby whom they are able to call upon for help. Gas appliances are, I suspect, more likely to break down in the winter because there is a greater use of heating then. The types of person that the amendment seeks to assist are those who need more heating than other people.
  Lord Boyd-Carpenter: My Lords, whether the amendment has it right, I would not know, but I hope that my noble and learned friend the Minister will realise that this is, I think, to all noble Lords, a most important matter. The position particularly of disabled people when there is a failure of their gas supply is not just alarming but can be dangerous.
  I am sure that the House will want to be reassured that the Bill as it stands or as it would stand if amended as proposed by the noble Lord, Lord Haskel, will take care of that. This is, socially, one of the most important issues with which we have been concerned this afternoon. I hope that my noble and learned friend the Minister will bear that in mind.
  Lord Skelmersdale: My Lords, I have some sympathy with the points raised by the noble Lord, Lord Haskel, and echoed in various quarters of your Lordship's House. But I just do not understand the amendment. It provides:
  "The transporter in the case of those who are disabled, of pensionable age or in other cases of urgent need is authorised".
  I assume that is by the Bill, but we will let that pass for the moment. It continues:
  "to carry out repairs to gas appliances and fittings at the same time as the emergency visit".
  That is laudable of course. The transporter is authorised to do it, but he does not have to do it, as I understand it, according to the amendment. Even if he did have to do it, there is a vast range, as we all know, of gas appliances. One wonders—I understand the concerns about demarcation expressed by the noble Lord, Lord Haskel—whether it is practical to expect all emergency "shutters off' of gas—which after all is what we are talking about, in the first instance to make the gas supply within the premises safe—to carry all the vast range of fittings which might be required to mend gas appliances. Although I well understand what the noble Lord is getting at, and I sympathise with his objectives, there are practical difficulties.
  Lord Milverton: My Lords, I hope my noble and learned friend the Minister will see whether there is some way in which he can take on board the amendment, because I believe that the noble Lord, Lord Haskel, has a point. With gas, it is important that the remedy is effected as efficiently and quickly as possible. There is something in the amendment. Anyone who has gas will be aware that it can be exasperating if one cannot obtain the necessary assistance immediately. I hope that my noble and learned friend will be able in some way to take on board or be sympathetic to the amendment.
  Lord Fraser of Carmyllie: My Lords, I, too, share the concerns expressed by my noble friend Lord Skelmersdale about the terms of the amendment. I assume that, where the word "authorised" is used, what is intended to apply is authorisation as required by the Gas Installation and Use Regulations 1994, which require a person carrying out such work to be competent.
  The more substantive approach I should like to take is to remind the House that we did debate a similar amendment in Committee. As a result of that debate we made some changes to the relevant provisions in the draft conditions for public gas transporters' licences. However, we remain of the view that we have the right balance of obligations on the public gas transporters relating to the provision of an emergency service.
  Standard condition 18 now requires public gas transporters to undertake appropriate minor repairs to appliances in the course of fixing a leak so long as it can be done within half an hour and with parts costing less then £4. We have increased that figure from the current level of £2.50 applied by British Gas, in response to the comments we received on this matter.
  Also in response to those comments we have extended the requirement on transporters to carry out such repairs as far as possible in such a way as to maintain the supply of gas so that it covers appliances used for cooking and heating. I should add also that the minor repairs referred to in standard condition 18 must be provided free of charge to all customers, not just those who are particularly vulnerable. In practice that will allow the majority of such leaks to be repaired effectively on the spot at no charge.
  However, there is a great difference between effecting minor repairs, such as fixing leaks, and conducting more fundamental repairs to complex appliances. The skills and equipment needed are different. For public gas transporters to be obliged to provide a full appliance service capability would increase their costs and would mean that people would end up paying more. It is the consumer involved who should have to pay for the more complex work. Appliance repairs are available in a competitive installation market. There are about 47,000 firms around the country and safety is regulated by the regulations to which I referred, with a registration scheme for installers.
  Given that large number of individuals, it would seem right that consumers should be able to choose who carries out the more complicated work as opposed to the simple repairs. In those cases where it is beyond the description of a small or minor repair, the transporter is required, by standard condition 18, to provide the customer with a list of persons in the locality who are appropriately qualified to carry out such repair work.
  I hope that, in the light of the explanation and in the light of the changes that we have already made to the draft licence, the noble Lord will feel able to withdraw his amendment.
  Lord Haskel: My Lords, I thank the Minister for that detailed reply. The improvements in the conditions of the licence, which the Minister mentioned, are welcome but they do not go far enough. Obviously, it is easy for
  786
  someone who lives in London or in a big city to get an installer to come and fix their appliance but what about people who live in the country and in isolated places? The Minister has ignored the convenience of the consumer, because the consumer wants one person to come to fix the leak and the appliance.
  I am sure that if the business becomes competitive, gas transporters will try to supply such a service. They will fall over themselves to supply customers with what they want. I believe that the Bill should contain a clause that encourages them to do so. We should not have a clause in the Bill that encourages some kind of demarcation arrangement, about which I spoke previously.
  Secondly, our anxiety about safety was raised because there are rumours that the Minister's department is to close down or virtually disband the consumer safety unit. If that is the attitude of his department, we should be most anxious about safety. However, it is not my intention to divide the House on this matter, but I hope that the Minister will consider what I have said. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 68:
  Page 32, line 24, at beginning insert ("No officer shall be authorised by a public gas transporter, gas supplier or gas shipper to exercise any powers of entry conferred by this Schedule unless—

  (a) the transporter, supplier or shipper has taken all reasonable steps to ensure that he is a fit and proper person to exercise those powers; or

  (b) in cases of emergency, those powers are powers conferred by paragraph 20 above.

  (1A)").
  The noble and learned Lord said: My Lords, in speaking to Amendment No. 68, I shall speak also to Amendments Nos. 109, 110, 111, 112, 122, 123, 138 and 145. I beg to move.
  Lord Ezra: My Lords, Amendment No. 68 deals with meter reading and I wish to raise one or two points. We had a considerable debate about the matter in Committee. Anxiety was expressed by myself and others that under the new arrangements not only would there no longer be a unitary meter reading service with persons who would have a common identification card and an office telephone number that could be used if anyone had any doubt, not only would there be a diversity of suppliers, but there could also be independent meter reading firms. Therefore, it was suggested, but regrettably not accepted by the Government, that there should be a scheme for the registration of people entitled to act as meter service providers who are not directly employed by the suppliers.
  Although Amendment No. 68 is to be welcomed because it emphasises that the transporter, supplier or shipper has taken all reasonable steps to ensure that the meter reader is a fit and proper person to exercise those functions, it leaves open the question of the other operators. In view of the fact that a security issue is raised, apart from the issue of competence, will the Minister give further thought to that?
  5.45 p.m.
  Lord Peston: My Lords, I am slightly puzzled. I thought that Amendment No. 68 was not technical but that it was a new contribution by the Government in response to some of our anxieties. I certainly read it that way and I hope that I am not now being told that that is not the case. I am hoping to be told that the amendment really says something.
  Lord Fraser of Carmyllie: My Lords, perhaps I was trying to go a little faster than was appropriate in the circumstances. I am happy to explain more fully why we have introduced this package of amendments which were intended to respond to the anxieties expressed not only by the noble Lord, Lord Ezra, but by other noble Lords and organisations outwith Parliament. They relate to those people who, under the Bill, will be able to exercise statutory rights of entry into peoples' homes.
  Obviously, we take most seriously the security of the public. Having listened to the anxieties that have been expressed, we have decided to introduce a statutory requirement for licensees to take all reasonable steps to ensure that officers exercising rights of entry are fit and proper persons. Amendments Nos. 68 and 109 do that. That should provide added certainty that the interests of the consumers will be protected.
  Amendment No. 138 seeks to meet another anxiety that was touched on by the noble Lord, Lord Ezra. It is the threat of bogus callers who seek to enter peoples' homes to commit crimes by pretending to be bona fide officers of a gas company. That can be a real problem and it is why we have been careful to make the provisions that we have in the licences so that the public can readily identify legitimate officers of a gas company and to avoid the misuse of badges and other authority.
  However keen we are to regulate licensed companies in this regard, and no matter how much we regulate them, that cannot affect the behaviour of criminals. Amendment No. 138 would therefore make it an offence for:
  "Any person who with intent to deceive … impersonates an officer … for the purpose of obtaining entry to any premises; or … makes any statement or does any act calculated falsely to suggest that he is an officer".
  That offence is to be liable on summary conviction to a level 4 fine, which is £2,500 at present.
  Amendment No. 145 provides that a public gas transporter, supplier or shipper is permitted to delegate to an agent the function of authorising officer or servant of that agent. This delegation is to be in accordance with the terms of any written authority setting out the procedures to be followed by the agent. It is necessary for practical reasons if an agent is working for several suppliers. The licence holder will be obliged by the duties set out in Amendments Nos. 68 and 109 to ensure that the procedures are followed by his agents. The licence holder will thus remain responsible for ensuring that these officers are fit.
  We have put in place detailed safeguards to protect consumers in relation to licensed gas companies with statutory rights of entry of their sub-contractors. We have also made a number of refinements to the
  788
  safeguards in response to the anxieties expressed. I hope that I have answered all the points that were raised but if not I am happy to attempt to do so.
  Lord Clinton-Davis: My Lords, I am sure that what the Minister has done is in the best interests of everyone. However, is there any real difference between the provisions of Amendment No. 138 and the present law? Would it not be a criminal offence to do all those things anyway? My criminal law is a little rusty these days but I wonder whether those situations are not met by the criminal law in any event.
  Lord Fraser of Carmyllie: My Lords, it may indeed be something of a belt and braces job, with the common law of both England and Scotland covering such activity. I shall look at the matter. I am never keen to introduce to the statute book statutory offences when the common law is more than capable of handling them. I shall look at the matter again and, if the provision is unnecessary, I shall consider its deletion.
  Lord Boyd-Carpenter: My Lords, will my noble friend amplify that answer a little? It appears that what is forbidden in Amendment No. 138 is already forbidden under the criminal law. I do not follow what improvement or change is being effected by the Bill.
  Lord Fraser of Carmyllie: My Lords, as I have indicated, that may well be the case. The only particular feature is that it allows for a penalty of a fine not exceeding level 4. Clearly, the common law contains no such provision. From my recollection as a prosecutor, intent to deceive and impersonation matters are covered by the common law. But against the background which I have indicated to the noble Lord, we shall look again at that matter.
  On Question, amendment agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 69:
  Page 32, line 43, at end insert ("in a consumer's premises").
  The noble and learned Lord said: My Lords, this is a technical amendment. I beg to move.
  On Question, amendment agreed to.
  Schedule 3 [Other amendments of Part 1 of 1986 Act]:
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 70 to 74:
  Page 34, line 37, leave out ("7(11) above, section 10(8)") and insert ("10(8) or (11)").
  Page 36, line 50, leave out ("(c)") and insert ("(b)").
  Page 37, line 21, at end insert ("and the extent to which it is reasonable to expect that the transporter will recover that expense from elsewhere").
  Page 37, line 21, at end insert—
  ("( ) If and to the extent that regulations made by the Director with the consent of the Secretary of State so provide, subsection (10) above shall have effect as if—

  (a) the reference in paragraph (d) to the laying of a new main, the enlarging of an existing main or the construction or enlarging of any other works required for the conveyance of gas included a reference to a new main which had previously been laid, an existing main which had previously been enlarged or any other works required for the conveyance of gas which had previously been constructed or enlarged;

  789

  (b) the reference to the expense to be incurred in laying or enlarging the main or constructing or enlarging the other works included a reference to the expense which had been so incurred; and

  (c) the reference to the extent to which it is reasonable to expect that the transporter will recover that expense from elsewhere included a reference to the extent to which the transporter had been able so to recover that expense.").

