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Lord Haskel: I am glad that these concerns are already met. I wish to make two comments. As regards registration with CORGI, I understand that it is the company which is registered and not the individual operatives of the company. The company can register itself as a CORGI fitter, but it is not the staff of the company who are registered. That is a point which the noble Earl may like to look into.

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I believe that there should be a closer definition of "competent" if we want to move on and ensure that standards are higher. The word "competent" is not a sufficient definition. However, as I have the noble Earl's assurance that these matters are being taken care of, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 1, as amended, agreed to.

Lord Peston moved Amendment No. 25:

After Clause 1, insert the following new clause:

("Report on competition and efficiency of gas supply industry

.—(1) The Director shall prepare annually a report showing—
(a) the state of competition in the carrying on of activities required to be licensed under section 7A of the 1986 Act;
(b) the efficiency on the part of persons authorised by or under Part I of the 1986 Act to carry on any activities and the efficient use of gas conveyed through the pipes.
(2) The Director shall send a copy of the report mentioned in subsection (1) to the Secretary of State, and the Secretary of State shall lay a copy before each House of Parliament.
(3) The Director shall from time to time undertake a cost-benefit analysis of the effect of competition in gas supply, shall prepare a document setting out his research and conclusions, shall send a copy of the report to the Secretary of State, and the Secretary of State shall lay the report before each House of Parliament.").

The noble Lord said: This is a long amendment, but pretty straightforward. I believe that we all agree that we are now entering new territory. We moved from a public monopoly to a regulated private monopoly, which introduced some degree of competition in the supply to business premises on a large scale. Now we move to essentially regulated competition. We do not have a great deal of experience of that kind of activity. There is a degree of decentralisation as regards water, but no competition to speak of. I am not certain that anyone will claim that there is competition in electricity supply.

But here I believe that there will be some competition and the question is how it will work. The noble Earl, Lord Ferrers, said that we shall have to see and I entirely agree with him. As regards consumer protection, one wonders—to use the words we used earlier—whether it will be effective. We have talked about taking account of the effect on the environment and of promoting energy efficiency. Is any of that going to happen?

Whatever one's political differences, once we have a Bill of this kind we want it to work. I want it to work and I also want to learn from what is going on. As a parliamentarian, I want to be able to participate in the learning process with a view to seeing what follows.

In the Bill as drafted, I cannot see where I can get any leverage on that point. By that I mean Members of the Committee and how we get involved in assessing what is going on in considering whether competition is working and whether consumers are being satisfied. We also want to know whether all the other good events as a result of this Bill will actually take place.

It seems to me that the easiest way of achieving that is to say that the director prepares a report along the lines I have suggested and that the report goes to the Secretary of State and then it comes before us. That gives us the very first toehold in being able to see what has been going on. That is the main point of the amendment, but it includes a

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harder final part. I do not believe that it is unfair of me to suggest that this is a worthwhile activity. I agree that it is typically the kind of thing which economists like.

I would like to see the director examine what the benefits of competition have been and whether there have been costs. Do we have any way of assessing whether the benefits exceed whatever costs have been incurred and whether there has been a net advantage? That does not seem to me to be something that the director would be expected to do every year and that is why I merely say, "from time to time". It is a function rather more for the director than for the Secretary of State and the department. I also do not believe that it is something that can be done satisfactorily by academic outsiders because I do not believe that they can get anywhere near the kind of information that they would need.

As the noble Earl is aware, I am not a supporter of the Government, but, viewed as an experiment as to how we might do things, it is enormously interesting. As I say, the regulation of a private, competitive industry where there are energy efficiency and environmental concerns involved should be scrutinised very carefully and we should try to learn from it, particularly as we might then want to carry over those lessons to other sections of the economy.

I press this amendment with very great seriousness. Members of the Committee have a contribution to make in asking the Government to be sensitive to this kind of issue and say, "Yes, we believe that it will work out, but it is an experiment and we shall survey it in a way in which we can learn from it". I beg to move.

Lord Boyd-Carpenter: The amendment that has just been moved obviously has certain merits. The report for which it calls would be of considerable interest. My only hesitation is whether it would impose excessive further burdens on those who have to operate the gas industry. When such changes take place, it is always a temptation for those of us in either House to impose conditions that there shall be full and detailed reports on various aspects of the activity of the organisation concerned. One has to be careful that, in our zest for knowledge of what is going on, we do not impose too heavy a burden on those who already carry responsibility for conducting the industry.

