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The Earl of Lindsay: My Lords, I am grateful for the broad welcome that the noble Lord, Lord Graham, has given. The changes effected by these regulations were not brought about by pressure so much as by a realisation that
technical drafting errors had crept in. Indeed, with such fairly complex rating regulations, it is not unusual for such errors to occur.On the subject of consultation, I can reassure the noble Lord that local authorities were consulted. There have been good consultations and communication with all involved.
Obviously, the billing authorities have been losing some rateable values from those properties which had a brief exempt period. We estimate that there may be some 3,000 properties involved with rates of liability last year of around £30 million. The loss of rates revenue up to the end of June is therefore estimated to be about £7.5 million over 40 authorities.
In the general scheme of things those are relatively small sums and the benefit that the regulation tonight brings is that we shall be saving any further losses in that matter. If we disaggregate down into individual properties and individual police authorities, we are talking of losses of a few thousand pounds and no more in most cases.
Lord Graham of Edmonton: My Lords, I am grateful to the Minister. The exchange has allowed me to see the size of the benefit. The Minister is quite right that when we are talking of tens of billions of pounds raised by rates and distributed, it is a minuscule amount. Nevertheless, as I understand it from the Minister, this was a mature reflection on the manner in which the original legislation had been drawn. It has been improved and is beneficial and therefore a great many people should be grateful, as I am, to the Minister and his colleagues.
On Question, Motion agreed to.
The Earl of Lindsay: My Lords, I beg to move that the House do now adjourn during pleasure until ten minutes before eight o'clock.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.31 to 7.50 p.m.]
Gas Bill
House again in Committee on Schedule 3.
Lord Clinton-Davis moved Amendment No. 105A:
Page 37, leave out line 15 and insert:
("8. For section 14 of the 1986 Act the following section shall be substituted—
14.—(1) The prices to be charged to domestic consumers for the supply of gas and the provision of services (hereafter referred to as Terms of Supply) shall be published in such manner as in the opinion of the supplier, after consultation with the Director and the Council, will secure adequate publicity for them.
(2) The manner in which the terms of supply are to be published shall be such as to enable domestic gas consumers or potential consumers accurately to compare prices and services when choosing a supplier.
(3) Suppliers shall be under a duty to send copies of their Terms of Supply to the Director and the Council not later than the time of publication or announcement of their implementation.
(4) In this section "services" shall be taken to mean standards of service or services which shall include the supply gas fittings to be used by the consumer supplied with gas by the supplier or any other meaning to be determined by the Director in consultation with gas suppliers and persons or bodies representative of those likely to be affected by his decision.".").
The noble Lord said: This amendment is about transparency and the need for consumers to be given the information that is necessary to enable them to make informed choices. In order to make those informed choices it is essential that there should be statutory protection to require each company's prices to be published. There was an obligation on the part of British Gas to do that under the 1986 Act and I can see no reason why that requirement should not be imposed on the companies that are involved in this market. After all, it seems self-evident almost that the ability to be able to compare services and prices that may be available to consumers when they are choosing a supplier is of paramount importance. Coupled with that there is not only the question of prices and services but a whole range of packages that are also in need of publication. I refer to gas fittings, supply incentives that might be available to customers if they adhere to their relationship with the gas company, and so on.
Despite the arguments to the contrary adduced by the Minister in Committee in another place, we believe that there remains a clear need for this provision. We are not content that the matter should be left to the discretion of the director general, albeit that she would perform her duty together with the Secretary of State. After all, if that situation were to remain, it is not beyond the bounds of possibility—even probability—that the standard supply conditions could be altered. There would be no real parliamentary accountability. Although it is true that there would have to be consultation, as set out in the Bill, before a modification of the standard licence conditions, there is no guarantee that the results of the consultation would be other than a denial really of the complaints that might have been made on behalf of consumers. Consumers might be waylaid. There is no protection.
Unless the Minister can come forward with some rather better arguments than those adduced by Mr. Eggar in another place, we shall not be convinced. Perhaps the Minister and his colleagues have had time to reflect on this point. The amendment seeks to arm the consumer, in the interests of the consumer, with the necessary information to enable him to make an informed choice. In a nutshell, that is what the amendment is all about. I beg to move.