  Page 37, line 33, leave out ("and a declaration under this") and insert—
  ("(13) A public gas transporter shall make a declaration under subsection (12) above in respect of each pipe falling within that subsection which is fit for the purpose of being a relevant main; and a declaration under that").
  The noble and learned Lord said: My Lords, these are technical amendments. I beg to move.
  On Question, amendments agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 75 to 98:
  Page 38, line 10, at beginning insert ("Except in prescribed cases,").
  Page 38, line 16, after ("section") insert (", or so determined by another public gas transporter and adopted by the transporter in accordance with such regulations").
  Page 38, line 19, leave out ("the declared calorific value") and insert ("declared calorific values").
  Page 38, line 24, at end insert ("—
  (a)")
  Page 38, line 27, leave out ("and, if the Director so determines, containing") and insert ("or
  (b) if regulations under this section so provide, the combustion of one kilogram of the gas,
  containing in either case, if the Director so determines,").
  Page 38, line 31, after ("means") insert ("a").
  Page 38, line 33, at end insert (", or so declared by another public gas transporter and adopted by the transporter in accordance with such regulations").
  Page 38, line 33, at end insert—
  ("( ) Regulations under this section may make provision as to the manner in which prescribed information with respect to the making of calculations in accordance with the regulations is to be made available to other licence holders and to the public.").
  Page 38, line 37, leave out from ("transporters") to second ("at") in line 39 and insert ("to be made on the basis of samples of gas taken at such places or premises, at such times and in such manner as the Director may direct;
  ( ) for requiring such determinations to be made at such places or premises,").
  Page 38, line 40, at end insert—
  ("( ) as to the manner in which the results of such determinations are to be made available to other licence holders and to the public;").
  Page 38, line 47, leave out from ("them") to end of line 5 on page 39 and insert ("and
  ( ) for requiring the results of such tests to be notified to the Director or to any person appointed under section 13(1) below, and to be made available to other licence holders and to the public.").
  Page 39, leave out lines 8 to 22 and insert—
  ("(a) for requiring declarations of calorific values of gas conveyed by public gas transporters to be made at such times and in such manner as the Director may direct;
  (b) as to the times when such declarations are to take effect, and as to the manner in which the calorific values declared are to be made available to other licence holders and to the public;
  (c) for imposing requirements on public gas transporters as to the correlation between—
  790

  (i) the calorific values of the gas conveyed by them for any period; and

  (ii) the calorific values declared by them for that period;

  (d) for requiring public gas transporters to carry out tests of gas for the purpose of ascertaining whether they are complying with the requirements of regulations made by virtue of paragraph (c) above;
  (e) for requiring such tests to be carried out at such places or premises, at such times and in such manner as the Director may direct; and
  (f) for requiring the results of such tests to be notified to the Director or to any person appointed under section 13(1) below, and to be made available to other licence holders and to the public.").
  Page 39, line 28, at end insert ("or section 13 below").
  Page 39, line 32, leave out ("required") and insert ("compelled").
  Page 39, line 43, leave out ("under") and insert ("made by virtue of subsection (3)(b) of").
  Page 39, line 46, leave out ("in the case of which") and insert ("conveyed by public gas transporters where").
  Page 39, line 49, leave out ("gas is of or above the declared calorific value") and insert ("transporters are complying with the requirements of regulations made by virtue of subsection (4)(c) of that section").
  Page 39, line 52, leave out ("that section or regulations made under it") and insert (", or under regulations made under, this section or that section").
  Page 40, line 5, after ("places") insert ("or premises").
  Page 40, line 6, leave out ("and").
  Page 40, line 10, at end insert—
  ("(c) for requiring samples of gas to be taken by public gas transporters at such places or premises, at such times and in such manner as the Director may direct; and
  (d) for requiring samples of gas so taken to be provided by public gas transporters, for the purpose of carrying out such tests, at such places or premises, at such times and in such manner as the Director may direct.").
  Page 40, line 15, leave out ("for") and insert ("as to").
  Page 40, line 21, at end insert (" or section 12 above").
  Page 40, line 36, leave out from ("functions") to the end of line 38 and insert ("under section 12 above or this section").
  The noble and learned Lord said: My Lords, these are technical amendments. I beg to move.
  On Question, amendments agreed to.
  Lord Haskel Lord Haskel moved Amendment No. 99:
  Page 40, leave out line 48 and insert—
  ("8. For section 14 of the 1986 Act the following section shall be substituted—
  "Obligation to publish prices and other services
  14.—(l) The principal prices to be charged to domestic consumers for the supply of gas and the provision of services (hereafter referred to as Terms of Supply) shall be published in such manner as in the opinion of the supplier, after consultation with the Director and the Council, will secure adequate publicity for them.
  (2) The manner in which Terms of Supply shall be published will be such as to enable domestic gas consumers or potential consumers, accurately to compare prices and services when choosing a supplier.
  (3) Suppliers will send copies of their Terms of Supply to the Director and the Council not later than the time of publication or announcement or implementation.
  (4) In this section "services" may be taken to include services the supplier is obliged to provide in accordance with standard licence conditions and such other services as he may choose to provide." ").
  The noble Lord said: My Lords, this amendment obliges gas suppliers to publish their prices for gas and other services to domestic consumers or potential consumers with adequate publicity for them. That is so

  791
  that domestic consumers can compare prices when choosing a supplier. Many arguments were put in Committee about the fact that if there is no transparency and proper information regarding prices, the consumer is unable to make an informed choice and competition becomes a sham. As we have been reminded several times, the purpose of the Bill is to introduce competition.
  The amendment was moved in Committee by my noble friend Lord Clinton-Davis. It was supported by many other noble Lords, and the Minister said that he would consider the points made. Sadly, he has not been moved by our arguments.
  One of the advantages of a long summer break is that we have had time to re-read the reasons why the Minister felt that it is not necessary to have an obligation on the face of the Bill for suppliers to publish their prices. I found three errors in his reasoning.
  First, at col. 826 of Hansard the Minister, the noble Earl, Lord Ferrers, said that price schedules are provided in draft standard condition 3 of the supply licence. He said that that is just as binding on suppliers as if it were in the Bill. That is incorrect. The Gas Bill can be amended only with parliamentary consent, whereas a licence condition can be amended by the director general with the consent of the Secretary of State. I feel that the requirement to publish price information in a proper manner is so crucial to consumer choice that it should be contained within a document which can be changed only by Parliament and not left to the discretion of the director general.
  The second point on which I take issue with the Minister is referred to at col. 827 of Hansard where he says that publishing prices in the long term could work against the benefit of consumers because consumers may wish to negotiate their prices as in the industrial market. To compare the needs of the industrial market with those of the domestic market is disingenuous. Of course industrial users will wish to negotiate prices with suppliers and keep secret the result of those negotiations so that competitors cannot work out their production costs. To suggest that that applies also to domestic consumers is ridiculous.
  The third error in the Minister's response is to be found at col. 828. He implies that the published list of prices will not be movable or negotiable. That is totally wrong. Of course suppliers will be able to offer volume discounts, special deals and other offers. That is the nature of competition. But that competition will not exist if the public do not know what are the prices and cannot make comparisons as easily as they can in relation to petrol and other products. We must ensure that the consumer is treated fairly. I beg to move.
  Lord Skelmersdale: My Lords, having given the noble Lord, Lord Haskel, what my father would undoubtedly have called a slap in the belly with a cold wet fish on the previous amendment, I offer my unqualified support for his arguments on this occasion.
  As I have made clear throughout the Bill, competition in the telecommunications industry would not have happened at all but for total transparency of prices. The domestic telecommunications market is analogous with the domestic gas market. That is the first point.
  792
  The second point is that in the early days of the freeing-up of competition in the gas contract market—the largest suppliers—British Gas was operating with what I can only describe as one hand tied behind its back. It alone of all the competitors was obliged by law to publish its prices. Therefore, of course there was unfair competition. There is no earthly justification for that to happen in the domestic market.
  Lord Ezra: My Lords, I support the amendment. We had a lengthy debate about this in Committee. The Government said that they would think about this and it is regrettable that they have not tabled an amendment. The fact that under the terms of the licence the suppliers will be obliged to publish prices is not sufficient because, as the noble Lord, Lord Haskel, rightly pointed out, prices may be altered by the regulator without any parliamentary debate.
  This is a matter of considerable importance. If we are to have a fair competitive situation in the supply of domestic gas, we must have total price transparency. Individual consumers are not in the position of commercial or industrial enterprises which have skilled negotiators at their disposal who can obtain a list of all the suppliers, summon them to their office and go through with them the terms and conditions under which they are prepared to sell. The individual domestic consumer will not have the time or the skill to do any of that, just as the individual motorist, if the prices of petrol were not visible on the forecourt, would not be able to tell, without wasting a great deal of time, where he should be going for his petrol if he wished to obtain it at the most attractive price.
  I cannot see why the Government are reluctant on the point. They said that they would look again at the matter. I hope that we have persuaded the noble and learned Lord, who has been so helpful in the discussions so far, and that, in this matter too, he will see the force of the argument from all sides of the House.
  6 p.m.
  Lord Fraser of Carmyllie: My Lords, if the only issue here was that of publishing prices I could see some of the force of the argument that has just been put forward by the noble Lord, Lord Ezra. However, it is not just a question of a consumer's freedom to negotiate. The licence conditions require suppliers not only to publish prices but also to supply according to them. They can only supply according to the published terms; for example, they could not offer consumers a special deal to suit their circumstances or to meet a competitor's approach.
  Clearly I take the point that the individual domestic consumer is not like a single large industrial user; indeed, their negotiating muscle is not to be equated. However, your Lordships will be aware of the type of special arrangement that such firms as John Lewis adopt. They say that, if you can find a competitor who provides the goods at a price lower than the one they charge, then they will adjust their price to meet it. Under the existing condition arrangements, that would not be possible. Even if the company wished to do so, it could not offer a special deal; in other words, it could not

