Sitting of 5 June 1989

Preamble
Reassembling after the Spring Bank Holiday Recess, the House met at half-past two of the clock: The Lord Chancellor on the Woolsack.
Prayers— Read by the Lord Chancellor.

Community Charge: Second Homes
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
Whether in the case of individuals or families occuping more than one home it is intended to issue guidance to local authorities as to the application of the community charge.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Hesketh): My Lords, we have produced jointly with local authority associations Practice Note No. 9 which gives advice on determining a charge payer's main residence and Practice Note No. 13 which gives more general guidance on the standard community charge. Copies of practice notes which will be distributed to all charging authorities are available in the Library.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for that reply. Is he aware that the admirable documents to which he refers do not make clear, in the case of a citizen with more than one home, who decides which is his principal and which his second home; nor is it clear whether he alone is liable to pay the special charge for a second home or whether the members of his family are also liable?
Lord Hesketh: My Lords, in the circumstances the individual would have to pay the charge only in the area where he was first registered. He would appeal against one or further registrations. The appeal would then be to an evaluation and community charge tribunal.
Lord McIntosh of Haringey: My Lords, on the assumption that the Question of the noble Lord, Lord Boyd-Carpenter, refers to individuals or families owning more than one home, since they cannot occupy more than one home at the same time, does the Minister agree that his second answer is quite unsatisfactory? Ought not guidance to be given to indicate the original submission that individuals and families should make? Will he agree that decisions should not simply be left to appeals and tribunals but that clear guidance should be given in the first place?
Lord Hesketh: My Lords, initially it will be up to the individual to decide. It is to be hoped that he will then achieve a satisfactory agreement with the CCRO. It is only in the third set of circumstances that he would in fact go to an appeal.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that, contrary to the belief of the noble Lord opposite, it is perfectly possible to occupy more than one home; indeed, it is a very frequent
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occurrence? Will my noble friend also answer my second supplementary question? Where a charge is in respect of a second home, is it payable only by the owner or is his family also liable for it?
Lord Hesketh: My Lords, my noble friend asks about the criteria for considering someone resident, essentially above and beyond someone who has a second home and who is paying a standard charge. No definition of sole or main residence is laid down in the Act. Length of stay will be a relevant factor but no precedents have yet of course been set. It will be up to the CCRO to judge and assess individual cases. Case law will be built up on that basis.
Lord Grimond: My Lords, will the Minister say whether it is still the Government's contention that this is a tax not on property but on the use made of services? Will he confirm that the decision therefore depends not on who owns, or does not own, the home but on what use is made of the local services? Is that not the whole basis of the Government's case for this tax?
Lord Hesketh: My Lords, whether people use them or not, the fact is that there are services which benefit every property, such as the fire service, highways and many others. As a result, everyone should make a contribution to those services which are fundamental to the infrastructure.
Lord Tordoff: My Lords, will the Minister explain who is "everyone" in this circumstance? Surely, that is the basis of the original Question put by the noble Lord, Lord Boyd-Carpenter.
Lord Hesketh: My Lords, to answer that question, "everyone" means those who are paying the community charge.

Pelican Crossings
2.41 p.m.
Lord Foley Lord Foley asked Her Majesty's Government:
Whether they will consider making lights at pelican crossings legally enforceable for pedestrians as well as motor vehicles.
Viscount Davidson: My Lords, we have no plans to introduce legislation along those lines. It would be difficult to enforce and we doubt that pedestrians would respect such a law unless there was strict police enforcement. The police effort could not be justified. Pelicans are normally sited at particularly busy crossing points yet less than 4 per cent. of all pedestrian casualties occur at them.
Lord Foley: My Lords, I thank my noble friend for his Answer. In view of the appalling traffic problems in this city, perhaps I may ask this question. Does he consider that in traffic black spots, such as Sloane Square where there are many pedestrian crossings and pedestrians have the right of way on them, it would be a good idea to build an underground tunnel? That would not only relieve traffic congestion but make life much safer for pedestrians.
Viscount Davidson: My Lords, I am sure that most of your Lordships are aware of the problems of Sloane Square. All I can say is that I shall pass on my noble friend's very interesting suggestion to my right honourable friend.
Lord Underhill: My Lords, I appreciate the initial reply of the noble Viscount. Can he confirm that under the Act of 1984 (in what I think is Section 25) the Secretary of State has the power to issue regulations to control the movement of traffic and pedestrians at pedestrian crossings? Has the use of that power been considered at all?
Viscount Davidson: My Lords, my right honourable friend the Secretary of State launched a new packet of proposals specifically to improve pedestrian safety on 19th April. The measures are detailed in a leaflet on which comments have been invited. So far over 2,000 leaflets have been distributed to local authorities, police forces and other interested bodies and individuals. The proposals have been well received.
With regard to the noble Lord's other question, I shall have to write to him.
Lord Monson: My Lords, does the Minister agree that pedestrians are 50 times more sinned against than sinning in this matter? Is he aware that if a young police constable desirous of quick promotion were to stand at a typical pelican crossing in Kensington High Street in plain clothes, he would be able to arrest between 20 and 30 motorists every hour for driving through a red light?
Viscount Davidson: My Lords, as a pedestrian and a driver I do not think that I can take sides in this matter.

Iran: Sanctions Proposal
2.44 p.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
Whether they propose to institute sanctions against Iran, and, if so, when.
The Minister of State, Foreign and Commonwealth Office (Lord Glenarthur): My Lords, we deplore Iran's continuing incitements to murder the citizens of other countries. We remain in close contact with our friends and allies about these threats, and keep all diplomatic and political responses under careful review. We call upon Iran to renounce publicly the use or threat of terrorism and violence in all forms.
Lord Molloy: My Lords, while I agree absolutely with what the Minister has just said, does he consider that the point raised in my original Question should perhaps be suspended for the time being in the hope that following the recent events in Iran there will be a dramatic change in policy which will gradually be acceptable to all?
Lord Glenarthur: My Lords, I certainly agree with the noble Lord that we should await developments.
Lord Mellish: My Lords, is the Minister aware that some of us regard sanctions, especially against Iran, as absolutely daft and that the idea of them is impossible? In view of the death of the Ayatollah Khomeini, would it not be better to wait and see and hope and pray that the country becomes civilised?
Lord Glenarthur: My Lords, I certainly agree with the noble Lord about the views of many on economic sanctions, which we share. I agree too that we must wait and see what happens.
Lord Mayhew: My Lords, can the noble Lord confirm that since the death of the Ayatollah Khomeini it has been made clear that the threat against Mr. Salman Rushdie still stands?
Lord Glenarthur: My Lords, I am not aware of any such assurance being given.
Lord Cledwyn of Penrhos: My Lords, does the noble Lord agree that, following the death of the Ayatollah Khomeini, what is urgently needed in Iran is a stable government which complies with the rules of international law? Will Her Majesty's Government convey this through the embassy which acts for us in Teheran, together with our good wishes to the new government, in the hope that they will make it possible for a resumption of normal diplomatic relations with us as soon as possible?
Lord Glenarthur: My Lords, again we have to wait and see what happens. We are ready to have normal relations providing the Iranian Government abide by international obligations in future. In particular we look to Iran to renounce publicly the use or threat of terrorism and violence.
Lord Molloy: My Lords, does the Minister agree that, if any decision, or the possibility of anything being acted upon, is always regarded as daft, it does not give much encouragement to our fellow Britons who are held in Lebanon under the control of the Iranian Government? This ought to be dramatically clear. We hope that there will be a change of policy and we shall reciprocate so far as we can.
Lord Glenarthur: My Lords, yes. We have to wait to see what that change of policy is.

UN Peacekeeping Operations: UK Contribution
2.47 p.m.
The Viscount of Oxfuird The Viscount of Oxfuird asked Her Majesty's Government:
What is the current level of the United Kingdom commitment to United Nations peacekeeping operations.
Lord Glenarthur: My Lords, the net amount included in the Foreign and Commonwealth Office estimates for the current financial year specifically for UK peacekeeping operations is £ 64 million.

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We contribute troops to two UN peacekeeping operations: 741 officers and men to the United Nations Force in Cyprus and a signals squadron of 162 men to the United Nations Transition Assistance Group in Namibia.
The Viscount of Oxfuird: My Lords, I thank my noble friend for his reply. Can he advise the House on how the contribution of the United Kingdom compares with that of other United Nations countries?
Lord Glenarthur: My Lords, I take it that my noble friend is concerned about the financial contributions. There are various schemes for the arrangements for UN peacekeeping. Some small UN peacekeeping operations are financed through the United Nations regular budget, to which we subscribe £ 20 million this year. Others are financed by special accounts, and the United Nations Force in Cyprus solely through voluntary contributions.
So far as concerns comparisons with others, it is a fact that many countries do not pay their dues. The Soviet Union owes 147 million dollars in respect of arrears for the United Nations Force in Lebanon, for example; and the United States owes 90 million dollars. Some 80 countries are in arrears with their peacekeeping dues.
Lord Hatch of Lusby: My Lords, will the noble Lord tell the House what is the present and projected cost of the United Kingdom contribution to the peacekeeping force in Namibia? Since the events of 1st April this year, have the Government considered whether or not that amount should be increased, and the United Nations Force in Namibia increased, in view of the tragedies which have already taken place?
Lord Glenarthur: My Lords, increasing the force would be a matter for the United Nations Secretary-General. We have made it clear that we would consider promptly and sympathetically any request by him for reinforcements. We support his plan to double the number of peace monitors in Namibia up to 1,000.
I am afraid that I do not have the specific financial figures with me, but I shall let the noble Lord know.
Lord Cledwyn of Penrhos: My Lords, in view of the fact that these peacekeeping forces play a role of the utmost importance, does the noble Lord not agree that it is deplorable that countries which are members of the United Nations do not pay their dues? Can he indicate why the Soviet Union and the United States are not paying their dues? What steps have Her Majesty's Government taken through the usual channels of the United Nations to protest and to seek to persuade these countries to pay up?
Lord Glenarthur: My Lords, I am unable to say precisely why either the Soviet Union or the United States does not pay. I know that in the United States it is a matter for some discussion as to whether the paying of its dues would be possible. I believe that it is in our interests that this matter should be taken up because certain peacekeeping operations are
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severely hit, in particular the United Nations force in Cyprus, as its finances are based solely on voluntary contributions, which have for a long time fallen short of the amount required.
Lord Mayhew: My Lords, does the noble Lord agree that in spite of the increasing value of the peacekeeping forces, the arrangements for organising them at the United Nations are thoroughly unsatisfactory, which is evident from his replies? Have the Government any proposals for improving this? For example, now that the Russians are more co-operative, have the Government considered trying to revive the military staffs committee and giving it responsibility for organising peacekeeping forces?
Lord Glenarthur: My Lords, I know of no plan to revive the military staffs committee, but I agree with the noble Lord that at a time when there are increasing demands on the United Nations, the methods of making the contributions that all countries make to peacekeeping forces around the world should be made as effective and as proper as possible.
Lord Elwyn-Jones: My Lords, is the United Nations as an organisation solvent at this moment? If not, is that not a deplorable state of affairs?
Lord Glenarthur: My Lords, I do not know the answer to that. However, I shall inquire and let the noble and learned Lord know.

Business
Lord Denham: My Lords, it may be for the convenience of the House if I announce that the Committee stage of the Electricity Bill will be adjourned at approximately 7 p.m. for approximately one hour and that: during this adjournment the Magistrates' Courts (Remands in Custody) Order 1989 will be taken.

Electricity Bill
2.54 p.m.
The Parliamentary Under-Secretary of State, Department of Energy (Baroness Hooper): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.— (Baroness Hooper.)
On Question, Motion agreed to.
House in Committee accordingly.
[THE CHAIRMAN OF COMMITTEES IN THE CHAIR.]
[Amendment No. 129A not moved.]
Lord Williams of Elvel Lord Williams of Elvel moved manuscript Amendment No. 129B: Before Clause 11, insert the following new clause:
("Licence conditions for nuclear installations.
Where a person authorised to generate electricity under section 6( 1 )(a) above proposes to do so by means of nuclear

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fission, it shall be a condition of the licence that the Secretary of State may at any time if he perceives that there is a matter affecting the safety of the public by order requisition and bring under its own control the relevant nuclear installations.")
The noble Lord said: It may be for the convenience of the Committee if I also speak to Amendments Nos. 233A to 233J inclusive. I must first apologise both to the Committee and to the noble Baroness for tabling my manuscript amendment rather late. The reasons for this were that when addressing the question of the safety of nuclear installations I tried initially to avoid a re-run in Committee of the debate that had taken place in Standing Committee in another place on the same subject. I tried to limit the amendment to the area boards, which in future will have the ability to apply for generating licences and also, we read in the press, to apply for generating licences using nuclear fission. Those reports may be right or wrong, but we read that.
When I further considered that, I moved on in my thinking to the possibility of private nuclear stations which would be outside the area boards, National Power and BNFL. In other words, it is conceivable under the new arrangements that some consortium might wish to set up a nuclear power station and would have the ability to be granted a licence and to feed the electricity into the grid. Thus confining the amendment simply to the area boards would not have been successful in achieving what I wanted.
Recently we have had a great deal of publicity about the problems associated with spent fuel from nuclear reactors. That subject has not yet been discussed in Committee here and I feel that it would be useful if we had some comment on the matter. The only solution therefore was to widen the amendment to include the whole nuclear industry. The manuscript amendment widens Amendment No. 129A and substitutes for the expression at the beginning of Amendment No. 129A,
"Where a public electricity supplier holding a licence which authorises him to generate electricity",
the expression,
"Where a person authorised to generate electricity under section 6(1)(a) above".
In other words that covers anybody who has a licence to generate electricity, whether he be a public electricity supplier or any other person. It is that amendment and the consequential amendments to Clause 92 to which I am speaking.
The question before the Committee is whether the Bill gives the public enough reassurance that public safety is, and in the future under privatisation can be, protected by the Government rather than by any arrangements that the Government might make to ensure that the various inspectorates and health and safety executives involved can make the proper rules.
Threats to public safety can arise from a number of sources. There can be an accident in a nuclear plant. We have had, alas, in the past few years a number of examples of such accidents which have been devastating in their consequences. I believe that those accidents would be covered by Clause 92, which refers to events,
"likely to disrupt electricity supplies".
It is rather difficult to imagine an accident in a nuclear plant that would not disrupt electricity supplies in one way or another. There was a debate in another place on that matter. It concentrated on what one might call the post-Chernobyl problem. There are still unanswered questions on which the noble Baroness may perhaps be able to comment about how far the Health and Safety Executive will issue regulations along the lines of regulations issued for the chemical industry after the Flixborough accident to deal with accidents of that nature.
There are also questions of how far the CEGB, even as an organisation capable of receiving directions from the Secretary of State, has succeeded in co-ordinating the various arrangements that it has for its different nuclear plants. It was argued in another place that there were some arrangements for Hinkley, there were some arrangements for Capenhurst and there were some arrangements for Chapel Cross but they were not identical. Nobody knew what was happening and the various county councils involved were perhaps inadequately organised. But these are no doubt questions to which the noble Baroness will wish to respond.
What is not covered by Clause 92 is any kind of accident that does not disrupt electricity supplies. The problems of spent fuel and radioactive waste are such issues. There is no evidence that a leak in wet storage of AGR spent fuel at Sellafield will disrupt electricity supplies. There is no evidence that discharges into the Irish Sea of radioactive material will disrupt electricity supplies. Nevertheless there is a point at which such leaks and such discharges could cause a public safety problem. It is that problem to which our amendments are directed.
We do not know much about nuclear accidents but we know that they are unpredictable. No Member of the Committee nor any expert can say where the next nuclear problem will occur. I venture to predict that if and when such an accident occurs there will inevitably be chaos and confusion, however many rehearsals of emergency operations have been carried out. I am afraid that that is a fact of life. However well prepared we are, certain things will always go wrong.
In the amendments we seek to ensure that the Government have the power, when such an accident occurs, to intervene, to take control and to say, "It is now our responsibility". That is not in consultation with the company involved, with the county councils or other people. The Government have the responsibility and the duty to take control and to issue such directions as they believe fit to make sure that the safety of the public is protected so far as that is possible.
The amendments deal with the licence. It has to be made clear that any licence for the generation of electricity must contain a provision which allows the Secretary of State to intervene if, in his perception, there is an issue affecting the safety of the public. In this case "intervention" means taking control of the installations which have caused the problem.
The amendments to Clause 92, which are grouped with Amendment No. 129B, amplify and put flesh on the bones of what is proposed should be contained

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in the licence. They do so by giving the Secretary of State power to issue directions where he perceives there to be a possibility of disruption to electricity supplies, not just in consultation with the company in question but as a matter of urgency without consultation if the Government decide that a major problem endangers the safety of the public.
It has always appeared to us on these Benches that at the end of the day, whatever arrangements are made for the ownership of the industry, the Secretary of State and the Government must be responsible for such matters. I am well aware that there is a Nuclear Installations Inspectorate. I am well aware that there is a Health and Safety Executive. I am well aware that there is now a world organisation of nuclear operators who have signed a major charter for the swapping of information. I am well aware of all that. However, I do not believe that when a dramatic incident occurs the Nuclear Installations Inspectorate, the Health and Safety Executive or any world organisation will have the powers to take the appropriate decisions to protect the safety of the public. For that reason we believe that such powers should be given to the Secretary of State. That is the thrust of these amendments. I beg to move.
Lord Renton: The noble Lord, Lord Williams, has raised a very important matter. Whether nuclear generation is carried out by a public authority or under the powers contained in the Bill by a private generator, surely it must be paramount that it is carried out safely and in a way that does not endanger the public.
In this country we have a great deal of experience in the generation of electricity by nuclear means as carried out by the Central Electricity Generating Board. I am sure that Members will agree that the board has a remarkably good record. Touch wood— we have never had a Chernobyl incident. And we do not wish to contemplate such a risk. I am sure that in passing this Bill we in Parliament should make provision for eliminating that risk so far as possible. We should enable such steps to be taken under statutory authority if, by some mischance and despite the best will in the world, a disaster should happen.
I do not believe that anyone could disagree with the broad objectives stated by the noble Lord. The question is how to carry them out. I agree that Clause 92 may be capable of being strengthened although it already contains valuable provisions. As stated in the explanatory note, the clause,
"enables the Secretary of State to give directions to persons authorised by a licence or exemption under Part I for the purpose of preserving the security of buildings used for or in connection with the generation, transmission or supply of electricity or of mitigating the effects of any civil emergency".
That is a broad term. It will enable almost any steps to be taken by the Secretary of State, or under his direction, should the worst happen.
We also find a little effective help in Clause 9, which we have already passed, although perhaps not as much as the noble Lord would wish. There, the obligations of licence holders are stated under the heading, "General duties of licence holders". So there are a certain number of provisions in the Bill
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which will achieve the agreed common purpose. However, the noble Lord, Lord Williams, suggests that as a condition of the licence,
"the Secretary of State may at any time if he perceives that there is a matter affecting the safety of the public lay order requisition and bring under its own control"—
I believe that "its" is not the right word—
"the relevant nuclear installations".
That means that the noble Lord wants the Secretary of State to run the installation after it has already proved to be a disaster. I am not sure whether that is the best way of dealing with the matter. Admittedly it would be possible, but the Department of Energy does not have the staff or the means to begin to run a nuclear power station which has broken down. Therefore, if the Secretary of State must exercise his power he could do so only by getting someone other than the person licensed to take on the job.
Although I was interested to hear the noble Lord's comments I have doubts about our legislating in this way. I should have thought that having satisfied himself that the licence holder can command the expertise needed to generate electricity through nuclear power, and has at his command the people with the knowhow and expertise to deal with any emergency that should arise, it is best to continue to fasten that responsibility upon that person rather than to call in somebody else. To my simple mind, that is how I see this important matter; but I shall be very interested to hear what my noble friend on the Front Bench has to say.
3.15 p.m.
Baroness Hooper: Perhaps I may start by referring to the very good safety record of civil nuclear installations in the United Kingdom. That very much reflects the dedication, skill and painstaking care which the many thousands of workers in the nuclear industry bring to this aspect of their job. Anybody who has had the opportunity to visit a nuclear power plant, as I have, will recognise that.
The Government believe that safety is of paramount importance throughout the energy-creating industries, whether in the hostile conditions of the North Sea, the deepest workings of a coal mine or at any of the nuclear power stations currently operating in this country. Safety procedures and regulations are rigorous and taken very seriously in this country and perhaps I may say that that is something which we discussed in your Lordships' Chamber during the passage of the Atomic Energy Act. That is also a topic which had a high priority in the discussions in which I participated at a meeting of the governing board of the International Energy Agency last week. I should like to quote from the final communiqué which pledged Ministers to pursue in their respective energy policies a number of objectives including:
"where national decisions so contemplate the use of nuclear power, this will be facilitated by demonstrating that safety both in operation and in waste disposal has already been and will in the future be maintained and further improved".
That is a commitment taken on by the Government.
The Government have taken action to ensure that the highest standards of safety can be seen to be enforced in the nuclear industry. For nearly 30 years

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the Nuclear Installations Inspectorate— a body wholly independent of the nuclear industry and now forming part of the Health and Safety Executive— has acted as the essential watchdog of the nuclear operator safety standards. Over the past two years that body has been substantially strengthened with its staff levels increased by over 30 per cent. and futher expansion is planned. The Nil has extensive powers. Its inspectors can require the operators to make improvements to the design or operation of a station if that is required in their view to ensure an appropriately high standard of safety. If necessary, they can require a station to be closed down until matters are to their satisfaction.
I believe that it is also important to remember that the operating companies therefore have a direct financial interest in maintaining the highest safety standards. After all, if generation has to be stopped for a time because of an accident or breach of safety rules, the generating company will suffer the resultant loss of revenue.
Of course, nuclear safety has been particularly in our minds since the Chernobyl accident some three years ago, to which the noble Lord, Lord Williams, referred. Nobody doubts the seriousness of that accident which taught us and the rest of the world invaluable lessons. However, neither the design weaknesses in the Chernobyl reactor nor the deliberate failures by station staff to observe prescribed safety procedures would have been tolerated here. Perhaps I may say that if that is an example of a nuclear power station operating in the public sector, then that is not an argument that can be used against the private sector operation of this industry.
All that describes the system now. What is important is not who owns the industry, but the strength of the regulatory framework to protect employees, consumers and the public; and privatisation will not affect that. The powers of the NII will be quite unaffected, and I have no doubt that it and the industry staff will continue to act in the responsible and effective way in which they have done in the past. I do not believe that the circumstances envisaged in the amendment would therefore arise. Before the Secretary of State or anyone else could perceive that there was a matter affecting the safety of the public, the NII would have acted to prevent that.
If there is a national emergency or natural disaster then that is where we come to Clause 92, as the noble Lord, Lord Williams, pointed out. The power in Clause 92 to give directions is aimed at fulfilling two specific objectives: maintaining the physical security of electricity installations, and planning for civil emergencies such as severe weather conditions or natural disasters. It does not cover civil defence planning because adequate powers already exist under the Civil Defence Act 1939, and those are being applied by the Bill to the privatised industry.
Nor does it cover measures which would need to be taken in the event of an actual civil emergency since adequate powers exist under the Energy Act 1976. It is not intended under those powers to deal
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with measures which may be required in the unlikely event of a nuclear accident. Nuclear emergency plans are provided for under licence conditions imposed on nuclear site operators under the Nuclear Installations Act 1965. Additionally, it has recently been announced that new health and safety executive regulations will place a formal requirement on local authorities to prepare integrated off-site plans for nuclear installations.
Discharges of radioactivity into the environment are subject to authorisations issued by authorising departments; and for Sellafield, to which the noble Lord, Lord Williams, referred, those are the Department of the Environment and the Ministery of Agriculture, Fisheries and Food. Those arrangements are not affected by privatisation.
It is important that action required in the unlikely event of a nuclear accident be taken expeditiously and effectively. My noble friend Lord Renton is right to say that the expertise to deal with the situation is not in fact in Whitehall, but in the local organisations; in particular, the police and emergency services and indeed in the Nuclear Installations Inspectorate.
The electricity supply industry at present co-operates fully with the Government on civil emergency planning and the physical security of electricity installations. We anticipate that that co-operation will continue after privatisation; but the power to give directions contained in Clause 92 will enable the Secretary of State to ensure that.
This is an important subject, and I hope that what I have said will have reassured those Members of the Committee who have anxieties that the amendments proposed are not necessary. I could deal in detail with each of the Amendments Nos. 333A to 333J, but since the noble Lord, Lord Williams, did not do so, I shall restrain myself to the general remarks which I have made in relation to these amendments.
Returning to Amendment No. 129B, that would place any Secretary of State in an impossible position. For example, if he seizes the assets of private individuals, what about compensation, and what would it achieve if he did so? As I said, the same statutes and regulations would apply to the stations whether in the public or private sector. The same regulatory authorities would be responsible for enforcing the same strict rules.
I am at a loss to see the benefit of this amendment. As my noble friend Lord Renton said, the Secretary of State does not have expertise in the day to day management of nuclear power stations and would be wholly dependent on the staff of the existing operators. Therefore, I ask the Committee to consider the fact that the amendment is neither necessary nor would it bring any useful benefits.
Viscount Hanworth: The safety of nuclear installations, whether generating or otherwise, is a real worry to the public and I do not think the Minister has satisfied us. Clause 92 is not sufficient. The Government have taken very far-ranging powers in this Bill, so why cannot they take this long stop amendment? It might never be needed because the existing powers might be sufficient, but they should have it nevertheless.
Lord Renton: Perhaps the noble Lord would be so good as to answer this point. If the Secretary of State is to bring this matter under his own control, whom does he expect to do the work, bearing in mind that his own department consists of civil servant officials who do not have the experience and expertise, or indeed the knowledge, to deal with these highly technical matters?
Lord Williams of Elvel: Perhaps I may reserve my response to the point made by the noble Lord, Lord Renton, for when I wind up on the amendment.
The Earl of Lauderdale: One point has occurred to me in listening to my noble friend the Minister. She said that everything is all right and issued a communiqué assuring us that everything will be all right. The fact is, as the noble Viscount, Lord Hanworth, said, that there is growing anxiety within the public— reasonable or unreasonable is of no matter— about accidents relating to energy of all sorts. The Piper Alpha affair is the most recent case which aroused horror and stirred everyone's imagination.
The point that bothers me in my noble friend's reply is that it appeared to be a stalling reply to say that everything is all right so far, and that the NII is quite sufficient. The fact is that the NII, and the apparatus that exists at present, was conceived for nuclear installations under state control. It is now proposed that the nuclear installations should not be under state control. That is the critical difference. That is what worries people, and that is what worries me. I cannot say that I am satisfied with my noble friend's answer in this regard. She has not spelt out, as I think we need to have it spelt out, that the NII does have the right powers and procedures to deal with, in effect, private enterprise nuclear power stations.
Rather than press this matter now, perhaps my noble friend the Minister will be willing to have another look at the amendment and come back at the next stage of the Bill.
Baroness Hooper: Perhaps I may respond to my noble friend and reiterate what I said earlier. Over the past two years, in response to the anxieties that have been expressed as a direct result of the Chernobyl accident, the NII has been substantially strengthened and its staff levels increased by over 30 per cent. I also said that further expansion is planned. Whether the NII is directing its attention to the public sector or to the private sector is neither here nor there. It will still impose its standards in the same rigorous way. The inspectors will still be able to require operators, whether in the public or the private sector, to make improvements to the design or operation of a station if that is required. As I said, if necessary the inspectors can require a station to be closed down. I do not know what further action my noble friend thinks is possible.
Lord Williams of Elvel: I am grateful to the noble Baroness for giving her response to this series of amendments; and the noble Lord, Lord Renton, was as always, very perspicacious, if I may be impertinent
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in saying so, in putting his finger on the essential point; as indeed was the noble Earl, Lord Lauderdale.
The essential points are these. Who is to own the nuclear plant in question? That point was made by the noble Earl, Lord Lauderdale. Until now we have the CEGB, which is a public body, which can be directed by the Secretary of State; whatever his legitimate purpose is, the Secretary of State decides. When the industry is privatised, that power of direction, other than in Clause 92, will no longer exist.
The next question is whether the Department of Energy or any public body— the Secretary of State or otherwise— has the expertise. I believe that the noble Baroness responded to that particular point by saying that it is in the interests of the licence holder to make sure that the station, or whatever installation it may be, operates to its proper capacity and proper safety as soon as possible— it is to be hoped, immediately after an accident has occurred. That must therefore lead to the conclusion that any licence holder in his senses will co-operate with the Government authorities as the CEGB now co-operates with the county councils, the police, the ambulance services and everyone else. Therefore, I do not believe that we will need armies of civil servants trained to operate nuclear power stations in order to implement my amendments. The noble Baroness answered that question perfectly well.
This goes back to the problem raised by the noble Earl, Lord Lauderdale. We have always had a very good safety record, and I join the noble Baroness in paying tribute to those people within the electricity authorities who have maintained that safety record. We have a system, which the noble Baroness properly described, where the NII lays down the rules and can enforce those rules. That will continue after privatisation. However, the area boards who may in the future be licensed to generate electricity will be owned by we know not who after 1995 when the special share lapses. National Power. which will have the main licence to generate electricity by nuclear fission, will be owned by we know not who if the Secretary of State decides to ask for the redemption of the special share, which he is entitled to do at any moment after privatisation.
BNFL is a plc, owned by the Government admittedly; but the Government have no powers to direct because the Government cannot direct a plc other than through legislation specifically for that purpose. UK NIREX, which is responsible for the disposal of intermediate and low-level radioactive waste, is half owned by the CEGB and the South of Scotland Electricity Board and hence will be half privatised when these two bodies are privatised. Therefore, if there is any sort of accident a great chunk of the nuclear industry will be; in hands whose interests are not necessarily those of the body politic at large.
Are the Government to play no other role than simply saying that there is an inspectorate which sets the rules? Will the Government then be a passive bystander if there is a major accident? Will the Government restrict themselves to the power of intervention, as in Clause 92, only after consultation

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with the company— not as of right, but after consultation with the company? Even then, will Parliament not see the direction that the Secretary of State issues if it would be— again I quote from Clause 92—
"against… the commercial interests of any person"?
Is that the way we are to handle nuclear emergencies? How seriously will the Government take their responsibilities? What these amendments propose is a firm and clear understanding that the Government have an absolute right to take over any installation in order to protect the safety of the public. That is the duty of the Government. These amendments are designed to ensure that they are both able and willing to fulfil that duty.
Lord Renton: Before the noble Lord sits down, I wonder whether he will answer the question which I put to the noble Viscount, Lord Hanworth, and which is fundamental to his amendment. I refer to the amendment which states:
"…the Secretary of State may … if he perceives that there is a matter affecting the safety of the public by order requisition"—
that means actually to possess—
"and bring under"—
it is meant to be "his"—
"own control the relevant nuclear installations".
How is he going to do that himself or through his department when neither he nor the department has the means to do so? They have neither the trained staff nor the expertise. Who is going to do it?
Lord Williams of Elvel: I can answer the noble Lord very easily. First, I agree with the noble Baroness that any licence holder will co-operate. Secondly, the thrust of the amendments to Clause 92 will actually allow the Secretary of State to make such direction as he feels fit. He can direct the licence holder to co-operate, and that is the point of the amendments.
3.31 p.m.
On Question, Whether the said amendment (No. 129B) shall be agreed to?
Their Lordships divided: Contents, 112; Not-Contents, 104.

DIVISION NO. 1

CONTENTS

Addington, L.

Carter, L.

Airedale, L.

Chandos, V.

Allen of Abbeydale, L.

Cledwyn of Penrhos, L.

Amherst, E.

Cocks of Hartcliffe, L.

Ardwick, L.

Dainton, L.

Attlee, E.

David, B.

Aylestone, L.

Davies of Penrhys, L.

Birk, B.

Dean of Beswick, L.

Bottomley, L.

Denington, B.

Brain, L.

Donaldson of Kingsbridge, L.

Bramall, L.

Dormand of Easington, L.

Briginshaw, L.

Elwyn-Jones, L.

Bruce of Donington, L.

Ewart-Biggs, B.

Burton of Coventry, B.

Falkender, B.

Callaghan of Cardiff, L.

Falkland, V.

Carmichael of Kelvingrove, L.

Fisher of Rednal, B.

Flowers, L.

600

Foot, L.

Northfield, L.

Gallacher, L.

Ogmore, L.

Galpern, L.

Peston, L.

Gladwyn, L.

Phillips, B.

Graham of Edmonton, L.

Pitt of Hampstead, L.

Gregson, L.

Ponsonby of Shulbrede, L. [Teller.]

Grey, E.

Grimond, L.

Porritt, L.

Halsbury, E.

Prys-Davies, L.

Hanworth, V.

Rathcreedan, L.

Harris of Greenwich, L.

Reilly, L.

Hatch of Lusby, L.

Ritchie of Dundee, L.

Houghton of Sowerby, L.

Rochester, L.

Howie of Troon, L.

Sainsbury, L.

Hughes, L.

Saint Brides, L.

Irving of Dartford, L.

Saltoun of Abernethy, Ly.

Jacques, L.

Scanlon, L.

Jay, L.

Seear, B.

Jeger, B.

Seebohm, L.

Jenkins of Putney, L.

Sefton of Garston, L.

John-Mackie, L.

Serota, B.

Kilmarnock, L.

Shackleton, L.

Kinloss, Ly.

Shepherd, L.

Kirkhill, L.

Soper, L.

Leatherland, L.

Stallard, L.

Listowel, E.

Stedman, B.

Lloyd of Kilgerran, L.

Stoddart of Swindon, L.

Lockwood, B.

Strabolgi, L.

Lovell-Davis, L.

Taylor of Blackburn, L.

Macaulay of Bragar, L.

Taylor of Gryfe, L.

McCarthy, L.

Taylor of Mansfield, L.

McIntosh of Haringey, L.

Tordoff, L. [Teller.]

McNair, L.

Turner of Camden, B.

Mason of Barnsley, L.

Underhill L.

Mayhew, L.

Wallace of Coslany, L.

Mishcon, L.

Walston, L.

Molloy, L.

White, B.

