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Mr. Fabricant: With regard to people being attacked in the street, does my hon. Friend recall the worrying statistic that, in the last year of nationalisation, only a third of telephone boxes were working at any one time, whereas within two years of privatisation, more than 95 per cent. of public call boxes were operating?

Mr. Gibb: My hon. Friend makes a good point, which shows the efficacy of the private sector.

My hon. Friend the Member for Bournemouth, West also pointed out the complexity of the new electricity trading arrangements, and we all look forward to tomorrow's briefing on the new arrangements which the Minister has kindly arranged. My hon. Friend pointed out that the Bill contains wide powers for the Secretary of State that will impose new regulatory burdens, the extent of which we do not know, as the regulations have yet to be published. He made the valid point that a Bill designed ostensibly to help the consumer could well result in higher electricity charges because of the huge regulatory burden.

My hon. Friend the Member for West Worcestershire--the former Minister directly responsible for falls of 29 per cent. in real terms in our electricity bills--made the important point that the regulator giving way to competition is the best way to help the consumer. Under the Bill, competition is no longer the primary objective. The Government have set up a whole raft of regulatory objectives, many of which are wholly antipathetic to the promotion of competition. My hon. Friend referred also to the important concerns regarding the NETA arrangements, and challenged the swagger with which the Secretary of State said that the arrangements will certainly result in a 10 per cent. fall in electricity prices.

My hon. Friend the Member for Mid-Worcestershire (Mr. Luff) rightly pointed out the absence of intellectual honesty by the Government in admitting the enormous lack of investment in water and sewerage infrastructure during the decades of state control.

The hon. Member for Hazel Grove said that we need a strong regulatory framework to counter the power of the market. He said that he wanted joined-up thinking and all-party consensus--well done.

My hon. Friend the Member for Lichfield (Mr. Fabricant), in an interesting speech, said that it is almost as if the Government had forgotten that the utilities

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had been privatised. He rightly pointed out that increased costs to companies will mean increased costs to consumers.

My hon. Friend the Member for Christchurch (Mr. Chope), in an important speech, pointed to the huge increases in Scottish water charges from the state- controlled Scottish water industry that will ensue over the next few years. He also raised the important concern that the independence of the regulators will be compromised because of the power vested in the Secretary of State to lavish enormous largesse on the regulators in terms of expenses and pay-outs.

There are one or two things in the Bill that we support. We welcome, in principle, the reform of the electricity pool. There are now far more players in the market than at the time of privatisation, so now is the time to introduce a properly functioning exchange. We will, however, be looking at the details to make sure that it is a properly functioning exchange. We agree that the supply and distribution of electricity need to be separately licensed, enabling the natural monopoly area to be confined to the smallest component. We welcome the merger of electricity and gas regulators, which reflects the fact that most suppliers provide both gas and electricity. It follows, therefore, that the consumer councils should be merged also.

It is interesting to note that the positions on the new council are to be well remunerated. We now have the slightly unedifying sight of candidates for such jobs outbidding each other in sycophantic praise for the Government's proposals. The payroll vote is being expanded beyond the confines of the House to a whole host of what were once independent third party opinion formers--like the hon. Member for Plymouth, Sutton (Mrs. Gilroy) before she became a Back-Bench Government supporter.

The Bill will impose enormous regulatory burdens and costs on the companies operating in the four utilities sectors. It will add to uncertainty and increase regulatory risk. The Government will claim that it will do the opposite, but this is another example of their saying one thing and doing another.

The Bill contains some important reforms, but the Government have allowed their deeply held prejudice and lack of understanding of industry to damage not only the Bill but the very industries and their consumers that they are seeking to protect. The Bill is bureaucratic, over-regulatory and costly, and I urge the House to support the reasoned amendment to it.

9.40 pm

The Minister for Energy and Competitiveness in Europe (Mrs. Helen Liddell): We have heard a lot of interesting speeches, not least the one from the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb). I always get the impression that he is still in a state of shock that the electorate could have been so lacking in majesty as to elect a Labour Government. He seems to have a sense that there was a golden age when the peasants knew their place and the bosses lined their pockets.

It is bizarre that the official Opposition should oppose the Bill. They have learned nothing from experience and seem to have failed to have taken on board the public

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revulsion at the fat-cat payouts under the previous Administration. The hon. Member for Tiverton and Honiton (Mrs. Browning) made several points that recognised how much sense there is in the Bill. It is regrettable that dogma then took over and the official Opposition did not find it possible to support the Bill in its entirety.

