asked Her Majesty's Government:

My Lords, John Howard has a full programme of meetings in London, including calls on my right honourable friends the Prime Minister, the Foreign Secretary and the Chancellor. My right honourable friend the Prime Minister will speak at a parliamentary ceremony in the Royal Gallery tomorrow, hosted by the Lord Chancellor and Madam Speaker, which celebrates the centenary of the passage through Parliament of the Commonwealth of Australia Constitution Act. The week will also include a Guildhall banquet hosted by the Lord Mayor of London and a service for Australia at Westminster Abbey. I should like to take this opportunity to acknowledge my noble friend's role as founder chairman and now president of the ANZAC Group of Peers and MPs.

My Lords, I am most grateful to my noble friend for her reply. Is this not a timely moment to recall the statesmanship of those—Australian and British parliamentarians alike—who created the 1900 Act, heralding as it did a century of excelling friendship between the two countries: one that aligned us side by side in war; that has given us cherished and enduring cultural, sporting and other ties; and that makes Australia still the second highest investor in Britain and us the second highest investor in Australia? Notwithstanding the privations inflicted on us by Australia's test cricketers and the "Wallabies"—not to mention Wimbledon—long may it continue!

My Lords, I welcome my noble friend's words. Our relationship with Australia goes from strength to strength and we hope that it will continue to do so in the next one hundred years. Our ties with Australia are wide ranging. I hope that the House will forgive me if I brush quickly past our sporting ties, not least after the result at Wimbledon on Monday. As my noble friend has pointed out, we are staunch allies and Australia has been a supporter of NATO's policies in the former Yugoslavia. It is our business to value partners, and we do so most warmly today.

My Lords, I declare a longstanding interest in Australia. Even today I work for a British company which is very active in Australia. I had the honour of fighting alongside Australians in a couple of campaigns and I have the highest regard for them. I am a member of the Returned Services League of Australia. It is a great organisation which could give any British government advice on how to care for veterans. In that context, does the Minister accept the great sacrifices made by Australians in two world wars? Do the two governments have any plans to erect a memorial or to do something to commemorate this in the coming years in our city of London?

My Lords, we are acutely aware of the service given by Australians in the two world wars and in many other wars. During the Gallipoli campaign they suffered thousands of casualties. The Minister for the Armed Forces, John Spellar, travelled to the Gallipoli peninsula in April to commemorate the 85th anniversary of ANZAC day and the sacrifices made by Australian, British and other troops. I was at the commemoration at the Cenotaph in London. I was also with John Howard when he laid a wreath to the war dead at the Cenotaph this morning. I was deeply moved on both occasions.

I am able to say that last night John Howard announced that the Australian Government will build a war memorial in London. The Prime Minister and Her Majesty's Government warmly welcome that initiative. I should also like to pay tribute to the distinguished service of the father of the noble Viscount, Lord Slim, the late first Viscount Slim, who was a valiant commander-in-chief of the allied land forces in South-East Asia, which included Australian troops, and who was described by the late Lord Mountbatten as the finest general the Second World War produced. The noble Viscount, Lord Slim, himself should be mentioned for his successful term and for his contribution in that regard. I do so most warmly.

My Lords, as an Australian whose father stood for the very first ever federal senate elections, perhaps I may ask the Minister whether she is aware that Miss Margaret Parkes—the 75 year-old great granddaughter of Clarinda and Sir Henry Parkes, who was always known as the Father of Federation—has flown here specifically to join in the celebrations this week?

My Lords, I welcome most warmly the news that she is here. We celebrate that fact. It is fitting that a great granddaughter should be present today to help us celebrate this great occasion of the 100th birthday. I welcome her most warmly.

My Lords, I join in the congratulations to the Australian people on this anniversary. Will the noble Baroness convey to Mr Howard, on behalf of the people of this country, our warmest thanks for the role which they played in liberating East Timor and for the outstanding leadership displayed by General Cosgrove when he commanded the forces there?

My Lords, I am very happy to say that that message will be conveyed. It has already been expressed, but it certainly bears repetition.

My Lords, I should like to declare an interest as my father held an Australian passport. Has the Minister any further details regarding the centenary gift proposed for Australia which she declared in her oral Answer to the House on 17th January and her Written Answer on 29th February?

My Lords, Her Majesty's Government are marking the centenary in Australia with a substantial contribution—about half the total cost—to a monument in Canberra. The gift recognises the relationship between the people of Australia and Britain and commemorates our shared belief in the rule of law, freedom of speech and assembly as well as the sovereignty of Parliament embodied by Magna Carta. A design team has been chosen by open competition. The centrepiece is a commemorative pavilion. We very much look forward to its construction.

My Lords, the noble Baroness has outlined a very encouraging programme and a fitting celebration of an Act passed 100 years ago under a Conservative government, whose Prime Minister was Lord Salisbury. Does she agree that, looking to the future, relations between Britain and Australia are getting closer and closer, particularly in hard economic and commercial terms and in terms of investment flows between the two countries? Does she further agree that Australia is now part of the great Oceania, South-East Asia, Asia Pacific market which in few years' time may be richer and bigger than that of the entire European Union? Does she conclude from that that some of our foreign policy energies and the energies of her department—which sometimes seem to get bogged down in quarrels and difficulties nearer home with our nearer and sometimes less friendly neighbours—could be better deployed in building up and strengthening our ties with one of our loyalist, best and longest-standing friends?

My Lords, I can reassure the noble Lord that we have always valued that relationship, that we have tended it carefully, nurtured it and it is now in full flower. I should also like to remind the noble Lord that, although he was right in saying that the Act was passed during the period of office of another government, the inspiration for it came from my noble friend Lord Morris who sits on these Benches; and the then government showed good sense in taking it over and making it their very own.

My Lords, does the Minister agree that it is most appropriate that we should be celebrating the centenary of the Commonwealth of Australia when Australia has only recently voted to keep the Queen as Queen of Australia?

My Lords, there are many reasons to celebrate. I warmly join the noble Lord in saying that we have much to celebrate on this occasion.

asked Her Majesty's Government:

My Lords, British farmers and growers produce a tremendous variety of products. Individual farm businesses are best placed to know their own products and markets, but the Government can and do help by providing a wide range of financial and other assistance to help farmers and growers become more competitive and develop their marketing skills. Anyone who was at the Royal Show this week could not fail to be impressed by the number of marketing initiatives, both government-backed and from individual farmers or groups of farmers, which are now being introduced.

My Lords, I thank the noble Lord for that reply. I agree that a number of initiatives are being introduced. The NFU farm assurance scheme and the National Dairy Council white stuff campaign are much to be welcomed. However, does the noble Lord accept that there is a long way to go in terms of joined-up government in this area? I have in mind the Food Standards Agency report National Diet and Nutrition Survey which shows our children on a diet of fizzy drinks, sweets and biscuits. Very low in their diet is milk, cheese and fruit. Could not all government departments, starting with the Department for Education and the Department of Health, do far more to forge a link between local producers and local consumers so that healthy habits in terms of eating and an appreciation of the true quality of food produced in Britain are encouraged throughout our society?