  793
  make such a special arrangement. I believe that that simple example demonstrates that there is a potential risk that, far from operating to the benefit of the consumer, if there is no prospect of loosening up the provision at some time it could operate against the interests of the consumer.
  Therefore, we want to avoid ruling out the possibility that at some point in the future it might be desirable for consumers to negotiate a deal with a supplier suited to their particular needs. I am not yet confident that that will definitely happen. However, I do not believe that it would be prudent to rule out the possibility now before we have seen how the market will develop.
  I should like to reiterate the fact that the Government consider it important—and we are in agreement on this—that at least at the early stages of the market there should be published prices. That is why price schedules are provided for in the draft standard condition 3 of the supply licence. That would be quite as binding on suppliers as if it were in the Bill. I see that the noble Lord wishes to intervene. I give way.
  Lord Clinton-Davis: My Lords, I am much obliged. I believe that we should welcome what the Minister has just said, but I am rather confused on the matter. The noble and learned Lord says that the situation would be inflexible if we were to import the provision into the Bill, but if in fact prices are published so that a comparison can be made along the lines mentioned by my noble friend and the noble Lord, Lord Ezra, surely there is nothing to stop negotiation taking place thereafter. Would it not be possible for someone to say, "I know that I can get a better deal from someone else"? Indeed, one could negotiate on that basis.
  Lord Fraser of Carmyllie: No, my Lords; that is not the way that it is arranged at present. That is why we want to allow for the potential of greater flexibility in the future. There is not much point in having a duty simply to publish a set of prices if one is not actually under an obligation to supply at that price. That is where the difficulty arises. We want to allow for some flexibility in the future if the market develops in that way. I have indicated that I accept that there is no direct and wholly apt comparison to be drawn with the industrial gas market. Nevertheless, where that requirement is not in place, gas prices are very much lower.
  As I understand it, the principal concern of the noble Lord, Lord Haskel, is that he understood that we were at the outset requiring that the provision of a price schedule should indeed appear within the standard conditions. However, the noble Lord was concerned that, because it would not be on the face of the Bill, it might be removed by the director without Parliament having had the opportunity to have its say. I should tell the noble Lord that any proposal by the director to remove the standard condition requiring publication of prices would be subject to the Secretary of State's veto and could only be carried out after public consultation.
  If the noble Lord does not like my argument and does not believe that the opportunity for greater flexibility at some indefinite point in the future is one to which we
  794
  ought to have regard, he can be reassured that, as such changes take place, the price will be published. It will be there in the standard conditions and it could be vetoed by the Secretary of State. However, I believe that the noble Lord's particular concern is that such a change might taken place during a Recess without Parliament knowing anything about it. I hope that I can reassure the noble Lord by confirming that we believe that Parliament ought to have the opportunity to consider if it wishes any proposal to remove the obligation to publish prices. In practice, that means the Secretary of State would wish to inform Parliament of any such proposal and that his veto would be used so as to prevent such a change being made when Parliament was not sitting. With that explanation of the arrangement in the standard condition as the changes take place, and also with the statement on behalf of the Secretary of State, I hope that the noble Lord will feel reassured.
  Lord Haskel: My Lords, I thank the Minister for that reassurance. However, I must confess that I am somewhat confused. The noble Lord, Lord Skelmersdale, drew a comparison with the telecommunications business as regards price lists. As I understood the Minister, once a gas supplier has published its prices it cannot offer any special deals. However, if it is to be similar to the telecommunications business, I should point out that the latter is offering special deals all the time; for example, there are special deals depending on what time one telephones and how often one telephones and special deals regarding calls to Europe or the United States. I cannot imagine that the same will not apply to the gas business because that is one of the few ways in which gas suppliers will be able to compete with one another.
  I accept the Minister's assurances that, if there is any change, it will only take place with the Minister's approval and that that will not be done unless Parliament is sitting. I thank the noble and learned Lord for that assurance, but perhaps another way of dealing with the matter—and one which will satisfy everyone—would be for the Government to put the provision for the publication of prices into the licence rather than into the legislation. Perhaps, therefore, the Minister would consider dealing with the matter by including the amendment in a subsection of the Bill which would allow for this part of the legislation to fall by order. That would be no more bureaucratic than the process that he suggested. It would deal with the modifications of the standard licence conditions and satisfy the consumer concerns. I hope that the Minister will give the suggestion some consideration. The proposal came from an organisation which is quite concerned about the matter. Can the Minister reply on that latter point?
  Lord Fraser of Carmyllie: My Lords, I shall certainly consider what the noble Lord has said and came back to him, but he does place me in somewhat of a difficulty. I have given him as clear an indication as I can why I believe it is right that this should be a condition of the licence. I hope that I have given a clear and unequivocal statement of what the intention of the Secretary of State would be should the director at some unknown point in the future decide that it would be appropriate to remove that qualification.
  Lord Haskel: My Lords, I thank the Minister for giving those strong assurances. He will consider what has been said and I shall consider what he has said. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 100 to 105:
  Page 41, line 24, at end insert ("by regulations").
  Page 41, line 28, at end insert ("so").
  Page 41, line 35, after ("State,") insert ("by regulations").
  Page 41, line 41, at end insert ("so").
  Page 42, line 8, after ("Regulations") insert ("under this section").
  Page 43, line 1, at end insert ("under this section").
  The noble and learned Lord said: My Lords, these are technical amendments. I beg to move Amendments Nos. 100 to 105 en bloc.
  On Question, amendments agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 106 to 108:
  Page 45, line 3, leave out ("signal") and insert ("signify").
  Page 45, line 5, at end insert ("to the premises" ").
  Page 45, line 16, leave out from ("for") to end of line 18 and insert ("paragraphs (a) and (b) there shall be substituted the words "any reference to a gas operator were a reference to the relevant authority" ").
  On Question, amendments agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 109 to 112:
  Page 45, line 33, at end insert—
  ("(11) Except in cases of emergency, no officer shall be authorised by a public gas transporter to exercise any powers of entry conferred by regulations under this section unless the transporter has taken all reasonable steps to ensure that he is a fit and proper person to exercise those powers." ").
  Page 46, line 5, after ("(7)") insert ("and (11)").
  Page 46, line 10, leave out ("and").
  Page 46, line 13, at end insert ("and
  (d) the reference in subsection (11) of that section to regulations under that section were a reference to regulations under this section.").
  The noble and learned Lord said: My Lords, in speaking to Amendment No. 68, I spoke also to Amendments Nos. 109 to 112. I beg to move Amendments Nos. 109 to 112 en bloc.
  On Question, amendments agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie had given notice of his intention to move Amendment No. 113.
  Page 48, leave out lines 46 to 48 and insert ("the difference between—

  (a) the cost of carrying out the modifications (including a reasonable element of profit); and

  (b) any contributions towards that cost which the transporter will or may be able to recover from other persons."").

  The noble and learned Lord said: My Lords, this amendment has been incorrectly drafted. I shall not move the amendment.
  [Amendment No. 113 not moved.]
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 114 to 120:
  Page 50, line 10, after ("above") insert ("the").
  Page 52, line 6, leave out ("a standard condition") and insert ("standard conditions").
  Page 52, line 7, leave out ("its") and insert ("their").
  Page 54, line 18, after first ("above") insert ("the").
  Page 54, line 35, leave out ("a standard condition") and insert ("standard conditions").
  Page 54, line 36, leave out ("its") and insert ("their").
  Page 54, line 41, leave out paragraph 25 and insert—
  ("25. For section 27 of the 1986 Act there shall be substituted the following section—
  "Modification by order under other enactments.
  27.—(1) Where in the circumstances mentioned in subsection (3) or (4) below the Secretary of State by order exercises any of the powers specified in Parts I and II of Schedule 8 to the Fair Trading Act 1973 or section 10(2)(a) of the Competition Act 1980, the order may also provide for the modification of—

  (a) the conditions of a particular licence; or

  (b) the standard conditions of licences under section 7 above, licences under subsection (1) of section 7A above or licences under subsection (2) of that section,

  to such extent as may appear to him to be requisite or expedient for the purpose of giving effect to or of taking account of any provision made by the order.
  (2) Where at any time the Secretary of State modifies under subsection (1)(b) above the standard conditions of licences under section 7 above, licences under subsection (1) of section 7A above or licences under subsection (2) of that section, he—

  (a) shall also make (as nearly as may be) the same modifications of those conditions for the purposes of their incorporation in licences under that section or, as the case may be, that subsection granted after that time; and

  (b) may, after consultation with the Director, make such incidental or consequential modifications as he considers necessary or expedient of any conditions of licences under that provision granted before that time.

  (3) Subsection (1) above shall have effect where—

  (a) the circumstances are as mentioned in section 56(1) of the said Act of 1973 (order on report on monopoly reference), or in section 10(1) of the said Act of 1980 (order on report on competition reference); and

  (b) the monopoly situation exists in relation to, or (as the case may be) the anti-competitive practice relates to—

  (i) the carrying on of activities authorised or required by a licence; or

  (ii) the storage of gas on terms which have been, or could have been if he thought fit, determined by the holder of a licence under section 7 above.

