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Lord Fraser of Carmyllie Moved Amendment No. 121:


Page 57, line 26, leave out ("or (3)") and insert (", (3) or (13)").

The noble and learned Lord said: My Lords, this amendment is consequential to Amendment No. 74. I beg to move.

On Question, amendment agreed to.

Lord Fraser of Carmyllie moved Amendments Nos. 122 and 123:


Page 57, line 26, after ("or (5),") insert ("18(11),").
Page 57, line 28, leave out ("and 18(5)") and insert (", 18(5) and 26(1)").

The noble and learned Lord said: My Lords, in speaking to Amendment No. 68, I spoke also to Amendments Nos. 122 and 123. I beg to move Amendments Nos. 122 and 123 en bloc.

On Question, amendments agreed to.

Lord Fraser of Carmyllie moved Amendments Nos. 124 to 127:


Page 59, line 30, leave out ("subsection") and insert ("subsections").
Page 59, line 34, at end insert—
("(3A) Standards may be determined either as respects the provision of gas supply services generally or as respects the provision of such services to customers of a particular class or description." ").
Page 60, line 28, at end insert—
("(2) After subsection (2) of that section there shall be inserted the following subsection—
"(3) Where the standards of performance mentioned in subsection (1) above relate to the provision of gas supply services to customers of a particular class or description, the reference in that subsection to the supplier's customers shall be construed as a reference to such of his customers as are of that class or description." ").
Page 60, line 33, after ("supplier") insert ("who is authorised to supply gas to domestic customers and whose licence incorporates the standard conditions" ").

On Question, amendments agreed to.

6.15 p.m.

Lord Fraser of Carmyllie moved Amendment No. 128:


Page 60, line 45, at end insert ("(including in particular the storage of gas, the provision and reading of meters and the provision of pre-payment facilities)" ").

The noble and learned Lord said: My Lords, in moving Amendment No. 128, I wish to speak also to Amendments Nos. 130 and 132. These are technical amendments. I beg to move.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 129:


Page 61, line 3, at end insert—
("( ) After subsection (2) of that section there shall be inserted the following subsection—
"(2A) When taking any decision or action in the exercise of the functions assigned to him under this Act, the Director shall specify to persons materially affected the reasons for that decision or action in sufficient detail to enable such persons to plan for the future with a reasonable degree of assurance; and this subsection shall be construed to cover decisions to take no action." ").

The noble Earl said: My Lords, it has been clear this afternoon that the Government have made a great effort to meet the concerns which many of us raised in

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Committee. I know that I am not the only one of your Lordships who is grateful for the movement by my noble friend. I thank him for that. Yet again this amendment is one where the Government have responded. My noble and learned friend has tabled Amendment No. 134 so there is no need for me to rehearse the arguments. I only wish to comment on the word "may" in the fifth line of his Amendment No. 134. Would he like to use the word "shall" rather than "may"? I beg to move.

Lord Peston: My Lords, we have a difficulty here because we are only allowed to speak once on Report, but I believe the noble Earl can reply to a question. As the noble Earl, Lord Caithness, is aware, I am totally sympathetic to his amendment. Is he saying that he is happy that the Government's Amendment No. 134 covers satisfactorily the ground that he had in mind in his amendment?

The Earl of Caithness: My Lords, I believe it certainly covers most of my concerns. The points of difference are not ones that I would wish to quibble over at this stage. I therefore hope that my noble and learned friend will speak to Amendment No. 134 now.

Lord Peston: My Lords, I do not wish to delay matters. The principle behind the noble Earl's amendment is one which he knows I strongly support. I of course will always support him as regards replacing "may" with "shall". I hope that the Minister will be able to reassure him, and therefore me, that he has gone a reasonable way down the road of removing what we call regulatory risk.

Lord Fraser of Carmyllie: My Lords, I am grateful to my noble friend for his kind words. I hope that I can explain to him that this is not the traditional dispute over "may" and "shall" but reflects the present position and why we would not wish to be under an absolute duty to make these regulations. Both my noble friend and the noble Lord, Lord Peston, suggested in Committee that the director ought to have an obligation to consult and give reasons. The Government resisted that because they were concerned that a blanket obligation could be misused by regulated companies and more particularly by regulated companies' lawyers to gum up the regulatory process. We remain of the view that a general duty in this area of the type which my noble friend has proposed would not be appropriate. Having considered the comments of both the noble Lord and my noble friend we have prepared, as he appreciates, Amendment No. 134 which we hope picks up the importance of consultation and reason giving without suffering the disadvantages to which I have alluded. An order under this provision, if needed, could be tailored to the precise descriptions of decisions which were giving rise to a problem. The possibility that the duty might lead to an over legalistic regulation is a matter which would need to be considered in framing any order.