Monson, L.

Williams of Elvel, L.

Murray of Epping Forest, L

Wilson of Langside, L.

Nicol, B.

Wilson of Rievaulx, L.

NOT-CONTENTS

Alexander of Tunis, E.

Hailsham of Saint Marylebone, L.

Allerton, L.

Arran, E.

Harmar-Nicholls, L.

Balfour, E.

Henley, L.

Beaverbrook, L.

Hesketh, L.

Belhaven and Stenton, L.

Hives, L.

Birdwood, L.

Holderness, L.

Blyth, L.

Hood, V.

Borthwick, L.

Hooper, B.

Boyd-Carpenter, L.

Hylton-Foster, B.

Brougham and Vaux, L.

Ironside, L.

Butterworth, L.

Johnston of Rockport, L.

Caithness, E.

Kimball, L.

Campbell of Alloway, L.

Kinnoull, E.

Campbell of Croy, L.

Long, V.

Carnock, L.

Lovat, L.

Carver, L.

Lyell, L.

Constantine of Stanmore, L.

McAlpine of Moffat, L.

Cottesloe, L.

McFadzean, L.

Dacre of Glanton, L.

Mackay of Clashfern, L

Davidson, V. [Teller.]

Malmesbury, E.

De Freyne, L.

Margadale, L.

Denham, L. [Teller.]

Merrivale, L.

Dormer, L.

Mersey, V.

Dudley, B.

Middleton, L.

Dundee, E.

Monteagle of Brandon, L.

Effingham, E.

Munster, E.

Elibank, L.

Murton of Lindisfarne, L.

Ellenborough, L.

Napier and Ettrick, L.

Elliot of Harwood, B.

Nelson, E.

Elliott of Morpeth, L.

Nelson of Stafford, L.

Erne, E.

Norrie, L.

Erroll of Hale, L.

Northesk, E.

Foley, L.

Nugent of Guildford, L.

Fraser of Kilmorack, L.

Onslow, E.

Gardner of Parkes, B.

Orkney, E.

Glenarthur, L.

Oxfuird, V.

Gray of Contin, L.

Pender, L.

Grimthorpe, L.

Penrhyn, L.

601

Platt of Writtle, B.

Somers, L.

Plummer of St. Marylebone. L.

Stanley of Alderley, L.

Strathcarron, L.

Portland, D.

Strathclyde, L.

Portsmouth, E.

Strathspey, L.

Pym, L.

Sudeley, L.

Reigate, L.

Swansea, L.

Renton, L.

Terrington, L.

Rippon of Hexham, L.

Thomas of Gwydir, L.

St. Davids, V.

Trumpington, B.

Sanderson of Bowden, L.

Vaux of Harrowden, L.

Sharpies, B.

Westbury, L.

Skelmersdale, L.

Windlesham, L.

Slim, V.

Wise, L.

Resolved in the affirmative, and amendment agreed to accordingly.
3.40 p.m.
Clause 11 [Modification by Agreement]:
Lord Peston Lord Peston moved Amendment No. 130:
Page 8, line 47, at end insert—
("(2A) In the case of any such objections which are made and not withdrawn, the Secretary of State shall cause an inquiry to be held under the provisions of section 59 of this Act.").
The noble Lord said: Amendment No. 130 is the first of several amendments that deal with the modification of licences. Under Clause 11 we are discussing where the director proposes to modify the licence and where the holder of the licence consents to the modification being made. The question arises as to how we ought to proceed in dealing with such modifications which obviously will be necessary on occasions.
Subsection (2) starts off extremely sensibly. It refers to the director giving notice of what he is proposing to do and stating the reasons. Paragraph (c) refers to representations. Should we read the clause to mean that the director general should regard himself as being obliged to seek representations, or is the clause passive in the sense that the director general is simply obliged to wait and see if any representations occur? More generally, as on some of these matters of changing licences issues of broad public interest may arise, we felt that we ought to press the point that Clause 59 refers to the possibility of public inquiries into relevant matters. Do the Government agree that in certain matters to do with modification of licences a public inquiry may well be relevant?
My third point is a little technical but is not far-fetched. Objections to matters relating to the award of a licence may have occurred earlier than the award of the licence. These may have been unresolved. The director general may have gone ahead and awarded the licence without resolving those objections. Under this heading we ought at least to be considering whether those unresolved objections are meant to be and could be incorporated into these modifications. It has been drawn to my attention, although I hasten to add that I do not wish to open up this subject again in its entirety, that environmental aspects to the awarding of licences may have been left unresolved. These might cause the director general at least to modify what he is doing with the licence.
My final point is for information and is not one of criticism. When the director general announces that he is considering modification of the licence and gives reasons, will the representations that are then to be allowed be confined to the modifications that he is putting forward at that point, or can representations be made on broader issues at the moment the director general has opened up the licence? I raise these matters under this heading. I argued on an earlier occasion in Committee that the licences are so important that they require full exploration in all their dimensions. Modification is clearly a matter of importance. This is the easiest part of modification because it is modification where the licensee consents to what is happening. There are more complicated aspects of this to come. I look forward to hearing the noble Baroness's answers on these points.
Lord Renton: Has the noble Lord considered whether it is right to compel the Secretary of State to hold an inquiry, bearing in mind that some of the objections may relate to very minor matters or may be trivial or even frivolous?
Lord Peston: With the permission of the Committee, this is always a difficult matter. On the occasions when I had experience of government I was always in favour of governing and was much less on the side of those who wished to object to governing and who wanted to be consulted and so on. It is easy to argue— and psychologically I tend to be on that side— that those who object are being trivial, frivolous and so on. In my experience of these matters, the people who object and wish to make representations take great offence if it is suggested that what to one person may seem a minor matter is actually minor, trivial or frivolous.
The noble Lord makes a not irrelevant point and it is relevant elsewhere in the Bill in considering representations. It is a matter of balance. When I sit on this side of the Chamber perhaps I am rather more in favour of representations and objections than I would be if I were sitting on the government side trying to move things ahead. I well understand the tensions that arise. As someone who naturally wants to go ahead with things, I have to lean over backwards not to argue that those who object are being frivolous. That is the best answer I can possibly give.
Lord Harmar-Nicholls: The noble Lord was vague on another part of my noble friend's question. He seemed to indicate that the director general ought to ask for representations to be made if someone genuinely thought that there was something to make representations about. Is he in favour— I hope that he is not, but if he is I trust that my noble friend will not agree to it— of encouraging the authorities to ask for people to make representations against a point that is put forward in all good faith in the first place?
Lord Peston: With the Committee's permission, perhaps I may clarify that point. Again I tend to sit on the fence a little. I clearly do not believe in encouraging frivolous or trivial objections. When I

603
said that the director general should go out of his way to get representations, I wanted to ensure that the views of relevant bodies such as consumer bodies and one or two of the more serious environmental groups were sought. I am certain that the noble Lord would then say that those are the kind of bodies that one does not need to seek out because they will seek out the director general. Perhaps there is very little between us on this matter. I am not one to encourage the waste of time in important areas. We are discussing the serious matter of the supply of electricity. It is a matter of getting the balance right.
Baroness Hooper: I believe that at an earlier stage in the Committee's discussions we touched on the question of whether the director general has or should have the power to vary or revoke a licence. This point arose on Amendment No. 70. Clause 11 enables the director to modify the conditions of a licence only if the licensee consents. The director is obliged under the clause to publish notice of his proposals and to allow a period for representations and objections. That is his duty in bringing the matter to the attention of the public or persons likely to be affected. He then waits, but I do not regard that as being a passive way of carrying the matter forward.
The procedure as set out in Clause 11 will enable a sensible outcome to be negotiated without undue procedural fuss and, hopefully, with the minimum of red tape. I believe that the amendment before us would in fact introduce a bureaucratic and wholly unnecessary tier of complication.
In any event, if the director cannot modify a licence by agreement, he may make a reference to the Monopolies and Mergers Commission. He may of course do so in any case. We see this as the appropriate vehicle for inquiring into licence modifications from the public interest point of view, rather than by the holding of separate public inquiries. The procedures as outlined in Clause 11 are well-precedented and have worked well in other privatisations.
The noble Lord, Lord Peston, asked one or two specific questions about whether public inquiries under Clause 59 are relevant to Clause 11. The answer is no; it is for the director to consider any objections or representations made. Further, the representations under Clause 11 should be specific in relation to the matter which has been published by the director. However, it almost goes without saying that anyone can make general representations about anything at any time.
The noble Lord also asked about the kind of matter which may be involved. He referred to the possibility of environmental matters being put under this heading. I should like to give him an example of where we would not want any change and therefore the involvement of the Secretary of State is necessary. That would occur, for example, where a licence condition requires the setting up of consultation machinery on safety,.
We believe that the Secretary of State should have an involvement in that type of situation. After all, it is the Secretary of State who is involved in issuing
604
the initial licences, which, as Members of the Committee will know, are currently available in draft form and have been since the beginning of January. They have been the subject of considerable consultation and anyone can make representations on the licences in general. Therefore by vesting day they will have been in the public domain for 12 months. We believe that great care is being taken but that Clause 11 is necessary in case anything in the light of experience requires a change. In view of those remarks, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Peston: I thank the noble Baroness for her answer. As she knows, I devote all my spare time to reading the draft licence documents and cannot wait for more to appear. However, perhaps I may ask her to clarify one part of her answer which I think I understood. Did she in fact say that the representations would be limited to the precise licence modifications that the director general is discussing and that it would not be— this relates to earlier interventions— an invitation to general representations on the behaviour of the licence holder in toto? I think that she said that it would be specific but I should like to have that point clarified.
Baroness Hooper: I shall be delighted to try to clarify the point further. Certainly the representations and objections considered would be in relation to the specific modification, although, as I continued to say, no one can stop a person from making general representations if he or she wishes to do so.
Lord Peston: I fully understand that explanation for which I thank the noble Baroness. Accordingly, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Peyton of Yeovil Lord Peyton of Yeovil moved Amendment No. 131:
Page 9, line 8, leave out from ("State") to end of line 10.
The noble Lord said: It is my belief that the question of the relationship between the Secretary of State and the director will be of great importance in the newly formed supply industry. I think that it could be a source of real difficulty. Therefore I hope that the Government will have second thoughts as to what the arrangements should be.
As regards the director general, we are told that this almost supreme being has been identified but as yet the terms and conditions of his employment remain a subject of difficulty. We long to hear further news as to who this person will be and I hope that my noble friend will be able to help us on the matter. However, whoever the appointed person turns out to be, he will need to be in very close touch with the Secretary of State and he will need all the authority that he can muster. Therefore he will wish to avoid, so far as is possible, the harassment which would arise from a public difference of opinion with the Secretary of State.
I cannot help feeling that even in what is likely to be a very difficult area of public affairs the relationship between the director general and the

605
Secretary of State will be a fairly close one. Therefore I cannot believe that it will be helped along by the Secretary of State having formal power to give directions to someone who in essence reports to him and who he has appointed or who will in due course be appointed. I hope that the Government will look at this point, because I am sure, as I said at the beginning of my remarks, and I have no intention of dwelling for too long on the subject, that this relationship is one which will be of great importance. I am equally certain that the Government may well be setting a snare for themselves by giving the Secretary of State such powers.
Baroness Hooper: Perhaps I may begin by saying how sorry I am that, despite the interest which my noble friend Lord Peyton has shown as regards the appointment of the Director General of Electricity Supply, he seems to have missed the announcement which was made on 22nd May. The appointment, subject to Parliament's approval of the Electricity Bill, has in fact been made. Professor Stephen Littlechild is the designated director general. I can of course arrange for my noble friend to receive a copy of the press release, which goes into considerably more detail.
I turn now to the points raised by my noble friend Lord Peyton by way of this amendment. It appears that he is content for subsection (4) of Clause 11, which requires the director to send a copy of a notice under subsection (2) to the Secretary of State, to continue. However, he does not wish the Secretary of State to have any further say in the matter. I should perhaps reassure my noble friend that we see it as highly unlikely that the Secretary of State would ever wish to block a licence modification which the director may seek to make. For that matter, it is also highly unlikely that the director would wish to make a licence modification that the Secretary of State might wish to block. The idea of a public confrontation, as described by my noble friend, would be a consideration here.
However, we feel that it is necessary to provide some sort of flexibility to deal with any eventuality where there could be good and valid reasons not to change, or not to change in a particular way, a licence modification suggested by the director. We believe that it is important that the Secretary of State should be free to act in that way for some of the reasons that I gave in relation to the previous amendment. Whether he uses his power under subsection (4) will of course depend upon the circumstances. I hope that it is appreciated that the Secretary of State should have discretion to judge when action may be necessary in that respect. I hope that my noble friend will feel able not to press his amendment.
4 p.m.
Lord Lloyd of Kilgerran: I support the amendment, without unduly prolonging the debate, for three reasons. First, from these Benches we always like to see the powers of the Secretary of State, as a general matter, reduced or limited wherever possible. This is an example of where the Secretary of State's powers seem to be unnecessary.
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My second reason is the general one that the amendment will shorten the Bill by two and a half lines. To shorten any Bill by that amount is always acceptable.
The third and main reason, as the Minister said, is that we do not want a confrontation between the Secretary of State and the director. As the noble Lord, Lord Peyton of Yeovil, said, the director and the Secretary of State will be in close association and both will know what is going on. It is therefore unnecessary to have those words in the clause. The Minister said that we want to avoid confrontation between the director and the Secretary of State. In normal circumstances there would be no confrontation. The amendment should be supported.
Lord Peston: I rise partly for clarification again. Am I right in believing that we are dealing with Amendments Nos. 131 and 132? My groupings say that we are, but, if so, I did not hear the Minister's reply to Amendment No. 132. I believe I heard the Minister say that she would send the press release about the appointment to the noble Lord, Lord Peyton. My second question is; will she send me a copy of the press release? I was aware of the appointment but I should like to know more of the details.
I come to my third question. The Minister said that theoretically she could see a role for the Secretary of State here. On other occasions when we have discussed these matters, as on the previous amendment, she was able to give an example. I should be interested to know in what circumstances the noble Baroness considers— following upon what the noble Lord, Lord Peyton, said— the Secretary of State would overrule the director on an agreed modification of the licence. I would find the overruling odd. If the department has thought it through, I should like to know the kind of case that it has in mind.
Lord Harmar-Nicholls: My noble friend Lord Peyton has a point. As it stands, it looks as though the Government expect that there will be differences of view between the Secretary of State and the director. It would be better to have it made clear that we expect the director's authority to be real and that the Secretary of State would not want unnecessarily to intervene. As it stands, the wording makes it look as though we expect the opposite to happen. I do not believe that that is good.
Baroness Hooper: It would clarify the position if we were to deal with Amendments Nos. 131 and 132 together. I understood my noble friend to be speaking only to Amendment No. 131; so I responded in the light of that. It is important to bear in mind that although he takes away the Secretary of State's power to block in Amendment No. 131, my noble friend then gives the power of referral to the Secretary of State in Amendment No. 132.
Lord Peston: If the Minister will forgive me, I intervened precisely to distinguish what happens in Clause 12 from what happens in Clause 11. When

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we get around to discussing the amendment tabled by the noble Lord, Lord Peyton, to Clause 12, the Minister will find that there are other arguments which need to be developed. It is precisely to what the noble Lords, Lord Peyton, Lord Lloyd and Lord Harmar-Nicholls, said on Clause 11(4) that one seeks an answer. I was not party to the groupings. I do not see that Amendment No. 132 goes with Amendment No. 131. It is a different debate, as we shall see in a moment. I should like to know what the Government have in mind as to what might happen under subsection (4).
Lord Peyton of Yeovil: Perhaps I may help the Committee. I failed to refer to Amendment No. 132. It covers a different point from that covered by Amendment No. 131.I hope that we might deal with it without prolonging the discussion.
Baroness Hooper: If the Committee so wishes, I am happy to stick to Amendment No. 131 and to respond to the questions asked about where it is envisaged that the power would be used and why we therefore believe that it is necessary. Although the Secretary of State and the director are subject to the same duties under Clause 3, the Secretary of State will nevertheless always have his perception of the requirements of the wider national interest. That may lead him to form a view different from that of the director, although, as I said in my initial response, I believe that that is highly unlikely.
Examples of licence conditions which the Government would not wish to see changed but which might be subject to agreement between the director general and the licensee could include, for example, those on the health and safety of employees, on special services for the elderly and disabled, or on fuel security. We believe that it is important that the Secretary of State should be able to ensure that such provisions are maintained in a particular form.
Lord Peyton of Yeovil: Perhaps I may apologise to my noble friend. Somehow or another I missed the important announcement of who is to be the Director General of Electricity Supply. My only excuse is that I was out of the country at the time. I had confidently expected that when the Government were able to identify a person of such tremendous stature and heroic character, he or she would be welcomed with a blaze of publicity. I regard it as somewhat unfortunate that that noble person was not greeted with the enthusiasm and wonder as I do not doubt his character deserves.
In replying to the amendment, my noble friend used the words "highly unlikely" in describing when the power would be used. They are words which cause me a hostile vibration. When Ministers say that it is highly unlikely that a power will ever be used in justifying a power they are putting into a Bill, I believe that they should think again and not grab at it. Piling up powers which Ministers say they will not use always seems to me dangerous.
Perhaps I may prevail upon my noble friend, without any commitment at all, to take another look
608
at the matter and to see whether there is something in what has been said in Committee today which merits further study.
Lord Dean of Beswick: Part of the debate seems to centre around the appointment of this almighty person with all the virtues to carry out a very difficult job. I managed to read of the appointment myself last week but it was certainly not made in the form of a general announcement in a public sense. Even people over here may well have missed it. However, if the Government are not careful there is a danger that they will be accused of being more than a little discourteous on the subject. It was only the previous week that Members of all sections of your Lordships' House, even government supporters, were asking who the person was. It seems strange that the Government waited until both Houses were in recess before the announcement was made. I should have thought that it might have been better for the Government to have waited a few days for it to be announced in your Lordships' Chamber so that people with a vital interest in the Bill, who have sat here through long hours and who will certainly sit through even more before the Bill goes on the statute book, would have been the first to know and would not have had to pick it up generally.
Baroness Hooper: On that latter point, I should say to Members of the Committee that the information was released in answer to a parliamentary Question and appeared in Hansard. It was a parliamentary Question tabled in another place.
Lord Dean of Beswick: I am grateful to the noble Baroness for giving way. The Written Question was made available almost as both Houses went to sleep for the Whit week break. I know that that has happened in the past with successive governments of both colours. However, I do not believe that it is the best and most courteous way of conducting business, when people have been pressing in your Lordships' House for an answer, for that answer to arrive by what appears to to have been the sleight of hand, which is over-used, of a Written Question by a government supporter.
Baroness Hooper: I apologise to anybody who feels that the announcement was in any way attempted in an underhand manner. I believe that it was made through the normal parliamentary method. The anouncement was made on 22nd May. If I have it right, that was the Monday of the week before the recess began, so it was in the public domain before both Houses, as it were, went to sleep.
In relation to Amendment No. 131, as I have tried to explain we see the provision very much as a fallback position to cover the kinds of matters which I believe are extremely important. We feel that the Secretary of State should have some right in protecting people as regards health and safety and also in respect of special services for the elderly, the disabled and so on.
As I have tried to point out, the whole question of the relationship between the Secretary of State and the director general is one of checks and balances. My

609
noble friend Lord Peyton has tabled a series of amendments which refer to many aspects of the relationship. I fear that if we were to agree to the amendment, far from simply reducing the Bill by two-and-a-half lines, as was suggested by the noble Lord, Lord Lloyd of Kilgerran, it might add quite considerably to the Bill through the various other repercussions that might be involved.
However, I do not wish to be unreasonable. Of course I shall look at the arguments that have been put forward, but without commitment and subject to the very real problem of having the delicately balanced relationship seen in other privatisations. In many ways we are building on the experience gained from other privatisations where this type of provision has operated. It seems only right and reasonable that it should do so in this case. Nevertheless, I agree to look at the arguments.
Lord Peston: Perhaps I may intervene yet again. One is delighted to hear that the noble Baroness will think about the amendment again. I am bound to say that one reason why I hope that she will do so and why she might well consider following the line indicated by the noble Lord, Lord Peyton, is that her examples have exactly the opposite effect in my mind to what she intended. I find it inconceivable that a director, appropriately appointed— even one as committed to privatisation and biased as this particular person— should not take those matters into account at all times.
The idea that we might find ourselves with a director who did not look at matters such as health and safety at all times I find impossible to believe. I take it that that is what the noble Lord, Lord Peyton, is saying. It is precisely because one cannot come up with an example of where the director would differ from the Secretary of State— I am glad like others to hear that the noble Baroness is thinking about this again— that I see no reason not to accept what the noble Lord has said.
Lord Peyton of Yeovil: It would be churlish in the extreme if I did not say to my noble friend that I greatly appreciate her courtesy in undertaking, albeit without commitment, to look at the point raised which has had some support from both sides of the Committee. I am grateful to my noble friend. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 11 agreed to.
4.15 p.m.
Clause 12 [Modification references to Monopolies Commission]:
Lord Peyton of Yeovil Lord Peyton of Yeovil moved Amendment No. 132:
Page 9, line, 11, leave out ("Director may") and insert ("Secretary of State may on the advice of the Director").
The noble Lord said: I can make this point very briefly. Clause 12 gives the director power to make a reference to the Monopolies and Mergers Commission. I wish to make clear at the start that I myself do not share the opinion that the Monopolies
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and Mergers Commission is a body possessed of so much acumen and wisdom that it never errs. I believe that it very frequently errs. Therefore I do not think that it can be relied upon in this or any other context to produce perfect, unchallengeable and always reliable and sensible answers.
However, in my view it has always been a matter for Ministers to make such references. I wish to know from my noble friend— I am seeking information— in what other statutes powers are given to people other than Ministers to refer questions such as this to the Monopolies and Mergers Commission. I believe that it is a matter which should very much reside with Ministers. Even though precedents may have been set elsewhere, of which I am unaware, I do not believe that this power is one which should be handed out at all freely to others. The Monopolies and Mergers Commission can be an extremely disturbing element in anyone's existence. I hope that there will not be too many occasions when the commission's assistance and advice will be called upon within this industry. I am very hopeful that, on second thoughts, my noble friend may decide that the power should be reserved to the Secretary of State and not be given to the director.
Lord Lloyd of Kilgerran: I wish to support what the noble Lord has just said in support of his amendment. I wish to make a confession. In the course of my own experience, I always thought that the power to refer matters to the Monopolies and Mergers Commission rested with Ministers and not with any employee of the Government. The director would be such an employee. I should be glad to know of any instances where such directions have been made by employees rather than Ministers.
Lord Harmar-Nicholls: I agree with the words of my noble friend, as he expressed them in moving the amendment, rather more than with the words of the amendment itself. I agree absolutely with my noble friend that the decision to refer a matter to the Monopolies and Mergers Commission should rest with the Secretary of State. The amendment states that,
"the Secretary of State may on the advice of the Director"
make references to the Monopolies and Mergers Commission. Those words give a power to the director that he should not have as regards whether the Monopolies and Mergers Commission should examine certain matters. I would accept wording which stated, "The Secretary of State after consulting the director may advise". Such wording would leave the matter more in the hands of the Secretary of State without even sharing the responsibility with the director.
However, I hope that my noble friend who is to reply will accept the general argument of my noble friend as regards preserving the power to refer certain matters to the Monopolies and Mergers Commission in the hands of the Secretary of State rather than placing it in the hands of someone else.
Baroness Hooper: I am afraid that I am unable to satisfy my noble friend Lord Harmar-Nicholls on

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that last point. First of all, we believe that the proposed amendment would upset the careful balance of powers— I referred to this on the previous amendment— which has been developed as regards the relationship between the director and the Secretary of State throughout the Bill.
I believe it is right and wholly appropriate for the director to be the person who is responsible for referring the question of whether conditions in a licence should be modified to the Monopolies and Mergers Commission. That follows his role under Clause 11 where it is the director who may have tried to agree procedure for licence modification by agreement, but the licence holder has not given his consent to the proposed modification. Or indeed it may be that as a result of representations made to the director in the course of the procedures envisaged under Clause 11, he decides that he will in any event refer the matter to the Monopolies and Mergers Commission. This clause therefore enables him to take the matter a step further, if he so wishes, by referring the matter to the Monopolies and Mergers Commission. The clause expressly exists to deal with those cases where the director has been unable to reach agreement on licence modifications with the licensee under Clause 11.
However, I can give some good news to my noble friends. The provision in this clause is well precedented. It follows Section 13 of the Telecommunications Act 1984 and Section 24 of the Gas Act 1986. These provisions give the power to make licence modification references solely to the director, and not to the Secretary of State. I trust I have therefore been able to convince my noble friend that this amendment is not necessary.
Lord Peston: Will the noble Baroness clarify something which convinces me that I do not understand the Bill? Is she saying that the general powers that the Secretary of State has under various Acts of Parliament as regards monopolies and mergers will not apply to this industry? Is she saying that the power of the Secretary of State to refer a matter to the Monopolies and Mergers Commission does not apply in the case of electricity? In other words is that somehow written out of his powers in ways which I do not understand? I had assumed that all this provision does is to leave the powers of the Secretary of State where they are with respect to monopolies and mergers— that includes this industry— but to give further powers to the director. That does not detract necessarily from what the noble Lord, Lord Peyton, is saying. Am I right in saying that this Bill does not take away the powers that the Secretary of State for Trade and Industry has with respect to monopolies and mergers?
Baroness Hooper: The noble Lord is perfectly right in the assumption that the general powers of the Secretary of State are not affected. This provision exists to deal with those cases where the director has been unable to reach agreement on licence modifications with the licensee.
Lord Peyton of Yeovil: I can only apologise to my noble friend for my ignorance in that it had escaped
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me that there were already two precedents on the statute book which gave powers to an official, rather than to a Minister, to make a reference to the Monopolies and Mergers Commission. I am sure the Chamber will sympathise with my excuse. In the flood of legislation which inundates us these days, sometimes it is difficult to catch up even with important items. If my noble friend detects therefore some vein of irony in my apology, she would not be all that far wrong. It would appear to me from what my noble friend has said that there have been two recent precedents. That does not, in my view, deal with the fact that they are bad precedents and now we have—
Lord Mulley: Does not the noble Lord agree that this is a perhaps a third mistake?
Lord Peyton of Yeovil: The noble Lord, Lord Mulley, may express the matter as he wishes. I was about to say to the Committee that these two precedents are, in my view, bad ones. They have now fathered a bad habit. I hope that my noble friend will take that message back to her right honourable friend. I hope she will say that because something bad has been done on two previous occasions, it should not necessarily be regarded as a water-proof, copper-bottomed excuse for perpetrating the same action again. My acceptance of the argument of my noble friend is tinged with dismay. In the circumstances I shall not trouble the Chamber by dividing the Committee on so small a point. Therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.30 p.m.
Lord Peston Lord Peston moved Amendment No. 132A:
Page 9, line 20, after ("interest") insert ("as defined in section 84 of the 1973 Act").
The noble Lord said: With the permission of the Committee, I shall also speak to Amendment No. 132C. What I have to say follows very much on what we have just debated under the earlier amendment of the noble Lord, Lord Peyton of Yeovil. As always what I am about to say may indicate more my lack of understanding than anything substantive.
To put the matter simply. I had understood paragraph 12 and consequential paragraphs and sections to raise monopolies and mergers matters. I thought that the issues before us concerned anti-competitive practices and monopolies. It therefore seemed to me and my noble friend Lord Williams of Elvel that we ought to write into the Bill immediately the specific criteria which the Monopolies and Mergers Commission is obliged to look at under Section 84 of the 1974 Act.
My difficulty is that, having listened to the comments of the noble Baroness on the earlier amendments, I feel that the Monopolies and Mergers Commission is being used here for non-monopolies and mergers matters. In other words, to put it in as nasty a way as I can, the Government clearly need a body to look at licence modifications which are not agreed; but they do not have such a body because

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they have gone out of their way to abolish relevant bodies which might have done that. The Government do not wish to invent a quango, because they say that they do not like them. Therefore they look around for whatever body is left in existence. Practically the only one left in existence is the MMC, so the Government say that although these are not MMC matters, that is the only body there is and it will look at the licences.
To take the example which the noble Baroness gave in respect of an earlier amendment, one of the issues might concern health and safety. It could well be that the director would raise an issue under health and safety. Under this clause if the licence holder does not agree, the director has to refer the matter to the Monopolies and Mergers Commission. I think that that must be the correct interpretation, although I have only just worked out that that is what it must mean. If that is true, my argument under the amendment that the commission must also consider the competition criteria does not carry the weight that I thought it did when I put down the amendment.
I should now like to know what criteria the MMC should look at. It cannot operate in an entirely ad hoc manner in an area in which it is not organised to act. This is a very good example of why it is worth scrutinising legislation in great detail in this Chamber because it throws great light on what is happening.
I did look at the Notes on Clauses and, although I was not present when we privatised the gas industry and telecommunications, and therefore can have no responsibility for those matters, I saw the sentence which said that this had been done before and therefore it would be done again. I fully accept the logic of the view that that is not the most rational argument that one could dream up.
I should like to ask whether the equivalent powers for those two industries have yet been used. Have the directors for those industries yet referred any issues of this kind to the Monopolies and Mergers Commission, and do we have any experience of these matters which we can build on?
Lord Harmar-Nicholls: I hope that my noble friend can give a satisfactory reply to the main point raised by the noble Lord. The only reason why I made a point of being present in the Committee when these issues were discussed was because I do not share the supreme confidence that the Monopolies and Mergers Commission has the special knowledge and aptitude required. Anybody who has had contact with the commission on such matters, as I have, knows that it can be far from perfect.
If what the noble Lord has said is anything like true, I should not like to think that we were handing over to the commission a decision which ought to be in the hands of the Government or the director of this particular industry. I therefore hope that my noble friend has a good reply and that this provision is not, as the noble Lord suggested, an alternative to setting up a distinct authority or examining body which would know what it was about rather better than the Monopolies and Mergers Commission,
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whose legalistic approach to so many matters seems to divorce it from the practical considerations that ought to be taken into account.
Baroness Hooper: In view of the wider issues which have been raised, I should say that it is the Government's policy that the electricity industry, as we propose to recognise it, should be fully subject to competition law. By competition law I mean mainly the Fair Trading Act 1973, the Restrictive Trade Practices Act 1976 and the Competition Act 1980. There will have to be some exemptions, but we intend that those should so far as possible be transitional in nature. We shall no doubt go into more detail on this later, when the Committee discusses later clauses of the Bill— particularly Clauses 41 and 95.
Simply subjecting the industry to competition law would not be sufficient. There are some areas where a degree of monopoly will remain for the foreseeable future. The most obvious of these is the conveyance of electricity by means of electric lines. So we cannot leave it to competition— to market forces— to protect the interests of the consumer; we have to have the system of regulation through licensing which we are now considering.
A degree of flexibility is required, and so we have in Clause 11 a provision for licence modifications by agreement between the director and the licensee; and in Clauses 12 to 14 provisions for modifications where there is no agreement but there are public interest reasons why the director thinks a modification should be imposed on the licensee. In the interests of the licensee, we have followed the examples of telecommunications and gas and provided that licence modifications may only be imposed on a licensee following a report to that effect from the Monopolies and Mergers Commission.
So we get to the position where the commission and the public interest have entered the picture. If nothing else were said, there would be some doubt whether Section 84 of the Fair Trading Act applies, because subsection (2) of that section limits its application to functions of the commission under that Act. But if Section 84 does not apply, by what standard is the commission to determine whether or not a matter referred to it operates, or may be expected to operate, against the public interest? Subsection (7) of Clause 12 supplies part of the answer to that question, and requires the commission to have regard to the matters set out in Clause 3— matters such as securing that reasonable demands for supply are met, and the others which we have already discussed.
Subsection (8) supplies the remainder of the answer to the question. It specifies which provisions of the 1973 Act are to apply in relation to references to the commission under Clause 12. Members of the Committee will see that Section 84 is not mentioned. Therefore, the effect of subsections (7) and (8) in this respect is to require the commission, when looking into a reference made under Clause 12 by the director, to have regard to the electricity matters set out in Clause 3 of the Bill, and not to the more

