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Lord Boyd-Carpenter: The paragraph is absurd. It puts a case where it could not possibly be sound law that the apparatus should be taken away on distress when it does not belong to the person concerned. I agree entirely with what has been said by the noble Lord opposite. This is absolute nonsense.

Lord Skelmersdale: Since I sat down I have been reflecting on the matter. It occurs to me that in the case of a holiday home complex there would be sub-metering going on. In other words, the owner of the complex would pay the gas bill and the individual hirer of the accommodation for a week or a fortnight, or whatever it is, would pay the runner of the complex for the gas consumed during the period of occupation. In those circumstances, I believe most definitely that the sub-meters would belong to the owner or runner of the complex and not to the gas company.

Lord Airedale: In view of what has been said, will the Minister take this matter back and have another look at it?

Lord Clinton-Davis: The noble Lord, Lord Skelmersdale, is a trainee meter reader anyway and is not to be taken too seriously. If it is irrelevant, as has been suggested, will the noble Lord think about the matter again?

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Lord Inglewood: I am extremely grateful for the comments and help of all Members of the Committee. I am advised that this measure is necessary. However, my advisers have not had the benefit of your Lordships' comments. We shall reflect on the points made and consider them carefully. In any event I am anxious to include our Amendment No. 95.

Lord Peston: Following the noble Lord's logic, the thing connected to the service pipe is rather important. Several other meters lying around might be fairly relevant. It is always dangerous when someone like me ventures into the finer points of law and that I fully accept. I am glad that the noble Lord's officials will look at it; there are other matters of greater priority which, I hope, will also be studied. I am indebted to the noble Lord. Perhaps he will say more in due course about the matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Inglewood moved Amendment No. 95:


Page 29, line 25, after ("meter") insert ("which is connected to a service pipe").

The noble Lord said: This amendment deals with an error made in translating the provisions of the 1986 legislation to which the noble Lord, Lord Peston, has just alluded. I beg to move.

On Question, amendment agreed to.

Lord Peston moved Amendment No. 96:


Page 29, line 37, at end insert:

("Duties of relevant gas shipper or supplier in relation to gas fittings

.—(1) It shall be the duty of any relevant gas shipper or supplier to make arrangements for the supply of spare parts for, or replacements of, any gas fitting or appliance of a type approved under Regulations made under this Act or under any other enactment.
(2) The Secretary of State shall—
(a) make Regulations specifying the nature and extent of the obligations imposed by subsection (1) above upon relevant gas shippers or suppliers; and
(b) monitor the carrying out of those obligations, which may be modified or added to in further Regulations.
(3) Regulations made under subsection (2) above shall be made by statutory instrument which shall be subject to annulment in pursuance of a Resolution of either House of Parliament.").

The noble Lord said: This amendment was introduced in another place by my honourable friend the Member for Newham, South. I thought that we ought to go over the ground of this amendment again because it helps us to clarify what will happen in the new competitive market. I am delighted to move the amendment here because Newham, South is in East London which is where my own territorial title comes from and that, plus the fact that £1 will buy me a cup of coffee in East London, leads me to have a sense of duty to that part of the world from which the gas industry hailed in the first place.

The question of the supply of spare parts in a competitive market involves some interesting economics. When it had its monopoly, British Gas clearly ran a policy of making sure that it carried spare parts on a large but, one hopes, an optimal scale. On the whole, both when it was a nationalised industry and subsequently, that policy worked pretty well. Clearly, a sensible organisation will continuously scrutinise its policies on such things. It was a characteristic of British

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industry that it held far too much stock of spare parts and had far too much capital locked up in that. It is one of the benefits of industry being more concerned with efficiency that it now has a more efficient approach to the holding of stock.

However, when we move away from a monopoly market to a competitive market, the question arises: will the suppliers take the provision of parts seriously? Will we not merely lose the great stock depots that British Gas used to have with not a lot replacing them? Nowadays, in the market-oriented economy, people tend to abide by the almost religious principle that "the market will provide". However, noble Lords must know that in all sorts of areas the market does not provide. Anybody whose computer is not working will discover enormous delays as they chase around trying to find the spare parts. Indeed, you are often told, "It's all obsolete now. What you really need is a new £1,000 computer"—as opposed to just a 5p spare part! That is the advice on spare parts in some areas of the market economy. However, one could argue that in most cases it does not matter. If my PC at home is not working, I am irritated but my life does not collapse. Failures of various other pieces of equipment similarly cause only irritation, but the issue is more important when it comes to gas because we are talking about what is usually a person's principal source of heat and cooking.

The failure to provide spare parts or to take any responsibility for that can be disadvantageous to consumers. I thought that the Minister in another place took a rather frivolous view of the matter by more or less saying that he is confident that the market will provide. What I find so interesting about this is that as a result of this legislation we shall not have a "market" in the Adam Smith sense of that word; we shall have something which should be called "regulated" or "ordered competition". Therefore, I think that there are good grounds for the Secretary of State taking a direct interest. That is why I thought that I should air these thoughts to the Committee. We need to understand where we are going.

I agree that the market will not fail us totally. Some suppliers will take seriously the question of providing supplies of spare parts. However, I believe that it has been necessary to place on the record my fears about this matter and my suggestion that there is a role here for the Secretary of State. I certainly think that the problem is serious enough for us to warrant a more logical and thought-out response than that given in the other place. I beg to move.

Lord Inglewood: The noble Lord, Lord Peston, is a distinguished economist and is a great deal more experienced in these matters than I am; but I am a bit concerned lest his general grasp on the principles of economics may momentarily have let him down when he put his name to this amendment.

The noble Lord is, I fear, confusing two different markets by suggesting that suppliers and shippers of gas should be obliged to enter the already competitive markets of appliance manufacture, spare parts and repairs. That is rather like saying a baker should be obliged to sell bread-knives or combine harvesters or

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even false teeth, or that a newsagent should sell spectacles. The trouble is that they might not be very good at it, and the practice could lead to inefficiency. If only opticians were allowed to sell newspapers, we would all have a longer walk to get a paper in the morning.

The amendment could inadvertently damage competition for another reason. It creates a risk of unquantifiable costs which would be imposed on market entrants by administrative action. That is likely to deter market entrants, who may feel that the risks are lower elsewhere. This could simply put at risk the prize of self-sustaining and effective competition.

Further, there has been a competitive market in the servicing and repair of gas appliances for years. I believe that that point meets many of the anxieties of the noble Lord, Lord Peston, who was concerned lest there would not be a proper market. However, we already have a market in that area. It is for the management of companies that are active in this sector to find the most efficient and effective manner to distribute parts to meet their customers' needs, and they have been doing just that. We do not see that there is any need for regulatory intervention.

The noble Lord referred to great depots in connection with Newham. However, in the modern world, the business practice of having great depots has fallen out of custom because, increasingly, just-in-time deliveries are superseding that way of managing one's business.

Finally, there is nothing to stop a gas supplier or shipper entering this market quite independently of other obligations if that is what they wish to do. I hope that that explains our thinking and that it will answer the noble Lord's worries.


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