Lords Sitting of 13 June 2000

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

Carers' Benefits
Baroness Pitkeathleyasked Her Majesty's Government:
What progress has been made on a review of carers' benefits.
The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, the Government remain committed to the support of carers. As we said in our carers' strategy, we are keeping the financial needs of carers under review. We shall continue to do that in the context of government spending plans.
Baroness Pitkeathley: My Lords, I thank my noble friend for that reply. I am happy to acknowledge the great progress that has been made for carers in the past three years. My noble friend will know that this is National Carers' Week. I am pleased to see some noble Lords and noble Baronesses wearing ribbons to demonstrate that. She will also know that yesterday the Carers National Association published a report, Caring on the Breadline, which gives a stark picture of the effects on carers' income of their caring duties. Given that 58 per cent of the respondents said that they had had to give up paid employment in order to become carers, will my noble friend tell us the Government's view on adjusting the benefits system to enable carers to do that more easily and on encouraging employers to recognise the one in eight members of their workforce who have caring duties?
Baroness Hollis of Heigham: My Lords, I am grateful that my noble friend, who has had such a long and distinguished record with the Carers National Association, marks carers' week by asking her Question today. I am sure that the whole House will join with me in recognising the achievements of the CNA in keeping carers afloat in what is often a demanding and gruelling experience for so many of them.
My noble friend is absolutely right to say that one of the main reasons carers are poor is that so many of them have to leave work to care for others. As my noble friend said, the figure is about six in 10. She asked what the Government are doing in this area. First, we are trying to keep carers in contact with the labour market on a part-time basis, if a full-time basis is not available. We are trying to bring them into the ONE system for advice and counselling. We are extending the earnings disregard so that "mini" jobs
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are possible—obviously many carers will benefit from the minimum wage—and, above all, in the Bill that is currently going through your Lordships' House we are bringing carers into the new state second pension in which for every year of caring they will gain approximately an extra £1 on their benefit in retirement.
Lord Higgins: My Lords, while the proposal to help carers with the state second pension which the noble Baroness has just mentioned has been welcomed, is there any guarantee that when it is paid it will be higher than the minimum income guarantee?
Baroness Hollis of Heigham: My Lords, that depends on the circumstances of the family concerned. A large proportion of pensioners have income in addition to their retirement pension in terms of occupational pension and savings. Clearly if a couple or a single person have no income other than their retirement pension they will be eligible for the minimum income guarantee (MIG). However, the vast proportion of those carers who currently receive ICA would not normally be entitled to MIG. In that sense, the question as posed by the noble Lord does not arise.
Lord Addington: My Lords, can the Minister give us the figure which shows how much money the Government have saved through carers taking on this work? Would that figure be taken into account when considering whether to raise benefits for those who take on that work?
Baroness Hollis of Heigham: My Lords, the Government have not done a costing as such. However, I believe that the costing in the report, Caring On the Breadline—my noble friend Lady Pitkeathley will correct me if I am wrong—is about £34 billion. That is the estimate of the value of carers' work to our community. That is a higher figure than the entire sum spent on retirement pensions and about 50 per cent more than we spend on all NHS hospitals. That gives some idea of the scale of indebtedness of our society to carers.
Lord Ashley of Stoke: My Lords, is my noble friend aware that the charging policies of local authorities are causing enormous distress to carers all over the country, partly because the charges are unfair and partly because the criteria are crazy? Can she offer any help on that point?
Baroness Hollis of Heigham: My Lords, my noble friend Lord Ashley is absolutely right to raise that issue. Our White Paper, Modernising Social Services, recognised that the scale of variation in local councils' discretionary charges for non-residential care is unacceptable. This has now been confirmed in the Audit Commission report, Charging with Care. My noble friend Lord Hunt tells me that a first consultation meeting—I think that it will be held tomorrow—will take place between government officials and representatives of service users, carers,

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local authorities and other parties in order to work towards developing statutory guidelines to address the very real problem that my noble friend has identified.
Lord Morris of Manchester: My Lords, is my noble friend aware how warmly many of us welcomed the Minister of State's helpful amendments to the Carers and Disabled Children Bill of my honourable friend Tom Pendry at Report stage in another place; and that we wish him all possible speed and success in achieving its enactment?
Baroness Hollis of Heigham: My Lords, my noble friend Lady Pitkeathley will have the honour, the pleasure and the reward of introducing that Bill when it arrives at the House of Lords. I am convinced that it will have support from all sides of your Lordships' House.
Baroness Thomas of Walliswood: My Lords, can the Minister tell us what additional assistance the Government are thinking of providing to carers who are not wage earners? I am thinking particularly of those people whose elderly parents become in need of care after they have retired; or, at the other end of the scale, of those children and school pupils who are providing caring services to members of their families.
Baroness Hollis of Heigham: My Lords, again, that is a very real problem. Something like three-quarters of all carers, those receiving ICA, are family members—either a spouse or a child—and of course have incomes other than the carer's income coming in, including disability living allowance of either £35 or £50, according to the rate being paid. But clearly if the person being cared for lives outside the family home and is an elderly person, there is no such extra income coming into the family because the person being cared for receives disability benefit. That is one of the reasons why the Government have made available an additional £140 million for respite care. But these and other issues are being reviewed by my noble friend Lord Hunt and his department in terms of their wider response to supporting carers.

Graffiti
2.43 p.m.
Baroness Rendell of Baberghasked Her Majesty's Government:
What steps they are taking to deter those who deface historic buildings and monuments with graffiti.
The Parliamentary Under-Secretary of State, Home Office (Lord Bassam of Brighton): My Lords, deterrents to tackle all types of graffiti are already in place. Graffiti and vandalism are offences under the Criminal Damage Act 1971. Where the value of criminal damage is more than £2,000, the maximum
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penalty is 10 years' imprisonment for those aged 18 and over; and up to two years' detention in a young offenders institution for those aged 15 to 17.
Baroness Rendell of Babergh: My Lords, I thank my noble friend for that reply. If I may extend my Question to include buildings in general—that is, masonry, brickwork, metal surfaces and so on—is the Minister aware that there are areas near central London where one can hardly walk more than a couple of yards without passing graffiti, much of it highly obnoxious? As specialist manufacturers are producing coatings which deter and repel spray paint, does my noble friend agree that it should be government policy to use those coatings and to recommend them for private, domestic and local authority use?
Lord Bassam of Brighton: My Lords, the methods that the noble Baroness suggests should be used are valuable. I understand that they have been used successfully both here and abroad. I also commend to your Lordships' House the activities of those local authorities which employ teams of "graffiti busters". I understand that they have been successful in Stevenage and that there are very good schemes in the London Borough of Sutton and in the Boroughs of Croydon, Merton, Kingston and in Liverpool. I strongly commend that those authorities work closely together with crime and disorder partnerships to do all that they can to deter the widespread nuisance of graffiti, which defaces our excellent public buildings and spoils many local environments.
Baroness Masham of Ilton: My Lords, does not the Minister agree that those who deface monuments with graffiti should clean them up themselves as a part of community service orders—or even be brought from young offenders institutions to do that work?
Lord Bassam of Brighton: My Lords, the noble Baroness makes some wise suggestions. The scheme in the London Borough of Sutton, to which I referred earlier, does exactly that. Young offenders who are subject to community service orders are involved in cleaning up areas which have been subjected to graffiti. I think that is useful and a constructive use of their time. It is something to be commended and adopted nationally.
Viscount Falkland: My Lords, is not an important part of the attraction to those who put graffiti on walls the illegality of it? There is an excitement about it which makes it difficult to deal with. Would not the problem be better approached by diverting those who do it, by all means possible, to buildings of lesser merit? I could name a few.
Lord Bassam of Brighton: My Lords, the noble Viscount seems to be suggesting that there are some buildings over which it would be more acceptable for "graffitists" to spread their wise words. I am not sure that the public at large would necessarily agree with that. I am rather reminded that on the subway system in New York there was a big campaign over 10 years to deter graffitists. It did so very successfully through a mixture of the methods suggested by the noble Baroness, Lady Rendell, and by ensuring that graffitists were caught. That is an extremely powerful deterrent.
Lord Glentoran: My Lords, do the penalties mentioned by the Minister in his original Answer apply to criminal damage to roads and public buildings in Northern Ireland?
Lord Bassam of Brighton: My Lords, I shall speculate. I think I am right in saying that they probably do, yes.
Lord Mackenzie of Framwellgate: My Lords, does my noble friend agree that, as in many things, prevention is better than cure, particularly as regards crime? The powers of stop and search are very relevant to this issue. Young police officers have approached me—they are very reluctant to bend the rules in this area, for obvious reasons—and pointed out that the Police and Criminal Evidence Act, which provides powers of stop and search, simply deals with stolen goods and offensive weapons; it does not include stopping people who are carrying, for example, aerosol cans for defacing buildings. In my day, of course, we used to use the Ways and Means Act. I am not suggesting that young police officers should do that. But there is a good case for extending the law. Will the Minister consider extending the law to cover stopping and searching people where it is suspected that they are carrying weapons or tools for defacing buildings?
Lord Bassam of Brighton: My Lords, my noble friend speaks with far greater expenence of these matters than I. No doubt over the years he has apprehended a number of graffitists. Perhaps we should take his good advice to heart and consider his proposals when we come to our next review of the situation.
Baroness Massey of Darwen: My Lords, given that lessons in citizenship now form a part of the national curriculum in schools, does my noble friend consider that education might be an effective deterrent to those who might be tempted to spread graffiti?
Lord Bassam of Brighton: My Lords, I tend to agree that education can act as a form of deterrent—although that comment may not be quite the right use of language here. Nevertheless, encouraging a sense of civic pride and steering young people towards more
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socially useful outlets for their energies and artistic enthusiasms would be a much more appropriate way of dealing with the problem.

Tree Planting: Origin Checks
2.50 p.m.
Baroness Sharpiesasked Her Majesty's Government:
Whether proper checks are being made by the Forestry Commission on the origins of tree saplings being planted by it and others.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Hayman): My Lords, the Forestry Commission checks the source of all the trees it plants itself to ensure that the most suitable seed has been used. For trees planted by others with grant aid from the Forestry Commission, the commission checks the source of the trees wherever necessary. For example, the commission often includes a condition when grant-aiding broad-leaved and native Scots pine woodland which specifies that only plants grown from locally collected seed can be used.
Baroness Sharples: My Lords, I thank the noble Baroness for that reply. Is she aware that imports from continental suppliers often include trees from countries where the climate is completely different from our own? Is she further aware that in the national forest in Leicestershire, trees have been planted using unsuitable products from Hungary?
Baroness Hayman: My Lords, the National Forest Company, has, I understand, today announced that more than 3 million trees have now been planted and that many of the partners in that exercise, for example, the Woodland Trust, specify the use of native origin trees. Two issues arise here. The first, regulation, has been tackled at EU level. A new directive now in place extends the number of species upon which we shall be able to take action against imports should adverse effects be found. Secondly, we must consider the issue of supply. I understand that with some broad-leaved species, the native supply is not adequate to meet demand.
Lord Hylton: My Lords, does the Minister accept that during the 20 to 30 years after the Second World War, the Forestry Commission undertook a great deal of work on the provenance of particular trees and identified their superior strains? Will she ensure that that work, which has been completed, is not lost, either in the present or in the future?
Baroness Hayman: My Lords, I agree that such work is extremely important. Some 95 per cent of the trees planted by the Forestry Commission are grown from seed collected in Britain. The commission carefully selects trees that are best suited to its requirements, usually gathering seeds from its own seed stands. For native woodland, it uses locally

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collected seed. Equally, in terms of the grant aid, which is now at an all-time high, it has extended, on a voluntary basis, initiatives to encourage owners to use locally collected seed in native woodland that has conservation value. The commission is continuing to work hard in this area.
Lord Tebbit: My Lords, are there any circumstances, perhaps relating to species, in which it would be illegal for the Forestry Commission or others to discriminate against trees from the European Union?
Baroness Hayman: My Lords, I understand that the directive, which gives member states powers to control imports, has been extended. Previously it covered only the main conifer species and three broad-leaved trees: oak, beech and poplar. The directive now allows us to ban the sale of material which would have an adverse effect on forestry and the environment, genetic resources or biodiversity. We have the necessary powers in place.
Baroness Sharples: My Lords, does the noble Baroness agree that the grants made available for tree planting are not at all generous? Perhaps the grants offered for plantings where the origin of the seed is definitely known could be rather more generous?
Baroness Hayman: My Lords, as I said, we have achieved an all-time high level of grant for woodland planting schemes at £40 million. Under the England rural development plan we foresee a 26 per cent increase in the woodland grant scheme budget and a 75 per cent increase in the farm woodland premium scheme budget. That means that we shall be able to take further action on forest regeneration and conservation. Equally, I hope that I have been able to reassure the House that we shall ensure that plantings are appropriate to meet local needs.
Lord Pearson of Rannoch: My Lords, can the Minister give the House an assurance that we are free to carry on planting indigenous oak trees in this country without any interference from the European Union?
Baroness Hayman: My Lords, I believe that I can give that assurance. However, I should tell the noble Lord that we have encountered a problem as regards oak trees. They produce seeds only irregularly in Britain, averaging around one-half of our total requirement. That is why we need to import acorns and beechmasts, or young trees grown from seed. It is not a matter of our not being allowed to ban imports; rather it is that we do not have sufficient native production of the necessary quality to ensure an adequate replacement of oak trees.

Red Tape Affecting Teachers
2.55 p.m.
Baroness Blatchasked Her Majesty's Government:
What action they intend to take as a result of the Better Regulation Task Force report entitled Red Tape Affecting Head Teachers.
The Minister of State, Department for Education and Employment (Baroness Blackstone): My Lords, the Government welcome the task force report. It is a helpful contribution to the campaign to raise standards in schools.
The Government were working to reduce bureaucracy long before the task force report and have implemented measures which reach far beyond the recommendations of the report. For example, on 1st June the Government announced that, from this September, they would cut by a third the amount of materials and by a half the amount of paperwork they send automatically to schools.
Baroness Blatch: My Lords, I thank the Minister for that reply. Does the noble Baroness agree with the comment made by the noble Lord, Lord Haskins, in paragraph 7 of the report. He stated that:
"A good deal of red tape arises from the large number of detailed reports".
In Appendix F, he lists 30 reports, most of which have been introduced since the Government came into office. All those reports take up a great deal of head teachers' and teachers' time. Which of those reports will be abolished and what will be the timescale?
Baroness Blackstone: My Lords, I have already set out the timescale for reducing the amount of material to be sent to schools. None of the reports will be abolished. I do not believe that it is possible to abolish a report that is already in the public domain. Perhaps it would help the noble Baroness if I told her that most of the paperwork sent out to schools during the past year has been in support of the introduction of the literacy and numeracy strategies and the revised national curriculum, which gives more flexibility to schools. Almost three-quarters of the paperwork sent to primary schools concerned literacy, numeracy or the curriculum. The same applied to nearly one-half of the paperwork sent to secondary schools.
Lord Tomlinson: My Lords, does my noble friend recall that the Conservative Party has pledged to abolish the literacy and numeracy hours? Can she confirm that we have seen a considerable improvement in the academic attainment of 11 year-olds as a result of those policies, introduced and sustained by this Government?
Baroness Blackstone: My Lords, my noble friend is right on both counts. I understand that the Conservative Opposition have declared that they wish to abolish the literacy and numeracy hours in primary schools. The Government find that very surprising,

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given that very big improvements in standards for both literacy and numeracy skills attained by large numbers of children at the age of 11 have been achieved. In one year, the literacy results for 11 year-olds rose from 65 to 70 per cent, while for numeracy they rose from 59 to 69 per cent. The Government hope to see a further improvement this year.
Baroness Sharp of Guildford: My Lords, is the Minister aware that during 1999 the average school received each month nine consultation papers, 16 sets of regulations, 18 sets of guidance and were asked to contribute to five data surveys? I am delighted to hear that the Minister will lessen this burden. Is she further aware that this level of administration impinges not only on head teachers but also on teachers, in the occupation that has been singled out as suffering the highest levels of work-related stress? What does the Minister propose to do about this?
Baroness Blackstone: My Lords, I have already set out the pledge that my right honourable friend the Secretary of State for Education and Employment made on 1st June. That is what the Government intend to do about it. Moreover, the Government will be inviting six head teachers from both the primary and the secondary sector to take part in the work that they will introduce to monitor the situation. It is absolutely right to try to cut down the amount of material that is sent to schools. But the Government make no apologies for their commitment to raise standards in our primary and secondary schools. Some of this material provides teachers with much-needed guidance on how to achieve just that.
Lord Dormand of Easington: My Lords, the Standards Fund, which is central to the report, has been increased by £1.7 billion this year. How much of the increase is new money? Will the allocations from the Standards Fund be made separately to LEAs and schools? If not, does the LEA decide on the allocations to each school? If they are made separately, does not that imply that all these decisions will be made by central government?
Baroness Blackstone: My Lords, the Standards Fund is a good mechanism for making sure that resources are targeted on areas of high priority. However, the Government accept that the fund needs streamlining to make it simpler for schools. Next year, we shall reduce a number of separate ring-fenced grants in order to give schools greater freedom to determine their spending priorities. We shall also make payments to LEAs automatically so that we can cut the paperwork in filing claims against actual expenditure. Certainly, we want to introduce a light touch in the arrangements for monitoring payments from the Standards Fund. I can confirm to my noble friend that the allocations from the Standards Fund are new money.
Lord Pilkington of Oxenford: My Lords, will the Minister take note of the remarks by the noble
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Baroness, Lady Sharp? Will the Government trust head teachers to run their own schools, rather than issue the amount of detail that has been sent out to them? There is no way in which the Department for Education and Employment can run every school in the country. Will the Government realise, and learn the lesson, that head teachers are possibly more competent to run schools than Ministers are?
Baroness Blackstone: My Lords, the Government work very closely with head teachers. I am delighted to say that the vast majority are competent to run their schools, although there are occasional exceptions. As I believe the majority of head teachers would agree, there has been a case for working to raise standards and, indeed, head teachers are collaborating in doing so. The Government have delegated greater authority to head teachers by providing them with more freedom to spend their budgets as they wish and as they think appropriate in their particular schools. Indeed, the Government have delegated more funding from LEAs to schools so that heads have that extra freedom.
Lord Peston: My Lords, while one always opposes unnecessary bureaucracy, the Government have the ultimate responsibility in this area. If they are to know what is going on and to be able to monitor the situation, do they not have a duty to collect data on a considerable scale, and to use it to let us know whether we are achieving higher standards and, more generally, what is going on in schools? We may favour a decentralised system, but a centralised database is necessary in this area.
Baroness Blackstone: My Lords, my noble friend is right; he is showing his background as a social scientist. We need adequate information in order to inform policy. If we do not collect data of this kind from schools we shall have no idea where we are going; we shall be unable to tell whether we are improving our performance—an objective which I am sure all Members of this House share. We are trying hard to lessen the burden for head teachers of data collection. One way in which we shall be doing so is by computerising far more of the data, so that they can be updated more readily than is possible using more traditional methods.
Baroness Seccombe: My Lords, the noble Lord, Lord Haskins, states in his report:
"there are still 38 funding streams within the Standards Fund for schools to find their way through. This number is rising. We believe such a plethora of funding streams is unmanageable and can only serve to distract schools from their key priorities".
Does the Minister agree?
Baroness Blackstone: My Lords, the number of funding streams in the Standards Fund has been reduced to 14 and is being reduced further, to seven. The Government agree that there was a need to streamline the fund and make it easier for head teachers in primary and secondary schools to operate. However, I stand by my earlier remarks. The

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Standards Fund is an important way of targeting schools where there is a need for extra help and of making sure that standards rise in those schools.
Baroness Thomas of Walliswood: My Lords, the Minister referred several times to the literacy hour. Is she aware that, when it was first introduced, some parents were told—and I know of such cases—that their child was already far in advance of the average literary achievement for the class but would nevertheless have to take part in the literacy hour as designed for that class? Has greater flexibility been introduced—as was the hope of the primary school teachers involved—now that the literacy hour is established?
Baroness Blackstone: My Lords, the Government have introduced flexibility in the national curriculum in a variety of different ways. However, as regards the literacy hour in primary schools, even a child who is reading very well can benefit from continuing to read, and from being given the opportunity to read more demanding, more advanced and more difficult books. I believe that that is indeed what teachers in primary schools are doing.

Demonstrations in Parliament Square
3.6 p.m.
The Lord Privy Seal (Baroness Jay of Paddington): My Lords, with the leave of the House, I should like to say a word about the demonstrations that took place outside Parliament yesterday afternoon. I have received a number of representations from Members on all sides of the House, drawing attention to the difficulties which many of your Lordships experienced in reaching the House yesterday afternoon. Many noble Lords who were anxious to be here for an important vote on the Financial Services and Markets Bill found that their progress was impeded on Westminster Bridge, in Whitehall and all around Parliament by a large crowd of demonstrators.
As noble Lords will be aware, this House passes an order at the start of each Session that the Commissioner of Police shall ensure that passage through the streets leading to this House is kept clear and open for the duration of the Parliament. Clearly, that was not done yesterday afternoon.
I take this matter extremely seriously. It is unacceptable for Members of this House to be kept from an important vote by disturbances in the streets. I understand that Black Rod is already pursuing with the Commissioner of the Metropolitan Police the question of the earlier disturbance which, as your Lordships will remember, took place in Whitehall on 22nd May. Black Rod has also written to the head of security in the Palace of Westminster in relation to yesterday's incident. Both lines of inquiry will be vigorously pursued.
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I take the view that yesterday's disturbance is precisely the kind of occurrence which a sessional order is designed to prevent. I assure your Lordships that I shall take a close personal interest in ensuring that adequate answers are received on this occasion.
Lord Strathclyde: My Lords, I am grateful to the Leader of the House for her statement. I congratulate her on taking a personal interest in developments. As she correctly pointed out, this is the second time in a month that this has happened. We have a personal interest: yesterday afternoon we might well have won the Division had the streets not been blocked.
One disappointing side of the noble Baroness's statement was that it did not contain concrete proposals or positive suggestions. I wonder whether the noble Baroness might give us some idea of what she has in mind.
Has the noble Baroness given any thought to the response that might be made by the Commissioner of Police? Can she tell the House that, were the Commissioner to ask for extra resources to carry out his duties, the Government would not seek to block any such proposal? Would that be a decision for this House—a sovereign House of Parliament—or would it be one for the Treasury?
Having raised this matter, we on this side of the House, indeed the whole House, will wish to hear regular progress reports. In that light, can the Minister say anything further about the events that took place on 22nd May?
Can we also be clear that nothing should be done to block the entirely legitimate rights of individuals to demonstrate and to lobby their representatives in Parliament? The difference between 22nd May and yesterday was that the event on 22nd May involved the problem affecting the people of Ethiopia. If there are, sadly, any future disturbances I hope that the noble Baroness the Leader of the House will come to the House to make a Statement to explain the circumstances.
Finally, can the noble Baroness explain why her Government have so recently passed control of Parliament Square to Ken Livingstone?
Lord Rodgers of Quarry Bank: My Lords, I, too, thank the noble Baroness the Leader of the House for making the Statement so promptly today. If Black Rod wrote to the Commissioner of the Metropolitan Police three weeks ago, it is a little disturbing that we have not yet heard the outcome of his inquiry. I am somewhat confused—I acknowledge that the fault may be mine—that on this occasion Black Rod wrote to the head of security in the Palace of Westminster. What is the line of authority in these matters and who should be speaking to the Commissioner of the Metropolitan Police and receiving an early reply? Can we have confirmation when the reply on both events is available? I understand that the noble Baroness has in mind then to make a Statement to the House which will satisfactorily tie up the matter.

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No one argues about the right to demonstrate. What is at issue is the right of Parliament to proceed with its work unimpeded.
Baroness Jay of Paddington: My Lords, I agree with the final sentiment of the noble Lord, Lord Rodgers. That is entirely the point. Both he and the noble Lord, Lord Strathclyde, raised some questions which were designed to elicit information and others to make separate points.
On questions of information, I shall be happy to explain to the noble Lord, Lord Strathclyde, the precise terms of correspondence between Black Rod and the various people involved in the line of authority. As I said in the Statement—perhaps I misspoke; the noble Lord, Lord Rodgers was not clear—I understand that communications between Black Rod and the Commissioner of the Metropolitan Police are made through the head of security in the Palace of Westminster. It is indeed right that the earlier query has not been substantively reported on or replied to. I shall ensure that that is followed up.

Insolvency Bill [H.L.]
3.12 p.m.
Lord McIntosh of Haringey: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it be an instruction to the Grand Committee to whom the Insolvency Bill [H.L.] has been committed that they consider the Bill in the following order:

Clause 1,

Schedule 1,

Clause 2,

Schedule 2,

Clause 3,

Schedule 3,

Clauses 4 to 8,

Schedule 4,

Clauses 9 to 17,

Schedule 5.—(Lord McIntosh of Haringey.)

Lord Tebbit: My Lords, I hesitate to raise the issue in such erudite company but should not the Motion refer to the Grand Committee "to which" the Insolvency Bill has been committed rather than "to whom"?
Lord McIntosh of Haringey: My Lords, perhaps I may give a conservative answer to the noble Lord. It always has been phrased in that way. I think that the authorities of the House may well wish to look into the matter.
On Question, Motion agreed to.

Railtrack (Waverley Station) Order Confirmation Bill
Baroness Ramsay of Cartvale: My Lords, I beg to move that this Bill be now read a third time.
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Moved, That the Bill be now read a third time.—(Baroness Ramsay of Cartvale.)
Lord Mackay of Ardbrecknish: My Lords, perhaps I may intervene briefly not so much on the detail of the Bill but on the fact that it is before the House at all
Planning has been devolved by your Lordships and Parliament to the Scottish Parliament and to the Scottish Executive. This Bill is entirely about the planning of Waverley Station in Edinburgh. If we have devolved planning to the Scottish Parliament, the Scottish Parliament should be dealing with such issues. If the Minister tells me that it is perfectly in order for this House to deal with this planning matter, I shall raise questions about the planning matter relating to the Scottish Parliament building and the inflating of the costs therein.
The Government cannot have it both ways. They have either devolved these planning matters to the Scottish Parliament or they have retained them. I should be deeply grateful for some explanation as to why this matter—it appears to be entirely to do with planning—is not one now for the competence of the Scottish Parliament.
The Duke of Montrose: My Lords, perhaps I may ask for the forbearance of the House as regards my curiosity. In paragraph 12 of the schedule tie feudal title of this land is to be vested in the company. As the Scottish Parliament is about to abolish all feudal titles, what is the purpose of vesting this title in the company?
Baroness Ramsay of Cartvale: My Lords, perhaps I can enlighten noble Lords opposite. First, this measure goes forward under the Private Legislation Procedure (Scotland) Act 1936. No comparable procedures are available to the Scottish Parliament. It has no procedures available to pass private legislation. That is the answer to the noble Lord, Lord Mackay of Ardbrecknish. Private legislation is not devolved to the Scottish Parliament.
Lord Mackay of Ardbrecknish: My Lords, I am grateful to the noble Baroness for allowing me to intervene. I understand the answer. Was that a mistake by the Government when they took the Bill through? Should it have been devolved to the Scottish Parliament?
Baroness Ramsay of Cartvale: My Lords, no, it was certainly not a mistake. I do not remember the noble Lord, Lord Mackay of Ardbrecknish, moving an amendment seeking to put it into the Scotland Bill.
On Question, Bill read a third time, and passed.

Utilities Bill
3.16 p.m.
Lord McIntosh of Haringey: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

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Moved, That the House do now resolve itself into Committee.—(Lord McIntosh of Haringey.)
On Question, Motion agreed to.
House in Committee accordingly.
[THE CHAIRMAN OF COMMITTEES in the Chair.]
Clause 1 agreed to.
Schedule 1 [The Gas and Electricity Markets Authority]:
Baroness Buscombemoved Amendment No. 1:
Page 110, line 5, after ("two") insert ("and no more than five").
The noble Baroness said: In moving this amendment, I speak also to Amendments Nos. 2 to 7 and 14.
The gas and electricity industries have made enormous progress since privatisation both in terms of quality of service and price in a free market environment and for the benefit of the consumer. In establishing the new authority it must be of paramount importance to ensure that this progress is not compromised by the regulatory regime becoming too unwieldy, which would simply result in greater cost—cost that would eventually be passed on to the consumer.
Hitherto there have been two regulators: one for electricity and one for gas. Now, as a combined authority, how many more do we need? The Government have recognised that three is the ideal number of appointments to the board, having stated in their response to the consultation on the utilities Green Paper:
"The Government has concluded, in light of detailed consideration of responses, that small executive boards of 3 full time members should provide the most effective regulatory model for all the sectors covered in the Green Paper".
That was before half the Bill was dropped when there were four sectors. They continue:
"This model offers the advantages of collective but streamlined decision making by a small cadre of high calibre, professional regulators; greater accountability; scope for greater continuity and consistency when new regulators are appointed; and an ability to spread the regulatory burden. This is particularly important in energy and telecommunications, given the increasing complexity of these sectors".
The Government have also stated in the regulatory, environmental and equal treatment appraisals of utility reforms that there will be higher costs to the regulator as a result of the Bill. Moreover, in A Fair Deal for Consumers—Modernising the Framework for Utility Regulation published by the DTI, the Government say that,
"to the extent that additional costs are incurred, these will be passed on to the licensees and ultimately borne by the consumers".
That is a theme to which we on these Benches shall keep returning, for which we make no apology.
We have proposed a limit of five on the number of authority members. We have also tabled amendments to ensure that the new regulatory structure is fully accountable, particularly in relation to scrutiny by the Select Committee on Trade and Industry of the House
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of Commons. We firmly believe that the appointment to the authority of both the chairman and members should be referred to that committee in advance as a matter of due diligence. A similar procedure already exists for appointments to the Monetary Policy Committee of the Bank of England whereby individuals submit themselves to scrutiny by the Treasury Committee prior to appointment.
When a similar amendment was tabled in the other place the Minister, Mrs Liddell, said that it would,
"weaken the power of the Trade and Industry Committee as an effective [scrutineer] of the regulatory process, as it would have been implicated in the appointment of those who serve in the regulatory authority".
We seek to mirror what already happens to the membership of the Monetary Policy Committee. All the members of that committee appear before the Treasury Committee before or shortly after appointment to answer detailed questions about their views and experience. The Treasury Committee will subsequently take evidence on the performance of the Monetary Policy Committee to see how it is delivering vis à vis the economy. It does not feel "implicated" or compromised by that procedure; indeed, it is the kind of scrutiny that would take place as a matter of course in any similar body in a commercial organisation. We contend, therefore, that the arguments rehearsed in another place against what we believe to be a sensible, transparent approach are spurious.
In addition to due diligence in regard to appointments, we propose in Amendment No. 4 that the degree of responsibility incumbent on members of the authority should be recognised on the face of the Bill by the inclusion of criteria, to be published by the Secretary of State prior to the coming into force of the Bill, about the skills and calibre of those appointed to the authority. We want to see a transparent, professional approach to appointments. Therefore, we seek an assurance that the calibre of members is such that they have the degree of experience, expertise and commitment to carry out their duties effectively. I have already referred to the Government's response to consultation on the Green Paper that there is a need for high calibre professional regulators. We now spell that out in these amendments.
In relation to the Monetary Policy Committee of the Bank of England, it should be noted that there is an obligation on the Minister to ensure that members have the appropriate skills and experience. As to the council, while we propose in Amendment No. 5 that the appointment of the chairman should be scrutinised by the Select Committee on Trade and Industry of the House of Commons, we do not believe that such a test should be applied to members of that body. We consider that it is sufficient to scrutinise the chairman as he is the driving force behind the council.
In tabling these amendments—I turn now to Amendment No. 6—we are mindful of the practical financial consequences of the Bill as currently drafted. We take into account, first, the costs associated with increased regulation; secondly, the threat of unlimited fines; and, thirdly, the unspoken parameters of implementing social and environmental policy. I