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general public interest matters set out in Section 84 of the Fair Trading Act 1973.
Not only is this in accordance with what has been done in previous cases, but it is appropriate in the context. We are here discussing references to the Monopolies and Mergers Commission of matters relating to the generation, transmission or supply of electricity pursuant to a licence. Those are— self evidently— electricity matters. It is right therefore that the commission should reach its decision in the light of the provision set out in Clause 3 of the Bill— a clause which, if I may borrow a phrase from my noble friend, Lord Peyton, in an earlier discussion, expressed the purpose behind Part I of the Bill. My reply to these amendments is concerned only with references to the commission under Clause 12. As I have said, we shall discover, when we reach Clause 41, that there may be other circumstances in which part or parts of the electricity industry may become involved in references to the commission. Any such reference would be handled by the commission in accordance with the terms of the 1973 Act, including Section 84.
In relation to the examples requested by the noble Lord, Lord Peston, so far as I am aware only two licence modification references have been made following previous privatisation legislation. They are chat lines under the Telecommunications Act and Manchester Airport under the Airports Act.
In giving this wider explanation, I hope that I have helped the Committee to consider the amendment in the correct context.
Lord Peston: I should like to thank the noble Baroness. In all ways she is extremely helpful. Nonetheless, I am not satisfied. As I understand it, Section 84 criteria will apply as and when competition issues arise. In that sense, my amendment may be unnecessary for that purpose.
What concerns me is a matter that I should like to warn the Committee that I shall feel obliged to return to. The Monopolies and Mergers Commission will be dealing with electricity matters, as the noble Baroness has pointed out. I agree with what the noble Lord, Lord Harmar-Nicholls, says about the commission dealing with competition matters. I am not at all happy about that. I think that the noble Lord's use of the word "legalistic" is correct. It is not entirly satisfactory.
It is not obvious to me that the Monopolies and Mergers Commission is the correct body to interpret the very wide and vague purposes of the Bill, along Section 12 lines, which concern modification of licences. The noble Baroness has clarified what the Bill is about, but in doing so she has shown that the Bill is unsatisfactory in relation to modifying licences against the will of those of those who hold licences. I do not believe that the Monopolies and Mergers Commission is the right body to deal with this. I am of the opinion that we need a body which would develop the relevant expertise and deal with these matters in the correct terms. In giving a warning, as a result of listening to the excellent exposition that the noble Baroness has given—
Lord Harmar-Nicholls: I gather that the noble Lord is going to withdraw the amendment. I do not know whether I would have wanted to support the amendment and I cannot say that I altogether understand it. With the noble Lord's permission, I should like to ask the Minister to keep in mind that the wording of the Bill is very clumsy, if we want the right results to flow from it.
The noble Baroness seemed to rely on subsection (3) and (7) of Clause 12. Under subsection (7) the director and the Minister will tell the Monopolies and Mergers Commission what they must look at. In subsection (3) they are laying down the kind of ingredients that must be taken into account before the Monopolies and Mergers Commission or anybody else could give any report on what is right and what is wrong. I agree with the noble Lord, I do not like the fact that the Monopolies and Mergers Commission will be under such explicit and close instruction, as indicated by the two subsections that the noble Baroness relied upon. I do not think that it is the right body. It has a legalistic approach and routines which it follows rigidly. There are one or two situations outside this Bill where the Monopolies and Mergers Commission has created a little bit of a furore, which is not to the general good of the commercial world.
The noble Lord says that he is going to withdraw the amendment, but I believe that subsections (7) and (3) are a very clumsy way of dealing with this matter.
Lord Peston: I think that the noble Lord, Lord Harmar-Nicholls, would be entirely wrong to support this amendment. I accept, on the basis of the noble Baroness's explanation, that the amendment is misplaced; but it does not mean that the ideas underlying the amendment are mistaken. I am simply giving notice that a different kind of amendment is required. I should like to give an example. I was unaware of the Monopolies and Mergers Commission's work on chat lines. I am a very imaginative person but I find it difficult to work out what expertise the Monopolies and Mergers Commission has which would qualify it to advise the Secretary of State on chat lines. That is precisely my point. We need a body that could advise the Secretary of State on electricity matters in these areas. I beg leave to withdraw the amendment.
4.45 p.m.
Lord Peston Lord Peston moved Amendment No. 132B:
Page 10, line 15, after ("matters") insert ("including the collection of evidence from the relevant consumer committee or committees").
The noble Lord said: This amendment is somewhat locked in to the earlier amendment. I hope that the relevant body which will be looking at the kinds of issues that might be referred by the director, or the Secretary of State if we changed the rules slightly, will be aware that, in considering any matters that involve the public interest, we in the Committee would expect that evidence would be collected from the relevant consumer committees. I hope that the noble Baroness will be able to say that there can be no doubt that this is how the matter will proceed. That is the reason for the amendment.
Baroness Hooper: Under Clause 43, the director will have a duty to investigate any complaint which deals with any of the public electricity suppliers' duties or obligations under the Bill or licence— that is an "enforcement matter" which might require the director to consider taking action under Clauses 25 to 28 of the Bill. The consumers' committees must refer any complaint which appears to them to be an enforcement matter to the director, while the director is able to delegate his duty under this clause to a consumers' committee and require it to investigate and report to him on an enforcement matter.
It is, of course, possible, not to say probable, that the director may decide that an enforcement matter which had been investigated and reported upon by a consumers' committee was operating against the public interest and ought therefore to be referred to the MMC. In such a situation, it would be entirely right and sensible that any evidence uncovered by a consumers' committee about a public electricity supplier should be passed by the director to the MMC under subsection (6) of this clause, to assist the MMC in their investigations.
I draw the attention of the Committee to the fact that subsection (6) places a duty on the director to provide information and assistance to the MMC. In a situation such as I have described, the evidence supplied by the committee to the director would in all probability be information likely to assist the MMC in their investigation. If so, it would be squarely within paragraph (a) of the subsection, and the director would be obliged to pass it on to the MMC. Consumers' committees like any other body with a relevant interest, will be free to submit evidence directly to the MMC.
I hope that this explanation has answered the noble Lord's concerns and that he will feel able to withdraw his amendment.
Lord Peston: I beg leave to withdraw the amendment.
Amendment, be leave, withdrawn.
[Amendments Nos. 132C and 132D not moved.]
Lord Peston Lord Peston moved Amendment No. 132E:
Page 10, line 44, after ("eight") insert ("properly qualified").
The noble Lord said: With the permission of the Committee, in moving this amendment I should like to speak also to Amendments Nos. 132F and 132G. Again, I do not want to delay the Committee on this point. These matters can no doubt in due course be raised with an amendment at Report stage.
Very simply, the purpose of the amendments has been made clear in my earlier comments. This additional group of people under the MMC will not, as I see it, be considering an MMC matter. I think that has now been made abundantly clear. They will be looking at more specific public interest matters connected with the electricity industry. On reflection, my view is that this would be done better by a body which was not the MMC. However, should the Government persist in arguing that the MMC should undertake this task, it seems to me that it is
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absolutely fundamental, on the one hand to the interests of the industry itself and on the other hand, and much more importantly, to the interests of consumers that the Monopolies and Mergers Commission should appoint people who know something about the electricity industry and who are properly qualified.
I do not want to stir up old troubles, but the Committee will recall that a fortnight or so ago when we were discussing the appointment of the director some Members of the Committee were rather keen to have appointed a director who knew something about electricity. The Government were unable to give any assurance on that point. The result is that they have appointed someone who knows nothing about electricity. So far as I can tell from the public statement that I read in the press, he knows nothing about this Bill or the provisions that he is proposing to implement. No doubt he will receive some education on the matter in due course.
We are dealing with matters of a very important financial kind, apart from anything else, and it is apparent to me that if licences are to be modified we must have some assurance from the Government that the eight additional people will have appropriate qualfications for the work. The words I use are "properly qualified". I should be perfectly happy to write a schedule of what I regard as properly qualified with respect to electricity, but I shall not trouble the Committee with it at this time. What is not wanted is a bunch of amateurs who are ignorant of the industry pronouncing on matters which are fundamental to its survival. I beg to move.
Baroness Hooper: I regret that the noble Lord, Lord Peston, without having had full details and information of the appointment of Professor Littlechild— and the noble Lord acknowledged that— should feel able to denounce him in advance.
Lord Peston: Perhaps I may interrupt the Minister. I was not seeking to denounce Professor Littlechild, but as an economist myself I think that the noble Baroness ought to accept that I know something about the writings of most of my colleagues. I am unaware of the contributions that Professor Littlechild has made to the economics of the electricity industry— that is the only point I am making— or to any other aspect of the electricity industry. So far as I understand he is perfectly qualified as an economist, but that was not my point. My point repeats that which I made in the earlier debate: is he someone who knows anything about this industry? I am fairly certain the answer is that he is not.
Baroness Hooper: We believe that he is admirably qualified for the post. He has had extensive experience of regulatory issues both in the United Kingdom and abroad; he has worked on the regulatory regime for British Telecom; and in fact he has been a member of the Monopolies and Mergers Commission for six years. He has a wide knowledge of regulatory systems both here and in the United States of America. His job will be primarily regulating the industry and that experience will therefore be invaluable.

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As regards the amendments we are discussing, and indeed the whole question of appointing properly qualified persons for the task, the wording of this amendment is somewhat vague. It is not always clear what "properly qualified" should mean, although the noble Lord, Lord Peston, has attempted to clarify the phrase today.
Clearly it will be the function of the people appointed to investigate what are often quite complex matters relating to the regulation of the electricity industry, and therefore it would obviously be helpful for some of the members to have had some experience of or possibly even in the industry. But we do not think that it is essential for all to be so qualified because, as the Government have said several times when discussing the various appointments to be made under the Bill, what counts is to have people of high quality and ability. After all, the outsider can often offer fresh and valuable insights into a problem which might escape those more closely acquainted with it.
The Government naturally hope that it will not be necessary to refer to the MMC any matters relating to the privatised electricity supply industry since it is possible that any such references might involve the commission in a significant burden of additional work. The reason for this subsection is to enable the Secretary of State to appoint not less than eight additional members to help with that work. However, we expect that the members of this electricity panel would be part time and would be called upon only as and when required to assist with a reference. I trust that those explanations will enable the noble Lord to withdraw his amendment.
The Earl of Lauderdale: Before the Committee leaves this point, my noble friend has just said that very often the outsider who is a sufficiently competent man has a better view and a better capacity to tackle a completely new subject than has someone who has been immersed in that subject for a great part of his life. She will be the first to admit that this Bill comes from a team of Ministers not one of whom had any experience of electricity before. No doubt that fact speaks for itself.
However, is it quite satisfactory to leave the matter where it is now? I am a layman and I make mistakes all the time. I am not ashamed to admit it. But laymen may not be sufficient for these purposes. This is a very complicated industry and one on which the community and industry as a whole depend tremendously and will still depend 10 years hence when the present team of Ministers has disappeared together with the present Department of Energy, followed by the DTI, and when all those responsible for this legislation are no longer in sight. Therefore, the make-up of the personnel who are to support the director general is very important.
I should like to repeat something that I have said several times already. Can the Government not consent to have another look at this matter and not simply say, "It is no good; we will not do it. We have given you all the answers"? The answers that we have had so far for the most part seem to give us the same information. Will the Government please give
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a thought again to this matter? I plead with them because otherwise we shall continue to have negative advice all the time and the pattern of voting is going to change quite significantly. I hope that my noble friend will take to heart what I have been trying to put to her.
Baroness Seear: I should like to support the remarks of the noble Earl, Lord Lauderdale. When we speak of eight people being properly qualified, the fact of the matter is that there is a very wide range of expertise needed among those people. No one person or two persons will have all that expertise. A team of eight persons is needed who between them will possess the degree of specialist knowledge which the generalist simply does not have.
At present we are suffering deeply from Green Papers and so on written by generalists. We want to have a good mix— a team of specialists with different specialisms, all of which are relevant to the work that must be done. It should be a team and not eight individuals, and the picking of the team should ensure that they are people with complementary specialisations.
Baroness Phillips: This is a genuine inquiry on my part. Is the act of appointing directly by the Secretary of State to the Monopolies and Mergers Commission peculiar to this Bill? As I understand it, appointment to the Monopolies and Mergers Commission in the first instance came from a totally different department. With similar provisions for privatisations in the Water Bill, will persons be appointed directly to the monopolies commission by the Secretary of State? I ask only because it is very relevant to the people who are at present on the monopolies commission. It is very much linked with whether such people have the expertise not only for this but for other matters that they will be handling.
5 p.m.
Baroness Hooper: We believe that this is an important matter. That is why the power has been given to the Secretary of State to make these appointments. As I said, it is most probable that the appointments will involve people who have a specific knowledge of the electricity industry. However, that should not be essential for all members.
We believe that it is essential that the commission should be given the maximum degree of flexibility and independence as to how it carries out its investigations into any electricity references. This applies more in relation to Amendments Nos. 132F and 132G, to which the noble Lord, Lord Peston, also spoke. The purpose of referring a matter to the MMC is to gain an independent and disinterested view— this is only fair to both sides. We think that it is best for the chairman of the MMC to be left to decide the composition of the group in the light of his assessment of the issues raised by the reference to be considered by the group. Giving the director a role in selecting the members for a special group could be seen as undermining the independence of the commission. We must also remember that it is the director who will have made the reference to the MMC, and he could be said to have an interest in

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its outcome. It would clearly be wrong for him to have a say in the composition of the groups set up to consider his reference.
In relation to the specific question raised by the noble Baroness, Lady Phillips, similar provision is already made for newspaper and telecommunications references as is proposed for water.
Lord Peston: Before bringing this discussion to an end, perhaps I may say that there is a difference of philosophy between us. I do not wish to prolong the debate. On the argument about lay people who are able to give judgments on any matter under the sun, such power stems from our Civil Service, which is largely unqualified and can justify its own existence only on the same basis. Some of us think that there is some strength in the argument so long as it is not taken too far. The problem in our country is that we undervalue expertise and people who know about issues.
I am not seeking to undermine the independence of the MMC— although I reiterate that it is not the MMC in its normal role but in its electricity role— nor the value of lay people. As the noble Earl, Lord Lauderdale, said, he is a lay person, and I have spent my life giving advice as a lay person. I am not saying that people who are inexpert are completely valueless. I was trying to argue the reverse: that people who know about something have a certain value.
Following the matter raised by the noble Baroness, Lady Seear, I should like simply to point out the range of expertise that we may require. I have given warning that I shall return to this theme at Report stage in a different way. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 132F and 132G not moved.]
Clause 12 agreed to.
Clause 13 [Reports on modification references]:
[Amendments Nos. 132H to 132L not moved.]
The Deputy Chairman of Committees (Lord Strabolgi): Amendment No. 133 is in the name of the noble Lord, Lord Peston. I apologise. It is the noble Lord, Lord Peyton.
Lord Peyton of Yeovil Lord Peyton of Yeovil had given notice of his intention to move Amendment No. 133:
Page 11, line 34, leave out ("Director") and insert ("Secretary of State").
The noble Lord said: Our names are very similar. Any minor error on that ground could be well forgiven. I could never object to being associated very closely with the noble Lord opposite.
I do not like immediately to say that I shall not move the amendment, because it has the support of the noble Lord, Lord Williams of Elvel. Perhaps the noble Lord, Lord Peston, could indicate whether he has any great objection to my not moving the amendment. The point has already been aired with rather disappointing results. I doubt whether any
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purpose would be served by my moving it. I therefore do not move the amendment.
[Amendment No. 133 not moved.]
[Amendments Nos. 133A to 133E not moved.]
Clause 13 agreed to.
Clause 14 [Modification following report]:
[Amendment No. 133F not moved.]
Lord Peyton of Yeovil Lord Peyton of Yeovil moved Amendment No. 134:
Page 12, line 17, leave out subsection (2).
The noble Lord said: The words that I wish to leave out are these:
"Before making modifications under this section, the Director shall have regard to the modifications specified in the report".
The director himself will have made the reference. It is surely very unlikely that he would not read the report which was addressed to him as a result of a reference that he had himself made. I believe that these words are otiose. They are not required. They add nothing to the needs of the Government. I hope that in the interests of good composition, brevity and common sense— I know that those qualities are not always all that close to the Government's heart— my noble friend may find it in her heart to accept this amendment. I do not wish to detain the Committee on what is a very small point. However, I long to hear my noble friend say that she agrees.
Lord Renton: I should like to support my noble friend and I hope that he will make many more such small points which too few of us dare to make.
Baroness Hooper: The present wording of this clause gives the director a degree of discretion in the licence modifications that are to be made. It is this element of discretion that these amendments seek to remove. It seems to me to make sense that he should not be bound to the small print of the modifications specified in the report since he will have the expertise to decide the best wording of the modifications necessary to remedy or prevent the effects adverse to the public interest that have been identified. Therefore I think that there is a value in the wording and I regret that I fail to be persuaded by my noble friend's arguments.
Lord Peyton of Yeovil: I wish that I had understood a word of what my noble friend has just said. I am afraid that the sense of it wholly escaped me.
Perhaps I may briefly say that having been informed at an earlier stage by my noble friend that I had somehow missed the earth-shaking announcement of the appointment of the new Director General of Electricity Supply, I hastened like a semi-crippled rabbit to the Printed Paper Office and obtained a copy of Hansard of 22nd May, and read the great announcement that Professor Littlechild had been appointed. At an earlier stage I delivered myself of the opinion, quite wrong evidently, that it would be unlikely that any man who was not greatly familiar with the affairs of this complicated industry would be able to summon up the resources of courage to accept the appointment.

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I do not wish to add anything to the difficulties and the problems which Professor Littlechild will doubtless encounter. I pay tribute to Professor Littlechild. If a gentleman of his learning makes a reference to the Monopolies and Mergers Commission and then receives its report, I have little doubt that he will read it and have regard to any modifications that may be contained in it. Am I being very unreasonable? Am I being too generous to Professor Littlechild? I believe that if the Government do not accept the amendment, they will be saying that Professor Littlechild, their own chosen appointee, is someone who is very short when it comes to common sense.
Please will my noble friend not agree— she could have done so so easily— to take this nonsense out of the Bill?
Lord Dean of Beswick: The noble Lord, Lord Peyton, has referred once again to the appointment of Professor Littlechild and the fact that he will go through certain exercises in reading the pieces that the noble Lord referred to before he makes any reference. I too have a copy of Hansard for 22nd May, which means that it would not be available in print before 23rd May and possibly would not be available to the press until 24th May. However, I am not arguing about that.
This post will by any standards, I think the Committee will agree, be a tremendous job to carry out. It is complex and completely one off. But I see in the Written Answer that the Secretary of State referred to the fact that Professor Littlechild worked on the regulatory team for British Telecom and has been a member of the Monopolies and Mergers Commission for six years. Bearing in mind that this will be a highly salaried job because of its complexity and the responsibility involved in it, will Professor Littlechild divest himself or otherwise be divested of the other positions that he holds? The Government seem to have a penchant for appointing certain people to jobs while they still hold a variety of other jobs at the same time. The Committee may recall that a few weeks ago there was a debate in the Chamber on the appointment of people to non-elected bodies. The point I am trying to make is will Professor Littlechild be expected to place the whole of his time and his emphasis at the disposal of this new job? Will he therefore be asked, requested or ordered to give up the other positions to enable him to concentrate on this job?
5.15 p.m.
Baroness Hooper: I assure the noble Lord that the appointment of Director General of Electricity Supply will be a very full-time job for Professor Littlechild. It is in that light that he has accepted it. I should say further that as well as the admirable general qualifications to which I referred and to which the noble Lord, Lord Dean, has now added, Professor Littlechild, has also been advising the Secretary of State on electricity privatisation since 1987, so he has an extremely good background knowledge of what is involved in the job. He will, as I said, be regarding it as a full-time job, and he
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will give up any other appointments which would conflict with his role as director general. I believe that almost goes without saying.
However, I return to the amendment. I must tell my noble friend Lord Peyton that the effect of his amendment would, as I understand it, be to remove any obligation from the director to take into account the modifications specified in the MMC's report before making any modifications himself. That would make the entire referral process meaningless. I feel that the procedure set out in these clauses offers the best means of fairly resolving any disagreement between a licensee and the director.
In view of the remarks that have been made on this front, I almost hesitate to say that this kind of arrangement is precedented in the Gas Act and the Telecommunications Act. It has been seen to work effectively in the regulation of the gas and telecommunications industries. It is on those grounds that I feel unable to accept.
The Earl of Lauderdale: May I just add one small point? Are we taking from what my noble friend said about it being a full-time job— full time is full time is full time— that the director general will also divest himself or exclude himself from any investment in the electricity industry when it is privatised? Can we take that for granted?
Baroness Hooper: I believe that he would have to, yes.
Lord Peston: On that theme, although we seem to have gone a little way from the amendment, I assume that all conflicts of interest will simply not be allowed to occur. I cannot imagine that Professor Littlechild, or any other subsequent director, will allow a conflict of interest to arise.
I have sat here listening to the discussion on the amendment and have not joined in; but I am now even more mystified than the noble Lord, Lord Peyton. Reference is made to the Monopolies and Mergers Commission by the director. We ask why the director does this. I assume that the answer is that he would like to know the Monopolies and Mergers Commission's opinion. The director is not in the business of guaranteeing full employment for the Monopolies and Mergers Commission or anything of that kind. Obviously, having asked its opinion, he will take some notice of it. It therefore follows, as the noble Lord, Lord Peyton, has put quite logically, that subsection (2) is quite otiose. It has no relevance. It implies almost a kind of wilful madness on the part of the director, but I shall not discuss the matter ad hominem; but any director would not surely be so crazy, as it were, wilfully to disregard a report sent to him. However, I feel that the noble Baroness has invented a kind of fiction of the most bizarre kind of director that I find it hard to believe we could ever have. I hate to press her ever to listen to her noble friends— indeed, the more mischief I can make the better— but on this occasion I feel that she might give a sympathetic ear to her noble friends on this matter.
Baroness Hooper: I find it difficult to follow the argument that disagrees with a provision which enables the director, in making any modifications following a report, to have some freedom in the precise wording of the modifications that he makes. He should not have to follow the precise wording of the Monopolies and Mergers Commission's report. But as there seems to be considerable confusion now as a result of our discussion on this amendment, perhaps it would be best if I read the arguments that have been put forward and come back later.
Lord Peyton of Yeovil: The argument is that, having made a reference to the commission, no director general would be so stark, staring, plumb crazy wholly to disregard the report when he received it. You do not have to be very charitable to make that assumption.
I am exceedingly grateful to my noble friend for her undertaking to look at the matter again. I believe that she is wise to do so and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 134A not moved.]
Clause 14 agreed to.
Clause 15 [Modification by order under other enactments]:
On Question, Whether Clause 15 shall stand part of the Bill?
Lord Peston: My noble friend Lord Williams and I have given notice that we shall be querying Clause 15 in the hope of having clarification of this most obscure clause. The Committee is still dealing with the general section of the Bill headed "Modification of licences". However, in this area we are clearly within the ambit of the Fair Trading Act 1973 and the Competition Act 1980. Are we discussing competition matters but not other licence amendments?
The main reason for querying Clause 15 is for enlightenment about why such a clause is necessary. Why does not the competition legislation apply in any event? I devote myself to notes on clauses and I am certain that buried somewhere in the Bill will be a statement that such a provision is already contained in another privatisation Act. Nonetheless, that does not convince me of its correctness.
I understand that the Fair Trading Act 1973 and the Competition Act 1980 apply to the electricity industry except, as the noble Baroness said, in respect of one or two transitional arrangements. They must apply a fortiori to the supply companies, which are private monopolies created by statute. Having created those private monopolies, there is no doubt that the least the Government can do is to make them subject to the competition legislation. That legislation will leave the Secretary of State for Industry with many powers which we hope he will use to promote competition and to act in the national interest.
I should like to have explained the necessity of writing into the Bill the applicability of those powers; or is it that I should smell a rat because Clause 15
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limits the powers rather than stating that the Bill applies? I know that it is a technical question and I do not wish to delay the Committee. I shall be happy if the noble Baroness wishes to write to me and other noble Lords in due course. However, it is a serious matter. I wish to know why such a complex clause appears in this part of the Bill and I argue that the competition issue is simple and straightforward.
Baroness Hooper: I shall try to give an explanation but if it does not go far enough I shall endeavour to supplement it by writing to the noble Lord. The previous three clauses deal with modification of licences in circumstances where a particular matter relating to the generation, transmission or supply of electricity is referred to the Monopolies and Mergers Commission and is found to operate against the public interest. The purport of Clause 15 is to provide for modification of a licence following a report from the Monopolies and Mergers Commission under other legislation about a monopolies or merger reference or an anti-competitive practice relating to the generation, transmission or supply of electricity.
Clause 15 is similar to Section 27 of the Gas Act 1986. It extends the powers conferred by the Fair Trading Act and the Competition Act mentioned in subsection (1). Therefore, an order may be appropriate if made under any of those powers in any of the circumstances specified in subsection (2). The equivalent section of the Gas Act was used to modify British Gas's authorisation following the Monopolies and Mergers Commission investigation under the Fair Trading Act into the supply of gas to large customers. We believe that the provisions of this clause are an important complement to those in Clauses 12, 13 and 14. Their equivalent has already been used to promote customer interests.
The noble Lord asked specifically whether we were discussing competition matters, and the answer is yes. The clause is necessary because the 1973 and 1980 Acts do not specify that licence modifications can be made. Therefore the clause covers that point and does not limit the powers of the MMC in the other areas.
Lord Peston: I thank the noble Baroness for that answer. She has said in terms that the clause does not limit the competition legislation, and that is the important answer which I am glad to hear it. It is a technical question. In my view the 1973 and 1980 Acts enable the Secretary of State to modify licences. However, I am not a lawyer in any of those areas and I accept the department's view that it is necessary to have a paragraph stating that the Secretary of State must do so. I note en passant that the Secretary of State to whom we are now referring is the Secretary of State for Energy. However, when we are discussing the Secretary of State in relation to competition legislation, it is the Secretary of State for Industry. I hope that we are not creating endless; employment for lawyers in deciding which Secretary of State is meant. It is clear that in this provision we must be referring to the Secretary of State for Energy.
Clause 15 agreed to.
Clause 16 [Duty to supply on request]:
Lord Peston Lord Peston moved Amendment No. 134B:
Page 13, line 24, at end insert ("at reasonable cost").
The noble Lord said: We now have a change of subject. I assume that we are discussing a public electricity supplier in the technical sense used in the Bill and therefore not a generator or transmitter. In tabling the amendment I hope to receive the kind of reassurance which the noble Baroness has given to me in respect of this and other Bills; I hope that she will tell me that the Bill clearly means "at reasonable or least cost" and that no such amendment is required. Given the monopoly power of the suppliers, unless one can point to the fact that the Bill clearly means that, my amendment is necessary.
I have stated "at reasonable cost". Knowing me, I am sure that the noble Baroness understands that I mean "least cost". The amendment is tabled in part so that I can be guided to where I am convinced it is not necessary to go. If I cannot be convinced of that, I believe that the provision should be written on the face of the Bill. I beg to move.
5.30 p.m.
Baroness Hooper: The noble Lord, Lord Peston, explained the purpose in introducing this amendment, and that is a purpose which the Government share. That is why we have made specific provision in Clause 19 of the Bill to establish what charges the supplier can recover from the consumer in respect of making a connection. The clause makes clear that the consumer may be required to defray only the expenses reasonably incurred in providing the supply, to such extent as is reasonable in the circumstances. Thus there is already a reasonableness criterion applied to what expenses can be incurred in providing the connection.
The provision also prevents, for example, charges being levied for work on the general system of supply beyond that portion which might reasonably be allocated to the provision of the new supply. If there is any dispute over the charges which the supplier wishes to make for providing a supply the consumer would have the right to seek a determination of the matter from the director general under Clause 23— in effect, an appeal procedure.
There is therefore already in the Bill precisely the protection that the noble Lord is trying to provide. I hope that in view of this explanation he will accept that his amendment is unnecessary and will withdraw it.
Lord Peston: I thank the noble Baroness for that reply. Although I am in danger of boring Members of the Committee, may I ask whether "reasonable" includes comparison with what other suppliers are charging? We created these local supply monopolies, which were the area boards, and they clearly do not compete with each other. One cannot go to an area board outside one's own area and say, "I want electricity from you". That is one reason why regulation is so important. The one benefit of the Bill is that there are several suppliers and that
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therefore in theory one should be able to say, "Well, look, it seems to cost this much to be connected with that area board"— and I shall stick to that term because it is one which I understand better— "and here I am being charged a lot more and that looks unreasonable to me". Do I understand that the general set of concepts would allow a consumer to make those comparisons and to press for a determination of comparison of area boards, because that would seem to me to be one basis for reaching reasonableness?
Baroness Gardner of Parkes: Would it not be a problem to try to assess how reasonable something is in comparing one area board with another, because conditions in different areas will be quite different? I believe that even within an area there will be a difference between supplying 50 houses within two blocks or 50 houses spread over a large area. Therefore I do not accept that it should be possible to compare one area with another.
I know that historically the London board area has always had much higher costs in the past than areas outside London. Yet in recent years, in the time in which I have served on the board, we have been able to increase our costs by much less than other area boards and so there has gradually been a levelling out. Therefore the basis of costs varies according to the area.
Lord Peston: The noble Baroness touches on a classic matter of consumer protection. If I were on her side, which is speaking for the industry, I should produce her arguments. However, I am on the consumer's side and I do not accept those arguments at all. You can always think of excuses as to why your high costs correspond to your problem rather than your inefficiency. Almost the only database that we shall have will be comparisons. I am not saying that it will be an invalid reply to say, "We have bigger problems connecting you and therefore we have to charge you more". I simply make the point that it is a relevant consideration to say, "I do not accept that it is expensive to make my connection. I am arguing that you are inefficient compared with other area boards".
I must say to the noble Baroness that I do not wish to defend this Bill because I do not like it. However, if comparisons between area boards are not allowed and are regarded as completely invalid, this Bill loses a great deal of its rationale. There has to be area board or supplier comparison; otherwise there is no other data on which to work because there is no competition at the supply point.
Baroness Hooper: I believe that what should help greatly in arriving at a determination of what is reasonable in all the circumstances is the transparency of costs. I believe that it is probably inevitable that not only consumers but also consumer committees will look at costs on a comparative basis. Of course, they will need to show that they are comparing like with like and I believe that that covers the point made by my noble friend. Indeed, it will be open to the consumer to bring those circumstances to the attention of the director

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general in making his appeal or application if he feels that such considerations have not been taken fully into account.
Lord Peston: I do not believe that there is any difference between us on this matter and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Lord Strabolgi): Before calling Amendment No. 135, I should inform the Committee that if this amendment is agreed to I cannot call Amendment No. 135A.
Lord Ezra Lord Ezra moved Amendment No. 135:
Page 13, line 30, leave out paragraph (c) and insert—
("(c) the type of appliances for which power is required;).
The noble Lord said: As the noble Lord, Lord Peston, mentioned in moving his amendment, Clause 16 deals with the duty to supply on request. Subsection (2), to which this amendment refers, specifies the details which any person requesting a supply has to provide in order to obtain that supply.
I take it that "person" includes a potential domestic consumer. In that case, it seems to me that subsection (2)(c), which requires that person, being a domestic consumer, to provide an indication of the maximum power which may be required at any time is asking for something which is very difficult to provide. All Members of the Committee are users of electricity, and how many can say what is the maximum amount of electricity which may be required at any one time? What one does know is what appliances one has. Therefore I should like to propose that instead of subsection (2)(c) requiring the intended consumer to specify the maximum power required at any time, which is very difficult for a domestic consumer to calculate, what should be required is to indicate the type of appliance for which power is required. I beg to move.
Baroness Gardner of Parkes: I oppose this amendment. I believe that the wording is interesting and I believe that the way in which the noble Lord explained it makes it sound very sensible. At present, when one applies for a supply one is asked what appliances are to be used, whether it is an electric cooker, electric bar heaters or a system of total heating by electricity, or whether there will be a gas supply. Therefore it is an approximation, and the boards only wish to establish whether some sort of special supply is required instead of a normal domestic supply. If so, it would not be appropriate to supply that which is only suitable for domestic demand.
At present, anyone who applies for an electricity supply is asked what is to be run on it, so that in practice the system works in exactly the way the noble Lord has said. What is relevant to the supplying authority is to know what will be the maximum power required because this could apply to a commercial customer or a larger consumer. A power supply may be required in excess of ordinary domestic demand. As I see it, this part of the Bill does not apply only to domestic consumers. Therefore I believe that the current drafting is better.
Lord Renton: I agree with my noble friend on that. I would merely add that surely it is only fair that the supplier of electricity should know what voltage is going to be required. That is the important information. The maximum power must be expressed in voltage and watts, and I should have thought that that is the right way to do it. The types of appliances for which it is required may vary very much in the power that they use and may vary from time to time, so it is only fair on the supplier that he should know the watts and voltage to be required.
The Earl of Lauderdale: May I ask the noble Lord, Lord Ezra, whether this has any bearing on houses or groups of houses which have combined heat and power systems, or has that no relevance at all?
Lord Ezra: I was interested to hear the comments made on this proposed amendment. The difficulty is that this appears to apply to all consumers, whereas I believe there is a distinction to be made between domestic and other consumers. In the case of domestic consumers, I should have thought it reasonable, as the noble Baroness, Lady Gardner, pointed out, to ask what sort of appliances they are likely to use. If they have whole house electricity heating, that will require one sort of supply; but if they are to have a normal supply which excludes a basic heating requirement, then another sort is required.
Therefore, I should have thought that the noble Baroness, Lady Hooper, might well take this matter away to see whether an amendment could be made to cover domestic consumers in addition to industrial consumers. I agree that in the case of commercial or industrial consumers the supplier needs to know the maximum amount likely to be required at any one time. However, I am anxious to cover the interests of domestic consumers who might be confused or misled, and I therefore hope that will be taken into consideration.
Baroness Phillips: I support the noble Lord, Lord Ezra. I am interested in the assumption— I have not sat on a board as the noble Baroness has— that now one is actually asked these questions. That is not my experience. I recently had an extension to my house in which extra points were installed. It was discovered that there was not the right amp mains, or something, leading, I gather, to a dangerous state.
The electrician said that it was because he did not assume I would be using two appliances in different rooms at the same time. How he came to that assumption, I do not know. One does not have points put in for decoration, but presumably to be used. Therefore, it seems to me essential to have this information. If one is to be asked about other matters, then this information must surely be supplied; and we are particularly talking about domestic consumers.
Lord Somers: The noble Lord, Iord Renton, mentioned voltage. Surely voltage does not come into it because everyone has to accept the voltage on the grid at the time. I hope that situation is not going to be altered. What does matter of course is the

