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Earl Ferrers: My Lords, I would not say that talking about the past is being bizarre. I said only that the noble Lord's expressions are bizarre.

Lord Sefton of Garston: My Lords, that is not what the noble Earl said and that is not what is recorded in Hansard. The noble Earl said that the noble Lord, Lord Sefton, made a speech that was bizarre. We are talking of some things that have not changed over 50 years. Of course some things have not changed over 50 years! Many people believe in Jesus Christ. That has not changed in 2,000 years. I believe that what I was saying 50 years ago is still correct. I still believe that.

Baroness Gardner of Parkes: My Lords, I thought that the noble Lord imagined that he had lip-read what I had said to myself about the coal industry. My comment was not, "That's ridiculous" but "It's recovering".

Lord Sefton of Garston: My Lords, I am sure that all the miners who are being made unemployed today will welcome that statement. It was made in such an authoritative way. But I do not believe that the coal industry is recovering. Because of its very nature, the coal industry will not be able to compete with the new forms of energy and will go out of existence. But that is not the important point. What is truly important is that coal is the last remaining large reserve of our energy resources. We must look at this matter from the viewpoint of the nation's needs.

I have asked several questions lately, in the form of Questions for Written Answer as to the energy resources that we have left in terms of oil and gas. I cannot obtain a satisfactory answer. I am worried that we encourage more people to burn gas and yet do not bother to ask whether electricity would be a better fuel. There is no co-operation between the two; there is competition between them. People are encouraged to use gas regardless of the fact that already in the North Sea oil rigs are being pulled down. God knows where the rest of our energy resources will come from.

I do not welcome the Bill. I believe that it is still right that the energy resources of the nation should be under the control of the nation. The nation should decide how gas should be used, when it should be used and at what price it should be sold to the customers. That is what I believe. Therefore it would be wrong of me—earlier I was the only Member to speak from these Benches—to allow statements to be made that could conceivably suggest that I, or any Socialist like myself, could possibly welcome this Bill. It is a Bill which places all our energy resources one way or another in the hands of a greedy set of people, whose only interest is the amalgamation of power and profit.

5.7 p.m.

Lord Clinton-Davis: My Lords, it is always refreshing to speak after my noble friend Lord Sefton. He speaks as he feels; and he feels very strongly about this matter and

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indeed many other topics. He is absolutely right, and I agree with him, in that, as my noble friend Lord Peston, said at the beginning of the debate, it is extraordinary that we should be debating this issue without in fact examining energy policy as a whole. That is a serious deficiency.

I believe that it is unlikely in the extreme that this Government will, in their own time, enable any debate on energy policy to take place in this House, in particular on the issues which were the subject of a Statement only a couple of weeks ago affecting atomic energy. One has to ask why they adopt that point of view. Why should they expect us, with our very limited time, to provide time to debate issues, such as the Statement, which are introduced by the Government in the first place? So perhaps the Minister, when he replies, will give an indication of whether we are likely to debate these issues. I suspect that the answer will be in the negative or that it will be a matter for the usual channels or that kind of drivel. I was very sorry to hear of the difficulties confronting the noble Lord, Lord Cochrane of Cults. I sympathise with him. Just before he spoke I was combating a fit of coughing and I said to myself, "My goodness, disease stalks this Chamber".

This has been an interesting debate. I do not agree with my noble friend Lord Sefton when he complained that your Lordships have directed attention to matters of some detail and to areas which will engage our attention at Committee stage. I believe that it is appropriate to gain from a debate of this kind some indication of the anxieties that beset individual Members of the House.

At the beginning of the debate I was given a firm injunction by the noble Earl, Lord Ferrers, that I was not to use the term "cherry picking". I will obey that injunction to the full, though I note that it fell on deaf ears elsewhere. I suspect that he would like to be able to dictate my speech to me, but it would be much worse if he did so. I am not suggesting that my speech will be any good, but his would be worse.

It is clear from this debate that deep anxieties are felt. They were encapsulated by the noble Baroness, Lady Gardner of Parkes, when she said that protection was moving away from the consumer and shifting to the supplier. That incorporates some of the anxieties—not all of them—expressed by numerous non-governmental organisations which have made representations to your Lordships in preparation for this debate. I refer to Age Concern, the National Association of Citizens Advice Bureaux, the Gas Consumers Council, the National Consumer Council, the Royal National Institute for the Blind, the Country Landowners' Association and others. They feel, as we on this side of the House feel, that serious deficiencies exist in the Bill. They are matters which will come before us in detail in Committee—we shall ensure that they do—and I simply want to give some idea of the main issues that we feel need to be ventilated. I can only hope that the Government will be more responsive to these criticisms—after all, they are designed to improve the Bill rather than to rend it asunder—than they were in another place.