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articulate but a few examples of the cost implications which result in a significant and, frankly, depressing increase in cost, which in turn will significantly increase the capital cost to the utilities industries. In the circumstances it is appropriate to ensure that the Treasury is fully aware of the number of appointments, and terms and conditions of service, of staff to the authority.
Finally, in proposing in Amendment No. 14 that any notice issued by the council or the authority with regard to appointments should be sent to the Select Committee on Trade and Industry of the House of Commons and the Secretary of State we seek consistency in regard to consultation and proper communication. I beg to move.
Lord Borrie: In commenting on Amendment No. 1 I should repeat the declaration of interest that I made at Second Reading; namely, I am a non-executive member of the Management Board of the Office of Gas and Electricity Markets, commonly known as Ofgem. It is particularly appropriate to mention that interest in relation to this amendment. Ofgem is intended as a model for the new authority that is to be set up under the Bill. It may assist the Committee if I say that the Management Board of Ofgem was intended to consist of a total of 10 members: five executives and five non-executives (including myself). However, one of the non-executive members has resigned, so that currently the total is nine. The noble Baroness who moved the amendment will note that that number is rather higher than the maximum of five which she proposes.
I believe that informed opinion has moved on from the government statements during consultation to which the noble Baroness referred and that it is generally accepted as desirable that the authority, rather like Ofgem at the moment, should consist of both executives and a sprinkling of non-executives. If one has not only the chief executive but perhaps one, two or three (without specifying a precise number) of his key lieutenants and one adds a sprinkling of two or three non-executives, bearing in mind that sometimes there is illness or non-attendances for some reason and a quorum may be required, to place a maximum of five in the statute will unduly hobble the desirable composition of the authority.
One does not suggest that nine or 10 is the ideal; one can think of other figures. However, it is much better to have a minimum rather than a specified maximum as the Bill stands at the moment.
Baroness Buscombe: Does the noble Lord disagree with the Government in this matter? The Government have said that,
"in light of detailed consideration … small executive boards of three full-time members should provide the most effective regulatory model for all the sectors",
which would include water and telecommunications, if they were still there.
Lord Borrie: I believe that the authority should consist of a mix of executives and non-executives. I
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note that the Minister nods. The noble Baroness is a little out of step with current thinking on these matters. My experience in both the public and private sector, bearing in mind all the committees that have debated this subject in relation to the private sector—Cadbury, Greenbury, Turnbull and the rest—is that it is widely understood that non-executives with their greater responsibilities in the private sector, very properly, are usefully replicated in this sphere of the public sector. To confine the total membership to only five would inhibit, if not make practically impossible, the desirable mix that I have suggested. I ask the Committee to reject Amendment No. 1.
Lord Ezra: I support the comments of the noble Lord, Lord Borrie, based on my experience in a publicly-owned enterprise. For many years I served on the National Coal Board. It was very important that that board should have a mixture of executives and a sprinkling of non-executive personalities from other walks of life who could add to the knowledge and understanding of the many problems which it then had to face. I should have thought that it is going too far to limit the total membership of the new authority to five. That would limit very much the number of executives and non-executives on the board. Therefore, I feel great sympathy for the views expressed by the noble Lord, Lord Borrie.
3.30 p.m.
Lord Peyton of Yeovil: I should like to make a modest point in relation to the rather odd notion that the chairman of the House of Commons Select Committee on Trade and Industry should be asked to confirm, or be consulted about, appointments. I wonder where my noble friend Lady Buscombe got that idea from. I believe that I heard her refer to the chairman of the Treasury Committee. I imagine that she meant the chairman of the House of Commons Treasury Select Committee. In that case, she was sheltering behind what I believe to be a rather bad precedent. I have great misgivings about the notion of consulting whoever may be from time to lime the chairman of a House of Commons Select Committee. I should be grateful if my noble friend would tell me whether I have misunderstood the point.
Baroness Buscombe: M y noble friend has not misunderstood. That is what we are asking for.
Lord Peyton of Yeovil: I believed that that was so. However, I still find it an astonishing proposal and it is not one that I should be persuaded easily to support. I hope very much that my noble friends will think again before they elevate an unknown chairman. I am sure that the present chairman is a most admirable man or woman; I have no idea who he or she is. However, I should certainly not wish to confer powers, privileges or rights upon such an unknown person in the future.
Lord McIntosh of Haringey: I am most grateful to the noble Baroness, Lady Buscombe, for reminding us

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of the genesis of the proposals in the Bill. She quoted correctly and is quite right in saying that we are looking to have a small cadre of high quality professional regulators. Indeed, that is what we have under the chairmanship of Callum McCarthy. The authority has three executive directors, John Neilson, Dr Eileen Marshall and Richard Morse, who are all Ofgem employees.
However, my noble friend Lord Borrie is also right in saying that the amendment does not refer separately either to executive or non-executive directors; it refers to all directors. The result is that the noble Baroness's amendment would squeeze the number of non-executive directors to not more than two. That seems to me, as it does to my noble friend Lord Borrie, a thoroughly bad idea which is in conflict with the principles of corporate governance developed over the years with the assistance of the Cadbury and Hampel committees. Indeed, it is in great conflict with current practice, as debated during the course of the Financial Services and Markets Bill, which is nearly an Act.
The effect of Amendment No. 1 would be to limit the size of the authority. That would deprive us of non-executive members, who play an important role in ensuring that the authority has a wide range of skills, perspectives and experience upon which to draw. For example, one member may be appointed because of a particular knowledge of the issues surrounding fuel poverty; another may be appointed as an expert in economic analysis, competition matters or related businesses. They would have a role in de-personalising regulatory decision-making, which is a key government objective in replacing individual regulators with a regulatory authority.
That is why in relation to the authority we have adopted similar principles to the recommendations of Cadbury and Hampel and, indeed, what I believe is now generally accepted as best practice in business. Currently we do not envisage a membership of more than nine, as it is at present. However, the membership may need to increase; for example, for changeover periods between the appointment of a new member and the stepping down of an old one, or we may need to draw on particular skills or expertise that would call for the appointment of a supernumerary member of the authority.
After a great deal of thought, we have drafted the Bill in a way that affords flexibility regarding the size and composition of the authority, its overall numbers, the proportion of executive and non-executive members and whether they work full or part-time. We do not believe that it would be right to write a statutory maximum into the Bill.
Amendment No. 4 would restrict the flexibility of the Secretary of State by requiring him to publish criteria to be used for appointments to the authority. It would require him not only to publish criteria but to publish them only once; that is, prior to the coming into force of this paragraph. Of course, it is right that he should publish criteria. It is entirely possible that the criteria may change over time; for example, as progress towards competition in the gas and electricity
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industries advances, it is possible that the mix of skills required in the authority will change over time. Amendment No. 4 would simply make that impossible.
Amendments Nos. 2, 3, 5 and 7 require the appointments to be subject to prior consultation with the Trade and Industry Select Committee in the House of Commons. I believe that both the noble Lord, Lord Peyton, and the noble Baroness, Lady Buscombe, were wrong about the amendments. They have nothing to do with the chairman of the Trade and Industry Committee; they concern the committee itself. That is an interesting suggestion which has been made on many occasions. Personally, as a supporter of the legislature against the executive as a matter of political theory, I am rather in favour of it. However, one does not make a change of that kind in a Bill such as this without thinking very carefully about it.
Two years ago I was responsible for piloting the Bank of England Bill through the House of Lords. At that time, there were suggestions that appointments to the Monetary Policy Committee should be subject to confirmation by the Treasury Select Committee. The noble Baroness, Lady Buscombe, seems to believe that that is the case, but it is not. The appointments are made by the Chancellor of the Exchequer and it is entirely within the powers of the Treasury Select Committee to invite those who are proposed for nomination to the Monetary Policy Committee to appear before the Treasury Select Committee. Indeed, it does so. Within only the past couple of weeks it called Charles Allsop before it and suggested that he should not be made a member of the Monetary Policy Committee. Having listened carefully to their views, the Chancellor went away and did something else; in other words, he did appoint him to the committee.
Therefore, the Treasury Select Committee does not have power over the membership of the Monetary Policy Committee. No committee in another place has powers over public appointments of that kind. The noble Lord, Lord Peyton, believes that it is a very bad idea. I believe that, if it were properly thought through, it may be quite a good idea. However, it is certainly not appropriate to introduce it in this Bill at this time.
Amendment No. 14 would require both the authority and the consumer council to send copies of their draft forward work programmes to the Trade and Industry Select Committee. However, those bodies are already—or will be under the Bill—under a statutory obligation to publish their forward work programmes in such a manner as to bring them to the attention of persons likely to be affected by them and to consider any representation made in respect of the draft forward work programmes.
That will ensure that the information is in the public domain; it will provide an opportunity for alternative suggestions to be made, and allow for improvements before the final programmes are published. Surely there is plenty of transparency in those arrangements.
As for parliamentary scrutiny, the authority, the GECC and the Secretary of State can all be called to account before the parliamentary committees; not just

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the Trade and Industry Committee, which is named in the amendment, but also the Environmental Audit, the Social Security and the Public Accounts Select Committees. They all have interests.
Parliamentary scrutiny is addressed in the Green Paper, A Fair Deal for Consumers, which the noble Baroness, Lady Buscombe, quoted. It was asked whether a new Select Committee to scrutinise utility regulation was required. There was not much support for that, so we responded that the current arrangements for parliamentary scrutiny were adequate, but that Parliament might wish to take further steps to ensure effective co-ordination between the existing committees when it addressed the utilities issue.
I turn finally and briefly to Amendment No. 6, which would require Treasury approval for the number and the terms and conditions of service of authority staff. We have consulted the Treasury about its involvement. It used to be standard practice to write into legislation requirements for Treasury approval, but that is no longer the case. The Treasury is content to he consulted by the Secretary of State administratively and we are therefore satisfied that sound administration will result in it being consulted about pay scales and the associated terms and conditions of service of authority staff.
For those various reasons, we are not sympathetic to any of the amendments.
Lord Lawson of Blaby: I am sure that the Minister performed a valuable service to the Committee in reminding it of the arrogance of the Chancellor of the Exchequer who was faced with a verdict, whether right or wrong, of the Treasury Select Committee as regards Mr Allsop. I do not propose to form a view, but the committee's view was that Mr Allsop was not fitted to be a member of the Monetary Policy Committee. The Chancellor then overrode it, just like that! He gave no reason, but said, "You're wrong and I'm right. He's going to be a member".
That makes a certain nonsense of the Bill's provision that the all-party Treasury Select Committee in the other place should interrogate and form a view. As the Minister said, as he piloted that Bill, he might have taken it a little more seriously. The situation poses a serious question about membership of the Monetary Policy Committee of the Bank of England. If the Treasury Select Committee can be treated in such a way, what is the point of having such a process?
Perhaps there is some point, particularly in the case of the regulatory body we are discussing today because it is an important body. It is not as important as the Monetary Policy Committee, but it is nevertheless of considerable importance. I seldom disagree with my noble friend Lord Peyton, but this is a matter on which he might reflect. Open hearings perform a useful democratic and public policy function, as suggested by my noble friend Lady Buscombe.
Whether the Trade and Industry Select Committee of the House of Commons is up to the job is another matter. I am so out of touch with the House of
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Commons, I would not know. However, open hearings which are attended by the press perform a useful function. That is an important proposal and I hope that the Government will take it away for consideration.
I turn to my final point. I had no intention of speaking, but the Minister provoked me when he justified the composition of the regulatory body by appealing to Cadbury and Hampel on corporate governance, saying that there should be executive and non-executive directors. Nothing could have been more absurd or ridiculous. Whether or not Cadbury and Hampel are precisely right, the point is that in business and industry the executive directors are the management and the non-executive directors are not. They exist in order to keep an eye on the management in the interests of the shareholders.
The situation is totally different in respect of a regulatory agency. Indeed, in many countries, particularly in Europe but also in other areas, such functions are considered so separate that they have two boards. They have a two-tier board system comprising a supervisory board and a board of management. This case is completely different because there are not those two functions. The regulators are performing an important function. I had a minor part in its genesis when we had to decide how to privatise the utilities and what was the appropriate form of regulation. We were in uncharted waters and we tried to put something in place. But the one thing that these people are not doing is managing the industry or the business.
It may well be that five is too small a number, but to say that there should be two categories—executive and non-executive directors—and to draw on Cadbury and Hampel and the model of corporate governance in order to justify that simply will not wash. I must say that during my years in this place I have seldom listened to a more threadbare argument than that put forward by the Minister today.
3.45 p.m.
Lord McIntosh of Haringey: I wonder whether the noble Lord, Lord Lawson, was present during any of the debates on the Financial Services and Markets Bill. If he had been, he would have realized—the noble Lord, Lord Kingsland, will confirm that I am right—that that the firm view of the Conservative Opposition was that the code of corporate governance, which arises from Cadbury and Hampel and other committees, should apply to the Financial Services Authority. That is despite the fact that the authority, like this gas and electricity markets authority, has no shareholders. That was the view of the Conservative Opposition, of innumerable speakers from the Conservative Benches with experience of City matters, of the Liberal Democrat Party and of a number of my noble friends. At the end of the day, we acceded to that view, which had not originally been our opinion, and introduced into the Financial Services and Markets Bill the provision that the authority and the Chancellor should have regard to the provisions of the code of corporate governance.

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That was in exact contradiction to what the noble Lord, Lord Lawson, has just said. I should have welcomed his support on the matter when we debated it in Committee on the Financial Services and Markets Bill.
Lord Kingsland: For perfectly understandable reasons, time seems already to have bleached the Minister's memory. He is right in saying that the Opposition supported a role for non-executive directors in relation to the FSA. However, the circumstances were different. First, the FSA was not, as the Minister was then at great pains to say, a classic regulatory authority. It was, by contrast, established in the form of a private company. It was partly for that reason that the Opposition felt it appropriate to have non-executive directors on the board—in exactly the same way as they would be on the board of a private company.
However, there is a second and even more important reason why the Opposition felt that in that case non-executive directors were appropriate. It was that, unlike in this Bill, the FSA was given delegated legislative powers; but it was not answerable to your Lordships' House for the exercise of those powers. In those circumstances, it was right to introduce an extra check that is not necessary in this Bill; that was the check of non-executive directors. In answering the points which were made from these Benches in the course of the Financial Services Bill, the Minister was at great pains to say that the non-executive directors would always be in a majority, precisely to fulfil that supervisory role.
Lord McIntosh of Haringey: I suppose it is my fault for raising the Financial Services and Markets Bill, but the contrast between what the noble Lord, Lord Lawson, said and what his colleague said earlier was so great that I could not resist.
Perhaps I may return to the issue of the Trade and Industry Select Committee, which the noble Lord mentioned. He referred to the arrogance of the Chancellor of the Exchequer in rejecting the view of the Treasury Select Committee on the appointment of Mr Allsop. In present company, I cannot believe that any Chancellor of the Exchequer, past or present, would ever be arrogant.
Leaving that to one side, I am afraid that his recollection of the Bank of England Act is not entirely accurate. That Act does not say that there should be confirmatory hearings; it does not say that there should be consultation before an appointment is made; and it does not even say that the Treasury Select Committee should interview the candidates for appointment as members of the Monetary Policy Committee.
We have always taken the view—most recently we took this view in the consideration of the Financial Services and Markets Bill—that it is not for the Government to say what Select Committees in another place do. It is for them to set their agendas; it is for
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them to set their topics; and it is for them to set their procedures. It has been possible and it has been the practice for the Treasury Select Committee to interview the candidates put forward for membership of the Monetary Policy Committee. However, those hearings are in no way confirmatory and in no way do they implicate the Treasury Select Committee in the appointments which, quite clearly, under the terms of the Bank of England Act, are the responsibility of the Chancellor of the Exchequer.
Baroness Buscombe: I thank the Minister for his response to our amendments. With reference to the interesting debate on executive directors versus non-executive directors, if the mix is felt to be so important, why is that not referred to on the face of the Bill?
Turning to what my noble friend Lord Peyton of Yeovil said, I reconfirm our wish to see the appointments of the members of the authority scrutinised by the Trade and Industry Select Committee because we, on these Benches, believe in strengthening the powers of Parliament over the executive and that would be a good way of contributing to that aim. We have thought this matter through carefully and we are pleased that the Minister, in his response, has agreed with us, in principle, on this matter—
Lord McIntosh of Haringey: I was expressing a view, not about the provisions of this Bill, but as someone interested in public policy, that perhaps at some time in the future—if, for example, I can persuade my party to put the matter into a manifesto—it may be desirable for there to be confirmatory hearings. That has enormous implications for the relationship between the executive and the legislature, which are way outside the scope of this Bill. I, personally, and the Government, collectively, are behind the scope and the provisions of this Bill as drafted.
Baroness Buscombe: I thank the Minister. I accept what he has just said. I also take strength from his support of this matter as being worth considering when reviewing policy.
With regard to Amendment No. 6 and Treasury approval, the Minister stated that that used to be standard practice. We believe that it should be so again, given the degree of responsibility resting with the members of the authority in terms of cost implications.
I thank the Minister. We shall read Hansard with great interest to see what he has said and we may consider returning to some of those points on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 2 to 6 not moved.]
Schedule 1 agreed to.
Clause 2 agreed to.
Schedule 2 [Gas and Electricity Consumer Council]:
[Amendment No. 7 not moved.]
Lord McIntosh of Haringeymoved Amendment No. 8:
Page 112, line 32, leave out ("Secretary of State") and insert ("Minister for the Civil Service").
The noble Lord said: In moving Amendment No. 8 I shall also speak to Amendments Nos. 10, 11, 13, 28, 29, 102, 103, 115, 282 to 284, 286, 317 to 322, 329, 331, 332 and 349. I shall not take the amendments in the exact order in which they appear on the Marshalled List, but I shall deal with all of them to the limited extent that the Committee is interested in the details of these rather technical matters.
Amendment No. 317 is a transitional provision making common-sense arrangements for the treatment of complaints and investigations which are in progress when the authority and the council come into being. Anything that would have engaged the council's duty to investigate complaints, had the duty already been in force when the complaint was made, will be treated as if the duty applied to it. For other investigations the authority will either agree with the council that the council will continue the investigation, or take such further steps as it thinks appropriate.
Amendments Nos. 102, 103 and 115 are minor amendments which make it clear that the consumer council's power to conduct investigations into matters relating to gas fittings and the use of gas applies in relation to consumers supplied by exempt as well as licensed suppliers.
Amendments Nos. 318, 319, 320, 321 and 322 repeal surviving references to the outgoing Gas Consumer Council and electricity consumers' committees that appear in various Acts which are not principally concerned with utilities regulation.
Amendment No. 329 corrects a reference to a provision in the Gas Act which is to be repealed because it concerns the power of the outgoing Gas Consumer Council to conduct investigations.
Amendments Nos. 331 and 332 repeal Sections 40 and 41 of the Gas Act which give the outgoing Gas Consumer Council duties in relation to advising the Director-General of Gas Supply and the production of annual reports.
Amendment No. 349 makes miscellaneous, very minor and consequential repeals to the Gas Act.
Amendment No. 10 brings the provisions aligning the council's obligation to have regard to the opinion of the authority as to the likely effects of disclosures, as it applies to the annual report, in line with other disclosure provisions elsewhere in the Bill.
Amendments Nos. 8, 11, 13, 28, 29, 282, 283, 284 and 286 are a miscellaneous group of minor amendments which improve and correct the current drafting. They all relate to the establishment and operation of the consumer council. I believe that they are not contentious and do not raise significant issues of policy which require debate. As noble Lords who
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took part in Second Reading will know, I wrote to them about those amendments when they were tabled last week. I beg to move.
Lord Kingsland: The Minister is quite correct to say that the majority of the amendments are consequential and transitional. I shall only comment on the two final amendments to which he referred. First, I note that Amendment No. 11 requires the consumer council to submit accounts to the Comptroller and Auditor General. There does not appear to be a similar requirement for the authority to submit accounts to the Comptroller and Auditor General. Have I missed something?
Lord McIntosh of Haringey: No.
Lord Kingsland: Perhaps, in responding to my observations, the Minister will enlighten the Committee on that matter.
Secondly, Amendment No. 10 concerns the circumstances in which the authority is consulted by the council as to whether or not it should make public certain information. The Bill, as originally drafted, assumed that such requests by the council to the authority would be made on a case-by-case basis. However, by adding the words,
"or to information of a description",
the amendment appears to move away from a case-by-case basis and towards the submission of some more generalised comment. I accept that the comment would come within that particular class of information: nevertheless it would be a more generalised comment.
Perhaps the noble Lord would be kind enough to let the Committee know the motive behind the amendment.
4 p.m.
Lord McIntosh of Haringey: I should like first to deal with Amendment No. 11, the first of the two amendments that the noble Lord, Lord Kingsland, referred to. That amendment ensures that the accounts of the consumer council will be audited by the Comptroller and Auditor General rather than the choice of auditor being left to the Secretary of State.
We are committed to increasing transparency and openness to Parliament, and we believe that the auditor of these public bodies should be the Comptroller and Auditor General rather than an auditor appointed by the relevant Minister. An exception would be made if the auditor of a particular body needed a special type of knowledge or experience of a sort to be found in the private sector.
If the noble Lord cares to read in yesterday's Hansard the report of the Grand Committee proceedings on the Government Resources and Accounts Bill, he will see that I faced an amendment by the noble Lord, Lord Higgins, providing that all public bodies should be audited by the National Audit Office. I resisted that amendment. I think that it is better to come out into the open with this now, in case I am

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accused later of inconsistency. In the course of the debate in the Grand Committee I argued that it was not necessary to change from private audit to National Audit Office audit for all the existing non-departmental public bodies, but we have, as in this case, appointed the Comptroller and Auditor General as the auditor of all the public bodies established since the present Government came into office in May 1997.
Following that principle, the amendment is required because our original intention was to appoint the Comptroller and Auditor General by notice given by the Secretary of State under paragraph 7, but that would still leave the choice of auditor to the Secretary of State. Our amendment achieves greater certainty and clarity. It inserts into the Bill a requirement that the council's accounts are to be audited by the Comptroller and Auditor General and that a copy of the accounts and his report on them are to be laid before Parliament. If the noble Lord, Lord Kingsland, will consult the noble Lord, Lord Higgins, I think he will find that that is acceptable to the Opposition Front Bench generally.
The second amendment that the noble Lord referred to was Amendment No. 10. That aligns the council's obligation as it applies in the annual report—the obligation to have regard to the opinion of the authority as to the likely effects of disclosures—with other disclosure provisions elsewhere in the Bill. Since there is a range of other disclosure provisions in the Bill, it would be wise if I wrote to the noble Lord about what those other disclosure provisions are so that he can get the full flavour of the wisdom of Amendment No. 10. We have not moved away from a requirement to seek an opinion from the authority on a case-by-case basis on matters of disclosure. That requirement was never in the Bill.
On Question, amendment agreed to.
The Deputy Chairman of Committees (Lord Murton of Lindisfarne): In calling Amendment No. 9, I should point out that if it were to be agreed to I should be unable to call Amendment No. 10, owing to preemption.
Lord Ezramoved Amendment No. 9:
Page 113, line 7, leave out paragraph (b) and insert—
("(b) have regard to any opinion expressed by the information publication arbiter as to the application of sub-paragraph 14)(c) to the information; and
(c) consider whether publication of the information in question is in the interests of consumers;
and paragraph (b) applies whether the opinion is given in relation to the information itself or to information of a description which applies to that information.
(5A) In carrying out its functions the Council has a general duty to publish information when it is in the consumer interest to do so.
(5B) Before publishing such information the Council must consider whether the consumer interest is outweighed by any consideration of confidentiality attached to it.").
The noble Lord said: In moving the amendment, I should like also speak to the other amendments in the group, which deal with the same issue.
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The amendment concerns the role of the gas and electricity consumer council, particularly in regard to its publication of information. I believe that it is common ground that there is support for the creation of a single consumer council to deal with gas and electricity and that it should have a degree of independence to express its opinion in support of consumers.
The issue that the amendments address is the extent to which the council could publish information in the interests of consumers after taking account of the possible impact of publication on third parties. It is a delicate issue, to which I referred at Second Reading. The question is who could determine whether there was likely to be an adverse impact on others as a result of the intention to publish certain information.
The Bill proposes that the authority's views should be taken into account in determining the matter. However, there are some doubts about that. After all, the authority is involved in the whole operation of the new system propounded in the Bill. Its interests could well at times be divergent from those of the consumer council. I should be particularly interested to hear what the noble Lord, Lord Borrie, has to say on this.
The authority itself might prefer that this delicate issue be determined by some third party. The proposition in the amendments is that there should be such a third party when the Freedom of Information Bill goes through and an appropriate authority is created, and that that might well be the party to decide these issues.
I am associated in the amendments with my noble friend Lady Sharp, who will also have something to say. I do not need to go into the matter at any greater length. The amendment is to deal with the issue of publication of information and who should express an opinion as to whether it adversely affects others. The proposition is that it should be not the authority, but a third party. I beg to move.
Lord Borrie: I am grateful to the noble Lord, Lord Ezra, for mentioning me in his speech supporting this series of amendments. I have a great deal of sympathy with him and feel that his amendments should be supported. It is appropriate—for conflict of interest reasons—that someone other than the proposed authority should determine these issues.
I have two brief questions for the noble Lord. First, Amendment No. 151, the substantive amendment proposing the appointment of an "information publication arbiter", that entity is described as a body, yet the noble Lord seemed to be referring to it in his speech as a person, an individual. Has he any further thoughts on that?
Secondly, I have a niggling feeling about the amendment, as an English lawyer used to the word "arbitrator" and to the fact that the person performing the same function across the Border in Scotland is the "arbiter". I am curious as to why the noble Lord chose the word "arbiter", the Scottish term, rather than the

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English term. It sounds a very agreeable word. Perhaps we should adopt it here as well, or for the UK in general.
Lord Kingsland: The Opposition support the approach taken by the noble Lord, Lord Ezra. There will clearly be circumstances in which conflicts over the disclosure of information emerge between the authority and the consumer council. Some of that information might be confidential yet also relate to matters under investigation by the authority. In all those circumstances, we think it appropriate that a third party should be available to arbitrate on any dispute that could not be resolved between the two by consensus or compromise.
Baroness Sharp of Guildford: I do not think that I need add very much to what my noble friend Lord Ezra said on this subject. He clearly explained why we have put forward the amendment. It links up with the Freedom of Information Bill and the notion of the information arbiter. I do not know the derivation of the term. It is one which I, so to speak, took over from my noble friend Lord Ezra. I reiterate the points made by the noble Lord, Lord Kingsland. There is implicitly a conflict of interest between the role of the consumer council and the authority. It is important to try to make that differentiation.
Lord McIntosh of Haringey: I support one aspect of these amendments. I support having "arbiter" instead of "arbitrator"; it is shorter.
I take these amendments very seriously. In doing so, I distinguish three themes within them. I should like to consider each of them in turn. The first theme is the concept of an information publication arbiter. The amendments propose that the Secretary of State may appoint this person to consider whether any disclosures the council has in mind will have serious and prejudicial effects; in other words, whether they are outwith the council's powers, if I may use another Scottish word. The other amendments in this group oblige the council, in exercising its publication functions, to have regard to any opinion expressed by the arbiter.
The Bill already places the council under a duty to have regard to any opinions expressed by the authority. The authority, unlike the proposed arbiter, operates within a carefully constructed and balanced framework of duties. It is possessed of the relevant expertise; it is experienced in taking similar decisions itself, under its own publication powers; and it is in a continuing relationship with the council under the umbrella of the memorandum of understanding, which will enable them to work together to develop a common understanding of, among other things, "the seriously and prejudicially effect" test which both must consider in taking publication decisions.
We think it is a bad idea to have a new body, an arbiter, instead of this rather well-placed relationship between the authority and the council. What would happen if the authority expressed a view, even if the council was not required to have regard to that—the
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memorandum of understanding is, after all, intended to promote working collaboratively on matters such as the disclosure test—and the arbiter gave a different view? The result would be uncertainty and confusion. Should the council heed the arbiter, despite his lacking the advantages I have set out? On the other hand, if the arbiter and the authority agree, then the arbiter has added nothing to the process.
The second theme in the amendments concerns giving the council a general duty to publish information in the consumer interest, subject to deciding whether the consumer interest in publication is outweighed by any consideration of confidentiality attached to it. I acknowledge that this is a well-drafted amendment and that thought has been given to some of the issues. We do not believe that a general duty, as opposed to specific duties or general powers, to publish would be appropriate. The council's role is to advance the interest of consumers. Its publication powers are an essential tool of which it will no doubt wish to make extensive use. There need be no doubt that the council will be energetic in publishing information and advice.
What, then, would a general duty to publish add? Its principal effect, we believe, would be to create a risk that the council's priorities could be distorted. The volume of material which it could publish in the consumer interest is huge. It must be free to take decisions on priorities. It has other important functions besides publication—investigating complaints and other matters, researching issues and practice in other fields and countries, and so on. So we do not think that turning it from a power to a duty would be a good idea.
The amendments alter the disclosure test so that, like the Food Standards Agency, if the consumer interest in publication is stronger than confidentiality considerations, the council could publish. The council would have to decide where the balance of advantage lay, rather than determine whether or not the threshold would be breached. On the one hand, confidentiality is a lower threshold than serious and prejudicial effects; on the other, there would be no serious and prejudicial effects ceiling on what the council could disclose.
Later we shall consider amendments which seek to restrict what the council can disclose. I know it is a debating point, but if I find myself being too bold for the Conservatives and too cautious for the Liberal Democrats, perhaps we may be doing something right.
We recognise that the council may on occasion wish to publish information, even though this could possibly cause serious and prejudicial effects, because the consumer interest in publication is so powerful. In these cases it will be open to the council to ask the authority—at the head of a government department and able to publish such information if the case for doing so is strong enough—to publish it.
Lastly, I shall speak about Amendment No. 77 which would remove subsection (3) from Clause 20. In other words, it would remove the condition that information provided to consumers under this subsection must be in

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the public domain already. The subsection appears instead of a disclosure test. The purpose of this part of Clause 20 is to charge the council with making available to consumers information which is already in the public domain but which is inaccessible because, for example, it is in diverse forms and places. That could be information about services, tariffs, the "small print" and so on. The council's role will be to make this information readily available in ways which make it possible to make comparisons between companies.
It would be inconsistent and indefensible to give the council a broad power to publish without a disclosure test, or a condition limiting the power to what is in the public domain. For these reasons I think that this will be a distinctive and valuable part of the council's work. Therefore, we cannot support the amendment. I hope that, despite my jesting at the beginning, it will be thought that I have treated these amendments with the serious attention they deserve, but I am afraid we cannot support them.
4.15 p.m.
Lord Ezra: I am much obliged to the noble Lord for that detailed response, but I must say that I am extremely disappointed. What the Minister has missed is the concern of the consumer council that it could remain, as it was previously, in the thrall of the authority. Under the previous regime the consumers' councils were, in all cases but gas, very much dominated by the views and the control of the regulators. Therefore, the feeling is that this important matter of the publication of information and deciding whether information could justifiably be published in the interests of consumers even if it might have an adverse impact on third parties should be determined by a body other than the authority which is so much involved in the regulatory process. It may be that some of our amendments require adjustment, but it is on the principle that I feel that the Government's response has been disappointing.
I should like to study very carefully what the Minister said, but I shall certainly be coming back to this issue at a subsequent stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringeymoved Amendments Nos. 10 and 11:
Page 113, line 9, at end insert—
("and paragraph (b) applies whether the opinion is given in relation to the information itself or to information of a description which applies to that information.").
Page 113, line 25, leave out ("who shall lay a copy of the statement") and insert ("and to the Comptroller and Auditor General within such period after the end of the financial year to which it relates as the Secretary of State may specify by notice given to the Council.
( ) The Comptroller and Auditor General shall—

(a) examine, certify and report on each statement of accounts received by him under sub-paragraph (3), and

(b) lay a copy of each such statement of accounts, and of his report on it,").