My Lords, the noble Baroness is entirely right. The nutritional value of the food we eat is extremely important and should be a part of our education system. The noble Baroness referred to the local situation. Farmers' markets are an interesting initiative. There was one in Bath in 1997. There are now 200, compared with 2,500 in the USA. In addition, the ministry and the Countryside Agency have assisted in the setting up of the National Association of Farmers' Markets. Those are local initiatives which relate the production of local produce to the consumer. It is to be hoped that the Department of Health and other departments will have their part to play in educating children and adults about the value of healthy eating.

My Lords, I welcome the Government's encouragement of local farmers' markets. But is the noble Lord aware that the markets of hill farmers in the Pennines in northern England have a minimal impact in terms of the total economy? Is he further aware of the desperate plight of the farmers of the Yorkshire, Durham and Northumberland dales? Have the Government any plans other than farmers' markets which might offer a way out of the desperate plight in which many hill farmers find themselves at the moment?

My Lords, we are entirely aware of the problem. It is as much a problem of the commodity market as it is of the system. We have done a good deal since the action plan was introduced under the initiative of my right honourable friend the Prime Minister. We have removed the weight limit on the over-30 months scheme for cattle; we have scrapped the dairy hygiene inspection charges, which will help the small dairy farmer; we have put an additional £4 million into the redundant building grant scheme, which will help the small upland farmer; and we have introduced a number of other initiatives. But at the end of the day there is no avoiding the fact that farming is facing a major change. We have put in a good deal of money through the various schemes introduced by my right honourable friend Jack Cunningham, when he was Minister, and Nick Brown. They have introduced money into the uplands. It is not enough—I agree with that—but we have made a start. We are aware of the problem.

My Lords, what progress has been made on reducing misleading labelling on food, an issue which is of great concern to many families?

My Lords, like every other member of the European Union, we are constrained by the European regulations and by the rules of the WTO. Labelling must not be misleading. But there is nothing to prevent the voluntary labelling of the country of origin so long as the information does not mislead the consumer. The Food Standards Agency is reviewing the whole situation with regard to labelling. It has taken that forward at EU level. That is the response to the better food labelling initiative launched in January by my noble friend Lady Hayman. It is worth pointing out to those who believe that this all comes from Europe that the Trade Descriptions Act 1968 states that the place of origin is the place in which a product last underwent a substantial change. So the problems of labelling are not all down to Europe.

My Lords, I am sure that we all welcome the noble Lord's comments about the growth in farmers' markets. But can he confirm or deny that there is great concern among those taking part in the farmers' markets that EC regulations are likely to stop that development in terms of demanding that there should be refrigeration equipment in the streets when farmers are trying to sell local produce?

My Lords, the ministry is at present discussing the problem with Europe. Our understanding is that we should be able to produce a system which will allow the farmers' markets to produce. One can see farmers' markets all over Europe. We want a system that allows these local initiatives to flourish.

My Lords, perhaps I may return to the theme of the noble Baroness, Lady Miller of Chilthorne Domer—healthy eating. I try to purchase organic food whenever possible. Can my noble friend say what is the uptake of the organic farming scheme?

My Lords, I have extremely good news. In 1998–99, £1 million was allocated in grants. That was following on from the previous government's scheme. In 1999–2000, £11 million was allocated; £12 million has been allocated for 2000ߝ2001; and £140 million is allocated in the rural development plan for 2001–2007. In April 1999, there were 60,000 hectares in the organic farming scheme. There are now 160,000 hectares. That is a threefold growth in one season. We have reacted to the demand for organic farming; and it is working.

My Lords, the noble Lord will have noted the word "growers" in the Question. Does that include horticulture? Is the noble Lord aware that horticulture receives no grants? What do the Government intend to do to help that hard-pressed side of agriculture?

My Lords, I always think that the horticultural industry is an excellent example of the free market working without subsidy, which I am sure noble Lords on the Benches opposite would support. There is the assured produce scheme. It is producing standards which will improve the saleability and the marketing of horticultural produce. That is the best way to go. The Government will not be introducing a subsidy. The horticultural industry has to relate to the market.

asked Her Majesty's Government:

My Lords, the target date for the opening of a fully navigable channel at Novi Sad is spring 2001. Some vessels already navigate along canals and Danube tributaries which bypass Novi Sad.

My Lords, I very much welcome the noble Baroness's reply if only because of the very serious losses that the obstructions have caused to the economies of countries such as Romania and Bulgaria. Did I hear the noble Baroness correctly in saying that some transhipment of goods is at the moment possible?

My Lords, the noble Lord is quite right: a certain amount of transhipment is possible. Obviously larger vessels encounter the greatest difficulties, but smaller vessels are able to get through. The situation is improving. We hope that the clearing of the Danube, a task which is now being pursued with some energy, will greatly help matters in the area.

My Lords, I, too, am grateful to my noble friend for that reassuring information. Additional to the issue of the navigability of the Danube is the continuing plight of the 350,000 citizens of Novi Sad, who are forced to use a single very inadequate pontoon bridge in order to get about the city. That bridge is all that now stands in place of the three major bridges that were destroyed. Will my noble friend bear in mind the ironic fact that the region of Vojvodina, in which the city of Novi Sad lies, is governed by political parties which have long been bitterly opposed to Milosevic, as indeed are the people of Novi Sad? Those people have been asking for how much longer they will have to pay such a high price for the policies of a man whom they intensely dislike.

My Lords, I understand the sentiments expressed by my noble friend. We hope that the people of Serbia will come to the right decision as regards what is in their best interests. We also hope that the clearance of the Danube will do much to make matters a little easier for the people of Novi Sad.

My Lords, can the Minister tell the House, first, why the canals situated mainly inside the Federal Republic of Yugoslavia are subject to such very high tolls and charges, thus making it much more difficult to bypass Novi Sad? Secondly, as regards a broader issue, can she indicate how rapidly the development of the Balkan economic stability pact is progressing, of which, obviously, the Danube river system is an absolutely crucial element?

My Lords, I cannot give the noble Baroness a specific answer in relation to her first question. I hope that she will allow me to write to her on that matter. As regards the Balkan economic stability pact, that pact is now yielding a great deal of beneficial help and assistance. As a result, considerable support has already been made available both bilaterally and multilaterally for the countries of the region. This has been intensified since the end of the NATO air campaign. The UK is an active supporter of the Stability Pact for South-East Europe, which has the potential to bring many benefits to the region and to act as a clearing house both for existing sources of assistance and for new ideas and initiatives. The UK continues to provide considerable support through the bilateral assistance programme. The Department for International Development's country programmes for Rumania and Bulgaria have been enlarged since the end of the conflict. Some £6 million has been made available for Rumania, along with £4 million for Bulgaria. We continue to provide bilateral assistance to Hungary of the order of £2·5 million per annum. We are a major contributor to the EU programme for all the accession countries. Matters are progressing as swiftly as we could reasonably anticipate at this point.

My Lords, can my noble friend explain to the House why it is taking so long to clear a few bridges out of a river? Speaking as a civil engineer, I can confirm that the European civil engineering industry would be quite capable of undertaking this task far more quickly than the timetable that has been indicated—and could probably also build a new bridge. Is this a political problem or is this a matter of lack of resources?