There is no doubt that the Bill requires amendment so as to enshrine in the law some basic ingredients rather than leaving them to be dealt with in the licensing system, which is capable of substantial variation from time to time

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without any, or any adequate, parliamentary debate or scrutiny. That is a wholly unsatisfactory state of affairs. My noble friend Lord Peston dealt with a number of those issues and I propose to enlarge on them and to mention some with which he did not have time to deal.

First, I want to refer to questions affecting consumer interest. There is no direct provision in the Bill for consumer protection. We were reminded by the noble Baroness, Lady Gardner, that there are 18 million consumers of gas. At present there are regulatory safeguards in being, including service safeguards and price controls, which affect British Gas. It will be some considerable time before the Bill comes fully into effect and in the meantime it would be inequitable that consumers should or might be obliged to pay the price for competition years before they can realistically expect to obtain benefits which may ultimately accrue to them. That is a matter that needs to be dealt with.

We know that low-income consumers on prepayment meters are paying far more proportionately than other gas consumers. Does the Minister regard that as just and fair? No safeguards are provided for rural consumers and that is unsatisfactory because of the specific circumstances which affect them.

The duty to supply should be enshrined in legislation. That concept was dismissed in another place by the Government. But it is noteworthy to point out that in the United States, where gas monopolies are required by law to do precisely that, it has been found to be perfectly satisfactory. Why therefore should not a provision apply here, thereby putting the issue beyond any legal doubt?

My noble friend Lord Peston made a point which was reiterated by the noble Earl, Lord Caithness, and the noble Baroness, Lady Gardner, concerning the imperative of transparency to enable the consumer to obtain maximum information, within reasonable bounds, and to enable the consumer to make informed decisions concerning the choice of gas supplier. That is a vital matter because it is only in that way that a full and proper comparison can be made of what is offered by possible suppliers.

We feel also that the Gas Consumers Council—the noble Baroness, Lady Macleod, was involved in that many years ago—should continue to play an important role in protecting consumers' interests, as the noble Baroness self-evidently believes. In order to do that one must ask—we shall put this by way of a probing amendment—whether it should have a formal role, with its responsibilities being clearly defined in law.

Consumers should have wider access to the courts to enforce rights and pursue remedies by way of representative actions than is envisaged by the Government. The Government have chosen to construe very narrowly the right of consumer organisations to undertake representative actions. They confine that right in relation to consumers' contracts under the Unfair Terms in Consumer Contract Regulations 1994, which purport to implement the European directive, to the Office of Fair Trading exclusively. That is in marked contrast to the attitude of most member states of the European Union, which have chosen to give a wide range of organisations powers of that kind. One must ask therefore why the Government have chosen to do this.

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That single fact illustrates all the cant in which the Government engaged over subsidiarity. Here we have a right which is designed to empower citizens to obtain remedies through representative organisations. The Government limit that right. When this issue was raised in another place in Committee on 27th April, all that the Minister could say was, "We have decided against the amendments proposed". He went on to say:

    "We believe that the present remedies available via the DGFT are appropriate. We do not think that other bodies should be able to exercise those remedies".—[Official Report, Commons, Standing Committee A, 27/4/95; col. 322.]

That was a sort of "Giordano" response and it is not acceptable. The Minister must explain why, if other member states can go down that route empowering their citizens in a much more meaningful way, the Government are against that position. We believe that the situation is wrong; we oppose the current position and we shall introduce amendments to broaden it.

The Minister may ask what other bodies there are. We believe that Ofgas and the Gas Consumers Council—which will be the recipients of large numbers of complaints from consumers and are therefore in a peculiarly advantageous position to adopt this role—should be able to pursue those remedies in the courts. The OFT is not the right instrument to protect consumers because it is not designed to adopt a position of defending the interests of consumers; it is designed to maintain a careful, independent, objective balance between industry and the consumer. I ask the Minister to let us have a response to that point. It is certainly not what Mr. Eggar said in another place.

In this general context we share the anxieties of the Consumers' Association concerning the powers of the Secretary of State to veto a reference to the Monopolies and Mergers Commission without being properly accountable. We believe that it is questionable whether he should be able to exercise such a veto, but in any event, if he does, he should be required to justify to Parliament that intervention in each case. One also has to ask whether the Secretary of State's power does not impair the powers and independence of the regulator, about which the Government frequently wax so enthusiastic.

I turn from that to the question of guaranteeing security of supply, which has been mentioned by a number of your Lordships in this debate. In that regard I turn to what the Gas Consumers Council says. It says:

    "Our anxieties have been exacerbated by the obscure wording used in the licence. 'To make available a supply of gas' means nothing in comparison to the wording of the Gas Act that has been in use since the last century".

It is deeply concerned as a matter of principle about that.