  (4) Subsection (1) above shall also have effect where—

  (a) the circumstances are as mentioned in section 73(1) of the said Act of 1973 (order on report on merger reference); and

  (b) at least one of the two or more enterprises—

  (i) which ceased to be distinct enterprises; or

  (ii) in the application of that provision as it has effect by virtue of section 75(4)(e) of that Act, which would cease to be distinct enterprises,

  was or, as the case may be, is engaged in the carrying on of activities authorised or required by a licence.

  (5) Where at any time the Secretary of State modifies standard conditions under subsection (2)(a) above for the purposes of their incorporation in licences granted after that time, he shall publish those modifications in such manner as he considers appropriate.
  (6) In this section expressions which are also used in the said Act of 1973 or the said Act of 1980 have the same meanings as in that Act." ").
  On Question, amendments agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie Moved Amendment No. 121:
  Page 57, line 26, leave out ("or (3)") and insert (", (3) or (13)").
  The noble and learned Lord said: My Lords, this amendment is consequential to Amendment No. 74. I beg to move.
  On Question, amendment agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 122 and 123:
  Page 57, line 26, after ("or (5),") insert ("18(11),").
  Page 57, line 28, leave out ("and 18(5)") and insert (", 18(5) and 26(1)").
  The noble and learned Lord said: My Lords, in speaking to Amendment No. 68, I spoke also to Amendments Nos. 122 and 123. I beg to move Amendments Nos. 122 and 123 en bloc.
  On Question, amendments agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 124 to 127:
  Page 59, line 30, leave out ("subsection") and insert ("subsections").
  Page 59, line 34, at end insert—
  ("(3A) Standards may be determined either as respects the provision of gas supply services generally or as respects the provision of such services to customers of a particular class or description." ").
  Page 60, line 28, at end insert—
  ("(2) After subsection (2) of that section there shall be inserted the following subsection—
  "(3) Where the standards of performance mentioned in subsection (1) above relate to the provision of gas supply services to customers of a particular class or description, the reference in that subsection to the supplier's customers shall be construed as a reference to such of his customers as are of that class or description." ").
  Page 60, line 33, after ("supplier") insert ("who is authorised to supply gas to domestic customers and whose licence incorporates the standard conditions" ").
  On Question, amendments agreed to.
  6.15 p.m.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 128:
  Page 60, line 45, at end insert ("(including in particular the storage of gas, the provision and reading of meters and the provision of pre-payment facilities)" ").
  The noble and learned Lord said: My Lords, in moving Amendment No. 128, I wish to speak also to Amendments Nos. 130 and 132. These are technical amendments. I beg to move.
  On Question, amendment agreed to.
  The Earl of Caithness The Earl of Caithness moved Amendment No. 129:
  Page 61, line 3, at end insert—
  ("( ) After subsection (2) of that section there shall be inserted the following subsection—
  "(2A) When taking any decision or action in the exercise of the functions assigned to him under this Act, the Director shall specify to persons materially affected the reasons for that decision or action in sufficient detail to enable such persons to plan for the future with a reasonable degree of assurance; and this subsection shall be construed to cover decisions to take no action." "").
  The noble Earl said: My Lords, it has been clear this afternoon that the Government have made a great effort to meet the concerns which many of us raised in
  798
  Committee. I know that I am not the only one of your Lordships who is grateful for the movement by my noble friend. I thank him for that. Yet again this amendment is one where the Government have responded. My noble and learned friend has tabled Amendment No. 134 so there is no need for me to rehearse the arguments. I only wish to comment on the word "may" in the fifth line of his Amendment No. 134. Would he like to use the word "shall" rather than "may"? I beg to move.
  Lord Peston: My Lords, we have a difficulty here because we are only allowed to speak once on Report, but I believe the noble Earl can reply to a question. As the noble Earl, Lord Caithness, is aware, I am totally sympathetic to his amendment. Is he saying that he is happy that the Government's Amendment No. 134 covers satisfactorily the ground that he had in mind in his amendment?
  The Earl of Caithness: My Lords, I believe it certainly covers most of my concerns. The points of difference are not ones that I would wish to quibble over at this stage. I therefore hope that my noble and learned friend will speak to Amendment No. 134 now.
  Lord Peston: My Lords, I do not wish to delay matters. The principle behind the noble Earl's amendment is one which he knows I strongly support. I of course will always support him as regards replacing "may" with "shall". I hope that the Minister will be able to reassure him, and therefore me, that he has gone a reasonable way down the road of removing what we call regulatory risk.
  Lord Fraser of Carmyllie: My Lords, I am grateful to my noble friend for his kind words. I hope that I can explain to him that this is not the traditional dispute over "may" and "shall" but reflects the present position and why we would not wish to be under an absolute duty to make these regulations. Both my noble friend and the noble Lord, Lord Peston, suggested in Committee that the director ought to have an obligation to consult and give reasons. The Government resisted that because they were concerned that a blanket obligation could be misused by regulated companies and more particularly by regulated companies' lawyers to gum up the regulatory process. We remain of the view that a general duty in this area of the type which my noble friend has proposed would not be appropriate. Having considered the comments of both the noble Lord and my noble friend we have prepared, as he appreciates, Amendment No. 134 which we hope picks up the importance of consultation and reason giving without suffering the disadvantages to which I have alluded. An order under this provision, if needed, could be tailored to the precise descriptions of decisions which were giving rise to a problem. The possibility that the duty might lead to an over legalistic regulation is a matter which would need to be considered in framing any order.
  The Director General of Gas Supply has followed an open, pro-competitive and consultative approach in reaching regulatory decisions. In the light of her existing policy on this, we would not envisage a need to make an order under this provision. However, the power is

  799
  available and could be used if the situation changed. It is for that reason that I am not immediately attracted to the idea of replacing "may" with "shall". It is a back-up provision, but I can assure my noble friend that we are aware of his concerns and have so put matters in place that if it proved to be necessary the opportunity to act is there.
  The Earl of Caithness: My Lords, I am grateful to my noble and learned friend for explaining why he has worded his amendment in the way that he has. I sympathise with him. He is a lawyer and I would not wish to reduce the workload of some of his compatriots in these areas. It is probably wise at this stage to retain the word "may". A power is available to be used should reasons not be given. Not to give reasons would of course be a great hindrance, as we explained in Committee. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 130:
  Page 61, line 6, leave out ("subsection (4) of that section") and insert ("that subsection").
  The noble and learned Lord said: My Lords, in speaking to Amendment No. 128, I hope that I spoke also to Amendment No. 130. If I did not I should add that it is a technical amendment. I beg to move.
  On Question, amendment agreed to.
  Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 131:
  Page 61, line 12, at end insert—
  ("( ) After that subsection there shall be inserted the following subsection—
  "( ) The Director shall have power to take action on behalf of consumers to challenge in the appropriate court the terms of a contract under which gas is supplied to consumers which appear to the Director, to the Director-General of the Office of Fair Trading or to the Gas Consumers' Council to be unfair within the meaning of the Unfair Terms in Consumer Contracts Regulations 1995." ").
  The noble Lord said: My Lords, Amendment No. 131 stands in my name and in the names of my noble friend Lord Peston and the noble Lord, Lord Ezra.
  The amendment concerns a matter which I originally broached on Second Reading. I believe it to be an important issue. I hope that the gap between the Government and ourselves on this issue of principle is not unbridgeable.
  We believe that in transposing the directive on this issue in the Unfair Terms in Consumer Contract Regulations 1994 the Government deliberately chose to take a very restrictive view about the directive, in contrast with the view taken by most other member states. We take the view that it is right that the consumer should be enabled to have much wider access to the courts to enforce rights and pursue remedies through representative actions. The Government believe that that goes too far and ought to be limited.
  I do not need to rehearse what the Government seek to do here. The Minister is well aware of the point that I made, which was further dealt with by my noble friend at the first Sitting of the Committee stage.
  What happened in another place was unfortunate. At that time the Minister seemed to rule out any suggestion of that kind out of hand. He said simply, in effect, that the Government had decided against the amendments that were proposed. He said:
  "We believe that the present remedies available via the DOFF are appropriate. We do not think that other bodies should be able to exercise those remedies".—[Official Report, Commons, Standing Committee A, 27/4/95; col. 322.]
  No rationale was ever put forward. It was that which caused us to question the Government's views and their bona fides on the issues.
  We believe that, unless the amendment we now propose were to be accepted, the DGFT would not necessarily be the right person to initiate a representative action. I argued previously that Ofgas and the Gas Consumers Council would receive substantial numbers of complaints from consumers and would therefore be in an advantageous position to pursue those remedies in the courts. The difficulty with the OFT is that it is not designed to defend the interests of consumers but to adopt a vigilant, independent and objective balance between industry and the consumer. Clearly, on that basis, the DGFT is not in the best position to pursue such remedies.
  I hope that the Minister will recognise that in tabling the amendment we are saying that the Government may not necessarily be right about this matter. We know that litigation is pending through judicial review. On the previous occasion the Minister said that it was inappropriate to deal with the matter piecemeal. That reiterates the argument that was made previously. This is the vehicle we are now considering. We take the view that the Minister would not invalidate the Government's position if he were to adopt the amendment. If the amendment were accepted the director would still have the power to take the action, but the other bodies would be able to help the director to determine whether something was unfair, and the director would then take action.
  I believe that we have to be more specific than the Government have been. I do not believe that our proposal for dealing with the matter is ideal. I should like to go further. We have tried to offer the Government an opportunity to meet us half way on this issue. That is what I hope the Government will be prepared to do.
  I repeat that we should like to go very much further. We believe that the original directive was designed to enable governments to go much further and that the restrictive attitude adopted by the Government is wrong. However, there it is. I hope that the Minister will regard what we propose here as a positive way of meeting his case without trespassing on matters which are currently seized of by the courts, because it would not invalidate the Government's contentions in any way in relation to the judicial review. I hope that the Minister will accept that it is a useful way of trying to get round that particular problem. I beg to move.
  Lord Fraser of Carmyllie: My Lords, I fear that I must disagree with the noble Lord. He alluded to the fact that an action for judicial review is under way at the present time. I appreciate that it is his intention to

