| Previous Section | Back to Table of Contents | Lords Hansard Home Page |
Lord McIntosh of Haringey: I should make it clear that we are entirely committed to encouraging competition as the consumer's best friend in the utilities markets. That is why the principal objective of the authority is to protect the interests of consumers wherever appropriate by promoting competition. That establishes a presumption in favour of competition as the means through which the interests of consumers should be protected. It will ensure the maximum penetration of effective competition consistent with the practical, economic and other constraints prevailing in the gas and electricity sectors, to which my noble friends Lord Borrie, Lord Currie and Lord Hardy have referred.
It is always a good debating point to seek to get me to disagree with the Secretary of State. However, the noble Lord, Lord Kingsland, is on safe ground here because he quoted from Hansard. There cannot be any doubt but that what the Secretary of State is reported as saying in Hansard is an accurate reflection of his views. The Secretary of State made clear the Government's belief that, with the advance of competition in the utility sectors, the role of the regulator would diminish. We have all agreed with that in this debate. But to argue that the role of the
regulator will diminish is not to say that we can predict that it will ultimately disappear, or even how rapidly it will diminish.There will continue to be some activities in each of the gas and electricity sectors in which competition is either non-existent or, as yet, imperfect. I am not sure whether the mathematical formulation of an asymptotic curve is appropriate here, but certainly the idea that sector-specific regulation could be removed within a measurable period of years is rather unlikely. In electricity, for example, distribution will be a monopoly activity for the foreseeable future. Supply, although in theory now fully open to competition, continues to reflect the historical dominance of the public electricity suppliers. So although it is important that competition should be promoted as the best way of protecting consumers' interests, it is equally important that we do not build in a bias which would abandon regulation before the market is ready for that.
Clause 5 already obliges the authority to include in its annual report an assessment of competitive developments in each sector. If the authority believed that competition had reached the stage in which regulation was no longer necessary or desirable, it would be open to it to say so in that assessment. The record of bodies in recommending their own demise is well known! But as I have said, it is our expectation that regulation will continue to be needed, at least in certain areas, for the foreseeable future. Therefore, we believe that it would be an artificial exercise to make the authority set a timetable for the withdrawal of regulation.
Similarly, I should expect the assessment of competitive developments to describe areas in which regulatory controls had been relaxed and the reasons why they had been relaxed. I should also expect it to describe other areas where representations had been made for reducing regulatory controls and the reasons why controls should not be relaxed in those areas. Ofgem has already indicated its intention to relax licence conditions on supply over the course of the next two years.
I believe that the existing provisions for annual reports will help the process of reducing regulatory controls as competition develops. However, I believe that it would be an unnecessary burden to require the authority to identify and justify every single regulatory requirement that had not been relaxed. I am afraid that I cannot, therefore, accept the amendments.
Lord Kingsland: The Minister will be pleased to hear that, provisionally, I am relatively content with his answer. I can see the difficulties that were outlined by other noble Lords about mimicking competition in a complex utility such as electricity. What pleased me about the Minister's response is that he said nothing whatsoever about social and environmental objectives, which were raised by the noble Lord, Lord Borrie, and others. I was delighted that the Minister did not use the social and environmental dimension as a reason for the regulator to continue in existence.
Had he done so, I would have pointed out that, for example, such matters as were referred to by the noble Lord, Lord Borrie, apply equally to the oil sector in remote parts of the country with impoverished consumers. Therefore, the social and environmental aspects of regulation are just as important in relation to oil and, indeed, coal as they are in relation to utilities such as gas.
I shall sit down content in the knowledge that, once fierce competition is established in the sector and effectively mimicked in circumstances where only one party can ever be involved, we shall see the end of regulation. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 17 to 19 not moved.]
Clause 6 [Publication of advice and information about consumer matters]:
The Deputy Chairman of Committees: In calling Amendment No. 20, I should point out that if it were to be agreed to, I should be unable to call Amendment No. 21 owing to pre-emption.
Baroness Wilcox moved Amendment No. 20:
- Page 4, leave out lines 10 to 20 and insert--
The noble Baroness said: In speaking to Amendment No. 20, I should like to speak also to Amendment No. 23. Today we are discussing the role of an important body--the new gas and electricity markets authority (GEMA). It will make important decisions about energy affecting most consumers and, of course, the regulated energy companies. I believe that public bodies that make decisions for us--such as the new GEMA--should operate as openly and transparently as possible. Ideally, such principles should be enshrined in the law, so creating a general expectation that openness should occur. Ideally, such bodies should operate a presumption of openness: that means information being publicly available unless there is a good reason for it not to be. There are many processes that will help bodies to achieve this. My amendments pick up three aspects of this.
The first subsection of each of the amendments places the authority under a strong duty to publish information in the consumer's interest--a presumption of openness. The key word I have used is "shall" instead of "may", as used in the Bill as currently drafted.
The second subsection of each of the amendments requires the authority to publish its decisions and the information on which those decisions are based. The wording is similar to that in the Food Standards Act 1999 which set up the new Food Standards Agency. This is a new public body which is making efforts to operate openly and transparently. This might, for example, mean that the authority publishes the minutes of its meetings and any background papers attached to them; or, as the Food Standards Agency is doing, it could hold open meetings around the country. I understand that the agency is opening up its board meetings too.
The third subsection of each of the amendments requires the authority to incorporate a public interest test when deciding whether or not to publish information. As Clause 6 is currently drafted, the authority would not publish information if it was thought to,
I hope that the Minister agrees with me about the importance of the openness of regulatory bodies. How the regulatory structures are set out in this Bill is likely to have an impact on other legislation such as the forthcoming water Bill.
Today we are talking about what is, to all intents and purposes, a new body. It will have a primary duty towards the consumer. It will also have particular regard to specified groups of people such as the disabled, the chronically sick, pensioners and those on low income; and it will have to take account of economic, social and environmental interests in its policy making. It will have a range of different interests to reconcile.
It should operate differently from OFFER and Ofgem before it. I believe that the public need to see that the regulatory body for gas and electricity is operating differently from before. They will also need to understand how and why it makes the decisions that it does. I hope that these amendments will help that process. I beg to move.
("(1) The Authority shall publish advice and information which will promote the interests of consumers in relation to gas conveyed through pipes, and may publish that advice or information in such manner as it thinks fit.
(2) In particular, it shall secure that records of its decisions, and the information on which they are based, are kept and made available with a view to enabling members of the public to make informed judgements about the way in which it is carrying out its functions.
(2A) In publishing advice or information under this section, the Authority must consider whether the publication of the advice or information in question would or might seriously and prejudicially affect the interests of a particular individual or body of persons (corporate or unincorporate), and if that is outweighed by the public interest in publishing that advice or information.").
"seriously and prejudicially affect the interests of a particular individual or body of persons".
However, there may be circumstances where a company is behaving in a way which is detrimental to its customers. If GEMA wanted to alert the public to the problem, it might find that it was not able to do so because of the serious harm that it may be claimed to cause that company. In making decisions whether to publish, the two concerns should be balanced. If the public interest in publishing the information is greater than the serious harm that it may cause to the company, it should be published.
Next Section
Back to Table of Contents
Lords Hansard Home Page