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The noble Lord said: Amendments Nos. 10 and 11 were spoken to with Amendment No. 8. I beg to move.
On Question, amendments agreed to.
Schedule 2, as amended, agreed to.
Clause 4 [Forward work programmes]:
Lord Jenkin of Rodingmoved Amendment No. 12:
Page 2, line 32, at end insert ("and an initial assessment of the costs, benefits and impacts for businesses throughout the energy supply chain of carrying out and implementing each project").
The noble Lord said: In moving this amendment I shall speak also to my related amendment, Amendment No. 15, and, if I may, to Amendments Nos. 17, 19, 26, 27, 37 and 49 in the names of my noble friends on the Front Bench.
At Second Reading I referred to the undoubted fact that whereas the onshore utilities industries—gas and electricity—are currently regulated by two regulators and will be regulated by the new authority, those regulators' remit stop at the beach. The offshore oil and gas industry comes under an entirely different system of regulation; namely, the Department of Trade and Industry. The thought that lies behind the two amendments in my name, as I adumbrated briefly at Second Reading, is that it is perfectly possible—indeed, there has been recent experience to suggest—that a zealous pursuit of the regulatory objective by the onshore regulator Gas and electricity markets authority—GEMA—could adversely impact upon what I would call, in the industry parlance, the upstream industry. In other words, overzealous and immediate protection conceived to be in the interests of consumers could operate to their detriment by inhibiting investment financing for that part of the offshore industry. That industry has an astonishing record since gas field resources became apparent and it started operating in the early 1960s. There have been huge discoveries, bringing massive advantage to the UK economy. Some £160 billion in taxes has been paid since the 1970s, and in 1998 exports were valued at £3 billion, which is a massive contribution to our economy.
The gas supplied by the offshore industry is already making a major contribution to our nation's ability to meet the Kyoto dioxide targets. Switching to gas-fired power stations has enabled carbon emissions to fall by 12 million tonnes per annum between 1990 and 1997. The offshore industry supports one of the main thrusts of the Bill because it will enable the Government swiftly to remove the current embargo, such as it is, on the construction of new gas-fired power stations. As I made plain at Second Reading, I have always regarded that measure as misconceived. The Government recognise that when the new arrangement is introduced, they will be able to abandon that restriction.
There is a regulatory gap between the responsibilities of GEMA and the DTI. The amendments to Clauses 4 and 5 seek the Government's views on whether there might be the opportunity to achieve some meshing of the two regulatory systems, so that the one takes account of the other in managing energy policy. We all want a sustainable, viable and

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diverse energy market. The fear of the offshore industry is that the Bill may militate against achieving it.
The amendment to Clause 4 seeks to ensure that GE MA is obliged to make a cost/benefit analysis of projects proposed in forward work programmes—not of every decision that it makes, as that would be wholly inappropriate. When making recommendations and decisions about the strategic relevance of a forward work programme, GEMA should take account of its impact. That would ensure full understanding of the cost of burdens and regulations throughout the whole energy chain, to minimise the impact on a competitive and diverse energy market—which is in the overwhelming interests of consumers. If existing and future consumers are to be protected in the longer term, some way must found of closing that regulatory gap.
I am most grateful to the noble Lord, Lord McIntosh, for receiving a delegation from the industry a few days ago. With him were representatives of the department responsible for the Bill and the bodies that regulate the offshore industry, so we were able to test the arguments on both sides.
My amendment to Clause 5 seeks to ensure, particularly in light of subsequent changes to projects in the forward programme—notwithstanding that they may have been occasioned by representations—that the authority will make an assessment of the costs, benefits and impact on businesses and include it in the annual report. That is proposed to mesh the two different regulatory systems, which might otherwise operate to the detriment of consumers.
While the initial concerns that I voiced at Second Reading reflected the views of the offshore industry, it entirely recognises that the interests of the whole energy chain need to be considered if a competitive and diverse energy market is to be maintained. The two amendments seek to recognise points made at Second Reading. The noble Lord, Lord Borrie, indicated that the regulator should not concentrate wholly on the narrow focus of an immediate reduction in prices but should ensure adequate investment for the future. The amounts that have to be raised from the market and spent by the industry offshore run into hundreds of millions of pounds. The noble Lord was right and the amendments reflect what he usefully said on that occasion.
Consideration and understanding of the real impact of regulation across the market will prevent one particular part of the energy chain carrying a disproportionate burden that could ultimately feed through to the market and consumers and to the supply and use of energy sources in the long or short term. The amendments support the Government's intentions; will facilitate more effective competition; provide a more consistent, transparent and predictable regulatory framework; ensure that regulation is flexible enough to accommodate and encourage future market development; and ensure that gas can continue to make a contribution to the Government's environmental objectives.
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At Second Reading, the noble Lord, Lord Currie of Marylebone, made the valid point that if one is making a cost/benefit analysis, it is often easier to assess the cost than to gauge the benefit. All of us who have tried to do so will endorse his remarks. However, I should just point out that I do not believe that that is a reason for not trying so to do.
The introduction of this check and balance, which the proposal would require of the authority, would surely lead to a greater understanding on the part of the authority of the impact of regulation throughout the whole energy chain—that is to say, the offshore oil and gas wells, and so on, although we are talking primarily about gas wells here. In that way it would be able to shed some light on the benefits that can be gained from the proposals that the authority might be considering. I suggest also that such an approach would be consistent with the current regulatory regime with which government departments have to comply to ensure a transparent and accountable regulatory framework.
In later amendments, I shall revert to the problem that the gas industry has experienced as a result of quite inappropriate forms of regulation by the present regulators which, instead of helping consumers, has led to a considerable increase in prices. That is merely an indication of what can happen if there is no clear understanding of what the impact of such regulation will be.
I understand that we cannot have seamless regulation. In a sense, we are dealing with two different parts of the same industry for which a different regulatory regime currently exists and, as far as I am aware, there is no proposal that they should be merged. But they should be meshed in such a way as to enable them to take account of each other. That is something that the Bill does not provide at present. I believe that my amendments suggest a way forward. I beg to move.
4.30 p.m.
Baroness Buscombe: I rise to speak in wholehearted support of what my noble friend Lord Jerkin of Roding has articulated so clearly in relation to the need to take a realistic and practical approach to the forward work programmes. His point about the need for meshing is also most important.
It is not necessary to repeat the arguments that my noble friend put forward, but I should like to add a few comments on Amendments Nos. 26 and 27, which deal with the costs and benefits of regulation and the regulatory impact issues. These amendments would enable the issue of the set-up costs for the council and the authority, which may be recovered from licence holders, to be probed. The amendments would require the expenditure involved to be "reasonable".
Amendments Nos. 37 and 49 would impose additional obligations on the authority in discharging its primary duty, requiring it to ensure that the obligations imposed on licence holders are the minimum necessary to attain the principal objective

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and to ensure that the licence holders can fund and, where it is reasonable to do so, recover the cost of meeting those obligations.
We are looking for the minimum necessary to be placed upon licence holders. It is worth remembering that the Secretary of State, Stephen Byers, said in another place in April of this year that the central objective of the Government's energy policy was to ensure secure, diverse and sustainable supplies of energy at competitive prices. That objective cannot be realistically achieved without having regard to the additional financial burdens placed upon licence holders as a result of this Bill.
In essence, the consumer is being put first in this Bill; but, ultimately, what the consumer wants is more for less. Therefore, a balance has to be struck if licence holders are to able to do their job for the benefit of the consumer. Expecting the financial viability on the part of the provider to be low priority is, therefore, unrealistic.
Lord McIntosh of Haringey: I am grateful to the noble Lord, Lord Jenkin, for the way in which he introduced these amendments. I well understand the concerns of the offshore industry. I was pleased that the noble Lord gave me and my officials an opportunity to talk to those concerned. I also well understand that the concerns of the industry are rather wider than the amendments that the noble Lord has placed before the Committee. I say that because a cost-benefit analysis can be carried out, but that does not necessarily mean that it is taken note of and that the concerns of the offshore industry are actually accounted for. I shall, therefore, take the amendments literally, together with the cost-benefit analysis of them, and then say a few words about the wider concerns of the offshore industry.
Amendment No. 12 would require both the authority and the council to include in their forward work programmes an assessment of the impact on businesses in the energy supply chain of each project that they propose to carry out. Indeed, as the noble Lord, Lord Jenkin made clear, the energy supply chain includes upstream as well as downstream.
Amendment No. 15 would require, where necessary, a further impact assessment to be included in the annual report of the authority. Amendment No. 17 is similar. It would require the authority to include a regulatory impact assessment in its annual report in respect of additional costs imposed on licence holders as a result of the activities of the authority, the Secretary of State and the council. The noble Baroness, Lady Buscombe, made that clear.
Such assessments carry a cost in themselves. But it is not clear that they would result in any substantive benefit. When it comes to the cost of regulation, the forward work programme clause already contains a requirement to include an estimate of the overall expenditure of the authority and the council respectively for the year. Where the projects lead to the
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exercise of regulatory functions and powers, the legislation already provides robust checks and balances.
I shall, first, take the authority. Many of the projects outlined in its forward work programme will involve the modification of licences. Licence modification procedures are, quite rightly, subject to proper due process. The authority is required to consult interested parties before new licence conditions or modifications can be made. The effect of the modification and the reasons have to be set out. Once decisions have been taken, the Bill will require the authority to provide a full explanation for them.
Where a licensed company disagrees—or, in the case of a standard licence condition, enough licensees disagree—with the licence change, the change has to be dropped or the matter referred to the Competition Commission for a ruling on where the public interest lies. That is a fundamental safeguard for licensed companies. Where other interested parties like offshore companies raise concerns, the authority, like other public bodies, will be bound by the normal principles of administrative law in considering those concerns.
However, we must remember that this is a Utilities Bill directed at the regulation of electricity and gas companies in the UK. It is not an energy Bill or an energy policy Bill. We acknowledge that regulation can affect other sectors. But the authority's direct powers extend only to licensed companies. If we were to add an explicit reference to the offshore industry on the face of the Bill—as we would if we were, in effect, talking about the energy supply chain—there would, for example, be a legitimate case for a similar reference to the coal industry or to manufacturers of generating plant. Indeed, the list could be endless.
If the offshore industry or another interested party had concerns that a particular measure, while having short-term attractions, would operate against the long-term interests of consumers, the authority would be bound to have regard to those concerns in the light of its principal objective; namely, to protect the interests of consumers. Indeed, as the noble Lord, Lord Jenkin, rightly reminded us, that means not just current but also future consumers. After all, they are the ones who will benefit from offshore investment. We are clear that the definition of the "interests of consumers" includes both short-term and long-term interests.
Although the authority's principal objective is to protect the interests of consumers, that does not diminish the importance attached to the interests of the offshore industry. The long-term interest of consumers demands a steady supply at reasonable prices. As such, the interests of consumers and those of the offshore industry converge. There will be occasions when a full regulatory impact assessment is appropriate. But the authority should continue to have discretion to apply the procedures most suited to the gas and electricity sectors within the transparent decision-making framework that the Bill puts in place.

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The amendments extend to the council. The council's only direct power in relation to companies, however, is concerned with access to information. The Bill tackles this matter separately and we shall be debating Clause 24, which contains the relevant power, in due course.
In addition, the Bill gives the Secretary of State a power to define the information which companies and the authority need not supply to the councils. The Government have published a consultation document setting out some proposals for the areas which such regulations may cover. These include a proposal covering information where the compliance burden of supplying it would be excessive.
I turn to the Secretary of State. It is already the Government's position that proposals for new primary or secondary legislation should be subject to their own regulatory impact assessment. Our intention to produce impact assessments when Ministers use the secondary powers in the legislation was set out in the regulatory impact assessment on the Bill which was published in January and updated in April.
Taken together, the existing arrangements and proposals amount to a satisfactory means of keeping the regulatory burden to a minimum. I know that that is a general opposition concern, which I appreciate, and with which I sympathise. These amendments have been motivated by a desire to minimise regulatory burdens. But I fear that the opposite would be the outcome. The authority and the council would be saddled with an unnecessary bureaucratic chore.
Amendment No. 19 would have the effect of making it a statutory requirement for the authority to include its statement of accounts as a part of its annual report. I have sympathy, in principle, with the amendment. It would ensure that readers have in one document an account of the authority's activities alongside a statement of the resources used in delivering those activities. That would be a good thing. The Bill will make it easier to publish the authority's annual accounts with the annual report by aligning the respective reporting periods. Hitherto, the regulator has been required to produce an annual report on a calendar year basis. The Bill, however, will change that. It will require the authority to prepare its annual report on a financial year basis.
However, I do not believe that we should make it a statutory requirement. There is always a risk of delay in completing the audit which may lead to delays in producing the annual accounts, and it would certainly be undesirable for the annual report to be delayed for that reason. I accept the general principle but I should prefer not to be tied down in the way provided in the amendment.
Amendments Nos. 26 and 27 in Clause 8 give the authority powers to modify conditions in licences to ensure that the expenses of the Secretary of State in setting up the authority and the council, and the ongoing expenses of the council, can be recovered. We are working on the basis that there is widespread support for the establishment of the authority and the council. There must be recognition, therefore, that
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costs will arise from their establishment. Of course, those expenses should be reasonable. But the Government are not in the business of seeking to recover unreasonable costs from business. We are looking for cost-effective expenditure. The expenses will be those that are needed to establish the new regulatory bodies and to fund the ongoing expenses of the council.
The amendment refers also to the recovery of the Secretary of State's costs in establishing the authority and the council. There are costs associated with the establishment of the authority and the council. In the case of the authority, those are primarily the costs of merging Offer and Ofgas. We do not currently anticipate that the Secretary of State will incur any significant expenses in relation to the establishment of the authority. Of course, there will be some transitional costs but there is provision in the clause for recovering those legitimate costs.
Finally, I turn to Amendments Nos. 37 and 49. The Bill gives the authority a new principal objective to protect the interests of consumers. Amendments Nos. 37 and 49 would require the authority and the Secretary of State to have regard to ensuring that, in pursuing the new objective, the obligations imposed on licensees are the minimum needed. They would also seek to ensure that licence holders are able to meet the costs of their obligations and to recover them where that is reasonable.
I believe that the amendments misunderstand the significance of the new consumer objective. It is understandable that the Opposition are concerned about the risk of over-regulation. Of course, it is true, as the noble Baroness, Lady Buscombe, said, that the regulatory costs are ultimately borne by consumers. But that is why the first part of the amendment is unnecessary. If the authority has a duty to protect the interests of consumers, it will not be doing its job if it imposes unnecessary regulation on licensees.
Again, these are serious, important amendments. I am sorry that I have spoken for so long about them but I hope it will be recognised that they deserve the attention which the Government have given to them.
4.45 p.m.
Lord Jenkin of Roding: Before the noble Lord sits down, in introducing his speech, he said that he would say rather more about the offshore industry. Have we had that?
Lord McIntosh of Haringey: Yes. Although the offshore industry is important, it is not the only factor which is important. If you start to write into a Bill the need to take account of the concerns of the offshore industry, through the old legal maxim that the inclusion of one means the exclusion of others, you may end up by neglecting, for example, the coal industry or the plant manufacturers.

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I did not wish to embark on a discussion of the economics of the offshore industry, on which the noble Lord, Lord Jenkin, is far more expert than I am.
Lord Jenkin of Roding: I shall obviously read what the Minister said on the subject generally. He said that if he dealt with the offshore industry, he would also have to deal with the other industries. I am reminded, inevitably, of that marvellous publication Cosmographica Academica which has the memorable phrase, "I cannot be fair to you because if I was fair to you I would have to be fair to everybody else too". I understand the logic of that. That wonderful short, slim volume is full of bons mots of that kind. Although the title is in Latin, the quotations are all, of course, in English.
I am not sure that the noble Lord has really addressed himself to the question of the two different systems of regulation. I am grateful to my noble friend on the Front Bench for picking up the suggestion that they should be more effectively enmeshed in some way. After all, they are part of the same supply chain. I understand what the Minister said; namely, that this is a Bill about the onshore industry—gas and electricity suppliers. But one has to ask also, particularly of gas but also of electricity: from where do they get their materials? Is that not absolutely at the heart of their business?
If the regulator, because of his pursuit of what is now his primary objective—the protection of consumers—is tempted to ignore the long-term concerns of the supplying industries, one's last state will be worse than the first. It seems to me that that is something of which the Government need to take rather closer note.
We shall want to study carefully what the Minister said in his reply. Unless my noble friend on the Front Bench wants to add anything about her amendments, at this stage, I shall seek leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringeymoved Amendment No. 13:
Page 3, line 2, at end insert—
("( ) The Authority must send a copy of any notice given by it under subsection (4) to the Council.").
On Question, amendment agreed to.
[Amendment No. 14 not moved.]
Clause 4, as amended, agreed to.
Clause 5 [Annual and other reports of the Authority]:
[Amendment No. 15 not moved.]
Lord Kingslandmoved Amendment No. 16:
Page 3, line 25, at end insert ("; and
( ) an estimated timetable, when, if at all, it expects competition in each particular sector to be sufficient to enable the Authority to withdraw from regulating that sector").
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The noble Lord said: I rise to move Amendment No. 16 and to speak to Amendment No. 18. Although the two amendments would lead to differing demands on the authority, they have a common objective; that is, they both seek to probe the reasons why the Government wish to have regulation in these two sectors.
I have no doubt that the Minister will have read carefully the proceedings of the Bill in another place. He will recall, in the Second Reading debate, that the Secretary of State accepted the argument that regulators are not appropriate in those circumstances in which a utility sector is fully exposed to competition, as the following extract from the debate illustrates. My honourable friend Mr Gibb asked:
"Does the right hon. Gentleman believe that there is still a role for the regulator when the utility sector involved—even if it is a narrow one—is fully exposed to fierce competition?".
The Secretary of State responded:
"There may be a limited role, but it would depend on the specific circumstances. As a general rule, my personal view is that regulators are not appropriate in those circumstances, and I should much rather have the discipline of an effective market".—[Official Report, Commons, 31/l/00; col. 793.]
Given that the Secretary of State accepted that point, it is surely appropriate to build a timetable into the Bill which enables the Government to assess when full competition has been reached so that regulatory bodies and associated costs can be scaled down at that point.
In addition, the Government also stated at Second Reading that the Bill would result in the outcome of every utility facing competition, as the following additional extract illustrates. My honourable friend Mr Alan Duncan said:
"Over the past few years, most of the privatised utilities have faced new entrants and new competition. Which utilities does the Secretary of State consider remain monopolies facing no competition?".
The Secretary of State responded:
"As a result of the measures that we are introducing, there will be none".—[Official Report, Commons, 31/1/00; col. 785.]
In the light of those exchanges, does the Minister agree with his right honourable friend?
I am of course aware that, in the course of the Second Reading debate in your Lordships' House, and in response to some remarks made by me, the Minister said that there was an important caveat to be made about competition in the utilities sector, particularly relating to electricity and gas. As he rightly pointed out, in the electricity sector there is a national grid, and in the gas sector certain pipelines are common to all parties and cannot be subject to the kind of fierce competition to which the Secretary of State referred without some artificial intervention by a regulatory authority to mimic competition.
I accept that, in those circumstances, a continuing role for the regulator will be required. But, apart from those circumstances, does the Minister accept that, as long as the conditions of fierce competition are established, the roles of the regulators in both sectors

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become—to use a word which became a leitmotiv in the Financial Services and Markets Bill debates—otiose. I beg to move.
Lord Borrie: I hope that my noble friend does not entirely accept the tempting arguments of the noble Lord, Lord Kingsland. He said, rightly, that for some while now, and certainly for some years to come, competition will be developed, in which case regulation can quietly be reduced. In recent times, Ofgem has been able to say in relation to the supply to customers throughout the country that price caps are no longer needed because competition is such that that would be "otiose", to use the word of the noble Lord.
The noble Lord, Lord Kingsland, rightly said that, in relation to the pipes and the wires—to use my own shorthand—ongoing monopoly inevitably means that there has to be regulation. I only rose to speak because the noble Lord did not make these points and add only that he should pay regard to the fact that fuel—we are talking about gas and electricity—is an essential for the community. Therefore, the social and environmental aspects referred to in the Bill are extremely important in regard to regulation. Despite the merits of competition, with which the noble Lord and I agree, there are circumstances in which competition may result in the disadvantaged consumers in society (disadvantaged either because they are poor or because they live in remote areas) being excluded from the desirable situation whereby all members of the community have the benefit of the supply of those essential fuels.
I shall not develop the environmental points. But there are social and environmental aspects of regulation which we should not ignore. Competition on economic grounds, although tremendously beneficial, does not necessarily meet all those requirements.
Lord Ezra: I support the remarks of the noble Lord, Lord Borrie. I fully endorse the view that regulation should diminish as competition develops and the market-place functions effectively. However, some aspects of the two fuels are basic, as the noble Lord, Lord Borrie, mentioned, and will probably continue to require a degree of intervention or regulation over many years. I refer to the disadvantaged consumers, who specifically need help. Reference is made to them in the Bill in clauses which we shall debate later.
Environmental aspects are particularly serious at a time when the price of fuel (particularly of electricity) is diminishing. The interest in energy efficiency and the achievement of the Government's objectives in reducing pollution may be ignored unless there is some degree of intervention to deal with it, as proposed in the Bill.
Therefore, while I support the concept that, as competition develops, the role of regulator should be adapted accordingly, I still feel that in the aspects referred to by the noble Lord, Lord Borrie, there will be a continuing role for some time to come.
Lord Currie of Marylebone: Perhaps I can add to the remarks of the noble Lord, Lord Ezra, and those of my
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noble friend Lord Borrie, with which I fully agree, about the nature of competition and supply in electricity.
A unique feature of the national grid system is the need to balance it on an almost second-by-second basis, without which it will become unstable. So it is not merely a question of a monopoly grid needing regulation; it is also a question of the need to balance the system centrally. That means that supply issues need a watching eye close to real time when the need to balance the system is pressing. Some players in the market have momentary but important monopoly positions. We need to watch and regulate that. That aspect will be crucial, even when supply competition is highly vigorous.
Many followers of the electricity industry argue that that is a reason why competition in supply cannot work effectively. I do not believe that. I believe that reforms in electricity trading are vital. But we should be aware that there will be a special need to have a watching brief over competition and supply because of the unique characteristics of electricity. Gas also has some of those features, but not to the same extent.
5 p.m.
Lord Hardy of Wath: I support the view taken by my noble friend and endorse the comments that the noble Lord, Lord Ezra, has made. One expects healthy competition to be a good thing. However, I am sure that many in Westminster will be aware that over the past two or three years there have been some grim examples of hard-sell competition. For example, pensioners have had their doors knocked on repeatedly at night. Therefore, I believe that we need to have a monitoring capacity to protect the consumer, who otherwise might benefit substantially from free competition.
Lord McIntosh of Haringey: I should make it clear that we are entirely committed to encouraging competition as the consumer's best friend in the utilities markets. That is why the principal objective of the authority is to protect the interests of consumers wherever appropriate by promoting competition. That establishes a presumption in favour of competition as the means through which the interests of consumers should be protected. It will ensure the maximum penetration of effective competition consistent with the practical, economic and other constraints prevailing in the gas and electricity sectors, to which my noble friends Lord Borrie, Lord Currie and Lord Hardy have referred.
It is always a good debating point to seek to get me to disagree with the Secretary of State. However, the noble Lord, Lord Kingsland, is on safe ground here because he quoted from Hansard. There cannot be any doubt but that what the Secretary of State is reported as saying in Hansard is an accurate reflection of his views. The Secretary of State made clear the Government's belief that, with the advance of competition in the utility sectors, the role of the regulator would diminish. We have all agreed with that in this debate. But to argue that the role of the

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regulator will diminish is not to say that we can predict that it will ultimately disappear, or even how rapidly it will diminish.
There will continue to be some activities in each of the gas and electricity sectors in which competition is either non-existent or, as yet, imperfect. I am not sure whether the mathematical formulation of an asymptotic curve is appropriate here, but certainly the idea that sector-specific regulation could be removed within a measurable period of years is rather unlikely. In electricity, for example, distribution will be a monopoly activity for the foreseeable future. Supply, although in theory now fully open to competition, continues to reflect the historical dominance of the public electricity suppliers. So although it is important that competition should be promoted as the best way of protecting consumers' interests, it is equally important that we do not build in a bias which would abandon regulation before the market is ready for that.
Clause 5 already obliges the authority to include in its annual report an assessment of competitive developments in each sector. If the authority believed that competition had reached the stage in which regulation was no longer necessary or desirable, it would be open to it to say so in that assessment. The record of bodies in recommending their own demise is well known% But as I have said, it is our expectation that regulation will continue to be needed, at least in certain areas, for the foreseeable future. Therefore, we believe that it would be an artificial exercise to make the authority set a timetable for the withdrawal of regulation.
Similarly, I should expect the assessment of competitive developments to describe areas in which regulatory controls had been relaxed and the reasons why they had been relaxed. I should also expect it to describe other areas where representations had been made for reducing regulatory controls and the reasons why controls should not be relaxed in those areas. Ofgem has already indicated its intention to relax licence conditions on supply over the course of the next two years.
I believe that the existing provisions for annual reports will help the process of reducing regulatory controls as competition develops. However, I believe that it would be an unnecessary burden to require the authority to identify and justify every single regulatory requirement that had not been relaxed. I am afraid that I cannot, therefore, accept the amendments.
Lord Kingsland: The Minister will be pleased to hear that, provisionally, I am relatively content with his answer. I can see the difficulties that were outlined by other noble Lords about mimicking competition in a complex utility such as electricity. What pleased me about the Minister's response is that he said nothing whatsoever about social and environmental objectives, which were raised by the noble Lord, Lord Borrie, and others. I was delighted that the Minister did not use the social and environmental dimension as a reason for the regulator to continue in existence.
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Had he done so, I would have pointed out that, for example, such matters as were referred to by the noble Lord, Lord Borrie, apply equally to the oil sector in remote parts of the country with impoverished consumers. Therefore, the social and environmental aspects of regulation are just as important in relation to oil and, indeed, coal as they are in relation to utilities such as gas.
I shall sit down content in the knowledge that, once fierce competition is established in the sector and effectively mimicked in circumstances where only one party can ever be involved, we shall see the end of regulation. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 17 to 19 not moved.]
Clause 5 agreed to.
Clause 6 [Publication of advice and information about consumer matters]:
The Deputy Chairman of Committees: In calling Amendment No. 20, I should point out that if it were to be agreed to, I should be unable to call Amendment No. 21 owing to pre-emption.
Baroness Wilcoxmoved Amendment No. 20:
Page 4, leave out lines 10 to 20 and insert—
("(1) The Authority shall publish advice and information which will promote the interests of consumers in relation to gas conveyed through pipes, and may publish that advice or information in such manner as it thinks fit.
(2) In particular, it shall secure that records of its decisions, and the information on which they are based, are kept and made available with a view to enabling members of the public to make informed judgements about the way in which it is carrying out its functions.
(2A) In publishing advice or information under this section, the Authority must consider whether the publication of the advice or information in question would or might seriously and prejudicially affect the interests of a particular individual or body of persons (corporate or unincorporate), and if that is outweighed by the public interest in publishing that advice or information.").
The noble Baroness said: In speaking to Amendment No. 20, I should like to speak also to Amendment No. 23. Today we are discussing the role of an important body—the new gas and electricity markets authority (GEMA). It will make important decisions about energy affecting most consumers and, of course, the regulated energy companies. I believe that public bodies that make decisions for us—such as the new GEMA—should operate as openly and transparently as possible. Ideally, such principles should be enshrined in the law, so creating a general expectation that openness should occur. Ideally, such bodies should operate a presumption of openness: that means information being publicly available unless there is a good reason for it not to be. There are many processes that will help bodies to achieve this. My amendments pick up three aspects of this.
The first subsection of each of the amendments places the authority under a strong duty to publish information in the consumer's interest—a presumption of openness. The key word I have used is "shall" instead of "may", as used in the Bill as currently drafted.

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The second subsection of each of the amendments requires the authority to publish its decisions and the information on which those decisions are based. The wording is similar to that in the Food Standards Act 1999 which set up the new Food Standards Agency. This is a new public body which is making efforts to operate openly and transparently. This might, for example, mean that the authority publishes the minutes of its meetings and any background papers attached to them; or, as the Food Standards Agency is doing, it could hold open meetings around the country. I understand that the agency is opening up its board meetings too.
The third subsection of each of the amendments requires the authority to incorporate a public interest test when deciding whether or not to publish information. As Clause 6 is currently drafted, the authority would not publish information if it was thought to,
"seriously and prejudicially affect the interests of a particular individual or body of persons".
However, there may be circumstances where a company is behaving in a way which is detrimental to its customers. If GEMA wanted to alert the public to the problem, it might find that it was not able to do so because of the serious harm that it may be claimed to cause that company. In making decisions whether to publish, the two concerns should be balanced. If the public interest in publishing the information is greater than the serious harm that it may cause to the company, it should be published.
I hope that the Minister agrees with me about the importance of the openness of regulatory bodies. How the regulatory structures are set out in this Bill is likely to have an impact on other legislation such as the forthcoming water Bill.
Today we are talking about what is, to all intents and purposes, a new body. It will have a primary duty towards the consumer. It will also have particular regard to specified groups of people such as the disabled, the chronically sick, pensioners and those on low income; and it will have to take account of economic, social and environmental interests in its policy making. It will have a range of different interests to reconcile.
It should operate differently from OFFER and Ofgem before it. I believe that the public need to see that the regulatory body for gas and electricity is operating differently from before. They will also need to understand how and why it makes the decisions that it does. I hope that these amendments will help that process. I beg to move.
Baroness Sharp of Guildford: We on these Benches very much support the two amendments brought forward by the noble Baroness, Lady Wilcox. In many senses, they pick up the spirit of the amendments that we put forward in terms of openness of information to the consumer councils. We endorse fully what the
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noble Baroness said about the need for the new authority to be seen to be open and available to consumers.
Lord Jenkin of Roding: I should like to pick up on one point that was touched on by my noble friend Lady Wilcox. As I understand it, the Government have already made clear in relation to the two industries whose regulation was withdrawn from this Bill at an earlier stage in another place—namely, water and telecommunications—that it remains their intention that the provisions so far as concerns the consumer councils shall follow broadly the same pattern so far as is possible, having regard to the different natures of the four industries. To my mind, it is therefore important that we get these provisions right in this Bill.
Although it may be perfectly possible in theory to move a whole lot of amendments about the consumer provisions in the legislation for telecommunications and water—it may be one Bill; it may be two—we anticipate the possible argument that "the House accepted this in the Utilities Bill and therefore we are not going to listen to any further arguments".
The noble Lord, Lord McIntosh, always listens to the arguments and then mostly says "No".
Baroness Wilcox: Not today.
Lord Jenkin of Roding: Not today we hope. It is important that in debating these provisions about the consumer councils we have in mind that the Government have indicated that they will want to harmonise them as much as they can in future legislation.
Having said that, I am absolutely certain that the key words of "openness" and "transparency" are vital —particularly in giving the reasons for decisions. If an authority has to turn down a request, it is enormously important that everyone should understand very clearly the reason for that. In that sense, I, too, support my noble friend's amendments.
Lord Kingsland: So far as concerns the disclosure of information in the Bill, generally the Opposition will need to be persuaded that any change from what is likely to be the ultimate content of the Freedom of Information Bill is desirable before we would be prepared to depart from the terms of that Bill.
5.15 p.m.
Lord McIntosh of Haringey: Perhaps I may first say to the noble Lord, Lord Jenkin of Roding, that I do not first listen to the arguments and then say "No"; I listen to the arguments and persuade noble Lords to withdraw their amendments.
I should say to the noble Lord, Lord Kingsland, that we will be discussing the Freedom of Information Bill That Bill is drafted in such a way that there are specific information regimes in specific sectors which; an he different from the basic minimum requirements of the Freedom of Information Bill. It is important that we