  801
  attempt to approach this matter in such a way that it would not invalidate the Government's position in that action of judicial review. However, I cannot agree with him that this approach would not carry that risk.
  As the noble Lord is aware, we are confident that the directive has been correctly implemented by the Government. As he said, there are those who do not agree that we have done that and have accordingly raised proceedings for judicial review. Against the background of an action for judicial review which has not yet been heard, I do not believe that we can look further at the proposal pending the outcome of that case.
  More generally, even if we felt in a position to do that we certainly would not want to approach the issue of the implementation of the directive in a piecemeal manner solely for the gas industry by amending the Gas Act. I recognise that the noble Lord is concerned that the vehicular argument, as he described it, should not be used too regularly, but it seems to me to be appropriate in this context.
  I do not believe that I can say much more on the subject so long as legal proceedings are pending before the courts.
  Lord Clinton-Davis: My Lords, I understand what the Minister says. I am disappointed that he feels that it would so embarrass the Government in those proceedings that he cannot accept the amendment. I think that he is wrong about that. However, he has made the decision of the Government quite clear. When it comes to vehicles, I hope that the Government's vehicle that is currently careering through the courts meets with an untimely end.
  Can the Minister indicate when the proceedings are likely to be heard? Is there any indication of that?
  Lord Fraser of Carmyllie: My Lords, I am never entirely confident about my understanding of the detail of English legal procedures. I understand that it has not been possible to put the action through the accelerated procedure. It is likely to be heard at the beginning of next year.
  Lord Clinton-Davis: My Lords, I hoped that the Minister would say that the accelerated procedure would apply, particularly in the light of our discussions here. However, that is not to be the case. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  6.30 p.m.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 132:
  Page 62, leave out lines 21 to 24 and insert—
  ("(a) such activities as are mentioned in section 5(1) above; and
  (b) activities ancillary to such activities as are so mentioned (including in particular the storage of gas, the provision and reading of meters and the provision of pre-payment facilities).").
  The noble and learned Lord said: My Lords, in moving Amendment No. 128, I spoke to Amendment No. 132. I beg to move.
  On Question, amendment agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 133:
  Page 63, line 30, at end insert—
  ("Functions with respect to gas measuring equipment etc.
  After section 36A of the 1986 Act there shall be inserted the following section—
  "Functions with respect to gas measuring equipment etc.
  36B.—(1) If and to the extent that the Secretary of State so directs, the functions of the Secretary of State under section 6 of the Weights and Measures Act 1985 (testing of standards and equipment) so far as relating to—

  (a) any article used or proposed to be used as a standard of a unit of measurement in relation to gas;

  (b) any measuring equipment, or other metrological equipment, for use in relation to gas; or

  (c) any article for use in connection with any such equipment,

  shall be exercisable by the Director concurrently with the Secretary of State; and references in that section to the Secretary of State shall be construed accordingly.
  (2) Any sums received by the Director by virtue of this section shall be paid into the Consolidated Fund." ").
  On Question, amendment agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 134:
  Page 64, line 43, at end insert—
  ("Duty to consider representations and give reasons
  . After section 38 of the 1986 Act there shall be inserted the following section—
  "Duty to consider representations and give reasons.
  38A—(1) The Secretary of State may by order exercise any one or more of the powers conferred by subsections (2) to (4) below.
  (2) This subsection confers power to provide that, before the Director makes a specified decision in relation to a licence holder, the Director—

  (a) shall give to the licence holder a written notice stating—

  (i) that he is considering making the decision and the reasons why he is considering doing so; and

  (ii) that the licence holder may, within a period specified in the notice, make written representations to him or, if the licence holder so requests, make oral representations to a person appointed by him for the purpose; and

  (b) shall consider any representations which are duly made and not withdrawn.

  (3) This subsection confers power to provide that, where the Director makes a specified decision in relation to a licence holder, the Director shall as soon as practicable give to the licence holder a written notice explaining why it appeared to him to be appropriate to make the decision.
  (4) This subsection confers power to provide that, where a specified decision made or proposed to be made in relation to a licence holder will or may materially affect any specified person, any provision made by virtue of subsection (2) or (3) above shall, with any specified modifications, apply in relation to that person.
  (5) Nothing in any order made under this section shall require the Director to disclose any information the disclosure of which he considers would or might seriously and prejudicially affect the interests of a particular individual or body of persons, whether corporate or unincorporate.
  (6) An order under this section—

  (a) may make different provision in relation to different cases or different circumstances; and

  803

  (b) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

  (7) In this section—

  'decision' means any decision under this Part, or under a condition of a licence, other than a decision to make a provisional order under section 28 above;

  'specified', in relation to an order under this section, means specified in the order or of a description so specified;

  and references to a licence holder include references to an applicant for a licence." ").
  The noble and learned Lord said: My Lords, I spoke to Amendment No. 134 when speaking to Amendment No. 129. I beg to move.
  On Question, amendment agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 135 to 137:
  Page 65, line 10, leave out ("section 38 above") and insert ("subsection (1) of section 38 above, which is required by or has been obtained in pursuance of a notice under subsection (1A) of that section").
  Page 65, line 14, leave out from ("is") to end of line 17 and insert ("required by the other licence holder for purposes connected with the carrying on of relevant activities.
  (1B) In subsection (1A) above 'relevant activities', in relation to a licence holder, means—

  (a) activities which he is authorised by his licence to carry on; and

  (b) in the case of a public gas transporter, such activities as are mentioned in section 7(1)(b) and (c) above." ").

  Page 65, line 21, leave out ("(2) and") and insert ("to").
  On Question, amendments agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 138:
  Page 65, line 22, at end insert—
  ("Making of false statements etc.
  48A. After subsection (1) of section 43 of the 1986 Act (making of false statements etc) there shall be inserted the following subsection—
  "(1A) Any person who with intent to deceive—

  (a) impersonates an officer of a public gas transporter, gas supplier or gas shipper for the purpose of obtaining entry to any premises; or

  (b) for that purpose makes any statement or does any act calculated falsely to suggest that he is an officer, or an authorised officer, of such a transporter, supplier or shipper,

  shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale."").
  The noble and learned Lord said: My Lords, in moving Amendment No. 68, I spoke to Amendment No. 138. I beg to move.
  On Question, amendment agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 139 to 142:
  Page 66, line 9, after ("regulations)") insert—
  ("(a) for paragraph (aa) there shall be substituted the following paragraph—
  "(aa) provide for anything falling to be determined under the regulations to be determined—

  (i) by the Director or by such other person as may be prescribed by the regulations; and

  804

  (ii) in accordance with such procedure and by reference to such matters and to the opinion of such persons as may be so prescribed;" and.

  (b) in paragraph (b),").
  Page 66, line 45, leave out from (""prescribed",") to end of line 46 and insert ("for the words "(except in section 33A above)" there shall be substituted the words "made, unless the context otherwise requires, by the Secretary of State"").
  Page 66, line 50, at end insert—
  ("( ) the definition of "regulations" shall cease to have effect;").
  Page 67, line 1, leave out ("after the definition of "regulations"") and insert ("immediately before the definition of "subsidiary"").
  The noble and learned Lord said: My Lords, in moving Amendment No. 100, I believed that I had spoken to these amendments. I have been corrected; I have no doubt about the accuracy of the correction. I beg to move Amendments Nos. 139 to 142. They are technical amendments which should have been spoken to when I moved Amendment No. 100.
  On Question, amendments agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 143 and 144:
  Page 67, line 2, leave out ("definition") and insert ("definitions").
  Page 67, line 6, after ("pipe;") insert—
  ("'storage', in relation to gas, means storage in, or in a facility which is connected (directly or indirectly) to, a pipe-line system operated by a public gas transporter;" ").
  The noble and learned Lord said: My Lords, in moving Amendments Nos. 143 and 144, I speak also to Amendments Nos. 146 to 148. They are all technical amendments.
  On Question, amendments agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 145:
  Page 67, line 7, at end insert—
  ("(1A) After subsection (1) of that section there shall be inserted the following subsection—
  "(1A) In this Part any reference to an officer authorised by any person includes, in relation to an officer who is an officer or servant of an agent of that person, an officer who, in accordance with the terms of any written authority given by that person to the agent, is authorised by the agent on behalf of that person."").
  The noble and learned Lord said: My Lords, I spoke to Amendment No. 145 when moving Amendment No. 68. I beg to move.
  On Question, amendment agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 146 to 148:
  Page 67, line 8, leave out from ("for") to end of line 9 and insert ("paragraphs (a) and (b) there shall be substituted the words "to the supply of gas (directly or indirectly) to a public gas transporter, gas supplier or gas shipper".").
  Page 67, line 13, leave out ("25,000").
  Page 67, line 14, leave out ("732,000").
  The noble and learned Lord said: My Lords, in moving Amendment No. 143, I spoke also to Amendments Nos. 146 to 148. I beg to move.
  On Question, amendments agreed to.
  [Amendment No. 149 not moved.]
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 150 and 151:
  Page 68, line 1, leave out ("paragraph 1(1)") and insert ("sub-paragraph (1) of paragraph 1").
  Page 68, line 8, at end insert—
  ("( ) After sub-paragraph (3) of that paragraph there shall be inserted the following sub-paragraphs—
  "(4) If and to the extent that regulations made by the Secretary of State so provide, a public gas transporter shall pay, by way of compensation for any loss sustained by any person in consequence of the exercise of those powers, such sum as may be determined in accordance with the regulations.
  (5) Except with the consent of all public gas transporters, no regulations may be made under sub-paragraph (4) above which amend, or re-enact with modifications, regulations previously made under that sub-paragraph." ").
  The noble and learned Lord said: My Lords, in moving Amendment No. 133, I wished to speak also to Amendments Nos. 150 and 151. I beg to move.
  On Question, amendments agreed to.
  Schedule 4 [Minor and consequential amendments]:
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 152:
  Page 70, line 40, at end insert—
  ("Statistics of Trade Act 1947 (c.39)
  —(1) In relation to gas, subsection (5)(b) of section 9 of the Statistics of Trade Act 1947 (restriction on disclosure of information obtained under that Act) shall have effect as if the references to the total quantity or value of any articles produced, sold or delivered included a reference to each of the following, that is to say—

  (a) the total quantity or value of gas which is supplied in Great Britain;

  (b) the total quantity or value of gas which in Great Britain is supplied—

  (i) for the same purposes, or for different purposes but in similar quantities;

  (ii) to premises appearing to the Secretary of State to be of the same description; or

  (iii) on terms appearing to the Secretary of State to be similar as respects continuity of supply;

  (c) the total quantity of gas which in Great Britain is conveyed or shipped to premises for supply purposes, or is stored; and

  (d) the total quantity of gas which in Great Britain is conveyed or shipped to or from, or is stored in, facilities or pipe-line systems appearing to the Secretary of State to be of the same description.