My Lords, I can confirm that neither of the two suggestions made by my noble friend have been the source of the problem in the area. I wish that the noble Lord was right; namely, that the clearing of the Danube would be as easy as he suggests. However, it has been a difficult process, although we have made great strides forward. Her Majesty's Government have been at the forefront of those pressing for progress and ensuring that the job is done. Furthermore, the European Union has committed 22 million euros to the initiative. We hope that the work will be completed as speedily as possible. We understand the urgency and thus we are trying to push forward the agenda as quickly as possible.

Her Majesty's Government:

My Lords, on-the-spot fines are not currently available as a penalty for a criminal offence in England and Wales. The Government take very seriously the problems posed by drunken hooligans and are considering whether it will be necessary to introduce new methods to deal with this type of behaviour. Any new measures would of course need to comply with the European Convention on Human Rights.

My Lords, I am grateful to the Minister for that response, which takes us forward a little. Can he tell the House whether his right honourable friend the Prime Minister had taken the trouble to obtain advice from lawyers—although I appreciate that we cannot ask what that advice might have been—before he made his rather startling announcement last weekend? More importantly, did the Prime Minister take advice from the police service, who would have the responsibility for administering such a scheme?

My Lords, I think that it is now well known that on Monday afternoon my right honourable friend the Prime Minister spent some two hours in the company of seven chief constables taking their careful advice. What this matter has demonstrated is that the Prime Minister, along with the Government as a whole, is committed to finding ways to deal with the outlandish behaviour of louts and yobs—the kind of behaviour we all find so objectionable—outside public houses and other public places on Friday and Saturday nights. Any government should take those issues seriously. We are determined to tackle that kind of horrible behaviour because it does nothing for our town and city centres and harms our communities.

My Lords, does my noble friend agree that we must not lose sight of the human rights of ordinary people who wish to go about their business on Saturday nights and not be impeded by people who are drunk or who are football hooligans? Does he further agree that most people would prefer to have in place a government who put forward plenty of new ideas in an effort to tackle these problems, rather than simply settle for a government who during 18 years of power did nothing?

My Lords, the simple and short answer to my noble friend is, yes, of course I agree. We know that we must put this situation right by tackling loutish and yobbish behaviour. That is why yesterday the Government proposed new measures to tackle football hooliganism. I believe that those measures have received wide public support. Furthermore, I hope that all parties in your Lordships' House will also support such moves.

My Lords, has the Minister read the opinion of retired Chief Superintendent Tom Swendell of the Hertfordshire police force? He states that:

"Policing is an activity for the streets. There are far too many feet under desks. When the administrative culture becomes bigger than the operational commitment, that's a road to disaster".

Is not that the kind of advice that the Home Secretary should be taking, instead of listening to advice that results in what we are seeing at the moment; namely, a gimmick a day from a Home Secretary who for three years aped Michael Howard and now quite clearly has lost the plot?

My Lords. I cannot agree that my right honourable friend the Home Secretary has lost the plot. The fact that the Home Secretary and the Prime Minister are determined to deal with the kind of behaviour that has been discussed many times recently in your Lordships' House speaks volumes about the Government's serious commitment to dealing with public disorder. We all need to care about these issues and I should be extremely disappointed if the noble Lord, Lord McNally, did not care as well.

My Lords, it appears that the plot being followed here is that the number of serving policemen should fall while the number of crimes committed should rise. That is what is happening at the moment. So far as concerns on-the-spot fines, did the Minister note that the Home Secretary has promised to introduce legislation as soon as possible; namely, to bring forward measures to the House of Commons on Monday? Can the Minister tell the House whether it will be for the individual policeman to decide on the level of the fine to be imposed on the spot, as would be done in a court in accordance with the seriousness of the offence?

My Lords, I find it rather hard to take the noble Lord entirely seriously. He was a member of a government who presided over a rate of recorded violent crime increasing by 168 per cent. Furthermore, he was a member of a government who saw crimes of robbery increase by 405 per cent. As I said, I find it extremely difficult to take the noble Lord seriously when discussing these matters. We shall pursue all feasible means to bring down the amount of loutish behaviour occurring in our town and city centres. Furthermore, I expect noble Lords opposite to give the Government their support.

My Lords, is my noble friend aware that I am slightly mystified this afternoon? I hope that he will be able to help me. I read in this morning's press that the Conservative Opposition supported in principle the introduction of these measures. Is that the case? If it is, can my noble friend explain the behaviour of noble Lords opposite this afternoon?

My Lords, I believe that we are all puzzled from time to time by the words and actions of noble Lords opposite. I was extremely puzzled when I read an account which stated that, on the one hand, Ann Widdecombe would support our measures to deal with football hooliganism but, on the other hand, comments were made by other members of the same political party to the effect that they were not sure whether they supported these moves and were concerned about issues of civil liberties. As a government we need to lead the charge in this area. We should protect the civil rights and civil liberties of those who wish to go about their business peaceably.

My Lords, will the noble Lord accept that we are in great danger of losing the plot? There is no shortage of legislation against offences of the kind that he outlined, but it is not being implemented. We do not need new laws; we need existing laws to be implemented by whatever measures are necessary to allow that.

My Lords, I take the noble Lord's remarks as a serious contribution to the debate. However, we must consider the fact that every Friday and Saturday night those who are drunk and disorderly in our town and city centres take up valuable police time in terms of processing after arrests have taken place. There is merit in examining in more detail a fixed penalty system. The idea was given some measure of support by leading and senior police officers earlier this week.

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord McIntosh of Haringey.)

moved the amendment:

After Clause 6, insert the following new clause—

(".(1) The Secretary of State shall review and prepare a report On Review of Act. the operation of this Act.

(2) In reviewing the operation of this Act the Secretary of State shall consult persons appearing to him to represent the users of royal parks and such other persons as he considers appropriate.

(3) The report shall contain details of-

(a) the number of-

(i) prosecutions, and

(ii) convictions, for park trading offences;

(b) the effect of this Act on trading within royal parks; and

(c) the cost of enforcing the law relating to park trading offences.

(4) The Secretary of State shall lay the report before each House of Parliament no later than eighteen months after the day on which this Act is passed.")

What has this to do with the Bill, which is about controlling itinerant traders in St James's Park and other parks?

I hope to satisfy my noble friend with my dénouement—that is one of the shreds of my French vocabulary!

I believe that we are again being bounced into further constitutional change. But this time, I believe that the monarchy will be one of the targets for attack. Therefore, to come to my noble friend's point, it is important that it is not possible to use as future ammunition the idea that, while everyone else has to put up with illegal traders and nothing is done about it, in the case of the Royal Parks a special Bill was rushed through Parliament with a guillotine Motion in another place. The production of a report on the workings of the legislation will be helpful to other parts of the country where a similar problem arises. That is the thinking behind my amendment. Instead of being attacked as élitist, the passage of this legislation could be seen as a public service. I beg to move.

Briefly, I accept—

Before the Front Bench?

I was not intending to pre-empt the noble Lord. As this is Committee, I merely intended to give a response. However, I always give way to the noble Lord, Lord Strabolgi.

I am sorry to have to disagree with my noble friend. I served under him in the 1974–79 government and he was a very fine Chief Whip. I was puzzled about the amendment and his reason for tabling it. I am afraid that most of his speech has not illuminated me.