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amperage. One cannot tell simply by assessing the equipment in a single house what the amount of current is going to be at any time. One can only obtain a rough estimate of what may be needed as a maximum. Therefore, I think the amendment is a far more appropriate way to do it.
5.45 p.m.
Lord Dean of Beswick: Perhaps I may make a brief contribution. This is a reasonable amendment for the consumer. Demand for electricity can change pretty quickly. For example, people can decide on a house improvement, and as a result the total load of electricity required can dramatically change. A householder may decide to change from one type of heating to another, and that can alter the situation. I should not have thought that it was asking much of the Minister to look at what the noble Lord, Lord Ezra, said. It is worthy of consideration. The Government have nothing at all to lose. We support the amendment.
Baroness Gardner of Parkes: In listening to the noble Baroness, Lady Phillips, I think there is a slight misunderstanding. Supply goes into a domestic property at the same power. Whether or not you have enough power to run your kitchen appliances might depend on the wiring within the house; but that is not relevant to the main supply which is connected. The supply to your meter is the responsibility of the area board. The supply after the meter and the wiring within the house is a matter for your own electrician. Of course, the boards will check to see whether it has been done safely and whether the loading is correct.
I agree with the noble Baroness that some people could be using every appliance at the same time. I have exactly the reverse experience in my dental surgery. At the time when commercial premises were assessed according to the number of power points and appliances I was told that I would be put on the maximum tariff because of all the equipment I had. In fact, each piece of dental equipment uses a minimal amount of power and the drain on power was extremely low.
This is a complicated subject. I can appreciate the point made that perhaps some consideration should be given to the non-understanding of domestic customers, but I believe that all the boards now have an excellent practice in this respect. In the past one could sign on for a supply over the telephone or in some other way; but because of the growth in bad debts and the need to identify customers as real people, it is necessary to visit a showroom and sign on for an initial supply. At that time the potential customer receives a considerable amount of attention from the counter staff who go into what appliances are likely to be used and assesses what the maximum supply will be. Provided that maximum is not over the domestic norm, there would be no need for any special supply.
Baroness Hooper: We have had an interesting debate; but it is important to establish that the purpose of this information is to enable the supplier
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to decide on what changes, if any, he might need to make in his distribution network and contracts for supply to meet requests from consumers. The contractual situation that is to emerge is that the supplier will be obliged to supply up to the maximum requested and the consumer can only contractually demand that amount. Of course, he can consume less. To that extent therefore he is setting a maximum which the public electricity supplier needs to be aware of for practical purposes in order to install whatever plant or line is required and to ensure that he himself contracts for the necessary amount of supply.
Therefore, it will be in the interests of the supplier to assist the consumer in answering the question by, for example, indicating the standard demand levels. I understand that it is now common practice, as my noble friend Lady Gardner pointed out, for checklists to be issued asking people to mark off the sort of appliances they have, or hope to have, in order to achieve that. Simply asking for information as to the types of appliances for which the power is to be used without asking for the maximum supply Figure may be useful for advice on an appropriate tariff, but it would not fully meet the needs of the supplier in being able to guarantee the supply. In addition, the knowledge of the types of appliances to be used does not, of itself, give information on the maximum power demand that is likely to be made because that depends on patterns of usage of the appliances.
Finally, the information provided on types of appliances can only be true in terms of what is being used or what it is intended should be used at a given time. It gives no information on likely usage for the future. It may well be that a customer wishes to have provision for a larger supply than he uses at present against the eventuality that more will be required in the future. By way of further reassurance, the requirement is the same as that which currently exists in legislation. It has not caused any of the difficulties that have been suggested and that has been true since 1899.
Baroness Seear: One understands entirely if we are talking about an industrial consumer and if it has to say how much power it will use. But the situation is different for the domestic consumer. I dare say that the noble Baroness is a much better housewife than I, for I could not possibly say how much electricity I shall use over the next quarter or half year. If you go out into the street and ask the first hundred women what power they shall be using over the next year I doubt very much whether more than 10 per cent. will have a shot at the figure. Of those, 9 per cent. of them will get it wrong. It does not make sense at all. I ask the noble Baroness to take the question back for further consideration as regards the domestic consumer. The requirement is fair enough for the industrial consumer.
Baroness Hooper: Perhaps I did not express myself sufficiently clearly when I explained that it was common practice currently for area boards to help consumers in estimating their consumption, whether they are domestic or industrial consumers. From

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her own personal experience my noble friend Lady Gardner of Parkes said that is so, and in providing this information or in reaching a solution regard is had for the kind of appliances in use.
Baroness Seear: The noble Baroness told us that this has been going on since 1882 or some such time. Whatever it is, it is long enough. Perhaps I may ask the noble Baroness whether she has ever been asked to make such an estimate. In all the years that I have been using electricity no one has ever asked me to make an estimate. It may have been the practice since 1899, but it has been going on in places which most of us know nothing about.
Baroness Hooper: I raised this as a personal problem and said that I had never been asked for such information. I would find it difficult to produce unaided details of my maximum requirements. I am told that is why the procedure has evolved. I understand from people who have recently moved home that they are supplied with a checklist and asked to complete it. Whatever the mechanics are, I would not wish to get distracted too much from the main issue. Suffice it to say that I had hoped to explain that it is in the interests of the supply company to help to obtain the right kind of figure in terms of maximum demand. That is for the reasons that I have stated as regards its own needs for contracting supplies as well as for the types of connections, lines and pipes that would be required.
Therefore whatever the mechanics of assisting the domestic consumer, whom we are all agreed may need some help, the provisions will be adequate. But that does not detract from the argument that simply having a list of appliances would meet the needs and ensure the security of supply that we all wish to have.
Lord Peston: Perhaps I may intervene briefly because it may assist me not to move my own amendments in a moment. I accept the noble Baroness's point that most of us have no experience of this procedure because we do not request a supply. We live in premises where the supply has already been installed, as the noble Baroness, Lady Gardner of Parkes, pointed out. There is no question that arises from our point of view because our interests begin on this side of the mains. This point concerns those whose interests begin on the other side of the mains.
I am extremely sympathetic to what the noble Lord, Lord Ezra, said. Perhaps the noble Baroness can clarify what she meant by supply as regards premises. Does it refer entirely to premises where there is no supply in the sense in which we are discussing it and a request is made for such a supply? Is that all this subsection is about or does it also apply to a situation where you are aware that you are going to use a great deal more electricity? Are we here dealing with a situation where one is changing the present condition, which is precisely what motivates the noble Lord, Lord Ezra? Although you have an electricity supply, in another sense— I speak as a lay person— you want something rather bigger or stronger on the other side of the mains.
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It is not clear to me whether that is covered by this subsection. In other words, supply also means the enlargement of the supply on the far side of the mains. If that is so, I believe that the point made by the noble Lord, Lord Ezra, is germane; namely, that it would be more helpful for the domestic consumer if the subsection were written explicitly to include the appliances rather than in terms that would essentially require a knowledge of thermodynamics if one were to write in "maximum power". That depends on what is meant by supply.
As regards my amendments, it would help me a great deal if the noble Baroness could tell us whether supply also means more supply on the far side of the mains.
Baroness Gardner of Parkes: I believe that it will be better if I say something on this point as I seem to have raised all the problems in the first instance. The position is that most domestic homes have a 20-kilowatt supply which covers practically everything in the home. If you were the kind of person who was suddenly developing in your own basement some new high technology which you thought was going to take a fantastic additional supply, surely you would go back—
Lord Peston: What I have in mind is my role as Dr. Frankenstein building a monster that requires a massive machine.
Baroness Gardner of Parkes: We would certainly wish to know about it if you were doing that. It would be desirable for you to go back to the board and say, "I am intending to create a monster in my basement". I do not know what powers the board would have to prevent you doing that. We are here entering the realms of fantasy. However, without doubt the board would wish to know that you were proposing to do something quite exceptional in your house. That would take you way outside the net of the ordinary domestic consumer. For the ordinary domestic consumer pretty well everyone would be covered by the normal domestic supply. However, if you require an abnormal heavy load supply the area board or the supply company would need to know.
Another point that has not been raised is that if a consumer is asked what appliances she intends to have and she says that she is going to have an electric fire, she will then be asked whether it is a large one or a small one, whether it is one kilowatt or three kilowatts. She may be inquiring about a toaster and she may be asked whether it is to be a pop-up toaster or for thick or thin slices. One can go into all these things and spend hours doing so, but at the end the consumer will be told that she is fully covered by the normal domestic supply.
The supply company has to know the maximum supply required and it will treat your maximum as the domestic norm. The company has to know the maximum because if every person is to be given a slice of cake one has to be sure that the cake is big enough. There is a duty to provide a supply. People like ourselves have all grown used to electricity always being there, and it is an alarming situation if

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there is a failure of supply for any reason, such as there was during that terrible storm. Therefore it is necessary to know the maximum required. It does not matter if people do not use it all. But if the maximum is not known there will not be enough supply to ensure a continuous supply of electricity to people.
Viscount Hanworth: Does the noble Baroness appreciate that in a certain number of cases it is not only the maximum that you wish to know about but the time at which it is used? The electricity company tries to balance three phases. If the situation concerns the normal consumer leading a normal life one can assume that one place is much like another, but it is not always so. Therefore the electricity supply company would be a good deal better off anyway knowing what the consumer had in the way of appliances and, if necessary, in finding out how they are used. Otherwise balancing the three phases, which is very important, may be impossible.
6 p.m.
Baroness Hooper: We have to try to strike a proper balance. We clearly want to make things easier for the average consumer— not just the domestic consumer— but it must be taken in the context that Clause 16 places a specific duty on the public electricity supplier to supply electricity on request to any premises within his authorised area. The effect of this is to give all owners and occupiers of premises the right to require a supply and therefore there is the duty on the supplier to produce it. That has to be taken within certain limits of expectation. The supplier and the consumer between them have to agree what they think will be the maximum supply.
To answer the specific question raised by the noble Lord, Lord Peston, this will apply to all premises where a connection is being requested. It will therefore apply to all new premises. If a supply is already in existence but more is required, an application must be made specifying that. The same process must then be gone through in order to ascertain what the maximum demand will be. This is to ensure that the supplier can fulfil his duty and provide the consumer with a ready supply of electricity, which is, after all, what he wants.
Lord Brain: We have been going round in circles. Maximum power is measured in kilowatts. It is universally known and can be understood by the technicians. But if one says to the customer, "Your supply is for one washing machine, one cooker, three hair dryers, two toasters, an electric kettle and a tumble dryer" and then he changes the mix— who is to know whether they are one kilowatt or 500 watt units?— the result will be nonsense. If one changes one's mix of domestic applicances, the supplier will have no idea whether you are within the limit. Fifty kilowatts is a figure that he knows and everybody else knows. That can be converted into the various appliances by using a checklist which is sent out with the demand form. I have given this information in the past when moving into an older house because I needed to get the kilowattage right. I was helped,
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as the noble Baroness explained. This amendment will cause more complications if it is accepted.
Lord Ezra: The noble Baroness, Lady Hooper, said that we must endeavour in legislation to make life as easy as possible for people and not more complicated. We gathered from the noble Baroness, Lady Gardner of Parkes, who is familiar with these matters, that when a new house has to be connected to electricity people are asked what appliances they use. That information is converted by the skill of the electricty board into what they need to be supplied with. It will know roughly what the figure is. What worries me about the present wording of the Bill is that a duty is put on all potential users to indicate precisely the maximum amount of electricity they are likely to require. I do not believe that the ordinary domestic consumer should be put under that obligation. He might feel that if he does not meet that commitment his supply will be cut off because he has failed to give the information required. I would be happier if the noble Baroness would take this away and think about it from the point of view of making life easier for the ordinary domestic consumer, bearing in mind that what we have heard is done already. Why not mention it in the legislation.
Baroness Hooper: I am sorry that I have been unable to convince the noble Lord. There are obviously two schools of thought. It seems to me that by accepting the amendment, or even agreeing to take it back, I would not necessarily be helping the domestic consumer. We have to ensure that the domestic consumer is helped through the advice of the public electricity supply companies and the advice given by the consumer committees so that a sensible solution can be arrived at for the maximum supply required. As I said at the outset, we are talking about a maximum figure. It will not oblige the consumer to consume up to that amount.
Lord Ezra: I do not wish to divide the Committee on this issue. However, the point remains that it must be our aim and object to make life easy, especially for the domestic consumer of electricity. I reserve the right to come back to the matter at a later stage and think about the advice and assistance that should be given to the domestic consumer to comply with this requirement. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 135A to 136 not moved.]
The Earl of Dundee The Earl of Dundee moved Amendment No. 136A:
Page 14, line 13, leave out ("18") and insert ("17").
The noble Earl said: This amendment is primarily a matter of clarification. As presently drafted, Clause 16(5)(a) establishes that references to giving a supply in Clause 16 and Clauses 18 to 22 also include continuing to give a supply where one is already provided. It is clear from the context of Clause 17 that the same meaning should apply to the term in that clause. Indeed it would be unreasonable to seek to argue that under Clause 17(2)(a) the supplier should be under an obligation to continue to give a

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supply when he is prevented from doing so for reasons beyond his control. The provision in Clause 17(3) also makes clear that the clause is to apply to continuing supplies. The amendment that we have proposed would have the effect of ensuring that there is no ambiguity on the point and that the Bill is consistent in its use of terms. I commend it to the Committee. I beg to move.
On Question, amendment agreed to.
[Amendment No. 137 not moved.]
Clause 16, as amended, agreed to.
Clause 17 [Exceptions from duty to supply]:
Lord Ezra Lord Ezra moved Amendment No. 138:
Page 14, line 31, at end insert—
("( ) Where supply is withheld unreasonably, such as to prejudice the interests of an alternative supplier, then the Director shall intervene to set a reasonable rate for supply accordingly").
The noble Lord said: This amendment relates to the exemptions from the duty to supply and raises the position of small private suppliers. As the Bill is presently drafted, it looks as though a small supplier who gets into difficulty with his supply would not be able to have stand-by arrangements. That would jeopardise his whole position. A large number of small suppliers of 50 megawatts or less are presently operating. Under existing arrangements they have no difficulty in continuing to operate. However, with this clause as drafted their position could be jeopardised. The purpose of Amendments Nos. 138 and 139 is to ensure that these people have a reasonable recourse to stand-by arrangements. If they are left without such facilities their position could be very much worse than it is now. I beg to move.
Baroness Hooper: I have listened carefully to the reasons given by the noble Lord, Lord Ezra, for introducing the amendments. However, I must say that I do not believe that they will achieve what he sets out to achieve. In so far as the public electricity supplier is exempted from the need to provide a supply to premises which are already receiving supplies from someone else down his lines, then it cannot be unreasonable to withhold a supply. We do, however, understand the anxieties expressed by the noble Lord, and indeed we have already taken steps to meet such anxieties. Perhaps it would assist Members of the Committee if I were to explain some of them.
Where a supply is being given to premises by a private supplier but using the public electricity supplier's lines, under Clause 17(1) the public electricity supplier would be exempted from the obligation to meet a request for a supply to those premises. However, under the terms of its licence, the public electricity supplier would be required to offer terms for the provision of top-up or stand-by supplies or sales of electricity to the private electricity supplier. In that way those who purchase supplies from someone other than the public electricity supplier will have indirect access to the public electricity supplier for the security of the supply. In other words, the small or independent
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generator which cannot fulfil by itself the total requirements of the consumer can under the licence arrangement oblige the public electricity supplier to top-up or provide stand-by supplies to it; but the consumer cannot demand that arrangement directly.
We accept that in some cases the final consumer may wish to arrange for part of his supplies to be provided by one or more private suppliers and to contract direct with the public electricity supplier for the remainder. We have already discussed those concerns with the CBI and indeed with other groups, organisations and individuals.
I realise that some doubts or fears have been raised about the attitude of the future public electricity supply companies. However, the area boards have assured us that they and their successor companies will be prepared to negotiate contracts with such customers for the provision of part supplies. Such contracts would reflect reasonable commercial terms, including the provision of appropriate metering and information to enable reconciliation of inputs and consumption. That will ensure that the supplies of electricity to all customers are adequately protected.
Therefore there is no question of the area boards and their successors adopting an all or nothing approach. We believe that the licence provisions which I have explained, together with that assurance from the area boards, should meet the concerns expressed by the noble Lord, Lord Ezra, as regards problems being caused to new entrants in the market. In view of that explanation, I hope that the noble Lord will feel able to withdraw the amendment.
Baroness Phillips: Before the noble Lord responds, perhaps I may intervene for a moment. I am becoming a little concerned and somewhat confused in this matter. Unlike the noble Lord, I am not so well-informed as regards kilowatts and various other matters. I find increasingly that when one wishes to purchase an item one is expected to give an answer to all kinds of questions. Indeed, it is becoming increasingly a do-it-yourself world. I notice that the Minister refers each time to the "public electricity supplier". Surely the Bill is all about the industry not being publicly owned any more; it is going to be privately owned. Plcs are not public— unless I have a total misunderstanding of the words.
Baroness Hooper: Plc literally means a public limited company.
Baroness Phillips: That is right!
Baroness Hooper: That means that the shares are owned by the public. Nevertheless, the name "public electricity supplier" (as defined in the Bill relating to what we now call the area boards) refers to those people who will have a duty to supply the public. That is the reason for the name.
6.15 p.m.
Lord Peston: Before we conclude this issue, I wonder whether there is one matter which could be clarified here. It concerns the issue which I understood to be behind Amendment No. 138. The

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case I have in mind is this. The lines belong to what we call the public electricity supplier; but I (who almost certainly would be a firm rather than a householder) would want my electricity to be generated from the private producer's power station. Therefore that electricity must be sent through those supply lines. As I understand it, that is what is happening.
It seems to me that in such cirumstances the public electricity supplier could then threaten the consumer by saying, "You can do that if you wish and not do it my way, but if anything goes wrong I shall not bail you out." That seems to me to be the point. As I understand it, Lord Ezra is saying that it ought to be the duty of the public electricity supplier to limit such threatening behaviour.
That is my interpretation of the amendment. If that interpretation is correct, then I feel that there is a certain validity in it. It is particularly valid from the Government's point of view as regards their anxiety to promote competition. Indeed, it would be a most unfair practice to say, "Of course I am in principle the back-up supplier, but I am afraid that you cannot rely on me if you do not use me in the first place." Such behaviour is usually regarded in competition matters as being not acceptable.
Therefore the enlightenment we require, and why I think one ought to be somewhat sympathetic towards the noble Lord's amendment, is necessary to avoid precisely that particular practice.
Baroness Hooper: I believe that I gave the answer to this particular issue by referring to the terms of the licence which will require a public electricity supplier to provide top-up or stand-by supplies to the individual generator. In this clause we are talking about a duty to supply the end customer or consumer. It seems unfair if the consumer chooses to use some other supplier— which he is perfectly entitled to do and which we wish to encourage him to do— that the public electricity supplier should also have the duty to supply that consumer. Since any gap that exists will be made up under the licence arrangements which will be enforceable, there is no problem— or at least there should be no problem.
Lord Ezra: As I understand it, the position is that notwithstanding what is said in Clause 17, the licence terms will oblige the public electricity supplier to provide stand-by or back-up supplies in such circumstances. That is what I understood the noble Baroness to have said. All I can say is that I am a little concerned that that should not be written on the face of the Bill. It seems to me to be quite an important issue.
I should have preferred to have seen such a provision written down so that it could be included in the legislation. After all, licence terms can be changed by the director or by whatever other means. Such measures do not come to this Chamber for approval; but legislation must go through the normal parliamentary processes.
I should like to examine carefully what is specified in the licence terms so as to try to be clear about
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what validity that could have in the long term— because these arrangements for the supply of electricity can be for a long term— and then if need be to return to the matter at a later stage. However, in the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 139 and 139A not moved.]
Clause 17 agreed to.
Clause 18 [Power to recover charges]:
Lord Stanley of Alderley Lord Stanley of Alderley moved Amendment No. 140:
Page 15, line 5, leave out ("areas").
The noble Lord said: I ask the Committee's permission to speak also to Amendments Nos. 142, 142A and 144. The amendments ensure that the rural user of electricity will pay the same price as his town cousin. As the Bill is written, it will be possible for the new plcs to charge higher prices to users of electricity in rural or difficult areas, such as the Scilly Isles, than elsewhere. That fact was made clear by the Minister in another place in Committee on 26th January (cols. 506 and 508). I trust therefore that my noble friend will agree with that fact and not waste the Committee's time arguing about it. It is similar to the Water Bill. In the end, I received an assurance from my noble friend Lord Caithness that the plcs could charge differently for water.
I dislike the ability to discriminate against the less well off, rural consumer for the following main reason: it would put further pressure on the small local communities which are so vital to our national and social wellbeing and stability. My noble friend may say that it will not happen because it has not happened in the past. The new electricity suppliers are to be commercially driven. Their main concern will be profit, not service. Of course they will increase their charges when they can. I should do so if I were in their position. The easiest place for them to do so will be in the rural areas where there is probably no other form of power. There is unlikely to be gas or any other form of power because few rural areas have a gas pipeline.
Moreover, the very fact that such plcs will have to compete with other forms of power in the main conurbations may even mean that they will make those areas loss leaders so as to compete. As anyone who has been in a supermarket will know, loss leaders result in excessive profit margins elsewhere. The areas concerned are likely to be the rural areas. Whatever my noble friend says about such profits being subject to the restriction provisions in this clause, or the previous clause, and controlled by the director, she will have to admit that, as the Bill is written, it would be possible to charge extra for those less privileged users. I hope that my noble friend and the Committee will look sympathetically at the amendment. I beg to move.
Lord Carter: I was pleased to add my name to a number of the amendments in the group. As the noble Lord, Lord Stanley of Alderley, pointed out, we are dealing with the danger of differential

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charging ending up as a penalty to those who live in rural areas. In addition to the poverty about which we hear in inner cities, there is poverty in rural areas. It is estimated that 25 per cent. of the rural population lives on or near the margin of poverty.
There are other cases where there is equalisation of charges; for example, postal charges are equalised irrespective of the area in which a person lives. Outside the public sector, for many years the Milk Marketing Board has equalised transport charges for the collection of milk in different parts of the country. I understand that a tariff structure is operated in the north of Scotland by the hydro-electric board, and as a result there has been an increase in the number of premises connected to the electricity supply. The Government should accept the amendments, to avoid the danger of a penalty falling on people who live in rural areas.
Lord Renton: I too wish strongly to support at any rate the principle of the amendments. I do not know whether technically they achieve exactly what my noble friend requires. Surely it is essential that in each area there should be a common tariff for all domestic consumers. There always has been, so far as I know. If it can be done by the North of Scotland Hydro-Electric Board, which has about as widespread a disparity of domestic consumers as one could find almost anywhere in Europe, it should be easily done anywhere else.
I am a keen supporter of the Bill, as the Committee knows, but I would go so far as to say that, if we fail to ensure that there is a common domestic tariff in each area, people in the countryside will regard the Bill as a retrograde step. I press my noble friends on the Front Bench to do something about that.
Lord Ezra: My noble friend Lord Hanworth and I have tabled one of the amendments in the group. I too should like to support the point of principle. The legislation will suffer enormously if, as has just been said, it were shown immediately to react against those who live in rural communities. If we were all starting from scratch and choosing where we lived according to what electricity, water and so on were to cost, that would be different. We live in a situation in which those discriminations do not exist. It is important that that situation be continued and that suitable safeguards are incorporated into the legislation.
Lord Peyton of Yeovil: I too support this series of amendments. The burden which could be placed on rural communities, if their interests were not safeguarded, would result in a major blot on the legislation. I cannot entirely restrain my curiosity. I inquire of my noble friend as to the meaning of the word "undue". Amendment No. 143 tabled by my noble friend Lord Stanley of Alderley seeks to delete the word "undue" from subsection (4), where it is attached to "preference" and "discrimination". I wonder whether when preference and discrimination become undue. I hope that my noble friend will be able to enlighten me.
Baroness Elliot of Harwood: I strongly support the amendment. I live in the Border area, where we
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obtained electricity much later than they did in the Highlands. Living without electricity was extremely exhausting, unpleasant and inconvenient. Electricity made all the difference to people who had never had it before. It is now vital. It would be most unfair if there were any variation in the cost because we live in rural areas. I hope that the Government will be adamant and say that there will be the same charges and opportunities for electricity on farms.
Lord Wise: I support the amendment moved by my noble friend. I believe that it is recognised that in practice, with the possible exception of the Scilly Isles, there is now a common tariff throughout the country. I believe that it will remain so in the north of Scotland. It is considered relevant and useful there, and so one can surely ask why it is unnecessary and undesirable elsewhere.
The restriction imposed in subsection (4) is limited and will in no way protect rural customers. I hope that my noble friend on the Front Bench will look favourably on this amendment.
6.30 p.m.
The Minister of State, Scottish Office (Lord Sanderson of Bowden): I am well aware that many Members of the Committee would like to see public electricity suppliers under an obligation to operate a system of common tariffs within their area. However, I have to point out that it is important that we recognise that the provisions in Clause 18(1) do not impose a requirement on public electricity suppliers to charge differential tariffs but merely allow the possibility of their development at some time in the future. That is no different from the position which applies in England and Wales under the existing law as set out in the Electricity Act 1947. The provisions of that Act neither require nor prohibit area boards from operating different tariffs in different areas.
The requirements on a public electricity supplier not to show undue preference or exercise undue discrimination are an essential element of the tariff provisions. Again, however, these requirements are not new but are part of existing legislation. Let me explain why this is necessary for the protection of consumers. It is our intention that the Bill will introduce real and effective competition into the electricity supply industry in order to create the best deal for the consumer. At least we are at one on that purpose. If we impose restrictions on public electricity suppliers which do not apply to their competitors— for example, if we prevent them from charging on the basis of true cost— it would mean that public electricity suppliers would have to charge at higher levels in the lower cost parts of their designated area than was justified. This would prevent them from competing with other suppliers supplying in only those parts of the area. Equally, restraining prices in higher cost areas to an unduly low level would put up barriers to competition in those areas. None of this would be in the best interests of consumers. Only by allowing flexibility to meet competition can its real benefits be gained.
I noted that my noble friend Lord Stanley of Alderley mentioned the Scilly Isles. Perhaps I may

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take that example as a clear indication of what we feel to be the best way forward for the future. The agreement which was made between the South West Electricity Board and the European Commission to part-fund the construction of a mains link between the Scilly Isles and the mainland requires that for the economic lifetime of the link, tariffs operated on the islands should be the same as those in operation on the mainland. This recognises that for that time all SWEB's consumers will be able to benefit from being supplied through the grid.
I should remind the Committee that the Electricity Bill has not changed the supplier's power to charge different tariffs in different circumstances, where justified, but has merely clarified it. The effect of the condition attaching to the grant will not therefore change as a result of the Bill. The provisions of the Bill, however, which prohibit undue preference and undue discrimination will continue to protect all consumers from unfair pricing practices.
Any variation in tariffs will require to be justified by reference to costs and having regard to the tariffs charged to other customers in comparable circumstances. Any consumer who feels that a public electricity supplier has not adhered to those criteria in individual cases will be able to take his grievance to the director general. If, having investigated the matter, the director general concludes that the criteria have not been met, he may take enforcement proceedings against the public electricity supplier.
As the Committee will be well aware, in the case of the licences and the conditions which attach to any licence, it is forbidden under Condition 2.3 that the licensee should cross-subsidise any of its businesses from any other businesses. I am well aware of the sensitivity of this difficult area and I am also aware— before I am asked about it— of the situation relative to the North of Scotland Hydro-Electric Board. This matter has already been debated under a different amendment. As concerns the North of Scotland Hydro-Electric Board, one of the principal reasons why the geographical area, which is very extensive, with problems very different from those of any other parts of the United Kingdom, has been treated in the way that it has is in effect because 50 per cent. of the electricity generated there comes from the hydro power which is contained within that area virtually alone.
The Earl of Lauderdale: Perhaps my noble friend can tell me one thing. Are we to infer from what he has said that the meaning of the words "due" and "undue" will ultimately be decided by the director general?
Lord Sanderson of Bowden: Yes. If there is a grievance raised by any group of people or person on this matter, the decision would be made by the director general.
Lord Renton: I think we shall have to consider very carefully what my noble friend has said, especially as he is relying upon existing legislation. I am not at all sure that the existing legislation will serve in these new circumstances. We shall have more competition
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and greater freedom on the part of suppliers. Although it may not be the generality, there will be those who try to make up their accounts and achieve their profits— which is laudable— by finding loopholes in the existing legislation. Indeed, there is a loophole in this clause which we are considering. My noble friend Lord Stanley of Alderley suggests in his first amendment that in Clause 18(1), page 15, line 5, the word "areas" should be left out, so that it would not be possible in a particular area for domestic consumers to have other than a common tariff— that is, if my noble friend's amendment were accepted, as I think it should be.
My noble friend Lord Sanderson will no doubt correct me if I am wrong, but another factor that is relevant to this is that I am glad to say that the area boards will be retained. I am particularly glad because in 1957 I had to pilot the Bill in which those boards were established. They will be responsible for their part of the national grid. The area boards should have pretty strong control over the situation in their area. Whatever the other factors resulting from competition which will enter into it, they should be in a position to ensure that in each of their areas there is a common domestic tariff.
Therefore I very much hope that my noble friend will not resist these amendments at this stage. I think that what he has said should make us a little careful, because the existing legislation will perhaps need to be even more closely examined than it has been in order to ensure that there are no loopholes. Let us not in any way have a loophole in the Bill. My noble friend Lord Stanley has suggested that we should close the loophole by leaving out the word "areas" in line 5 of page 15.I think that that should be done anyway.
Lord Peyton of Yeovil: I hesitate to delay the passage of the Bill further but I had not expected that my noble friend's reply would bring us face to face quite so abruptly with competition. That is one of the really divisive issues in the Bill. I know that the Government sincerely and genuinely believe that one of the major benefits to flow from competition will be lower prices, with great benefit to the consumer. They feel that the amendments now proposed would somehow get in the way— as undoubtedly they would, if that competition were real, genuine and bringing the expected benefits with it. I do not believe that, basically because it is difficult to imagine competition producing large and not very well defined benefits where there is no large surplus available to play with. There will not be a large surplus, at least in England and Wales. I fear that the Government, in opposing these amendments on the grounds that they would frustrate the benefits, are taking a ground which seems to me to be unreal.
A further source of anxiety arises from what my noble friend referred to when he said that any variation in tariff would have to be justified according to costs. That goes to the root of the matter. It is precisely in the deep rural areas which do not have many privileges where the variation in costs will occur. I believe it is very important that the Bill should produce adequate safeguards. I hope

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very much that the Government will take full account of the anxieties which were very eloquently expressed by my noble friend Lord Stanley of Alderley. Those anxieties represent the interests of a vital element of the community which does not always get the fair share it is so often promised.
Lord Peston: I did not intend to intervene on this amendment because I took it for granted that the Government would accept it. I do not expect the Government to listen to me with any sympathy, but I should have thought the noble Lord, Lord Sanderson of Bowden, would listen to one or two of his noble friends. I did not understand the noble Lord, Lord Sanderson, to be accepting the amendment or expressing the slightest sympathy towards it. I did not hear him say that he would take the amendment away and redraft it. Therefore, I believe he is against the amendment. I think that is rather unfortunate.
As regards the word "undue" in line 25 of page 15, all we are discussing here are weasel words. The drafters of the Bill do not have the guts to draft it in straightforward terms such as, "preference will not be shown". So, in order to protect consumers from all kinds of unforeseen contingencies, the drafters have inserted words such as "undue". I belong to those who think one should say what one means. The word "undue" is not a meaningful modifier here. I entirely agree with the Members of the Committee who say that it should be omitted.
However, the real point here concerns how the consumer is to be protected. As the noble Lord, Lord Peyton of Yeovil, said, it is hopelessly far-fectched to refer to the suppliers in this connection. We are discussing the area boards; the statutory local monopolies. The public suppliers are simply not competing. It is hopelessly far-fetched to argue that an element of competition is introduced here. It may be introduced at the generating level. One can invent one or two other esoteric areas where there may be some competition. Nevertheless, the idea that the consumer is protected by competition in supply is simply wrong.
How, then, is the consumer protected? I well understand the argument that one can approach the consumer with a cost analysis and tell him that he is paying about eight times what everyone else is paying, but that as a full analysis has been made the consumer concerned should pay that because of the costs involved in his supply. The Government could explain how they are protecting that consumer by such means. They could say they are protecting that consumer by charging him a good deal more than other people because he is so much more expensive to supply. The difficulty here relates to an amendment that I shall discuss later. However, I have raised it before. To the average consumer, all these matters are extremely esoteric. All the consumer understands is that in certain areas he is in danger of being charged a rather high price for the supply of electricity.
As I understand it, this amendment states in a fairly simple way that it would not be wholly unreasonable within a particular area for consumers to be reassured that, broadly speaking, they would
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meet the same tariff. I agree that one could think of all kinds of complications where some people may be considered to be slightly better off than others. However, that is the nature of the world we live in. One cannot fine tune these things perfectly. I do not wish to raise the usual hilarity that occurs whenever I say anything in favour of rural areas. Nonetheless, it seems to me perfectly reasonable for this amendment to go forward, even if we simply remove the word "areas" rather than go into the matter of rural areas.
I hesitate to speak on other grounds because I know that the noble Lord, Lord Sanderson, would think that if I were supporting the provision all his noble friends must simply be mistaken. However, for once, there is a genuine consumer protection point here which the noble Lord should at least be willing to reflect upon. I know that in certain rural areas— for example, the north of Scotland— it is still enormously expensive to connect one or two households to the system. However, viewed in terms of the billions of pounds that this industry is worth, it would be fairly de minimis even to instruct the boards to meet those costs. I regard it as perfectly reasonable for everyone more or less to feel that, within their normal income, they could expect a supply of electricity. I believe that is what the noble Baroness, Lady Elliot of Harwood, said.
I would even go a little further than this amendment. However, the amendment should be taken extremely seriously. As Members of the Committee have said, if one turns it on its head one could say that the ability to carry out this provision already exists, but in practice I believe the provision is rarely used, if at all. If I lived in a rural area, I would smell a rat as regards the Government having gone out of their way to write the provision into the legislation in this form. One or two Members of the Committee have implied that it is suspicious that the Government have gone to all this trouble to write the provision into the legislation if there is absolutely no possibility of it being used.
6.45 p.m.
Lord Renton: I wish to follow up the point about the existing law. The fact that it is not being used under the existing law does not mean that it would not be used under the new law.
Lord Ezra: I wish to support what the noble Lords, Lord Peyton of Yeovil and Lord Peston, have just said about competition in rural areas. That is surely an illusion. If there is to be competition under this Bill, it will occur at the generating end to some degree and it could also occur in the supply to big industrial consumers. However, what we have been saying here in relation to domestic consumers is that there will be public supply companies which will have a private monopoly. It is of vital importance that they be curbed in the use of that private monopoly.
Those who live in rural areas and who have so far been protected in that regard should continue to be protected. We are all concerned about this. I have not so far noted such unanimity during the debates in the Committee stage of this Bill. We are all