  (2) If different areas of Great Britain are specified for any purposes of this paragraph by order made by the Secretary of State, this paragraph shall have effect for those purposes as if any reference to Great Britain included a reference to each of those areas.
  (3) An order under this paragraph shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
  (4) In this paragraph—

  "convey" means convey through pipes;

  "for supply purposes", in relation to any conveyance or shipment of gas to any premises, means with a view to the gas being supplied to the premises, or being used in the premises by the holder of a licence under section 7A(2) of the 1986 Act;

  "gas" and "public gas transporter" have the same meanings as in Part I of the 1986 Act;

  "store" means store in, or in a facility which is connected (directly or indirectly) to, a pipe-line system operated by a public gas transporter;

  806

  "supply", in relation to gas, means supply to premises to which the gas has been conveyed, other than supply (directly or indirectly) to a public gas transporter, gas supplier or gas shipper.

  (5) For the purposes of this paragraph—

  (a) gas is shipped if, in pursuance of arrangements made with a public gas transporter, it is introduced into, conveyed by means of or taken out of a pipe-line system operated by that transporter; and

  (b) any reference to the shipment of gas to any premises, or to or from any facilities or pipe-line systems, shall be construed accordingly.").

  On Question, amendment agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 153:
  Page 76, line 5, leave out paragraph 20.
  The noble and learned Lord said: My Lords, the amendment has been brought forward in response to points which were raised at earlier stages by the noble Lord, Lord Peston, and the noble Lord, Lord Ezra. As my noble friend Lord Ferrers made clear in response to that debate, the deregulation order-making power in the Deregulation and Contracting Out Act applies only to legislation passed up to and including the 1994 Session. That was because we recognised that Parliament could not know what future legislation might consist of and whether it would be appropriate to introduce an order-making power of that kind.
  In view of the strong views expressed, we have considered again whether such a provision was really needed in the Bill. We have concluded that it is not. I beg to move.
  Lord Peston: My Lords, I thank the Minister on behalf of all noble Lords who are interested in the matter. I believe that he is entirely right: the provision is not needed in this Bill, apart from any question of principle. I am most indebted to him for taking out the paragraph.
  Lord Ezra: My Lords, perhaps I may reiterate what the noble Lord, Lord Peston, said. It was a provision that caused us acute concern. I am glad that the Government have come to the conclusion that it is not relevant. It seemed to us that it raised a serious matter almost of constitutional concern. Now that the paragraph has been removed, we are once again indebted to the Minister for his understanding of the position which we then expressed.
  On Question, amendment agreed to.
  Schedule 5 [Transitional provisions and savings]:
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 154 to 178:
  Page 76, line 26, leave out ("the persons so mentioned") and insert ("those persons").
  Page 77, line 3, leave out ("as may be") and insert (", and only such provision, as the Secretary of State considers").
  Page 78, line 2, after ("may") insert ("if he thinks fit").
  Page 78, line 3, at end insert ("appropriate for the purpose of securing that the scheme makes such provision, and only such provision, as he considers").
  Page 78, line 11, after ("provision") insert (", and only such provision,").
  Page 79, line 30, leave out ("paragraph") and insert ("paragraphs 4(4)(b) and").
  Page 80, line 8, after ("be") insert ("issued as fully paid and").
  Page 80, line 9, leave out ("of their nominal value in cash") and insert ("in cash of their nominal value and, if the scheme so provides, such premium as may be so specified or determined").
  Page 80, line 10, at end insert—
  ("Statutory accounts
  —(1) This paragraph has effect for the purposes of any statutory accounts of the transferee, that is to say, any accounts prepared by the transferee for the purpose of any provision of the Companies Act 1985 (including group accounts).
  (2) Subject to sub-paragraph (3) below, the value or amount to be assigned to any asset or liability which is vested in the transferee by virtue of paragraph 6 above shall be—

  (a) the value or amount (if any) assigned to the asset or liability for the purposes of the corresponding statement of accounts prepared by the public gas supplier in respect of the last complete accounting year of the supplier to end before the appointed day; or

  (b) if the asset or liability is part only of an asset or liability to which a value or amount is so assigned, so much of that value or amount as may be determined by or under the scheme under paragraph 2 above; or

  (c) if no value or amount is given by paragraph (a) or (b) above or the value or amount so given is inappropriate in all the circumstances of the case, such value or amount as may be determined, on the basis of the supplier's accounting records, by or under that scheme.

  (3) The amount to be included in respect of any item shall be determined as if so much of anything done by the public gas supplier (whether by way of acquiring, revaluing or disposing of any asset or incurring, revaluing or discharging any liability, or by carrying any amount to any provision or reserve, or otherwise) as may be determined by or under the scheme under paragraph 2 above had been done by the transferee.
  (4) Without prejudice to the generality of the preceding provisions of this paragraph, the amount to be included from time to time in any reserves of the transferee as representing the transferee's accumulated realised profits shall be determined as if such proportion of any profits realised and retained by the public gas supplier as is determined by or under the scheme under paragraph 2 above had been realised and retained by the transferee.
  (5) In this paragraph, in relation to the public gas supplier—

  "accounting records" means accounting records kept by the supplier in pursuance of section 221 of the Companies Act 1985;

  "complete accounting year" means a financial year of the supplier determined in accordance with section 223 of that Act.").

  Page 82, line 4, after ("Director") insert ("(in such terms as may be specified by the applicant for the purposes of this sub-paragraph)").
  Page 82, line 9, leave out ("the persons so mentioned") and insert ("those persons").
  Page 83, line 5, leave out ("sub-paragraph (4)") and insert ("sub-paragraphs (3A) and (4)").
  Page 83, line 10, at end insert—
  ("(3A) Sub-paragraph (3) above shall not apply in relation to a licence treated as granted under section 7A(1) of the 1986 Act which authorises only the supply to premises of gas which has been conveyed to the premises otherwise than by a public gas transporter.").
  Page 83, line 11, leave out ("so granted") and insert ("granted under section 7A(1) or (2) of the 1986 Act").
  Page 83, line 12, leave out ("the 1986") and insert ("that").
  Page 83, line 18, after ("revocation") insert ("or suspension").
  Page 83, line 45, at beginning insert ("(1) Subject to sub-paragraph (2) below,").
  Page 83, line 48, after ("such") insert ("one").
  Page 84, line 3, at end insert—
  808
  ("(2) lf, in the case of any such authorisation as is mentioned in sub-paragraph (1) above, the Secretary of State is satisfied that exemption from such one or more of paragraphs (a), (b) and (c) of section 5(1) of the 1986 Act as may be requisite to meet the particular circumstances of the case will be granted under section 6A of that Act as from the appointed day, he may by order direct that that sub-paragraph shall not apply in relation to the authorisation.
  (3) An order under this paragraph shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.").
  Page 85, line 14, leave out ("This paragraph") and insert ("Sub-paragraph (1A) below applies where—

  (a) a public gas supplier has been required under subsection (1) (duty to supply certain premises) of section 10 of the 1986 Act to give a supply of gas to any premises; and

  (b) the required supply is not given before the appointed day.

  (IA) The requirement shall have effect on and after the appointed day as if it were—

  (a) a request made to the supplier's supply successor for a supply of gas; and

  (b) if the premises are not connected to a relevant main, a requirement made of the supplier's transport successor under subsection (2)(a) of section 10 requiring him to connect the premises to such a main and supply and lay any pipe that may be necessary for that purpose.

  (1B) Sub-paragraph (2) below").
  Page 85, line 16, leave out ("section 10 of the 1986 Act (connection charges)") and insert ("subsection (4) (connection charges) of section 10").
  Page 85, line 18, leave out ("paragraph") and insert ("sub-paragraph").
  Page 85, line 31, at end insert—
  ("( ) In this Part of this Schedule "supply successor", in relation to a public gas supplier, means the person who becomes a gas supplier by virtue of a scheme made by or in relation to that public gas supplier under Part I of this Schedule.").
  Page 85, leave out lines 40 to 43.
  Page 88, line 6, at end insert—
  ("Street works notices
  27A. Any notice—

  (a) which has been given by a public gas supplier in England and Wales under section 54, 55 or 57 of the New Roads and Street Works Act 1991, or in Scotland under section 113, 114 or 116 of that Act; and

  (b) which is in force immediately before the appointed day,
  shall have effect on and after that day as if it had been given by the public gas supplier's transport successor.").

  The noble and learned Lord said: My Lords, I am advised that, unless there is objection, I may move the remaining amendments. There is no objection to that; I therefore do so. I beg to move Amendments Nos. 154 to 178.
  On Question, amendments agreed to.
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 179:
  Page 88, line 6, at end insert—
  ("Restrictive trade practices
  27B.—(1) In relation to any supply of gas before the appointed day, the reference in subsection (2) of section 62 of the 1986 Act (exclusion of agreements from Restrictive Trade Practices Act 1976) to a supply of gas otherwise than under a licence granted under section 7A(1) of the 1986 Act shall have effect—

  (a) in the case of a supply before 23rd August 1986, as a reference to a supply of gas otherwise than in performance of any duty imposed by the Gas Act 1972; and

  (b) in the case of a supply on or after that date, as a reference to a supply of gas otherwise than under an authorisation granted under section 7 of the 1986 Act.

  (2) In relation to any introduction or taking out of gas, or any use of a system or facility, before the appointed day, subsection (2A) of section 62 of the 1986 Act shall have effect as if—

  (a) the reference to a public gas transporter were a reference to a public gas supplier; and

  (b) the reference to gas shippers were a reference to any persons.").

  The noble and learned Lord said: My Lords, I shall now move the other amendments to which I have spoken. I beg to move Amendment No. 179.
  On Question, amendment agreed to.
  Schedule 6 [Repeals]:
  Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendments Nos. 180 to 182:
  Page 89, line 37, leave out from ("48(1),") to ("of') in line 41 and insert ("definitions of "regulations" and").
  Page 89, line 42, column 3, at end insert—
  ("Section 62(7).").
  Page 90, line 11, column 3, leave out ("and 6") and insert (", 6 and 9(3)")
  On Question, amendments agreed to.