St James's Park, the main park where there is a problem, was laid out by John Nash in the early years of the 19th century on behalf of George IV. But that was almost the last connection with the monarchy and the Royal Family, which seems to be exercising my noble friend.

At present, the Royal Parks are administered by the Royal Parks Agency, which comes under the Department of the Environment. The Bill is necessary in order to control the itinerant traders who have proliferated in St James's Park in recent times. Almost 20 can now be counted. They are unlicensed. They sell hot food, mostly sausages cooked in cheap and bad fat, which makes a dreadful smell and pollutes the most beautiful of all the parks. Indeed, St James's is probably one of the most beautiful parks in the world. Not only are the smells unpleasant; the food itself is dangerous and unhealthy. It is sometimes bought by unsuspecting tourists who, I am afraid, may suffer from it.

The Bill closes a loophole in the legislation. At present, Westminster City Council has the right to control such traders in the streets around the park, but it has no control over the park itself. The council can impose a fine, but it is derisory. Most of the traders are controlled by one small company. They are often refugees and others who have entered the country illegally.

My noble friend's amendment is unnecessary. All Acts are reviewed from time to time. Subsection (3)(a) of the proposed new clause states that,

"the report shall contain details of … the number of prosecutions and convictions".

If there are any convictions, it will surely mean that the legislation was necessary. If there are none, I hope that the noble Lord will not come forward and say that it should be rescinded. It is probable that the Government could themselves issue a report after a certain period to see how the legislation was working. I hope that my noble friend will withdraw his amendment.

I appreciate the good intentions which lie behind the amendment moved by the noble Lord, Lord Cocks. Although he did not speak at Second Reading, I am aware that he was present throughout and listened to the debate. Therefore, he will be aware that I and the noble Lord, Lord Strabolgi, are keen to close a loophole whereby currently it is impossible for people who push trolleys around the Royal Parks, as opposed to the owners, to be prosecuted as a result of the case of Kol Curri last May.

I made it clear during Second Reading that I wished the Bill a fair wind. I hope that the Government are able to provide a response to the request of the noble Lord without the need for anything to be put on the face of the Bill. We on this Front Bench cannot support an amendment that requires the Bill to return to the Commons, thus lengthening the time taken before the Bill becomes law. As an individual, I have given my word to the Friends of the Royal Parks Forum that I shall do all in my power, within the rules of the House, to give the Bill a fair wind. I seek to keep my word in all cases. Like the noble Lord, Lord Strabolgi, I hope that the noble Lord, Lord Cocks, will be minded to withdraw his amendment.

I am sure that my noble friend Lord Cocks will understand if I respond to the amendment rather than to those parts of his speech which did not refer to it. I assure my noble friend that these are not unprecedented powers. The powers proposed under the Bill are already available to the City of Westminster under the City of Westminster Act 1999. One of the reasons that matters have become worse in the Royal Parks is that illegal traders have moved there from Westminster, where the controls are stricter.

The Government want to review the operation of the legislation after it has been in operation for, say, 18 months to assess both its effectiveness in the Royal Parks and any impact outside them. I am happy to give my noble friend an assurance now that such a report will be prepared and that its conclusions will be announced to both Houses. My noble friend may wish to table a Question in the House when the time comes. In the meantime, I hope that my noble friend will see fit to withdraw his amendment.

In response to my noble friend Lord Strabolgi, I did not like his reference to serving under me. I always thought that he served with me as part of a great team. I thank the noble Baroness for her observations and completely understand her position. I also thank the Minister for giving me the assurance that I seek. The position is most satisfactory, and I am sure that it will assist people in other parts of the country who face the same problem. I beg leave to withdraw the amendment.

moved Amendment No. 1:

Page 5, line 37, at end insert (", or of preparations for").

moved Amendment No. 2:

Page 6, line 2, at end insert—

("() Any consultation undertaken by the Director General of Gas Supply, the Director General of Electricity Supply or the Secretary of State before the commencement of subsection (6) shall be as effective for the purposes of that subsection as if undertaken by the Authority after that time.").

moved Amendment No. 3:

Page 6, line 20, after ("of") insert ("existing and future").

My Lords, with great respect to the noble Lord, I do not believe that Amendment No. 3 is necessary. When one uses the word "consumers" as it appears here it means any consumers at any time. I do not believe that "existing and future" is at all necessary.

My Lords, I regret to say that I disagree with both noble Lords. The Bill already makes reference to existing and future consumers at lines 25 and 26 on page 7 and lines 36 and 37 on page 10. That is deliberate and explicit, because we support the point made by the noble Lord, Lord Ezra. The Government want sustainable development to be a serious consideration in the protection of consumers, which means that it is right to say explicitly that we are concerned about present as well as future generations.

Our difficulty lies with the effect of the amendment. I understand the desire to emphasise that the authority and the Secretary of State have a duty to existing as well as future consumers. It is an important principle and one which we have been careful to make clear on the face of the Bill.

The reference to future consumers removes any doubt that steps can be taken to promote energy efficiency, providing a long-term benefit to consumers in terms of lower monthly bills that offsets any marginal increase in unit price. It enables the promotion of renewables technology that will help ensure continuity of supply in years to come as fossil fuel reserves dwindle. And it helps explain why it is in the interests of consumers that energy companies are able to attract the capital they need to maintain the infrastructure for which they are responsible. But this principle is already clearly stated in Clauses 9 and 13 in the subsections which Amendments Nos. 6 and 10 would remove. Those amendments would add nothing of substance. They simply move the reference to "existing and future" to the place in which the term "consumers" first appears.

What these amendments would do, however, is to cast doubt over whether the broad definition of consumer applies to all the other references to "consumers" in Clauses 9 and 13. Not counting the subsections containing the definition, the term "consumer" appears no fewer than four times in each of the two clauses. What meaning is to be given to that term on the six occasions on which, by these amendments, the words "existing and future" are not to be inserted?

The amendments would leave this in doubt. The definition of "consumers" which they remove is clear: that the broad construction should apply to each and every use of that term in Clauses 9 and 13. The definition thereby provides a consistency within those clauses that would be lost if the proposed amendments were made. There is also the question of preserving consistency with the similar definition of "consumers" in Clause 17 which applies to the clauses setting out the functions of the new consumer council. One does not give prominence to something by putting it earlier in a clause. One gives effect to it by having a definition section which by parliamentary convention comes towards the end of a clause.

My Lords, if the Minister had not answered the noble Lord, Lord Renton, I would have done so now by saying that if the word "consumers" had the meaning the noble Lord gave it, the Government would not have introduced the definition in the later part of the Bill.

I regret that the proposed change has not been accepted. However, I am glad that again we have had firm assurance from Government that they subscribe fully to the principle of sustainability. They consider that they have done that by the wording in the Bill. I do not, therefore, insist on my amendment. I beg leave to withdraw it.

moved Amendment No. 4:

Page 6, line 35, at end insert ("; and

(c) the need to promote energy efficiency").

My Lords, I am sure that all noble Lords will agree with the noble Lord, Lord Ezra, about the importance of creating energy efficiency. In his lifetime and through his many activities the noble Lord has sought to do just that.