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concerned that there should be adequate safeguards under these private monopoly arrangements for those consumers who will not be able to turn anywhere else for alternative supplies. Therefore, I very much hope that the noble Lord will be persuaded by what has been said to him from all sides of the Committee.
Lord Brain: It is not the cost of electricity that we are talking about; it is the cost of distributing the electricity and the cost of the wires. I support the noble Lord in this amendment, in that rural areas are much more costly as regards distributing electricity. Are we to have a different price for houses that are situated a mile away from a town as compared with a house that is situated 10 miles away? Will the legislation go into that detail? Are we to end up with British Telecom charging people on different exchanges different prices for their phone calls because their respective wires are different distances away from the exchange?
Lord Sanderson of Bowden: This is an extremely important subject. I am very pleased that my noble friend Lord Stanley of Alderley has raised it. I fully appreciate his own particular interest. It seems incredible that there is clear unanimity on all sides of the Chamber that downward pressure on prices is what we are all trying to achieve as a result of the passing of this Bill. When 70 to 80 per cent. of the cost lies in generation, that is understandable.
I understand very clearly that adequate safeguards should be written into any legislation. What I am concerned to do however is to ensure that all of us have studied the terms of the licence, which in some respects is not exactly easy to follow, but which the noble Lord, Lord Peston, and I have tried to understand as we proceed with the Bill. I made one point about cross-subsidisation, but I say genuinely to my noble friend that I, and I hope he too, would prefer to look very closely at what I have said and at what we intend in the best interests of the consumer, particularly in the rural areas. Perhaps between now and the next stage of the Bill I can, without any commitment, look carefully to see whether we can do anything which may meet some of the reservations of my noble friend as regards what he would term inadequate safeguards.
Lord Kirkhill: Perhaps I may intervene very briefly to suggest to the Minister that he might look northwards to the present practice of the North of Scotland Hydro-Electric Board.
Lord Sanderson of Bowden: In answer to the noble Lord, Lord Kirkhill, I have already looked northwards. As he will know, as a past chairman of the North of Scotland Hydro-Electric Board, the problems are writ very much larger in that area than they are in the rest of the United Kingdom. Of that there is no doubt. With my responsibility for the Highlands and Islands I know it only too well. The other point is that hydro-electricity generation is a major part of the electricity generation in that area. Fifty per cent. of the power comes from that source.
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It is relatively cheap power, and it has been written into legislation for a very long time that the advantages should be spread across the board geographically.
I understand what the noble Lord says. By the same token, we have to be very clear about what we are aiming at, which is to bring downward pressure on prices. I should not like, without very serious consideration, to move from the position written into the Bill for the rest of the United Kingdom without being absolutely certain that it would do good and not evil.
Lord Kirkhill: I accept all that the noble Lord says. I thought that his noble friends Lord Peyton, Lord Stanley, and others might think it a good idea were he to look northwards once again.
Lord Stanley of Alderley: Before making my concluding speech I ask my noble friend: is he or is he not giving me an undertaking to come back at Report with some form of government amendment to help consumers in rural areas?
Lord Sanderson of Bowden: I have to say to my noble friend Lord Stanley that that is asking too much. I have said that, without commitment, I shall look very carefully at the matter— as I have asked him to do. I am very happy that he should have discussions with us between now and the next stage of the Bill. What I cannot do is give him a commitment that the Government will come forward with an amendment at Report.
Lord Stanley of Alderley: I thank my noble friend for that reply. At least I know where I stand. I should like to thank noble Lords on all sides of the Chamber who took part in the debate. I believe that all Members of the Committee understand what I and the noble Lord, Lord Ezra, are trying to achieve with these amendments. I take the point made by my noble friend Lord Renton that we should perhaps look at existing legislation and change that. I am afraid that I have not done that, as my noble friend knows, but perhaps that represents another solution.
My main concern is the question of profit before service. I believe, in an old-fashioned way, that service should come before profit. I think that that is where I part company with some Members of the Committee.
My noble friend Lord Peyton raised the question of the word "undue". I think that that point was answered very nicely by the noble Lord, Lord Peston. I took the word out because we had had trouble with it in the Water Bill. I was advised that it gave great scope for any future plc to do more or less what it liked. I am not a lawyer but I took that point. That is why I took out the word "undue". I hope that that answers that question.
My noble friend Lord Sanderson said, quite correctly, that there is nothing in this Bill that would force plcs to charge different prices. The corollary is that there is nothing to prevent them from doing so. I was surprised that he brought up that point because he must have realised that I have read fairly carefully— as have other noble Lords— the

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discussion in another place in which that argument was cut down to size.
My noble friend Lord Sanderson also pointed out that we were all trying to give the consumer real and effective protection in the form of competition. I am sorry; we do not have competition in the villages or remote areas, as has been pointed out time and time again, particularly by the noble Lord, Lord Ezra. I do not believe that my noble friend grasped my fairy tale about loss leaders. The effect in villages and rural areas will be the opposite. There will be competition in the conurbations, where plcs will drop their prices in order to compete with gas, but in the villages there is no need for them to do so because there is no gas or other alternative. I am afraid that I cannot wear that argument.
The noble Lord, Lord Carter, raised the question of Scotland. My noble friend on the Front Bench said that Scotland was different; it had hydro-electric power. What is the difference between Scotland and Wales?
Lord Sanderson of Bowden: Perhaps I may be permitted to intervene in this interesting discussion. The fact is that the North of Scotland Hydro-Electric Board area is the only area where common tariffs exist as of right on a geographical basis— not the whole of Scotland.
Lord Stanley of Alderley: I am terribly sorry; I meant to say the north of Scotland. I shall ask: what is the difference between the north of Scotland and the north of Wales? In fact, that suits me better because in the north of Wales we have two nuclear power stations; so we provide quite a lot of power, just as the north of Scotland provides a lot in the form of hydro-electric power.
I have no doubt that my amendment is not drafted 100 per cent. correctly. I have no doubt that it ought to be changed. But, in all seriousness, my noble friend has given me nothing. If I were to be unkind— which I am quite often, and perhaps brutal— in my words (because I am a farmer) I should say that he may have been just a little shaken by the support I have received from the rest of the Committee, so he tried to palm me off with some very nice words. They were nice, but I am afraid that I want more. If the Committee accepts the amendment and the drafting is wrong I shall remove it at Report and put in something far better which would meet the point made by my noble friend Lord Renton. In the meantime, I believe that I cannot detain the Commmittee any longer.
6.57 p.m.
On Question, Whether the said amendment (No. 140) shall be agreed to?
Their Lordships divided: Contents, 65; Not-Contents, 67.

DIVISION NO. 2

CONTENTS

Airedale, L.

Carmichael of Kelvingrove, L.

Amherst, E.

Brain, L.

L. Carter, L. [Teller.]

Brooks of Tremorfa, L.

Cledwyn of Penrhos, L.

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Cocks of Hartcliffe, L.

Monson, L.

Davies of Penrhys, L.

Nicol, B.

Dean of Beswick, L.

Northbourne, L.

Dormand of Easington, L.

Ogmore, L.

Elliot of Harwood, B.

O'Neill of the Maine, L.

Elwyn-Jones, L.

Peston, L.

Ewart-Biggs, B.

Peyton of Yeovil, L.

Ezra, L.

Pitt of Hampstead, L.

Fisher of Rednal, B.

Renton, L.

Grey, E.

Rochester, L

Halsbury, E.

Saltoun of Abernethy, Ly.

Hanworth, V.

Seear, B.

Harrowby, E.

Shannon, E.

Houghton of Sowerby, L.

Sharples, B.

Irving of Dartford, L.

Stanley of Alderley, L. [Teller.]

Jay, L.

Kinloss, Ly.

Stedman, B.

Kirkhill, L.

Taylor of Blackburn, L.

Lauderdale, E.

Taylor of Gryfe, L.

Lawrence, L.

Taylor of Mansfield, L.

Listowel, E.

Underhill, L.

Lloyd of Kilgerran, L.

Wallace of Coslany, L.

Lockwood, B.

Weir, V.

Macaulay of Bragar, L.

Whaddon, L.

McNair, L.

White, B.

Malmesbury, E.

Winchilsea and Nottingham, E.

Masham of Ilton, B.

Mason of Barnsley, L.

Winstanley, L.

Mishcon, L.

Winterbottorn, L.

Monk Bretton, L.

Wise, L.

NOT-CONTENTS

Arran, E.

Johnston of Rockport, L.

Balfour, E.

Joseph, L.

Beaverbrook, L.

Kimball, L.

Borthwick, L.

Long, V.

Brabazon of Tara, L.

Lyell, L.

Bridgeman, V.

Mackay of Clashfern, L.

Brougham and Vaux, L.

Macleod of Borve, B.

Caithness, E.

Margadale, L.

Campbell of Croy, L.

Marshall of Leeds, L.

Carnock, L.

Mersey, V.

Colwyn, L.

Monteagle of Brandon, L.

Constantine of Stanmore, L.

Mottistone, L.

Craigavon, V.

Munster, E.

Craigmyle, L.

Murton of Lindisfarne, L.

Davidson, V. [Teller.]

Nelson, E.

Denham, L. [Teller.]

Nelson of Stafford, L.

Dundee, E.

Norrie, L.

Eden of Winton, L.

Northesk, E.

Elibank, L.

Orkney, E.

Elliott of Morpeth, L.

Pender, L.

Ferrers, E.

Penrhyn, L.

Fraser of Carmyllie, L.

Portsmouth, E.

Gardner of Parkes, B.

Redesdale, L.

Glenarthur, L.

Sanderson of Bowden, L.

Grantchester, L.

Selkirk, E.

Gray of Contin, L.

Skelmersdale, L.

Greenway, L.

Strathclyde, L.

Harmar-Nicholls, L.

Thomas of Gwydir, L.

Havers, L.

Torrington, V.

Henley, L.

Trumpington, B.

Hesketh, L.

Vaux of Harrowden, L.

Hives, L.

Wynford, L.

Hooper, B.

Young of Graffham, L.

Hylton-Foster, B.

Resolved in the negative, and amendment disagreed to accordingly.
The Earl of Dundee: The Committee may feel that we have reached a suitable moment to break. We shall return to this Bill in an hour's time, at five past eight. I beg to move that the house do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Magistrates' Courts (Remands in Custody) Order 1989
7.5 p.m.
The Earl of Arran The Earl of Arran rose to move, That the draft order laid before the House on 3rd May be approved [20th Report from the Joint Committee.]
The noble Earl said: My Lords, I beg to move. This order, which has been considered by the Joint Committee on Statutory Instruments, gives effect to Section 128A of the Magistrates' Courts Act in four areas. These are the petty sessional division of east central, in inner London, the outer London borough of Croydon, the metropolitan borough of Manchester and the petty sessional division of Nottingham.
It may be of some help to your Lordships if, first, I fill in some of the background to Section 128A and remind the House of its effect before explaining why we are seeking approval for the order.
Section 128 A was added to the Magistrates' Courts Act 1980 by Section 155 of the Criminal Justice Act 1988. That section developed out of the findings of the court escort scrutiny, carried out by the Home Office and Lord Chancellor's Department in 1985. That scrutiny found that many eight-day remands are purely formal. It is clear before they happen that no progress will be made with the case and that all that will happen is that the defendant will be further remanded. This is wasteful of time and resources for those who escort prisoners, for prisons and for the courts themselves. If 28-day maximum remands were introduced throughout England and Wales and court savings were estimated to be in the order of some 68,000 remand hearings a year, a valuable saving that should enable other cases to be dealt with more expeditiously. Similarly there would be a saving in time for police and prison officers in respect of escorting prisoners to and from courts which could be used in more constructive ways.
We decided, therefore, in the light of this and the comments received on a consultative paper that we issued, to introduce a provision allowing courts to remand in custody for up to 28 days in certain circumstances.
Section 128A now provides that a court may remand a defendant in custody for up to 28 days provided that it has previously remanded him in custody for the same offence and provided that he is before the court; in other words, eight days remains the maximum period for the first remand in custody and a longer remand cannot be made unless the defendant is present. Before exercising the power, the court must also have regard to the total length of time the defendant will have spent in custody, if it does so, and it must give both parties an opportunity to make representations and then set a date on which it expects the next substantive stage in the proceedings to go ahead. It can then remand to that date or for 28 days, whichever is the shorter. The section specifically preserves the defendant's right to apply for bail while he is remanded in custody. Concern was nevertheless expressed about this provision during its passage through Parliament. This focused, on suggestions that if it were enacted
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defendants would spend longer in prison, that the opportunities for bail would be decreased and that the remand population would increase.
We do not believe that this will be the case. Nevertheless, my right honourable friend the Home Secretary decided that the power would be introduced first on an experimental basis in a few areas rather than nationwide in one go. The Government made it clear both here and in another place that they would not wish to extend the arrangements throughout England and Wales if the experiments showed them to have the results which opponents feared.
I turn now to the experiments and the specific purpose of this order. Information about the use of remands in custody and the length of time spent in custody under current legislation has been collected since October last from four magistrates' courts. They are Manchester City, Nottingham City and County, Croydon and, for inner London, Highbury Corner. The Home Office Research and Planning Unit is collating and analysing this information and it will be used to provide a basis for comparison with the way in which the courts use the new power. We now have sufficient information to proceed to the second stage in the experiments by introducing the new power to these courts. That is what this order does.
We have made it clear that these experiments will be fully monitored and the results published. Before asking your Lordships to approve the extension of this power to the rest of the country we shall want to look at the results very carefully. Meanwhile, I am sure noble Lords will agree that it is right to press on. As I mentioned earlier, there are potentially significant gains to be made in the more efficient use of police manpower and prison manpower— which will be available to improve the regimes in our prisons— and, last but not least, in the courts themselves.
I therefore commend this order to your Lordships' House.
Moved, That the draft order laid before the House on 3rd May be approved [20th Report from the Joint Committee.]— (The Earl of Arran.)
Lord Mishcon: My Lords, I am sure that the House will wish to express its appreciation to the noble Earl for the clarity with which he explained this statutory instrument. I wish that I could say that the statutory instrument itself deserves commendation. Indeed, it does not. I submit to the House that this is not only a retrograde step but a seriously wrong and in fact scandalous step when one realises just what is happening in our prisons in connection with remand prisoners generally.
It is the convention of this House that when a vote has been taken— as it was in the Standing Committee, as the noble Earl correctly said, and indeed there was a Division called on this statutory instrument— we do not call a Division in this House. If that were not the convention I say very frankly from these Benches that we would have prayed against the order and wanted to divide the House. However, as I said, we are bound by the convention.

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As I have used rather strong language, the House will expect me to justify what I have said about a scandalous situation. This statutory instrument is brought before Parliament a few weeks after an exchange at Question Time in this House on 24th May which was concerned with remand prisoners. Perhaps I may be permitted to remind your Lordships that the discussion arose out of a Question tabled by the noble Lord, Lord Hylton. It is recorded at col. 391 of our proceedings of 24th May.
Together with my noble and learned friend Lord Elwyn-Jones, I ventured to put to the Minister certain very serious statistics showing the present position in regard to remand prisoners and the length of stay on remand. At this stage I shall only deal with the figures that I gave to the Minister and his reply. I brought to his attention the fact that at any one time there were 850 prisoners on remand awaiting trial for a period of more than six months and of that figure 100 were awaiting trial in prison on remand for more than a year. I abbreviate the Minister's answer because I am only dealing with those statistics, but he replied to me:
"I accept what the noble Lord, Lord Mishcon, says in general".
So the figures are not in any way denied.
At this moment in the history— the disgraceful history— of the conditions in our prisons, when there are far too many people confined in one cell and where in that cell the isolation from general life even of a prison is a disgrace, there are people who have not yet been found guilty of the offence with which they are charged who are languishing for such periods of time before trial. One would have thought that when the noble Earl said that the Government were going to get a move on, the "move on" would be to see that every step was taken to ensure that remand prisoners were brought to trial as soon as possible; moreover, that every court in the land would watch to see that that happened and would put to the prosecution at very frequent intervals questions of why the matter had not yet been brought to trial.
We used to have a safeguard in the rule that prisoners were brought before the courts every eight days before a further remand was ordered unless there was a voluntary agreement by the prisoner to another effect. What will now happen is called an experiment, but if it is an experiment it is an amazing one in the circumstances which I have tried to describe to the House. There is no experiment about, "Please we are increasing bail hostels" or "We are making sure that the courts inquire more closely into why trials are taking longer". A court will now have the right to order a maximum period of 28 days. It will no longer be eight days. I appreciate that it is a maximum but one knows that maxima are generally used— in fact they are not treated as only maxima. The excuse is given that if there are any exceptional circumstances or change in circumstances the prisoner will have the right to come back to the court and make an application even though the 28-day order has been made.
That completely ignores the practicalities of the situation. The prisoner does not receive a telephone call from his solicitor 48 hours after he has been put on remand asking whether there are any exceptional
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circumstances or if there has been a change in circumstances. There is not that kind of communication. Letters are not received within 48 hours, 72 hours or even seven days after a prisoner is put on remand. When the eight-day remand period was in vogue— as it still is except for the changes that will be made by this statutory instrument which is called an experiment— every eight days counsel had a chance to talk to the prisoner to find out whether there was any change in circumstances. That opportunity will no longer be given.
This is happening at a time when scandalous figures have been brought before this House and the Minister has had to agree with their accuracy. We are finding not that prosecution authorities are encouraged to get on with the case or that the courts are encouraged to look into the situation to discover why matters are not dealt with so that the prisoner on remand is brought to trial as soon as possible; we are being told that in four areas the period of remand will be increased before the prisoner has a practical opportunity to come back to the court to argue why the remand period should not be ended or abbreviated. It is a very serious step that the Government are taking. I repeat that, but for the convention that binds us, there would have been a prayer against this statutory instrument. On behalf of my noble friends I should have wanted to divide the House.
Lord Elwyn-Jones: My Lords, I rise to support the views that have been expressed by my noble friend Lord Mishcon on what I can only describe as a deplorable response to the powerful exchanges emanating from all quarters of the House on 24th May about the scandalous state of affairs in relation to prisoners on remand.
First, we reminded ourselves that, of the prisoners remanded in custody, 40 per cent. are either acquitted or given non-custodial sentences at their trial. That is the fact. Yet all those potentially innocent prisoners— because the presumption of innocence until guilt is proved is an important part of our criminal law— so held are treated worse in many ways than many prisoners who are already convicted. This appalling combination of time spent and the worsening of conditions that have to be suffered by remand prisoners is a deplorable element in our prison arrangements. For instance, educational and recreational facilities are often minimal for remand prisoners. They spend most of each 24-hour period locked in their cells. Yet they are not only potentially innocent, but, at worst, they suffer no fate such as that which they suffer during the period when they are held for trial. It is a situation which should have called for an urgent response by the Government, not in making things potentially worse— as this order will do— but at the very least improving the position.
Determined measures to reduce the number of remand prisoners are essential if we are to relieve prison overcrowding and ensure that our penal system reflects some at least of the basic principles of what decent criminal justice ought: to represent. This is a sad occasion. It is a pity that there are not more of us present to explore and indeed expose

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what is proposed. Far from achieving the objective of reducing the size of the prison population, this order may well have the opposite effect.
I share my noble friend's dismay at what is proposed and our inability— I shall not use the unkind word futility— of the House to do much about prison conditions.
The Earl of Arran: First, I should like to take note of and give considerable observance to, the points made by the noble Lord, Lord Mishcon, and the noble and learned Lord, Lord Elwyn-Jones, and in particular to the point made by the noble Lord, Lord Mishcon, concerning the convention of the House. We know that the noble Lord, Lord Mishcon, however deeply and strongly he feels about a matter such as this, by convention does not divide the House. However, I shall endeavour to make some points against the issues that the noble Lord, Lord Mishcon, and the noble and learned Lord, Lord Elwyn-Jones, have raised.
Of course as we have said many times before, both here and in another place, this Government take very seriously the situation concerning the remand population of prisoners at the moment. I believe and hope, as all noble Lords know, that work is being done to provide better information to magistrates' courts through bail information schemes, which the noble Lord, Lord Mishcon, touched upon. Over the three financial years up to April 1991 a further 500 bail hostel places will be provided and improved training on bail decisions is being provided by the Lord Chancellor's Department. The first electronic monitoring trial involving people on bail will commence in Nottingham on 14th August and two further trials will commence in North Tyneside in September and Tower Bridge, London, in October.
The noble Lord, Lord Mishcon, touched upon prisoners in police cells. On 2nd June, 175 prisoners, mostly on remand, were held in police cells. The consequences of the recent disturbance at Risley Remand Centre account for 136 prisoners being locked out of prison in the northern region. The prison service is working on measures to reabsorb these prisoners into the prison estate. The situation is very much better in the South East, where 39 prisoners are currently held in police cells and where the picture is better than it has been for more than two years.
The noble Lord, Lord Mishcon, touched upon the opportunity for the defendant to meet his solicitor. We have heard that the remand hearing provides an essential opportunity for the defendant to meet and consult with his solicitor. However, I wonder whether a weekly remand hearing is the best or only way of engineering such an opportunity. Obviously, if the proposals are adopted, solicitors will visit their clients more often in prison. We accept that on occasions in the past solicitors have experienced difficulty in gaining access to their clients. We accept also that with a longer maximum period it will be more incumbent on the prison authorities to ensure that such problems are overcome. However, the idea that a formal court hearing can be justified simply
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as an opportunity for consultation does not survive close examination.
The noble and learned Lord, Lord Elwyn-Jones, touched on remand prison conditions. It is the Government's contention that this order will not worsen prison conditions. It is hard to see how this could possibly be so. The hope on the contrary is that prison staff who now have to leave their establishments to escort prisoners will be available to improve regimes within the prisons.
In conclusion, I hope I have made it quite clear that this is an experimental situation, and that the experiments will at all times be fully monitored and the results published. It is right that any proposal to change the law governing the remand in custody of defendants not yet convicted of a criminal offence should receive the most careful consideration by Parliament. There are, however, good grounds for believing that the present arrangements can usefully be reformed without prejudicing the interests of justice and fairness to defendants.
The aim, once again, of the experiments is to establish that the benefits to be gained from dispensing with unnecessary court appearances are not outweighed by other costs, including the cost of defendants remaining in custody for longer than would otherwise have been the case or was necessary. There is no question of rushing this fence. Nevertheless it is incumbent upon us all to take all reasonable steps to dispense with unnecessary court hearings. The burden on the magistrates' courts and the volume of criminal cases which they now have to deal with are so substantial that unless we capture savings which have been identified then delays will increase rather than diminish. Therefore I commend the order to your Lordships' House.
On Question, Motion agreed to.
Lord Strathclyde: My Lords, I beg to move that the House do now adjourn during pleasure until 8.5 p.m.
Moved accordingly and, on Question, Motion agreed to.
[The Sitting was suspended from 7.31 to 8.5 p.m.].

Electricity Bill
House again in Committee on Clause 18.
[Amendment No. 141 not moved.]
Lord Peston Lord Peston moved Amendment No. 141 A:
Page 15, line 13, at end insert ("and understanding of it").
The noble Lord said: This amendment is of some significance. Earlier in Committee we were discussing tariffs, and so forth. I waxed strongly about the formulae which will be used to fix tariffs, not least those fixed by the suppliers. My view was that the formulae are extremely complex and difficult to understand and that is a worrying matter.
Having argued that view to Members of the Committee, several people wrote to me pointing out that I was mistaken in assuming that the formulae

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were difficult to understand. They explained them to me, in every case saying that they were extremely easy and I had completely misunderstood them.
The amendment is not unrelated to that which we discussed before the break. It concerns the need for the tariff and the method of determining it to be comprehensible and adds the words "and understanding of it". I slightly regret not going a little further than adding those words. On reflection, leaving in the words "in the opinion of the supplier" is not entirely satisfactory. I should rather have said "in the opinion of the director". However, that is a mere detail. It is important to press on the Government the need not merely for publicity per se, but for people to be able to understand the formulae and why they are being charged a particular amount.
As a matter of good business practice, a rational supplier would undertake to do so; but I do not wish to rely on that entirely where the supplier in question has a monopoly. Therefore I press the point about understanding and table this amendment with a view to hearing the Minister's comments and those of other noble Lords should they find this matter interesting. I beg to move.
Lord Renton: There are so many different levels of understanding in the community, and I suppose that those who are born very clever have a reasonable opportunity of understanding even though something is gibberish. The average person may find that something which is necessarily technical may be rather difficult for him to understand. In the very nature of things, for every person of average understanding, there are a great many people with less than average understanding. The question is: whose understanding is it that the noble Lord, Lord Peston, is trying to get at?
Lord Peston: I believe that that is an interesting point but I do not believe that it is quite devastating. Of course, as a university teacher, I am well aware of the different levels of understanding or not understanding. I assume that we should have to have recourse to the notion of the average or within 10 per cent. of the average consumer or something of that nature.
This relates to certain arguments which we have had before. There is no point in giving publicity in this area except with a view to helping people to understand what is happening. I think we can agree on that. Let me hasten to add that I am not suggesting that the formulae, which even I had difficulty in understanding, should be in the publicity. However, to go back to some of the debates which we have had earlier, not least connected with rural areas, in so far as the tariff reflects costs and the supplier wishes them to be thought reasonable, I should have thought that there should be an obligation on the supplier to enable people to understand at least simple matters of that sort to do with cost and the difference between a standing charge and the cost of the current, and so on and so forth.
I am not certain that those matters are terribly difficult for most people to follow. I am fairly certain, particularly with the modern approach to these
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matters when we are all involved with energy efficiency and so on, that the more we can educate the public on matters of this sort, the better it will be. I do not regard my remarks as out of sympathy with the Bill. I am out of sympathy on other grounds, but I believe that this sort of amendment is within the spirit of the Bill, and is one to which the Government could give some thought. I do not press the point any more strongly than that.
Baroness Gardner of Parkes: I am not sure that there is much point in this, although I do not believe that there is any harm in it. We have always tended to take a view in Committee that unless there is a point in putting in something, then one does not want to complicate the legislation with words.
As I understand electricity now— and I believe that it will be the same in the future— the one matter in which the consumer is interested is what he will have to pay. He is not really interested in how the formula is worked out to achieve the result, but if he thinks he is paying more or less than the man next door, then he is concerned about that. He wants to see a published tariff and there is now a tariff published widely in newspapers. If I gave a list of all the local papers in which the tariff is published in the London area, then Members of the Committee will see that that is very good business for the local newspapers.
The main feature of the published tariff is that the difference is shown between someone using offpeak and standard units. The argument over a standing charge and units used is a different matter. That argument has gone on for a long time and everyone believes that it is fairer to have a standing charge because people would be disadvantaged by a change in the system. Over the years in the gas and electricity industries there have been arguments as to which is the best system, and various methods have been tried but that is a different matter.
The tariffs are published in a fairly simple way for those people who are interested to understand. However, most people are really interested in what they have to produce from their pocket at the end of the day to meet their bill. Provided that they are satisfied that the director is watching their interests and that he is the man determining the tariffs, they will not care whether he works it out using the x plus y plus z formula or the k, 1 and p formula. The erudite formula is not something of interest to people although the actual tariff is. I believe that the words are adequate on that point.
Lord Brain: I believe that this is perhaps unnecessary because publicity is not adequate if it is not understood. I suspect that one is adding words unnecessarily. I take the point that was mentioned from the Front Bench about the words:
"in the opinion of the supplier".
Surely "adequate publicity" is a broad general term and one does not need to qualify it by the opinion of anybody. I know that that is not part of the amendment, but I wish to draw that to the attention of the Government.
Lord Sanderson of Bowden: I believe that we are in total agreement with the noble Lord, Lord Peston, that consumers should be entitled to know the basis on which their electricity tariffs have been made. Like my noble friend Lord Renton however, I believe that the amendment is unnecessary.
As the Committee will be aware, we have already placed a requirement on suppliers in subsection (2) of Clause 18 to frame their tariffs in such a way as to show the methods by which, and the principles on which they have been made as well as the prices to be charged. When the tariffs are published, if the director considers that insufficient information has been provided he will be able to use his powers under Clause 46 of the Bill to require the supplier to provide such additional information as he considers necessary. Therefore, I believe that that answers the point of the noble Lord, Lord Peston, on the words:
"in the opinion of the director".
That is where he comes in. Or, if the information provided is not clearly set out or is not comprehensive, he will be able to remedy the situation. We feel that that is an adequate safeguard.
I am pleased to say that in many cases electricity suppliers give very comprehensive information. Perhaps I may say to my noble friend Lady Gardner that not only in her area but in others we find the standing charge very well explained; for example, in the East Midlands Electricity Board publicity when it sends out bills, and so on. I hope with that explanation of where the safeguard lies for the consumer, the understanding will be in terms which they can understand as can the noble Lord, Lord Peston, and myself.
8.15 p.m.
Lord Peston: I thank the noble Lord for his reply which I understand. I am quite sympathetic to the point of view he takes. It just seems to me— and I leave this thought with Members of the Committee— that if we are to have this new Electricity Bill which is a new departure for us altogether, that where the opportunity arises we should take advantage of the new departure and not simply say that matters are all right now.
I feel that the area of educating people in energy matters and so on is not one which we should ignore. I believe that the noble Lord is saying that I am to some extent over-egging the pudding in insisting on understanding but I do that for good reasons. However, having made my point, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Hanworth Viscount Hanworth moved Amendment No. 141B:
Page 15, line 16, after first ("charge") insert ("so framed as to show the methods by which and the principles on which the charge is made,").
The noble Viscount said: Many of us dislike the principle of standing charges particularly because it bears so hard on the poor who use so little electricity. One fears that arguments might be put forward (or rather one fears no arguments against might be put forward) for increasing these standing orders. This amendment simply puts into the Bill that the
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methods by which and the principles on which the charges are made should be stated. I beg to move.
Lord Sanderson of Bowden: Again, under the provisions of Clause 18(2), when a public electricity supplier fixes a tariff he will be required to present it so as to show the methods by which, and the principles on which, the charges making up the tariff have been made, as well as the prices to be paid. These requirements will apply to any of the charges included in the tariff whether it be the unit rate, a standing charge or any of the other types of charges covered by Clause 18(3). There is therefore no need to duplicate the requirements of subsection (2) in each specific case given in subsection (3).
The Committee will be aware that the provisions of Clause 18 are substantially the same as those which apply now to the area boards when fixing their tariffs under the Electricity Act 1947. These have resulted in the boards producing very helpful explanatory leaflets for their customers setting out the different tariffs and showing what those tariffs represent. Other boards provide this type of information on the back of the quarterly bill itself; as does the East Midlands board to which I referred. We would expect this type of practice to continue.
We have, however, introduced a new safeguard for customers in our proposals to ensure that they are kept fully informed. Condition 7 of the public electricity supply licence requires a supplier to keep the director informed of the tariffs fixed by him and the charges which make them up. Where the director considers that any of the tariffs fixed are so complex that explanatory statements are required to assist consumers, he may direct the licensee to draw up an explanatory statement which he will have to publish alongside the tariffs to which they relate. This will ensure that customers are fully aware of what they are being asked to pay for.
I hope that with that explanation and the knowledge that on the charge sheets which come out the method by which the standing charge is explained, as in some of the area boards' explanatory leaflets that I have seen, the noble Viscount will consider withdrawing his amendment.
Baroness Seear: The noble Lord said that at present it comes out in some of the area boards' leaflets. We should like to ensure that everybody who receives a bill has a clear explanation of how the standing charge has been arrived at.
Before the noble Lord replies, which I see he is graciously about to do, it is not good enough to say that because it is being done at present it will be done the same in the future. The whole point that we have been making throughout the evening is that we are moving from a public to a private enterprise way of doing things. To expect us to take it for granted that because it is being done in the public sector it will be done in the private sector, with, quite properly, different objectives is to tax our credulity rather far.
Lord Sanderson of Bowden: The noble Baroness tempts me to go down a road which seems to imply, by her way of putting it, that everything in the public

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sector glitters with gold and everything in the private sector does not; but I shall not. However, I should like to point out that the reason I said some electricity boards is that I have not studied every single publication of all the electricity boards. Therefore I could not say that it is the case for all. Nevertheless, I say that by the measures which are being brought forward in this Bill and by setting up the directorate under the director general who has the power to intervene I believe we are providing the safeguards necessary to carry through what the noble Baroness and I both want.
Viscount Hanworth: It seems that the principle behind this amendment has been accepted. On the other hand, one is not entirely satisfied that there is not a case for including this amendment in the Bill. Nevertheless, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 142 to 1447A not moved.]
Lord Campbell of Croy Lord Campbell of Croy moved Amendment No. 144A:
Page 15, line 27, at end insert—
("and charges for initial connection shall be in accordance with a common tariff for identical work.").
The noble Lord said: This amendment raises the question of charges for connection to a mains supply in remote areas. I have in mind, of course, northern Scotland, where difficult situations can arise. This is related to but is different from the subject that we debated on 16th May on my Amendment No. 74 to Clause 3(2). On that amendment my noble friend Lord Sanderson gave the assurances that I sought about a common domestic tariff in the area of the North of Scotland Hydro-Electric Board.
Clause 19, which we shall come to, refers to reasonable charges and gives the director some discretion. However, on reading that clause, that seems to mean what is reasonable for the supplier, and on this amendment to Clause 18 I am concerned with the consumer. I must make clear that I am not in favour of a right to a highly subsidised supply to any and every habitation. I can think of cases where a single house is miles from any main supply, in a remote glen with very difficult access. The cost in such a case could be £ 100,000 or more simply for a single connection. I am not urging extreme, extravagant proposals.
However, it must be faced that remote areas have problems of geography and distance in supply to resident and active communities. That has been recognised in the regime which has been pursued by the North of Scotland Hydro-Electric Board since its inception in the early 1940s. The latest of its schemes ended last year, but it was ended by a decision taken in 1983 because it was only a five-year scheme. That scheme was called the uneconomic rural development scheme, and a passing reference was made to it earlier this evening by the noble Lord, Lord Carter.
Other consumers in the area of that board in effect paid for assistance in special cases over that period of five years, with some subsidy. However, the
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conditions of that scheme were that only existing and occupied premises qualified. Further, £ 600 had to be produced by the prospective consumer and there was a limit of £ 10,000 from the board. The scheme was also supported by EC funds. It did not apply to new premises. I would be surprised if all the existing premises which need connection, and deserve it on development or serious community interest grounds, have by now been covered. Indeed, there may be new premises, perhaps essential for some desirable development in the Highlands or Islands, where a connection charge could be prohibitive in the absence of the recent scheme.
I recognise the requirement to be fair to all consumers. I can speak with confidence from my own experience for two reasons. First, I have been a resident and a consumer in the area of the North of Scotland Hydro-Electric Board for over 30 years. Secondly, for two periods I was a Minister responsible for electricity in Scotland— in the early 1960s and again in the early 1970s. I am certain that the large majority of consumers in northern Scotland are still prepared collectively, when paying their electricity bills, to make a contribution to special cases in the remote areas. Of course, the effect on each is fairly insignificant. I am one of those consumers and I quickly add that my home is not in a remote part of that area.
What I now suggest— I do not think it has previously been put forward— is that there should be a common basis for connection charges throughout the area of the board. This would mean that there would be the same charge, for example, for identical work for 100 yards of the same type of cable laid in a similar situation. It would even out the elements of distance to remote areas and of transport to the islands. An item of equipment in Orkney would cost the same as in Angus; for example, laying of 100 metres of the same type of cable. This principle would not encourage very expensive connections unless the prospective consumer regarded the project as so important that he was prepared to pay a great deal. I feel sure that the majority of consumers in north Scotland would still willingly share the expenses of such connections, as they have in the past in previous schemes.
I have not designated the north board area in this amendment though I have it in mind. I suggest that it is the most relevant area in the country as regards remote and difficult connections. Again I draw attention to the point concerning possibly hybridity that I raised on 16th May. I understand that the Government do not wish to put in the Bill a fairly arbitrary area. They can do it in an order later as subordinate legislation. But they do not wish to do so in a Bill in case it runs the risk of suddenly raising questions of hybridity and therefore taking up a huge amount of time and probably running into the next Session. If after mature consideration the Government accept in principle what I am proposing, the designation of the north of Scotland area— and any others if they were thought suitable for similar treatment— could be done by order as is proposed in regard to Clause 3.
I remind the Committee that my noble friend Lord Sanderson gave very satisfactory and welcome