The Director General of Gas Supply has followed an open, pro-competitive and consultative approach in reaching regulatory decisions. In the light of her existing policy on this, we would not envisage a need to make an order under this provision. However, the power is

18 Oct 1995 : Column 799

available and could be used if the situation changed. It is for that reason that I am not immediately attracted to the idea of replacing "may" with "shall". It is a back-up provision, but I can assure my noble friend that we are aware of his concerns and have so put matters in place that if it proved to be necessary the opportunity to act is there.

The Earl of Caithness: My Lords, I am grateful to my noble and learned friend for explaining why he has worded his amendment in the way that he has. I sympathise with him. He is a lawyer and I would not wish to reduce the workload of some of his compatriots in these areas. It is probably wise at this stage to retain the word "may". A power is available to be used should reasons not be given. Not to give reasons would of course be a great hindrance, as we explained in Committee. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Fraser of Carmyllie moved Amendment No. 130:


Page 61, line 6, leave out ("subsection (4) of that section") and insert ("that subsection").

The noble and learned Lord said: My Lords, in speaking to Amendment No. 128, I hope that I spoke also to Amendment No. 130. If I did not I should add that it is a technical amendment. I beg to move.

On Question, amendment agreed to.

Lord Clinton-Davis moved Amendment No. 131:


Page 61, line 12, at end insert—
("( ) After that subsection there shall be inserted the following subsection—
"( ) The Director shall have power to take action on behalf of consumers to challenge in the appropriate court the terms of a contract under which gas is supplied to consumers which appear to the Director, to the Director-General of the Office of Fair Trading or to the Gas Consumers' Council to be unfair within the meaning of the Unfair Terms in Consumer Contracts Regulations 1995." ").

The noble Lord said: My Lords, Amendment No. 131 stands in my name and in the names of my noble friend Lord Peston and the noble Lord, Lord Ezra.

The amendment concerns a matter which I originally broached on Second Reading. I believe it to be an important issue. I hope that the gap between the Government and ourselves on this issue of principle is not unbridgeable.

We believe that in transposing the directive on this issue in the Unfair Terms in Consumer Contract Regulations 1994 the Government deliberately chose to take a very restrictive view about the directive, in contrast with the view taken by most other member states. We take the view that it is right that the consumer should be enabled to have much wider access to the courts to enforce rights and pursue remedies through representative actions. The Government believe that that goes too far and ought to be limited.

I do not need to rehearse what the Government seek to do here. The Minister is well aware of the point that I made, which was further dealt with by my noble friend at the first Sitting of the Committee stage.

18 Oct 1995 : Column 800

What happened in another place was unfortunate. At that time the Minister seemed to rule out any suggestion of that kind out of hand. He said simply, in effect, that the Government had decided against the amendments that were proposed. He said:


    "We believe that the present remedies available via the DGFT are appropriate. We do not think that other bodies should be able to exercise those remedies".—[Official Report, Commons, Standing Committee A, 27/4/95; col. 322.]

No rationale was ever put forward. It was that which caused us to question the Government's views and their bona fides on the issues.

We believe that, unless the amendment we now propose were to be accepted, the DGFT would not necessarily be the right person to initiate a representative action. I argued previously that Ofgas and the Gas Consumers Council would receive substantial numbers of complaints from consumers and would therefore be in an advantageous position to pursue those remedies in the courts. The difficulty with the OFT is that it is not designed to defend the interests of consumers but to adopt a vigilant, independent and objective balance between industry and the consumer. Clearly, on that basis, the DGFT is not in the best position to pursue such remedies.

I hope that the Minister will recognise that in tabling the amendment we are saying that the Government may not necessarily be right about this matter. We know that litigation is pending through judicial review. On the previous occasion the Minister said that it was inappropriate to deal with the matter piecemeal. That reiterates the argument that was made previously. This is the vehicle we are now considering. We take the view that the Minister would not invalidate the Government's position if he were to adopt the amendment. If the amendment were accepted the director would still have the power to take the action, but the other bodies would be able to help the director to determine whether something was unfair, and the director would then take action.

I believe that we have to be more specific than the Government have been. I do not believe that our proposal for dealing with the matter is ideal. I should like to go further. We have tried to offer the Government an opportunity to meet us half way on this issue. That is what I hope the Government will be prepared to do.

I repeat that we should like to go very much further. We believe that the original directive was designed to enable governments to go much further and that the restrictive attitude adopted by the Government is wrong. However, there it is. I hope that the Minister will regard what we propose here as a positive way of meeting his case without trespassing on matters which are currently seized of by the courts, because it would not invalidate the Government's contentions in any way in relation to the judicial review. I hope that the Minister will accept that it is a useful way of trying to get round that particular problem. I beg to move.


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