However, we are dealing with the principal objective of the new authority. I believe that one should keep the principal objectives basic and simple. It is not helpful to add to the basic objective set out in the clause as drafted. Clauses 70 and 99 provide adequately for requirements for energy efficiency targets under statutory regulation. I should have thought that that provision would meet the noble Lord's wishes.

My Lords, we had a useful debate on the positioning of the authority's duty to promote energy efficiency. My noble friend Lord Borrie recalls it well. I am sorry that I was not able to persuade the noble Lord, Lord Ezra, at that time of the appropriateness of leaving that duty subject to the principal objective to protect the interests of consumers.

As I said then, regulation is intended to mimic the effects of competition by putting downward pressure on costs and by creating incentives to improve, efficiency and the quality of service to consumers. It is, right, therefore, that the authority's general duties should have an economic focus—that is what this Bill is about—one which is primarily concerned with the price and quality of service offered to consumers. That is why the authority's principal objective is to protect the interests of consumers.

But we recognise the importance of encouraging energy efficiency. That is why, subject to the duty to further the principal objective, the authority is given a duty to promote efficiency in the use of gas and electricity. Let me dwell for a moment on what that duty entails. The authority has no choice as to whether it should comply. It must exercise its statutory functions in the manner it considers best calculated to promote the efficient use of energy. To that extent it is the same as the duty to further the principal objective. The only difference is that in the event of a conflict between energy efficiency and the interests of consumers, the interests of consumers present and future, as we have agreed, should prevail.

But how often will the interests of consumers conflict with any sensible measure to promote energy efficiency? The interests of consumers include the interests of future consumers. Measures to promote energy efficiency are in the longer-term interests of consumers as they result in decreased energy consumption and, consequently, lower monthly bills. For that reason, it seems unlikely that a measure to promote energy efficiency could ever be resisted on the ground that it conflicted with the duty to further the principal objective. If a measure were so costly or ineffective as to be contrary to both the long and short-term interests of consumers, it seems right that the interests of consumers should prevail. No matter which way one looks at it, the duty to promote energy efficiency is best left where it is.

There are also difficulties with the amendment proposed by the noble Lord. They would require the authority to further its principal objective,

"having regard to the need to promote energy efficiency".

My difficulty with the amendments is that I am uncertain where the "need" to promote energy efficiency comes from. It can be contrasted with the straightforward duty to promote the efficient use of gas and electricity, as required by Clauses 9 and 13.

It is true that there is a requirement to have regard to the need to secure that all reasonable demands for gas and electricity are met and that licence holders are able to finance the activities which are the subject of statutory obligations. But these obligations are very different from the promotion of energy efficiency. They stem from the regulators' primary duties under existing legislation—the "demand duty" and "finance duty". They form key aspects of the interests of consumers which must be satisfied if those interests are to be protected. The use of the word "need" in the formulation of these obligations reflects a statutory recognition of the unique status of these aspects of the interests of consumers. It is not an appropriate formulation for an obligation to promote energy efficiency which, important though it is, cannot be said to have the same fundamental status in defining the interests of consumers.

I do not wish to say more about any deficiencies in the wording of the amendment. I prefer to rest my argument against the amendment on the points I made at the beginning. I ask the noble Lord, Lord Ezra, to draw comfort from the strength of the wording of the duty to promote efficiency in the use of gas and electricity and not to press the amendments.

My Lords, I thank the Minister and the noble Lord, Lord Borrie, for their comments. The essential difference between the noble Lord and myself is that I regard energy efficiency as an intrinsic and essential part of the interests of the consumers. I do not see that it should be "subject to" the interest of consumers; it is a part of it.

In the latter stages of debates in Committee we dealt with the problem of fuel poverty. In this country, 4 million to 5 million people live in houses so poorly equipped and so inefficient in energy usage that they suffer seriously. We have proportionately a higher mortality rate in winter than any other country in western Europe. I should have thought that the issue is an essential part of the interests of consumers. I do not understand why it is made "subject to" those interests.

However, I take comfort from the other provisions of the Bill, as the Minister asked. I accept that the Government consider energy efficiency important but regret that they are not prepared to give the intrinsic status I should have preferred. In the light of the assurances we have received, I beg leave to withdraw the amendment.

moved Amendment No. 5:

Page 7, line 21, at end insert—

("(c) to safeguard the interests of consumers by securing a diverse and viable long-term energy supply:").

My Lords, will the noble and learned Lord deal with a point that puzzles me? He made a persuasive speech about diversity, but I should have thought that an essential component would be coal. However, the noble and learned Lord did not mention coal once. He mentioned oil and gas, but not coal. I draw his attention to the fact that his government virtually closed down the coal industry, leaving only 15 pits in the country. There is no doubt that some people prefer coal as a fuel, but is the noble and learned Lord saying that coal is not necessary or that it is of such minor significance that it need not be dealt with?

My Lords, we return to the interests of consumers. I fail to see why in the Bill, whose main objective is to serve the interests of consumers, we should not try to give a good definition of those interests. They must comprehend a diverse and viable long-term energy supply. To have to be dependent in due course on only one source of energy would be dangerous and no one would welcome it.

In Committee, we were told that market forces will provide the solution. I do not agree entirely. The Bill is itself a demonstration of the extent to which the Government feel that they must intervene for other reasons against market forces. They are intervening seriously to ensure the development of renewables. That intervention is necessary because it would not happen under market forces. They are also committed to supporting combined heat and power to a greater extent than would be the case under market forces.

Perhaps I may turn to coal. We hope that, in an amendment which I shall move later and which I hope will receive widespread support, clean-coal technology will fit into the diversity of supply. Therefore, I should be very disappointed if, yet again, the noble Lord were to tell us that this is clearly part of government policy and that there is no need to state it. I believe that this is such an essential element in the interests of consumers that it should be stated. Therefore, I very much hope that, on reflection, the noble Lord will be prepared to accept the amendment.

My Lords, on this occasion I am pleased to be in agreement with the noble Lord, Lord Ezra, and I gladly support the amendment moved by my noble and learned friend to which the noble Lord, Lord Ezra, added his name.

I was not intending to add to what my noble and learned friend Lord Fraser of Carmyllie has already said. However, in spite of his knowledge and experience of fuel matters, I feel that the noble Lord. Lord Dormand of Easington, did not have his finger on the point when he referred to Clause 1. It seems to me that Clause 1 is so unspecific that it does not deal with the very necessary argument put forward in Amendments Nos. 5 and 9. As noble Lords may realise, I am all against unnecessary detail being added to any Bill. However, I believe that in Amendments Nos. 5 and 9 some foresight is being shown which should be expressed in the Bill. Therefore, I gladly support those amendments.

My Lords, we had a useful and full debate on the issue of security of supply 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.

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.

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.

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.").

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 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.

My Lords, I am greatly impressed by the Minister's modesty about his wife, who was a very distinguished chairman. I do not think that anyone has yet paid tribute to the outgoing gas and electricity consumer councils, which have been blessed with very special leadership. I am very grateful to both of them.

I am suspicious of professional consumers. Ordinary consumers know best and I am concerned that they should have access. Their views as consumers, rather than as professionals, should be taken into account. Their access should be given due consideration.

My Lords, I am grateful for that intervention. The chairmen of the existing consumer councils are still in post. I am sure that it will be appropriate to pay tribute to their services when their term of office comes to an end.

