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Lord Haskel: I agree entirely with the Minister. The director general writing advertisement copy could bring many gas companies to bankruptcy. At this late stage I do not want to pursue the matter but it is important to have it on the record that material should be written clearly and that people should not be confused. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 55A not moved.]

Clause 8 agreed to.

[Amendment No. 56 not moved.]

Clause 9 agreed to.

Lord Peston moved Amendment No. 57:


After Clause 9, insert the following new clause:

Unfair terms in gas supply contracts

. After section 47 of the 1986 Act there shall be inserted the following section—
'Unfair terms in gas supply contracts.

47A.—(1) This section applies to any term in a contract made between a gas supplier and his customers.
(2) Subject to subsection (3) below, any person may bring proceedings for an injunction (in which proceedings he may also apply for an interlocutory injunction) against any gas supplier appearing to him to be using or recommending use of an unfair term in contracts concluded with customers.
(3) An application for an injunction under this section shall not be made unless—

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(a) the applicant has been or would be adversely affected by any matter to which the application relates, or
(b) the applicant is the Director or the Council, or
(c) the court considers that it is in the public interest for the applicant to make the application.
(4) The court on an application made under this section may grant an injunction on such terms as it thinks fit.
(5) An injunction may relate not only to use of a particular contract term but to any similar term, or a term having like effect, used or recommended for use by any party to the proceedings.
(6) In this section—
"term" means any term or condition including any term or condition in a contract provided under a scheme made under paragraph 12 of Schedule 5 to this Act.
"unfair term" has the same meaning as in the Unfair Terms in Consumer Contracts Regulations 1994.".").

The noble Lord said: I apologise to Members of the Committee who may have thought that we were about to have a great row on Amendment No. 56. I felt that this was not the time of night to get involved in such matters.

Amendment No. 57 stands in the names of the noble Baroness, Lady Gardner of Parkes, the noble Lord, Lord Ezra, and myself. The noble Baroness regrets that another engagement prevented her staying in the Chamber for this amendment. It is an extremely important one, and I thought that at least I should air some of the argument now, although I am fairly certain that we shall want to return to it.

As the Committee is aware, next month the Unfair Terms in Consumer Contracts Regulations 1994 come into effect. They are supposed to implement the European directive on unfair terms in consumer contracts. The directive states that persons or organisations having a legitimate interest under national law in protecting consumers should be able to take representative legal action to prevent the continued use of unfair terms in consumer contracts. That is an easier way of ensuring justice than the complainers having the expense and hassle of taking legal action themselves.

The difficulty with the directive—I blame myself partly—is that the Government gave that role exclusively to the Office of Fair Trading. I and my advisers are convinced that this does not place into English law either the wording or the intention of the directive. Since I am speaking for the Opposition on this matter, I have to admit that I do not have the faintest idea of what happened on that occasion. I do not recall being involved with the matter. I do not know how it got through without my arguing about it or even saying that the regulations would not do. At some point, when I have a little time, I shall find out just where I blundered on all these matters.

The fact remains that our version of the directive, as we put it in regulations, is flawed. Here, at least in the case of gas, is an opportunity to put the matter right. In the simplest possible terms, the amendment ensures that the powers that the regulations which the Government gave to the OFT to act on the directive would be extended to Ofgas and the Gas Consumers Council so far as gas supply contracts are concerned. It will also permit other bodies of a similar nature to bring proceedings provided that the courts thought that it was in the public interest for them to do so.

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I believe that this is an immensely important matter. It is not a topic that I want to debate at this hour of the night when we are discussing detailed matters concerned with implementing a European directive. I wanted simply to take this opportunity to place the arguments on record. I do not propose to divide on the amendment at this stage. However, I warn the Chamber that this is not the last that it will hear on the matter. That is partly because I blame myself for bungling the whole thing in the first place. I beg to move.

9.45 p.m.

Lord Skelmersdale: In that case, perhaps I may be permitted at this late hour to give a preliminary view on what the noble Lord, Lord Peston, has just said. Notwithstanding the arguments that he has advanced on the right way to implement a directive of this or any other kind emanating from Brussels, I am absolutely certain in my own mind that one should not pick off industries one by one.

I know that there is a great temptation, simply because there is a Gas Bill going through this place or indeed Parliament generally, to do just that. But whatever the answer to the conundrum posed by the noble Lord, it seems to me that it ought to be general and not specific.

Earl Ferrers: This new clause seeks to give the Gas Consumers Council, the director and anyone acting in the public interest, the right to seek an injunction to prevent the continued use of unfair terms. I understand that the Consumers' Association has sought judicial review of the Government's implementation of Article 7 of the Unfair Contract Directive. The matter is therefore now before the courts.

The Government are confident that they have correctly implemented the directive. Regulation 8 of the Unfair Terms and Consumer Contracts Regulations provides the Director General of Fair Trading with the power to seek an injunction to prevent the continued use of unfair contract terms.

The issue of to whom it is appropriate to grant such a power is one which goes a great deal further than just gas supply. It relates to consumers in general. I agree with my noble friend Lord Skelmersdale. It is inappropriate to deal with the matter in a piecemeal manner in this way and solely in relation to gas.

We also consider it unnecessary and undesirable to extend that power of the Director General of Fair Trading to seek injunctions to other bodies such as the director, the Gas Consumers Council or anyone acting in the public interest. Ofgas and the Gas Consumers Council will be able to liaise with the Office of Fair Trading in the usual way over any relevant consumer complaints. It is undesirable to establish an alternative route by which unfair terms can be challenged. That would cause duplication of the role of the Director General of Fair Trading and possible inconsistencies.

This is not a matter for the Bill. It should be addressed, if at all, in the context of the regulations. It would be anomalous to have different provisions for gas than for other industries.

Lord Peston: I thank the noble Earl. I must be extremely careful, bearing in mind his remarks on judicial

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review. If I say anything which the noble Earl feels is out of order, I hope that he will immediately leap to his feet and stop me.

I must say to him in terms, having read the directive, that it is inconceivable that our regulations incorporate the provisions correctly in English law. I do not seek to bias whoever is taking the decisions on judicial review, but the directive does not stand up for one minute to anybody who has read it. What we have done is simply not right. Let me add, since I have been involved in one or two other attempts to say this sort of thing, that the noble Earl's department has been getting other implementation directives in regulations wrong as well. Those are matters I shall come back to.

I understand the argument raised originally by the noble Lord, Lord Skelmersdale, and now by the noble Earl, Lord Ferrers. It would be infinitely better for the whole thing to be sorted out once and for all. That is what judicial review may do and that would suit me. On the other hand, if I can reverse the argument, the Gas Bill is the Bill before us. We do not have a Bill on general representations or anything else. This is all we have got. I tend to make the best of a bad job. If the Gas Bill is all I have, then that is the bit I shall try to make a little better.

The noble Lord and the noble Earl are not wrong. There is always a problem of picking off a specific industry. However, we do not have before us a general industry privatisation Bill or anything like that. The Gas Bill is what we are dealing with and I am trying to deal with it. I have made my points, which is what matters to me. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 58 and 59 not moved.]


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