How can we be assured that new suppliers and other companies will have the duty to undertake this and have the necessary financial resources to guarantee security of supply to customers and to implement the conditions in the draft suppliers licences? Ministers in another place say that the regulator is in a position to fine licence holders if they fail to comply. In my judgment that is hopelessly insufficient if for financial reasons the supplier has failed to undertake his obligations.

There is a clear need to define the term "fit and proper persons" in the context of the Bill much more specifically regarding financial status. Ministers in another place

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argued that there is provision elsewhere in the Bill to respond to a situation where companies fail to perform this role adequately, due to perhaps insufficient technology or failure to provide sufficient managerial or financial resources. If that is the case, where does it appear in the Bill? I may be wrong but I have not detected it.

The next point I wish to refer to is a representation made by the National Association of Citizens Advice Bureaux. It says,

    "The CAB Service would be extremely concerned if competition meant that a public gas supplier was able to supply cheap gas at the price of a worse service, as this would inevitably lead to greater hardship as low income households are attracted to the cheapest supply. Competition should not be about low income households having to sacrifice standards of service to secure lower prices".

That is a powerful observation and I hope that the Minister will respond to it, if not now, then certainly during the course of the Committee stage.

I turn next to safety, which is another matter referred to by my noble friend Lord Peston. We are talking here about safety not simply for those employed in the gas industry, although that is important enough, but also for customers at home. In that regard it is essential that new suppliers should have well trained people undertaking these safety processes. Problems were raised by my noble friend regarding the existing Corgi standards. We shall return to that in the further stages of these debates.

The environment was referred to by my noble friend Lord Peston and in a rather oblique way by the noble Lord, Lord Wade. It is essential that we should have full regard for environmental considerations in the Bill. The Minister said that it is perfectly all right when it comes to energy efficiency because these new companies will be able to diversify their functions to deal with that. Is that to be made an obligation in the licence? Will they have any choice in the matter? There may be certain temptations not to go down that route. The Minister must respond to that point.

We also say that transporters should be obliged to take account of the concept of sustainable development and to inform the director general how they are undertaking this duty. Equally, suppliers should be under an obligation to provide customers with details of how they can obtain free advice in relation to energy efficiency, perhaps by giving details on all invoices, as the Gas Consumers Council has suggested.

I want to end on the matter of executive salaries. It is relevant to refer to this because of the anxieties that were expressed by large numbers of people only the other day. When Mr. Giordano, Cedric Brown and government Ministers say that it is all about the politics of envy, they have got hold of the wrong end of the stick. It is to miss the point about the concerns which have been expressed by individual shareholders. They have questioned not only the propriety of the announcements concerning huge benefits afforded to the executives, but also the managerial skills which enable them to do that, coinciding with the announcement of huge job cuts and cuts in employees' remuneration and benefits, as well as the closure of gas showrooms. In the view of thousands of investors—and we agree with them—that demonstrated poor management and poor judgment. They should not be grotesquely rewarded as they have been. The board

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treated these criticisms with lofty disdain and with an arrogance, armed as it was with the block votes of the large, unaccountable institutions.

So much for the Government's oft proclaimed powers of individual shareholders to influence events. Incidentally, so much for their complaints about block votes at Labour Party Conferences, which are at least out in the open. There has been unreasonable profiteering in this industry. Profits are derived from consumers, and they have been excessive. Shareholders have been unable to control these abuses and when they try they are dealt with dismissively and defensively by those in power. We shall seek to deal with these abuses when we have won the next election. Meanwhile, we shall seek to mitigate the position vis-o-vis this Bill since clearly the Government have no interest in so doing.

We shall be proposing amendments to require that all licence holders shall publish on an annual basis details of all salaries, benefits and share options receivable by directors. We shall seek to regulate and take account of the level of pay and share options and the extent to which they reflect performance in setting prices. We believe that the interests of those shareholders, which have been spoken of airily by the other side for so long, should be respected. They should mean something. With those criticisms we propose to improve this Bill in the stages that remain.

5.28 p.m.

Earl Ferrers: My Lords, I am grateful for the way in which your Lordships have discussed this Bill. As one would expect, it has been a very informed debate. The interesting fact is that there has been very little dissent from the basic approach, which is the extension of choice to those 18 million customers currently enjoyed by consumers in the commercial and industrial market. There was one dissenting voice; namely, that of the noble Lord, Lord Sefton of Garston. He is entitled to his point of view. He said that I called him "bizarre". On the last occasion in which he took part in a debate I said that he made a bizarre speech. Indeed, when he made a similar speech today I thought that that was just as bizarre, because part of it was about the coal industry which has nothing to do with the gas industry which we are talking about. On the previous occasion when I happened to say that the noble Lord made a bizarre speech, without being at all controversial—

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