I take the noble Baroness's point about the direct representation of consumers rather than professional representatives. I am sure that Ann Robinson will pay attention to that. Perhaps the noble Baroness would like to take part in the consultation. She is well qualified to express her views.

My Lords, I should like to raise one issue that arises from the Minister's answer. I am grateful to him for including me in the circulation of the Parliamentary Answer that he mentioned, which said where the offices will be set up around the country. As I understand it, one of the offices is to be in Cardiff. The natural assumption is that it will cover only Wales. Concern has been expressed that it might serve a wider area. Is that the case?

The intention is that the Bournemouth office will cover the South West.

My Lords, as the Minister said, the purpose of the amendment was to elicit information. I am most obliged to him for the information that he has provided, particularly on adequate lay membership of the councils. In those circumstances, I beg leave to withdraw the amendment.

moved Amendment No. 12:

Page 16, line 1, leave out from first (""complaints"") to ("to") in line 4 and insert ("means complaints made directly").

My Lords, I find the amendment unhelpful. It would deprive consumers of statistical information about a small number—or perhaps even a large number—of consumer complaints. The consumer council which will come into existence will no doubt receive many complaints and will have its own ways of devising what is a complaint and what are the differences between a complaint on the one hand and a request for information on the other. But electricity and gas suppliers and distributors will also have their own ways of doing that. If they need guidance, no doubt the new consumer council can give them guidance in order to achieve across the country some measure of accord on how to distinguish consumer complaints from requests for information.

However, if you cut out of the statistics complaints that have gone to the electricity distributor or supplier and not to the consumer council, then we in this House, the general public and consumers generally will have a deficient and defective piece of information as regards how many complaints, and the details and types of complaints and so on, are being made.

I recognise the difficulty which the noble Baroness, Lady Buscombe, has mentioned but it seems to me a difficulty of distinguishing between complaints and information which can be resolved by agreement between the companies and with guidance from the consumer council.

My Lords, up to a point, one must acknowledge that the public, as the noble Lord said, should have the right to make complaints. But surely it is necessary for us to consider to whom the complaint should be made, bearing in mind that the responsibility for registering those complaints will lie upon the council.

As the Bill stands, complaints can be made to various other bodies, including,

"electricity suppliers and electricity distributors (or anyone carrying on activities on their behalf".

How on earth is the council to be able to make a correct, comprehensive and formal report unless complaints are made to it?

It may be that the answer is for the Bill to be amended on Third Reading to ensure that if complaints are not made directly to the council but must be registered by the council, the people to whom the complaints are made should have a duty to report them to the council. Therefore, I believe that my noble friend has done a valuable service in drawing attention to this problem. It may well be that between now and Third Reading, the Government should reconsider the whole question.

My Lords, Clause 20 places the new consumer council under a duty to publish statistical information about complaints made by consumers against certain consumer-facing utility companies. I say immediately that the Bill provides what the noble Lord, Lord Renton, seeks; namely, that in order to collect those statistics and to publish that statistical information, the council has a right to demand information from the consumer-facing utility companies. So no amendment will be necessary on Third Reading.

As with the other provisions of Clause 20, the intention is to give the council the role of providing information that consumers need to make informed decisions about their gas and electricity suppliers. It is also intended to provide a spur to companies to maintain and improve levels of performance.

For the purposes of the duty to publish complaints statistics, the term "complaints" is defined to include complaints made to the companies concerned. The amendment would specifically remove that part of "complaints". I accept that to demand that information from the companies would put pressure on them to improve their performance. That is why we have included such complaints within the scope of this duty. But just because a restricted disclosure of complaints statistics would go part way towards helping consumers to form judgments is no reason to deprive consumers of the full picture. I believe that excluding complaints made direct to companies would seriously reduce the effectiveness of the provisions of Clause 20.

I am sure that the noble Baroness, Lady Oppenheim-Barnes, will agree that the whole pattern of consumer protection means that the complaints are made first to the company of which the complaint is made, whether it is a gas, electricity or bus company. You try to get the company to put it right first before you go to the consumer council.

As to how those complaints are registered, which appears to be the concern of the noble Baroness, Lady Buscombe, there are innumerable examples in both the private and public sectors of distinguishing between complaints which should be registered and which should go on to be recorded as evidence of poor performance and those which are simply routine. When a phone call comes in, you do not immediately say, "Is it an inquiry or a complaint?" You register who is making the call, the time of the call, whether a call has been made before and what the call is about. In other words, it is analysed. As a market research consultant, I have taken part in providing an analysis form which enables people who want to register customer complaints, whether in the private or public sector, to do so effectively.

It is not easy to do that, but it is certainly not impossible. To cut it out altogether would really be to take away a very important role of the consumer council, which is to provide a complete analysis of the interface between electricity and gas companies and their customers. I hope that the noble Baroness, Lady Buscombe, will not press the amendment.

My Lords, before the noble Lord sits down, perhaps he will elaborate on what he said. I accept that complaints made to the various companies which he has mentioned should be borne in mind. But is it really fair on the council to have to register complaints if the companies are under no obligation to report them to the council?

My Lords, companies are under an obligation to report them and they are under an obligation to report them in the form which the council requires.

My Lords, I am extremely disappointed by the Minister's response to the amendment. The industry feels strongly that restricting publication and analysis of complaints to those received by the authority and the council would provide the only robust and equitable means of comparison between companies in terms of their customer service performance.

Indeed, I quote from a letter addressed to the Utilities Bill team at the Department of Trade and Industry from representatives of the Electricity Association following the Committee stage. It states:

"Even against the assumption that the new Council will publish guidelines as to how a complaint is to be defined and recorded, there is still ample scope for interpretation between an enquiry or request for action/information and what might be regarded as a complaint. This is particularly so if telephone complaints are to be included, as they probably will be, given the growing numbers of customers who are using the telephone".

I am surprised also by the response of the noble Lord, Lord Borrie. The letter goes on to state:

"If companies are receiving significant numbers of initial complaints, but resolving issues quickly so that complaints are not being referred to OFGEM or the Council, surely that is to their credit! If they are generally offering a low standard of service, as the Minister suggests, that will very quickly be demonstrated through a whole raft of indices including Guaranteed and Overall Standards of Service, performance monitoring of Codes of Practice and Quality of Supply data. Even in the complaints arena alone, no poorly performing company will be able to 'firefight' to the extent necessary to ensure that all first time complaints are satisfactorily resolved quickly enough to avoid references to the Council. Customers can of course vote with their feet, as increasing numbers are now doing, and leave the offending supplier. Competition is a powerful deterrent to poor service".

I am not happy and I should like to test the opinion of the House.

moved Amendment No. 13:

Page 16, line 39, leave out ("of gas").

moved Amendments Nos. 14 to 18:

• Page 16, line 44, leave out ("authorised person") and insert ("person authorised by a licence or exemption").
• Page 18, leave out lines 12 to 14.
• Page 18, line 23, leave out ("of electricity").
• Page 18, line 28, leave out ("authorised person") and insert ("person authorised by a licence or exemption").
• Page 19, leave out lines 43 to 45.

moved Amendment No. 19:

Page 21, leave out lines 29 and 30.

moved Amendment No. 20:

Page 23, line 13, at end insert—

("(5) Nothing in this section authorises the Council to direct the Authority to supply information which is subject to the restrictions on disclosure contained in section 55 of the Competition Act 1998 nor authorises the Authority to comply with such a direction.").