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should understand that. I shall be setting that out in more detail when we come to the appropriate amendments.
I have listened to the arguments and I am aware of the views of the National Consumer Council. I take them very seriously.
The amendments seek to make a number of changes to the publication function of the authority. They make publication of information and advice in the consumer interest a duty rather than a power, as the noble Baroness, Lady Wilcox, made clear. But we believe that this is mistaken. The authority has a primary duty to protect the interests of consumers, and the power to publish information and advice is one of the tools it has in carrying out this primary duty. Sometimes—but not always—that duty will prompt it to exercise this power.
In addition, the concept of a broadly defined duty to publish can be mistaken. The publication role is one of the many activities of the authority. That means that it has to decide priorities between its activities and allocate resources accordingly. If the duty to publish information is not to distort the setting of priorities, the authority would have to have some discretion as to what to publish and what to leave unpublished. I am sure that that is what the noble Baroness intends. However, this element of the discretion would make the duty very difficult to enforce. In our view, this kind of function is better encapsulated in a power rather than a duty, and that is what the Bill provides.
Secondly, a new duty on the authority to make available the records of its decisions, and the information on which they are based, is proposed. The Bill already requires the authority and the Secretary of State to publish their reasons for key decisions. In addition, the Freedom of Information Bill, which will apply to the authority when it becomes law—I refer here to the matter raised by the noble Lord, Lord Kingsland—will oblige the authority to maintain and operate an approved publication scheme which the authority must adopt having regard to the public interest in the publication of reasons for its decisions.
The authority will be making decisions every day. I assume that the noble Baroness, Lady Wilcox, is seeking a record of decisions with regard to the exercise of key regulatory functions. The Gas and Electricity Acts already require the regulator to keep a public register in which the provisions of every licence, exemption, modification or revocation of licence conditions, direction, consent or determination made under licences and enforcement orders must be entered.
We do not believe that the requirements proposed in the amendments add anything to those requirements and we have to oppose this feature of the two amendments.
The third and last aspect of the amendments seeks to replace the existing disclosure test with one which obliges the authority to weigh the public interest in disclosure against any serious and prejudicial effects. Again, we do not think that this adds anything of
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substance to the power that the authority already has. Under Clause 6, the authority must have regard to the need for excluding matters which would cause serious and prejudicial effects. It is not required to exclude them. This means that the authority has the power to decide that, even though serious and prejudicial effects are likely, the interest in publication is strong enough to justify publication.
I said earlier that the Conservatives appear to be looking to limit the grounds for publication and that the Liberal Democrats, on the whole, are looking for ways to extend them. Although I do not think it is intended, this amendment would limit the power of the authority to publish information because it would take away the "have regard" criterion for excluding matters which would cause serious and prejudicial effects and replace it with a requirement. I do not think that that would be the right move. I urge the noble Baroness not to press the amendment.
Baroness Wilcox: In his reply the Minister referred to the National Consumer Council, but when I spoke I did not refer to that body. I should have done so and for that I apologise. The National Consumer Council, of which I was chairman, and the National Federation of Consumer Groups, of which I am president, along with other consumer groups, have all pressed for the wording to be changed here.
I have come across this kind of wording many times in the past. I recall, some seven years ago, when I first saw the introduction of the banking code. All the way through the code stated that the consumer or customer "shall", while the bank "may". Perhaps I attach more importance to those words than do the Minister and his advisers in the Box.
I should like to take this opportunity to thank the noble Baroness, Lady Sharp of Guildford, for supporting these amendments, and my noble friend Lord Jenkin, who also demonstrated his support.
I think that this represents a missed opportunity. If the people of this country are to be convinced that we are moving away from secrecy towards greater openness and if there is to be a presumption of openness, the words chosen to be put on the face of the Bill are extremely important. I shall not press my amendment today, but this issue will be raised again and again—indeed, each time a new body is set up. I repeat: I should prefer to see the word "shall" used in place of the word "may". However, for the time being, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringeymoved Amendment No. 21:
Page 4, line 17, leave out from ("matter") to end of line 20 and insert ("which relates to the affairs of a particular individual or body of persons (corporate or unincorporate), where publication of that matter would or might, in the opinion of the Authority, seriously and prejudicially affect the interests of that individual or body.").
The noble Lord said: In moving Amendment No. 21, perhaps I may speak also to Amendments Nos. 22, 24, 25, 76, 78, 94, 147, 281, 289, 296, 309, 333 and 343. It

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may be appropriate for me to remind the Committee of what I said at Second Reading; namely, that every part of this Bill has been duplicated because it amends both the Gas Act and the Electricity Act. Of course, that means that virtually every amendment has also had to be put down twice. For that reason, this group is not quite as long and complicated as it may appear at first sight.
All the amendments concern the power of the authority to publish and to bar unauthorised disclosure of information. Amendments Nos. 21, 22, 24 and 25, concerned with the authority's power to publish information and advice in the interests of consumers under Clause 6, are essentially tidying up provisions. Amendments Nos. 21 and 24 make it clear that, as is the case with the regulator's existing powers to publish which Clause 6 adapts, it is only the possibility of serious and prejudicial effects for the body to which the information relates, as opposed to any body, with which the disclosure test is concerned. Amendments Nos. 22 and 25 make it clear that the interests of consumers includes the interests of future as well as present consumers.
The other amendments in this group carry forward the well-established practice of providing, in legislation which empowers public authorities to require information from individuals and businesses, that unauthorised disclosure of information so obtained shall be a criminal offence.
At present, the Gas and Electricity Acts each contain a provision to this effect, but they are slightly different from each other. The amendments repeal those sections and replace them with one regime; namely, the new clause to be inserted by Amendment No. 281—the key amendment after Clause 102—which will apply to information obtained under either Act, as befits a situation where there is a single licensing authority operating lined-up—I almost said "joined-up"—licensing regimes.
Like the existing provisions, the new clause works by prohibiting disclosures and then defining exceptions where disclosure is permitted. Generally these exceptions are for disclosures from one regulatory authority to another for the purpose of facilitating the performance of the other authority's statutory functions.
In addition, the various publication powers conferred on the authority and the council elsewhere in the Bill are, as a rule, exceptions to the prohibition on disclosure. However, each typically is subject to its own "harm test" limiting what may be disclosed without the consent of those to whom the information in question relates. Furthermore, the protection afforded by the new clause will apply to information obtained under the Bill, for example, by the consumer council under Clause 24.
In summary, the amendments carry forward the principle that unauthorised disclosure should be a criminal offence, and establish a common regime for
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each of the three statutes—the Gas Act 1986, the Electricity Act 1989 and the Bill. I commend the amendments to the Committee. I beg to move.
Lord Jenkin of Roding: I should like to respond briefly to the Minister's opening remarks. I do not know what has been the experience of other noble Lords, but I have found trying to deal with this Bill, trying to understand its structure and to work out where its amendments fit, and trying to understand the Government's proposal on the order in which the clauses and schedules are to be dealt with, extremely difficult.
While working on the Bill last weekend, I had to come to the conclusion that this is not a good way to try to bring legislation before Parliament. No doubt the minute that passed from parliamentary counsel to the Minister in charge of the Bill in another place explained why it was necessary to legislate extensively by reference to the existing Acts rather than simply to write a new Bill. I can understand that Ministers may have decided to accept the situation without perhaps fully appreciating quite how complicated this was going to become. Every time a change is proposed, it has to be done twice, using two amendments. Finding one's way around the provisions has proved to be a difficult problem.
It may be perfectly acceptable to the noble Lord and his advisers who have lived with the legislation from the start and now understand how to negotiate their way through it. However, I should like to put on the record that for Back-Benchers, and perhaps even more acutely for my noble friends on the Front Bench, this Bill contains several hurdles over which one must leap even before one can begin to address its substance. I hope that those in high places who will need to make decisions on matters such as this in the future may perhaps take note of my remarks.
Lord McIntosh of Haringey: I am very sympathetic to what has been said by the noble Lord, Lord Jenkin. Indeed, I made many of the same comments when I first encountered the Bill. If the Gas Act and the Electricity Act are, in effect, being repealed and replaced with a new Act, why not simply repeal those Acts and then introduce new legislation?
Unfortunately, the situation is more complicated than that. This legislation repeals only one part of the Gas Act and of the Electricity Act; namely, the regulatory elements. The two Acts each contain a great many more provisions that are not to be repealed. Furthermore, the two Acts are not aligned with each other. They were introduced three years apart—understandably, I do not blame the previous government for that. Conditions were different and the industries were constituted in very different ways. The Acts could not be brought into line.
We have tried to effect a compromise here. We have taken out whole chunks of the Gas and Electricity Acts and replaced them with whole chunks as set out in this Bill. We felt that it was better to do that than to amend words in certain lines through certain clauses and so forth. Thus we have tried to meet the problem half

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way. I hope, therefore, that negotiating the Bill is a little easier than it might otherwise have been. Had we gone in the direction of amending in minute detail rather than gross replacement of entire sections, so to speak, we would have needed to introduce Keeling schedules to every one of the amendments as well. That would have further increased the complexity of the exercise.
I believe that on the whole we have come to the right conclusion on how to handle the matter. However, I am sure that parliamentary counsel and those responsible in the department will take very seriously the comments made by the noble Lord, Lord Jenkin.
As regards the order of consideration, I feel that by and large it has been successful. We are dealing with the Bill in the order in which we need to deal with it, with the amendments numbered in the right way. I may be proved wrong on this over the course of our deliberations, but I am pleased that we have worked it out in this way and that we have done so with the agreement of the Front Benches opposite.
Lord Jenkin of Roding: I understand entirely what the Minister has said. He has given a reasonably convincing explanation. Can we expect a consolidation measure fairly soon?
Lord McIntosh of Haringey: I cannot answer that question. It is not even a matter for the Government; it is for the Law Commission to consider.
On Question, amendment agreed to.
5.30 p.m.
Lord McIntosh of Haringeymoved Amendment No. 22:
Page 4, line 24, at end insert—
("(4) In this section "consumers" includes both existing and future consumers."").
On Question, amendment agreed to.
[Amendment No. 23 not moved.]
Lord McIntosh of Haringeymoved Amendments Nos. 24 and 25:
Page 4, line 33, leave out from ("matter") to end of line 35 and insert ("which relates to the affairs of a particular individual or body of persons (corporate or unincorporate), where publication of that matter would or might, in the opinion of the Authority, seriously and prejudicially affect the interests of that individual or body.").
Page 4, line 38, at end insert—
("( ) After subsection (3) of that section there is inserted—
"(4) In this section "consumers" includes both existing and future consumers.".").
On Question, amendments agreed to.
Clause 6, as amended, agreed to.
Clause 7 agreed to.
Clause 8 [Payments by licence holders relating to new arrangements]:
[Amendments Nos. 26 and 27 not moved.]
Lord McIntosh of Haringeymoved Amendments Nos. 28 and 29:
Page 5, line 21, leave out ("or") and insert ("and").
Page 5, line 36, leave out from ("may") to ("or) in line 39 and insert ("give directions to the Authority for the purpose of securing that sums relating to any of the expenses mentioned in subsection (3) are included in the sums payable by virtue").
On Question, amendments agreed to.
Clause 8, as amended, agreed to.
Baroness Wilcoxmoved Amendment No. 30:
After Clause 8, insert the following new clause—
APPEAL TO AUTHORITY BY NON-LICENCE HOLDERS
(" .—(1) A person who is not a licence holder may appeal to the Authority to withdraw or vary a decision (other than that in section 47 of the Competition Act 1998).
(2) In this section "decision" means—

(a) the introduction of a new licence condition;

(b) the modification of an existing licence condition;

(c) any other decision prescribed by the Secretary of State in regulations made under this section.

(3) The application must—

(a) be made in writing, within such period as may be specified in guidance issued by the Secretary of State under subsection (9);

(b) give the applicant's reasons for considering that the relevant decision should be withdrawn or (as the case may be) varied.

(4) The Authority may decide—

(a) that the applicant does not have a sufficient interest in the relevant decision;

(b) that, in the case of an applicant claiming to represent persons who have such an interest, the applicant does not represent such persons, or

(c) that the persons represented by the applicant do not have such an interest.

(5) The Authority, having considered the application, may—

(a) withdraw or vary the relevant decision;

(b) decide that sufficient reasons have not been shown why it should withdraw or vary the relevant decision.

(6) Where a decision has been made under subsections (4) or (5), the Authority must notify the applicant of its decision, give reasons for that decision and make them public.
(7) The applicant may appeal to the Competition Commission against a decision of the Authority notified under subsection (4) or (5).
(8) The making of an application does not suspend the effect of the relevant decision.
(9) The Secretary of State shall issue guidance about the procedures for applicants for making an appeal under this section.").
The noble Baroness said: At Second Reading, I raised the matter of third parties having the right to appeal against the decisions of the authority. I raised the distinction between this legislation and the Competition Act 1998, under which consumer bodies, for example, have the right to challenge competition

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decisions of the Office of Fair Trading. The utility regulators are subject to this provision where they have concurrent competition powers.
My proposed new clause would give bodies other than licence holders the opportunity to appeal against the non-competition decisions of the authority. Such decisions could include the introduction of new price controls or new licence conditions, or the modification of existing ones. The new clause is modelled on Section 47 of the Competition Act which sets out the procedures for third party appeals.
I am most interested in consumer bodies having this opportunity. The gas and electricity consumer council would be a particularly appropriate body for this. I believe that the consumer councils in the different sectors are vital in advocating the interests of consumers. An effective framework in which they can operate is important for us all. Having the right to challenge a decision made by a regulator should be a part of that framework.
After I raised this point at Second Reading, the Minister kindly sent me a letter setting out the reasons why it would not be appropriate for such a right to be made available for energy regulation. I understand that the same letter was sent to some other Members of the Committee. I am most grateful to the Minister for letting me know the Government's thinking and that they considered the issue important. It was very helpful. I understood the Minister's point that competition decisions are different in nature from those of an energy regulator.
However, I tabled the new clause because I wanted to raise the fact that there is an inherent unfairness in the regulatory system in that it is tipped in favour of the companies and against consumers. Companies can challenge the decisions of a regulator, but consumer bodies cannot. So, when the regulatory authority is making decisions, it will be concerned about who can challenge those decisions. The companies' right to do so must make them a continuous presence in the decision-making process. Potentially, therefore, consumers could lose out. Having this right of appeal would even out the imbalance.
This is an issue that applies to other areas, not just to energy. The regulatory model in this Bill is likely to be followed in other areas such as the forthcoming Bill and even communications regulation. It could apply to such areas as postal services and rail, where both a regulatory and a consumer body exist. I have been pressed by the National Consumer Council, the National Federation of Consumer Groups and various other bodies to take this matter on board and think for the future. It is an important issue. Once more, I urge the Government to reconsider their position. I beg to move.
Lord Borrie: I normally feel extreme sympathy, if not support, for any amendment on consumer matters proposed by the noble Baroness, Lady Wilcox. In this case, however, I feel that, given the noble Baroness's record, the proposal is extreme. It begins with a statement that any person who is not a licence holder
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may appeal, not only to the authority but further, in subsection (7), to the Competition Commission. It is suggested that any person should be able to do that, despite the fact that before the authority's decision is made, as I understand it, anyone can make comments to inform the authority of his or her views.
I bear in mind a point that my noble friend the Minister has repeated several times; namely, that the principal objective of the authority against which the appeal is to be made is to promote the interests of the consumer. Yet, in putting forward this amendment, there is a kind of suspicion on the part of the noble Baroness that the authority will not do that very well; that it will not, before a final decision is made, take note of comments from the National Consumer Council and other appropriate bodies.
Although I feel that the new clause is rather extreme in its statement that anyone can appeal, subsection (4) backtracks from that. One of the grounds for the authority rejecting the appeal is that the applicant does not have "a sufficient interest" in the relevant decisions. I should have been slightly more persuaded of the merits of the new clause if, instead of beginning as it does with the statement,
"A person who is not a licence holder may appeal"—
which clearly means any person—it had required the appeal to be made by someone who had a sufficient interest. That is the position arrived at if subsection (4) is taken into account, but only after the authority has been put to the trouble of dealing with an appeal from someone who may have no such sufficient interest.
While I feel that there is something in the amendment—although it does not take into account the rights of people to put forward their views before a final decision is made—as drafted, it seems to be "round the wrong way" in that it enables anyone to lodge an appeal and then the authority can knock it back if the person concerned has insufficient interest.
Baroness Wilcox: I hate to think that I have made it sound as though "any old bod" could challenge a decision. I thought that there were safeguards to ensure that bodies challenging a decision would have a legitimate interest. I refer to subsection (4).
Lord Borrie: Yes, I agree with the noble Baroness. But that is for the authority to determine. Anyone may make an appeal, but, so far as I can see, a ground for rejecting it is that the appellant does not have a sufficient interest. Given the way in which the amendment is drafted, the authority will have to look into that question.
Baroness Sharp of Guildford: We, too, have some difficulty with the wording of the amendment, although we agree with the spirit of the proposal. We feel that there is often an imbalance between representation on the part of the corporate sector, which frequently engages professional lobbyists to push its interests, and the consumer sector, which relies on consumer organisations. Such organisations are sometimes less well organised than the professional

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lobbyists. We therefore feel that there is an inherent imbalance and we have some sympathy with the spirit of the amendment; however, we are not particularly happy with the wording.
Lord McIntosh of Haringey: This issue was debated in the Green Paper and referred to in responses to the Green Paper. I recognise that the noble Baroness, Lady Wilcox, is right. There is an asymmetry in the present position. Licensees can force the authority to refer licence modification decisions with which they disagree to the Competition Commission but third parties, including consumer groups, cannot.
We decided against extending the ability to challenge the authority's decisions having given careful consideration to the responses. The argument is, in part, a practical one. We need to retain streamlined and efficient regulation. There have been few references to the MMC or its successor body, the Competition Commission. That is a strength of the system. References are time-consuming for all concerned. They can take up to nine months each. They create uncertainty until the issue is resolved. They distract management from other matters. Giving the council, and other third parties an ability to force a reference would inevitably add to the number of references.
I know that the noble Baroness, Lady Wilcox, would say, quite reasonably, that consumer groups would act responsibly, and would not trigger trivial references. But I think it is bound to be the case that if a new right of appeal is introduced, it will be used. Otherwise there is little point in having it. And if more decisions were referred, decision-making would tend to shift to the Competition Commission and away from the authority. On the whole, that would undermine the authority. It would undermine the principle of sector-specific regulation which we set out here.
In any case, new rights for consumers to challenge the authority are unnecessary. The gas and electricity consumer council will have full opportunities to contribute and influence the statutory consultation process which precedes licence modification decisions. Indeed, noble Lords have recognised that. The noble Lord, Lord Borrie, referred in particular to that point. It will have enhanced rights of access through the Bill to information to enable it to make a fully informed contribution. And the Bill—and this is important—will require a full explanation of decisions once they have been taken. This requirement, I think, negates the first part of the amendment. If the council or other consumer group makes a sound, well-researched representation during the consultation process, and the authority is required to account for its decisions, then I think that we can safely assume that the explanation will cover the reasons why a certain approach was or was not adopted. There is no need for a separate power to require the authority to account for its decision.
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In considering third party rights, it is also important to refer to the change which this Bill makes to the regulator's general duties. For the first time, the regulatory authority will have a principal objective to protect the interests of consumers. There should, in other words, be no clash of interests and no need for the council to be able to second guess the authority.
5.45 p.m.
Baroness Wilcox: I thank the Minister for his reply. I am grateful that he recognises that there appears to be an imbalance on the face of the Bill.
I am somewhat thrown by the fact that noble Lords do not like the wording of the amendment. It was modelled on Section 47 of the competition legislation. However, I accept that the noble Lord, Lord Borrie, knows more about these issues than I do. I apologise if the wording has defeated my ambitions in this area.
Lord McIntosh of Haringey: I did not criticise the wording.
Baroness Wilcox: I thank the Minister. I shall continue to press for the consumer where I can. I am grateful that the Minister did not raise the concern that such a right would delay the decision-making process. It is an argument I hear from others. I believe that we take as long as necessary to make these important decisions on behalf of the consumer and with regard to open and fair competition. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 9 [Objectives and duties under 1986 Act]:
Lord Ezramoved Amendment No. 31:
Page 6, line 10, after ("consumers") insert ("in the context of sustainable development").
The noble Lord said: In moving this amendment, I speak also to Amendment No. 42. Amendment No. 31 is supported by my noble friend Lord Beaumont of Whitley who unfortunately cannot be here today—I am delighted to see that he is present—the noble Lord, Lord Hardy of Wath, and my noble friend Lady Sharp of Guildford.
The amendment is of a fairly fundamental nature. It refers to the principal objectives of the Secretary of State and the gas and electricity markets authority in carrying out their respective functions. As has been repeatedly mentioned in the course of debate, they are to protect the interests of consumers. Clause 9 refers to gas, and Clause 13 to electricity in the same terms. The purpose of the amendment is to add after the word "consumers" the words, "in the context of sustainable development".
I recognise that this is a Bill which deals with economic regulation. However,
"economic regulation of the utility industries does not take place in a vacuum. The ways in which the utility regulators carry out their functions have consequences for the social and environmental, as well as the economic, aspects of the pursuit of sustainable development".

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The words that I have uttered are not mine; they are the words of the Government. They are contained in the draft statutory social and environmental guidance to the gas and electricity markets authority. It continues:
"The Government intends"—
there is nothing advisory about that word—
"that the regulatory system should make an appropriate contribution towards achieving sustainable development. This means that economic regulation should be conducted in a way which is alert to the Government's wider social and environmental goals".
The Bill deals with economic regulation. The Government say that they intend that it shall be seen in the framework of sustainable development. That should be on the face of the Bill. We should be able to debate the issue. It is not satisfactory to say that the Bill is about economic regulation when the Government state categorically that it is their intention that economic regulation shall be viewed within a sustainable framework.
The amendment is simple but fundamental. I believe that it properly reflects the Government's intentions as set out in the draft guidance. The word "intend" goes way beyond guidance. The Government should have said that they hope, or have a firm expectation. They should not have used the word "intend". If they have an intention, that is very firm indeed. Therefore I believe that the words "sustainable development" should be on the face of the Bill. I beg to move.
Lord Beaumont of Whitley: I am sorry that I misled the noble Lord, Lord Ezra, about my presence today. I had to write a note of apology: I cannot be here later. I was unaware when we would reach the amendment and therefore gave a rather blanket apology.
The noble Lord, Lord Ezra, has put the case very strongly. We are talking here about the long-term benefit of the consumer. As the Bill now stands it may he that regard will be had only to the short-term benefit of the consumer. The major problems before us today, whether they be global warming or other matters, mean that we must think much further ahead than would have been the case five, 10 or 15 years ago. Therefore, for that reason and for those given by the noble Lord, Lord Ezra, I believe that this matter should be included on the face of the Bill.
Lord Hardy of Wath: I support the amendment moved by the noble Lord, Lord Ezra, and suggest that we should not disregard the longer term. Bearing in mind that we may be only months away from net dependence on gas imports, perhaps we should recognise that in 10 or 15 years' time there may well be capacity to use the research done in the 1970s and 1980s into the possibility of an alternative source of gas. I do not suggest that at this stage we embark on the implementation of the Westfield technology, with which the noble Lord, Lord Ezra, will be familiar, but
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it is not a bad idea for those responsible for the gas and electricity industries to give consideration to what may be a crisis in a relatively short time.
Baroness Buscombe: I have some difficulty in speaking to this amendment. I believe that when we on these Benches were in government the term "sustainable development" first emerged in relation to something as delicate as the rural economy, in particular planning matters. I do not believe that it is particularly apposite here. However, the draft statutory social environmental guidance to the gas and electricity markets authority makes it clear that the Government have committed themselves to the goal of sustainable development. For these purposes, "sustainable development" is defined as "a better quality of life for everyone, now and for generations to come". That sounds like nirvana. To put such an incredibly broad term on the face of the Bill is perhaps a step too far given the terminology used in the guidance.
In addition, I question the use of the words "in the context of sustainable development" in relation to the Secretary of State and the authority carrying out their respective functions to protect the interests of consumers. What else can it mean but the protection of the interests of consumers generally? Surely, it does not mean the protection of consumers from the utility industries. We on these Benches cannot support the amendment.
Baroness Sharp of Guildford: I rise to support my noble friend who moved the amendment and to thank others who have also given their support. The reason why it is important that this provision is on the face of the Bill is that in many senses the definition of the interests of consumers in paragraphs (a) and (b) of subsection (4) carries the implication that those interests are best looked after by the promotion of a competitive industry. We are all cognisant of the fact that competition helps to ensure that consumers get the best deal. However, we also recognise that there are social and environmental costs. As the Minister himself said not long ago, when we look at consumers' interests we must consider not simply the short term but the long term. Therefore, these are inter-generational issues. I am aware from the debate yesterday in Committee on the Government Resources and Accounts Bill that this is an issue in which the Minister takes a particular interest.
Once one begins to look at these inter-generational issues, it is important that sustainable development is written into the Bill. Unless we have an eye on sustainable development, we shall affect the interests of future generations. In that sense, it is well known in economics that social costs and benefits can diverge from private interests. It is noticeable that the Government have taken a lead, for example in relation to Kyoto, to ensure that long-term environmental interests are considered. It is important that government take that lead because the private individual does not naturally think in those terms.

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We feel very strongly that this matter should be written into the Bill so that it is quite clear to those who seek to interpret it that we look to the long-term interests of the consumer, not to short-term private issues.
Lord Currie of Marylebone: I support the objective of sustainable development but worry about this particular amendment, in part for the reasons given by the noble Baroness, Lady Buscombe. Sustainable development is a very broad concept that perhaps fits uneasily into the specifics of the Bill. However, the Bill also makes clear that longer-term inter-generational questions are very much the concern of the regulator today. The Bill defines consumers as both present and future consumers. As drafted, the Bill would place on the authority the requirement to be concerned about future sustainability. As a member of the management board of Ofgem, I know that that body certainly considers not only the short-term position but also the longer-term development of the industry. Therefore, I do not believe that the amendment is necessary.
Lord Jenkin of Roding: I hear some of the hesitations that other Members of the Committee have expressed about the wisdom of writing this matter into the Bill. The noble Lord, Lord Beaumont of Whitley, will remember that some five years ago he and I served on a special Select Committee under the chairmanship of the noble Lord, Lord Tombs, to examine the issue of sustainable development. I well recollect that we had more than one session to try to decide what "sustainable development" meant. We had the Brundtland definition which referred to meeting the needs of society without prejudice to the ability to meet the needs of future generations. We also had the definition of my right honourable friend John Gummer which made reference to meeting the needs of today without cheating on our successors. As a concept, clearly it is unexceptionable. However, I believe that it may create difficulties as a statutory objective.
A few months ago a Question was tabled about the coal industry. I am not sure whether the noble Lord, Lord Hardy of Wath, was involved at the time. However, in a supplementary to the noble Lord, Lord Sainsbury of Turville, I said that if the Government sought ways to meet the Kyoto targets on CO2 it was not immediately apparent that to encourage power stations to burn more coal was the best method. With considerable aplomb the Minister said that there was always a need to balance conflicting objectives, which is right. There is another example of that in today's press. The Government have made a huge number of statements about the need for sustainable transport and to get people out of their cars and on to public transport, bicycles and so on, and with much of that I have sympathy.
However, what does the Department of Trade and Industry now seek to do? It seeks to make it easier for people to buy many more cars by making them cheaper. The Minister may wriggle in his seat, but the
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fact of the matter is that it is very difficult to see how these matters can easily sit next to each other. It may be that car makers and distributors should not make unreasonable profits, but the Government need to explain to the country why it is right to increase the price of petrol and introduce powers to charge for parking and so make it more difficult for people to use their cars and, at the same time, make it easier for people to buy cars by cutting the price.
Briefly, the point I am making is that the concept of sustainable development is rather vague. It concerns "peace and motherhood" and we are all in favour of it provided we do not try to define it too closely. I do not believe that it would be right to include it in the Bill.
6 p.m.
Lord McIntosh of Haringey: I am not wriggling in my seat; I was making a sceptical face. No other part of my body moved. I am expressing my scepticism that anyone from the Conservative Benches should believe that it is wrong to act to avoid excessive charges by motor dealers in this country. If it is perfectly possible for cars to be offered more cheaply, we believe that consumers should obtain them more cheaply. If we can help to achieve that, I believe that it is the right thing to do, and I believe that the Conservative Front Bench in the Commons was of the same opinion.
Of course, we all agree with the objective of sustainable development, even if the noble Lord, Lord Jenkin, has some difficulty in defining it. However, I am afraid I must say that the amendments are aimed at the wrong target. We must remember that the Bill is, as I said, not an energy policy Bill; it is a utilities Bill. It deals with economic regulation and, to use the word of the noble Lord, Lord Kingsland, it "mimics" the effects of competition by putting downward pressure on costs and creating incentives to improve efficiency and quality of service to consumers. It is right that the authority's general duties should have an economic focus generally concerned with price and quality of service offered to consumers. That is why the authority's principal objective is to protect the interests of consumers.
In "the interests of consumers" we include their fundamental interests in ensuring that their reasonable demands for gas and electricity are met and that their supplies are secure. That is why we have the demand criterion and the finance criterion. However, we recognise that the way in which the authority exercises its functions can have significant consequences for the environment and for society as a whole. The authority should weigh such considerations properly in the balance.
The noble Lord, Lord Ezra, says that this issue should be on the face of the Bill so that it can be debated. My response is that it is on the face of the Bill in Clauses 10 and 14. In any case, while the principal objective and duty in subsection (2) of Clauses 9 and 13 deal with economic considerations, the authority is also subject to duties in relation to energy efficiency, public safety and the environment. In the definition of "consumers", subsection (3) requires the authority to

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have regard to the interests of people who are disabled or chronically sick, of pensionable age, who have low incomes or who reside in rural areas. All those social and environmental objectives are on the face of the Bill.
However, we structure the duties in the Bill to ensure that when a choice is made between alternatives of equal benefit to the consumer the authority should lean towards the one that does most for energy efficiency, public safety and the environment and takes account in Clauses 10 and 14 of the Government's social and environmental objectives. It should be recognised that measures concerned with such matters will often be in the interests of consumers, in particular their long-term interests, as noble Lords have said; that is, the interests not only of present but of future consumers.
Therefore, there should be no conflict between the two sets of duties and no problem will arise. However, it would be wrong for the general duties of an economic regulator to be amended in the way that the amendments propose. The concept of sustainable development incorporates social and environmental, as well as economic, considerations. If we incorporate the social and environmental considerations into the principal objective, we remove the priority afforded to the interests of consumers. That is contrary to the principal purpose of regulations as set out in the Bill. It would leave the authority uncertain as to how it should respond if pressed to take measures which, in the interests of the environment, are neither in the long nor the short-term interests of consumers.
However, other matters in the social and environmental field should be decided by the Government and implemented through specific legal provision, not necessarily in the course of this Bill. They fall outside the scope of economic regulation. Examples of government action as opposed to authority action include the climate change levy with its exemptions for renewables and good quality combined heat and power, the pensioners' winter fuel payments, and our support for research and development into renewables.
We are all on the same side. However, I believe that the amendments are aimed at the wrong target and would not achieve the effect which the noble Lord, Lord Ezra, seeks.
Lord Beaumont of Whitley: The Minister said that the objectives we are trying to achieve are included in Clauses 10 and 14. In looking at those clauses, I see that guidance on social and environmental matters may, indeed, be issued from time to time. However, nowhere in the Bill is there a definition of what the objectives might be. Perhaps I may say in passing that, although I remember perfectly well, with the noble Lord, Lord Jenkin, the debates that we had in the special Committee of this House, I still do not see much difference between the definitions of Mrs Brundtland and of John Gummier. It seems to me that they have almost exactly the same basis.
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The case for saying that sustainable development is difficult to define is grossly over-stated. However, as what we are trying to achieve is not imposed or mentioned in Clauses 10 to 14, I rather suspect that it is a matter to which we shall return. However, I defer to the noble Lord, Lord Ezra, whose name is first on the list, as to what should happen to this particular amendment.
Lord McIntosh of Haringey: Before the noble Lord, Lord Ezra, responds, perhaps I may say two things. First, I did not complain that sustainable development is difficult to define. I believe that it is a well understood concept and that it could be defined. If, for other reasons, it had been right to accept this amendment, I should not have been worried about it. Secondly, the noble Lord, Lord Beaumont, says rightly that our social and environmental policies are not defined. It is not intended that they should be defined here. They are as they will be set out in guidance from time to time.
Lord Ezra: I thank the Minister and noble Lords who have taken part in this discussion. In a sense, I suppose that this matter involves a play on words. As the noble Lord, Lord Currie, rightly pointed out, if one reads on in Clause 9 one finds that consumers are defined as "both existing and future consumers". Therefore, that may be another way of talking about sustainable development.
However, what surprised me about the Government's response to the amendments is that they are so firm on this subject in the guidance. Their stance seemed to me to go beyond guidance. It was a firm statement of government policy. I believe that firm statements of government policy should be in the relevant Bill, but it appears in the guidance. There is a definition of "consumers", both present and future.
I should like to reflect on these matters. I shall certainly come forward with an amendment at a later stage, perhaps putting "consumers present and future" in an earlier part of the Bill so that one does not have to read on in order to find out what is meant by "consumers". That may be a way round what has turned out to be, surprisingly to me at any rate, a difficult issue. I should have thought that as the Government feel so strongly about sustainable development they would have welcomed the opportunity to put it in the Bill. That is not so. Therefore, we must consider another way of getting across that point. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Kingslandmoved Amendment No. 32.
Page 6, line 11, leave out ("appropriate") and insert ("possible").
The noble Lord said: In moving Amendment No. 32, I shall speak also to Amendment No. 33. In doing so, I shall discuss all the issues that I want to cover in the group.