Social Security (Income Support and Claims and Payments) Amendment Regulations (S.I. 1995/1613)
6.38 p.m.
Earl Russell Earl Russell rose to move, That a humble Address be presented to Her Majesty praying that the regulations be annulled.
The noble Earl said: My Lords, first, I should like to thank the noble Baroness, Lady Hollis of Heigham, for tabling the Motion. She pipped me to the post; on that I congratulate her. I am sorry that the noble Baroness is unable to be present. However, although she is unable to be present, it seems to me that the issue nevertheless deserves some debate. I am most grateful to the Minister for reacting like the real trouper he is to finding that, after all, he would not have the evening off. I am grateful to him and sorry to put him to the trouble.
Autumn is the season when Prime Ministers have visions. This Prime Minister has had one; but, unfortunately, it was bifocal. It is a characteristic of a bifocal vision that you can see only one half of it at a time. The Prime Minister has a vision of a home-owning world in which he hopes there may be 1·5 million more home owners. But at the same time he has a vision of trimming away some of the edges of the welfare state and increasing self reliance. As the Secretary of State put it in his memorandum to the Social Security Advisory Committee, people who buy houses must be able to sustain major commitments if unable to work. One can understand the sense of that, but it does not sit very easily with 1·5 million more home owners.
I can see the case either for reducing home ownership or for reducing dependence on the state. I find a great deal of difficulty in seeing both at once. I find even more difficulty in seeing the case for increasing home ownership sitting beside the case to which the Prime Minister is also committed for a deregulated and, as he sees it, more competitive labour market. Unless one is
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able to rely on the state in time of trouble, home ownership is essentially for those in stable, secure jobs. The deregulated labour market, as it develops, means more and more people who are not in stable, secure jobs, who are therefore in not at all a good position to be home owners unless they can rely on support through the benefits system when they cease to be in employment. I wish to know to which part of that vision the Prime Minister is committed. I cannot see that it can possibly be both. There is a natural incongruity in that.
I understand, of course, that there is a strong and genuine case for keeping down costs. No one wants to see costs growing unduly; but a desire to keep down costs is no excuse for wasting money. So we need to be clear, when we undertake a measure which is designed—as this is—to reduce costs, to be sure that it does so. I am surprised that the Government are not more concerned than they appear to be by the size of the gross mortgage debt in this country. When Mrs. Thatcher (as she then was) came into office, it was 26 per cent. of GNP. It is now 62 per cent. of GNP or £370 billion. That is a great deal bigger than the national debt. It is truly a potential avalanche waiting to descend on our heads. So if we have a massive wave of repossessions, we may get a succession of failures running through the economy, causing a great deal of dislocation which I would not wish to see—and nor, I hope, would the Government.
The costs of repossessions, both social and financial, are extremely heavy. It is the central effect of repossession that it is extremely hard for the person who has suffered it to obtain work. No employer likes taking on people who have no fixed address. At present, of all the people who draw income support to help with their mortgages, 50 per cent. return to work within a year. That is an important figure. I do not see how, under any of the alternative arrangements proposed, that figure can possibly be matched.
There is also an increasing volume of evidence—much collected through the Institute of Education in London—of severe difficulties in obtaining schooling suffered by children who are homeless, itinerant or on the move. It is something on which we would welcome interdepartmental consultation because there is the potential for the beginning of another cycle of deprivation and for all the costs to public funds that that may entail.
I am certain that the Minister is just about to tell me that all those fears are groundless because we can entirely rely on insurance to take up the slack. That faith is misplaced because, after all, insurance is a private business. It is designed to achieve profit, though I know it does not always succeed. Insurance is not a social science and cannot function efficiently if it attempts to be one. I wish to refer to some of the disadvantages and I rely on evidence presented largely by the Social Security Advisory Committee. It draws attention to anecdotal evidence of people applying for mortgage protection insurance who are refused it on the grounds that if they ask for it they must be about to lose their jobs and are therefore bad risks. In fact, if you want it, you must need it, so you cannot have it.
From the commercial point of view of the insurance company, there may be a good deal of logic in that position. Cherry-picking is the very nature of insurance, but in social security it is not the cherries that we need to pick. So the people who are most likely to need help will be those who are least likely to get it through the insurance system. For example, many people have been told that under their policies they cannot have any help from their insurance company if they become unemployed within six months of taking out the policy. That is the crack between the insurance system and the welfare system into which a great many people may fall. I do not know what will happen to them when they do.
The Minister will remember an amendment moved by the noble Lord, Lord Swinfen, during the disability Bill, drawing attention to the difficulty suffered with insurance by those with an inheritance of genetic disorders, people perhaps with a grandparent who suffered from Huntington's chorea. Many of them are perfectly able to work and pay taxes. I do not see that their prospects of becoming home owners are particularly good and that causes me concern.
It is also normal in insurance policies that people in temporary jobs—contract jobs, self-employed or undergoing training—tend to be excluded. The Government have often gloried in the increase in self-employment, they have gloried in all forms of deregulated employment. However, a great many such people will not be able to obtain insurance so they would not be able in future to become home owners. For example, in my own field let us take the contract scientific researchers who are now the underclass of the academic world. It will be even harder to keep them in universities than it is now, if they have no hope of stable housing.
There is a real doubt whether that is in the public interest. There is a strong case for arguing that since deregulation will mean frequent short-term experience of unemployment, it necessarily implies a strong welfare state. It is a world in which people often fall over. If you fall over, you must be able to get up again. Often you cannot do that without help, otherwise you are pushed into a position where you may not be able to get back into employment for the rest of your life. That is no more in the interests of public funds than it is for the person who suffers it.
There has been a good deal of argument between the Government and the committee about insurance cover for repairs. The Government have gone some way to meet the committee on it, but at the same time they argue that there is not really a public interest in repairs. I believe that they are wrong on that. It is of the nature of a market that if we diminish the supply without diminishing the demand, the price must increase. If we diminish the housing stock, the price of housing in general must go up.
I also found the attempt in the regulations to deal with this an example of the disadvantages of the total enumeration method of legislation. I do not think that I need explain to the Minister what I am getting at; I think he knows well enough. In fact, it is not a bad attempt to set out all the things for which one might need help with repairs. However, I should much have preferred the
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general phrase used by the Secretary of State in his reply to the committee: namely, help for any repairs "which are required to maintain fitness for occupation".
The Government have gone a long way towards total enumeration of those repairs. However, they have left out, for example, repair to broken locks. Anyone who lives in a rough neighbourhood knows what will happen to the house if you cannot afford to repair the locks. That is an example of what the noble Lord, Lord Renton, always says: the draftsman cannot foresee everything.
The Social Security Advisory Committee quotes the insurance ombudsman:
"The experience of the Bureau is that this kind of insurance generates enough problems as it is. These problems will only be compounded if this kind of insurance is presented, incorrectly, as being the equivalent in all material respects to the state benefit it is intended to replace".
The committee recommended that the Government should defer the introduction of this until they are convinced that the insurance upon which they intend to rely is in place. That is a sensible recommendation. If the Government are as confident as they say that the insurance will appear, it should not cost them very long.
While we are on the subject of the committee, I should like to congratulate Sir Thomas Boyd-Carpenter on his appointment to the chairmanship. He will find, as I remember Sir Peter Barclay telling me he had found, that it is a steep learning curve. I am sure that, like Sir Peter, he will climb it successfully, and indeed with distinction. I wish him better luck than his predecessor in getting the attention of the Government for the reports that he produces. I beg to move.
Moved, That a Humble Address be presented to Her Majesty praying that the regulations be annulled.—(Earl Russell.)
Lord Graham of Edmonton: My Lords, I rise very briefly and unexpectedly. I did not intend to make a contribution, but, in view of the kind words of the noble Earl, Lord Russell, in the absence of my noble friend Lady Hollis, I should like to say that I appreciated his remarks. As the House well knows, the case that was made so well by the noble Earl would have been made equally well by my noble friend. It is sufficient to say that in another place my parliamentary colleague, Keith Bradley, twice sought to do precisely what this parliamentary initiative seeks to do, but to no avail. I am grateful for the remarks of the noble Earl, Lord Russell. He covered all the points. We on these Benches fully support everything that he said. That is all that I intend to say this evening.
The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, I did think, as the noble Earl, Lord Russell, said, that I was about to get away with a free evening this evening. However, I am happy to respond to the points that the noble Earl made on this issue and, so to speak, pick up the baton. I hope that it does not encourage the noble Earl too much when I say that I was almost beginning to get withdrawal symptoms over the past three months without having to fence with him across the Dispatch Box.