My Lords, perhaps I may deal with Amendments Nos. 20 and 21 in turn because they are not quite the same.

As noble Lords will be aware, in March the Government published a consultation document on categories of information which the authority and the licensees should be entitled to withhold from the consumer council. Information obtained by the authority other than from licensees under the powers it has as gas and electricity regulator was in the second of the classes in the document. Information obtained under the Competition Act 1998 is a subset of that group.

There are a significant number of Acts under which information could be obtained where that information might subsequently pass to the authority. I see no good reason to single out the Competition Act 1998 for explicit treatment here. In any case, for reasons I am about to give, I do not believe information will reach the council anyway. Under the regulations which we are to make, and on which we consulted, information such as information to which Section 55 of the Competition Act applies will be information which the authority is not obliged to pass to the council under Clause 24 of the Bill. The question, therefore, is whether it could do so.

The Bill does not add the consumer council to those bodies to whom Competition Act information, if I may call it that, may be passed under exceptions to the prohibition in that Act on disclosing such information. The prohibition on disclosure of information in this Bill expressly provides in Clause 104(11) that information obtained by the authority in the exercise of its concurrent competition functions is subject to the Competition Act prohibition on disclosure, and not to the one in the Bill. I hope that that reassures the noble Baroness, Lady Buscombe, that Amendment No. 20 is unnecessary.

Amendment No. 21 would add a requirement to consult the authority, the council and licensees' representatives on regulations under Clause 27. Clause 27 contains two regulation-making powers: in subsection (1), a power to set out the sorts of information the authority and licensees need not supply to the council, or the council supply to the authority; and in subsection (3), a power to appoint an adjudicator to determine disputes about whether information requested by the council or the authority can be withheld.

Taking the regulations under subsection (1) first, we have already sought views on what the regulations under Clause 27(1) should contain. We are now analysing representations received and will announce our future intentions in due course. In this case, therefore, the requirement is unnecessary and if there were to be subsequent amendments we would consult on those as well.

The House may recall that when we introduced subsection (3) of Clause 27 I noted that the information commissioner is a possible adjudicator under regulations. She is the front-runner, as a result of representations from various quarters in recent months. If we proceed to make regulations appointing her, I am not sure what more there would be to consult about. An express obligation to consult might oblige us to delay introducing regulations in order to comply with the duty and I do not believe there would be any benefit from that.

In those circumstances, without in any way being antagonistic to the thinking behind the amendments, I hope they will not be pressed.

My Lords, I thank the Minister for his full reply in regard to both amendments. I shall read what he had to say with care, and I beg leave to withdraw the amendment.

moved Amendment No. 22:

Page 28, line 27, leave out ("or condition").

My Lords, I am grateful to the Minister for that full explanation, although I shall want to read carefully what he has said. I had thought that the Minister would bring forward a further amendment, which, unless I have missed it, he has not included. I am concerned about the following matter. As I understand the scheme of things, it will be for the Secretary of State to set the standard conditions. He may talk to GEMA and reach a view as to what is appropriate but he will set the standard conditions. There are certain circumstances in which GEMA might ask the competition authorities to report on a matter. That is clearly a desirable provision. However, as I understand the position, under Clause 35 it is open to the authority to modify the standard conditions.

I ask the Minister to consider the following circumstance. Let us consider a standard condition that has been modified by the authority. At some subsequent time the authority takes the view that that modified standard condition has been breached. In those circumstances the authority looks to its powers under what is now Clause 59. As I understand the position, having discovered a breach of a condition in those circumstances, the authority could impose an unlimited fine. In such circumstances where the authority is, as it were, the legislating body in that it can modify the standard conditions, it is the authority that conducts the investigation and acts as jury in determining whether there has been a breach and as a judge in imposing an unlimited fine.

I hope that the Minister will reassure me that in those circumstances, notwithstanding the statement that he made on the first draft of the Bill that reached your Lordships' House, he continues to have no unease that the matter that I have mentioned does not in any way breach the European Convention on Human Rights. I believe that some unease should be felt at a situation where a single authority performs all those different functions. Those functions can only be separated out when the authority decides to refer the matter to the Competition Commission; it is not a matter that that body can address itself. I am uneasy about that situation. I would welcome hearing the Minister say yet again that he is confident that there is no prospect of breaching the European convention in these circumstances.

My Lords, the noble and learned Lord, Lord Fraser, is entitled to make the points that he has made. However, he makes them in the context of a series of amendments which should reduce his fears, at least in respect of revocation provisions of a licence. We shall take out what was originally proposed as being conditions of a licence which could, as the noble and learned Lord said, be changed under certain circumstances without consent and make them terms which cannot be changed without consent. To that extent, any change which is being made now gives me greater confidence in asserting—as I did at the beginning of our discussions—that the Bill is compatible with the European Convention on Human Rights.

My Lords, before the Minister sits down, I hope I may add that I am not surprised that he says he has greater confidence in making that assertion now. What I am trying to ascertain is whether he has complete confidence in making it.

My Lords, I make these statements, as always, on legal advice and that advice has not changed.

The noble and learned Lord makes a legitimate point which deserves a response; namely, that certain standard conditions can be modified without consent. Under certain circumstances a breach of conditions could invoke penalties. I do not call them offences as I do not want to reopen the debate that we had on the then Financial Services and Markets Bill. However, they are penalties.

If the noble and learned Lord is present when we debate Amendment No. 38 and the amendment with which it is grouped, he will hear what we think of unlimited penalties. I shall not weary the House by replying at length to the issue that he raised. However, I shall write to the noble and learned Lord before Third Reading and copy the letter to all other noble Lords who have taken part in the debate.

We go to extraordinary lengths to set out in the legislation procedures under which licence conditions may be modified without consent. I shall set all that out in the letter and reaffirm my confidence that I have done the right thing in making the declaration that I have.

moved Amendment No. 23:

Page 46, line 46, at end insert ("; and

() any advice given by the Health and Safety Commission or the Secretary of State under section 3C (advice about health and safety in relation to electricity)").

moved Amendment No. 24:

Page 51, leave out lines 42 to 45 and insert—

("(b) a person ("the initial contributor") has made a payment to the distributor in respect of those expenses, the line or plant having been provided for the purpose of making a connection to any premises or distribution system as required by that person."").

My Lords, perhaps I may express our support for Amendment No. 25 and thank the Minister for his very helpful clarification of this matter concerning connections. As he stated, it is in response to the amendments which we debated in Committee. I am aware that he has been in consultation with the industry between Committee stage and today. We are very grateful for that. I thank the Minister.

moved Amendment No. 25:

Page 52, line 32, leave out from ("29;") to first ("any") in line 33 and insert—

("(b) any terms which it is reasonable in all the circumstances for that person to be required to accept; and

(c) without prejudice to the generality of paragraph (b),").

moved Amendment No. 26:

Page 53, line 15, at end insert—

("() to facilitate the achievement of the Government's national renewable energy targets, including small-scale renewable generation through net metering"").

