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Baroness Oppenheim-Barnes: Before my noble friend sits down perhaps I could ask him a question. I fear that I am at risk of being considered a dithering wimp because at the outset of this debate I had the greatest sympathy with the amendment as it was moved, but as I listened to my noble friend's argument I understood precisely what he was trying to say.

I accept that if this competition is to be provided and it is in the interests of consumers—just as privatisation, incidentally, has been in the interests of consumers—why could not that, instead of pre-empting the duty, be put alongside the duty to ensure that competition existed as well as the supply?

I realise that it would mean an amendment at another stage of the Bill. But would my noble friend consider that as a possible solution?

Earl Ferrers: My noble friend Lady Oppenheim-Barnes is too modest. She need not consider herself a wimp simply because she has been persuaded by what I said. It shows that she is very intelligent and entirely correct. I should like to go along with her thoughts in some respects. But the question to ask is this: what is the regulator doing? His first job is to ensure that there is gas available. I do not think one can equate that with saying that at the same time he has to consider the interests of the consumer. If there is no gas, there is no consumer. So the first duty must be that there shall be gas provided correctly and the immediate secondary interest is that the consumer shall be protected. I feel that it would be right to keep the Bill as it is.

Lord Peston: I come back on that point. I am sure that the noble Lord, Lord Ezra, would also wish to do so. But, first, I should like to thank the Minister. I wanted him to go on record as confirming that the singular includes the plural and the plural includes the singular. That is very important. I was surprised that he did not go on to say that the present includes the future and the future includes the present and the amendment of my noble friend Lord Haskel would be covered in that way.

Let me give the Minister an example of why potential consumers are fundamental. In a few moments we shall have a debate on topics such as sustainable growth, energy policy and so on. What underlies our interest in those matters is precisely our interest in succeeding

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generations and potential consumers. So, logically and practically, there are very good grounds why potential consumers need to be taken into account. Those are my comments on the two rather minor amendments, if I may so call them.

It would never occur to me to use the word "wimp" in reference to the noble Baroness, Lady Oppenheim-Barnes. She has told me off enough times for me to know that that is not her usual outlook. She said that she started by agreeing with me and then agreed with the noble Earl, Lord Ferrers; now she has what I believe is sometimes called a balanced view. My view is slightly less balanced. Indeed, the noble Earl said exactly what I hoped that he would not say. He made exactly the mistake that 200 years ago Adam Smith would have wished him not to have made; namely, that the product comes ahead of the consumer. That is just wrong. The consumer comes first. Satisfying consumer demand is what matters. The only value in the gas is if the consumer wants it. That is the whole point. The production comes later.

I was taken aback when the noble Earl insisted that he did not even want to think about that. It seems to me to be an actual error. The argument does not apply specifically to gas. It would apply if we were drafting a Bill about anything else. The whole point is: what does the consumer want? Does the system give the consumers what they want? Then we judge the system.

I do not resile at all from my remarks. I hope that the noble Lord, Lord Ezra, will not resile from his. It is an important distinction and I still hope to persuade the noble Earl to accept it. It would represent a very considerable contribution, as it were, to what the consumer wants; namely, the consumer receives what the consumer wants, and that is all that matters.

Earl Ferrers: I do not wish to prolong this discussion for too long. I ask the noble Lord to read again what the clause says:

    "The Secretary of State and the Director shall each have a duty to exercise the functions assigned to him by or under this Part in the manner which he considers is best calculated ... to secure",

first, that gas is conveyed through pipes; and then:

    "that licence holders are able to finance the carrying on of the activities".

Those are absolutely basic things. Then subsection (2) says that:

    "Subject to [the] above ... to protect the interests of consumers".

If the licence holders cannot finance their activities, there is no gas. The whole thing is done, in fact, with the consumer in mind. But there must be new Section 4(1) before one comes to new Section 4(2).

Lord Ezra: I listened with great care to all noble Lords, and particularly to what the noble Earl had to say. I am rather puzzled by his last argument. He implied that, as a result of this piece of legislation, an entirely new product in a new market is being created. He said that if there is no gas, there is no need to support the consumer.

Let me remind him that there are 18 million consumers presently receiving gas. They want to be assured that under the new arrangement they will continue to receive gas and that their interests will be seriously considered. I must say it is unthinkable that

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the Secretary of State and the regulator could do nothing to safeguard the consumer should they not be able to persuade the suppliers to supply gas or could not find any suppliers with the financial resources to carry out the business. Does the noble Earl indeed mean that the situation could arise in which, if not enough suppliers were found or their financial resources were inadequate, the whole supply of gas to the domestic market would be jeopardised? Of course he does not mean that. If he does not mean that, surely the interests of the consumers—there are 18 million of them—at least to continue to be supplied on the basis on which they are supplied at the moment should be safeguarded.

I hope that the noble Earl will think again. I repeat the words used by his right honourable friend; namely, the fact that just because it is secondary to safeguard the consumer does not mean that it is less important. The logical action is to promote it.

I feel that the noble Baroness, Lady Oppenheim-Barnes, opened up the possibility of a compromise. We on this side of the Committee have suggested that the protection of the consumer should come first. I personally would be content if the noble Earl were prepared to take back that suggestion, consider it and promote the protection of the consumer into the first category. That would be sufficient. Therefore, I ask him whether he is prepared to accept the proposition made by his noble friend.

Earl Ferrers: The noble Lord, Lord Ezra, is always deeply enticing when he suggests that we should think about the matter again. We have thought about this a great deal. He said that we did not seem to realise that there are 18 million consumers. Of course there are. That is what the whole of new Section 4(1) relates to. It is about securing that reasonable demands are met; that licence holders can finance their business so as to allow consumers to obtain gas; and about allowing effective competition. What is effective competition if it is not in the consumers' interests? That is its prime purpose.

Immediately following on from that comes the part about looking after the consumer. The second part is dependent upon the existence of the first, but the first also concerns consumers. If I may say so, we are splitting hairs and the consumers are considered in both parts.

Lord Ezra: I am sorry that the noble Earl is not prepared to consider the matter again in the light of what his noble friend suggested. It is wrong to make the interests of consumers subject to the obligation under the first part. It qualifies that too much. I do not see why it should be difficult for the Government to introduce into the first part the protection of consumers. If the noble Earl is not prepared to think again, even in the light of the moderate proposal made by his noble friend, I feel that the opinion of the Committee should be tested.

Earl Ferrers: I do not want to be confrontational. I believe that the Government are right and the noble Lord believes they are wrong. I shall certainly consider what was said by the noble Lords, Lord Ezra and Lord

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Peston. There is no monopoly of wisdom in these things. However, if I consider this, the chances are that I shall come back with the same conclusion.

Lord Hailsham of Saint Marylebone: Hear, hear!

Earl Ferrers: My noble and learned friend is not being particularly helpful.

Lord Hailsham of Saint Marylebone: Let us have a Division.

Earl Ferrers: I am trying to be honest with the noble Lord, Lord Ezra, as I always am. I shall certainly consider what he and the noble Lord, Lord Peston, say. However, I believe we have got it right. I am prepared to consider what was said, but in saying that I do not hold out any great hope that I shall change my mind.

Lord Ezra: In that situation I am glad that the noble Earl is prepared to ignore the pressures from his own Benches. If he is seriously prepared to reconsider the situation and come back with some suggestions, then I would not want to press the amendment to a Division.

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