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The Bill provides for the abolition of Ofgas and Offer and their replacement by a single regulatory authority for gas and electricity whose primary objective will be to protect the interests of consumers. The effect of that commitment is to reorder the priorities of the regulators. For example, Clause 9 states:
"For section 4 of the 1986 Act (general duties of Secretary of State and Director) there shall be substituted—
4AA.—(1) The principal objective of the Secretary of State and the Gas and Electricity Markets Authority (in this Act referred to as 'the Authority') in carrying out their respective functions under this Part is to protect the interests of consumers in relation to gas conveyed through pipes, wherever appropriate by promoting effective competition between persons engaged in, or in commercial activities connected with, the shipping, transportation or supply of gas so conveyed".
In a recent paper for the Institute of Economic Affairs, Mr Stephen Littlechild, the former electricity regulator, described as "positively unhelpful" proposals by the Trade and Industry Secretary, the right honourable Stephen Byers, to make protection of consumer interests the "principal objective" of regulators. Mr Littlechild said:
"The duty to promote competition will no longer be unqualified; this will have to be demonstrated to be the most appropriate way to protect consumers".
He went on to warn that the regulatory change in emphasis could open the floodgates to companies appealing to the Competition Commission against attempts by Oftel and Ofgem to promote competition.
I am anxious to hear the Minister say to the Committee today that Mr Littlechild's analysis is incorrect. I am fortified in my expectation that that will be the Minister's answer by his final remarks to the noble Lord, Lord Ezra, about the noble Lord's amendment. In response to the noble Lord's request to include the expression "sustainable development" in Clause 9, he said that it would both remove the priority of consumer interest and leave the authority uncertain as to how to respond.
Moreover, earlier today, in responding to my Amendments Nos. 16 and 18, the Minister was clear beyond peradventure that the only circumstances in which competition between persons engaged in commercial activities would be inappropriate in promoting consumer interest would be those involving what the noble Lord, Lord Borrie—in a magnificent colloquialism—described as "wires and pipes".
If the only exception to the fierce competition between parties to promoting the interests of consumers is wires and pipes, I suggest to the Minister that my Amendment No. 32 is entirely appropriate. It seeks to replace the word "appropriate" with the word "possible". From what the Minister said today to the noble Lord, Lord Ezra, from what he said to me and from what he said at Second Reading, the clear inference is that the only circumstances in which the consumer interest would not be completely served by,
"competition between persons engaged in, or in commercial activities connected with".
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would be the wires and pipes circumstances. My amendment would make it clear, beyond doubt, that in no circumstances whatever would the fears expressed by Mr Littlechild have any firm ground.
As regards Amendment No. 33, the existing legislation requires the gas regulator, for example, to protect the interests of consumers. He must ensure that licensed companies can finance their activities. Under the Bill, the financing duty becomes subordinate to the new primary duty to,
"protect the interests of consumers … wherever appropriate by promoting effective competition".
Further, the new gas and electricity markets authority (GEMA) merely has to "have regard to" the need to ensure that licence holders can finance their activities. This duty is, therefore, much less clear than the existing one and does not promote the objective of regulatory certainty.
Substitution of Amendment No. 33 for the existing words in the clause would resolve that uncertainty. I beg to move.
6.15 p.m.
Lord McIntosh of Haringey: I am not responsible for Stephen Littlechild. I do not believe he is right in saying that we are abandoning competition by the way in which we formulated the principal objective of the authority. Although I said so at Second Reading and during debates on previous amendments, I had better say it again in order to see whether I can convince the noble Lord, Lord Kingsland.
Under the Bill, the authority is given the principal objective of protecting the interests of consumers. It is to do so wherever appropriate by promoting effective competition. This requirement is built into the principal objective, and so it is the authority's primary duty. Together, they establish a presumption in favour of competition as the means through which the interests of consumers are to be protected.
The authority must ask itself whether it can best protect the interests of consumers through competition or in any other way, such as price controls. It is clear that competition is the preferred mechanism in the absence of any good reason to the contrary. The re-emphasis on competition will ensure the maximum penetration of competition consistent with the practical, economic and other constraints prevailing in the gas and electricity sectors. If the noble Lord, Lord Kingsland, likes that to be defined as "wires and pipes", so be it. It is just the way things are.
Whether competition is the best means of protecting consumers in any particular case is a matter of judgment for the authority. That decision will depend on the practicalities of introducing or increasing competition, the costs of establishing the competitive arrangements and the benefits—some of which may be long-term or uncertain—of competition over other forms of regulatory control.
It seems to me clear, and someone said it in the House of Commons, that something which is not possible cannot be appropriate. That seems self-evident. But just because something is possible, it is not

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necessarily appropriate. For example, it would be possible to establish competition by duplicating the grid and the network in electricity. Perhaps that is what the noble Lord. Lord Kingsland, means by "wires and pipes". However, that would promote competition only at a cost wholly disproportionate to the benefits that it would bring to consumers. So if we change the word "appropriate" to "possible", the duplication of the electricity grid and network would have to be taken seriously because, of course, it is possible, even though for other, perfectly overwhelming reasons, it is not actually appropriate.
So it is right that the authority should have some discretion as to whether to promote competition in a particular case. That is why the authority should promote competition wherever appropriate and not simply where it is physically possible to do so. None of that plays down the importance that we ascribe to the role of competition as a means of protecting consumers. I would expect the authority to draw on competition as the means of protecting consumers in the absence of a sound justification for not doing so.
I now turn to Amendment No. 33 which makes changes that go to the heart of the general duties. I shall set out those general duties as the noble Lord, Lord Kingsland, has spoken about them. The Bill puts consumers at the heart of the authority's general duties. We are giving the authority a principal objective to protect the interests of consumers. It will be the authority's sole primary duty to carry out its functions in the manner best calculated to further the principal objective. That is the effect of subsection (2) of Clauses 9 and 13.
That provision is intended to result in a fair deal for consumers. Putting consumers at the heart of the general duties will make a real difference to regulatory perspective. There can be no doubt where to draw the regulatory line; it must be drawn with the interests of consumers in mind. It ensures that the right balance is struck between the interests of consumers and those of shareholders.
Apart from the duty in respect of competition, the directors-general of gas and electricity supply have two primary duties. The first is the duty concerned with securing that all reasonable demands for gas and electricity are met—the demand duty. The second is the duty concerned with securing that utility companies are able to finance their licensed activities—the finance duty.
Under existing legislation, both the demand duty and the finance duty are stand-alone duties; they are ends in their own right. Under this Bill, those duties are positioned where they more naturally belong, as aspects of the duty to consumers. That helps to explain what we mean by the "interests of consumers" as that phrase is used for the principal objective. It incorporates not simply the narrow consumer interest in a high quality service at low cost, but also the broader requirements of a sustainable industry.
Of course, consumers have an interest in ensuring that all reasonable demands for gas and electricity are met. Ensuring that they receive a supply is the gas and
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electricity consumers most fundamental interest. That is why the demand duty is restated as an aspect of the primary consumer duty.
Who could doubt that consumers have an interest in ensuring that utility companies operate in a viable market with a long-term outlook? It is no good to them if the return to shareholders is so low that utility companies are unable to attract the capital needed to maintain their infrastructure.
On the other hand, it is certainly not in the interests of consumers that utility companies are able to make excessive profits, or pay excessive remuneration to certain people. The right balance must he struck between the interests of consumers and the interests of shareholders. That is why the finance duty has been incorporated as an aspect of ensuring the interests of consumers.
The words "have regard to the need" to secure that reasonable demands are satisfied, and that licence holders are able to finance their activities, reflect the weight that should be given to those aspects of the interests of consumers. They represent confirmation in statute—these are the words that the noble Lord, Lord Kingsland, would take out—that the consumer interest expects reasonable demands to be satisfied and licence holders to be able to finance their activities. It is difficult to see how the authority could comply with its primary duty (to further the protection of the interests of consumers) without carrying out its functions in a manner best calculated to secure those ends.
The amendments proposed would reinstate the demand duty and the finance duty as ends in their own right and make them independent of, and subject to, the duty to further the principal objective. They deny that the interests of consumers necessarily incorporate those matters that form the demand and finance duties. We resist them because they would render the general duties as a whole incoherent and leave the authority in doubt as to how it should interpret the "interests of consumers" for the purpose of the principal objective.
Lord Kingsland: I thank the Minister for his very full reply. As regards Amendment No. 32, if I understood him correctly, on the substance of the matter he and I are in agreement. Perhaps I shall reflect on introducing a word other than "possible" to try to provide the Bill with more precision at Report stage.
However, as regards Amendment No. 33, I confess to serious disappointment with the Minister's response. To me it seems unreasonable to expect, on the one hand, licensees to have imposed on them obligations by the authority and, on the other, not to be furnished with the wherewithal to finance them. I am equally surprised that the Minister is prepared to see a weaker obligation with respect to meeting all reasonable demands in Great Britain for gas and electricity conveyed to consumers. In those circumstances, I beg leave to withdraw Amendment No. 32. However, when Amendment No. 33 is called, I shall seek to test the opinion of the Committee.

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Amendment, by leave, withdrawn.
Lord Kingsland Lord Kingsland moved Amendment No. 33:
Page 6, line 17, leave out (", having regard") and insert ("and, subject to the principal objective, the Secretary of State and the Authority shall carry out those functions in the manner which he or it considers is best calculated")
The noble Lord said: I beg to move Amendment No. 33.
6.26 p.m.
On Question, Whether the said amendment (No. 33) shall be agreed to?
Their Lordships divided: Contents, 59, Not-Contents, 138.

Division No. 1

CONTENTS

Archer of Weston-Super-Mare, L.

Jopling, L.

Kimball, L.

Astor, V.

Kingsland, L.

Astor of Hever, L.

Liverpool, E.

Attlee, E.

Luke, L. [Teller]

Baker of Dorking, L.

Lyell, L.

Blatch, B.

McConnell, L.

Brabazon of Tara, L.

Mackay of Ardbrecknish, L.

Brougham and Vaux, L.

Marlesford, L.

Burnham, L.

Monro of Langholm, L.

Buscombe, B.

Montrose, D.

Byford, B.

Moynihan, L.

Clark of Kempston, L.

Northbrook, L.

Cope of Berkeley, L.

Northesk, E.

Craig of Radley, L.

Oxfuird, V.

Crickhowell, L.

Park of Monmouth, B.

Dean of Harptree, L.

Parkinson, L.

Denham, L.

Peel, E.

Dixon-Smith, L.

Pilkington of Oxenford, L.

Dundee, E.

Reay, L.

Fookes, B.

Renton, L.

Fraser of Carmyllie, L.

Seccombe, B.

Gardner of Parkes, B.

Shaw of Northstead, L.

Glentoran, L.

Shrewsbury, E.

Goschen, V.

Thomas of Gwydir, L.

Gray of Contin, L.

Waddington, L.

Hayhoe, L.

Wade of Chorlton, L.

Henley, L.[Teller]

Wilcox, B.

Hogg, B.

Willoughby de Broke, L.

Jenkin of Roding, L.

Young, B.

NOT-CONTENTS

Acton, L.

Billingham, B.

Addington, L.

Blackstone, B.

Ahmed, L.

Blease, L.

Allenby of Megiddo, V.

Borrie, L.

Alli, L.

Bragg, L.

Alton of Liverpool, L.

Brennan, L.

Amos, B.

Brooke of Alverthorpe, L.

Andrews, B.

Brookman, L.

Archer of Sandwell, L.

Brooks of Tremorfa, L.

Ashley of Stoke, L.

Burlison, L.

Ashton of Upholland, B.

Carter, L.[Teller]

Bach, L.

Chandos, V.

Barker, B.

Christopher, L.

Barnett, L.

Clarke of Hampstead, L.

Bassam of Brighton, L.

Clinton-Davis, L.

Beaumont of Whitley, L.

Cocks of Hartcliffe, L.

Berkeley, L.

Cohen of Pimlico, B.

Bernstein of Craigweil, L.

Crawley, B.

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Currie of Marylebone, L.

Macdonald of Tradeston, L.

Dahrendorf, L.

McIntosh of Haringey, L. [Teller]

David, B.

Davies of Coity, L.

Mackenzie of Framwellgate, L

Davies of Oldham, L.

Mackie of Benshie, L.

Desai, L.

Mallalieu, B.

Donoughue, L.

Mar and Kellie, E.

Dormand of Easington, L.

Mason of Barnsley, L.

Dubs, L.

Massey of Darwen, B.

Elder, L.

Merlyn-Rees, L.

Evans of Parkside, L.

Milner of Leeds, L.

Evans of Watford, L.

Mitchell, L.

Ezra, L.

Molloy, L.

Falkland, V.

Molyneaux of Killead, L.

Farrington of Ribbleton, B.

Morris of Castle Morris, L.

Faulkner of Worcester, L.

Morris of Manchester, L.

Filkin, L.

Newby, L.

Fitt, L.

Parekh, L.

Gale, B.

Patel of Blackburn, L.

Gavron, L.

Pitkeathley, B.

Geraint, L.

Plant of Highfield, L.

Gibson of Market Rasen, B.

Prys-Davies, L.

Gilbert, L.

Ramsay of Cartvale, B.

Goldsmith, L.

Rea, L.

Gordon of Strathblane, L.

Rendell of Babergh, B.

Goudie, B.

Rennard, L

Gould of Potternewton, B.

Rogan, L.

Greaves, L.

Sawyer, L.

Grenfell, L.

Scott of Needham Market, B.

Hardy of Wath, L.

Sharp of Guildford, B.

Harris of Haringey, L.

Shepherd, L.

Harrison, L.

Shore of Stepney, L.

Haskel, L.

Simon, V.

Hayman, B.

Smith of Clifton, L.

Hilton of Eggardon, B.

Smith of Gilmorehill, B.

Hollis of Heigham, B.

Smith of Leigh, L.

Howells of St Davids, B.

Stoddart of Swindon, L.

Howie of Troon, L.

Stone of Blackheath, L.

Hoyle, L.

Taylor of Blackburn, L.

Hughes of Woodside, L.

Thomas of Walliswood, B.

Hunt of Chesterton, L.

Tomlinson, L.

Hunt of Kings Heath, L.

Tordoff, L.

Islwyn, L.

Turnberg, L.

Jay of Paddington, B. (Lord Privy Seal)

Turner of Camden, B.

Walker of Doncaster, L.

Jeger, B.

Walmsley, B.

Jenkins of Putney, L.

Walpole, L.

King of West Bromwich, L.

Warner, L.

Lea of Crondall, L.

Whitaker, B.

Lipsey, L.

Wilkins, B.

Lockwood, B.

Williams of Elvel, L.

McCarthy, L.

Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.37 p.m.
[Amendments Nos. 34 and 35 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 36:
Page 6, line 24, at end insert ("or the Utilities Act 2000").
The noble Lord said: In moving the amendment, I should like also to speak to the following amendments: Amendments Nos. 41, 48, 53, 285, 294, 295, 302, 305, 306, 307, 308, 327, 328, 334, 339, 340, 342 and 345.
This group of amendments brings together the bulk of government amendments concerned with the functions of the gas and electricity markets authority. I shall start with Amendments Nos. 36, 41, 48 and 53.
The functions of the authority and of the Secretary of State are principally set out in the Gas Act 1986 and the Electricity Act 1989, as those Acts are amended by the Bill. However, once the Bill receives Royal Assent they will also have functions under stand-alone provisions of the Utilities Act. For example, Clause 4 requires the authority to prepare, consult on and publish a forward work programme. Clause 26 empowers the authority to publish a notice issued by the consumer council setting out its reasons for refusing to supply information.
The general duties in Clauses 9 and 13 relate to the authority's and the Secretary of State's functions. Similarly, the obligation in Clauses 10 and 14 to have regard to social and environmental guidance and the health and safety duty under Clauses 11 and 15 also relates to those functions. Amendments Nos. 36, 41, 48 and 53 make it clear that references to the authority's or the Secretary of State's functions in those clauses relate to their functions under the provisions of the Utilities Act equally as they relate to those under the Gas Act and the Electricity Act.
The amendments that follow are more technical or consequential in nature. Amendment No. 285 broadens the effect of paragraph 8 of Schedule 3 to ensure that in all documents relating to transfers under Clause 3 references to the authority or consumer council, as appropriate, are substituted for references to the outgoing directors general and Gas Consumers' Council. In particular, this will ensure that paragraph 8 will have effect in relation to licences. Amendments Nos. 295 and 305 insert words accidentally omitted to clarify that the existing standards of performance powers under Section 33A of the Gas Act 1986 and Section 39 of the Electricity Act 1989 apply in individual cases—in other words, for each customer or potential customer individually.
That is to emphasise the difference between "individual" and "overall" performance standards. If the former are not met—for example, if a company misses an appointment—compensation is payable to the individual customer concerned. Overall standards, such as that 95 per cent of letters to a company should be answered within 10 days, do not lead to individual payments if they are missed. But companies are required to run their businesses in a way that can reasonably be expected to lead to the standards being met.
Amendments Nos. 295 and 302 are technical amendments in relation to the power of the authority to require information from licensees in certain conditions, such as the suspicion of a breach of licence conditions or revocation of a licence. Amendment No. 295 ensures that the scope of the information power in Section 38(1) of the Gas Act 1986 matches the authority's revised duties and corrects a minor omission from the Gas Act 1995.
Amendment No. 302 inserts into Section 28 of the Electricity Act 1989 the equivalent provision to Section 38(1A) of the Gas Act. Amendments Nos. 306, 307 and 308 clarify that the existing standards of
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performance powers should apply to electricity suppliers. Distributors are covered by Clauses 53, 54 and 56.
Amendments Nos. 327, 328 and 342 repeal various provisions of the Gas Act and the Electricity Act consequential to the provisions of Clauses 59, 94 and 95. Each of Amendments Nos. 334 and 340 repeals provisions of the Gas Act which are the duplicate of provisions of the Bill. Amendment No. 340 repeals paragraph 15(2) of Schedule 7 to the Gas Act, which is the duplicate of Clause 5(9). Amendment No. 334 repeals the latter half of Section 47(7) of the Gas Act, which is the duplicate of paragraph 10 of Schedule 1 to the Bill.
Finally, Amendments Nos. 339 and 345 repeal spent provisions of the Gas Act and the Electricity Act respectively, which are concerned with the compulsory purchase of land in Scotland. I beg to move.
On Question, amendment agreed to.
[Amendment Nos. 37 and 38 not moved.]
Lord Ezramoved Amendment No. 39:
Page 7, line I, leave out ("Subject to subsection (2)") and insert ("In performing that duty").
The noble Lord said: In moving this amendment I wish to speak also to Amendment No. 51. The amendment refers to the functions of the Secretary of State and the authority in regard to the promotion of efficiency and economy on the part of persons authorised by licence to carry gas, or, in the case of electricity, similarly, and to protect the public from the dangers arising from the conveyance of gas, or, in the case of electricity, appropriately.
Our concern is that this important issue is made subject, in the case of gas, to subsection (2) and appropriately in the case of electricity. We feel that these are matters of such importance that the same words as are used in introducing subsection (3)—namely, "in performing that duty"—should be introduced. We fail to see why these important issues—promoting efficiency and economy, and protecting the public from dangers—should be relegated to an inferior position. The case for re-emphasising the importance of promoting efficiency is tied in with the whole of the Government's environmental policy and, therefore, should be emphasised accordingly. It is extremely surprising that the question of safety should be relegated in this way.
It is perfectly true that later on in the Bill in the case of gas—in Clause 11—the Secretary of State and the authority have to consult the Health and Safety Commission about all gas safety issues, and similarly in Clause 15 regarding electricity. But that does not alter the fact that in the duties of the Secretary of State and the authority safety is made, in Clause 9(5), subject to subsection (2) which deals with the need to secure, as far as possible, that all reasonable demands for gas to be conveyed through pipes are met and that licence holders are able to finance their activities. It does not seem to be proper that those two considerations should predominate over dealing with these issues. Matters of efficiency and safety should therefore be

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treated more seriously than they are on the face of the Bill. This can easily be corrected by introducing the words "in performing that duty" in place of "subject to subsection (2)". I beg to move.
6.45 p.m.
Lord McIntosh of Haringey: I gave a quite full response to the same issue when we were debating Amendments Nos. 31 and 42. Both those amendments were concerned with raising the profile of environmental and social issues in the authority's general duties. These amendments seek to achieve the same purpose by elevating the duties to promote energy efficiency, protect public safety and have regard to the environment to a level equal with that of the principal objective.
As I said before, regulation is intended to mimic the effects of competition by putting downward pressure on costs and by creating incentives to improve efficiency and customer service. It is right that the authority's general duties should have an economic focus. However, we recognise that the way in which the authority exercises its functions can have significant social and environmental consequences. That is why the authority is subject to secondary duties in relation to energy efficiency, public safety and the environment and will be required to take account of social and environmental guidance issued by the Government.
As I said on the previous amendment, that ensures that when the authority is making a choice between alternatives of equal benefit to the consumer, it should lean to the one that does the most for energy efficiency, public safety and the environment and takes account of the Government's social and environmental objectives. But it would be wrong to remove the priority afforded to the interests of consumers by making these considerations of equal importance to the principal objective in the way proposed by Amendments Nos. 39 and 51. To do so would run counter to the principal purpose of regulation. Measures which run counter to the interests of consumers, which could arise if we gave it equal prominence, fall outside the scope of economic regulation and are properly matters for government.
I am sorry that I am not able to say any more on this matter, but I dealt very fully with the previous amendments. In my view, the amendments raise essentially the same issues and create the same problems.
Lord Ezra: I thank the noble Lord for that answer. I think that there is some contradiction in the way that subsection (3) and subsection (5) are treated. Subsection (3) uses the words "in performing that duty". It could be argued that that derogates from the main objective because it refers to a particular class of consumers.
Lord McIntosh of Haringey: That is indeed correct; it refers to a particular class of consumers. But it is still within the context of the interests of consumers. It is because the other issues of energy efficiency, public
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safety and social and environmental objectives do not come within the same envelope that they have to be dealt with in a different way.
Lord Ezra: I do not agree with that analysis. I feel that efficiency, and, particularly, public safety, rate higher treatment than is proposed. However, I do not suggest that we should divide on this issue. I shall reflect on what the noble Lord said and come back to the matter at a later date. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Jenkin of Rodingmoved Amendment No. 40:
Page 7, line 14, at end insert ("and to the securing of a diverse and viable long-term energy supply").
The noble Lord said: I, too, am puzzled by the hierarchy, which defies logic. Certain matters are central and are summed up by the words "in the interest of consumers". The raising of capital and other matters are next in the hierarchy. Environment and safety—to which the noble Lord, Lord Ezra, referred—come later in the Bill. Some matters do not appear to rank in that hierarchy at all. One of them is securing a diverse, viable and long-term energy supply.
I fail to understand how objectives can be regulated by a points system according to where they appear in the Bill, which seems to be the logic of the Government. At least the matters mentioned by the noble Lord, Lord Ezra, are in the Bill, whereas the impact on the energy chain is not. I suspect that I will receive the same answer as I did to my Amendment No. 12 about the long-term impact on the upstream industry and the problems of ensuring that GEMA will take account of it. The Bill rests on the phrase "future consumers" and that is not enough. It ought to spell out the other considerations that the regulator must bear in mind when exercising his powers to protect consumers.
On Second Reading I referred to recent changes in gas trading arrangements that have the effect of increasing the cost to new entrants to the transmission pipelines, because the regulator insisted on auctions to match gas production with the ability to transmit it. That regulation was implemented without assessing the impact on long-term supply. Doubt is immediately cast in people's minds as to whether they ought to invest. If gas supply begins to languish, that will not be in the interests of consumers because they would have to use higher-cost imported gas.
Another fear looming on the horizon, of which the regulator should be bound to take account, is Ofgem's ambition to change gas and electricity trading and balancing regimes. It may make sense on paper to have a similar system for recognising that the load varies at different times of the day and week and—unlike the half-hourly electricity pool—finding ways of balancing supply and demand, but to move to a shorter balancing day for gas would significantly increase costs to the entire offshore industry—particularly the more mature fields, which depend on a regular offtake to operate efficiently. The result

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could be premature decommissioning of fields no longer regarded as viable, accelerating the need to import gas. Ofgem's apparent ambition to merge the two could quickly operate to the disadvantage of consumers, as auctions have done.
We all want a secure, efficient, competitive and diverse energy market, but while some of those objectives are written into the Bill others are not. How can we expect GEMA to take account of the wider objectives if there are no references to them in the Bill? My amendment would ensure that the authority will have regard to the need to secure a diverse and viable long-term energy supply. The noble Lord, Lord McIntosh, owes the Committee a better explanation of how the hierarchy is supposed to work and why some objectives have been omitted. I beg to move.
Lord Hardy of Wath: I offer a word or two of support for the noble Lord's amendment. In the 1970s and early 1980s, working out the UK's energy requirements was almost a parlour game. The only certain thing was that no one produced an accurate detailed forecast. I do not suggest that detailed forecasts of energy requirements in 20 years should be attempted now. The Magnox stations will be phased out shortly and relatively soon we shall have one nuclear power station at Sizewell and be increasingly dependent on imported gas. The oil situation is such that no one today contemplates establishing oil-fired power stations to replace anything we have or to meet future needs.
Although I have argued strongly for the retention of the coal industry in Britain, I have emphasised the need for improvements in the technology so as to enable coal to be burned cleanly. Given the enormous volume of coal that will continue to be burned in India, China and elsewhere, clean burning is clearly an international need. The last government were at fault for not giving adequate priority to research and development in that technology.
I was shocked the other day by a reference to a proposed substantial investment in wind power on the Yorkshire coast. That may be desirable—although as an environmentalist, I am not happy about the bird mortality that would inevitably result. The estimated annual output of that wind farm would be equivalent to six days of operation at a Drax power station. Opposition Members will recall that Drax power stations are flue gas desulphurised. While we may insist on a contribution from renewables, they may not provide more than the target the Government have rightly set. Not only must that target be met but also the fuel and power needs of our country. For that reason, I trust that the noble Lord accepts my support and that if I make a reference to the need for coal consumption and a mining industry in Britain, it is on the basis that they are environmentally clean.
7 p.m.
Lord Ezra: I, too, should like to support the amendment moved by the noble Lord, Lord Jenkin, and Amendment No. 52. I do so very much for the reasons so eloquently outlined by the noble Lord,
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Lord Hardy. This brings us back again to the issue of the Bill being seen in the longer-term context; in other words, that decisions which simply have a short-term impact should not be taken by the authority. The securing of a diverse and viable long-term energy supply is a crucial long-term consideration. Therefore, I support the proposal that this should be included in the Bill.
As it has been grouped with these two amendments, I should like to speak to Amendment No. 46, which is tabled in my name and that of my noble friend Lady Sharp. It proposes to insert the words,
"and to safeguard the security of electricity supplies",
into the new Section 3A(2)(a) of the 1989 Act, as set out in Clause 13. This is a most important issue. In the old days of the CEGB, which very few can now remember, it was quite clear that the responsibility for ensuring that the lights did not go out lay fairly and squarely on the shoulders of the board. In this more diverse situation with the Government, the new authority, the new electricity trading arrangements and the system operator being involved, together with the various companies, we now need to know who the country can expect to have the responsibility for securing electricity supplies.
The proposal here is that that responsibility should lie with the Government and the authority. If that is not so, perhaps we may hear from the Minister who does have that responsibility. When dealing with utilities and one as fundamental as electricity. I believe that this point should be made.
Lord Fraser of Carmyllie: Perhaps I may briefly add my voice of support to the amendment moved by my noble friend. If he is right, I believe I share his perplexity. I cannot understand why what is contained within the amendment is not wholly acceptable to the Government; indeed, I thought that it contained much of what was intended to be achieved by the Bill. If my noble friend is correct in believing that the answer he will receive is that this securing of,
"a diverse and viable long term energy supply",
is in some way sufficiently covered and contained within the definition of "consumers" in subsection (6), I shall consider that to be an extremely fragile basis for establishing such an important objective.
If, as the Government have been keen to emphasise, there is to be a set of, if you like, "ringing declarations" in the Bill about what is to be achieved, it would seem to me to be infinitely more desirable to set out such provisions in this clear unequivocal way rather than relying on the somewhat obscure subjection (6), which gives us a definition of "consumers".
Baroness Sharp of Guildford: I should like to support the amendment of my noble friend Lord Ezra, and those of the noble Lord, Lord Jenkin. We spoke earlier about the concept of hierarchy. My noble friend has reminded me that there was indeed a time when the CEGB ran a hierarchy, or a merit order, which was established in order to ensure security of supply on the part of the electricity industry.

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Having moved away from the managed market of the CEGB into this much more diverse market system, it is important to recognise that the market does not necessarily provide for security of supply. Should the electricity system fail in this county, we know very well that it would not be just a matter of the lights going out; it would also be a matter of all the computers going down. Great difficulties would arise in the event of that happening. Therefore, the buck has to stop somewhere. Someone has to take responsibility for ensuring that there is security of supply in this country. It would seem obvious that the authority should take that responsibility. However, if that is not so, I repeat the question put by the noble Lord, Lord Jenkin: whose responsibility is it?
Lord McIntosh of Haringey: This is the Utilities Bill; it is concerned with the economic regulation of gas and electricity. As I said before, it is not an energy Bill or an energy policy Bill. The responsibilities to which the noble Lord, Lord Jenkin, and others have referred are very real; but they are the responsibilities of government. To achieve those objectives, government must exercise a wide range of policy instruments, which can include securing properly functioning utilities markets. That is the purpose of the Bill. But it can also include the management of the United Kingdom Continental Shelf and securing stability and access to overseas sources of energy.
Most of the issues regarding a diverse and viable long-term energy supply fall far outside the scope of utilities legislation, as defined in the Bill. However, that is not to say that establishing appropriate economic regulation of the gas and electricity utilities is not an important element; indeed, that is the Bill's purpose. It imposes a principal objective: to protect the interests of consumers, wherever appropriate, by promoting competition; and a duty to secure that all reasonable demands for electricity and—as far as it is economical to do so—for gas, are met. To all intents, that is ensuring security of supply in the context of utilities legislation.
The amendments proposed are, therefore, a distraction and would serve to confuse rather than enhance the framework of obligations and duties under this legislation. This is simply not the place to make a law imposing such wide-ranging duties—duties that no government could conceivably neglect. Perhaps I may assure the Committee that the Government are indeed working to ensure security of supply.
On a day-to-day basis, the markets will ensure that energy supplies are maintained. The diversity of approach and the ability to change quickly that are provided by competitive markets ensure the sort of responsive system needed to underpin security and diversity. But, of course, the Government are acting to meet their responsibility to set the framework within which the energy markets can achieve that.
The Bill makes provision for the new electricity trading arrangements, which we shall discuss next week. These will increase the incentive on generators
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and suppliers to ensure that adequate generation is available to meet demand. Generators and suppliers will face commercial penalties, which could be large, if they do not meet their contractual obligations. This will be an important further contribution to security of supply. The new electricity trading arrangements will also ensure that the appropriate price signals are given to bring forward new investment when this is needed, and that customers manage their demand to the benefit of energy security.
The existing framework of regulation provides for tough service standards on transmission and distribution companies. These are monitored by Ofgem, the industry regulator, and include guaranteed standards whereby the distributor must pay the customer if the service levels laid down are not met. There are also licence conditions applying to gas suppliers and transporters that lay down quantified standards of security of supply in relation to meeting demand. These are enforced by Ofgem. The measures are backed up by wide-ranging emergency powers under the Energy Act 1976. These will permit the Secretary of State to make orders regulating or prohibiting the production, supply and acquisition of fuels to ensure security of supply.
The Electricity Act also includes powers to give directions on the level of stocks and the use of generating stations. Further measures are set out in the Electricity Supply Regulations 1988, which provide for the continuity and safety of electricity supply. Those require electricity supplies to be constant except in certain limited circumstances.
We shall continue to keep strategic issues relating to diversity and security of supply under careful review. Future energy policy will increasingly be conducted in the context of global and European markets. We have been working actively with the European Commission and other member states to help to build a single European market. That will not only help to promote free trade in energy but should assist in improving the security of supply across Europe.
I hope it is clear from what I have said that there is no derogation in any way by government from their obligation, which we fully recognise, to secure a diverse and long-term energy supply. It is simply that these amendments are in the wrong Bill. Those are issues of government policy and not the economic regulation of the utilities.
Baroness Sharp of Guildford: If those were obligations on Ofgem, how is it that they do not become obligations of GEMA?
Lord McIntosh of Haringey: In so far as they are obligations on Ofgem, they are obligations on GEMA. Nothing detracts from that. But the objectives of GEMA are set out very deliberately, as in all these cases, to ensure that it is not possible or necessary to play off one objective against another.

