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Lord Beaumont of Whitley: I am sorry that I misled the noble Lord, Lord Ezra, about my presence today. I had to write a note of apology; I cannot be here later. I was unaware when we would reach the amendment and therefore gave a rather blanket apology.
The noble Lord, Lord Ezra, has put the case very strongly. We are talking here about the long-term benefit of the consumer. As the Bill now stands it may be that regard will be had only to the short-term benefit of the consumer. The major problems before us today, whether they be global warming or other matters, mean that we must think much further ahead than would have been the case five, 10 or 15 years ago. Therefore, for that reason and for those given by the noble Lord, Lord Ezra, I believe that this matter should be included on the face of the Bill.
Lord Hardy of Wath: I support the amendment moved by the noble Lord, Lord Ezra, and suggest that we should not disregard the longer term. Bearing in mind that we may be only months away from net dependence on gas imports, perhaps we should recognise that in 10 or 15 years' time there may well be capacity to use the research done in the 1970s and 1980s into the possibility of an alternative source of gas. I do not suggest that at this stage we embark on the implementation of the Westfield technology, with which the noble Lord, Lord Ezra, will be familiar, but
it is not a bad idea for those responsible for the gas and electricity industries to give consideration to what may be a crisis in a relatively short time.
Baroness Buscombe: I have some difficulty in speaking to this amendment. I believe that when we on these Benches were in government the term "sustainable development" first emerged in relation to something as delicate as the rural economy, in particular planning matters. I do not believe that it is particularly apposite here. However, the draft statutory social environmental guidance to the gas and electricity markets authority makes it clear that the Government have committed themselves to the goal of sustainable development. For these purposes, "sustainable development" is defined as "a better quality of life for everyone, now and for generations to come". That sounds like nirvana. To put such an incredibly broad term on the face of the Bill is perhaps a step too far given the terminology used in the guidance.
In addition, I question the use of the words "in the context of sustainable development" in relation to the Secretary of State and the authority carrying out their respective functions to protect the interests of consumers. What else can it mean but the protection of the interests of consumers generally? Surely, it does not mean the protection of consumers from the utility industries. We on these Benches cannot support the amendment.
Baroness Sharp of Guildford: I rise to support my noble friend who moved the amendment and to thank others who have also given their support. The reason why it is important that this provision is on the face of the Bill is that in many senses the definition of the interests of consumers in paragraphs (a) and (b) of subsection (4) carries the implication that those interests are best looked after by the promotion of a competitive industry. We are all cognisant of the fact that competition helps to ensure that consumers get the best deal. However, we also recognise that there are social and environmental costs. As the Minister himself said not long ago, when we look at consumers' interests we must consider not simply the short term but the long term. Therefore, these are inter-generational issues. I am aware from the debate yesterday in Committee on the Government Resources and Accounts Bill that this is an issue in which the Minister takes a particular interest.
Once one begins to look at these inter-generational issues, it is important that sustainable development is written into the Bill. Unless we have an eye on sustainable development, we shall affect the interests of future generations. In that sense, it is well known in economics that social costs and benefits can diverge from private interests. It is noticeable that the Government have taken a lead, for example in relation to Kyoto, to ensure that long-term environmental interests are considered. It is important that government take that lead because the private individual does not naturally think in those terms.
We feel very strongly that this matter should be written into the Bill so that it is quite clear to those who seek to interpret it that we look to the long-term interests of the consumer, not to short-term private issues.
Lord Currie of Marylebone: I support the objective of sustainable development but worry about this particular amendment, in part for the reasons given by the noble Baroness, Lady Buscombe. Sustainable development is a very broad concept that perhaps fits uneasily into the specifics of the Bill. However, the Bill also makes clear that longer-term inter-generational questions are very much the concern of the regulator today. The Bill defines consumers as both present and future consumers. As drafted, the Bill would place on the authority the requirement to be concerned about future sustainability. As a member of the management board of Ofgem, I know that that body certainly considers not only the short-term position but also the longer-term development of the industry. Therefore, I do not believe that the amendment is necessary.
Lord Jenkin of Roding: I hear some of the hesitations that other Members of the Committee have expressed about the wisdom of writing this matter into the Bill. The noble Lord, Lord Beaumont of Whitley, will remember that some five years ago he and I served on a special Select Committee under the chairmanship of the noble Lord, Lord Tombs, to examine the issue of sustainable development. I well recollect that we had more than one session to try to decide what "sustainable development" meant. We had the Brundtland definition which referred to meeting the needs of society without prejudice to the ability to meet the needs of future generations. We also had the definition of my right honourable friend John Gummer which made reference to meeting the needs of today without cheating on our successors. As a concept, clearly it is unexceptionable. However, I believe that it may create difficulties as a statutory objective.
