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Lord Clinton-Davis: When the Minister reflects further on the matter, perhaps the principle of natural justice will appeal to him. It should not always be a question of having to opt for judicial review in order to remedy a situation. There should be the possibility of being able to negotiate the solution to a problem with the director. However, one cannot do so unless one knows the reasons for a decision that has been made. That is an additional argument that I hope will appeal to the noble Earl, Lord Caithness, in persuading the Minister to accept the amendment. The Minister has been most generous by saying that he will reflect on the matter, and Members of the Committee are grateful to him for that. However, I merely wanted to put forward that additional argument into the scale.

Lord Brightman: I had not intended to speak on the amendment, but, reflecting upon it, it seems to me that it seeks nothing except to require a person who makes a decision to give his reasons for it. In my experience, it is very seldom that it can be wrong to require a person who reaches a decision to state why.

Earl Ferrers: The noble and learned Lord, Lord Brightman, always has the capacity to put things very simply. When he puts the case like that, I am bound to admit that I would find it very difficult to say that it is unreasonable for a person to stipulate his reasons. However, the noble Lord, Lord Clinton-Davis, really hit the nail on the head, although he did not mean to do so. He said that what we need to do is negotiate. In other words, the director says, "I think that is wrong and therefore this should happen", and along come all the batteries of lawyers, and so on, who say, "No, we want to negotiate. We do not want to accept the director's

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explanation, we want to ask questions". Thus they would push the director into a corner. I do not believe that that would be right. It is one thing to give a reason but it is another thing, having given your reasons, to say, "Now boys, come on, we want to argue about it so that we can get you to change your mind". That is where the difficulty would arise. However, as I said, I shall certainly reflect on what has been said.

Lord Clinton-Davis: With respect to the Minister, I believe that he misinterpreted what I said. It is possible that I did not express my arguments sufficiently well. I entirely adopt the point made by the noble and learned Lord, Lord Brightman. Indeed, it is quintessentially right that people who make decisions should give reasons for them. In talking about negotiating, what I really mean is, for example, that if one knows the reasons underlying a decision, one should be able to go to the director and say, "With respect I think you have the wrong end of the stick. You have made an error here." We are not always talking about lawyers. I am a lawyer myself. Lawyers frequently like to achieve settlements rather than engage in litigation, curiously enough. I think the noble Lord, Lord Inglewood, would confirm that. I do not believe that it would be right to interpret what I said in the way the Minister did. As I said, I hope that the arguments that have been adduced will appeal to him and that he will reflect further. Indeed I hope that he will come forward with his own amendment.

9 p.m.

The Earl of Caithness: I wish that the noble and learned Lord, Lord Brightman, had moved the amendment instead of me: he would have been much more concise and punchier and would have taken up a great deal less time. I am grateful for his support, as indeed I am grateful to all Members of the Committee who have spoken and who have supported me, except for my noble friend on the Front Bench. That is a little sad. I thought that the noble and learned Lord had almost persuaded my noble friend. He concluded by saying that he would look again at this matter. I believe that it merits careful consideration. This is a good and valid point. There surely can be no harm in giving reasons. What is and has been damaging to our privatisation process, which is such a good idea and has worked so well in many cases—to such an extent that we have the noble Lord, Lord Peston, supporting it—is the arbitrary decisions of the regulator taken for no apparent reason. My noble friend Lord Cochrane of Cults has suffered at first hand. It is unacceptable.

It would be to the great credit of the Government if we added to the Bill the few words of my amendment. I am grateful to my noble friend Lord Ferrers for taking the measure away to have another look at it. I am always willing to discuss it with him between now and another stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 148A and 149 not moved.]

Earl Ferrers moved Amendment No. 149A:


Page 59, line 6, after ("etc.),") insert ("(a)").

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The noble Earl said: In moving Amendment No. 149A I wish to speak also to Amendments Nos. 149B, 149D and 157A. These amendments are technical amendments. I beg to move.

On Question, amendment agreed to.

Earl Ferrers moved Amendment No. 149B:


Page 59, line 7, at end insert ("and
(b) the words from "but no person" to the end shall cease to have effect.
(2) After that subsection there shall be inserted the following subsections—
"(1A) Where a licence has been or is to be revoked or suspended, or has expired or is about to expire by effluxion of time, and it appears to the Director, having regard to the duties imposed by section 4 or 4A above, to be requisite or expedient to do so for any purpose connected with the revocation, suspension or expiry, the Director may, with the consent of the Secretary of State, by notice signed by him—
(a) require the licence holder to produce, at a time and place specified in the notice, to the Director, or to any person so specified, any records which are specified or described in the notice and are in the licence holder's custody or under his control; or
(b) require the licence holder to furnish to the Director, or to any person specified in the notice, such information as may be specified or described in the notice, and specify the time, the manner and the form in which any such information is to be furnished.
(1B) No person shall be compelled for any such purpose as is mentioned subsection (1) or (1A) above to produce any documents or records which he could not be compelled to produce in civil proceedings before the court or, in complying with any requirement for the furnishing of information, to give any information which he could not be compelled to give in evidence in such proceedings."
(3) In subsections (2) and (4) of that section, after the words "subsection (1)" there shall be inserted the words "or (1A)".").

On Question, amendment agreed to.

Earl Ferrers moved Amendment No. 149C:


Page 59, line 7, at end insert:

("Annual and other reports

. After subsection (2) of section 39 of the 1986 Act (annual and other reports) there shall be inserted the following subsection—
"(2A) Every such report shall also include—
(a) a general statement as to the extent to which, during the year to which it relates, there has been effective competition in the carrying on of activities the carrying on of which is required to be licensed under section 7A above; and
(b) a general survey of developments during that year in respect of such competition." ").

The noble Earl said: I am bound to say that I hope the noble Lord, Lord Peston, will feel pleased and happy with life as it is so important to feel that way, particularly as this amendment follows up discussion we had on 22nd June when the noble Lord expressed a wish for an annual report on the state of competition in the gas supply and shipping market.

I explained that the director is already under a duty, in Section 39 of the 1986 Gas Act, to report on her activities during the year, including the exercise of her functions to secure effective competition. However, I accepted that this existing provision would not necessarily allow the report to cover the progress made in achieving that goal.

Amendment No. 149C makes it a specific requirement that the director's annual report, which is laid before Parliament, must include a general statement as to the extent of effective competition and a general survey of

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developments in respect of such competition. This wording is intended to allow the director's report to cover both the extent of competition—the number of companies competing and their market shares, and so on—but also wider developments, including, for example, the impact of this competition on prices. The amendment will also, I believe, provide an appropriate means by which the director could report annually to the Secretary of State and Parliament on the progress of the transitional phases. I am grateful to the noble Lord, Lord Peston, for having drawn this matter to our attention. I hope that that at least has made him a happy man. I beg to move.

Lord Peston: I thank the noble Earl. Second only to my hope that Arsenal will buy a decent midfield player one day, this has pleased me no end. I must admit that I did not expect such a rapid response from the noble Earl. I believe that the amendment will be of benefit to the regulator. It will focus the mind of the regulator on what I regard as the essence of the Bill; namely, competition. The regulator will be asked to provide a judgment on what has been happening as regards competition. The noble Earl is aware that I did not like the term, "her view of effectiveness". However, this measure is all to the good and I thank the noble Earl for it. I shall say "Content" when the Question is put.


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