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Lord McIntosh of Haringey: My Lords, we had a useful and full debate on the issue of security of supply

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in Committee. I am sorry that I do not seem to have convinced the House that security of supply is properly dealt with in the framework of the Bill as it currently stands. As I said then, the Bill is concerned with the economic regulation of gas and electricity. It is not an energy or an energy policy Bill. I am glad to have the explicit recognition of that point by the noble and learned Lord, Lord Fraser.

Before I proceed, perhaps I may say that, because that is the case, we are in no way fettering the freedom of the Secretary of State and, as Clauses 9 and 13 are amendments to the Gas Act and Electricity Act, they are in the context of the Long Title of those Acts. They are part of utilities regulation, whereas the discretion of the Secretary of State to maintain security of supply goes much wider than that and is not in any way fettered by the provisions in this Bill.

However, security of supply is indeed the responsibility of government as a whole. In order to achieve it, the Government must exercise a wide range of policy instruments. Relevant issues range from securing properly functioning utilities markets (which is the subject of this Bill), to the management of the UK continental shelf, to securing stability and access to overseas sources of energy, and of course, to the diversity of supply to which my noble friend Lord Dormand referred. It has always been our policy that there should be diversity of supply, on or under land, of domestic sources and not only of the offshore interests to which the noble and learned Lord, Lord Fraser, referred.

The bulk of these issues falls far outside the scope of utilities legislation. However, I am perfectly willing to acknowledge that one element is to establish appropriate economic regulation of the gas and electricity utilities. That is why the Bill makes it absolutely clear that the principal objective to protect the interests of consumers applies to both existing and future consumers. That is why there is a duty to secure that all reasonable demands for electricity and, so far as it is economical to do so, for gas are met. In the context of utilities legislation, that is security of supply. Therefore, the hierarchy of duties in the Bill already contains all the duties, relevant to the purpose of this legislation, which are necessary for security of supply.

As I said in Committee, it follows that amendments such as this are a distraction and would serve to confuse rather than enhance the framework of obligations and duties under the legislation. The noble and learned Lord, Lord Fraser, said that in Committee I answered that market forces would provide the solution. No, my Lords; I know the place of market forces and they are certainly important in many aspects of the Bill. However, I did not say that market forces could be relied on to preserve security of supply. Market forces play their part--an enormously important part--as a complement to the regulation of the utilities industries, but certainly the wider responsibilities of the Government are a recognition of the benefits and of the limits of market forces.

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I do not believe that the amendments will add to the Bill and I seriously consider that they will confuse the orders which we give to the utility industry and its regulators.

Lord Fraser of Carmyllie: My Lords, first, perhaps I may say to the noble Lord, Lord Dormand, that I hoped that he would understand that he should support what we are promoting. I may have given insufficient emphasis to it, but I made the point that these amendments do not seek to support one energy source over another. Perhaps I did not expressly use the word "coal". However, I certainly recognise the great importance of coal as an energy source within the United Kingdom. We are not saying that the oil and gas aspects of energy are in any way supreme. All sources should come under the duty that we wish to see imposed on GEMA.

I am not entirely persuaded by the noble Lord, Lord McIntosh. It seems to me that the point comes to this, and the noble Lord, Lord Ezra, made it well. If, downstream, one imposes a number of regulations on the industry, it would seem almost inevitable that by so regulating one is affecting decisions taken upstream. We seek to ensure only that when the regulator takes perfectly proper decisions relating to the downstream activity in the oil, gas or electricity world, he should have regard to what their impact might be on vitally important UK investment decisions offshore. That is all that we wanted to achieve. We certainly did not want him to extend his regulatory remit upstream. We wished simply for there to be a clearer understanding on that point.

The noble Lord, Lord McIntosh, said that the Minister of the day will have regard to just those considerations. I suppose that I am reassured to know that. But I still have some difficulty in grasping why he does not wish the regulator downstream to understand more clearly the possible impact of the regulatory decisions that he takes. However, I imagine that we shall be bashing our heads against the government wall for a very long time, and I do not propose to press the amendment now. With the leave of the House, I seek to withdraw Amendment No. 5.

Amendment, by leave, withdrawn.

[Amendment No. 6 not moved.]

Clause 13 [Objectives and duties under 1989 Act]:

[Amendments Nos. 7 to 10 not moved.]

Clause 18 [Acquisition and review of information]:

4 p.m.

Lord Ezra moved Amendment No. 11:

    Page 14, line 7, at end insert--

("(8) Nothing in this section shall inhibit the appointment of lay members to committees.").

The noble Lord said: My Lords, the amendment relates to the consumers council. My Amendment No. 67 in Committee was about the appointment of lay members in the regional organisation of the proposed consumers council. We were advised that

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the council was shortly to respond to the consultation on its organisation. That response has now appeared. On page 11, the report says that:

    "there was considerable support for the role played by lay representatives of customers".

However, it does not say how that will be done. I wonder whether the Minister is in a position to enlighten us. I beg to move.

Lord McIntosh of Haringey: My Lords, the Government fully accept that lay members of committees--that is, individuals who are not employed by or otherwise connected with the council--can have a valuable role in broadening the range of experience and expertise on which the council can draw. They can have a useful role in assisting the council in its work on behalf of consumers. I declare my past interest as the husband of the former chairman of the national Gas Consumers Council in the late 1970s. We have taken care in Clause 18 and the relevant paragraphs of Schedule 2 to give the council all the powers that it needs to be able to set up committees with lay members. That answers the strict wording of the amendment, but I know that the aim of the noble Lord, Lord Ezra, was to get me to say a bit more about our intentions rather than to press the amendment.

The Government's view is that it is primarily for the council to decide how many committees it needs and the role that they should play. I shall explain how the council intends to develop its plans.

The Department of Trade and Industry has already identified the chairman designate of the new council, Ann Robinson. When the full council has been appointed--the target date is November this year--I understand that she envisages that one of its first priorities will be to consider the establishment of committees.

There are a number of important issues to be resolved, with decisions to be taken on how many committees there should be and the precise role that they should play on behalf of the council, so that their input complements rather than overlaps with the work of the full-time staff in the regional offices. Decisions are needed on what sort of people should be appointed to committees and the links between committees and the work of other local organisations. The committees will certainly contain lay persons. That is important, so that the council has access to a wider range of experience and expertise.

I understand that Ann Robinson favours the appointment of individuals with a professional interest in addressing and dealing with consumer-related issues. That might include individuals from trading standards offices, citizens advice bureaux, trade and commerce bodies, and caring and charitable agencies. That would have the benefit of making the exchange of information and links between the council and local organisations more effective.

Those will be matters for the council when it has been appointed, but it is worth stressing that the council's plan for the committees will be subject to

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proper public scrutiny, as Ann Robinson intends to draw up and consult on the council's proposals for committees before the end of this year. The noble Lord, Lord Ezra, and others will have a full opportunity to comment and offer suggestions on the plans. At that stage, assuming that the council is appointed in November, it will have some practical experience of how its regional office teams are operating--I have already answered a Written Question saying that there will be seven regional offices--and will be in a better position to identify the most suitable role for committees and their lay members.

I hope that that reassures the noble Lord and that he will not feel it necessary to press the amendment.

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