A few months ago a Question was tabled about the coal industry. I am not sure whether the noble Lord, Lord Hardy of Wath, was involved at the time. However, in a supplementary to the noble Lord, Lord Sainsbury of Turville, I said that if the Government sought ways to meet the Kyoto targets on CO 2 it was not immediately apparent that to encourage power stations to burn more coal was the best method. With considerable aplomb the Minister said that there was always a need to balance conflicting objectives, which is right. There is another example of that in today's press. The Government have made a huge number of statements about the need for sustainable transport and to get people out of their cars and on to public transport, bicycles and so on, and with much of that I have sympathy.
However, what does the Department of Trade and Industry now seek to do? It seeks to make it easier for people to buy many more cars by making them cheaper. The Minister may wriggle in his seat, but the
fact of the matter is that it is very difficult to see how these matters can easily sit next to each other. It may be that car makers and distributors should not make unreasonable profits, but the Government need to explain to the country why it is right to increase the price of petrol and introduce powers to charge for parking and so make it more difficult for people to use their cars and, at the same time, make it easier for people to buy cars by cutting the price.Briefly, the point I am making is that the concept of sustainable development is rather vague. It concerns "peace and motherhood" and we are all in favour of it provided we do not try to define it too closely. I do not believe that it would be right to include it in the Bill.
6 p.m.
Lord McIntosh of Haringey: I am not wriggling in my seat; I was making a sceptical face. No other part of my body moved. I am expressing my scepticism that anyone from the Conservative Benches should believe that it is wrong to act to avoid excessive charges by motor dealers in this country. If it is perfectly possible for cars to be offered more cheaply, we believe that consumers should obtain them more cheaply. If we can help to achieve that, I believe that it is the right thing to do, and I believe that the Conservative Front Bench in the Commons was of the same opinion.
Of course, we all agree with the objective of sustainable development, even if the noble Lord, Lord Jenkin, has some difficulty in defining it. However, I am afraid I must say that the amendments are aimed at the wrong target. We must remember that the Bill is, as I said, not an energy policy Bill; it is a utilities Bill. It deals with economic regulation and, to use the word of the noble Lord, Lord Kingsland, it "mimics" the effects of competition by putting downward pressure on costs and creating incentives to improve efficiency and quality of service to consumers. It is right that the authority's general duties should have an economic focus generally concerned with price and quality of service offered to consumers. That is why the authority's principal objective is to protect the interests of consumers.
In "the interests of consumers" we include their fundamental interests in ensuring that their reasonable demands for gas and electricity are met and that their supplies are secure. That is why we have the demand criterion and the finance criterion. However, we recognise that the way in which the authority exercises its functions can have significant consequences for the environment and for society as a whole. The authority should weigh such considerations properly in the balance.
The noble Lord, Lord Ezra, says that this issue should be on the face of the Bill so that it can be debated. My response is that it is on the face of the Bill in Clauses 10 and 14. In any case, while the principal objective and duty in subsection (2) of Clauses 9 and 13 deal with economic considerations, the authority is also subject to duties in relation to energy efficiency, public safety and the environment. In the definition of "consumers", subsection (3) requires the authority to
have regard to the interests of people who are disabled or chronically sick, of pensionable age, who have low incomes or who reside in rural areas. All those social and environmental objectives are on the face of the Bill.However, we structure the duties in the Bill to ensure that when a choice is made between alternatives of equal benefit to the consumer the authority should lean towards the one that does most for energy efficiency, public safety and the environment and takes account in Clauses 10 and 14 of the Government's social and environmental objectives. It should be recognised that measures concerned with such matters will often be in the interests of consumers, in particular their long-term interests, as noble Lords have said; that is, the interests not only of present but of future consumers.
Therefore, there should be no conflict between the two sets of duties and no problem will arise. However, it would be wrong for the general duties of an economic regulator to be amended in the way that the amendments propose. The concept of sustainable development incorporates social and environmental, as well as economic, considerations. If we incorporate the social and environmental considerations into the principal objective, we remove the priority afforded to the interests of consumers. That is contrary to the principal purpose of regulations as set out in the Bill. It would leave the authority uncertain as to how it should respond if pressed to take measures which, in the interests of the environment, are neither in the long nor the short-term interests of consumers.
However, other matters in the social and environmental field should be decided by the Government and implemented through specific legal provision, not necessarily in the course of this Bill. They fall outside the scope of economic regulation. Examples of government action as opposed to authority action include the climate change levy with its exemptions for renewables and good quality combined heat and power, the pensioners' winter fuel payments, and our support for research and development into renewables.
We are all on the same side. However, I believe that the amendments are aimed at the wrong target and would not achieve the effect which the noble Lord, Lord Ezra, seeks.
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