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There is a direct analogy with the Bank of England Act 1998. There was pressure from all sides of the House to say that, in addition to the objective of price stability which was set for the Monetary Policy Committee of the Bank of England, there should be all sorts of other objectives—many proposed by Members on my own Back Benches—on exchange rates, employment and many other thoroughly worthy objectives. If a body like the Monetary Police Committee or GEMA is set a number of different objectives which are potentially in competition and conflict with each other, it does not know what to do. There must be a hierarchy and something at the top. The interests of consumers are at the top.
Lord Ezra: In dealing with the question of safeguarding the security of electricity supplies, was the Minister telling us that that is dealt with adequately in other legislation which is still in operation?
Lord McIntosh of Haringey: It does not all require legislation. Those are issues of government policy, some of which require legislation and some of which do not. I set out a whole list of legislation going back 25 years. Some of our obligations in securing a diverse and viable long-term energy supply are indeed in legislation. Some are not and do not need to be. Governments do not operate only through legislation.
Lord Jenkin of Roding: We are grateful to the noble Lord for his reply. He has obviously gone into the matter in some length. But what worries me about his reply is that I think he believes it.
Having heard the arguments on this and other amendments, I cannot for the life of me see why we cannot write into this Bill that GEMA should have regard to those other government obligations. I just do not understand why some of those are included and some are not and why there has to be a sort of hierarchy.
But the Minister has been kind and given the Committee a lengthy explanation of the amendments. I am sure that the noble Lord, Lord Ezra, and others will want to consult together to see how we can best reflect our objective of having those matters included on the face of the Bill without interfering with the Government's objective of having a Bill to regulate the gas and electricity industries. We shall want to return to the matter on Report, but, with that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringeymoved Amendment No. 41:
Page 7, lint 16, at end insert—
("( ) In this section and sections 4AB and 4A, references to functions of the Secretary of State or the Authority under this Part include a reference to functions under the Utilities Act 2000 which relate to gas conveyed through pipes.").
On Question, amendment agreed to.
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Clause 9, as amended, agreed to.
Clause 13 [Objectives and duties under 1989 Act]:
[Amendments Nos. 42 to 47 not moved.]
Lord McIntosh of Haringeymoved Amendment No. 48:
Page 9, line 30, at end insert ("or the Utilities Act 2000").
On Question, amendment agreed to.
[Amendments Nos. 49 to 52 not moved.]
Lord McIntosh of Haringeymoved Amendment No. 53:
Page 10, line 25, at end insert—
("( ) In this section and sections 3B and 3C, references to functions of the Secretary of State or the Authority under this Part include a reference to functions under the Utilities Act 2000 which relate to electricity conveyed by distribution systems.").
On Question, amendment agreed to.
Clause 13, as amended, agreed to.
Clause 10 [Guidance on social and environmental matters in relation to gas]:
7.15 p.m.
Lord Beaumont of Whitleymoved Amendment No. 54:
Page 7, leave out lines 24 to 27 and insert—
("(1) The Secretary of State shall issue guidance to enable the Authority to contribute to the attainment of any social or environmental policies, in particular policies to reduce emissions of greenhouse gases in line with the target of a 2% cut in carbon dioxide emissions by the year 2010 and any subsequent climate change targets that are adopted and any other targets set out or referred to in the guidance.").
The noble Lord said: I rise formally to move this Amendment No. 54. I emphasise the word "formally" because Amendments Nos. 55 and 60 in the name of the noble Lord, Lord Ezra, are probably more to the point than Amendments Nos. 54 and 59 standing in my name and that of the noble Lord, Lord Hardy of Wath. But there are times when I look at the progress that we are making and I wonder whether the 2 per cent cut in carbon dioxide emissions by 2010 is not rather more realistic than the target of 20 per cent which is contained in the other amendments to which I have referred.
In spite of what the Minister is bound to say in reply to the amendments, it is not at all a bad idea to insert into the Bill a certain amount of realism as to what we must achieve in terms of our objectives. The noble Lord, Lord Ezra, will speak to his amendments but the amendments in his name and that of the noble Lord, Lord Hardy, and myself are all to that end.
Perhaps I may comment on the other amendments in the group. Amendments Nos. 56, 57 and 58 in the name of the noble Lord, Lord Kingsland, seem to me to be well worth supporting. I am rather dubious about the meaning of Amendment No. 62 in the name of the noble Lord, Lord Kingsland. I suspect that it does not mean very much but, if it means something, I suspect that I do not like it at all. But the other amendments put forward by the noble Lord, Lord Kingsland, seem

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to me to be admirable and I want to support them in the course of formally moving this amendment. I beg to move.
The Deputy Chairman of Committees (Baroness Turner of Camden): I should inform the Committee that, if this amendment or Amendment No. 55 is agreed to, I cannot call Amendment No. 56 because of pre-emption.
Lord Ezra: I want to speak to Amendment No. 55, which is a correction of Amendment No. 54, where the figure of 2 per cent is referred to instead of 20 per cent.
As the noble Lord, Lord Beaumont, has made clear, the purpose of the amendment is to put into the legislation the very firm commitment which the Government have to a 20 per cent cut in carbon dioxide emissions by 2010. That is so firmly enshrined in government policy that it is proper that it should find its place in legislation and it is appropriate that this should be the legislation in which we place it.
It is entirely relevant to the functions of the regulator that that objective, so firmly stated and repeated by government, should be in the Bill. We know that the Government would prefer to retain a more flexible approach. Nonetheless, this is a matter of such fundamental environmental importance that we on this side of the Chamber would like to press very hard for it to be included in the Bill. I hope that, on consideration, when the Minister replies, he will accept this proposal. It is entirely in line with present government policy.
Baroness Buscombe: In rising to speak to this group of amendments, we wish particularly to refer to Amendments Nos. 56 to 58 and 61 to 63. We are concerned to ensure that there are sensible constraints with regard to the implementations of Clauses 10 and 14, which relate to guidance on social and environmental matters in relation to gas and electricity.
Let me make it clear that we are not opposed to the scope of these clauses; it is their effect that, if unchecked, could ultimately work against the interests of consumers, in terms both of quality of service and of price. These provisions give Ministers a discretionary power and we want to know how that power will be invoked. Under the existing framework there is an obligation on the part of the regulator to have regard to the disadvantaged, particularly the elderly and the chronically sick. That is a very good thing and at present, in response to that, approximately £1.20 per year from our electricity bills, for example, is used for energy efficiency initiatives and similar measures.
The effect of this Bill could multiply that sum. Will that benefit the consumer? And to what extent should our utility bills be used as a form of stealth tax to fund the Government's social and environmental projects? In our social security debates in this Chamber we consider winter fuel payments and other initiatives covered by the Department of Social Security and paid for from Treasury funds. We believe that this Bill
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provides an open ticket for the Government, in future, to mask the cost of those initiatives by placing them at the door of the licence holders in the utilities industries and, ultimately, the consumers.
Our amendments seek at the least to ensure that guidance issued by the Secretary of State pursuant to these clauses will be properly reviewed and considered at regular intervals for the long term. In particular, Amendments Nos. 58 and 63 would require any guidance issued to be laid in draft and approved by each House of Parliament. Although not regulations in the pure sense, the guidance will be used to set the framework in which the authority operates and yet, in preparing it, as currently drafted, the Secretary of State is not constrained by the Bill's regulatory objectives. We believe it to be appropriate therefore that a much higher degree of scrutiny is applied than is presently proposed. The amendments would make the issuing of guidance subject to affirmative resolution procedure.
An additional consideration which the Government must take into account in this context is the possible limitations on the powers of the Secretary of State, under Clause 14, as a result of Directive 96/92/EC, which sets out common rules for the internal market in electricity. Indeed, there is a corresponding Directive 98/30/EC for the internal market in gas.
Taking the electricity directive as an example, its purpose is to encourage the completion of the internal market in electricity and it is one of the measures adopted to establish the internal market within the European Community. The directive sees the completion of a competitive electricity market as an important step towards the completion of the internal energy market, but recognises the need to balance the opening of electricity markets to competition and the need to comply with public service obligations. In some member states the imposition of public service obligations is seen as necessary to ensure security of supply and consumer and environmental protection which free competition, left to itself, will not guarantee.
The directive allows member states, subject to Article 86 of the European Union treaty, to impose in the general economic interest public service obligations which may relate to security, including security of supply; regularity; quality and price of supplies; and environmental protection. Obligations must be clearly defined, transparent, nondiscriminatory and verifiable. There is also provision for member states to derogate from the application of the provisions of the directive relating to generation and the management of networks in so far as the performance of the obligations would obstruct the performance in law or fact of obligations imposed in the general economic interest.
The scope for derogation is constrained by the requirement that the development of trade must not be affected to such an extent as would be contrary to the interests of the Community, which are defined to include, inter alia, competition for electricity customers in accordance with the directive and Article 86 of the

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treaty. Article 86 (formerly Article 90),provides that, in respect of public undertakings and undertakings to which member states give special or exclusive rights, member states must not enact or maintain measures contrary to the rules in the treaty, including the competition rules in Articles 81 (formerly 85) to 89 (formerly 94).
Article 86 also provides that undertakings entrusted with the operation of services of general economic interest must be subject to the rules of the treaty, including the rules on competition in so far as the application of such rules does not obstruct the performance, in law or in fact, of the specific tasks assigned to them, and provided the development of trade must not be affected to such an extent as would be contrary to the interests of the Community.
The Secretary of State will therefore, we believe, be constrained by the requirements of the directive to the extent that any guidance on social or environmental matters amounts to the imposition of a public service obligation. We question therefore how the Minister proposes to respond to that.
Baroness Sharp of Guildford: I rise to support Amendment No. 55 in my name and that of my noble friends Lord Ezra and Lord Beaumont of Whitley.
I do not want to delay the Committee, but would like to say that, as it stands, Clause 10, new Section 4AB, is extremely vague. It says,
"The Secretary of State shall from time to time issue guidance about the making by the Authority of a contribution towards the attainment of any social or environmental policies set out or referred to in the guidance".
We know perfectly well that the Government have a target of 20 per cent. How much better it would be to incorporate that target into the legislation.
7.30 p.m.
Lord McIntosh of Haringey: Let me deal first with Amendments Nos. 55 and 60. I shall pass over Amendments Nos. 54 and 59.
These amendments seek to ensure that the guidance to the gas and electricity markets authority is particularly focused on the Government's policies related to climate change and more specifically to the Government's domestic target of reducing carbon dioxide emissions by 20 per cent by 2010. While I sympathise with the purpose of these amendments, which is to ensure that the guidance addresses the important issue of climate change, they are, first, unnecessary and, secondly, over-prescriptive.
As long as climate change remains an important issue in terms of the Government's environmental policies—I do not see it going away—it is not credible to suggest that the Secretary of State would choose not to include references to climate change policies and relevant targets in the guidance. In fact, paragraph 6·2 of the preliminary draft statutory guidance to GEMA already refers to both the domestic objective of reducing carbon dioxide emissions and the Government's Kyoto commitments to reduce greenhouse gas emissions.
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Why should we explicitly focus on this environmental goal and not others? I ask that of the representative of the Green Party as much as anybody else. What about the objective of making prudent use of natural resources? What about the objective of generating 10 per cent of electricity from renewable resources by 2010? Focusing the guidance specifically on the issue of climate change would ultimately detract from the social dimension of the guidance. Is the Government's goal of substantially alleviating fuel poverty in the years ahead, for instance, any less worthy than that of the climate change targets?
Focusing the guidance particularly on one aspect of environmental policy is not in line 'with our policy intention which is to provide guidance to the authority on both the Government's environmental and social policies and objectives to enable the authority to make an appropriate contribution to our sustainable development agenda. Amendments Nos. 55 and 60 simply pick out something which is of great importance but is only one matter among many; they are sub-optimising.
I now turn to Amendments Nos. 56 and 61. They ensure that the Secretary of State will issue a new version of the statutory guidance every five years at minimum. In addition, the amendments stipulate that the guidance should be issued on a long-term basis or, in other words, that the guidance should be based on the Government's long-term social and environmental policies and objectives.
I shall clarify our thinking on these issues. Inevitably the very nature of many social and environmental issues such as global warming and fuel poverty will mean that the Government's policies and objectives in these areas will look to the longer term. I suggest that it is unnecessary to specify on the face of the Bill that the guidance should be issued on a long-term basis. The Government will clearly wish to include their long-term policies in the guidance; otherwise, GEMA would not be able to make an appropriate contribution to these policies and objectives.
However, in addition to its long-term social and environmental policies and objectives, the Government may also wish to include social and environmental policies which aim to address more short-term concerns. Amendments Nos. 56 and 61 would make that impossible. In terms of actually issuing the guidance on a long-term basis, the Government have already stated in the Green Paper that the guidance should be issued on a medium-term basis to last several years. We do not wish to issue and re-issue short-term guidance. That would be unhelpful to the authority and to regulated companies. It could also lead to regulatory instability causing the cost of capital to rise and damaging the interests of consumers.
A possible time-frame suggested in the Green Paper for re-issuing the guidance was the length of a Parliament, or a price control period—a similar time—frame to that suggested in the amendment. It would be over-prescriptive to attempt to state on the face of the

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Bill how often the Government should issue the guidance. If the guidance is to consist largely of the Government's long-term policies and objectives, it may well not be necessary to re-issue the guidance every five years. Therefore, much as I sympathise with the purpose of these amendments, they are over prescriptive.
I also resist Amendments Nos. 57 and 62 because they are in conflict with our policy intention in issuing guidance and because I believe they are unnecessary. While it is the Secretary of State who will decide what is included in the guidance in consultation with the authority, council and licence holders, it is the authority itself which will ultimately decide what action should be taken on the basis of the policies and objectives in the guidance.
Therefore, the only way the Secretary of State could ensure that the guidance did not impose costs on consumers would be to omit all policies whose attainment could conceivably result in the authority, in having regard to the guidance, imposing significant costs on consumers. In this way the purpose of the guidance would be undermined, as the Secretary of State would be forced to omit the vast majority of social and environmental policies and objectives of relevance to the economic regulatory activities of GEMA. The amendments are unnecessary. While the current draft of the guidance refers to some broad headline aims—such as the attainment of the UK's commitment under the Kyoto protocol—I do not accept the argument that this will automatically result in GEMA imposing unreasonable costs on consumers.
We are not suggesting that the targets and policies in the guidance are for GEMA and GEMA alone to meet. GEMA's role is to act as an economic regulator operating within a statutory framework that provides appropriate checks and balances on the scope of its activities. That said, economic regulation does have social and environmental implications and it is important that all aspects of these should be properly managed. GEMA should have the opportunity to have regard to and make appropriate contributions to social and environmental policy objectives when taking decisions in the economic sphere, and the guidance will achieve this.
The noble Baroness, Lady Buscombe, mentioned the European directive and asked what we are doing about it. We have already taken most of the steps required to comply with the directive that she mentioned. Indeed, we are well ahead of the targets set for achieving competition. There are some provisions in this Bill, such as the ending of geographical exclusivity for gas transporters—I believe that we shall discuss that matter next week—which complete the process. We are satisfied that nothing in the Bill breaches our directive obligations. However, I realise that that is a summary reply to a long and well considered intervention from the noble Baroness, Lady Buscombe. I shall write to her on the matter and
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send copies of the letter to other noble Lords who took part in the debate. However, I am sorry that we cannot accept the amendments.
Lord Ezra: In regard to Amendments Nos. 55 and 60, the noble Lord gave the impression that if reference was made to the 20 per cent cut in carbon dioxide emissions by the year 2010, that would imply the exclusion of many other desirable objectives. But in fact the wording of the amendments does not do that at all. The amendments state:
"The Secretary of State shall issue guidance to enable the Authority to contribute to the attainment of any social or environmental policies"—
that opens the gate to anything that the Government might wish to propose—but in particular mention the issue which is a prime objective of present government policy. It seemed to us to be entirely relevant to mention it in that context. This measure should be given further consideration but we do not propose to press it at this stage.
Lord Beaumont of Whitley: As I indicated was my intention at the beginning of my remarks, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 55 to 58 not moved.]
Clause 10 agreed to.
Clause 14 [Guidance on social and environmental matters in relation to electricity]:
[Amendments Nos. 59 to 63 not moved.]
Clause 14 agreed to.
Baroness Ramsay of Cartvale: I beg to move that the House be now resumed. In moving this Motion I suggest that the Committee stage begin again not before 8.37 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Road Traffic Casualties
7.37 p.m.
Lord Williams of Elvelrose to ask Her Majesty's Government whether, in the light of their commitment to reduce road traffic casualties, they consider that the Road Traffic Act 1988 provides for sufficient penalties where the commitment of a minor offence, such as driving while uninsured, results in death or serious injury.
The noble Lord said: My Lords, perhaps I may first explain the background to my Question. The general matter of road casualties has always been, and will always be, of the greatest concern. There is in every year a massive loss of life and thousands of cases of serious injury. It goes without saying that anything which can be done to mitigate what in many respects is an unnecessary catastrophe should be done, and I welcome particularly the Government's review of the

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whole area, given the targets that the Prime Minister has set. I hope that my noble friend will be able to give the House a clear indication of how the review is proceeding and what the timetable for the review—and the publication of its results—now is. I am sure that my noble friend is aware that although we have a reasonably good record, by comparison with other countries, of adult casualties, we have an appalling record in child casualties, and I very much hope that this record will be addressed. Indeed, the official statistics of child casualties probably underestimate the true extent of child casualties on the road. I need only mention that in Germany, Holland and Denmark, drivers who kill a child are required to prove that they were not culpable. That is a suggestion that my noble friend may bear in mind.
Secondly, the campaign to reduce the incidence of road casualty has been reinforced by the growing public awareness of the distress of those who have lost relatives, lovers or merely friends as the result of road accidents. I speak, if I may say so, as one who knows, as two of my nephews have been killed on the road, at different times and, in fact, in different countries. But, leaving that aside, the plight of those who have suffered and have, as it were, remained behind has been graphically illustrated by the efforts of Mrs Margaret Highton—who lost her grandchild at a young age—and by the charity RoadPeace. I am grateful to both of them for bringing this whole problem to the forefront of public discussion. The victims of road tragedies deserve no less.
It would be wrong to claim that this is a simple problem. In some cases the fault lies with the careless pedestrian rather than with the driver of a car, and it would be absurd to blame the latter because an accident has occurred which is none of his or her doing. Nevertheless, there are many instances—possibly a majority of instances—where the law, and the practice of the law, seems to be inadequate.
Let me summarise what I believe. I am not an expert on these matters and I stand to be corrected. There are some clear offences under the Road Traffic Act 1988, as amended by the Road Traffic Act 1991, and equally clear penalties: causing death by dangerous driving; dangerous driving, which is defined in the 1991 Act (although I must say that the definition itself raises some doubts); and causing death by careless driving when under the influence of drink or drugs. So far, so reasonable. But there is a whole series of what I categorise as "minor offences"—which is not to minimise their seriousness—such as driving while uninsured, careless driving, driving without due care and attention, and not in proper control of the vehicle, which give rise to charges brought against the driver, the majority of which are heard in a magistrates' court.
Until January 1999, the consequences of a driver's action when he or she was involved in such an incident were not allowed to be reported in a magistrates' court. A case was then brought in which it was decided that it was relevant to a magistrates' court that the surrounding circumstances of a case—that is, if there was death or serious injury—could be mentioned. Up until then, it had not been possible to mention in court
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in the case of someone charged with a minor offence that death or serious injury had occurred. Since then it has become clear that the surrounding circumstances of the case—that is, death or serious injury—"may" be taken into account when sentencing. But "may" is not "must".
I hope that I do not have to describe to your Lordships the view of a family still in a state of shock and distress when they learn that the death of their child, mother, father or other relative is not even mentioned in court. The idea that a sudden, violent loss of a loved one is regarded as an irrelevance only adds to the grief of bereavement—and, indeed, to contempt for the law as it presently stands.
Let me illustrate this by recounting a recent case. A court heard how a wheel left a lorry and demolished a wall. A serious matter indeed. But what the court did not hear was that the wheel, between leaving the lorry and demolishing the wall, collided with a pedestrian walking on the pavement and killed her. The sentence of the offender reflected the "minor offence"—in practice the destruction of a wall rather than the life of an innocent pedestrian.
There is, to say the least, an absurdity in all this. I should have thought that it would be perfectly easy for the "may" to become a "must". All the circumstances of the case should be clearly set out to the magistrates. As far as I am aware, that would require no primary legislation; a simple instruction to magistrates would be enough.
Of course, most European countries and most states of the United States go further; they bring charges of homicide, manslaughter, vehicle homicide and so on following a road death where a "minor offence" appears to have been committed. In that sense we are out of step.
I do not think that it is necessary to go that far, but I believe that the courts should be able to pass sentence on an offender on a "minor offence" where death or serious injury has occurred and where a level of culpability by the offender has been adequately proved.
The last point that I wish to raise relates not to sentencing but to the offences. Is there not a ease for a new offence of causing death or serious injury by careless driving? Is there not a case for a new offence of causing death or serious injury by driving without due care and attention? Is there not a case for a new offence of causing death or serious injury while not being in control of a vehicle? Is there also not a case for the whole question to be dealt with under the rubric of involuntary manslaughter? Anyone who has driven anywhere since mobile phones were introduced knows that a driver who has one hand on the steering wheel of a car or lorry cannot be in control of the vehicle.
I leave all these questions, as it were, hanging in the air. I have no particular solutions. That is not my job. I very much hope that when my noble friend responds to the debate he will address these matters with the seriousness that the victims deserve.
7.48 p.m.
Baroness Darcy de Knayth: My Lords, I should like to thank the noble Lord, Lord Williams of Elvel, for asking this timely Question and I congratulate him on his clear and thoughtful exposition.
It seems to me that a big problem is that the maximum penalty is so low. Does the Minister agree that raising the limit, which would give judges more discretion, more flexibility, may well go some way towards making the victims or their families feel that justice has been done?
I should like to give an example which is not in itself a minor offence, but the argument is the same. It is a case which was given to me by the noble Baroness, Lady O'Cathain, who is extremely sorry that she cannot be here as she wanted to speak about it herself. She wrote about this case to the Attorney-General on 16th May. It involves the death of a young police officer where, in the words of the noble Baroness,
"Justice certainly does not seem to have been done. There is widespread concern in Sussex about this particular case and the family of the dead police officer will not let it rest".
The defendant knocked down and killed a police officer doing a roadside speed check. He failed to stop; dragged the body about 200 metres; then escaped and set fire to his van. He had a previous record of driving offences. The defendant admitted that he had consumed a considerable amount of alcohol (he had probably twice the permitted level in his blood), and he pleaded guilty to causing death by dangerous driving and to performing an act tending and intending to pervert the course of justice.
The judge gave the defendant a sentence lower than the maximum because of his obvious remorse and pleas of guilty: seven years' imprisonment and seven years' disqualification from driving until retested.
The words of the judge when pronouncing his judgment are significant. He said that:
"Parliament has decided that the maximum penalty for this offence is 10 years, whereas the maximum penalty for burglary is 14 years. This might strike the public as an odd approach to the value placed on human life, but I am bound by the law as it is".
The Court of Appeal then reduced the sentence to five years for the offence of causing death.
Does the Minister agree that, had the maximum penalty been higher, it would have allowed more scope for the judge to take account of the defendant's remorse and for the Court of Appeal properly to exercise its judgment, while still arriving at a sentence which could be viewed as just by the victim's family and the public? I understand that the Minister will not wish to comment on a particular case, but I should be glad if he would comment on the principle.
The noble Lord, Lord Williams of Elvel, spoke of the pain and shock felt by families when, in cases of minor offences, the fact that deaths have occurred is not mentioned. What can be done to make families feel not only less excluded from the process, but also that the enormity of their loss is recognised and acknowledged?
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Last weekend I spoke to an eminent recorder who was both wise and sensitive in his approach. He suggested that the victim's family should write a statement to the judge, to be seen by all parties after the trial but before sentencing, saying how the crime had affected the family members and how they thought the defendant should be sentenced. The judge should have regard to that statement and the wise judge would acknowledge the family's sentiments when sentencing the defendant. If appropriate, the judge would explain to the family members why he had differed from their approach by saying, for example, that there has to be uniformity in these matters and that what the family feels may be so out of kilter as to be inappropriate. But he could also turn to the defendant and say, "Look at what you have done to this family".
In another instance, if appropriate, the judge might explain that a fine is not compensation and does not mean that, for instance, a child's life is worth £100—one often hears accounts of people saying how much that kind of thing has hurt them. Likewise, the good judge will ensure that the defendant is not made to feel that he is being punished for the death where that is not a part of the prosecution's case.
After the trial, the family members should be offered a designated place in court to hear the sentence. The judge and all present should know where they are seated and they should be able to see the defendant.
Does the Minister agree that these measures might help? Would he think it a good idea if the Lord Chief Justice were to issue a practice directive to the effect that judges should be expected to receive favourably a statement from the victim's family, which they had been invited to write, setting out the views of the family members on how the crime had affected them and how sentencing should be approached? I understand that in, I believe, Western Australia, the practice has been initiated in the court system. It has been found helpful both to the family and in maintaining public confidence in the legal process.
The noble and learned Lord, Lord Woolf, has set a wonderful example. Very soon after being appointed Lord Chief Justice, he announced that, before he came to a decision about the release of the boys who killed Jamie Bulger, he wanted Jamie's parents to come and give him their views.
Several times during our conversation, the recorder said that,
"Courts are a public service. They are there to provide a service for all and in particular to the victims and/or their families, which is sometimes forgotten".
If we keep that in mind, we may make progress. I look forward to some interesting and, I hope, encouraging ideas from the Minister.
7.53 p.m.
Viscount Simon: My Lords, I am delighted that my noble friend has raised this much misunderstood subject. Perhaps it is appropriate that I remind noble Lords that I am a civilian holder of a police class 1

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driving certificate who goes on traffic patrol on a fairly regular basis and that I am a former tutor and examiner of advanced motorists.
The penalties for causing death on the road generally fall into two categories. First, if a serious charge is proffered under the Road Traffic Act, such as under Section 1 (causing death by dangerous driving) or Section 3a (causing death through drink or drugs) the maximum sentence is 10 years' imprisonment. The courts, however, tend to sentence at the lower end of the scale, which I believe might be through a lack of understanding on the part of trial judges. Secondly, there are offences which, at present, do not rely on a death as being a constituent part of that offence.
As we know, killing somebody other than by a vehicle on the road attracts a sentence of life imprisonment. Manslaughter is generally treated a great deal more seriously if a vehicle is not involved, whereas manslaughter on the road generally attracts a lesser sentence than the maximum tariff for the statutory offence under the Road Traffic Act.
Recently, some pressure groups have campaigned for an offence of vehicular death or causing death through driving without due care; I shall return to that at the end of my contribution. Although I have great sympathy with this stand, I guard against the evidential proof which would be required. Would, for instance, a momentary lapse of concentration warrant the same charge as that of a driver who consistently drives badly? Nevertheless, I think that any death on the road caused directly or indirectly by a driver of a vehicle in bad condition, with no MOT or insurance and so forth, should be sentenced more severely if death is involved.
One major problem with the current system is that police officers do not investigate death or serious injury on the road in any way closely resembling the detail given to that of a murder investigation, despite the horrendous cost of over £1 million for each road death. I have been told by an informed police officer that the total annual cost of road deaths and serious injuries is some 16 billion. Traffic officers do not, in the main, know their powers under the Police and Criminal Evidence Act and the Criminal Procedure and Investigations Act. Furthermore, they are not trained in interviewing and investigative techniques in the same way as their CID colleagues, even though the seriousness of the death is the same. This is not a criticism of the officers, but of the way in which they are trained.
Without proper investigation, the correct charges cannot be brought. Even when that is the case, the Crown Prosecution Service tends to drop the more serious charge for a lesser offence, such as driving without due care. But the family of a road death victim should be entitled to the same investigative procedures and charges as the family of a murder victim.
I think that there are three problem areas in respect of road death investigation. First, the standard of investigation is poor, with police supervisors unsure of the law. They have little training in the various
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techniques involved and are hampered by a lack of strategic guidance and support from ALPO. Secondly, the CPS does not appear to understand the complexities of road death and prefers the easier option of keeping cases in the lower courts. Thirdly, it seems that magistrates and judges are out of touch and have no knowledge of government and police road safety initiatives.
How can improvements be made in this area? A specialised road death investigation manual is currently being written which has no connection whatever with the murder manual. This will form the basis of compulsory training for all traffic supervisors, thus providing better and more informed officers. The Home Secretary should create a new parliamentary initiative on road casualty reduction so that chief constables should acknowledge, and be made to do something about, road casualties. The CPS should have improved training with cross-agency attachments with police officers and, finally, there should be awareness training for judges and magistrates.
I mentioned earlier that I would return to the matter of driving without due care. A couple of months ago, I was on traffic patrol on a motorway at night when the officers were called to a crash. In heavy traffic a slow-moving articulated lorry was being followed by another slow-moving articulated lorry. When the first vehicle slowed even further, the driver of the second lorry failed to notice. He ploughed into the back of the leading vehicle. Unfortunately, there was a transit-type vehicle between the two lorries. This was squashed between the two into a space of about three feet. The driver was killed instantly. As the driver of the second lorry had only a momentary lapse of concentration, with what offence would noble Lords charge him?
7.58 p.m.
Lord Davies of Oldham: My Lords, I too congratulate my noble friend Lord Williams of Elvel on introducing such an interesting Unstarred Question for discussion. I begin by declaring an interest as president of the Royal Society for the Prevention of Accidents.
Perhaps I may say that I have had some considerable difficulty in preparing for this debate. The reason is, I believe, clear enough. We all recognise that when tragedies occur on the roads and families suffer from the loss of their loved ones, there is a natural feeling that justice can be done only on the basis of the punishment meeting the dimensions of their loss. We all have sympathy with people in that situation.
When I introduced my mobile phones Bill last year, to which my noble friend referred, I was immediately made aware of the number of families who had lost loved ones as a result of driving that was careless in the extreme. In terms of other people's needs, it is also arrogant that a mobile phone should be used while a vehicle is being driven. That is why I hoped to persuade Ministers of the wisdom of introducing a specific offence. I have so far been unsuccessful, but I shall continue in my efforts.

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It is not only a question of drawing attention to the issue, but also of seeking to improve behaviour on our roads. The essence of a debate of this kind is the question of what improves road behaviour in order to minimise accidents. We all know that, whatever we do, we cannot repair the damage caused by the worst accidents.
I am mindful of the enormous tragedies that beset families. However, I want to raise an obvious question which I am sure the Minister will bear in mind in replying. We must look at what improves driving behaviour. Is it the case that basing sentences on outcomes that meet a certain kind of rough natural justice, where the sentence is based on the outcome of the accident, would actually improve safety on our roads?
I have my doubts as to whether that would be the response of the wider public. An accident is different from any other event. It is not like murder, which is intentional. An accident is, by definition, an unintended consequence, and is therefore in a totally different category. Would our fellow citizens drive better if they thought that the law could perpetrate savage punishments upon them because, through a minor offence, they had caused an outrageous and unfortunate consequence? We must seriously consider that question.
On a minor aspect, in the past couple of weeks there have been prosecutions, for driving without due care and attention, of individuals who have been eating chocolate or drinking water while their vehicle has been stationary at traffic lights. We might think that any effort by the police that draws attention to driving that lacks momentary attention—which these two offences clearly did—would assist in the cause of road safety. But I am by no means sure. I fear that, when ordinary members of the public look at that kind of event, they regard the charge as having been brought for the wrong reasons. It appears disproportionate to the nature of the action. If we have that degree of public alienation from our courts and our law, if people feel that the law is not being enacted in a way that is consistent with a broader evaluation of drivers, I fear that, rather than increasing road safety through better driving, we reduce the possibility of achieving that. I hope, therefore, that the Minister will address himself to this issue.
I have no doubt that courts have an important role to play in the development of the Government's road safety strategy. We want consistency of sentencing across the country, which does not happen at present. As my noble friend Lord Simon identified, we want our courts to be fully aware of the strategies adopted by government and authorities to make our roads safer. As my noble friend Lord Williams indicated, although we have much with which to be satisfied in terms of our general road behaviour, we have a dreadful record in regard to accidents involving children. It is not surprising, therefore, that there is much emotion surrounding the question of the appropriateness of sentencing when accidents occur.
8.4 p.m.
Lord Monson: My Lords, I, too, am grateful to the noble Lord, Lord Williams of Elvel, for giving us the chance to debate this apparent gap in our law—a gap that worries a great many people, not least those whose friends or relations have been killed or seriously injured on our roads through the carelessness of other drivers.
I would guess that carelessness is the main target of the noble Lord, Lord Williams. Driving without insurance (which he cites) cannot in itself cause death or injury—although if the absence of insurance cover is due to the driver being incapable of passing a driving test, that is another matter. But essentially we are talking about what a lay person might term "criminal carelessness" unrelated to drink or drugs.
As the noble Viscount, Lord Simon, pointed out, it is true that careless car drivers who kill fare much better than the careless drivers of trains or speedboats, careless doctors or nurses who administer 10 or 100 times the correct dose, or careless builders, civil engineers or architects who kill. In theory, at any rate, all of these can be imprisoned for manslaughter whereas the careless driver who kills faces a maximum fine of only £2,500 plus a maximum of nine penalty points on his or her licence. That seems logically and morally indefensible. However, if, as many people demand, a new offence of causing death by careless driving were to be put on to the statute book, with a maximum penalty of, let us say, two years' imprisonment, I suspect that many road users who were guilty of the more serious offence of causing death by dangerous driving would volunteer to plead guilty to the lesser charge.
The police and the prosecuting authorities would inevitably be tempted to save the time, trouble and expense of a contested case by accepting such a plea. Even if they did not, a jury—statistically consisting mainly of motorists, consciously or subconsciously thinking, "There but for the grace of God go I"— would tend to plump for a "guilty" verdict on the lesser charge.
That danger could be avoided, I submit, by opting for a more modest change in the law—specifically by concentrating upon disqualification for those who kill through carelessness. I say that as someone who was instrumental, in the late 1980s, in getting the minimum period of disqualification for causing death by dangerous driving raised from one to two years—against strong initial opposition from both Front Benches.
Let us suppose that courts were to be empowered to disqualify for up to 12 months those guilty of causing death by careless driving. As well as providing some consolation for grieving families, would not such a move tend to encourage more careful driving? I note the point made by the noble Lord, Lord Davies. To some extent I agree with the noble Lord, but on this point I do not.