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I should like to start by putting these measures in context. It has often been said that these measures for income support mortgage interest will add to the burdens of home owners—as if the current system provides a panacea for home owners in difficulty. Indeed, to a certain extent in part of his argument the noble Earl seemed to move in that direction.
This is simply not the case. I make no apology for repeating a statistic that will be very familiar and well worn to those noble Lords who have followed this debate. The vast majority of home owners—70 per cent. in fact—would receive no help from income support if they found themselves unable to work tomorrow. Indeed, 150,000 unemployed home owners currently do not qualify for income support.
As to the noble Earl's remarks in regard to my right honourable friend the Prime Minister and his desire to see more and more people do what they all want to do—namely, own their own homes—the noble Earl's "either/or" trap was, as I discovered, a clever one—into which I suggest neither I nor my right honourable friend the Prime Minister has fallen. It is not a matter of "either/or". As I say, 70 per cent. of home owners would not receive income support; and 150,000 home owners currently do not qualify. They do not qualify for a number of reasons. Help is not available to those with a working partner, and 62 per cent. of mortgages are based on two or more incomes. It is not available to those with modest savings or redundancy payments, and it is not available to those with a modest income.
So, income support mortgage interest is a very uneven safety net, contrary to the impression given by the noble Earl—and, to be fair to the noble Earl, the impression given by many people who campaigned against this change of policy since we announced it. Therefore, despite failing to help so many people it is a very expensive arrangement, with the burden on the taxpayer rising from £31 million in 1979 to around £1 billion today.
The main change that we intend to make is that for new borrowers—namely, those who take on new housing commitments after 1st October 1995—the waiting period will be nine months (perhaps more legalistically expressed, 39 weeks) after which the full eligible housing costs will be paid. For existing borrowers—those who took on their housing commitments prior to 2nd October 1995—the waiting period will be two months (eight weeks) followed by a further period of four months (18 weeks) when 50 per cent. of the mortgage will be paid. This puts existing borrowers on a par with those on private mortgage insurance which usually has a two or three-month waiting period.
Once housing costs become payable they will be paid at a standard rate which is set as close as possible to the average building society rate. I know that the noble Earl did not mention this aspect, but we hope that by the use of the standard rate many of the difficulties and bureaucracies, and indeed errors that are made, in the current system will be ironed out. Existing claimants and pensioners have been protected. During the consultation on these measures we had extensive
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discussions with all those concerned and we considered carefully the report of the Social Security Advisory Committee.
Essentially, we believe that lenders and borrowers should take back responsibility for the first few weeks of difficulty. Before we came forward with these proposals many borrowers were already taking out insurance. The Association of British Insurers says that one in three new borrowers were taking out insurance—that is, before this proposal even came across the horizon—and the Abbey National confirmed this—40 per cent. of its new borrowers were taking out insurance. That rather knocks on the head the argument that the noble Earl put forward on anecdotal evidence; namely, that if you ask for insurance, the company immediately thinks that you must need it, and therefore it will not give it to you. Quite clearly, on the evidence that I have presented, very many people were already taking out policies, and successfully, before the proposals we made came over the horizon.
However, following discussions with lenders and insurers a number of important easements have been introduced. The noble Earl mentioned some. I hope he will accept that we recognise that at present there are some groups whom insurers cannot cover. They are in particular: carers; those with pre-existing medical conditions or HIV related illnesses; remand prisoners; and deserted partners who have care of children. New borrowers in these groups will be treated as existing borrowers. We have also clarified the definition of new borrowing to avoid any perverse effects. We have introduced a 26-week linking period where re-qualification periods for insurance may have left borrowers uncovered. We have introduced special rules to "start the clock" on the restricted period for those who are not entitled to income support because of excess income or capital. So they will not be left having to pay for some time before the clock starts to tick—when, for example, they first sign on as unemployed.
Once housing costs become payable by the Department of Social Security Benefits Agency, they will be paid direct to lenders participating in the mortgage direct scheme. That will help control arrears by ensuring that benefit paid for housing costs is used for that purpose.
The measures we set out in the regulations provide the right balance between benefit and insurance provision and ensure that the two mesh together to provide more comprehensive cover for borrowers. Importantly, the introduction of those measures has encouraged all borrowers and their lenders to think about how they might cope when times get hard. Your Lordships may recall the point I made that 70 per cent. of borrowers would not be covered and will see the importance of the additional spread of cover that has come about because we made the decisions we did.
The question of reasonable repairs, which the noble Earl raised with me, is a difficult issue. People take out second mortgages and sometimes a new mortgage to repair, improve or expand their house. Some people do it because they like where they live but want a bit more room and therefore take out another mortgage; other people do it because the house is not properly habitable

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and they wish to make it habitable. That is a problem for the Government. Clearly it would not be right if one decided to take out a new mortgage in order to give one's wife the kind of kitchen one sees in classy magazines and then turned to the taxpayer and said, "Will you be prepared to pick up the tab for this lovely kitchen?" There is a world of difference between that situation and another situation which the noble Earl is perhaps about to put to me.
Earl Russell: My Lords, I entirely accept what the Minister says. My point concerned the method of drafting legislation. It owed its ideological origins to the noble Lord, Lord Renton.
Lord Mackay of Ardbrecknish: My Lords, I appreciate the point the noble Lord is making as to how one drafts legislation in order to tighten up on these issues and not allow the example I was making through the system. As is often the trouble with a general provision, when it said, "anything else reasonable", the blunt fact is that that was being interpreted too widely in the old scheme and we had to think of ways, by giving examples, to list the kinds of facility which would fall to be considered for help and, if they are not listed, the kinds of facility which would not. We tried to list the facilities which may be required to make a house habitable; to meet the needs of the disabled and, for example, to cover the provision of separate sleeping arrangements for children of different sexes aged 10 or over. We hoped that by listing the examples the position would he made clear to everybody, including the officials of the Benefit Agency who must administer the policy.
Perhaps I can turn to the points relating to insurance. The measures we have taken are founded on the belief that the insurance industry is able to rise to the challenge of providing effective, quality products for those borrowers who want them and that lenders want to ensure that all their borrowers are in a position to cope if they are unable to work. Lenders and insurers have already responded positively to those measures. A whole range of new products are emerging, many at substantially reduced rates.
Direct sale products are emerging, cutting out the middle man and cutting costs—one is even being offered by the Daily Mirror. Pick and mix products have been developed offering separate cover for redundancy, accident and sickness. The Skipton, Market Harborough and Hinkley and Rugby building societies are all offering the redundancy element free with top-up insurance as low as £2 per £100. Other lenders are cutting the cost of their comprehensive cover; the Woolwich now offers cover from £3.50 per £100. Lenders are encouraging take-up by existing borrowers to whom it was previously unavailable.
To return to the point I made, because of what we are doing the proposition that people should be insured and the availability of reasonably priced cover will help those people who would never be helped by the income support system if they became unemployed.
Other innovative products are emerging—one from the Halifax combining help to borrowers both in and out of work. The industry as a whole has been acting to
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ensure that the quality of insurance improves. We have worked with the ABI to help it produce its statement of best practice for mortgage protection policies. That is important as it addresses many of the issues of concern about the interface between benefit and insurance, including the treatment of groups such as those mentioned by the noble Earl, the self-employed and contract workers. We will continue to work closely with insurers and lenders now that the changes have been introduced to ensure that the interaction between state and private provision works to the benefit of all concerned.
The noble Earl made some points in relation to home ownership. Home ownership has rarely been as affordable as it is today. The taxpayer still funds MIRAS to the tune of £2.8 billion a year and the average borrower is still £140 better off than in 1990 due to the fall in interest rates. Unemployment is falling steadily and the figures today provide further encouragement. People are becoming used to the idea that we live with continual low inflation; many people had forgotten that low inflation was possible.
The measures we have introduced will lead to the development of better protection for all home owners and will provide confidence to the people who need it. Many critics claim that they will result in an increase in arrears and repossessions. I do not accept that they will. Research has shown that 70 per cent. of those repossessed were not in receipt of income support. The reasons why people end up being repossessed are complex, but around two-thirds of those who had their homes compulsorily repossessed had more than one set of arrears. Those figures were supported in comments by a representative of the Woolwich Building Society at a recent Council of Mortgage Lenders seminar. It was said that only 19 per cent. of the societies' repossessions in July were due to unemployment or business failure, but a staggering 52 per cent. were due to financial mismanagement. With multiple arrears and in the majority of cases no recourse to state benefit, it is perhaps not surprising that some borrowers end up losing their homes. Better protection for all home owners through private provision can only improve that situation.
I wonder about the alternatives. Is the status quo which leaves the majority of home owners without help perfectly acceptable to everyone? I remind your Lordships again of the statistics on repossession which prove that it was not a viable option to stay exactly where we were. Seventy per cent. of those repossessed were not in receipt of income support and the help available. There is a proposal that there should be a mortgage benefit system which would be available to all if people fell on hard times. But the cost of that has never been properly outlined. Any work that we have done on those costs shows them to be considerably in excess of the £1 billion we spend already; they range between £3 billion and £6 billion, depending on how one defines it.
My final point on income support mortgage interest is an important one and one which is all too often forgotten. While we believe it is right that all home owners should make some provision for short periods

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when they are unable to meet their mortgage commitments—all the evidence indicates that they will obtain that cover—the Government are not withdrawing from the provision of income support mortgage interest. We remain the insurer of last resort for those in long-term need. But by introducing these measures we have stimulated the development of a comprehensive mortgage protection insurance market, ensuring a better future for all home owners. All borrowers will benefit from the new arrangements, in particular the majority who were never covered by income support mortgage interest. Interest in insuring has increased and, as I predicted at this Dispatch Box earlier in the year, the costs of insuring have decreased dramatically. I commend the regulations to the House.
Earl Russell: My Lords, I thank the Minister for that reply. I did not want to appear ungenerous by not mentioning the various concessions which have been made in these regulations. I welcome them and I would not wish to imply otherwise. The Minister said that 43 per cent. of new borrowers are taking out mortgage insurance. That was, I think, based on a limited sample, but I will not argue about the sum. What I will say, if I may take a line from the late Lord Home of the Hirsel, whom I shall miss, is that his whisky bottle is not even half full; it is well under half full; it is 57 per cent. empty. That is a significant figure.
Lord Mackay of Ardbrecknish: My Lords, I was making the point that the society which mentioned the 40 per cent. was saying that that was before the current arrangements were even on the horizon. So it is not fair to say that the other 60 per cent. or 57 per cent.—I am not sure where the noble Earl got the figure of 43 per cent. from—will now be left adrift. I am talking about new borrowers. I am suggesting that the new borrowers of a year ago were taking it out at that rate. Perhaps I may suggest that they will be taking it out at a much greater rate from 1st October.
Earl Russell: My Lords, I take the Minister's point and I thank him for it. However, it means that the rate we shall reach at the end remains a matter of conjecture.
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We are both betting. At least one of us, and possibly both of us, will be wrong. We shall have to find out which.
I take the noble Lord's point about the uneven nature of the safety net as it was before. He left out one of the main reasons for that—there was no help in the first 16 weeks. But to say that a net has holes in it is not a sufficient excuse for throwing it away. Anyone who watches fishermen during the summer around the fishing ports will know that that is not their normal reasoning. If your net has holes in it, you mend it.
I noticed that the Minister did not engage with my argument that his proposals will not introduce a real net saving. He repeated, as I thought he would, his confidence in insurance. I shall offer him one more word of warning. Do not try to turn a profit-making business into a social service. It really does not work. It is not the nature of the animal. It is not what it is meant to do.
But in the end I think that we must both stand or fall by the question of who is right on the argument of saving, which brings me to my final question. Are we to assume that this, like many, but not all, other measures introduced by the Department of Social Security, will be monitored? It will be a very difficult job to decide exactly how to monitor it because the effect of repossession on employment will take quite some skill to calculate. I hope that the department will commission academic research on the effect of these proposals on the department's budget and that in one year's, two years' or three years' time we shall meet again across the Chamber and we shall be able to find out who is right. In the meantime, I beg leave to withdraw my Motion.
Motion, by leave, withdrawn.

Queen Mary and Westfield College Bill
Reported from the Select Committee without amendment; Bill not to be recommitted to an Unopposed Bill Committee.
House adjourned at thirteen minutes past seven o'clock.