---

Lord Kingsland: My Lords, I am most grateful to the Minister. He has no doubt heard what the Conservative Party Conference has been saying about the previous Conservative government.

Lord Sainsbury of Turville: My Lords, presumably this is the new Conservative government. I congratulate also the Electricity Association on this ingenious and elegant amendment. However, this is not the way to remedy any defects which may exist in the current legislation. One should be clear what one wants to do; and legislation should carry out that aim whereas permissive legislation allows a range of issues to be inserted in it.

The systems of regulation which exist in the water, electricity, gas, postal services, telecommunications, railway and air navigation sectors are of great economic importance to the UK. The decisions which the sectoral regulators in these areas take can and do have significant effects on all of us. It is important, therefore, that we achieve the best regulatory procedures we can, and to that end we have given and continue to give considerable attention to the regulatory framework, including appeal mechanisms. While we are grateful to the noble Lord for bringing to the House's attention some of the concerns raised in some sectors about the present appeal arrangements, we would prefer to look at any possible changes to those arrangements in the context of the wider regulatory issues to which they are linked and the sectors in which they operate.

We want a secure, long term, stable and effective regulatory framework. It is important that we achieve the right balance and make changes only where it is clear that there will be real benefits. Further work would be needed before we can contemplate any kind of across-the-board, potentially wide-ranging changes to the appeals mechanisms.

The Government are already keeping the appeals mechanisms under review. The proposed amendment takes us no further in developing the appropriate policies or framework for appeals mechanisms. It might facilitate some changes in the future, and we appreciate that those responsible for drafting the proposed new clauses have been at pains to draft a power which is permissive rather than prescriptive, at least in so far as it does not force the Secretary of State to adopt one possible approach to reform of the appeals processes rather than another. However, no decisions have yet been taken as to whether change is

15 Oct 2002 : Column 832

in fact desirable in this area and, if so, what the correct approach to reform is. It is possible, therefore, that the new clauses might act as a constraint on possible future reforms.

Even if the proposed clauses were to prove appropriate in taking forward any desirable and across-the-board changes these do not seem likely for some little time yet. In the meantime, the new clauses would create an expectation of action on appeals without it being clear what form such action would take, or when it might be taken. This would inevitably create uncertainty for everyone involved: and we are talking here about very large sectors of the economy, some of which are already in the throes of significant regulatory or commercial changes. Rather, we prefer streamlined, clear and efficient regulation that is well targeted.

We are aware of the work which has been done by and on behalf of various utility firms and associations in this area which will no doubt assist us in addressing a number of questions in relation to regulatory appeals mechanisms. However, the work done to date is only a start: a large number of stakeholders would be affected by any change to the regulatory regimes and they would need to be fully involved at every stage of policy development and any eventual change would need to be considered and consulted on fully.

It might seem odd for one government Minister to decline to accept on behalf of another a power to modify substantial parts of nine Acts of Parliament. On the other hand, Ministers are usually criticised for wanting to take too many powers to amend primary legislation, not too few. It may be argued that the amendment does not itself change the appeals mechanism: it merely facilitates change in the future after appropriate consultation. So why do we object to it? My answer is that for all the sophistication of their drafting, the new clauses take us no further in developing the policy or making any substantive changes to the regulatory frameworks. They could act as a constraint on future changes. Further, the clauses are—no doubt, deliberately and for good reasons—unspecific on certain points and are likely to create uncertainty for firms and those involved. Providing for changes to be made before it is clear which changes, if any, are even needed would, in this instance, lead to poor legislation.

I stress that I am not saying that the Government are simply opposed to the appeals mechanisms. We want to ensure that the best and most appropriate mechanisms are established for each regulatory regime in a coherent manner and according to the needs of the individual sector. The new clauses do not help us to do that. Rather than make legislative changes now, we should be clear about whether the proposed changes are needed.

15 Oct 2002 : Column 833

The amendment is not needed to ensure the success of the other provisions in the Bill. For the reasons that I have given, it would be best if the amendment were withdrawn.

Lord Kingsland: My Lords, I am most grateful for the Minister's full response. In particular, I know that the industry will be pleased to have been complimented on the ingenuity of its drafting.

I am surprised that the Minister is not prepared to take up the remarkable opportunity offered by the amendment. It would provide for a flexible approach to the issues. Not only does it allow for differential treatment between the utilities, but it caters for temporal variation in the introduction of any provisions that the Minister might contemplate.

I am also surprised that the Minister is not struck, to a greater degree, by the huge imbalance between the kind of protective powers given to companies subject to the competition regime and those granted to utilities under the regulatory regimes. The powers wielded by regulators under those regimes are draconian compared to the powers exercised by the Competition Commission and the OFT. In Committee and today, noble Lords have heard Her Majesty's Loyal Opposition complain frequently that the protective powers given to firms subject to the scrutiny of the OFT and the competition regime are not as great as they should be. However, compared to the protective powers given to the utility industries suffering under the lash of the regulators, they are most generous.

The Minister must be aware of that contrast. He must recognise that there is an urgent need to change the balance of power between the regulators and the regulated companies. To use the word "distressed" would, perhaps, be to over-emphasise the sentiments that I am experiencing; but I am certainly sad that the Minister has not taken the opportunity that we offered to insert the clauses, so that he can move swiftly, once the Bill is on the statute book, to a long and careful consideration of the balance of power between the regulators and the regulated in the utility sector.

Between now and Third Reading, I shall reflect on what the Minister said tonight. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Sainsbury of Turville moved Amendments Nos. 124 and 125:

Page 122, line 34, after "(c. 44)" insert "or section 6 of the Electricity Act 1989 (c. 29)"

Page 122, line 42, at end insert "or (as the case may be) section 3A(4) of the Act of 1989"

On Question, amendments agreed to.

[Amendments Nos. 126 to 129 not moved.]

Schedule 9 [Certain amendments of sectoral enactments]:

Lord Sainsbury of Turville moved Amendments Nos. 130 to 133:

15 Oct 2002 : Column 834

Page 230, line 26, leave out from "is" to second "or" in line 28 and insert "carried on by an airport operator"

Page 230, line 41, at end insert—

"(b) for "the reference" there shall be substituted "references"; and
(c) for "a reference" there shall be substituted "references"."
Page 236, line 25, leave out from "is" to second "or" in line 27 and insert "carried on by an airport operator"

Page 236, line 40, at end insert—

"(b) for "the reference" there shall be substituted "references"; and
(c) for "a reference" there shall be substituted "references"."

On Question, amendments agreed to.

Clause 166 [Advice and information: Part 4]:

Lord Sainsbury of Turville moved Amendments Nos. 134 and 135:

Page 124, line 43, at end insert—

"(5A) Advice and information published by virtue of subsection (1) or (3) shall include such advice and information about the effect of Community law, and anything done under or in accordance with it, on the provisions of this Part as the OFT or (as the case may be) the Commission considers appropriate."
Page 125, line 7, at end insert—

"(10) In this section "Community law" means—
(a) all the rights, powers, liabilities, obligations and restrictions from time to time created or arising by or under the Community Treaties; and
(b) all the remedies and procedures from time to time provided for by or under the Community Treaties."

On Question, amendments agreed to.

Clause 167 [Further publicity requirements: Part 4]:

---