For that reason, I should like to ask my noble friend the Minister whether there exist, in respect of other industries, comparable provisions of any sort. If they do, that means that we have some experience of the burden that they impose and of their value. I am far from dismissing the idea that this is a useful proposal. However, if we are to impose such conditions, we should hesitate to do so if they would be unique and, if they are not unique, it would be interesting to know what other industries have to carry that burden.

Lord Ezra: Like the noble Lord, Lord Boyd-Carpenter, I find this a constructive and positive amendment which would be most helpful to the Committee in further consideration of this vital issue. After all, we shall spend a great deal of time on this Bill and it is not unreasonable to have the opportunity to return to some of the issues at annual intervals to see how things have gone. I entirely agree with the caveat of the noble Lord, Lord Boyd-Carpenter, and should like to know from

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the noble Earl whether he agrees in principle with the proposition. If he thinks that the procedures proposed by the noble Lord, Lord Peston, would be too onerous, does he have any other suggestions? I think that we are entitled to ask to be kept informed at suitable intervals about how this new development is going.

Lord Skelmersdale: As has been said by noble Lords on all sides, we are certainly entitled—indeed, we expect and want—to be kept informed of the progress of competition policy from the director's viewpoint. On the other hand, I do not think that we want to be snowed under with reports on this, that or the other; nor do I think that they should be so comprehensive that they risk revealing pieces of information which are normally regarded as matters of commercial confidentiality. It therefore occurs to me to wonder whether it would not be much more practical from everybody's point of view for the annual report from the director general of Ofgas to be slightly enlarged to take account of this request which, as has been said on all sides, is perfectly reasonable.

Earl Ferrers: I never cease to admire the capacity of the noble Lord, Lord Peston, to ferret and to delve—and that is a very good thing. Having said that, however, I do not encourage him to do an undue amount of it. In tabling the amendment, he has just probed another point.

It is sometimes difficult in considering a Bill which amends parts of an existing statute, but leaves others in place, to spot when matters are already dealt with in unamended parts of the existing statute.

Section 39 of the Gas Act 1986 already requires the director to prepare an annual report on her activities during the year. That report must be laid before Parliament and it must also include a general survey of developments.

One of the director's proposed statutory duties is to exercise her functions to secure effective competition. Another is to promote efficiency and economy on the part of licensed companies and the efficient use of gas. These matters, which are specifically referred to in Amendment No. 25, must already be dealt with in the director's annual report under Section 39, which is required to cover matters falling within the scope of her functions.

That is, in fact, exactly what happens in practice. The director's latest report for 1994 includes sections on competition and on energy efficiency. It also refers to separate, more detailed Ofgas publications, on both those subjects.

Where I think that the noble Lord may well be on to a good point is that under Section 39, the director's report is to relate to what the director has actually done, but not necessarily to the progress that has been made in securing effective competition. That is the point about which the noble Lord is concerned. I am grateful to him for spotting that the existing provisions may not be sufficient to require a report on the progress of competition, which we are all agreed is necessary.

My noble friend Lord Boyd-Carpenter said that he was concerned about imposing other new burdens and wondered what happens in other organisations. I can advise him that, like other regulators, the rail regulator has to produce an annual report.

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If the noble Lord, Lord Peston, would be good enough not to press his amendment, I shall certainly look into the matter in more detail. I propose to bring forward an appropriate government amendment to Schedule 3 to address the point. It would also provide an appropriate basis on which the progress of the pilot phases could be reported on by the director. With that undertaking, I hope that the noble Lord will not press his amendment.

6.45 p.m.

Lord Peston: I warmly thank the noble Earl. As he knows, I have been feeling very rejected all afternoon and at last there has been a slight change.

I entirely accept the point about burdens which was raised by the noble Lord, Lord Boyd-Carpenter. One of the reasons why I am delighted to be retiring in the next year as a professor is that when I started as an academic, you simply went and did your job, which was teaching young people and carrying out research. Now, academics mostly fill out forms and respond to the equivalent of regulators and people who want to write reports. I am glad to be getting away from that, although I have enjoyed my career. Therefore, I am not one who would seek to impose burdens unduly either on the firms or on the regulator. I am totally with the noble Lord on that point. He will find that I shall also be with him on other matters. I was not seeking to press the point for its own sake or because I want to see a few more trees chopped down to produce reports.

In conclusion, I must say "Thank you very much" to the noble Earl. I look forward to seeing the form of his amendment and will undoubtedly welcome it when the time comes. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clauses 2 and 3 agreed to.

Clause 4 [Exemptions from prohibition]:

[Amendment No. 26 not moved.]

On Question, Whether Clause 4 shall stand part of the Bill?

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