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A more radical possible option would be to grant the power to impose a community service order involving work in a hospital casualty department. That might be considered at some future date.
Lastly, perhaps I may touch upon the perceptive and significant phrase with which the noble Lord, Lord Williams, ends his Question: "death or serious injury". If someone is hideously mutilated by another person's dangerous driving, his or her life can be ruined. If, worse still, the person is turned into a "human vegetable", it can mean a fate almost worse than death for their families. Yet the maximum penalty that can be imposed in England and Wales is two years' imprisonment. That is not so in Northern Ireland, where dangerous drivers can be sentenced to 10 years in prison for causing "grievous bodily injury", the same penalty as applies for causing death by dangerous driving.
I believe that it would be widely welcomed if the Government were to bring the law in England and Wales into line with that in Northern Ireland in this respect. I look forward to hearing encouraging noises from the Minister when he replies.
8.8 p.m.
Lord Berkeley: My Lords, I am probably ill-advised to be in speaking in this debate. When I was cycling down Marsham Street this afternoon I had to use my mobile phone and nearly bumped into my noble friend the Minister! I am not sure whether that would have been covered by the Bill proposed by my noble friend Lord Davies, but I apologise and I shall not do it again.
My concern about the issue which my noble friend Lord Williams of Elvel has so generously raised is a general concern about enforcement—whether for major or minor offences, parking or bus lane offences, or the more dangerous offences cited by another noble Lord.
I was shocked a few months ago by the case of a lorry driver who killed a child. As noble Lords have said, sadly that is not unique. He was found to have been driving for his 12th consecutive hour. He had several hundred tachograph cards available for fiddling the system. He was convicted. Charges of corporate manslaughter were brought against the owner of the small company for allowing him to do that; it was clear that the company had knowledge of what he was doing. For the death of the child the driver was fined a few hundred pounds, I believe, and the corporate manslaughter charges were dismissed.
I do not wish to comment on corporate manslaughter. I know that it is an issue the Government are considering. But, as the noble Lord, Lord Monson said, surely corporate manslaughter should apply equally between transport modes. If it is appropriate for one form of transport it should be appropriate for another.
On the whole people are very safe in motor vehicles. We all appreciate the way in which cars are designed to improve the safety of the occupants. Lorries and coaches, too, have gone a long way in this direction. Unfortunately, by their weight and speeds they
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become lethal weapons against pedestrians, cyclists or other smaller vehicles. That has to be recognised in sentencing and in the attitude taken by the police, magistrates and others. From discussions with the Parliamentary Advisory Committee for Transport Safety (PACTS), I detect a lack of knowledge about offenders, and a lack of communication between the different agencies and, from my own experience, a lack of enforcement.
I shall support the amendments to the Transport Bill proposed by the noble Earl, Lord Attlee, to widen enforcement of lorry regulations. However, I am concerned with the wider issue. The police say that enforcement is not a core duty. I do not know what is a core duty in relation to traffic. Last year I raised the question of wide loads on the motorway and asked why the Highways Agency should not manage the movement of those loads. The answer was that it is a police duty. Unfortunately communication between the police and the driver of the heavy load is the equivalent of the red flag. Sometimes they do not even have radios. Sometimes there is little communication between one police force and another.
Police should use the powers where necessary to stop vehicles. Local authorities or the Highways Agency should have powers to enforce regulations where police expertise is not required. A proportion of the fine or charge should be made available to the police and/or the local authority or the Highways Agency to enable them to provide proper resources to undertake that enforcement.
It is essential that people realise there is some chance that they will be caught and convicted if they commit an offence. Sadly, I do not believe that to be the case at present.
As regards increasing penalties, the amendment of the noble Earl, Lord Attlee, will refer to impounding lorries for certain offences. Why not impound cars for some offences? The whole point is to inconvenience people and prevent them from using the vehicle and again committing the offence. I fail to understand why such a measure should not be considered for more serious offences.
As my noble friend Lord Simon said, the police, magistrates, judges and others involved in such cases must realise that death or injury caused on the road is just as serious, and just as much to be deprecated, as similar offences not involving motor vehicles. Such offences must not be treated as a special area of which they might have personal knowledge. I hope that such a consideration does not influence them; I am sure it does not. I look forward to hearing from the Minister.
8.14 p.m.
Baroness Thomas of Walliswood: My Lords, we are indebted to the noble Lord, Lord Williams of Elvel, for raising this important subject. He has not only given Members of this House an opportunity to make some important points and to give us the benefit of their expertise, he has also given the Government an opportunity to tell us what they propose to do about the bizarre legal framework for dealing with, or not

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dealing with, deaths and injury resulting from road accidents in this country. I entirely support the concluding words of the noble Lord, Lord Berkeley.
The motorist is in a unique position in this country. Employers are responsible for the health and safety of their employees and can be obliged to compensate them if an accident is shown to be the fault of the employer. A housewife who kills or injures someone with a carelessly handled knife will not be charged with reckless behaviour when in charge of a knife. She will more probably face a charge of manslaughter or grievous bodily harm. The court will then determine the degree of culpability and a suitable level of punishment.
Even the National Health Service sometimes admits negligence and compensates people for injury or loss of a loved one in the course of intervention in hospital. Only the motorist can escape censure after he or she has killed someone as a result of his or her negligence when driving. It is nearly true that only the British motorist is in this privileged position.
It is a bizarre situation which has been a matter for criticism over 50 or so years. Occasionally the issue arises in the press as a specific case hits the headlines somewhere or other. Since 1990, RoadPeace has campaigned consistently and effectively for charging and sentencing motorists in a way which more truly reflects their responsibility, and for better treatment of victims and their families. I should declare an interest as a member of RoadPeace.
It is breathtaking to learn that the founder of RoadPeace, Brigitte Chaudrey, whose son was killed as a result of someone going through a red light, was told by an acquaintance, "It was an accident. Haven't you ever gone through a red light when you shouldn't have done so?" That attitude is totally unacceptable. I disagree with the remarks of the noble Lord, Lord Davies of Oldham, about popular opinion. There is a considerable groundswell of opinion that motorists should be treated like anyone else when they kill or injure another person.
The noble Lord, Lord Williams of Elvel, described how the practice of the courts is beginning to change. This may be in part a result of the combination of good campaigning and public opinion to which I have referred. It demonstrates that things can happen even without a change in the law.
I take the point of the noble Lord, Lord Monson, that introducing a more minor offence involving death or injury might not achieve the objective sought by those who are campaigning about, or feel strongly on, the issue. We may need to enforce the major offences already on the statute book rather than seeking to institute a more minor offence which would be easier to bring to court.
Many speakers have made valuable contributions about the police service and the attitude of the police to road accidents. It is bizarre that the police treat a death on the road as being less worthy of investigation than a death in the home. What is the difference? It is
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still the death or injury of a human being. That is the major fact to which everyone should give consideration.
I urge the Minister to bring forward changes in legal practice and to encourage a different attitude by the police, perhaps to their core responsibilities. There is a list of things we can do to ensure that this desperate situation can be righted. I look to the Minister to treat this issue with the due seriousness that it commands.
8.20 p.m.
Earl Attlee: My Lords, we are grateful to the noble Lord, Lord Williams of Elvel, for introducing a debate on such an important issue with his usual skill. I must declare an interest as a qualified army driving instructor who may benefit indirectly from one of my suggestions.
The noble Lord's timing is perfect. He raises this issue just before Committee stage of the Transport Bill, with plenty of time for noble Lords to draft suitable amendments. Very little provision is made for road safety in the Bill, and I am aware that many noble Lords are keen to address that matter.
Before I turn to my substantive comments, I cannot resist teasing the noble Lord slightly on the drafting of his Unstarred Question. We on these Benches regard the failure to have insurance as a very serious matter. Clearly, one's vehicle must be properly insured so that if one has an accident any victims can be adequately compensated. Further, it is not clear how the failure to have insurance causes an accident, apart from the provisions of Murphy's law.
The noble Lord reminds us that there is a disproportionate number of accidents involving child casualties, which is a major concern to noble Lords on these Benches. The question is: what penalties should be imposed in these tragic accidents? Should we consider the consequences or causes of the accident alone? It is important to remember that nothing that we do in life is as fraught with danger as driving a motor vehicle. For instance, in a factory very few activities are anywhere near as dangerous as driving a motor vehicle. If there is any hazardous activity in a factory steps are taken to reduce the risks.
Noble Lords have suggested that the penalties are too weak. Let us take the offence of driving without due care and attention. In the event of an accident that offence is easy to prove in the courts. However, the penalties are relatively minor, even where the results are tragic. A good example of the difficulty is an accident in traffic. A driver swerves to avoid the car in front, which perhaps stops a little too quickly, but is not fully aware of the traffic situation, in particular the presence of a cyclist on his nearside. He knocks over and seriously injures the cyclist. That accident has been caused by a momentary lapse of judgment. Should we lock up the driver and throw away the key just for a momentary lapse of judgment? At the other end of the scale is the offence of dangerous or reckless driving. The problem is that that offence is quite difficult to prove. I believe that in such cases it is necessary to show that the driving in question was

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continuous and that the driver knew, or should have known, that what he was doing was dangerous. I and other noble Lords have some anxiety about changing the burden of proof in cases involving children. One can continue that process in all branches of the law. Where would one stop?
The noble Lord, Lord Williams, and the noble Viscount, Lord Simon, touched on the dangers arising from the operations of commercial vehicles, in particular a wheel becoming detached. During the passage of the Transport Bill we shall attempt to make improvements in the law as it relates to the operations of commercial vehicles. We on these Benches are very interested in road safety improvements. The noble Lord, Lord Berkeley, raised a number of somewhat peripheral issues relating to abnormal loads, and the Minister will be interested to hear that I may table some suitable amendments also in that area. Thinking out loud, other possibilities that could be considered during the passage of the Transport Bill are the creation of a new offence of losing directional control of a motor vehicle. It means that the mounting of a footpath would be conclusive evidence of the offence. Unforeseeable loss of traction due to oil or isolated ice might be a legal defence. If that offence were adopted a statement such as, "I just found myself on the pavement", would almost prove the commission of the offence. The advantage of such a new offence is that it could attract more severe penalties and be easier to prove.
I suspect that the Minister will be reluctant to create a new offence. I believe that accidents are caused by lack of skill and awareness of danger, as I have said in earlier debates. During the passage of the Transport Bill I shall tempt the Minister by moving an amendment relating to the compulsory retraining or retesting of errant motorists. Noble Lords will be aware that the law provides for the compulsory retesting of drivers but only in certain cases. We could introduce retraining under a statutory scheme. If offenders did not take the training seriously they would not qualify for the necessary certificate of training, and in time—perhaps after six months—that could result in the automatic loss of driving licence. This is not necessarily our policy, but it is something we should consider. Noble Lords are aware of the problems of novice and young drivers which we must also consider. I shall be very interested to hear the Minister's response to my suggestions.
8.26 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, I offer congratulations to my noble friend Lord Williams on introducing this debate, which has obviously stimulated a good deal of interest on the part of other noble Lords. The Government's commitment to road safety is apparent from the Road Safety Strategy introduced a few weeks ago. It may assist if I mention two follow-ups to that strategy which are relevant to the issues with which we are concerned today. In that strategy we refer to the need for better enforcement, to
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which my noble friend Lord Berkeley and others referred. In particular, we are concerned that serious road traffic offences should merit strong penalties and provide a real deterrent to unsafe driving. At the same time, we want to ensure that many other offences which in themselves may not have life-threatening implications are nevertheless properly addressed.
As a follow-up to the strategy a review of all these penalties is now being undertaken. Consideration is being given to a wide range of road traffic offences, including those involving death and injury. Our intention is to ensure that the penalties fully reflect the nature of those offences. Those penalties may be innovative, as the noble Lord, Lord Monson, and my noble friend Lord Berkeley said. It is also important to look at penalties as a whole to avoid the risk of anomalies or inconsistencies arising in the road traffic area and more widely. This co-ordinated approach is now being addressed by the Home Office with support from my own department. Before the end of July we shall issue a consultation paper to which many of the points raised this evening will be relevant. Therefore, the concerns raised by noble Lords are being addressed by the Government.
Another parallel aspect of the follow-up to the road safety review is further research, particularly into the operation of the law on dangerous and careless driving, which has been commissioned by my department with the TRL. That study began in May 1998 and the report will be submitted later this year and should provide us with a great deal of useful information to decide whether changes in the law, or its administration, are needed in this rather complex area.
As the various contributions have indicated, this is not a straightforward issue. The public concern about sentences passed in road traffic cases where death or serious injury occurs reflects the devastating effect which such accidents can have on the victims and their families. We all sympathise with the many cases which have been referred to here, and the Road Safety Strategy is designed to reduce that toll on our roads, particularly among child pedestrians.
As my noble friend Lord Williams pointed out, in such cases the defendant may have been prosecuted, convicted and sentenced for a relatively minor offence which does not relate specifically to the occurrence of death or serious injury but where it is not 'apparent that the court has had regard to the consequences which are much more serious than the offence itself. We do not dispute the seriousness of those consequences. However, there is a balance between culpability and consequence. As we provide appropriate sanctions for unlawful behaviour, a key purpose of the criminal law in this as in other areas is to establish the extent of the offender's culpability. The Government have the duty to make available to the police, to the CPS and the courts guidance on how that degree of culpability should be established. Clearly, where someone has driven in a careless, reckless or dangerous manner, with or without fatal consequences, that should be taken very seriously by the courts.

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However, difficulties arise where the consequence is substantially out of proportion to the degree of culpability. A driver may have acted carelessly rather than recklessly, and certainly not intentionally, or may simply have been unsighted or have had no warning. However, his behaviour may have disproportionate effects and, in many cases, devastating and fatal effects. Therefore, I believe that it is right that we have a hierarchy of offences which relate to culpability. I believe that the noble Baroness, Lady Thomas, exaggerates the divisions. I accept that there are differences. However, in all areas, either by the offence or by the decisions of the court, degree of culpability is a relevant issue and is taken into account, both in the nature of the offence and in the sentencing.
As my noble friend Lord Williams mentioned, of late court judgments have changed in this area. In the case of Morling, to which I believe he referred initially, in 1977 it was decided that it was proper in all such cases for a court to have regard to the fact that a death had resulted from the manner of driving and to have regard to the possible consequences of taking the risk involved. In the other well known case of Simmonds last year, to which my noble friend referred explicitly, the court confirmed that, while culpability or criminality remain the primary consideration, the sentencing judge clearly was entitled to bear in mind that he was dealing with an offence that led to death.
I agree with my noble friend Lord Williams and with other noble Lords that all the circumstances of each case—the degree of culpability and the consequences—should be set down in court. That is the purpose of the CPS's advice to prosecutors. However, it is also important that each case is viewed on its merits with regard to all those considerations.
However, in the context of the review to which I referred, and on which the consultation will shortly be issued, we shall give serious consideration to the possibility of what further steps may be required, either in guidance or in changes to the law in respect of driving offences. Before making a final decision, we shall also take into account the outcome of the TRL research, to which I referred.
The noble Baroness, Lady Darcy de Knayth, focused specifically on the level of penalties involved. Of course, as I have already indicated, I am aware of the degree of distress that relatively low penalties for offences which involve death and serious injury cause to families and others. A higher maximum penalty, which she advocates, would in my view allow courts greater scope in determining the level of sentences. I believe that noble Lords may rest assured that the penalties for causing death by dangerous driving and other offences will be addressed in the course of the review to which I referred.
Of course, it is not sufficient to say that we shall increase the maximum level of the offence because that level does not necessarily determine the average level that the courts will impose. Nevertheless, it gives greater flexibility in cases where higher culpability or special circumstances are involved.
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The noble Baroness also referred to the question of statements to the court by road traffic victims or their families. That is also a complex issue. However, noble Lords will know that my right honourable friend the Home Secretary announced on 26th May the introduction of the victim personal statements scheme. That will provide victims of crime, and their relatives in homicide cases or carers in offences against children, with the opportunity to explain the effect that the crime has had on them. The statements will be considered at every stage of the criminal justice process. I shall bear in mind the suggestion by the noble Baroness, Lady Darcy de Knayth, that we should extend that to road traffic offences. The legal procedure would involve difficulties. Nevertheless, we shall consider the scope involved.
In relation to new offences, which my noble friend Lord Williams raised and, indeed, upon which the noble Lord, Lord Monson, my noble friend Lord Simon and the noble Baroness, Lady Thomas, commented, noble Lords will probably recall that the North Committee carried out a comprehensive review of road traffic law in 1988. In particular, it addressed the law relating to road traffic offences that had not developed in a satisfactory manner. It introduced various changes in the Road Traffic Act 1991, principally the new offences of dangerous driving and causing death by dangerous driving.
The committee had given detailed consideration to the possibility of creating a new offence of causing death by careless driving. However, at that point it concluded that it would be wrong to impose severe penalties on a driver for unforeseen tragic consequences of his or her actions. Hitherto, that view has been supported by successive governments. However, as I indicated, we are keeping the judgment under review. We shall certainly take into account the findings on that whole area of the TRL research, which will be reported in a few months' time.
In that context, my noble friend Lord Williams also referred to involuntary manslaughter. I believe that noble Lords will be aware that the Law Commission's proposals on reform of the law in this area recommended, among other things, the abolition of the offence of involuntary manslaughter and its replacement by two new offences of reckless killing and killing by gross carelessness. That may well have a bearing on the future development of road traffic Acts if it is put into law more generally.
Various other issues were referred to in the course of the debate. My noble friend Lord Davies referred once again to mobile phones, not knowing about the experience of the noble Lord, Lord Berkeley, earlier today (over which I shall pass rapidly). It is still the case that the police feel that under existing legislation in this area they have sufficient powers to deal with the problem.
The noble Earl, Lord Attlee, referred to the matter of retesting and rehabilitation. Extremely successful use has been made of those in relation to drink-drive offences where the offender makes a commitment to attend rehabilitation courses. That experience

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contributes to a more general development of retraining schemes which can be linked to mandatory retesting and which may prove to play a significant part in the new penalty structure. I confirm that we are looking at the matter in that context.
My noble friend Lord Simon referred to the new approach to investigation and the new manual being used by the police in this area. Therefore, the police are attempting to upgrade investigation of road traffic accidents.
I shall check Hansard and if I have failed to cover certain points I shall write to noble Lords. Once again, I thank my noble friend Lord Williams for initiating this significant debate. I believe that the review of penalties, which is to take place in July, will perhaps offer the opportunity to return to this issue.

Utilities Bill
8.38 p.m.
House again in Committee.
Clause 11 [Health and safety in relation to gas]:
Baroness Buscombe Baroness Buscombe moved Amendment No. 64:
Page 8, line 33. at end insert—
("(4) It shall also he the duty of the Authority—

(a) in conjunction with the Health and Safety Executive, to prepare, and from time to time revise, a document setting out such means as may, with the approval of the Health and Safety Commission, be agreed between the Authority and that Executive for securing co-operation and the exchange of information between them: and

(b) without prejudice to the effect or operation of any relevant statutory provisions (within the meaning of Part I of the Health and Safety at Work etc. Act 1974) to exercise the functions assigned to him by or under this Part in accordance with any agreement contained in that document.

(5) As soon as practicable after agreement is reached for the purposes of—

(a) the preparation of a document in accordance with subsection (4) above, or

(b) any revision of a document prepared in accordance with that subsection,

the Director shall send a copy of the document or, as the case may be, of the revised version of it to the Secretary of State, and the Secretary of State shall lay the copy before each House of Parliament.").
The noble Baroness said: We believe that to some extent the Bill creates confusion in respect of gas safety and quality. Therefore, we have brought forward a probing amendment to consider that point.
As we read it, the Health and Safety Executive retains regulatory authority in respect of the operational safety aspects of gas transportation. Therefore, we believe that, in addition, adequate mechanisms should be in place between the Health and Safety Executive and the gas and electricity markets authority where issues of gas safety are concerned.
At present, the Health and Safety Executive and the authority are required to have a memorandum of understanding. However, under Clause 11 that would be removed and replaced by a duty on the authority to
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consult the Health and Safety Commission rather than the Health and Safety Executive. The effect will be to weaken the link between the authority and the Health and Safety Executive. No explanation appears to have been given for this change.
We believe that we need adequate mechanisms in place to ensure clarity as to which organisation is responsible for an issue involving both safety and non-safety issues. Gas quality is a good example. At the moment, the gas safety management regulations enforced by the Health and Safety Executive already contain gas purity requirements for the delivery of gas into the Transco system. They also refer to gas pressure. Clause 100 proposes that GEMA should have responsibility for gas quality where safety is not an issue.
We believe that we must avoid a situation in which one regulator approves an arrangement which another would not. For example, on the emergency cooperation procedures between gas transporters, Ofgem is proposing in the gas transporters' licence that it should approve the emergency co-operation procedures between gas transporters. This is in addition to the role of the Health and Safety Executive in accepting the safety cases of gas transporters and the network emergency co-ordinator, Transco, without which gas transporters cannot operate.
During the Bill's passage through the Commons, in Standing Committee the Minister at the Department of Trade and Industry, Dr Kim Howells, suggested that,
"various provisions—existing and future—",
would deal with,
"co-ordination and consistency between GEMA and the Health and Safety Commission over the regulation of, respectively, the non-safety and safety aspects of gas quality".
For safety and operational reasons, the section from the Gas Act 1995 requiring the regulator to have a memorandum of understanding with the Health and Safety Executive should, we believe, be retained. This is preferable to simply requiring consultation with GEMA, and requiring GEMA to consult the Health and Safety Commission. I beg to move.
Lord Ezra: I support the amendment proposed by the noble Baroness, Lady Buscombe. On an earlier amendment I referred to my concern that safety had been relegated to an inferior position in the Bill. I believe that at least we should clarify the relations between the Health and Safety Executive and the authority. The amendment would bring that about. I am also concerned that such an obligation existed under previous gas legislation, but has been removed. I should have thought that it ought to be included in the Bill. I agree with the other proposals made by the noble Baroness.
Lord McIntosh of Haringey: I thought that I understood the amendment, but I am now slightly puzzled. I do not understand the thrust of the noble Baroness's point about the Health and Safety Commission and the Health and Safety Executive. The

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Health and Safety Commission is a separate body from the executive, but it can issue directions to the executive. Therefore, an agreement between the authority, GEMA, and the Health and Safety Commission has to all intents and purposes the same effect as an agreement between GEMA and the Health and Safety Executive.
Our objective in the Bill has been to align and update the often differing provisions of the Gas and Electricity Acts. That is why I am slightly puzzled by an amendment which refers only to gas. We are trying to ensure that the provisions are the same for gas and electricity. I appreciate that health and safety issues are different as regards gas. I realise that gas mains can blow up and that gas can be wrongly connected. Personally, as the most incompetent DIY-er in the business, I have more frequently been almost electrocuted by my own incompetence than I have been close to being blown up by gas.
Clauses 11 and 15 are supposed to bring the regime on safety into line as regards electricity and gas. The existing duties of the gas and electricity regulators in respect of safety are different and in many ways cumbersome. In the case of electricity, it has been said that the existing duty is very hard to interpret. In the case of gas, the duty imposes some bureaucratic procedures which are hard to justify. Yet the amendment reimposes those duties for gas but not for electricity.
We decided that the best way to tackle the issue is to impose a simple duty on the authority to consult the Health and Safety Commission, which is the policy-making body on health and safety, whenever a health and safety issue arises—and not only to consult, but to take proper notice of what the commission says. That reflects the reality of the position. The authority is an economic regulator without any direct responsibility for health and safety issues. However, the decisions it makes can have consequences for health and safety, and it is only right that in those circumstances it should take the advice of those who are expert in that field and who are charged with giving advice to all of government on those issues; that is, the Health and Safety Commission.
The amendment would reinstate in the Bill subsections (3) and (4) of Section 4A of the Gas Act which lay down a particular mechanism for ensuring that the authority and the executive should draw up a document setting out how they would exercise their separate functions. As it happens, there is no corresponding provision in the Electricity Act and the amendment would not introduce one. Therefore, if the amendment were accepted, there would once again be a difference which would be hard to justify between gas and electricity regulation.
Let me be clear about the position. I have no difficulty with the proposition that the authority and the commission should draw up a document of the kind that is envisaged in the amendment and I expect that as responsible public bodies they will do so; nor do I expect it to be a private document. I would expect, for example, copies to be placed in the Libraries of both
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Houses. But given an explicit duty in the Bill to consult the commission wherever a safety issue arises, it seems to us that the detailed procedure set out in the amendment is unnecessary and over-bureaucratic. I am sure that the Opposition would not want to be tarred with the brush of being over-bureaucratic.
Perhaps I may respond to the detailed points that the noble Baroness made. The gas transporter licence condition, which we shall discuss next week, will ensure a smooth transition, moving from the geographic exclusivity of licensed areas to competitive overlapping areas. At present, each area has only one transporter. Clause 75 changes that, and we shall deal with it when we reach those amendments.
8.45 p.m.
Baroness Buscombe: I thank the Minister for that explanation. As I said at the outset, there is confusion, or lack of clarity, on the part of those in the gas industries. They were looking for support as regards the meaning of Clause 11 in practice. We shall read with interest what the Minister said and I hope that those in the gas industries who have been concerned about the provision feel that the point has been clarified. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 11 agreed to.
Clause 15 agreed to.
Clause 12 agreed to.
Clause 16 agreed to.
Clause 17[Preliminary]:
Lord Ezramoved Amendment No. 65:
Page 12, line 36, after ("systems") insert ("including the efficient use of gas and electricity by consumers").
The noble Lord said: This amendment is a simple one. It is intended to demonstrate that the interest of consumers, as referred to in Clause 17, includes the efficient use of gas and electricity by consumers, not only in relation to the gas conveyed through pipes or electricity conveyed by distribution systems, but in the actual use made of those two fuels. It is important in that, once again, it underlines the need to achieve the greatest efficiency in use. I hope that this simple amendment will be accepted by the Government. I beg to move.
Baroness Buscombe: We have considerable sympathy with this amendment. However, the view on these Benches is that should the amendment be introduced, it should be introduced as a new substantive part of the Bill as,
"including the efficient use of gas and electricity by consumers",
in a sense, is a new concept. We feel that it does not make sense to tack it onto the Bill as drafted. Therefore, if at all, it should be brought forward as a substantive amendment.
Lord McIntosh of Haringey: The noble Lord, Lord Ezra, has moved this amendment in straightforward terms for which I thank him. He has pointed out that our definition of the interests of consumers is broad, as it is. Will he be satisfied if I give him the assurance that it is broad enough to allow the consumer council to take an interest in energy efficiency issues?
Lord Ezra: That would satisfy me. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 17 agreed to.
Clause 18 [Acquisition and review of information]:
Baroness Gardner of Parkesmoved Amendment No. 66:
Page 13, line 15, leave out ("may") and insert ("shall").
The noble Baroness said: I am sure that Members of the Committee on seeing the words "may" and "shall" will think, "Not again". In the years that I have been here we have argued about those words so many times. The discussion can be quite irritating, so I do not intend to go into the detail of those two words. The important matter is the principle.
In 1986 I took an active part in what became the Gas Act. We sat all night during proceedings on the Bill and my noble friend Lord Belstead was very understanding and listened to everything that was said. As a result, he included in Schedule 3, the words,
"For the purpose of ensuring that there are persons available in particular localities to assist the Council in the performance in those localities of its functions under this Act".
And so it goes on. Before the noble Lord looks it up, I admit that the word "may" is used there. At least the importance of local people to deal with local problems is quite clearly set out in the schedule. I consider that to be the real essential in this issue.
Many years ago, as a young councillor, I was on the local gas consumer council. People brought to us problems only after they had tried to deal with them in every other way. It was essential for them to know that there was someone nearby to consult. The suggestion of amalgamating gas and electricity is logical and shows how far our utilities have come—it is marvellous—and whatever I say about electricity consumer councils the same applies to the gas consumer councils. Nevertheless, it is important that people should have a place within reach to which they can turn. For there to be an obligation for such a facility in Scotland and Wales but for the provision of a similar facility in England to be only permissive is not good enough.
It is important for customers to have immediate personal contact and immediate response to local problems, whether it is storm damage or a dishonest salesman. People should be able to obtain answers to such problems quickly, although I appreciate that at the moment there are 24 such offices and there is room for some rationalisation. Why should Scotland and Wales enjoy the advantages of more regional committees and yet the English regions are not assured of the equivalent?
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I notice that in correspondence with the Minister there has been a bit of conflict. He apparently said that those appointed were all just good boys and in his letter to the Electricity Consumers' Committee he has gone on to say that he,
"did not intend to denigrate in any way the most valuable efforts of volunteers up and down the country".
I notice that at the bottom he gives his constituency address, which is in Wales. I believe Mid Glamorgan is in Wales. Therefore, his own area will certainly have a more local service. I speak for English people who would like an equally local service. It does not seem fair that Cardiff should be the place for consumers in Devon and Cornwall. I do not believe that people will be happy with that, and I believe that the Government, if they stop to think carefully, will also realise that there is a need for a more local solution.
A simple council, for example based in London, cannot reasonably be expected to be aware of the sensitive needs of the regions of England. Many people say that no one in London appreciates anything north of—
Noble Lords: Watford!
Baroness Gardner of Parkes: Watford, yes. How can anyone north of Watford he happy to be represented by someone in London? This is an important matter. To do justice to the English dimension there should definitely be a commitment on the part of the Government, not just to make it possible for the English authority to do this, but to ensure that, there is local and regional representation. I beg to move.
Lord Ezra: I support Amendment No. 66 in the name of the noble Baroness, Lady Gardner or Parkes and my own amendment, Amendment No. 67, complements it. The noble Baroness makes a valid point that over the years the consumer councils have drawn on local representation so that local issues can be dealt with by people who are familiar with the locality. While the large number of local councils, both in gas and electricity, should properly be rationalised and brought together, none the less there is a need for a continued local representation and for lay members, quite apart from the officials on such local bodies.
I have discussed this matter with those involved in setting up the new consumer councils and they accept the principle that it is desirable that they should have local representation. Such representation must not be overdone, but in the interests of getting a proper consumer service going they would support this principle, as I hope the Government will.
Lord Elton: When I became drawn into the discussions on the way in which consumers should be represented in the new arrangements, I was surprised by the temperature at which they were conducted. I believe that my noble friend quoted Dr Howells, saying that he intended no aspersions. Can the Minister confirm that in the Standing Committee in another place, the Minister referred to the members of

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these consumer councils as failed Conservatives, failed Liberals or retired people? That is not the way in which to set out on a consultation exercise.
I wonder whether Mrs Ann Robinson has managed to reduce the temperature and whether she has handled this in such a way as to restore the confidence of the chairmen of the consumer councils, who have said in a letter that they oppose this megalithic arrangement covering the whole of the United Kingdom for an industry which, in spite of takeovers and mergers, remains, unlike the gas industry, broken up and local.
On the record of the consumer councils, I commend to the noble Lord a breakdown of the backgrounds of the members of the consumer councils who are not failed anything. Rarely are they political in their outlook and if they are retired, a House of our generation should not look on that as a disqualification of any sort.
I hope that the noble Lord will come forward with some emollient words and restore the idea of the importance of local concerns in national industries. Otherwise, we draw one step nearer to the corporate state, which we all dread.
9 p.m.
Baroness Sharp of Guildford: I rise to support Amendment No. 66, moved by the noble Baroness, Lady Gardner of Parkes, supported by my noble friend Lord Ezra, together with Amendment No. 67.
The noble Lord, Lord Elton, is absolutely correct. Gas and electricity are national industries, both being delivered to our doors through wires or pipes. But they are fragmented at the local level. Therefore, we need a body that we can approach feeling that it has some understanding of the issues at the local level. I support very much what the noble Baroness said about needing some form of local body and local representation.
The noble Baroness asked "Why Wales and Scotland, and not England?" The answer is that unless the Government are sensitive to the need for local representation and a local voice on quite a number of these issues, we shall see further devolution.
Baroness Buscombe: As we heard from my noble friend Lady Gardner of Parkes, the amendments would require a regional committee or committees of the council to be established in England and would oblige the council to take account of local diversity in setting up committees. It is a very positive approach. However, I fear that the first part in relation to regions reflects a response to a disquieting drive for regionalism, a move that the Opposition do not support.
We have considerable sympathy with the call of my noble friend and the noble Lord, Lord Ezra, for accountability at the local level, for a local service. We
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need a central service to manage the process. However, local representation, responding to local issues, would be a welcome addition.
Lord Hardy of Wath: I cannot refrain from speaking, extremely briefly, since the noble Baroness, Lady Gardner of Parkes, referred to the position today, which was certainly not adopted in the 1980s. I recall taking a very active part in the gas privatisation deliberations. On this issue I referred to the experience of my wife, as a member of the East Midlands Gas Consumers' Council, which did some very good work at very little cost. It certainly did not embarrass British Gas, which was storming ahead as a most successful enterprise at that time.
The then government decided to have no truck with the idea that the noble Baroness has suggested. They wanted a national organisation. Indeed, without very much thought they proposed that it should be called the "gas users' council". I recall pointing out in Standing Committee that that would lead to its being known as "GUC", which did not sound terribly nice. I proposed that instead it should be called the "gas users national organisation". The Minister seemed about to accept that suggestion—the only suggestion that the government were prepared to accept—until I prematurely pointed out that it would become known as "guano".
However, I share the view that the noble Baroness puts forward now. I wish that the party opposite had taken the same approach a decade or more ago.
Lord McIntosh of Haringey: I suppose that in the light of these avowals I had better declare a past interest as well, indirectly, in that my wife was chairman of the National Gas Consumers' Council for a number of years from 1977 onwards. At that time, as my noble friend Lord Hardy rightly says, that council had regional gas consumers' councils, consisting of lay members as well as officials.
It is certainly true that, as a number of noble Lords have said, there is what my brief describes as "a lively argument" going on in the field—I think that the truth of the matter is that a hell of a row is going on—between those who believe that the interests of consumers are best championed by a council made up primarily of full-time professional staff and those who see a valuable role for committees of lay members.
Let me set out the general approach that we have taken to the organisational and regional issues concerning the council. Our approach has been to give the council a clear set of statutory functions but then to ensure that it has the flexibility and powers to organise itself in a way suited to delivering those outputs, outputs for which it will, after all, be accountable. It is more important for the Bill to get the council's functions right than to prescribe in detail how they are to be delivered. Organisational structures may well need to change over time, and the Bill must be capable of coping with change. We have pared down the statutory organisational requirements to the minimum.

