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Lord Inglewood: This is obviously an important point and it is very much on the same subject matter as the penultimate amendment that we discussed. I am most grateful to my noble friend Lord Caithness for setting out his case at length.

I suspect that I shall not disappoint the noble Lord, Lord Peston, because I must tell him that it is important to look at the yellow document and at Condition 6 which deals with special customer payment claims. That document stretches to five pages and covers many of the points which are germane to this matter. The amendment sets out criteria which the director must use in considering whether a levy should be raised; removes the Secretary of State's veto; and requires a decision as soon as practicable after an application has been made. We have considered very carefully representations that have been made to us about the criteria and timescale for the director's decision on such a levy under Standard Condition 6.

The purpose of having an economic regulator is precisely to ensure that these sorts of decisions are taken by an independent person with expert knowledge of the industry, and are not subject to political intervention. Condition 6 sets out a clear set of criteria and it will be up to the director to exercise her role in the levy payment arrangements in the light of those criteria and of her statutory duties.

The revised draft condition contains a clear timetable for the decision and detailed criteria to be applied. We believe that these form a more appropriate balance than the necessarily abbreviated description in the amendment. We also consider that the Secretary of State's veto should be retained, as a levy has a clear political component.

I hope that my explanation will have assisted my noble friend, in particular by drawing attention to the new draft conditions, because they go a long way towards meeting many of his anxieties.

The Earl of Caithness: I am grateful for the support of the noble Lord, Lord Peston, and I am grateful also for my noble friend's reply. Like the noble Lord, Lord Peston, I shall have more time to read these documents in the future than I have had in the past 24 hours. I must get used to that, having been very spoilt for 10 years being served with lots of briefs at the right time. It is much more difficult trying to do it all oneself.

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The simple point which I hope that my noble friend has taken on board is that we want there to be not only competition among gas suppliers but competition for every single group of people within the area where licences are granted. That is extremely important.

My noble friend Lord Skelmersdale said that he has been inundated already. That does not surprise me because nothing has happened yet. When independent gas suppliers start to look at areas throughout the country, it would be easy to say that, although they have a licence for that area, they will not target the elderly or those who find it difficult to pay. As my noble friend Lord Ferrers would love it to be called, they will cherry pick the good ones and one company will be left under a duty to supply the elderly and those most disadvantaged. That company will then have to absorb the extra costs and the costs of the free service. That is not equal and fair competition. That is the point. I hope that it is covered to my satisfaction in the documents to which my noble friend referred. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 7, as amended, agreed to.

Clause 8 [Standard conditions of licences]:

The Earl of Caithness moved Amendment No. 53:

Page 12, line 30, leave out from beginning to ("unless")

The noble Earl said: In moving Amendment No. 53, I speak also to Amendments Nos. 116 and 118.

We move to the standard conditions that will be applied. I believe that standard conditions should apply to all types of licence holders. In fact, standard conditions apply to gas shippers and gas suppliers, but they do not apply to, and are excluded under the Bill, as regards gas transporters. That seems to be an anomaly. I wonder why that is so. Perhaps my noble friend will explain. I beg to move.

Lord Inglewood: I am pleased to have the opportunity to explain the position to my noble friend. I thank him for proposing the amendment.

The competitive position for a public gas transporter under the new regulation framework is not comparable to that of a gas supplier or gas shipper. A gas supplier, or a gas shipper, will be in equal competition for the same customers with other gas suppliers, or gas shippers. That is the point of introducing competition and we want to ensure, by restricting the director's ability to modify licence conditions in ways which might offer unfair competitive advantage to some players, that such competition takes place on an equal basis.

A public gas transporter, however, will have a monopoly on gas conveyance in his own authorised area. Not only that, but British Gas TransCo will undertake the great majority of gas transportation for the foreseeable future. There is no question of TransCo being equal to other public gas transporters, and there will be numerous special conditions applicable to it.

There will be direct competition between public gas transporters in the creation of new pipeline networks and the conveyance of gas through them. Here, both the director and the Secretary of State are under a duty to secure effective competition under their general duties.

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The director will be required to bear this general duty in mind when considering modification to a public gas transporter licence.

I hope that my noble friend will now feel that he understands the position underlying the clauses.

The Earl of Caithness: I am grateful for my noble friend's explanation; it certainly helps. However, I believe that we still have a problem. Of course the position of the gas transporter is different from that of the suppliers and producers by the very nature of the pipe system at present. However, competition will increasingly be developed in that area as more people wish to put in their own pipelines as extensions from the existing TransCo system. There is, indeed, a system at Swindon at present. As more such systems develop, there needs to be a degree of certainty in the minds of the existing pipeline company, TransCo, and those who wish to come into the market, that they will all be treated equally.

I come back to the same point regarding equal competition. There needs to be security of supply and equal treatment of the shippers who use that pipeline.

We do not want conditions relaxed, so that a developer asks for tenders for a supply to a new housing development, takes the cheapest supply from a new competitor in the market, and finds that the size of the pipe does not produce enough gas to keep everyone warm and all the systems working in the first sharp cold winter that we have. Those are the kinds of conditions which could be relaxed. That is the point that I am driving at. When I read the Official Report tomorrow, I hope that what my noble friend says will reassure me. Perhaps we could arrange to have a discussion between now and a later stage to make certain that my concerns are met. Unless my noble friend wishes to say something further, I shall beg leave to withdraw the amendment.

Lord Inglewood: It may be of assistance to my noble friend if I explain that there will be standard conditions for public gas transporters but that it is right to have more flexibility to take account of the differing characteristics of public gas transporters.

The Earl of Caithness: That is indeed more helpful. We are making a lot of progress. When shall I be able to see those standard conditions?

Lord Inglewood: I am very pleased to tell my noble friend that they are available now.

The Earl of Caithness: I apologise to the Committee. I was not as well briefed as I should have been. I shall read them. I have more homework to do. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 54 not moved.]

Lord Haskel moved Amendment No. 55:

Page 12, line 50, at end insert:
("( ) Standard conditions for gas suppliers shall include a duty on licence holders to ensure that all written material produced by a gas supplier for use by customers or potential customers must be expressed in plain, intelligible language.").

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The noble Lord said: The purpose of this amendment is to ensure that gas suppliers produce written material for customers and potential customers in plain language so that they do not have some of the problems that the Committee has had this evening. It is important that all customers should receive information from competing gas suppliers that is easy to understand. The duty could apply to such written materials as letters, bills, price information, and promotional material. Contracts from gas suppliers are already covered by the unfair terms in consumer contract regulations. The requirement can then be extended to the broader range of materials. I beg to move.

Lord Inglewood: We agree that it is important that information provided to customers should be readily comprehensible. If I am allowed to introduce a personal aside, it would not necessarily be obvious to the average customer from reading the Bill exactly what is being proposed. Obviously, that is important, particularly in the context of the safety considerations that apply. However, we would expect competition to provide a strong incentive to suppliers to make themselves clearly understood. If they produce leaflets full of incomprehensible jargon, they are unlikely to be very successful in winning and retaining customers.

As the noble Lord, Lord Haskel, said, certain protection is provided by the new regulations on unfair terms contracts. We argue that to go further would involve excessive regulatory intervention. It ought not to be for the director general to tell suppliers how to write their advertisements.

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