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assurances in the debate on my amendment on 16th May which concerned the question of a common domestic tariff. I hope that the Government will consider carefully the subject that I have raised with this amendment on connection charges. If the proposal in the amendment is not acceptable, I ask the Government this evening to indicate how they visualise dealing with reasonable situations in remote areas and how they will be handled in the future. Perhaps they have an alternative in mind. At this point I beg to move the amendment.
8.30 p.m.
Lord Renton: I have a great deal of sympathy with my noble friend as regards this amendment. I am sure that what he is suggesting would be desirable if it were truly practical. The trouble is that it is fairly rare for the work of connecting to one house to be identical to the work of connecting to another. Premises and subsoils differ. There are obstructions and rock formations under the soil and these differ. Having said that, I believe that my noble friend has made a case which the Government should answer.
As regards the next point I wish to make, I am not blaming my noble friend Lord Campbell of Croy. Clauses 18 and 19 do not carefully and clearly separate the charges for the consumption of electricity from charges for the extension of electricity supply. It appears that Clause 18, which has the side note "Power to recover charges", is really intended to cover charges for the consumption of electricity. Clause 19 appears to cover charges for the supply of electricity in the various circumstances in which it can arise.
Therefore it was with some interest that I noted that the noble Lord, Lord Ezra, and the noble Viscount, Lord Hanworth, who have a similar but not exactly the same objective in mind, have put down amendments to Clause 19. We shall discuss them before long. I believe that the case that my noble friend has made is right in principle and I shall be interested to hear what my noble friend on the Front Bench has to say.
Lord Kirkhill: I take this opportunity to intervene briefly to say how much I support the argument which the noble Lord, Lord Campbell of Croy, has just developed. I believe that he has done so with masterly attention to detail. As some Members of the Committee will know, and as the noble Lord, Lord Sanderson, certainly knows, I have some experience in this matter, given that I was chairman of the hydro board for some four years or so. I honestly do not believe that I can add to what the noble Lord has just said, so I refrain from irrelevant additional comment.
However, I wish to remind the Committee of the remarks which the noble Baroness, Lady Seear, made but a short time ago. What I believe lies in part behind the noble Lord's argument is just a suspicion that when we move into the private sector there is at that point— and at the earlier point which he raised with his previous amendment— the hint of a lack of control. Some of us believe that control is necessary in the consumer interest.
Baroness Gardner of Parkes: I am rather concerned by this amendment. The points made by my noble friend Lord Campbell of Croy are very interesting and it may be that they are more relevant in Scotland than in general. I certainly cannot accept them as general policy.
I believe that the point made by my noble friend Lord Renton as regards how one would decide what is the same is interesting. It reminds me of the argument for equal pay for work of equal value. When I see how difficult it is to assess those cases, I believe that it will be equally impossible to compare like with like in terms of so much per number of metres that were to be laid.
The fact has to be faced that the scheme referred to in Scotland, as I understand it from this debate, has now ceased.. It was brought into being with the assistance of EC money. It was not something funded entirely by the board on its own account even at the time when it was nationalised and when it was not supposed to be a competitive private industry. It was not easy for it then.
The situation in England— I cannot speak for Scotland and I do not really speak for England, but I am giving a general picture— is that people can live in a very remote position. It is important to appreciate the present situation. If you live in a remote position, to run a cable to your home alone, and if it is the only one in that direction, will cost £ 10,000. If you agree to meet the cost, the cable will be run to your house. Within a few years someone may build a house halfway between your home and the connection point. The fee for laying the cable to the new house would be £ 5,000. The present practice is that the person who paid £ 10,000 for the original line would get a rebate of £ 5,000, or whatever is the appropriate amount according to the distance and where the take off point is.
As regards gas, where my home is in Oxfordshire there was no gas in the village. We put it to the gas board that we would like gas. The request was to the privatised gas board but I believe that the scheme was under way before it was privatised. The gas board said that if we could persuade 60 people in the village to take gas it would be installed and the cost would be, I believe, under £ 400 per house. It was quite difficult to find the 60 people. But some people were so determined to have gas that they used every argument they could to persuade others.
Eventually 60 people agreed and now the whole village has gas. There are always a few people who hold off until the last minute because they believe that they will be able to latch on to the system cheaply. In setting that price, which was a favourable price for everyone, the gas board also said that it would confirm that anybody else coming for gas afterwards would be asked to pay exactly the same amount so that there would be no advantage in playing the game until the last minute to try to get it cheaply. The electricity boards now have a fairer system. A rebate is given to the first person who has had the line laid a long distance, as others are added to it.
I had a letter from Action with Communities in Rural England which spoke of the high cost of laying on mains electricity. It wanted to see a scheme

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whereby a smaller number of consumers could have a supply connected for £ 500. As I explained, we were all connected to the gas supply for less than £ 500. However, there is a difference when the community wants it. If it is one isolated property, the cost of running a line can be out of all proportion. If that line is run, it is subsidised by every other consumer. For us to attempt to impose on what will be a privatised industry conditions much stricter than ever applied to the nationalised industry would not be right.
Lord Carmichael of Kelvingrove: We should be grateful to the noble Lord, Lord Campbell of Croy, for putting down this amendment which will be welcomed by people in rural areas all over Britain, particularly in Scotland. I agree with the noble Lord, Lord Renton, that "identical" would seem to be a weak point. However, in any such matter there is always a rough average over a large number of people. Things will never be identical, but there will be a rough average. It is the basis of so many measurements in sociology and areas such as work study. Everyone works differently, but there is a rough average in the way people work. Therefore the amendment is not as vague as first appears to be the case.
The noble Lord, Lord Campbell, has asked how we should solve the problem. No one can say that it is an easy problem. Electricity is vital in the modern world. We have a responsibility not so much to the man in a house way up the glen where connection would cost a vast amount of money but where it is reasonable to bring in a supply. I know places in Scotland which are not all that remote. Fairly close to Dunoon they are still using generators. If one happens to switch on one's bed light the generator starts and keeps one awake. Noble Lords on the other side of the Committee may have experienced that.
We have a rough comparison with television. Television did not come to the remote glens or to the remote islands at the same time as it came to London or to other conurbations, but it gradually spread out. More houses were able to receive television as new transmitters were put up at considerable cost. Electricity and television are both vital parts of modern life. No one objects to the fact that part of the television licence fee is used to provide transmitters to broadcast to small communities. Such communities may already have television but require perhaps the fourth channel. There is a general feeling that they should receive the full service. I hope that the Minister will take this point to heart. The noble Lord, Lord Campbell, has put forward a point which is of great importance to people all over the country.
Lord Sanderson of Bowden: We have had an interesting debate with knowledgeable contributions from noble Lords, particularly from my noble friend Lord Campbell in relation to the highlands and islands.
I understand the noble Lord's intent in bringing forward an amendment to protect consumers from being charged unduly high connection costs because
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of the area in which they live. That is common ground. I have to say, however, that we believe that the approach he has suggested is impractical. The cost of giving a length of cable and associated plant is unlikely to be different from one region to another. However, the same is not true— he has made this clear— of the costs of carrying out the works necessary to install that cable. Where on the one hand it may be a question of digging a trench across open ground, in another it may mean breaking a street and in yet another simply making use of a conduit already installed by a developer. Further differences are bound to arise as a result of differing labour costs from one area to another. There is also the whole question of distance.
The Government share the noble Lord's view that connection costs should be reasonable wherever the connection is made. It is for that reason that in Clause 19 specific provision is made to ensure that the supplier can recover from the consumer only the expenses reasonably incurred in providing that consumer with a connection. Where there is any dispute over the reasonableness of the costs incurred, the consumer has the right to take the matter to the director for determination under the terms of Clause 23. In this way we believe that the provisions of the Bill already meet the noble Lord's anxieties. Perhaps I may refer to the specific Scottish position.
The noble Lord, Lord Macaulay of Bragar, will no doubt tell me about a specific case. It is a long story but I shall not weary the Committee unless he wishes to raise it. The SSEB's present policy is that connection charges for isolated properties should reflect the actual costs incurred by the board in installing the supply and is therefore already in line with what is proposed in the Bill. A review by the board two years ago suggested that the total cost of connecting all of the 700 remaining occupied properties then without supply— around 0.04 per cent. of the board's total number of consumers— would run to several millions of pounds. In pursuit of its social obligations, the hydro board has operated a non-statutory uneconomic rural development programme to bring electricity to remote areas. This terminated on 31st March this year.
Under this programme a consumer could receive assistance towards connection costs from the board of up to £ 11,000, increased, as my noble friend Lady Gardner has said, in EC assisted areas by virtue of the regional development fund to almost £ 16,000 for a property which existed on 1st April 1984. Following completion of the programme, the board estimates that there are around 500 properties in the more remote areas of its district without a mains supply— around 0.09 per cent. of the board's total number of consumers. The majority of these are so remote as to render the provision of a mains supply completely uneconomic even within the terms of the programme. The occupiers of a minority of properties have declined to take up the opportunity of an assisted connection.
The board is satisfied that following completion of the uneconomic rural development programme it has achieved all that could reasonable be asked of it in meeting its existing obligations to rural

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consumers. The position therefore is that all reasonable steps have already been taken in Scotland to bring a mains supply to rural consumers.
The provisions of the Bill do not substantially alter the existing situation. There are of course some cases which do not fit the normal pattern. For instance, the existence of high voltage lines through any particular area would not necessarily mean that consumers located nearby would be able to take electricity from those lines. For both technical and economic reasons, supplies to consumers must take place through the hierarchy of lower voltage transmission and distribution lines and through a series of transformer stations and substations.
As I have indicated, under the terms of Clause 23 there is redress through the director as to the question of reasonable costs but I must side with my noble friend Lady Gardner of Parkes in the matter. I must therefore resist the amendment.
Lord Taylor of Gryfe: There is a substantial difference between us on the matter. The protection of the consumer which has just been quoted refers to "reasonable costs". Such reasonable costs can be very substantial. However, they are reasonable for the amount of contracting work involved. Therefore the costs will be justified. But this is a very important question: it concerns the protection of rural communities.
Those of us who have witnessed the situation in Scotland, where there is a substantial decline in rural activity in large parts of the country, see that there will be no inducement whatever for people to develop rural industries, or to expand the rural economy, if they feel that they will be faced with very high costs in order to install essential electricity.
I wonder whether the Minister can assist me on a further point. On discussing British Telecom's responsibilities, I seem to recall that we wrote into that Bill certain social obligations for the company when we privatised it. I am not sure whether we had a common tariff for installation in British Telecom. Indeed, British Telcom go to the excess and charge you for non-installation: they charge you for accepting a number which already exists. I regard that as a substantial abuse of monopoly power. However, I shall not pursue that issue at this stage. I simply ask whether there is a provision which protects the consumer so far as concerns British Telecom.
I plead with the Minister to visualise just what the implications are of saying, "All right, the consumer is protected if a reasonable charge is made." That is not what we are talking about; we are talking about protecting the rural economy and making it possible for that economy to survive.
Lord Macaulay of Bragar: I wonder whether the noble Lord, Lord Sanderson of Bowden, could clarify where he envisages the end result of all these proceedings. I say that because there is provision in Clause 23 which means that any dispute can be referred to the director by either party; but it is not a reference by both parties of mutual consent. The end result of that, according to subsection (5)(b), is
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that any award made by the arbiter shall be final and,
"In Scotland, shall be enforceable as if it were an extract registered decree arbitral bearing a warrant for execution issued by the sheriff".
That could mean that some innocent abroad, in terms that he may be several miles up the glen, gets himself involved in expenses of several thousands of pounds. He may not know about such expenses because they arise as the work progresses due to unforeseen snags. The dispute is then referred to the director, who finds against the consumer, who then may be rendered bankrupt at the end of the day just for trying to install electricity into his house. That is a service which is available to 99.9 per cent. of the population.
Baroness Gardner of Parkes: I do not think that one would get involved in costs for this work without being aware of the situation. I think that one would certainly be given a price for connecting the supply well in advance. One would have the choice of either accepting it or rejecting it.
Lord Macaulay of Bragar: I think that the point was made by another noble Lord that snags can arise as the work progresses. It may be that a person is prepared to take the risk initially but during the course of the work anxieties arise as to whether he can cope with the cost. It goes even further than that because it is stated later in the Bill that the decision of the arbiter cannot be referred to the Court of Session by stated case. Therefore the consumer in Scotland is stuck with the decision of the arbiter if the supplier takes the case to the arbiter without the consumer's consent.
Lord Sanderson of Bowden: In reply to the noble Lord, Lord Taylor of Gryfe, I should like first to say that I should have thought that what this Government have done over the past few years in relation to the disadvantaged areas in Scotland is quite remarkable. Forty-three million pounds will go to the Highlands and Islands Board this year for dealing with the problems which affect that area. Therefore I do not wish to hear too much about what is done. Of course, in the case of British Telecom we have recently announced a substantial programme for the Highlands and Islands.
As regards the point raised by the noble Lord in connection with British Telecom, I should like to read the question he asked before I respond. I do not have the answer readily available, but I shall of course write to the noble Lord on the matter.
As regards the whole difficult area of what is and what is not a reasonable amount, we have often discussed this issue. Indeed, my noble friend Lord Trafford asked in a previous debate on this Bill what was fair and reasonable. Moreover, I have no doubt that we shall return to the matter when discussing subsequent amendments. I must say to the noble Lord, Lord Macaulay of Bragar, that if we have a difference of view as regards what is and what is not reasonable then the way to determine the matter is the way as disclosed under Clause 23. In answer to his point about costs— and the Western Isles case of Balallan is very clear here— I must say that it is not

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a question of not knowing what the costs are; it is looking at the costs in relation to what the alternatives may be. For instance, it may be that the alternative for a particular crofter is a home generator or perhaps Calor gas.
Lord Campbell of Croy: I shall start by saying that the wording of my amendment was bound to be imperfect; it was an amateur's draft which was aimed simply at making the intention clear. I am most grateful to all Members of the Committee who have taken part in this short debate. I am especially grateful for the support which I have received from my noble friend Lord Renton. Of course I agree with him that situations differ, and again my drafting is at fault because I used the word "identical".
My intention was that the equipment in the Western Isles should cost the same as equipment in some more favoured part of the mainland. However, I realise that the actual work and the difficulty of the job depends upon rocks and, if I may say so, in towns it depends on streets and buildings. That is a most difficult matter to try to register.
I am also most grateful to the noble Lord, Lord Kirkhill. He was a chairman of the North Board and was widely regarded as someone who was determined to do all he could to provide electricity in Northern Scotland in the most efficient and effective way.
To my noble friend Lady Gardner of Parkes I should say that I tried to make it clear that I was not in favour of extravagant schemes. I referred to the fact that the European Community made a contribution to the five-year scheme which has now just come to an end. I think that the North of Scotland Hydro-Electric Board was absolutely right— no doubt supported by the Scottish Office— to make use of the funds which were available. Indeed, a number of connections have no doubt been made as a result of the contribution which came from the EC. I am grateful for the comparisons with other parts of Britain made by noble friend. She was able to do so because of her great knowledge of the industry.
My noble friend Lord Sanderson of Bowden did not surprise me when he said in his reply that he could not accept the amendment as it appears on the Marshalled List. When dealing with remote areas of the mainland, I draw the Committee's attention to northern Sutherland and Wester Ross. These are places where electricity can be a great boon, but it is sometimes difficult to bring electricity to such areas.
I should especially like to draw attention to the island groups. The word "rural" has been used in this debate. However, let us remember that when the Western Isles and Shetland are considered there are many miles of sea between them and the mainland. That means a substantial sea or air journey with equipment or men when connections have to be made. There is genuine anxiety in northern Scotland about connection charges with the change in legislation, and the fact that the previous schemes are coming to an end.
My noble friend Lord Sanderson referred to Clause 23. I hope that the Government, and
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everyone else who will be concerned with the Bill when it becomes an Act, recognise that although the North of Scotland Hydro-Electric Board did a great deal until March this year with the existing schemes, in the future consideration may have to be given, not to extravagent schemes, but to simple straightforward schemes where some help is needed for the common good in the area.
Lord Sanderson of Bowden: Before my noble friend decides what he wants to do with the amendment, perhaps I may point to the close co-operation that has recently taken place. My right honourable friend the Secretary of State for Scotland has announced co-operation between British Telecom and the Highlands and Islands Development Board in an imaginative scheme which will spend a great deal of money helping telecommunications in that area. I am sure that if my noble friend understands that that is the Government's view on such matters he will understand that if electricity becomes a problem in the future, as he envisages it might, we shall look at similar schemes.
9 p.m.
Lord Campbell of Croy: I thank my noble friend for that intervention. I have been at home during the past week, and I have been bombarded by papers from British Telecom telling me about the new scheme for northern Scotland. So far as I have been able to read it, it seems that it will be helpful for the area. If the Government are prepared in due course to take a similar view of the new supply of electricity in the area after the North Board, that is a good sign. At this point, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 18 agreed to.
Clause 19 [Power to recover expenditure]:
Viscount Hanworth Viscount Hanworth moved Amendment No. 145:
Page 15, line 32, at end insert ("having regard to the desirability of making an electricity supply available to all domestic consumers who require it").
The noble Viscount said: I am sure that we all want anyone who wishes to have a supply of electricity to be able to obtain it where it is practical. All the amendment does is to stress the desirability of giving a supply when it is possible. I beg to move.
Lord Sanderson of Bowden: Our proposals are designed to give consumers the same right to request the provision of a supply on reasonable terms. As I understand the amendment, the proposals amount to a requirement that all requests to supply domestic premises from the mains must be met, regardless of the cost to the supplier. That takes no account of the efficiency or otherwise of that approach. It may be that the use of alternative means would be both cheaper and more efficient in terms of energy use.
The proposal also leaves open the case where there is a request for a supply to domestic premises, and the person requesting the supply is unwilling to meet, for whatever reason, the costs reasonably and properly attributable to providing the supply. It

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would appear that, in those circumstances, the connection should still be made, presumably leaving other consumers to bear the excess costs involved. As the Committee will understand, it would be consumers and not the shareholders who would do that.
What we have proposed in the Bill represents a fair approach for all. The person requesting the supply will be guaranteed the offer of a supply on reasonable terms. He will also be aware of the costs of meeting his request. Where he believes that the quoted cost is unreasonable, he will be able to refer to the director for a ruling on the point. In this way the consumer will be in a position to make an informed judgment on the most appropriate way of obtaining a supply of electricty.
I do not believe that the amendment is sensible in terms of the general protection of consumers, or will necessarily ensure that the most efficient and economic way of obtaining a supply is adopted. Having heard what I said, I hope that the noble Viscount will withdraw the amendment.
Viscount Hanworth: I must make the point that I do not believe that the Minister's advisers can possibly have read the amendment. It says no more than "the desirability of. Nearly everything the Minister said was irrelevant to the amendment: nevertheless, I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Lord Peston Lord Peston moved Amendment No. 145A:
Page .16, line 9, after ("value") insert ("calculated on the basis of a reasonable discount factor").
The noble Lord said: In speaking to the amendment, I should like to say a few general words about Clause 19. The clause seems to be about two matters. The first relates to solving what is called the "free-rider" problem; namely, once one person has incurred the high cost of obtaining a supply, the marginal costs to the next person can be low. That is essentially the point made earlier by the noble Baroness, Lady Gardner of Parkes. The clause seeks to solve the "free-rider" problem, although, as economists are aware, it is insoluble. The clause makes some effort in that direction.
The clause is also about the general cost of connection. The amendment we have just debated relates to cases where the cost of connection is high. What one means by the cost of connection being high seems to be that it is a large capital sum. What puzzles me about the clause is why there is no reference to converting the capital sum into an annual charge. I shall take simple numbers, which are not right because of compound interest. If it costs £ 10,000 to connect a property where the connection will last 50 years, one could calculate that the annual charge could be £ 200 for depreciation, plus the interest on the £ 10,000, which is what the amendment is about, which for the average sum outstanding at, let us say, 10 per cent. discount, would be £ 500 a year. Instead of saying that connecting up will cost £ 10,000, one could say, "If you want to be connected up, it will cost you £ 700 a year". Much of that calculation depends upon
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having an appropriate discount rate and an estimate of the length of life of the connection.
I make the point immediately, as I do on almost all my interventions, that I am ignorant about this subject. For all I know, electricity boards are already offering this service as an annual charge rather than as a capital sum. However, Having listened to the debates on Scotland and rural areas, all I can say is that it did not sound like that.
If I am right that these companies, certainly when they are in the private sector, ought to be encouraged to deal with the matter in a different way, then I repeat the point that central to the whole economics of this is the rate of interest which the companies will use. In terms of the precise wording, what one is using the interest rate for is to capitalise current expenditure. But interest rates have exactly the opposite role: they can also— if I may use a word that does not exist— "currentise" capital expenditure or annualise current capital expenditure.
All that leads to the conclusion that the interest rate is of enormous importance here. What interests those of us on this side of the Committee is whether or not there ought at least to be some statement on the face of the Bill about what the interest rate should be. That arose earlier when we were discussing the pricing formula and again the interest rate was mentioned.
We have therefore put down the amendment in order to give the Government some chance of clarifying the whole capital current or amortised aspect of this sort of thing. One possible answer— and I should be interested to know whether or not the noble Lord is about to give it to the question as to what the relevant interest rate will be— is the marginal cost of capital to a private enterprise of this kind, bearing in mind the risk that it is taking. If that were to be the case, we should be talking about a rather high rate of interest. Alternatively, it might be the Treasury discount rate. In my days at the Treasury that was a relatively low number, although nationalised industries still used to baulk at the idea of having to meet such rates of return.
I think I have said enough to indicate the area in which we should like to hear the comments of the noble Lord. I conclude by saying that I accept that the amendment is rather technical and one does not necessarily require answers immediately to all the points one has made. I beg to move.
Baroness Gardner of Parkes: I find it a very interesting suggestion that there could be an annual charge. It is something which probably a lot of the boards would like to look at. So far as I know, none is using it at present.
When I bought a house in Cornwall I found myself saddled in this way with an annual charge for water connection which had been taken on by the previous owner. If we are to have something like this, it will be very important that successors in title to a property know that they will have this continuing charge. I feel that the whole idea is very interesting and I too am anxious to hear the Minister's reply.
Lord Sanderson of Bowden: I thank the noble Lord, Lord Peston, for enlarging a little on his amendment. As I understand it, his intention in proposing it is to ensure that the consumer is not overcharged as a result of an allowance for capitalised maintenance in the connection charges which has been calculated on an unfair basis.
We believe that the amendment is unnecessary. Under the terms of Clause 19 the supplier is entitled to recover only the reasonable expenses incurred in making a connection. Where those expenses include an allowance for the capitalised value of any expenses for future maintenance of electric line or plant supplied, then the reasonableness criterion will apply equally to that charge also. Thus if the supplier were to use an unreasonable discount rate in calculating the amount due, the charge would be inadmissible to the extent that it was unreasonable.
I looked in the dictionary to see what the word "reasonable" meant and it seems to be, "conformity to what is fairly to be expected". If a consumer believes that the charge he is being asked to pay for connection is unreasonable on any ground then he will have the right to take any dispute over the matter to the director for determination under Clause 23, as we have already discussed. That would of course include cases where the consumer believed that the allowance for the capitalised value of maintenance expenses was unreasonable.
I shall look very carefully at the more technical expressions that were used by the noble Lord, Lord Peston. If there is any other light that I wish to shine on him in relation to trying to explain the point, then I shall write to him.
Lord Peston: I thank the noble Lord. However, it is not I who require to have light shined on me, it is the Bill, if the noble Lord will forgive that slight quip. I thank him very much for his answer. The only point I would make on "reasonableness" is that, after all, we are discussing a Bill where the economics are the essence. In a way, "reasonableness" is not known to economists other than in concepts like, "what is reasonable is what the market will bear". Unfortunately that is not "reasonable" as it would be thought of by some consumers. In other words, "reasonable" is not so simple a matter.
I do not blame the noble Lord. Obviously it is not how one writes "reasonable" into a Bill: I appreciate that. On the other hand, I am concerned about where the decision about what is reasonable will come from. I assume that what he is saying— and I do not press this now— is that "reasonable" will certainly be considered by the director. Without seeking to insult his great profession, I hope this will not be a matter that is determined largely by the courts. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment /No. 146 not moved.]
Clause 19 agreed to.
Clause 20 [Power to require security]:
[Amendment No. 147 not moved.]
9.15 p.m.
Viscount Hanworth Viscount Hanworth moved Amendment No. 147A:
Page 16, line 41, leave out subsection (4) and insert—
("(4) For the purposes of subsection (l)(a) above, reasonable and sufficient security shall be deemed given where—

(a) it is reasonably practical in all the circumstances (including in particular the risk or loss or damage) for the supplier to provide such a meter; or

(b) where a direct payment is made to the supplier under regulation 35 of the Social Security (Claims and Payments) Regulations 1987 (deductions from income support and other benefits and direct payments to third parties); or

(c) the person requiring the supply is prepared to enter an agreement to pay the estimated costs by means of a weekly or monthly instalment plan, the payment to be adjusted on an annual basis to reflect actual consumption.

(5) In subsection (l)(a) above, "security" means any arrangement in consequence of which a public electricity supplier may be assured of payment of money due to him and shall include a deposit given to such supplier or guarantee or charge (whether legal or equitable) in favour of such supplier.
(6) Any dispute arising from subsections (4) and (5) above between a public electricity supplier and a person giving or wishing to give security shall be determined by the Director as though it were a dispute falling to be determined under section 21 below.").
The noble Viscount said: Clause 20(4) of the Bill states:
"A public electricity supplier shall not be entitled to require security in pursance of subsection (l)(a) above if—

(a) the person requiring the supply is prepared to take the supply through a pre-payment meter; and

(b) it is reasonably practicable in all the circumstances (including in particular the risk of loss or damage) for the supplier to provide such a meter".

I feel that that provision is rather restrictive. There are many other types of security which could reasonably be given, so why not list them? That is precisely what this amendment endeavours to do. I beg to move.
Lord Sanderson of Bowden: I am grateful to the noble Viscount for being so succinct in proposing the amendment. I have looked quite closely at it, and I am now a little clearer as regards its underlying intent.
While it is perfectly right that the Bill should place an obligation on the public electricity supplier to provide a supply when requested to do so, this has to be counterbalanced by a right to recover any charges due for providing that supply. Where there is a delay in recovery of charges, as is the case where supplies are taken on credit, then it is reasonable that the supplier should be allowed to require reasonable security for charges due. That is what Clause 20 permits.
Of course, where the consumer pays for his supply in advance of the supply, as in the case where a prepayment meter is fitted, then there can be no doubt about receiving the sums due. In such cases no security could be reasonably required. That is the purpose of the current Clause 20(4). This provision does not, by the way, define the meter itself as security, as the amendment attempts to.
The amendment suggests that where some form of payment arrangement has been entered into, this too gives security. Clearly, it does not. Any payment arrangement, whether direct deduction or voluntary payment, which is intended to recoup average