The Bill is complex and technical in many respects, but its underlying thrust, as my right hon. Friend the Secretary of State made clear earlier, is to take utilities regulation into a new era of changing markets and higher consumer expectations. It is a fair and balanced Bill, which reflects the wide-ranging consultations that we held. It is about reform and modernisation.

Mr. Fabricant: Will the Minister give way?

Mrs. Liddell: I want to make some progress, as I want to answer many points made by hon. Members who have been here all evening.

The Bill makes it clear that we are serious about giving all consumers a better deal, taking account of the Government's wider policy agenda on social reform. It shows that we are committed to pushing ahead vigorously with further and more effective competition in the utilities sector, and that we are determined to modernise the regulatory framework to take account of the nature of modern energy markets.

There is a great need to ensure the transparency, consistency and predictability of regulation. Good and transparent regulation leads to more effective business.

Mr. Fabricant: Will the Minister give way?

Mrs. Liddell: No, I want to make some progress. I do not know what part of that the hon. Gentleman does not understand. If there is time later, I shall be mindful of him.

If I do not manage to cover all the points made in the debate, I shall write to hon. Members. As the Bill has some extremely technical parts, I shall ensure that officials provide a briefing to both Government and Opposition Members so that no one will be disadvantaged as we go through the text in what will no doubt be a very long Committee stage.

The Bill contains the core of our proposals for legislation, but it is not yet complete. We faced a choice between waiting until all its provisions were ready or introducing a substantial core now and completing the Bill later by way of Government amendments--[Interruption.] It is obvious that Conservative Members would prefer that consumers did not get the advantage of the Bill as quickly as possible. That should surprise no one, given the performance of certain Opposition Members during the debate.

Sir Michael Spicer: On a point of order, Madam Speaker. Is it in order for the Government to introduce only half a Bill on Second Reading, as the Minister now admits?

Madam Speaker: The right hon. Lady is responsible for her comments and for laying out Government policy. That is not a point of order.

Mrs. Liddell: Thank you, Madam Speaker. Given that the hon. Gentleman spent much of the night suggesting

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that we were trying to renationalise the top 400 companies, it is surprising that he has caught on to the nature of the debate so far.

Several points were raised about renewable energy and I shall refer, in particular, to the issue raised by the hon. Member for Tiverton and Honiton. I am conscious that the renewables issue requires greater explanation. I hope shortly--within a few hours--to be able to publish the conclusions of the response to the public consultation on renewables. Several hon. Members raised that issue in the debate and I shall give a thumbnail sketch of the new powers. They will contribute to our broad strategy to target a 10 per cent. share of electricity supply from renewable sources.

The key elements of the strategy include the new renewables obligation on all suppliers; exemption of renewables electricity and heat from the climate change levy; and an expanded development programme for renewable technology, which takes into account the point that the hon. Lady made about emerging technologies and the importance of ensuring that the new regime for support for renewables is not an opportunity to choose winners, but a genuine opportunity to allow emerging technologies to develop.

The strategy is good news for all of us. A strong renewables industry will help us to protect our environment. The hon. Member for Hazel Grove (Mr. Stunell) made much of that point in his speech. We need to consider the use made of energy, as well as the price of energy. We must ensure greater energy efficiency, in relation to our commitments on renewables and on poverty, because we place great importance on ensuring that people have access to the most effective ways of heating their homes.

Many hon. Members have discussed the new electricity trading arrangements. The hon. Member for Bournemouth, West (Mr. Butterfill), who is a recognised expert on the issue, given his previous experience, drew attention to the fact that some academics have maintained that NETA will fail to deliver price reductions. However, there are as many academics who contend that it will deliver price reductions. We have undertaken some market testing of the balancing mechanisms, which leads us to conclude that energy prices will fall. However, another study was done with a test model that concentrated only on the balancing mechanism, and that appears to have led to the conclusion that prices will not fall.

I should point out that there is more to NETA than just the balancing mechanism. Indeed, the present operation of the market, in anticipation of NETA, is already displaying downward pressure on prices. The electricity pool has not worked. It has allowed gaming on electricity prices. Last July, in relation to the price spikes, it was obvious that the transparency necessary to operate a proper energy market did not exist.

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