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I recognise that the treatment of England as regards regional committees is different from that of Scotland and Wales. The difference reflects the fact of devolution and reflects representations from Scottish and Welsh interests. That is the explanation for subsection (2)(a). However, the difference is more apparent than real. Although the council is required to establish at least one committee in respect of Scotland and Wales, it is not obliged to establish committees in respect of areas within those countries, although it may do so. In the same way, the council may establish committees in respect of areas within England, although it is not obliged to do so.
It would be misleading to argue that the Bill ignores the English or any other regional dimension. The clause gives the council an explicit regional function. The council must serve consumers in the "different areas of Great Britain". As I have mentioned, it has powers to set up committees for England to assist it in this task. The clause also requires the council to maintain at least one office in England.
In fact, there will be more than one office for the regions of England. A final announcement about the council's structure is expected shortly. These offices will need to develop an expertise in consumers' issues and concerns in the geographical areas for which they are responsible.
Certainly, the council will want to reassure itself that it is receiving the advice it needs to supplement the work of its full-time staff in its regional offices. There are, of course, different ways of obtaining this advice. Committees are one route, and a potentially very valuable one. The regional offices would be capable of supporting regional committees. Indeed, I understand that Ann Robinson will now be developing proposals for regional committees or panels. But I do not think that the Bill needs to be prescriptive about how it obtains the advice it needs.
Before part-time committees are established, decisions have to be taken about how many there should be and how they can best be deployed in a way which complements rather than overlaps the work of the full-time consumer specialists in the council's regional office. The links between the committees and the work of other organisations, such as the trading standards offices and citizens advice bureaux also needs to be considered.
We believe that these are not matters for legislation. They are managerial decisions for the council. The council will be best placed to decide what arrangements would best serve the consumer and deliver the outputs in the most cost-effective manner. That sort of detail, frankly, does not belong in a Bill. It is enough that the council can do what is necessary.
I assure the Committee that the existing Gas Act, which established the Gas Consumers' Council, does not prescribe a requirement for regional committees. The Gas Consumers' Council itself established regional panels. I do not think we need be afraid that if regional committees will serve a useful purpose in helping the council, the council will not establish them.
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The amendment of the noble Lord, Lord Ezra, refers to the issue of local diversity and probes the extent to which regional committees will be deployed. We must recognise the role of the council's regional offices. They are quite distinct from committees. The regional offices will be made up of full-time professional staff. They will always be the main mechanism for delivering the council's services to consumers in the region. They will be charged with developing an expertise and familiarity with the problems and needs of consumers in their areas.
Whether or not there are committees, these people will need to have contact with local communities directly through the local media, face to face at citizen's advice bureaux or through surgeries. They will have to do outreach work in places like shopping centres and they will have to share events with other local bodies. They will develop links and networks with professional bodies working and delivering services at the local level, bodies such as the trading standards offices, trade and commerce organisations, charities and other caring agencies.
This is an innovative and credible programme for the regional offices and it can make a real impact with consumers. Perhaps that is more important than the issue, which has still to be resolved, of whether there should be separate committees of lay people. I am not against committees of lay people. I have made it clear that we have experience of them and other Members of the Committee will have experience of them also. But I urge the Committee not to be too prescriptive as to the way that the consumer council will operate, but to leave it to the council to work out its own destiny.
Lord Ezra: The noble Lord has given us a very reasoned reply. Of course these are matters on which the council must come forward with its proposals. The noble Lord says that these are purely managerial problems, but they have excited a good deal of interest, as the noble Lord, Lord Elton pointed out. Can the noble Lord tell us whether the organisational proposals of the council are likely to be made public before we conclude our consideration of the Bill?
Lord McIntosh of Haringey: I do not know. I know that Ann Robinson is working hard on them at the moment. I shall write to all noble Lords who have taken part in the debate if I have any news to give.
Lord Elton: The noble Lord, Lord Ezra, has asked a material question and one that needs to be answered before Report stage if my noble friend Lady Gardner is to be in a position to decide what to do at later stages of the Bill. It would be helpful to hear that.
I was a little worried by the noble Lord's approach to this problem. He said that it was a managerial question. To my mind, management is on the side of the producer. I think that he was probably thinking of management as being the management of the council, whose members are the appointees of the Secretary of State. But they are still not very close to the consumer. What is being expressed—I noticed startled surprise on the Benches behind the noble Lord—is that

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someone appointed by the Secretary of State is not as close to the consumer as a person who resides in Mercia, Wessex or Yorkshire is to the residents of Mercia, Wessex or Yorkshire. It seems to me that the only voice that those people are likely to have is through your Lordships expressing opinions they have heard in the field. Therefore, I am not sure whether I regard this as a management question in either sense in which the noble Lord uses those words.
The noble Lord described the furious argument which he said was going as between the voluntary and the professional methods of representation. Of course my noble friend's amendment is addressed purely to scale and to locality. I have not expressed a view on whether professionals or volunteers do the job better, but I think that for the representation of consumers one needs a mixture of both. That is for another debate. I think I have said enough to show where my sympathies lie if my noble friend wishes to return to this matter at a later stage.
Lord McIntosh of Haringey: I hope that I can now be a little more helpful to the Committee. I expect that a conclusion will be reached to the council's deliberations before we reach the second day of Committee. Perhaps I may also say that, if that happens, there will be some noble Lords who agree with the conclusion that is reached and some who do not. My view is that the matter should not be decided by this House; it should be decided by the people who are actually working on the ground. Therefore, I do not think that people should attach too much importance to the way in which the decision comes out.
Baroness Gardner of Parkes: I appreciate the support of the noble Lord, Lord Hardy. He made the point that in the past too much attention has been paid to the industry side. I am certainly not doing that but looking only at the consumer side. If people are asked whether they want a matter dealt with locally or at a great distance—perhaps the bright young ones could use e-mail—they will say the former. Only after lengthy debate on the Gas Act 1986 did the then Minister, Lord Belstead, agree to such a provision:
"For the purpose of ensuring that there are persons available in particular localities to assist the Council in the performance of those localities of its functions under this Act, the Council may, without any such approval as is required by sub-paragraph (1) above, appoint such persons to be so available as it may determine".
The last thing we want is some great bureaucracy, but members of the public have difficulty travelling from one area to another to work or for health treatment. People like facilities to be available within easy reach of their own homes. Distances grow ever greater. We had the same debate about people having difficulty getting to their nearest courts. It is a question of having persons available locally enough so that the public do not have to deal with a remote bureaucracy. No matter how good the big scene and how well it is managed from the centre, nothing is as useful as a local
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voice. I ask the noble Lord to reconsider before Report the inclusion of a similar provision to that in the Gas Act 1986, to ensure local representation.
Lord McIntosh: I have not made the argument for one side or the other but said that aspect is better left to the council. Of course I will look again at every issue raised in Committee.
Baroness Gardner of Parkes: I thank the noble Lord and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 67 not moved.]
Clause 18 agreed to.
Clause 19 [Provision of advice and information to public authorities and other persons]:
9.15 p.m.
Lord Kingslandmoved Amendment No. 68:
Page 14, line 4, leave out ("(c)") and insert ("(d)").
The noble Lord said: I shall speak also to Amendments Nos. 69–71, 73, 75, 85–89, 91, 93, 105, 107, 109, 111, 113, 117, 119, 121, 124, 125, 127, 130, 133, 138, 140–142, 144, 146, 152 and 287.
These amendments deal with inconsistencies in substance and procedure between this Bill and the Freedom of Information Bill. As to substance, commercially sensitive information held by the consumer councils may be at greater risk of disclosure under the Utilities Bill than under the Freedom of Information Bill. The tests to be applied when deciding whether information is commercially sensitive and therefore non-disclosable are inconsistent.
Clause 41 of the Freedom of Information Bill exempts from disclosure information that is a trade secret or that would, or would be likely to, cause prejudice to commercial interests. By contrast, the Utilities Bill allows information to be disclosed unless that
"would, or might, in the opinion of the Council, seriously and prejudicially affect the interests of the individual or body".
The inclusion of the word "seriously" adds a further condition to be met alongside "prejudice" and it is up to the council to decide what constitutes "serious and prejudicial". Once that decision has been made, there is no evaluation of the potential for significant harm, so publication can occur even if that is the likely outcome. Therefore, the council's exercise of its discretion is a subjective test. Even if it is not allowed to act "unreasonably" under the Wednesbury principles, a more objective test based on harm is, in our view, infinitely preferable.
Safeguards should be in place to prevent people seeking information and placing it in the public domain to undermine competitors. This is of particular concern where consumers may also be competitors in the context of a consumer council with wide powers of publication. The Utilities Bill does not specifically mentioned commercial interests, only interests of the individual or body. In our view, clear guidance should be given on how commercially

1621
sensitive information is identified and handled which is consistent with the guidance given under the Freedom of Information Bill. Business must feel confident that sensitive commercial information will not be publicly disclosed.
As far as concerns the procedural inconsistencies, there is an appeal mechanism under the Freedom of Information Bill which can be invoked if it is felt that disclosure has not been handled satisfactorily. The Utilities Bill has no such provision. We feel that this is unsatisfactory in the situation where the council has considerable discretion over the ultimate decision to publish.
Although the council is required to consult individuals or bodies before releasing information, there is no duty upon it to take account of the views of the consultee and there are no means whereby a company can appeal against a decision and prevent publication. There is also only a limited appeal concerning the type of information that the council can request. Therefore, there should be a right of appeal against a decision of the consumer council to disclose information. The council should not be the sole judge of whether disclosure would seriously and prejudicially affect a body.
At Second Reading, we observed that the authority appears to be adjudicator in the event of disputes between the council and the authority on information questions. However, the consumer council also has the role of examining the regulator and that could lead to a potential conflict of interest. Moreover, there could be circumstances where the regulator might have sight of information of relevance to regulatory issues that might be confidential. In determining its confidentiality, the regulator would be placed in a compromising position if the information turned out to be relevant in any regulatory dispute.
We should like to see the appointment of an adjudicator by regulation and propose that that role should be carried out by an independent arbitrator. We should also like to see the role of information adjudicator carried out by the information commissioner, established under the Freedom of Information Bill, to ensure transparent and independent procedure. I beg to move.
Lord Ezra: The latter part of the proposition just proposed by the noble Lord is very much in line with the earlier proposition that I made and to which the Minister gave a lengthy but, unfortunately, negative answer. I hope that he will seize this opportunity to think again on the subject.
Lord McIntosh of Haringey: First, I shall discuss the series of amendments which add an additional limb to the disclosure test applicable to the council's disclosures and publications. The amendments would have the effect that the consumer council could be barred altogether from disclosing information falling within the categories in the new clause in Amendment No. 152.1 am very surprised that the noble Lord, Lord
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Ezra, who, generally speaking, is in favour of greater publication and disclosure rights should appear—I hope I am wrong—to be supporting it.
Lord Ezra: I was supporting the reference to the independent arbitrator or arbiter.
Lord McIntosh of Haringey: Those are the amendments which refer to the information commissioner. I shall come to that point.
I shall set out what the Government are trying to do and try to make the matter clearer. Our approach builds on that in the Gas and Electricity Acts. Essentially, disclosure of information obtained under the legislation without consent is prohibited, unless the disclosure is for a purpose specified as an exception. There are various exceptions in the Bill for disclosures by the consumer council in order to promote the interests of consumers, generally subject to a condition that only disclosures which are not likely to cause serious and prejudicial effects are permitted.
The underlying proposition is that, in the circumstances of the gas and electricity sectors, adverse effects which fall short of the serious and prejudicial are justifiable in order to secure promotion of the interests of consumers. The Government's view is that the "serious and prejudicial effects" test is sufficient. Once the likely degree of harm is established then there is no need to distinguish an adverse effect in one category from an adverse effect in other categories if they are all of similar degree.
Of course, we recognise also that some of the categories in the amendment are not intended to protect specific kinds of information so much as effectively to sterilise the "serious and prejudicial effects" test by placing great swathes of information whose disclosure might have adverse effects short of the serious and prejudicial inside exempt categories.
Nobody will be surprised that we cannot agree to that. The Government want to protect the interests of consumers—that is the primary responsibility of the authority—not the interests of utilities.
I shall not go into the detail of the categories set out in Clause 152 because the noble Lord, Lord Kingsland, also spared us that detail. But if we are talking about information filed with the court or information which may endanger health or which is actionable for breach of confidence, I can certainly argue—but I shall not, for the sake of your Lordships' health this evening—that all of those have perfectly rational legal constraints upon them.
I turn to the issue of the Freedom of Information Bill. The noble Lord, Lord Kingsland, has said on more than one occasion now that there are conflicts between this Bill and the Freedom of Information Bill.
The purpose of the Freedom of Information Bill, which is still before your Lordships' House—and it is still possible that it may be amended—is to set a minimum standard for the right of access to information across the public sector, including from the authority and the council. But nothing in the Freedom of Information Bill precludes a bespoke

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sectoral regime in gas and electricity for the proactive disclosure of information against a higher harm threshold than that under the Freedom of Information Bill.
The Utilities Bill is concerned with a particular sector where, in addition to the general reasons for transparency which inform the freedom of information regime, there are additional specific reasons which increase the need for openness in that field.
Those reasons centre on the weakness of the consumer. Empowering consumers means not only establishing the consumer council to champion their concerns but also enabling it and the regulator to publish information which will promote their interests.
It is in that regard that I should hope to have the support of the noble Lord, Lord Ezra, and the noble Baroness, Lady Sharp, because I really believe that we are the ones in this argument who are in favour of greater information. I believe, from what the Liberal Democrats have said, that that is their view, too. Those amendments would be highly restrictive.
I turn to the issue of who becomes the adjudicator. The amendments in this regard start with Amendment No. 146, although there may be earlier ones. They propose that before publishing any information, if there is a dispute the council should refer the dispute to the information commissioner for determination. That is true of Amendments Nos. 75, 93, 117, 130, 146 and 287. The proposal has a serious practical weakness, which is that the information commissioner does not yet exist and may well become operative some time after this Bill comes into force.
However, the most important issue on which the Government disagree with the amendments is one of principle. We do not accept that a special appeal or adjudication mechanism is required to determine what the council may publish. Like the authority, the council will be a public body making disclosure decisions within a statutory framework. But we intend to ensure that those who may be affected have the opportunity to put all the relevant facts to the council before it takes a publication decision. That is why the Bill includes the consultation requirement I mentioned.
I explained earlier the Government's difficulties with the proposal of the noble Lord, Lord Ezra; that is, that there should be an information arbiter. Some of those difficulties arise here too. In particular, we would incur delay and expense as the information commissioner, once appointed, familiarises himself or herself with the specific issue.
For those reasons, and for the reasons generally of greater transparency and greater powers of publication for the consumer council, we cannot accept the amendments.
9.30 p.m.
Lord Kingsland: The Minister will not be surprised to hear that I regard his reply as wholly unsatisfactory. I recall him saying that the object of the measures
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contained in the current draft of the Bill was to protect the interests of the consumers, not the interests of the utilities. But, as I understand it from earlier exchanges in the course of the day, the way in which the interests of the consumers are to be promoted in the Bill is through the process of competition. That, I understand from what the Minister said, is the only way in which the interests of consumers are to be promoted.
Lord McIntosh of Haringey: Where appropriate.
Lord Kingsland: Where appropriate. But we discovered that "where appropriate" is defined in a narrow and specific way.
If it is in the interests of consumers that proper competition be promoted, how can it be in their interests that the standard for disclosure should be such as to, on occasion, seriously undermine the process of competition? If it is to be just the consumer council that determines whether the disclosure of information is serious or prejudicial—in other words, if it is to be a purely subjective judgment—
Lord McIntosh of Haringey: Perhaps the noble Lord will give way. If the council wishes to publish something which has a serious and prejudicial effect on any person or persons, it cannot do so. It can ask the authority to publish it.
Lord Kingsland: I apologise if I did not express myself as clearly as I ought to have done. I am not suggesting that it can do that without going to the authority. But I am suggesting that it is its judgment alone. The publication of confidential information in those circumstances can seriously damage a competitor in the market and, therefore, the process of competition. I put it to the Minister, therefore, that the interests of the consumer are intimately linked with successful competition, and that those can be undermined by the wrongful disclosure of information.
I shall read carefully in Hansard what the Minister said and return to this matter on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 69 to 75 not moved.]
Lord McIntosh of Haringeymoved Amendment No. 76:
Page 14, line 27, leave out from second ("section") to end of line 28 and insert ("(General restrictions on disclosure of information)").
The noble Lord said: This amendment was spoken to with Amendment No. 21. I beg to move.
On Question, amendment agreed to.
Clause 19, as amended, agreed to.
Clause 20 [Provision of information to consumers]:
[Amendment No. 77 not moved.]
Lord McIntosh of Haringeymoved Amendment No. 78:
Page 14, line 40, at end insert—
("(3A) The disclosure by the Council of information in the exercise of that function does not contravene section (General restrictions on disclosure of information).").
On Question, amendment agreed to.
Lord McIntosh of Haringeymoved Amendment No. 79:
Page 15, line 5, leave out ("targets") and insert ("obligations imposed by order").
The noble Lord said: In moving Amendment No. 79, I wish to speak also to Amendments Nos. 82 and 263 to 266. The amendments to Clause 20—that is, Amendments Nos. 79 and 82—are simply technical. They change the wording of the cross-references to energy efficiency in that clause to reflect amendments made in another place to the energy efficiency clauses themselves.
The amendments to Clauses 69 and 98 make clearer on the face of the legislation the Government's intention that the Secretary of State will set the overall target for improved energy efficiency and the authority will determine the energy efficiency targets that individual licensees will be obliged to meet so as to achieve this overall target. I beg to move.
On Question, amendment agreed to.
Baroness Buscombemoved Amendment No. 80:
Page 15, line 7, after ("made") insert ("to the Council or the Authority").
The noble Baroness said: In moving Amendment No. 80 I wish to speak also to Amendments Nos. 81, 83 and 84. I shall be extremely brief. These amendments relate to the publication of statistics on consumer complaints. At present the council must publish statistics on all complaints, including those received directly by companies. We believe that in order to provide a level playing field these amendments are important in that they would limit that obligation to complaints received by the council and the authority. I beg to move.
Lord McIntosh of Haringey: Clause 20 gives the new consumer council the role of providing information that consumers need in order to make informed decisions about their gas and electricity suppliers. Much of the information is also intended to provide a spur to companies—including monopoly gas transporter and electricity distribution companies—to maintain high levels of performance.
In line with these objectives, Clause 20 places the council under a duty to publish statistical information about complaints made by consumers against such companies. Subsection (2) goes on to state that, for the purposes of that duty, "complaints" include complaints made directly to the companies concerned, as well as those made to the authority and the council.
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As in all consumer legislation, it is expected that complaints will be made first to the company concerned.
Amendments Nos. 80, 81, 83 and 84 seek to restrict the scope of that duty so that it would apply only to complaints made to the authority or the council. It would no longer apply to complaints made to the companies themselves. These amendments would, therefore, seriously reduce the effectiveness of the provisions that Clause 20 puts in place.
Complaints made to the authority or the council alone will not tell the whole story of the day-to-day experience that consumers have of a particular utility company. If a problem arises, most consumers will make a complaint direct to the company concerned—at least, I would. It would be unusual for a consumer to refer to either the authority or the council unless he or she had failed to obtain a satisfactory response from the company against which the complaint had been made.
If we exclude these initial complaints, there is a risk that the pattern of complaints statistics will be distorted, highlighting only those companies foolish enough not to remedy problems when first alerted to them. Companies that receive a high number of consumer complaints but deal with them satisfactorily once the complaints have been made would not figure in these statistics. But surely that would mislead potential customers about the quality of service they offer. It might encourage rogue utility companies to adopt an approach based on a generally low standard of consumer service that improved only when someone complained. Follow-up complaints to the authority or council would be kept to a minimum, while most customers who did not bother to complain would be getting a lower level of service.
I do not think that these amendments will have the effect that the noble Baroness, Lady Buscombe, expects. I hope that she will not press them.
Baroness Buscombe: I thank the Minister for his very full reply to my brief moving of the amendment. We shall read with care what he said in Hansard. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 81 not moved.]
Lord McIntosh of Haringeymoved Amendment No. 82:
Page 15, line 24, leave out ("targets") and insert ("obligations imposed by order").
The noble Lord said: I spoke to this amendment with Amendment No. 79. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 83 and 84 not moved.]
Clause 20, as amended, agreed to.
Clause 21 [Power to publish advice and information about consumer matters]:
[Amendments Nos. 85 to 93 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 94:
Page 16, line 16, leave out from first ("section") to end of line and insert ("(General restrictions on disclosure of information)").
On Question, amendment agreed to.
Clause 21, as amended, agreed to.
Clause 22 [Complaints]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 95:
Page 16, line 17, leave out from ("section") to ("to") and insert ("32 of the 1986 Act (duty of Council").
The noble Lord said: In moving Amendment No. 95, I shall speak also to government Amendments Nos. 96, 98, 100 and 101. Although the noble Lord, Lord Jenkin of Roding, is unable to be here, I shall speak also, as far as appropriate, to his Amendments Nos. 97 and 99.
Amendments Nos. 95, 96 and 101 are minor government amendments which correct inaccurate cross-references to sections in the Gas Act 1986. Under the Bill as drafted, there is a prohibition on the council publishing or disclosing details from which a complainant could be identified without the complainant's consent. Amendments Nos. 98 and 100 extend this prohibition to the authority.
Perhaps I may think again about Amendments Nos. 97 and 99. Is it the intention of other Members of the Committee to speak to the amendments of the noble Lord, Lord Jenkin?
Lord Kingsland: No.
Lord McIntosh of Haringey: In that case, I shall pass over them. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 96:
Page 16, line 19, leave out ("31") and insert ("32").
On Question, amendment agreed to.
[Amendment No. 97 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 98:
Page 17, line 24, leave out from beginning to ("without") in line 27 and insert ("No report under subsection (7) or information about a complaint referred to the Council under this section from which the complainant may be identified, shall be published or disclosed by the Council or the Authority in the exercise of any power under the Utilities Act 2000 or this Act,").
On Question, amendment agreed to.
[Amendment No. 99 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 100 and 101:
Page 19, line 4, leave out from beginning to ("without") in line 7 and insert ("No report under subsection (7), or information about a complaint referred to the Council under this section from which the complainant may be identified, shall be published or disclosed by the Council or the Authority in the exercise of any power under the Utilities Act 2000 or this Act,").
Page 19, line 25, leave out ("32") and insert ("31").
On Question, amendments agreed to.
Clause 22, as amended, agreed to.
Clause 23 [Investigations by the Council]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 102 and 103:
Page 19, line 37, leave out second ("gas") and insert ("authorised").
Page 19, line 40, leave out ("gas") and insert ("authorised").
On Question, amendments agreed to.
9.45 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 104:
Page 20, line 9, leave out from ("unincorporate)") to end of line 14 and insert—

("(a) shall not be included in a report which is to be sent to any person under subsection (5)(a), unless one or more of paragraphs (a) to (c) of subsection (7) applies: and

(b) shall be excluded from any such report which is to be published under subsection (5)(b), unless one or more of paragraphs (a) to (c) of subsection (7A) applies.

(7) Information relating to a particular individual or body may be included in a report to be sent under subsection (5)(a) if—").
The noble Lord said: In moving Amendment No. 104 I should like to speak also to Amendments Nos. 106, 108, 109, 114, 118, 120, 122, 123, 128, 132, 134, 136, 137, 139, 148 to 150, 293 and 301. Amendments Nos. 104, 106, 108, 109, 114, 118, 120, 122, 123 and 128 deal with the council's power to send a report on one of its investigations to recipients it believes may have an interest in it or to publish it. The amendments make clear that where it is relying on the consent of those to whom information within the report relates to disclose or publish then that consent may be in relation to disclosure to specific recipients or to publication.
The other amendments in this group are principally concerned with the possibility of disputes arising when the consumer council seeks information from licensees. They honour the undertaking I gave towards the end of the debate on Second Reading to allow for the appointment by regulation of an adjudicator to determine such disputes instead of the authority. This is achieved by Amendment No. 150, which inserts the new clause after Clause 26. The adjudicator would also determine any disputes that might arise when the council seeks information from the authority, or vice versa.
These amendments create the possibility of an alternative to resolution of council/licensee disputes by the authority, should we decide to make regulations. We are proposing them because we recognise that there is a case for retaining some flexibility as to who

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is the best person to adjudicate disputed requests. As I indicated on Second Reading, one possibility that has been mentioned is the information commissioner to be created under the Freedom of Information Bill, who would have relevant expertise.
In addition, Amendment No. 132 amends Clause 24 so as to make as clear as possible the statement of the council's right to information. Similar provision is made in relation to the authority's right to information from the council by Amendment No. 148. As part of the creation of the power to make regulations setting out descriptions of information to which the council will not have an automatic right is transferred from Clause 24 to Clause 26A, which also gives rise to a consequential amendment, Amendment No. 136.
Amendments Nos. 293 and 301 are also consequential, whereby an order from the adjudicator or the authority, as the case may be, to comply with a council request for information is a relevant requirement, enforceable like a licence obligation.
Finally, Amendments Nos. 137 and 139 correct minor anomalies in the drafting of the conditions which apply to publication by the council of a notice from the authority giving reasons for withholding information from the council. I beg to move.
The Deputy Chairman of Committees (The Countess of Mar): I should inform the Committee that if this amendment is agreed to, I cannot call Amendment No. 105 because of pre-emption.
On Question, amendment agreed to.
[Amendment No. 105 not moved.]
Lord McIntosh of Haringeymoved Amendment No. 106:
Page 20, line 19, leave out ("publication") and insert ("disclosure").
On Question, amendment agreed to.
[Amendment No. 107 not moved.]
Lord McIntosh of Haringeymoved Amendments Nos. 108 and 109:
Page 20, line 22, at end insert—
(7A) Information relating to a particular individual or body may he included in a report to be published under subsection (5)(b) if—

(a) that individual or body has consented to the publication;

(b) it is information that is available to the public from some other source; or

(c) it is not information the publication of which would or might, in the opinion of the Council, seriously and prejudicially affect the interests of that individual or body.").

Page 20, line 25, after ("(7)(c)") insert ("or (7A)(c)").
On Question, amendments agreed to.
[Amendments Nos. 110 to 113 not moved.]
Lord McIntosh of Haringeymoved Amendments Nos. 114 and 115:
Page 20, line 28, at end insert ("or (7A)(c)").
Page 20. line 33. at end insert—
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("( ) In this section "authorised" has the same meaning as in section 31."").
On Question, amendments agreed to.
[Amendments Nos. 116 and 117 not moved.]
Lord McIntosh of Haringeymoved Amendment No. 118:
Page 21, line 5, leave out from ("unincorporate)") to end of line 10 and insert—

("(a) shall not be included in a report which is to be sent to any person under subsection (3)(a), unless one or more of paragraphs (a) to (e) of subsection (5) applies; and

(b) shall be excluded from any such report which is to be published under subsection (3)(b), unless one or more or paragraphs (a) to (c) of subsection (5A) applies.

(7) Information relating to a particular individual or body may be included in a report to be sent under subsection (3)(a) if—").
On Question, amendment agreed to.
[Amendment No. 119 not moved.]
Lord McIntosh of Haringeymoved Amendment No. 120:
Page 21, line 15, leave out ("publication") and insert ("disclosure").
On Question, amendment agreed to.
[Amendment No. 121 not moved.]
Lord McIntosh of Haringeymoved Amendments Nos. 122 and 123:
Page 21, line 18, at end insert—
(5A) Information relating to a particular individual or body may be included in a report to he published under subsection (3)(b) if—

(a) that individual or body has consented to the publication;

(b) it is information that is available to the public from some other source; or

(c) it is not information the publication of which would or might, in the opinion of the Council, seriously and prejudicially affect the interests of I hat individual or body.").

Page 21, line 21, after ("(5)(c)") insert ("or (5A)(c)").
On Question, amendments agreed to.
[Amendments Nos. 124 to 127 not moved.]
Lord McIntosh of Haringeymoved Amendment No. 128:
Page 21, line 24, at end insert ("or (5A)(c)").
On Question, amendment agreed to.
[Amendments Nos. 129 and 130 not moved.]
Clause 23, as amended, agreed to.
[Amendment No. 131 not moved.]
Lord McIntosh of Haringey: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at ten minutes before ten o'clock.