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charges over a given period cannot guarantee that at any point within that period all the outstanding charges will have been covered. This is particularly self-evident in the case of a fuel like electricity where winter usage could be considerably higher than in summer. It may therefore be perfectly reasonable for some additional security to be required in such cases. It is for this reason that both the proposals in subsections (4)(b) and (4)(c) of the amendment and in subsection (5) are not acceptable.
We believe the proposal in subsection (6) is unnecessary. Clause 23 already makes clear that its provisions apply to the whole of Clause 20. It is indeed this fact that provides the necessary protection to consumers. In any case where security is required, the consumer will have the right both to dispute it and to seek an independent determination from the director of that dispute. The powers of the director in this respect allow him to determine both the form of any security which would be reasonable and the amount. It is open to the director to determine that no security is reasonable or that some form of guarantee is sufficient, or, indeed, that some other approach to security would suffice in a given case. Where a payment agreement of some form exists, this will clearly be a relevant factor which the director will take into account.
I hope I have shown that the consumers' interests in the matter of security are already protected in the Bill. I hope that on reflection, and having listened to what I have said, the noble Viscount will be prepared to withdraw the amendment.
Viscount Hanworth: I am not entirely satisfied with the explanation the Minister has given because in other walks of life there are many means of giving security, or what is thought to be adequate security. However, I do not appear to have convinced the Minister, so I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 20 agreed to.
Clause 21 [Additional terms of supply]:
Lord Renton Lord Renton moved Amendment No. 148:
Page 17, line 7, leave out ("economic").
The noble Lord said: I beg to move the amendment standing in the name of my noble friend Lord Peyton of Yeovil. The word "economic" seems to be quite unnecessary. I invite the attention of the Committee to the context in which it is used. Clause 21(b) states:
"any terms restricting any liability of the supplier for economic loss resulting from negligence".
The word "economic" is quite unnecessary in any event. There is one curious view that it would be a contradiction in terms to say "economic loss".
Lord Williams of Elvel: I support the amendment. The debate which the noble Lord, Lord Renton, has started was a debate that I had intended to introduce on clause stand part. I am very glad that the noble Lord has introduced it in relation to this amendment.
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I wonder whether the Government really know what they are doing in this clause. They are saying that a public electricity supplier may require someone to whom it supplies electricity to assent to
"any terms restricting any liability of the supplier for economic loss resulting from negligence which it is reasonable in all the circumstances for that person to be required to accept".
That is a very odd concept.
I could go to the noble Lord, Lord Sanderson, and say, "I will supply you with electricity, and if there is any negligence on my part and any loss, economic or otherwise— or whatever all this means— you have to accept it, it is not my fault". For those of us who are dependent on electricity for our domestic well-being, this is an odd clause. I wonder whether the noble Lord can help us with respect to the Government's intentions in this matter.
Baroness Gardner of Parkes: This may seem to be an unusual clause in terms of what the noble Lord, Lord Williams, referred to as his domestic well-being, but it is enormously important to the electricity industry in these days when someone can set up a business which is run by computer in the middle of nowhere. If for some reason the cable to that computer is cut and there is insufficient back-up, a significant loss of information could result. People with such computers could claim unlimited sums from any area board or supplier of electricity. The provision is not included to cover instances where your toaster will not toast and you have to use the open fire; it is intended to cover the implications of the use of modern technology where people work at distances remote from offices.
Lord Williams of Elvel: I should have thought that it was perfectly possible for the computer expert living in the sticks and running his computer to insure against that. That is what insurance is for. I am thinking about the poor domestic consumer who is required to sign all sorts of papers which he does not necessarily understand saying that he cannot claim against the area board or privatised public electricity supplier in the event of loss. I believe that that is the point which the noble Lord, Lord Renton, raised. We are not after the big company.
Lord Renton: The noble Lord, Lord Williams, with great aplomb, has widened the debate into a discussion on clause stand part whereas I was merely dealing with the simplest possible drafting point of the unnecessary use of the word "economic".
Lord Sanderson of Bowden: Clause 21(2)(b) was introduced in recognition of the fact that in a few instances the loss of a supply of electricity for a very short period of time could result in substantial economic loss without there being any accompanying physical loss. The economic loss in such cases would well exceed the actual value of the supply lost.
Lord Williams of Elvel: Can the noble Lord define "physical loss" for us?
Lord Sanderson of Bowden: Presumably that means according to the capital equipment that would be lost.
Lord Williams of Elvel: The noble Lord used the words "physical loss". I asked him to define them.
Lord Sanderson of Bowden: That is as I understand it.
Lord Williams of Elvel: If the noble Lord does not understand the words that he is using, perhaps he would let us know. However, he has used the words and perhaps he would let us know what he means by them.
Lord Sanderson of Bowden: My understanding is that "physical loss" means loss of equipment. The economic loss in such cases could well exceed the actual value of the supply lost. With the increased reliance on computers in a great many aspects of modern business, this is of growing concern, as I am sure the noble Lord will know from his past experience. As the noble Lord has asked me what I mean by physical loss, I shall elaborate on what I have said. It is damage to property. That is exactly what I said about capital equipment.
The Government take the view that it would be unreasonable to place on the public electricity suppliers, and through them the generality of consumers, the burden of acting as the insurers for those consumers who are sensitive in this way to a very short duration of loss of supply— perhaps even only for a second or less. In light of that, the current provision has been introduced to allow the supplier to limit his liability for economic loss where this is reasonable. Where a consumer disputes the reasonableness of any terms imposed under this condition, he has the right to seek a determination of the matter from the director general under Clause 23.
The noble Lord, Lord Renton, has proposed that the suppliers' rights in this matter should be extended to cover any loss. While we believe that for the particular circumstances I have mentioned it is appropriate that the public electricity suppliers should be enabled to limit their liability for economic loss, we do not accept that they should be able to go further. On the contrary, it is right that the industry should take responsibility for its own actions.
While I feel sure that the noble Lord has in mind only liability for physical loss, I should point out that his amendment would also enable suppliers to limit their liability for personal injury and death. As the Committee will be aware, Parliament has already accepted the principle that there should be no right to limit liability where death or injury result from negligence on someone's part. This is clearly stated in Section 2 of the Unfair Contract Terms Act 1977.
This amendment seeks to limit the protection for consumers under the Bill. I hope that with this explanation my noble friend will understand the meaning behind the clause.
Lord Renton: My noble friend's reply has opened all sorts of vistas about rules relating to damages awarded by the courts. These are cases which will come before the courts. I can only speak with regard to the courts in England, which would lean against what is known as remoteness of damage; indirect
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damages do not directly result from the liability of the supplier. Far from enlarging the concept of the damages which could be obtained, I should have thought that my amendment would limit them by cutting out the word "economic" so that it would simply be the actual pecuniary loss suffered resulting from negligence.
This is a matter which may not have been thought through when this was drafted. Certainly the reply which we have received, very interesting though it is, surprises me immensely.
In the circumstances I am prepared to withdraw the amendment. Indeed, it might be just as well to do so, so that we can consider the application of this word when we come to the Report stage. I hope that meanwhile my noble friend will obtain legal advice as to the rules applied by the courts for assessing damages north and south of the Border. I beg to leave to withdrawn the amendment.
Amendment, by leave, withdrawn,.
Clause 21 agreed to.
Clause 22 [Special agreements with respect to supply]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 149:
Page 17, line 12, after ("may") insert (", unless he requires supply for domestic purposes,").
The noble Lord said: The purpose of this amendment is to prevent public electricity suppliers from using special agreements, which are outlined in this clause, to circumvent the protections in the Bill for domestic consumers. Clause 22 is obviously concerned with the largest commercial consumers requiring over 10 megawatts. Clause 22(1)(a), however, gives a power to the public electricity supplier to enter into special agreements in other circumstances.
This may be quite proper and correct if it is confined to commercial customers— say, those who require supply up to 7 megawatts or whatever number of megawatts one may wish to name. But it also opens up the problem of what I believe are known as Busby agreements. These are special agreements entered into by suppliers whereby they agree not to disconnect the supply in exchange for certain obligations which go rather beyond the boundaries permitted by the existing supply code. Such agreements were challenged unsuccessfully in the divisional court in a case Regina v. Midlands Electricity Board ex parte Busby. That is why they got the name Busby agreements.
I am advised that these agreements are now extensively used by boards to impose agreements on consumers, making them effectively the insurers of the safety of the meter and its contents. In effect consumers are offered a choice between no supply and the terms of the special agreement. I am sure that there is no difference between these Benches and the Government on this matter. It is a loophole which appears to us and our advisers to be in this clause. I beg to move.
9.30 p.m.
Lord Sanderson of Bowden: I am grateful to the noble Lord for the explanation of his proposed amendment. I was not quite certain what lay behind it before he spoke but now I am clearer.
The provision of Clause 22(1)(a) which he is seeking to amend does not require anyone to enter into a special agreement but rather gives them the opportunity to do so if both they and the public electricity supplier wish to do so. While I accept that it may be a little unlikely that a great many domestic consumers would wish to enter into such agreements, I do not understand why the noble Lord wishes to prevent them doing so if they choose. One of the main features of the privatisation exercise is to seek to improve consumer choice as to the manner in which they obtain electricity.
If the noble Lord is concerned that suppliers might somehow coerce domestic consumers into entering into special agreements— and I think that this is what lies behind his point— I must tell him that the Bill already contains specific provisions to prevent this happening. The supplier can only insist upon a special agreement if the criteria set out in Clause 22(1)(b) are met. If the consumer disputes that that is the case, then he has the right to ask the director to determine that dispute under the provisions of Clause 23. The director's decision on such matters will be final and binding.
I shall look much more closely into what he has described as Busby agreements and again, if I find anything in them which is not covered by the explanation that I have given as a redress against such situations, I shall consider carefully what has to be done.
Baroness Gardner of Parkes: When he looks into this matter, will my noble friend consider whether it could be the case if this amendment were accepted that it would preclude, say, a group of people in domestic premises who wanted to use a combined heat and power arrangement for incineration of rubbish from making a special agreement with the electricity supplier? It might well militate against the domestic consumer, and perhaps he could look also at that aspect.
Lord Williams of Elvel: I am most grateful to the noble Lord. If I may say so, I think that he must look at the question of Busby agreements. As we know there is the problem of a monopoly supply. We all agree that the area boards or the public electricity suppliers will be monopoly suppliers and the noble Lord must look at their relationship with the consumer. The major problem concerns how far a monopoly supplier can coerce a consumer who requires electricity into entering into a special agreement. It is a delicate balance and I hope that the noble Lord will consider carefully what we have said.
Lord Sanderson of Bowden: Before the noble Lord decides what to do with his amendment, perhaps I can elaborate a little on the Busby contracts. The point made about the Busby contract is covered by the licence condition No. 13, which would require
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the public electricity supplier to seek the director's approval for any form of application which includes a requirement for the consumer to give the supplier rights which are only available by agreement as a condition of supply. However, I shall look more closely to see whether there is anything else that I need to say about it.
Lord Williams of Elvel: I am most grateful. The licences are not part of the statute and can be varied at any time. I shall be most grateful if the noble Lord will consider the point that I have made. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Dundee The Earl of Dundee moved Amendment No. 150:
Page 17, line 17, leave out ("or such other wattage as the Secretary of State may by order specify").
The noble Earl said: In moving Amendment No. 150, which also appears in the name of my noble friend Lord Peyton, I should like to speak also to Amendments Nos. 151 and 176 and to government Amendments Nos. 174, 175, 178, 184, 185 and 187 to Clauses 34 and 35 and Schedule 9. These are all technical amendments designed to achieve a similar objective.
Lord Williams of Elvel: I am sorry to interrupt the noble Earl. He has announced a series of groupings which are completely strange to me.
Lord Renton: The list is rather odd. As I understand it, my noble friend is moving Amendment No. 150, which is on the list of groupings with Amendment No. 151 only. But it is refreshing to find that we may dispose of so many other amendments at the same time, especially at this late hour. However, perhaps my noble friend could speak very slowly so that we can tick them off and understand what is happening.
The Earl of Dundee: Perhaps I may help the noble Lord. I appreciate the apparent difficulty that we are in. What I propose to do may not conform with what we have on the list of groupings. However, there are three closely linked themes which I propose to address. If I were to continue, the noble Lord could come back to me if he were unhappy.
Lord Williams of Elvel: I am not accepting the situation. These groupings are carefully thought out through the usual channels. We spend a long time trying to determine what are proper groupings. From the Opposition's point of view I am simply not having the Government Front Bench rising and announcing a group of which we have not been advised.
The Earl of Lauderdale: Can we have the list announced slowly so that we can tick them off?
Lord Williams of Elvel: I am not accepting it.
The Earl of Dundee: The noble Lord, Lord Williams, is perfectly entitled to keep to what we have in the original list of groupings. Therefore if he

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would prefer to do that, I shall oblige and we shall do so. I shall address Amendments Nos. 150 and 151A.
Lord Williams of Elvel: Amendments Nos. 150 and 151.
The Earl of Dundee: I move Amendment No. 150 and speak to Amendment No. 151. They refer to Clause 22(1). These amendments remove an ambiguity which we believe would have followed from the existing wording of the Bill. To give an example, let us suppose that the Government wish to alter the threshold above which a special agreement should be entered into; for example, to X megawatts. If an order specifying the figure of X megawatts were made under Bill as drafted, it would result in legislation which said that a special agreement has to be entered into under Clause 22 in any case where the maximum power to be provided exceeds 10 megawatts or X megawatts. This would clearly be ambiguous, and the proposed amendment is therefore designed to remove the possibility of the ambiguity arising. Under the wording as proposed in the amendment any order revising the 10-megawatt figure would result in legislation specifying only a single relevant figure in place of the 10-megawatt figure.
The amendments to Clauses 34 and 35 and Schedule 9 achieve the same objective in relation to these provisions. Exactly the same considerations apply as I have already mentioned. I beg to move.
The Deputy Chairman of Committees (Lord Ampthill): The noble Lord has also spoken to Amendment No. 151. I should remind the Committee that if Amendment No. 151 is agreed to, I shall be unable to call Amendment No. 151 A.
Lord Williams of Elvel: I believe that the reason for the grouping of Amendments Nos. 150 and 151 was to allow the noble Lord, Lord Peyton, had he been in his place, to speak to the amendment to which he put his name. I understand that the noble Earl may also be speaking to the series which is grouped under Amendment No. 151A, to which the noble Lord, Lord Peyton, did not put his name.
As the noble Lord, Lord Peyton, is not in his place I am perfectly happy that the noble Earl should continue, but I believe that he should have given some notice that this would happen.
I do not believe that there is any great problem on the amendments. They are of no great substance, and we shall not oppose them. I just wanted to make sure that the procedure of the Committee was right.
The Earl of Dundee: I should make it clear, in the absence of my noble friend Lord Peyton, that I am moving both these amendments on behalf of the Government. I intend to approve Amendment No. 150, but I am opposing Amendment No. 151.
Lord Williams of Elvel: Is the noble Earl moving the amendment or not?
The Earl of Dundee: I am moving Amendment No. 150.
On Question, amendment agreed to.
[Amendment No. 150A not moved.]
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 151:
Page 17, line 21, leave out subsection (2).
On Question, amendment negatived.
The Earl of Dundee The Earl of Dundee moved Amendment No. 151 A:
Page 17, line 21, leave out from beginning to ("shall") in line 22 and insert ("The Secretary of State' may by order provide that subsection (1) above shall have effect as if for the wattage mentioned in paragraph (b) there were substituted such other wattage as may be specified in the order; but before making such an order, he").
The noble Earl said: I have already given the substance of Amendment No. 151A. As I said in my earlier remarks, Amendment No. 150 is not only linked with Amendment No. 151A. but also with Amendments Nos. 174, 175, 178, 184, 185 and 187 to Clauses 34 and 35 and Schedule 9. I beg to move.
The Deputy Chairman of Committees: If I may say so, the noble Earl should address himself to the amendments to which he is speaking because he has not conformed to the numbers on the Marshalled List.
The Earl of Dundee: Quite so. I beg to move Amendment No. 151A.
On Question, amendment agreed to.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 152:
Page 17, line 32, after ("who") insert ("having required a public electricity supplier to give a supply of electricity by notice under section 16(2) above").
The noble Lord said: The purpose of the amendment is to clarify who a tariff customer is. Oddly enough, although the Bill makes detailed arrangements over most aspects of supply, nowhere does it state quite clearly who is to pay for it. Schedule 6(1) states that a public electricity supplier may recover charges from a tariff consumer. Clause 22 defines a tariff customer as being a person who is supplied with electricity. The question in law and in practice is: who is supplied with electricity? The most obvious answer is contained in this amendment.
The practice of boards is to treat anyone resident in a house as being the person supplied with electricity. In other words, if you use electricity you are supplied with it and therefore you should pay for it. That is perfectly reasonable if someone living in a house requires electricity and receives a supply. However, problems arise when people move, squat and so forth and do not request that supply of electricity.
The object of the amendment is to clarify who is the tariff customer. I accept that it may be defective and impossible to incorporate in the Bill as it stands. However, I believe that it points to a gap which exists in the Bill. I beg to move.
9.45 p.m.
Lord Renton: I find this a somewhat confusing clause and I believe that the amendment would add enormously to the confusion. Subsection (4) states:
" 'tariff customer' means a person who is supplied with electricity by a public electricity supplier otherwise than in pursuance of such an agreement as is mentioned in subsection (1) above".
That means the ordinary customer. Therefore, for this purpose it does not include someone who has required a supply and entered into an agreement under subsection (1). It means all other people; in other words, the ordinary tariff customers. If I am wrong, no doubt my noble friends on the Front Bench will explain why. But that is how I read the provision.
If we accept the amendment, instead of being the ordinary customer, the tariff customer will be limited to the person who has required an electricity supplier to give a supply of electricity by notice under Clause 16(2). Therefore, it would limit the operation of that definition perhaps in a way that the noble Lord, Lord Williams, does not intend. I do not see the Government accepting it, but all Members of the Committee would appreciate an explanation of a "tariff customer".
Baroness Gardner of Parkes: I understand that a tariff customer is a person receiving a supply of electricity. The noble Lord, Lord Williams, was slightly off the track in saying that anyone in a place which has electricity could be responsible. That is not so because it is the person who has signed the agreement with the supplying authority.
The wording of his amendment may cause a degree of confusion. Someone could say, "I have not required you to supply it. I have not given the notice under Section 16". Admittedly all the area boards are keen to get customers in the door and signed up. Bad debts are now a big problem because people may move into a flat and take over someone else's supply. Now the policy is to disconnect and reconnect to the new occupier. The squatters referred to by the noble Lord are usually good at getting electricity supplies connected and are most expert. That is no longer a major problem for the boards. It is a fact that someone has to be responsible for the supply. I do not believe that the way in which this amendment is worded is helpful. All the conditions are already set out in Clause 16(2), and I do not think that they need repetition here. The wording may allow someone to escape on the grounds that as they had not received it, they could not be classified as a tariff customer.
Lord Sanderson of Bowden: I find myself in a certain amount of difficulty because I believe that the amendment of the noble Lord, Lord Williams, might help to clarify the position and I shall take it away. However, I must say to my noble friends that they have put doubts in my mind as to whether there is a subtle point which I have not recognised in the wording of this amendment.
Perhaps the noble Lord may be content to withdraw his amendment. I know that having looked at it, it would need redrafting. However, I make a
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commitment to come back on this particular point, having studied what my noble friends have said. I hope that the noble Lord will consider withdrawing his amendment at this stage.
Lord Williams of Elvel: I am most grateful to the noble Lord for his answer. I hope that he will not be deflected by the noble Lord, Lord Renton, and the noble Baroness, Lady Gardner of Parkes. We look forward to seeing what the Government produce on Report. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 22 agreed to.
Clause 23 [Determination of disputes]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 152A:
Page 17, line 35, leave out ("arising under sections 16 to 22 above").
The noble Lord said: Clause 23 deals with the determination of disputes, and the director general will have stronger powers than the existing consumer councils to make determinations in some types of disputes between the industry and its customers with decisions being binding on the supplier.
That is welcome. I do not wish to challenge that. I believe that that is an excellent construction. However, we are slightly concerned that the clause as drafted is rather too restricted. The Consumers' Association survey suggests that the director's powers in that respect should cover not just the narrow points but the widest range of services. Those could and perhaps should include losses incurred because of supply interruptions, questions of voltage fluctuation, and indeed possibly disputes about accounts. We also feel that they should cover disconnection for non-payment and the terms under which reconnections are made, which is a point on which we touched briefly in the last amendment.
This is a relatively simple and probing amendment. I should be grateful if the noble Lord can give his views. I beg to move.
The Deputy Chairman of Committees: I should remind the Committee that if it should be agreed to, I shall be unable to call Amendment No. 152AB.
Lord Sanderson of Bowden: I am pleased that the noble Lord recognised the major contribution made to consumer rights by Clause 23. For the first time there will be a right for an independent determination of disputes over the terms and conditions to be applied to the provision of the supply of electricity. I assume from his remarks that the intention of the amendment is to make any disputes arising from the provisions of the Bill the subject of determination under Clause 23 rather than any dispute whatever.
The latter would clearly be a nonsense. However, we do not accept the amendment. The noble Lord cited a number of examples of cases where he believes that the determination procedures of Clause 23 should apply; in particular, those arising under the provisions of Schedule 6. However, there are

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already provisions in that schedule which make certain actions criminal offences. It is clearly inappropriate for the director to become involved in such cases. Other provisions provide their own remedy without the need for the involvement of the director under Clause 23; for example, in those cases where the supplier disconnects the consumer when he has no statutory right to do so. What is at issue is not a dispute over terms but rather the question of whether the obligation to supply under Clause 16 is being complied with. This is a matter which the director has the power to deal with under the enforcement procedure set out in Clauses 25 to 27.
The provisions in Clause 23 ensure that where there is a dispute over the terms on which a supply is provided there is a right to independent determination of that dispute. It also provides powers for the director to ensure, in appropriate circumstances, that a supply can be given while the dispute is determined. It would be wholly inappropriate to weaken them by extending the area covered into fields where other forms of protection are already provided, diluting the amount of effort
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the director can give to those cases where the determination procedure is appropriate.
I hope that with that explanation the noble Lord, Lord Williams of Elvel, will understand the Government's position and why we are resisting this amendment.
Lord Williams of Elvel: I am grateful to the noble Lord, Lord Sanderson, for his reply. I accept that it would be widening the procedure for determination of disputes into an area which he might not wish to accept and which the Government might worry about. However, I wonder whether the Government have thought through the extent to which the director can operate in areas outside what I regard as the narrow area which is covered by Clause 23. Nevertheless, having said that, I shall have to read what the noble Lord said and consult advisers to see whether we wish to return to this point at a later stage. I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Ezra Lord Ezra moved Amendment No.l52AB:
Page 17, line 35, after ("above") insert ("or any genuine dispute about the amount of electricity supplied").
The noble Lord said: This amendment also relates to Clause 23. It specifically refers to,
"any genuine dispute about the amount of electricity supplied".
It is in line with the amendment proposed by the noble Lord, Lord Williams, though more specific. It is specific because it is felt that there could be a number of disputes arising from a genuine feeling that meters have not worked properly; that there has been a malfunctioning; or that somehow or other the supply has bypassed the meter, which of course would be a dispute on the part of the supplier. We feel that this area of dispute, which must be widespread, should be specifically referred to in this clause. I beg to move.
Baroness Gardner of Parkes: I wonder whether people understand the way in which this system works now. There is a code of practice but there is also a way that this is practised. First, there is an assessment, as any meter has a certain limit of accuracy. It is the policy of all boards to settle with customers wherever possible. For example, if a person claims to have been overcharged for electricity, the meter is tested in its existing position. If the meter is found to be faulty— by that I do not mean that the person has tampered with it, because as the Committee will know there is a black museum full of the different ways of making meters work to favour the consumer rather than the board— the area board will always settle with the customer.
On the other hand, if the meter is proved to be correct but the customer still claims that he has been incorrectly charged and that there is a fault in the meter, the matter can be referred to a special independent testing station. If the meter is then found to be faulty, in theory the customer could be asked to pay for the cost of the additional special test but in practice the area boards meet the full cost of testing. If it is found that the customer is wrong and that there is no fault in the meter, the customer must pay the bill but no interest is charged on the money outstanding, and, as I said, there is no charge of costs to the customer. There is therefore a very satisfactory existing method with this independent means of assessment. I believe that the customer who is concerned about his meter has a very good means of protection.
10 p.m.
Lord Macaulay of Bragar: I suggest to the Committee that the last two amendments show the clause to be very badly drafted. It might be a better idea for the Government to take the whole clause away and for subsections (1) and (2) to be seriously considered with a view to redrafting them. I may not be speaking precisely to the amendments proposed, but what puzzles me are the tenses used in subsection (1). It reads:
"Any dispute arising under sections 16 to 22 above between a public electricity supplier and a person requiring a supply of electricity".
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In any common use of language that does not include a person who has received a supply of electricity. Taking it to its logical— perhaps illogical— conclusion, if there is a dispute at that stage with a person who has not received a supply of electricity, the supplier can refer the matter in dispute (which is presumably a financial one) to the director. He then delivers a judgment which is equivalent to a decree against the consumer.
If my view of the matter is correct, it means that the consumer may find a decree against him for something that he has not received. The matter becomes even more confused and convoluted if we refer to Clause 19(1), because there we have the past tense:
"Where any electric line or electrical plant is provided by a public electricity supplier in pursuance of section 16(1) above, the supplier may require any expenses reasonably incurred"—
not reasonably estimated—
"in providing it to be defrayed",
which means that the expense has already been incurred by the supplier. That would not be covered by Clause 23(1) as it presently stands because there has been no supply within the terms of that subsection. When we refer to Clause 22(1) we return to the present tense:
"a person who requires a supply of electricity".
So the overall view taken by the noble Lord, Lord Sanderson, that anything from Clause 16 to Clause 22 can happily be resolved by the director in terms of Clause 23(1) is, if I may say so with the greatest respect, entirely misconceived.
As regards Clause 23(2), the matter becomes even more confused. Under that subsection the dispute does not go to the director because he can only give directions. Yet in Clause 23(2) the supply is already in position, because it reads:
"Where any dispute arising under sections 16 to 22 above between a public electricity supplier and a person requiring a supply of electricity to continue to be given".
That means that he has already been supplied, but the dispute cannot go to the arbiter in terms of Clause 23(1). To put the matter shortly, Clause 23 is a drafting shambles and it should be taken back again to the drawing board.
Lord Sanderson of Bowden: Far be it from me to argue with a distinguished lawyer from north of the Border. I would rather read closely his "may'Y'shall be", "wishes" and so on. If the draftsmen have arrived at a situation where they have got it wrong and the noble Lord has got it right, I shall be the first to congratulate him and to write to him on the subject. I prefer to look very closely at what he has said and the way in which he put it in order to see whether there have been errors. I am not admitting to them. I shall look at the matter closely to see whether we have the correct tenses in the right places and that we are dealing with the subject correctly.
I shall now deal with the substance of the amendment which the noble Lord, Lord Ezra, has

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brought before us. The amount of electricity supplied will be of interest primarily where the charges levied are dependent on the amount of electricity supplied. In such cases the Bill provides that a meter must be used for determining the quantity of electricity supplied. Where there is a dispute over the amount of electricity supplied, there are two main ways in which this can arise; namely, where the meter is inaccurate or where the reading taken is incorrect. In cases where there is a dispute over the accuracy of a meter, the normal first step would be for the supplier, with the agreement of the consumer, to fit a check meter whose readings would then be compared with those of the main meter used. The supplier would indeed have the right to install such a meter and could obtain entry for that purpose. If it should prove necessary, however, paragraph 7 of Schedule 7 to the Bill also provides for independent determination of the accuracy of the meter by the meter examiners appointed by the director. In this way the Bill already ensures that a mechanism exists for determining disputes over the amount of electricity supplied.
The second case of dispute is likely to be one over the charges being levied in respect of the amount supplied, and by implication, rather than directly, over the amount of electricity supplied. This kind of dispute can arise in a number of ways; for example, there may be a dispute over whether there has already been a partial payment made, or whether the amount of electricity charged at each of a number of tariff rates to be used is correct. Such disputes can concern matters both of fact and of law, and we do not believe that it is appropriate for the director to determine them. This is best left to the courts where there is already ample precedent in determining disputes of this nature.
In either of the cases I have described, so long as such a dispute continues, and in the absence of any independent determination for one party or the other either by the courts or as a consequence of a report on the meter by the meter examiners, the supplier would not be permitted to disconnect. Should he do so, then this would be an enforcement matter under the terms of Clauses 25 to 27 of the Bill. In such cases, it would be for the director to determine whether there is still a genuine dispute in considering whether to use his powers.
To recapitulate briefly, the Bill already provides proper provision for independent determination of disputes over the amount of electricity supplied resulting from disputes over the accuracy of the meter. There is already a long-established procedure of the courts for resolving cases of dispute over debt and the Bill prohibits disconnection where there is a genuine dispute over the amount of any debt. In view of what I have said, I hope that the noble Lord will consider carefully what he wishes to do with his amendment.
Lord Ezra: I am grateful to the noble Lord for that detailed explanation and also to the noble Baroness, Lady Gardner of Parkes. I should like to read
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carefully what they have both said. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 152B to 152H not moved.]
Clause 23 agreed to.
Clause 24 agreed to.
Schedule 6 [The public electricity supply code]:
Baroness Seear Baroness Seear moved Amendment No. 152J:
Page 92, line 18, after ("electricity") insert ("otherwise than through a pre-payment meter").
The noble Baroness said: I should like to speak at the same time to Amendment No. 153A. These two amendments are an attempt to deal with the important and sensitive issue of disconnection, a matter which has caused a great deal of hardship, anxiety and trouble in the past. We fully recognise that electricity has to be paid for. There is no question of suggesting that people should use electricity and then be able to get out of paying for it. That is not the intention. The intention of the amendments is to find a way in which disconnection can be avoided while at the same time ensuring that the suppliers can get the money that they ought, and need, to get.
In other circumstances and on previous occasions it has been argued that there should be an attempt to distinguish between people who could pay but will not and people who are not in a position to pay. It is our contention that that is not a very profitable approach; it is extremely difficult and time consuming to distinguish between people who are in a position to pay but will not do so and those who are finding it most difficult so to do.
The approach whereby time is spent in disconnecting people, the bad blood which is generated, the inevitable mistakes which are made and the problem of borderline cases— that is, people who may be considered as unable to pay or who with a little more effort could be made to pay— does not get one anywhere. The proposal put forward in the amendments would, I think, solve the problem or at least get as near to solving it as possible.
We suggest that, in a situation where a person has not been paying and where, as things are at present, that person would run the risk, if not the certainty, of disconnection, instead of such disconnection a prepayment meter should be installed. In that way the person could no longer continue not to pay. To be deprived of electricity is a very serious matter. After all, in a great many households it is the only means of lighting, of hot water, of cooking and of heating. Therefore it is an extremely serious matter to cut off that supply.
One recognises also that some people have played upon the fact that disconnection is such a serious matter. They have managed to have a continuation of the service without paying just because of the seriousness of the problems which arise if disconnection follows. If the Government would seriously consider the proposal to install a prepayment meter instead of the present system,

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there would not be the continual piling up of debts for electricity. It would also mean that the existing debt could be dealt with, because that is an accumulation which could be discussed and for which a paying-off process could be introduced.
It is important to remember that once this meter has been installed the debt will not be incurred again because prepayment means what it says— prepayment. We believe that this is a way in which both legitimate interests can be served. Of course the supplier needs to be paid, but this would avoid all the social and administrative problems involved in disconnection and subsequent reconnection. It would also avoid the kind of crises which may result.
I should say that the amendment has the full support of the National Consumer Council. Indeed, it originated from the council, which has given a great deal of thought to the matter. It seems to us to be a most practical approach towards overcoming what is a very difficult social and economic problem. I beg to move.
Lord Dean of Beswick: I rise to support the amendment so ably moved by the noble Baroness, Lady Seear. I think that she has covered the main principles involved. However, those of us who have had a long experience of dealing with the public and the question of electricity and cut-offs know of the appalling tragedies which sometimes result. In most cases, it is families with children who are involved.
Having been a member of a local authority and also a member of another place, I must say that many of the cases with which I dealt— because they involved inner-city areas which I represented— involved this problem. For instance, the Manchester area, where I served on the city council and near where I now live, historically has a high percentage of electricity cut-offs because of the problems in the area.
The case put forward for the installation of prepayment meters is an excellent one. Those of us who can recall the time when we had gas and electricity meters in the house, and when that was the only method of payment, know that it was far more efficient and easy to operate than the present system, where most people pay by means of a bill, which means that people are in debt for a quarter, even though they may pay on time, because they have already used the electricity. However, the amendment would ensure that people paid for electricity as they used it.
We must consider the results of a considerable increase in the number of disconnections. They would probably be in the most deprived areas; namely, the inner city areas. Who would care for the families with children where the electricity had been cut off and all sustenance had been removed? As the noble Baroness, Lady Seear, said, it is the only main service other than water that goes into the house. It gives the family hot water and a means of cooking. Without it, the family would lose two of the main elements to sustain life.
If that happened, on whom would the social burden of those families fall? It would either be for the DSS to provide an increased payment or for the
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local authority social service department to help. I do not want to go too far down this road, but we are all aware that local authorities have nothing like the resources for social services that they had. That would mean that they could not pick up the bill. If they did, it might be reflected in the amount of community charge or poll tax that an area would have to find to deal with the problem.
The amendment relates to an involved subject which we could debate for a considerable time. A number of issues could be brought forward. As I said, the noble Baroness, Lady Seear, has made out a first-class, undeniable case for the amendment. From these Benches, we support the amendment.
10.15 p.m.
Baroness Gardner of Parkes: I listened carefully to the noble Baroness, Lady Seear, when she moved the amendment, and to the noble Lord, Lord Dean of Beswick, when he supported it. I have every sympathy with the idea that we do not want to see anyone disconnected from the electricity supply. I understand the hardship involved. I believe that they underestimate how many people play the game of brinkmanship. The noble Baroness said that she knows that some people try to avoid paying. The threat of disconnection is a valuable weapon. If the threat of disconnection were removed, we would have many more problems. There would be people who would never pay.
In the London Electricity Board area, 200,000 people a year receive a notice warning of possible disconnection. There is a good code of practice. All types of arrangements are offered. Every consideration is given to people who come forward and say that they are willing to try to pay through a prepayment meter and also gradually to repay some of the debt. If people come forward and say that they have no money and that times are bad, again help is given. An additional charge is made on the prepayment meter, or the budget meter, which is a new method, to help people to clear the debt. There are 200,000 possible disconnections, but the number disconnected in a year is 14,000. My maths is bad, but if one takes 14,000 from 200,000 one will see how many people are influenced by the threat of disconnection to meet the board and reach some agreement about payment. They do not pay up. Many cannot do that. They make arrangements to pay in the future and to repay the debts.
Baroness Seear: I am sorry to interrupt the noble Baroness, but does she agree that the prepayment meter would ultimately obliterate the problem? There would be a backlog of people who have not paid, but once prepayment meters are installed the problem would not arise. It is surely better to see that the need for disconnection does not arise by putting in the prepayment meter than to keep the penalty hanging over people's heads, and then, as the noble Baroness said, not be able to get the money out of them. Surely prevention is better than cure.
Baroness Gardner of Parkes: I think that the noble Baroness should appreciate that the prepayment meters— or budget meters, as they are now— have a

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special key which will operate the meter only, so that it cannot be used as currency nor can it be sold to anyone else. If the DSS gives someone the money for so many pounds-worth of electricity, it can only be used on that person's electricity; the key cannot be sold off for anything else on the way home. So it is a genuine way of giving people their electricity.
Those meters are now offered to everyone threatened with disconnection. They are installed as a first priority in all such cases. However, the boards need contact with those customers to ask them what arrangements they are prepared to make about the past. The boards cannot afford just to write off the bad debts of several millions of pounds. I think it has gone down from £ 7 million to £ 6 million; but there are millions of pounds every year of bad debts in the London area.
Now unless the customer can produce security to prove that he will be able to meet his bills, every new customer will be offered a budget meter. In every case the code of practice offers the meters. I understand that the amendment would remove the right of the boards to disconnect or even to threaten disconnection. If that is the case, then customers can call the boards' bluff and the whole 200,000 will make no arrangements whatsoever to meet any arrears.
As the noble Baroness says, eventually when everyone who is a financial risk is on a system where the prepaid key has to be used, certainly the bad debts will be gone. But we have seen that it is a slow process. The production of these meters is not like lightning; it takes time to get the conversion. But the meters are becoming accepted in society.
When I was in court recently a man came before us. He was asked what he was doing out at night, and he said that he was off to recharge. his key at the local electricity board, as one does outside the premises. I thought, "Well, that's interesting. It just shows how to this man it has become a perfectly normal part of his life." One can put £ 99 worth of electricity on to the one key or one can put £ 1 worth on to it. People have this availability and it is a marvellous answer.
However, to take it as the only answer and remove the power of disconnection would be to make it less effective, because that is the first contact and the way in which the boards get the person with an existing supply to come and reach agreement about what can be done over past arrears.
Furthermore, all the other customers have to bear the loss of however many millions of pounds it is. It may be that some of those customers helping to bear the loss are themselves very poor poeple. They can ill-afford to pay more for their electricity because they are helping others who are perhaps not as lacking in funds but are shrewder and more calculating. The DSS can and does pay electricity bills directly to the electricity board in cases where there is a genuine social benefit entitlement. So again that removes a lot of people. The idea of the prepayment meters is excellent; but to remove the threat of possible disconnection is to take away one of the most important arguments that the boards now have.
Lord Sanderson of Bowden: I understand the very strong feelings expressed by the noble Baroness, Lady Seear, and also the noble Lord, Lord Dean of Beswick, on this matter. The main thrust of the amendments is that a supply should always be provided, albeit on the basis of payment in advance, to someone who owes money for supplies already received rather than their being disconnected. If we look first at the second amendment, this would allow the supplier to fit a prepayment meter immediately a debt in respect of electricity charges arose. It would also provide that, irrespective of the circumstances in which a debt arose, the consumer could only be disconnected if it were not possible to fit a prepayment meter. The first point to note about the amendment is that the consumer's consent will not be required for a prepayment meter to be fitted; the supplier could install one unilaterally. We believe that amounts to a serious invasion of the consumer's privacy and would impose a solution on him or her based simply on the argument that Parliament knows his interests better than he does himself. And yet, this would be the only avenue available to the supplier to ensure that he received the money he is due, as he would be unable to disconnect if a prepayment meter could be fitted unless the consumer agreed to be disconnected.
The second point to note is that the amendment does not say how the original debt is to be recovered. My noble friend Lady Gardner of Parkes spoke at considerable length on that point. It has been argued that the amendments would not preclude the agreement of a prepayment arrangement for recovery of the debt. But, as future supplies will be protected, there will be little incentive to the consumer to enter into such an agreement. This will be particularly true of those who have chosen not to pay rather than those who have real difficulty in making payment. That is the very point with which the noble Baroness, Lady Seear, opened her remarks, and with which I agree. It is a matter of those who will not pay and those who cannot pay. We all face a very difficult problem here.
I appreciate that the Committee is concerned with those who are unable to pay, rather than those who simply refuse to pay. We, too, are concerned about those who are unable to pay, and I will come shortly to the measures we have proposed to help them. However, it is incumbent on the Government and on this Committee to take the wider view into consideration also and to protect the interests of all consumers.
We recognise that there are consumers who have real difficulty in meeting their bills because of their particular circumstances at a given time. The noble Lord, Lord Dean of Beswick, mentioned that point. We share the view that disconnection should be avoided in such cases whenever possible, and so does the industry. That is why it instituted the voluntary code of practice that it operates at present. This states quite clearly that a consumer will not be disconnected if he enters into and keeps to a payment arrangement to cover both future charges and recovery of debt. It also states that disconnection will not take place if it is safe and practical to install a prepayment meter.

