Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Skelmersdale: I thought that was a temptation for me to produce a counter-argument. I have absolutely no such argument to produce on this occasion. It was very refreshing to hear the dulcet tones of the noble Baroness contributing to this debate. She has been very generous in waiting a very long time so to do. On this particular issue, as on so many others, she has hit the nail on the head, and I agree with her every inch of the way.

However, it occurs to me that since the Gas Act 1986 was enacted we had in 1991 the New Roads and Street Works Act which, to a tiny extent, this Bill amends. Therefore, if there is validity in the general point—and I think that there is; the noble Baroness mentioned water and the noble Lord, Lord Peston, almost went so far as to talk about the electricity industry which probably has a bearing on this, as does the telecommunications industry—I suggest that all these matters could be tidied up in the New Roads and Street Works Act.

Lord Ezra: Perhaps I may ask the noble Earl to give us a little elucidation about the way in which this legislation is being handled. Schedule 4 to the Gas Act 1986 is entitled:

But we have a different situation now. We have TransCo and people with transport licences. The gas suppliers merely supply the gas. I would find it confusing if we were to proceed on the basis of amending an Act which is not relevant to the new situation. I am following a point which the noble Lord, Lord Peston, made. How is one to interpret the provisions? Should they not apply to transporters of gas and not to public gas suppliers?

Earl Ferrers: I do not blame the noble Baroness, Lady Nicol, for producing this amendment and for speaking to it in the way that she did. The question of streetworks by utilities, and in particular by public gas transporters, is an important one. Often, we may not appreciate the complex engineering exercise that is necessary to keep a reliable supply of gas available on tap to some 18½ million customers at any one time. Maintaining this network in a safe and effective state requires a great deal of work for which street openings are necessary.

The Government do not think that there should be a general right for automatic compensation for economic loss arising from streetworks. We believe that such a general right would be inappropriate for two reasons. The first is that of practicality. There would be a great risk of inefficiency from having to process large numbers of claims arising from the extensive streetworks which a company like British Gas needs to execute, and a concern that money spent in this area will inevitably feed through to the cost of gas.

The second reason relates to the general principle of how streets are used. Successive governments have always taken the view that businesses should not have a right in law to any given level of passing trade and that traders must take the risk of loss due to temporary

22 Jun 1995 : Column 516

disruption of traffic flows along with all the other risks of running a business. If that principle is not accepted, one wonders where one would stop. As well as utilities' works, streets are resurfaced, closed or made one-way; and the emergency services can affect the traffic, too. One can go on for quite some time, listing all the different permutations of how businesses can be affected.

However, I recognise that the legal position, which the Government are not minded to alter, could bear heavily on small businesses on the very rare occasions when long-term and substantial disruption takes place. There comes a point when the general interest in utilities being able to operate streetworks efficiently and the general principles I have described could lead to harsh costs falling on such a small business.

It was for that reason that the Minister for Industry and Energy asked the chairman of British Gas what further he could do to assist. The chairman informed my right honourable friend that TransCo is revising its existing procedures to improve communication and co-operation with owners of commercial premises. British Gas will discuss with individual business owners issues including vehicular access, customer access, special notices and any special requirements. Beyond this, and subject to certain conditions, British Gas has undertaken that in those exceptional cases where small businesses suffer severe and clearly established loss of business over a prolonged period as a direct result of streetworks carried out by British Gas or its agents, British Gas will give sympathetic consideration to claims in respect of financial loss on an ex gratia basis.

Since the discussions in Committee in another place, to which the noble Baroness, Lady Nicol, referred, British Gas has agreed to set up a compensation scheme for small firms. That was put on the record in another place at Report stage. My right honourable friend in another place has put on record the precise terms of this undertaking. On those terms, I hope that the noble Baroness can feel satisfied that something is being done to help small firms. With regard to the point raised by the noble Lord, Lord Ezra, Schedule 3 amends the words in the old Act so that it refers to public gas transporters.

The Earl of Caithness: I had not expected to intervene on this amendment. However, I am slightly disappointed by my noble friend's reply. He said that one of the reasons for not accepting it was the cost of processing claims. This is now a private industry. It is not the Government but a private industry that must bear the cost in a fair and equal competitive market. We must let the industry face up to the real world. I believe that the noble Baroness has a point.

I should like to press my noble friend on two areas. First, given the strong arguments that he has adduced, why do we have the present situation for water? He did not answer that particular point. The noble Baroness made a convincing case to make the same rule for water apply to gas companies. Secondly, we will have more competition in the pipeline industry. We already have a separate pipeline system in Swindon. As developments take place around the country which serve both residential and commercial properties, it will not just be TransCo that provides the pipeline system. It is all very well for British Gas to say this, that or the other. It does not apply to all the

22 Jun 1995 : Column 517

players in the market. Now that the monopoly has been broken, if that is the answer and what everybody supports, I feel that added strength is given to the argument of the noble Baroness.

Earl Ferrers: My noble friend said that he was not convinced by what I had said. I am disappointed. I thought that I was wholly convincing. However, my noble friend is enormously stubborn sometimes in his reception of ideas. I will try to explain the position to him. He said that now British Gas was privatised, it was a private company. I say to my noble friend that that has nothing to do with it. We are talking about what happens when streets are dug up. I tried to explain to the Committee that if British Gas was told that if it dug up a street it would have to inquire of everyone in the street who would be disaffected, and by how much, it would result in quite a large exercise in processing documents and paying people.

My noble friend says that that is different now because British Gas has been privatised. That is not so. I do not know where my noble friend lives. Perhaps he lives in a very esoteric place. The whole area in which I live has been disrupted recently because of the installation of fibre-optic cable. I do not know whether everyone has received compensation, but I have not. Perhaps I was not sensible enough to apply for it. One starts with water. It was decided to resurface my particular street a short while ago, and the whole area was closed. Should one say that everyone should get out their claim forms and claim for that? I do not believe that to be realistic.

My noble friend also said that the noble Baroness Lady Nicol had a point. I agree with him. I said that she had a point, and I told her what my right honourable friend the Minister for Energy had said in another place. He has spoken to British Gas who have made some provisions. I hope that I have satisfied both my noble friend and the noble Baroness, Lady Nicol, in which case that will be two birds with one shot, and both in the opposite direction.

The Earl of Caithness: What my noble friend says makes me even more stubborn. There is a huge difference. If it was a public company owned by the Government, it would be taxpayer's money that would be used to pay compensation. In this case it is private sector money, and therein lies the difference. It is now in competition with other potential transporters of gas. The situation is dramatically different. Of course, one is talking about digging up streets. I have to say to my noble friend that if he thinks that I am stubborn, I find his arguments even less convincing on that second attempt.

10.15 p.m.

Lord Peston: I shall intervene only briefly, but I am still disturbed that the Minister continues to refer to British Gas. We are no longer discussing British Gas. We are now discussing the potentially competitive privatised gas industry. British Gas will have no special role once the Bill becomes law. The chairman of British Gas can talk about handing out money, but we are not discussing that any more. We are discussing the

22 Jun 1995 : Column 518

principles of a competitive private industry. Assuming the Government do not fall within the next few days, the Bill will become law. We must forget about British Gas, and think of it as just another rather good firm. Okay, but it is just another firm.

Next Section Back to Table of Contents Lords Hansard Home Page