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Lord Borrie: I normally feel extreme sympathy, if not support, for any amendment on consumer matters proposed by the noble Baroness, Lady Wilcox. In this case, however, I feel that, given the noble Baroness's record, the proposal is extreme. It begins with a statement that any person who is not a licence holder
may appeal, not only to the authority but further, in subsection (7), to the Competition Commission. It is suggested that any person should be able to do that, despite the fact that before the authority's decision is made, as I understand it, anyone can make comments to inform the authority of his or her views.I bear in mind a point that my noble friend the Minister has repeated several times; namely, that the principal objective of the authority against which the appeal is to be made is to promote the interests of the consumer. Yet, in putting forward this amendment, there is a kind of suspicion on the part of the noble Baroness that the authority will not do that very well; that it will not, before a final decision is made, take note of comments from the National Consumer Council and other appropriate bodies.
Although I feel that the new clause is rather extreme in its statement that anyone can appeal, subsection (4) backtracks from that. One of the grounds for the authority rejecting the appeal is that the applicant does not have "a sufficient interest" in the relevant decisions. I should have been slightly more persuaded of the merits of the new clause if, instead of beginning as it does with the statement,
- "A person who is not a licence holder may appeal"--
While I feel that there is something in the amendment--although it does not take into account the rights of people to put forward their views before a final decision is made--as drafted, it seems to be "round the wrong way" in that it enables anyone to lodge an appeal and then the authority can knock it back if the person concerned has insufficient interest.
Baroness Wilcox: I hate to think that I have made it sound as though "any old bod" could challenge a decision. I thought that there were safeguards to ensure that bodies challenging a decision would have a legitimate interest. I refer to subsection (4).
Lord Borrie: Yes, I agree with the noble Baroness. But that is for the authority to determine. Anyone may make an appeal, but, so far as I can see, a ground for rejecting it is that the appellant does not have a sufficient interest. Given the way in which the amendment is drafted, the authority will have to look into that question.
Baroness Sharp of Guildford: We, too, have some difficulty with the wording of the amendment, although we agree with the spirit of the proposal. We feel that there is often an imbalance between representation on the part of the corporate sector, which frequently engages professional lobbyists to push its interests, and the consumer sector, which relies on consumer organisations. Such organisations are sometimes less well organised than the professional
lobbyists. We therefore feel that there is an inherent imbalance and we have some sympathy with the spirit of the amendment; however, we are not particularly happy with the wording.
Lord McIntosh of Haringey: This issue was debated in the Green Paper and referred to in responses to the Green Paper. I recognise that the noble Baroness, Lady Wilcox, is right. There is an asymmetry in the present position. Licensees can force the authority to refer licence modification decisions with which they disagree to the Competition Commission but third parties, including consumer groups, cannot.
We decided against extending the ability to challenge the authority's decisions having given careful consideration to the responses. The argument is, in part, a practical one. We need to retain streamlined and efficient regulation. There have been few references to the MMC or its successor body, the Competition Commission. That is a strength of the system. References are time-consuming for all concerned. They can take up to nine months each. They create uncertainty until the issue is resolved. They distract management from other matters. Giving the council, and other third parties an ability to force a reference would inevitably add to the number of references.
I know that the noble Baroness, Lady Wilcox, would say, quite reasonably, that consumer groups would act responsibly, and would not trigger trivial references. But I think it is bound to be the case that if a new right of appeal is introduced, it will be used. Otherwise there is little point in having it. And if more decisions were referred, decision-making would tend to shift to the Competition Commission and away from the authority. On the whole, that would undermine the authority. It would undermine the principle of sector-specific regulation which we set out here.
In any case, new rights for consumers to challenge the authority are unnecessary. The gas and electricity consumer council will have full opportunities to contribute and influence the statutory consultation process which precedes licence modification decisions. Indeed, noble Lords have recognised that. The noble Lord, Lord Borrie, referred in particular to that point. It will have enhanced rights of access through the Bill to information to enable it to make a fully informed contribution. And the Bill--and this is important--will require a full explanation of decisions once they have been taken. This requirement, I think, negates the first part of the amendment. If the council or other consumer group makes a sound, well-researched representation during the consultation process, and the authority is required to account for its decisions, then I think that we can safely assume that the explanation will cover the reasons why a certain approach was or was not adopted. There is no need for a separate power to require the authority to account for its decision.
In considering third party rights, it is also important to refer to the change which this Bill makes to the regulator's general duties. For the first time, the regulatory authority will have a principal objective to protect the interests of consumers. There should, in other words, be no clash of interests and no need for the council to be able to second guess the authority.
5.45 p.m.
Baroness Wilcox: I thank the Minister for his reply. I am grateful that he recognises that there appears to be an imbalance on the face of the Bill.
I am somewhat thrown by the fact that noble Lords do not like the wording of the amendment. It was modelled on Section 47 of the competition legislation. However, I accept that the noble Lord, Lord Borrie, knows more about these issues than I do. I apologise if the wording has defeated my ambitions in this area.
Lord McIntosh of Haringey: I did not criticise the wording.
Baroness Wilcox: I thank the Minister. I shall continue to press for the consumer where I can. I am grateful that the Minister did not raise the concern that such a right would delay the decision-making process. It is an argument I hear from others. I believe that we take as long as necessary to make these important decisions on behalf of the consumer and with regard to open and fair competition. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 9 [Objectives and duties under 1986 Act]:
Lord Ezra moved Amendment No. 31:
- Page 6, line 10, after ("consumers") insert ("in the context of sustainable development").
The noble Lord said: In moving this amendment, I speak also to Amendment No. 42. Amendment No. 31 is supported by my noble friend Lord Beaumont of Whitley who unfortunately cannot be here today--I am delighted to see that he is present--the noble Lord, Lord Hardy of Wath, and my noble friend Lady Sharp of Guildford.
The amendment is of a fairly fundamental nature. It refers to the principal objectives of the Secretary of State and the gas and electricity markets authority in carrying out their respective functions. As has been repeatedly mentioned in the course of debate, they are to protect the interests of consumers. Clause 9 refers to gas, and Clause 13 to electricity in the same terms. The purpose of the amendment is to add after the word "consumers" the words, "in the context of sustainable development".
I recognise that this is a Bill which deals with economic regulation. However,
- "economic regulation of the utility industries does not take place in a vacuum. The ways in which the utility regulators carry out their functions have consequences for the social and environmental, as well as the economic, aspects of the pursuit of sustainable development".
- "The Government intends"--
- "that the regulatory system should make an appropriate contribution towards achieving sustainable development. This means that economic regulation should be conducted in a way which is alert to the Government's wider social and environmental goals".
The Bill deals with economic regulation. The Government say that they intend that it shall be seen in the framework of sustainable development. That should be on the face of the Bill. We should be able to debate the issue. It is not satisfactory to say that the Bill is about economic regulation when the Government state categorically that it is their intention that economic regulation shall be viewed within a sustainable framework.
The amendment is simple but fundamental. I believe that it properly reflects the Government's intentions as set out in the draft guidance. The word "intend" goes way beyond guidance. The Government should have said that they hope, or have a firm expectation. They should not have used the word "intend". If they have an intention, that is very firm indeed. Therefore I believe that the words "sustainable development" should be on the face of the Bill. I beg to move.
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