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We fully recognise the value of this approach in reducing unnecessary disconnections. That is why we have made it a condition of the public electricity supplier's licence that he should produce such a code in consultation with the relevant consumer committee and agree it with the director. We have, of course, gone further than that. My right honourable friend the Secretary of State for Energy said in Committee in another place that we would be introducing a further condition into the public electricity supply licence along the lines of that agreed for the British Gas authorisation by Mr. McKinnon and British Gas. I am pleased to tell the Committee that we have today laid in the Library of the House copies of that condition.
This condition requires the public electricity supplier to prepare, in consultation with the relevant consumer committee, methods for dealing with consumers in default. These must include methods for distinguishing those who find difficulty in meeting their obligation to pay for electricity, either through misfortune or inability to cope with electricity supplied for domestic use on credit terms. For such consumers the methods adopted must cover taking the consumer's means and ability to comply into account when making payment arrangements, and provide for a prepayment meter to be installed where safe and practical to do so, if the payment arrangement is not complied with.
These two licence conditions represent a substantial degree of protection for those consumers who have genuine difficulty in meeting their bills. They provide that, for such consumers, the safety net of a prepayment meter will be available as a last resort if one can be fitted and if the consumer accepts it. We believe this approach provides the best combination of consumer choice and protection, and meets all the aims of the proposed amendment while avoiding the difficulties it creates. I can do no better than my noble friend Lady Gardner of Parkes, who pointed out some of those difficulties.
We share the concern of the noble Baroness and other noble Lords as regards those who have genuine difficulty in meeting their commitments. We have accordingly taken steps which will enable their supplies to be continued on reasonable terms in the light of their circumstances. These give the consumer a free say in discussing with the supplier the method best suited in each case, while still allowing the safety net of the prepayment meter should the consumer need it and want it. I understand the point of view of the National Consumer Council as regards those who may not understand meters and get into trouble as a result. I have to say, however, that in the end it must be for the consumer to take the decision on what action he, or she, will take. He has an obligation to pay for electricity supplied to him and if, despite all opportunities given to discuss any problems, he does not come forward, then it must be assumed that he no longer wishes a supply.
The noble Baroness, when moving the amendment, said that debt can be dealt with. Yes, but it is a very difficult problem to deal with. While we have not accepted the terms of the amendment, we have gone some way towards recognising the problem, and the fact that it is difficult to
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differentiate between those who will not pay and those who cannot pay does not, in our view, mean that the effort should not be made.
I hope that, with that explanation and once she has studied the terms of the document laid in the Library today, the noble Baroness will understand why the Government are resisting her amendment.
10.30 p.m.
Baroness Seear: I am naturally very disappointed with the reply from the Minister. I do not think that he has fully appreciated the point that we have made. His response came under two heads. The first was his resistance to the idea that people should be required to have prepayment meters. I think that he said that it was an interference with liberty or privacy if such meters were imposed. But it is perfectly reasonable for a supplier to make such a requirement. I can see no objection to saying that if people have not paid and do not pay their bills they must have a different system of payment and that system will be the prepayment meter. I do not accept the noble Lord's suggestion that that is an infringement of people's right to pay or not to pay.
The noble Lord has also not accepted the point that it is both costly and inefficient to try to make a distinction between people who can pay and will not and people who are unable to pay. That is bound to be a very subjective judgment. It takes a great deal of time; it stirs up bad blood. Undoubtedly in a number of cases the decision will be made on the toss of a coin because often it will be very hard to decide whether a person is inadequate or is deliberately trying to avoid paying.
I fully accept that the money has to be collected, although I am sure that there are cases now in which the money is never collected. Every effort should be made to collect the money. It is a debt, like any other debt. Surely there are other methods. Debts for other items are dealt with in a variety of ways. Debtors who have not paid their electricity bills are debtors just as in any other area. They can be taken to court for non-payment of their debt.
Baroness Gardner of Parkes: Perhaps the noble Baroness will allow me to intervene. Is she aware of the enormous debt owed to local authorities in London for housing? The authorities have tried to recover those debts through the courts, and it is a very expensive and ineffective method of doing so.
Baroness Seear: Both the noble Baroness and the Minister have made our case. Every time they open their mouths they show that the present system, with the threat of disconnection, simply is not working. It is both an expensive and an inefficient way of getting the money in.
Baroness Gardner of Parkes: I did not refer to electricity but to people in local authority housing.
Baroness Seear: The noble Baroness also said in her previous speech that a very great deal of money was owed for electricity which it had not been possible to recover. I am saying that she and the Minister, out of their own mouths, have shown that the existing system is not working and they do not

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know how to make it work. This amendment puts forward, on the suggestion of people who are very close to this problem, an alternative. It leaves a backlog of debts to be collected but it prevents further debts being incurred. That, surely, is something. One will not get all the debts in, I am sure, but equally by working away at it some of the backlog will be got in. The important point is that no future debt will be incurred. That is surely what matters.
However, at this time of night, not knowing what is lingering in the Library, I have not the slightest intention of pursuing this amendment. I shall come back to it at a later stage. I beg leave to withdraw the amendment.
Amendment, by leavejwithdrawn.
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 153:
Page 92, line 22, leave out ("15 working") and insert ("28").
The noble Lord said: This amendment concerns the same subject as the previous amendment. I listened with care to what the noble Baroness, Lady Gardner of Parkes, said regarding prepayment meters. I almost thought that she made a case for the installation of them. The only thing about which she was not satisfied was the speed with which they could be introduced. I also almost thought that a case was being made in principle for writing off existing debts and starting to use the meters immediately. In the last two or three years the Government have proved their capacity to write off debts of privatised industry totalling billions of pounds to suit people at the top end of the financial scale. These amendments deal with people at the bottom of the social scale.
I think the Minister will appreciate that it is very difficult to pick up the full meaning of the document placed in the Library at this time of night or at any other time of day. I imagine that it is a rather detailed document.
Although the next batch of amendments are not linked, I should like to refer to them. They are Amendments Nos. 153, 154, 155 and 155A. They deal with the same subject, but different aspects of it. The Minister will obviously have taken these amendments on board in advance. I should like to ask him whether he thinks the reference in these amendments will be contained in the document, or whether there will be no reference at all to them. The Minister is suggesting that we should proceed.
The purpose of Amendment No. 153 is to require that electricity customers who are in difficulties or in deliberate default should be treated no more harshly than customers of British Gas. The Gas Act 1986, Schedule 5, paragraph 7(5), does not permit notice of disconnection to occur for 28 days after a demand for payment has been issued. It is unreasonable and unacceptable that this Bill proposes that electricity customers should be more harshly treated and be given only three weeks— that is, 15 working days— instead of four weeks to pay. With second-class post deliveries taking anything up to five or seven days, a four-week period is fairer to the consumer, while not unduly damaging the cash flow for the public electricity supplier.
It is interesting to contrast the wording of the Bill in relation to defaulting customers with the provisions made in the draft Public Electricity Supply Licence, Schedule 2, paragraph 1(b), for the payment by public electricity suppliers of fees due to the Secretary of State under Condition 24 of their licences. In these circumstances, before the companies are cut off or their licences are revoked they are allowed at least 30 days to pay and must receive one reminder that payment is overdue.
In the House of Commons Standing Committee debate on this issue, which concerned an amendment to change the relevant notice period to 30 working days, the Secretary of State for Energy, Mr. Parkinson, was able to claim that this did not equate to the Gas Act conditions. This amendment, on the other hand, cannot be criticised on that count. Mr. Parkinson also claimed that there were substantial differences in billing arrangements in the two industries which justifies a discrepancy. This point was immediately challenged by MPs and indeed seems not to apply except in some Scottish instances and for some commercial and industrial customers who in general are not the obvious intended target beneficiaries of the Bill's public electricity supply. I beg to move.
Lord Renton: This amendment raises a very short point and it is a good point. I do not know why it could not have been expressed in about half a minute. The point is this: in the previous discussion, as my noble friend on the Front Bench said, it was revealed that 15 working days is quite unrealistic and 28 working days is much nearer the point. Some people have to go into hospital and those who live alone perhaps do not have anybody left behind in their flat to pay the bills; or perhaps somebody may have to go abroad on business. People sometimes even go abroad on holiday. I went away for five weeks to New Zealand earlier this year and I was terrified that when I got back I would find that my supplies had been cut off because I had made no arrangements for somebody else to pay my bills. So 15 working days is quite absurd. Let us have 28 days.
Baroness Gardner of Parkes: I wish to speak briefly on that one point about the number of days specified. I think the points that have been made might be perfectly legitimate as regards the domestic customer, but of course a tariff customer referred to under this section could be a large commercial customer and the amount involved could be very large. Indeed, such customers are billed monthly.
When I was discussing this matter with a member of the board, I understood that if the period were changed to 28 days one would be giving those customers two full months' credit. I thought they were explaining that there was already a period of credit prior to the start of the 15 days. Perhaps that point could be clarified at a later stage.
Certainly in the type of instances that have been pointed out by the noble Lord, Lord Renton, one could either effect a direct debit arrangement with the authority for that one month before leaving in which case his account woud have been debited and there would have been no risk or, as he said, he could have arranged for someone else to pay the

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amount. But I think that there is some sympathy with domestic customers and there is a definite code of practice for domestic customers. However, a large industrial user of electricity could take this period on as a way of obtaining an extra month's free credit at the expense of the authority, and it then becomes a different commercial proposition.
Baroness Seear: We are constantly referred to the codes of practice and the good sense of the authorities; but that is not good enough. We want such matters written on to the face of the Act. We do not want to have to rely on non-enforceable codes of practice and on the assumption that officials in these organisations will behave sensibly. No doubt the great majority of them will do so, but half the time the law is about having to deal with the small minority of people who do not behave sensibly and decently. That is why we want this on the face of the Bill.
Lord Sanderson of Bowden: I understand full well that the purpose of this amendment is to extend the period allowed to customers to pay their bills, and the noble Lord, Lord Renton, made his point about that. In responding to the debate I draw the Committee's attention to the fact that the provisions of paragraph 1(5) of Schedule 6 already represent a considerable improvement on the existing statutory provisions which were provided in the 1947 Electricity Act. When nationalisation took place, the electricity industry made no statutory requirements on boards as regards the period of notice that they must give before disconnectng any consumer. As the noble Baroness said, the electricity consumer has had to rely on the common sense or good will of the boards in this matter up to now, and he has had no statutory rights whatsoever.
This Government have therefore gone some way to improving the position of the consumer through the provisions that we are now debating. Of course it is important to stress that the period of 15 working days represents a statutory minimum. There is nothing in this part of the schedule or any other part of the Bill to prevent a supplier giving longer periods of notice, but the new companies must take into account the circumstances of their market.
Looking just at England and Wales for a moment, the number of those receiving monthly and quarterly bills is 166,000 and 20· 2 million respectively; but a better idea of the relative effects of the two groups is obtained from considering revenues. Those customers who are billed monthly account for some 30 per cent. of total area board revenues, as my noble friend Lady Gardner of Parkes said. Clearly such customers have the potential to give rise to a considerable debt problem in a short period. The effects of this will be felt by all consumers. It is clearly right that in setting the minimum period which must be allowed for payments of bills the existence of those monthly billed customers must be taken into account. Otherwise, the ordinary consumer could suffer cost penalties.
Some noble Lords have compared these provisions with the 1986 Gas Act. Indeed the noble Lord, Lord Dean of Beswick, said so when he moved
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the amendment. The two industries have different practices when it comes to billing. For gas quarterly billing of tariff customers is almost universal. For electricity both monthly and quarterly billing are used, whereas in the south of Scotland there is a bi-montlhy billing. The proposals in this Bill and the provisions of the Gas Act reflect that difference.
We felt it right to make the period of payment for electricity bills 15 working days for the reasons that I have explained. I should of course stress the word "working" since it means in practice that a minimum of 19 to 21 calendar days must elapse, and, where holidays intervene, rather more. Noble Lords who have business intersts may care to reflect on whether they would regard it as satisfactory if their customers were given a statutory right not to pay the bills due for a period of 28 days. The Committee will understand that it is difficult to arrive at the right number of days that should by statute be the minimum. As a Government we feel that we have gone some way to improving the situation. However, in the light of what has been said, and at this late hour, I would request that the Committee allow me to take this matter away to consider it again in the light of what my noble friends and the noble Lord, Lord Dean of Beswick, have said.
Without commitment— I cannot give a commitment— I may well return to this at a later stage of the Bill.
10.45 p.m.
Lord Dean of Beswick: I am grateful to the Minister for that sympathetic reply. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 153A to 157 not moved.]
Schedule 6 agreed to.
Clause 25 [Orders for securing compliance]:
[Amendments Nos. 157A to 157J not moved.]
Clause 25 agreed to.
Clause 26 agreed to.
Clause 27 [Validity and effect of orders]:
[Amendment No. 157K not moved.]
Clause 27 agreed to.
Clause 28 [Power to require information etc.]:
[Amendments Nos. 157L and 157M not moved.]
Clause 28 agreed to.
Clause 29 [Regulations relating to supply and safety]:
[Amendments Nos. 157N and 157P not moved.]
Lord Ezra Lord Ezra moved Amendment No. 158:
Page 23, line 27, at end insert ("providing the Secretary of State has consulted with the Director and the appropriate consumer's committee, and makes a statement to Parliament, giving notice of his intention to grant a relief from obligation.").
The noble Lord said: It is about time that somebody moved an amendment, so I shall oblige.
This is quite an important amendment, because regulations under Clause 29(2) permit,
"persons authorised by a licence to supply electricity"
to be relieved of the,
"obligation to supply in such cases as may be prescribed".
That is pretty wide ranging, and the object of the amendment is to limit this power by regulation. The proposition therefore is to add the words:
"providing the Secretary of State has consulted with the Director and the appropriate consumers' committee, and makes a statement to Parliament, giving notice of his intention to grant a relief from obligation".
The relief is, after all, a fundamental one. It is a relief to do that which the licence enjoins the person to do. Being so serious it seems to us to be right that it should be qualified in the manner proposed. I beg to move.
Lord Renton: The making of a statement to Parliament is quite a palaver. We do not have an unlimited number of statements made to Parliament by Ministers. But if the noble Lord, Lord Ezra, has in mind merely, for example, the Answer to a Written Question, then that would be a different matter. However, I should have thought that it would be unusual to have this sort of consultation. If anyone feels that the Secretary of State has acted in a way in which he should not have done, the right thing is to raise the matter in Parliament in the usual way. There are various ways of doing that. One is by means of a Question for Oral Answer. I should not have expected my noble friends on the Front Bench to accept this worthy amendment.
The Earl of Dundee: I am grateful to the noble Lord, Lord Ezra. I appreciate his concern that any relief granted from an obligation to supply should always be kept to a minimum.
This is not a new provision. It already exists in the Energy Act 1983, under which the current regulations setting out the standards to be observed on safety and quality of supply— the Electricity Supply Regulations 1988— were made. These regulations provide for a number of circumstances— all relating to safety— where an electricity board would be relieved of its obligation to supply.
It may be helpful if I briefly run through the relevant provisions. Regulation 27 provides that no supplier shall be compelled to commence, or to continue to give a supply to a consumer unless he is satisfied that the consumer's installation will not provide a danger or cause interference with the supplier's system or with the supply to others.
Regulation 28 permits a supplier to discontinue a supply without giving notice in an emergency in the interests of safety, and to discontinue a supply after giving notice to the consumer where a consumer has not taken action necessary to prevent interference with other supplies. This regulation also makes provision regarding disputes between consumer and supplier over a discontinuance of supply, and provides that a supplier may not disconnect more than that portion of the installation than is necessary.
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Regulation 32 requires an electricity board to maintain a supply except where testing is necessary, in which case two days' notice is necessary, or where an inevitable accident of force majeure makes it impossible to do so. Regulation 35 requires details to be provided to the Secretary of State of interruptions to supply in specified circumstances.
In setting out these requirements, I have sought to demonstrate that the types of circumstances provided by the supply regulations to give relief from the obligation to supply are cases where it would be impractical to enter into the type of consultation process that the noble Lords would wish to see introduced. The very nature of the regulations in dealing with safety matters dictates that action be taken as quickly as possible to prevent danger or to protect the public from injury. We simply cannot introduce any procedure which might endanger life. I should stress that the Bill allows relief from the supply obligation only in prescribed circumstances. Parliament therefore has the powers to approve the circumstances which are set out in the regulations and if necessary to pray against any proposed changes.
The current electricity supply regulations were compiled after an extensive process of consultation with the industry and a wide range of interested bodies and they command widespread respect. Any change to the regulations could only be made by statutory instrument and the opportunity therefore exists to debate and propose changes.
I believe that at present they represent the right balance between ensuring continuity of supply and protecting the safety of the public. The noble Lord's amendment could severely hamper these objectives and in the light of the explanation I have given, I invite him to withdraw it.
Lord Peston: I intervene in case I misunderstood the noble Earl. Although this issue is concerned with safety and so forth, the general ability of any customer to complain to the director about anything still holds. In other words, if the customer believes that the decision to supply is unreasonable, he can still go through the complete set of procedures in connection with the director. He can say, "Although you have acted, I still wish to complain to say that you have acted incorrectly and you must put it right again". Can the noble Earl confirm that that side of the issue still holds?
The Earl of Dundee: I am grateful to the noble Lord for introducing that matter and I confirm that the provision still holds.
Lord Ezra: I listened with care to what the noble Earl said and I should like to study it. The object of my amendment was not to impede anything connected with safety. That could have been stated as an exception because, clearly, one must move quickly in those circumstances.
However, I should like to read what the noble Earl has said and if necessary come back to the matter. In the meantime, I beg leave to withdraw the amendment.

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Amendment, by leave, withdrawn.
[Amendments Nos. 159 to 160A not moved.]
Clause 29 agreed to.
Clause 30 [Electrical inspectors]:
[Amendments Nos. 160B to 160D not moved.]
Clause 30 agreed to.
Clause 31 agreed to.
Schedule 7 [Use etc. of electricity meters]:
Lord Ezra Lord Ezra moved Amendment No. 161:
Page 96, line 12, after ("supplier") insert ("in agreement with the customer").
The noble Lord said: This is a simple amendment. Although this may already be implied, it is intended to make absolutely sure that in this case the customer is in agreement. I beg to move.
Lord Glenarthur: I believe that the amendment is an unnecessary addition, despite the noble Lord's wish to see the matter put beyond doubt.
Under the terms of paragraph 1 of Schedule 7, where a meter is to be used to ascertain the quantity of electricity supplied, it has to be an appropriate meter. "Appropriate" in this context is defined in sub-paragraph (5) as being particularly suited to use for the supply in question, having reference to the terms on which the supply is to be provided. Finally, provision is made that where there is any dispute over matters arising under paragraph 1 these can be referred to the director for determination under Clause 23.
The effect of these provisions is to give very clear rights to the consumer in respect of the type of meter to be used. If one takes the example of a prepayment meter, in the first instance the consumer would be able to request an appropriate tariff when asking for supply under Clause 16. If that is refused, he can take the matter to the director for determination under Clause 23. If a prepayment tariff has been agreed, the supplier will be required to provide an appropriate prepayment meter, and again, if the meter proposed were considered to be inappropriate by the consumer, he has the right to seek a determination by the director. Similar considerations apply in respect of other types of tariffs and meters. I hope that provides the assurance sought by the noble Lord.
Lord Ezra: I am grateful to the noble Lord for that assurance. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
11 p.m.
The Earl of Dundee The Earl of Dundee moved Amendment No. 161 A:
Page 96, line 17, at end insert—
("(3A) The electricity supplier may require the replacement of any meter provided and installed in accordance with sub-paragraphs (2) and (3) above where its replacement—

(a) is necessary to secure compliance with this Schedule or any regulations made under it; or

(b) is otherwise reasonable in all circumstances;

and any replacement meter shall be provided and installed in accordance with those sub-paragraphs.").
The noble Earl said: I speak also to Amendments Nos. 164A and 165A. These amendments are concerned simply with clarification in drafting. I beg to move.
On Question, amendment agreed to.
[Amendment No. 162 not moved.]
Lord Carter Lord Carter moved Amendment No. 163:
Page 96, line 42, at beginning insert—
("2.— (1) Where a customer of an electricity supplier is disabled and is to be charged for his supply wholly or partly by reference to a meter, the meter shall be installed on the customer's premises in a position determined in consultation with the disabled person.
(2) The supplier shall make particular arrangements, where necessary, to reposition meters and provide special controls and adaptations for electrical appliances and meters.
(3) If the customer is unable, because of disability, to take his supply through an appropriate meter, the supplier shall make alternative arrangements to supply electricity.
(4) The supplier shall promote the interests of consumers who are disabled in respect of the prices charged for and the quality and variety of electricity services and apparatus provided.
(5) The supplier shall have regard to the information needs of disabled customers.").
The noble Lord said: I should like to speak also to Amendment No. 164.I appreciate the hour, but this is the last amendment with which we shall be dealing this evening. However, these amendments are important in the interests of disabled people Paragraph 2(1) is self-explanatory and concerns the need for adequate forethought and planning when installing and designing meters. If the privatisation of electricity results in substantially more prepayment or coin meters, it is vital that those meters are designed and positioned so that disabled consumers can use them.
At present Schedule 7 to the Electricity Bill states:
"The meter shall be installed on the customer's premises in a position determined by the electricity supplier".
The first part of the amendment, if passed, would ensure that if a meter were installed in a household with a disabled occupant the disabled person would be consulted about the most suitable place to position the meter. Ensuring that the meter is installed in an accessible place initially saves the need to reposition the meter later and is less costly. The disability organisations are concerned that Schedule 7 as currently drafted still leaves too much discretion with the supplier.
When the issue was raised in Committee in another place the Government spokesman said:
"The intention of the Bill and, I expect, of the suppliers is to take account of the needs of disabled people".
That does not really go far enough as no specific indication is given as to how that is to be done.
One can appreciate that meters need to be placed at the appropriate height because a wheelchair user may be unable to reach a prepayment or coin meter if it is installed at a height that an able-bodied person would find suitable. Equally, someone with arthritis may have difficulty bending down and would require a meter installed at an appropriate height. A recent OPCS survey on disabled people identified arthritis as the most common cause of disability.
The second part of the amendment would allow the supplier to make special adaptations to equipment and to reposition meters. Provision in other privatisation Acts has led to a wide range of specialist equipment being available. The best examples of that are BT aids to disabled customers, which enable a wide range of telecommunication equipment to be designed for disabled people. Other examples are the special extended handles available for gas prepayment meters and arrangements for clock controls on gas central heating to be brailled. There are four different types of handles for gas cookers and there are also free gas safety checks for elderly and disabled people.
The third part of the amendment concerns disabled people who because of disability are unable to use a prepayment meter; for example, limbless disabled people. Schedule 7, paragraph 1(4) states:
"If the customer refuses… to take his supply through an appropriate meter provided… the supplier may refuse to give or may discontinue the supply."
An assurance is needed that this will not mean disconnection for the disabled people who are unable to use prepayment meters, and that ought to be written into the Bill.
Sub-paragraph (4) of the amendment, dealing with special equipment, is not intended to introduce a dual pricing system but to ensure that disabled people do not face additional charges simply on account of their disability. This was raised in Committee in another place and the Minister said:
"We do not believe that it is appropriate for the cost of such modifications to fall on the supplier and ultimately on other customers. In such instances the correct source of aid is through the social security system."
The disability organisations do not accept that. In other areas the cost of making equipment and services accessible is borne by the supplier and not by the disabled person; for example, brailled bank statements, accessible toilets on British Rail trains, accessible taxis, British Airways skychair, and so on. Additionally, not all disabled people are on social security but many have low incomes, as the OPCS survey revealed.
Finally, sub-paragraph (5) of the amendment explores the need for provision in the Bill to ensure that disabled people are aware of all the facilities that are available to them. It is vital that information is published in braille or on tape and not merely in printed form. For example, if a leaflet is produced giving information about adapted meters it must be in such a form that the people at whom it is aimed can benefit from it.
All five parts of the amendment, if accepted, would cost very little but would do a great deal to help people with disabilities. I beg to move.
Lord Renton: As a patron of the Greater London Association for the Disabled, I am naturally favourably disposed towards both of these amendments. It is right that we should legislate to cover the position of disabled people in regard to meters. However, I must confess that I prefer Amendment No. 164 in the name of the noble Lord,
706
Lord Ezra, to that which has been moved by the noble Lord, Lord Carter.
I say that for this reason. Amendment No. 164 really says almost all of what needs to be said. It omits sub-paragraph (4) of Amendment No. 163 and I must confess that, although I am so much in favour of disabled people, I regard sub-paragraph (4) as not relevant and, indeed, impracticable. It is not the function of suppliers to provide all the apparatus that we use for electricity. In fact, most of it they do not supply. I have never heard— one would love to hear of it but I do not think it is practical— a suggestion that disabled people should be accorded special charges for their electricity. Therefore, I do not consider sub-paragraph (4) to be right. I must confess that I do not understand sub-paragraph (5). I hope we receive a sympathetic reply from my noble friend on the Front Bench but I really prefer Amendment No. 164.
Baroness Gardner of Parkes: I must apologise for not being present for a moment as I had to get a photocopy done before the machine closed down. I wish to comment briefly that I understood that there was already a condition in the licence which enabled the boards to discriminate in favour of assisting disabled people.
Lord Glenarthur: I certainly share the concern that the noble Lord, Lord Carter, has expressed to ensure that the needs of the disabled are taken account of in the privatisation exercise. It is for that reason as the noble Lord, Lord Carter, suggested, that the Secretary of State and the director general are given a specific duty under Clause 3 of the Bill. The noble Lord feels that that is not sufficient; but I believe I can show that it follows very much the course that my noble friend Lady Gardner of Parkes has pointed out.
There is a special condition, Condition 16, which is entitled: The provision of services for persons who are of pensionable age or disabled. I believe that goes a long way to meet the point that my noble friend makes. It requires the public electricity supplier to produce a code of practice on the provision of services to the elderly and disabled and agree its terms with the director. This would cover just the kind of matters that the noble Lord has set out; namely, the provision of special controls and adaptors for electical appliances and meters (including prepayment meters) and the repositioning of meters. It would also cover giving advice on electricity use.
As regards the particular point which the noble Lord raised about the refusal to supply other than by the appropriate meter— for example, the insistence of a prepayment meter— a prepayment meter would only be appropriate if a prepayment tariff was used. If the supplier sought to insist on such a tariff, the consumer would have the right to dispute the matter and seek a determination from the director under Clause 23. We believe that the provisions that I have described already do much of what the noble Lord seeks to do in the amendment. In some cases the general provisions of the Bill also have effect. In the case of the positioning of meters,

707
for example, if the consumer disputes the reasonableness of the position proposed by the supplier, he has the right to seek a determination of that dispute from the director under Clause 23. Similarly, if there is no appropriate meter, then it would be open to the consumer to seek some special agreement in respect of their supplies under Clause 22.
I agree that some aspects of this amendment are not covered by the proposed amendment. But, like my noble friend Lord Renton, I do not believe that it would necessarily be right that they should be or that particularly the supplier should be required to promote the interests of the disabled in respect of tariffs. I understand the force that lies behind that argument; but where the disabled have difficulty in paying their bills through lack of resources it will not come as a surprise to the noble Lord if I repeat what was said in another place; namely, that it was a matter for the social security system and not the electricity industry and its customers.
I believe that many of the elements that the noble Lord seeks to fit into the Bill are covered by the Bill itself and perhaps particularly by the licence which I am sure the noble Lord will have studied. Were they not, we believe it would be inappropriate to make the kind of amendment which the noble Lord seeks. I hope that he will feel that the Bill as it stands, with the licence, goes a long way to meeting his anxieties.
Lord Williams of Elvel: Does the noble Lord not recognise again that the licence is not a statutory instrument? The licence can be modified and varied.
Lord Glenarthur: That is an argument that is fairly familiar. I seem to remember that it cropped up during the course of the Telecommunications Bill and one or two others. It has also cropped up as regards this Bill a number of times as well. The fact is that licence conditions are not statutory instruments in the way the noble Lord wishes they were. Nevertheless, I have no doubt whatsoever that if the provisions of the licence are not met or followed, a great deal of concern will be raised about it. The fact is that under the determination of disputes procedure which can be undertaken under Clause 23, there is a right for people to actually seek the kind of redress that they are looking for.
Lord Carter: I am extremely grateful to the noble Lord for his reply. I was aware of Condition 16 of the draft licence. The disability organisations have been concerned that these measures would not go far enough. I hope that we now have it on the record. It was obviously in the nature of a probing amendment. I am sure the Minister realised that. I shall read with care what he has said as, I am sure, will the organisations which briefed me. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Seear Baroness Seear moved Amendment No. 164:
Page 97, line 27, at end insert—
("No additional charge shall be made if an appropriate or modified meter is required because a consumer is disabled.").
The noble Baroness said: This amendment is based
708
on much of the argument that we have just heard in connection with the previous amendment; but it is much briefer and much more specific. It asks for a great deal less. Nevertheless we believe that it would be valuable to have this on the face of the Bill. The amendment is self-explanatory. It simply safeguards the financial position if specially modified equipment is put into the house of a disabled person. I beg to move.
Lord Glenarthur: I certainly understand the motives that lie behind the amendment. Despite that, I do not think that it is any more appropriate. It is also a little curious to see the amendment in the place that it is as the substance of the provision into which it is to be introduced is not concerned with charging for meters at all. Be that as it may, the amendment proposes that a disabled consumer should not be charged more for a meter which has had to be specially modified to account for his disability than it would have cost him to be supplied with the unmodified meter. The point that stems from this is the one focused on earlier by the noble Lord, Lord Carter, which is that someone else would have to bear the cost. In practice this would be the supplier and through him the generality of his customers. The social security system is designed to meet the requirements of people who find themselves in this predicament. We are concerned, but the Bill as drafted already takes account of the interest which the noble Baroness advocates.
Lord Carter: Where in the social security system can the help be obtained?
Lord Glenarthur: I cannot give chapter and verse on which element. There is a raft of available help under the social security system to meet this kind of concern. I shall certainly try to find out for the noble Lord.
Baroness Seear: I am not surprised but I am none the less disappointed by the noble Lord's reply. He is being extremely doctrinaire in saying that people can go to the social services to get the money that they need. He said that if the adjustment was made, the cost would fall on the other customers. The additional cost for the other customers would be absolutely minuscule. It would be a great reassurance to many disabled people to have this on the face of the Bill. However, at this time of night I do not propose to press it further. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Dundee The Earl of Dundee moved Amendment No. 164A:
Page 100, line 40, leave out paragraph 10 and insert—
("10.— (1) A customer of an electricity supplier shall at all times, at his own expense, keep any meter belonging to him in proper order for correctly registering the quantity of electricity supplied to him; and in default of his doing so the supplier may discontinue the supply of electricity through that meter.
(2) An electricity supplier shall at all times, at his own expense, keep any meter let for hire or lent by him to any customer in proper order for correctly registering the quantity of electricity supplied and, in the case of prepayment meters, for operating properly on receipt of the necessary payment.
(3) An electricity supplier shall have power to remove, inspect and re-instal any meter by which the quantity of

709
electricity supplied by him to a customer is registered, and shall, while any such meter is removed, fix a substituted meter on the premises; and the cost of removing, inspecting and re-installing a meter and of fixing a substituted meter shall be defrayed by the supplier.
(4) Sub-paragraphs (2) and (3) above are without prejudice to any remedy the supplier may have against the customer for failure to take proper care of the meter.").
The noble Earl said: This amendment has already been spoken to. I beg to move.
On Question, amendment agreed to.
[Amendment No. 165 not moved.]
The Earl of Dundee The Earl of Dundee moved Amendment No. 165 A:
Page 101, line 42, at end insert—
(" "prescribed" means prescribed by regulations;").
The noble Earl said: This amendment has already been spoken to. I beg to move.
On Question, amendment agreed to.
Schedule 7, as amended, agreed to.
The Earl of Dundee: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Hythe Marina Village (Southampton) Wavescreen Bill
Recommitted to an Unopposed Bill Committee.
House adjourned at twenty minutes past eleven o'clock.

  ELECTRICITY: CHP PRODUCTION
  ELECTRICITY: CHP PRODUCTION
  HUNTERSTON A: LOCATION OF EXTRACTED PLUTONIUM
  HUNTERSTON A: LOCATION OF EXTRACTED PLUTONIUM
  FRANCHISING: CONTROL PROPOSAL
  FRANCHISING: CONTROL PROPOSAL
  SPORTING RIGHTS IN SCOTLAND: RATING VALUATION
  SPORTING RIGHTS IN SCOTLAND: RATING VALUATION
  SALMON FARMS IN SCOTLAND: STATISTICS
  SALMON FARMS IN SCOTLAND: STATISTICS
  SALMON FARMS IN SCOTLAND: DISEASE DATA
  SALMON FARMS IN SCOTLAND: DISEASE DATA
  SALMON: DRIFT NETTING
  SALMON: DRIFT NETTING
  SALMON ACT 1986: CONVICTIONS
  SALMON ACT 1986: CONVICTIONS
  GAME MEAT: PROPOSED EC DIRECTIVE
  GAME MEAT: PROPOSED EC DIRECTIVE
  ROYAL OPERA HOUSE: DEVELOPMENT LAND TRUST DEED
  ROYAL OPERA HOUSE: DEVELOPMENT LAND TRUST DEED
  BSE: HEALTH PROTECTION MEASURES
  BSE: HEALTH PROTECTION MEASURES
  USE OF "RIGHT HONOURABLE"
  USE OF "RIGHT HONOURABLE"