Lord Ezra: We are back on the fundamental issue, which has been raised many times during the consideration of this Bill, of safeguarding the interests of consumers. It is the opinion of noble Lords on this side of the Committee, and, I hope, a number on the other side, that this an issue of fundamental importance. There are certain safeguards which it is not sufficient to put in the licence and which should be in the Bill itself. The publication of prices and conditions of sale are among those safeguards.
It is not satisfactory to say that at some future point in time the consumer would perhaps be able to shop around. Shopping around for gas supplies is totally different from shopping around from one supermarket and another. Until it can be proved beyond any shadow of doubt that the publication of prices and conditions of sale are not necessary to safeguard consumers, that should be done by obligations written into the Bill itself and not left to the licence. This is an issue of very great importance. It would
We had the argument about whether the protection of the interests of consumers should be put among the prime responsibilities of the Secretary of State and director general. The Government argued against that. We divided, and we lost. It is still our opinion, however, that not sufficient emphasis has been given on the face of the Bill to the overriding consideration of safeguarding the interests of consumers. The publication of prices is paramount in that respect.
Lord Clinton-Davis: Before the Minister replies, perhaps I may put myself in order. For the convenience of the Committee I note that we are debating not only Amendment No. 105A but also Amendments Nos. 106 and 149. I apologise.
Lord Skelmersdale: As noble Lords will remember, I was one of those who zeroed in on this problem at Second Reading. I asked where the liberalisation of the telecommunications market would be without the publication of prices. I am absolutely certain that that applies equally well to the liberalisation of the gas supply market and in exactly the same way. Since then I have been doing a little research. I have discovered—the point has already been made—that there is sufficient emphasis in the draft supply licence to make certain that this will happen in the way that I and other Members of the Committee would like it to happen and, I am sure, the Government would like it to happen too.
I have heard the remarks, particularly of the noble Lord, Lord Ezra, and to some extent those of the noble Lord, Lord Clinton-Davis. They feel that the licence can be varied in such a way that, because this matter is so important, it should be fully statutory and therefore written into the Bill. The safeguards on the changes of licences are perfectly adequate. I am very happy that they should continue to be in the licence.
8 p.m.
Earl Ferrers: I know that the noble Lord, Lord Clinton-Davis, is very adept at these matters. I congratulate him for writing such an amendment for the Committee's consideration. My guess is that it might have emanated from the Gas Consumers Council. It is curious that, within two days of Ofgas setting 400,000 large and medium-sized customers free to negotiate prices with British Gas, the Gas Consumers Council, via the noble Lord, Lord Clinton-Davis, invites us to write into the Bill the requirement to price only according to schedules.
I understand the concerns of the noble Lords, Lord Clinton-Davis and Lord Ezra. I am happy to reiterate that the Government consider that it is important, at least in the early stages of the market, that there should be published prices. That is why price schedules are provided for in draft standard condition 3 of the supply licence. That is just as binding on suppliers as if it were in the Bill. I made some remarks about that in relation to the amendment we were discussing before dinner, proposed by my noble friend Lady Gardner of Parkes.
But I believe that there is a real risk that publishing prices in the long term—we are asking the Committee to look to the future and not only to the immediate stage—could work against the consumers' benefit. In the same way in the industrial market, schedules are not considered to be beneficial. That could also apply to the domestic market. People may want to negotiate their own prices. That does not mean that they will do so immediately. We want to leave flexibility for that to happen. Obviously, not all domestic consumers will want to do that.
Sometimes formal price schedules can operate to the disadvantage of the consumer. For example, if everyone knows a certain price level has been published, every competitor is almost certainly to be invited to go up to or very near that price. That means that that provision militates against the consumer. Some will say that consumers will not want to haggle, and that may be true. I do not believe that many will. However, it is not impossible and in future they may wish to do so. We ought to leave the arrangements as they are. Certainly in the immediate future prices will be published, but we want to leave the possibility open that when conditions change—I am not suggesting that they are changing or that they are going to change, but they may—it should be open to suppliers and consumers to make their own arrangements if that is in the interests of both.
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