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Lord Skelmersdale: My Lords, even if I were not an adviser to British Gas I would be torn by the amendments. On the one hand, as my noble friend Lord Cranbrook said, sustainable development is an important objective and one which we should all support. However, the question is: who should actually do it on any particular occasion? Is it really, as the amendments suggest, a matter for the gas regulator? A regulator's primary duties under the Bill are to ensure that people get gas, to promote competition and to ensure financial viability of the companies supplying and transporting it. I suggest that a duty to promote sustainable development sits very uneasily with these. Much of the contribution that I made in earlier debates on the Bill centred around regulatory discretion. I believe that there is quite simply too much and that the Bill has extended those powers still further.

In my view, the regulatory structure cannot support such a wide-ranging power to determine possible policy issues. That is surely a matter for the Government. Indeed, my noble friend highlighted what governments both here and overseas are doing in that respect. Such a power would inevitably add to the uncertainty that already exists in the energy market.

It is not beyond the wit of man to imagine a situation where a company has invested to enter the market and the market is then changed by a regulatory decision in the name of a personal interpretation of sustainable development. There would be little chance to appeal, even if the reasoning behind the situation were known. That cannot be right. However, I see that we shall be discussing that matter in relation to a later amendment. What is even more perplexing is that that duty would apply to the gas industry and not to other fuels. It could lead to restrictions on gas but leave competing fuels such as oil, which is even more polluting—in fact considerably more polluting—untouched.

I support other amendments that the Government have brought forward to widen the environmental scope of the Bill. However, this proposal would be going a little too far especially—and I give my answer to my noble friend's question—in view of Clause 1(2)(b) where it is quite clear that the Secretary of State and the director shall have a duty:

I believe that that was one of the things that my noble friend requested. I hope that my noble and learned friend the Minister will, first, confirm what I have said; secondly, agree with me; and, finally, say what else the Government intend as a matter of policy in terms of the efficient use of gas.

3.45 p.m.

Viscount Caldecote: My Lords, I should like to support the amendment moved by my noble kinsman. I have no doubt—indeed, I am sure that we all agree—that we have a most important responsibility to future generations to maintain the environment and sustainable development. My noble kinsman made a very strong

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case for the amendment both to honour our international agreements and to look after the benefits of future generations in this country.

I believe that there is a very real danger—perhaps this was emphasised and brought out by my noble friend Lord Skelmersdale—that privatisation, successful as it has been, produces intense pressure for cost cutting and short-term profit-making in an increasingly competitive scene. That occurs sometimes at the expense of sustainable development and the environment. I therefore strongly support the amendment.

Lord Peston: My Lords, before dealing with the substantial amendment, I thought that it might be useful if I were to say a word or two about interests. Your Lordships may wish to know that I am not a paid consultant of British Gas and, indeed, have never been a paid consultant of British Gas. Therefore, I do not and did not have anything to declare. However, I was, but am no longer, a non-executive director of a firm of which British Gas was a client, although I did not advise that company.

On 29th March 1994 (at col. 1062 of Hansard) I intervened to make some remarks on the Government's then forthcoming plans for extending competition; indeed, the matter that we are debating today. Last week I was asked by a journalist whether I ought to have mentioned at that time in 1994 an indirect relationship with British Gas. My reply, off the cuff, was "Maybe". Having now looked at what I actually said at the time, I believe that my answer should have been simply, "No, I had nothing to declare". Without wishing to appear holier than thou, I am confident that, like all noble Lords, I acted ethically, and I shall continue to do so.

I turn now to the amendment. I am in some difficulty in that respect because I am totally in agreement with the noble Earl about the importance of sustainable development. However, I am also in agreement with the view of the noble Viscount, Lord Caldecote, that there is always a danger that the pressures of competitive business enterprise cause one to neglect some of those matters. It is important that we bear that in mind. My problem is the following. Perhaps in due course I will express it interrogatively. Although we support these objectives, is this a Bill in which we ought to start on this, so to speak? Is there anything special about gas that requires us to say, "This is where we put it into legislation"? I suppose that the answer to that is that this is the only Bill we have before us. If we want to include this measure somewhere, for the moment this is where we have to put it. I suppose that the noble Earl, Lord Cranbrook, could say that this is a fairly innocuous amendment anyway.

I am torn on this matter. If the Minister were to say "Yes" to his noble friend, I would not then want to say "No". However, my position is that I would rather see all of this incorporated in a more general form of legislation than start to deal with different bits of legislation. I find it hard to be what I would regard as sensible but supportive. I am not 100 per cent. persuaded that this is the best place for the measure but equally, wearing my economist's hat, I am not against it. I am trying to have it both ways as usual.

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Lord Ezra: My Lords, I wish to support the amendments spoken to by the noble Earl, as indeed I did in Committee. He has raised an important issue and we should seize every opportunity of emphasising it. The noble Lord, Lord Peston, has raised a perfectly valid question. Are we right to introduce this provision in specific items of legislation rather than more generally? I do not know whether in the near future we will have any vehicle for a more general treatment of the subject. I therefore feel strongly that we should seize the present opportunity rather than wait for some uncertain future opportunity.

Furthermore, I was much impressed with what the noble Earl had to say about the need to conserve and to use as efficiently as possible valuable natural resources, and gas is certainly one of those. I also agreed with the noble Viscount, Lord Caldecote, when he said that, while we are all generally in favour of competition, not least from these Benches, nonetheless the sudden change from a monopoly situation, in which a tradition of caring for the consumer has been inherent in the way in which gas has been supplied, to a competitive situation could well lead to cutting corners and seeking to increase margins, perhaps in conflict with these wider social considerations. Therefore I think that in a Bill of this sort affecting such a basic issue it is perfectly proper that the reference to sustainable development should be introduced in the way in which the noble Earl has suggested.

Lord Bruce of Donington: My Lords, I have no particular technical interest in this Bill except that, it being a Bill and ultimately becoming an Act, it will be the responsibility of the Secretary of State to be accountable to Parliament for its conduct. Your Lordships will be aware that, within a different context altogether, there has been some discussion recently in another place as to the responsibility of a Secretary of State for policy on the one hand or for operations on the other. I would like to be clear in my own mind, because it is not clear from the Bill, who will be responsible to Parliament for the proper carrying out of the provisions of the Bill. Clause 1 of the Bill before your Lordships states,

    "The Secretary of State and the Director shall each have a duty to exercise the functions assigned to him by or under this Part in the manner which he considers is best calculated".

I have searched through the Bill and I cannot find the delineation of duties in any particular regard specifically directed towards the Secretary of State on the one hand or the director on the other. Amendment No. 2 that has been so ably spoken to by the noble Earl, Lord Cranbrook, mixes up the two. Amendment No. 2 states,

    "In so far as subsection (1)(d) above affects the Director, in performing ... he shall have regard to guidance from the Secretary of State".

What happens if the Secretary of State gives the wrong guidance to the director? How will the delineation of responsibility be established between them? These are not extreme matters involving the rather graver matters implicit in the Prison Service, but they are matters of some significance. I would like to know just how we are going to delineate specifically the responsibilities of the Secretary of State for which he can be called to

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account by Parliament and those for which he is not responsible. I must apologise for having introduced this question of principle, but perhaps it might be convenient for the noble and learned Lord to clarify it at this time.

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