My Lords, I would not like the fact that my name is attached to Amendment No. 26 but not to Amendment No. 27 to imply in any way that I do not support the noble Lord, Lord Ezra, and the noble Baroness, Lady Sharp, in their amendment. Both amendments are extremely important. It is always the Government's response that they do not want to add extra matter to the face of a Bill. It seems to me that in outlining the duty of an electricity distributor, which is what is done here, it is very important that at least the points outlined in Amendments Nos. 26 and 27 be added. There appears to be no doubt whatsoever that in suggesting these amendments we are suggesting that something should be put on the face of the Bill of which the Government approve and would like to see happen. The best way to do that is to put it on the face of the Bill so that any electricity distributor, looking at the Bill, knows that these measures are among his priorities. I very much support both amendments.

My Lords, I support both the amendment put forward by the noble Lord, Lord Beaumont, and my noble friend Lord Ezra and speak to Amendment No. 27 which is in my name and that of the noble Lord, Lord Ezra. I would like to say a word about the issue of embedded generation. It is clear, and there is a clear admission, that the new electricity generating arrangements disadvantage small generators of electricity yet, as we debated earlier, when we consider the interests of consumers it is not only current consumers but future ones with whom we are concerned. We know that unless we make a serious attempt to meet renewable targets future generations of consumers are going to be at a disadvantage. It is vitally important that we make a real effort to meet the targets.

Embedded generation, small-scale combined heat and power (CHP), small-scale solar panels, effective voltaics and so on, are all forms of energy generation which have great advantages. But they require encouragement. If we do not encourage them now we shall fail to develop the technology on a scale sufficient to enable it to be taken up by consumers. One of the great advantages of embedded generation is that electricity is generated close to its users; it does not incur the costs and losses of transmission. It is extremely important that there should be in the Bill powers and incentives to encourage this small-scale generation capacity so that future generations of consumers may benefit from it.

My Lords, in speaking to these two amendments I declare an interest as a member of the management board of Ofgem and a director of the solar energy group. I certainly support the objectives of the two amendments—we wish to promote embedded generation and renewables—but I have difficulties with them. The term "fair" in Amendment No. 27 is very subjective and open to widely differing interpretations. If one substituted more precise terms—such as "reasonable access" instead of "fair access" and "cost reflective prices" rather than "fair prices"—the amendment would be unnecessary because other aspects of the Bill cover the essential points.

Amendment No. 26 proposes net metering for renewables. Net metering is allowable under the Bill where it is appropriate, but not universally. It would be wrong to introduce genera] net metering for one simple reason: that is, that inflexible and unpredictable plant imposes substantial costs on the system which are ultimately passed on to the customer. The system operator has to take capacity off or put it on to the system in order to balance it and to maintain its integrity. That imposes costs.

It is important that we encourage both environmentally friendly generation, and flexible and predictable generation; better still, that we encourage environmentally friendly and flexible and predictable generation. Net metering eliminates an incentive for flexibility and predictability and will skew the nature of technical development in this area in the wrong direction.

It is worth noting that NETA has a number of special facilities for renewables which encourage small-scale renewable generation. In detail, these arrangements are very technical—I am not sure that they are fully understood—but they are carefully designed to encourage the emergence of aggregators, who will buy the inflexible and unpredictable part of output from small generators, pool those risks and therefore eliminate—or certainly substantially reduce—the discount that small, unpredictable generators will face. Those measures go quite a long way to meeting the concerns and overcoming the disadvantages. They are special arrangements; they go quite a long way towards promoting renewables without going as far as promoting net metering, which has quite substantial disadvantages.

My Lords, before the noble Lord sits down, he has noticed, has he not, the word "including"? There is no effort to make,

"small-scale renewable generation through net metering"

a major item; it is merely one of the things included in the targets.

My Lords, by including a specific mention one is giving it weight over and above other measures which are equally important in the promotion of renewables and embedded generation.

My Lords, it is true that these amendments go to the issue of the treatment of small-scale embedded generation within the electricity distribution networks. As the noble Lord, Lord Currie, has drawn out, the Government have recognised in drafting the Bill the importance of small-scale generation—typically, embedded generation—to the development of environmentally-friendly generation technologies, in particular renewables and combined heat and power.

As I said in Committee—and as the noble Lord, Lord Currie, has confirmed—the Government have sought through the various provisions of the Bill to make sure that embedded generators get fair access to distribution systems so that they can compete in the generation market on level terms with conventional large-scale generation. I think it will be acknowledged that that was not the case before. That is why the Bill introduces changes to the regulatory structure of the electricity industry which will remove barriers to embedded generation and enable it to compete fairly on its merits. This is key to encouraging renewable and combined heat and power generation.

I should emphasise that this is a very significant shift in the regulatory framework, working to the benefit of embedded generation. Even though it is difficult to understand and to find in the Bill, it is important not to underestimate it. For example, the separation of electricity supply and distribution, presently combined in the public electricity suppliers, will change the way distribution systems are managed, to the benefit of embedded generators. This is underpinned in the Bill by the explicit duty imposed on distributors to facilitate competition in generation—including embedded generation—as well as in supply. It is also supported by the draft distribution licence conditions which, for example, place system entry and exit points on an equal footing and introduce a power for the regulator to direct distributors to publish long-term development plans, as transmission licence holders are already required to do. In addition, distributors will be obliged to offer terms for connection to embedded generators, something which is not a feature of the present legislation.

The aim is to put in place a framework so that embedded generators will be able to obtain full value for their energy output and any locational benefits they provide and that distribution companies will look at embedded generation on an equitable and transparent basis when considering any network augmentation.

Furthermore, the Government are looking closely at any further practical difficulties faced by embedded generation. We have committed ourselves to addressing any continuing problems relating to the operation of distributed generation and its connection to the distribution system that are identified by a new industry-wide working group, chaired by Ofgem and involving DTI, DETR and representatives of the industry.

I hope that in the light of all this the noble Lords, Lord Beaumont and Lord Ezra, will accept that the Bill already does everything that they want and that Amendment No. 26 is unnecessary.

Let me be clear—as the noble Lord, Lord Currie, has been—the Bill does not rule out net metering. Indeed, the market is starting, as it should, to address this issue. At least one supply company has already offered a net metering package. The Government welcome this, but we cannot agree that we should introduce a provision which would, in effect—even with the word "including"—prescribe a system of net metering. This would ignore the difference in value between electricity that a customer supplies to the network and that which he takes from it. Any such general obligation would imply a degree of mandatory cross-subsidisation that would have to be paid for by other consumers.

Nor do we agree that legislation is the place for exhortations about this matter. Legislation is the place for strong, practical measures to make sure that the regulatory framework properly addresses embedded generation. That is what we have provided. Of course electricity suppliers can offer net metering to their customers if they choose, but from the point of view of the law and of this Bill the way forward lies in the measures to benefit embedded generation that I have described.

My Lords, in the time-honoured phrase, I should like time to study what the Minister has said before we come to the next stage of the Bill. In the meantime, with the permission of the noble Lord, Lord Ezra, I beg leave to withdraw the amendment.

moved Amendment No. 27:

Page 53, line 15, at end insert—

("(c) to provide embedded generators with fair access at fair prices to the network"").

moved Amendment No. 28:

Page 126, line 45, after ("person") insert ("at any place other than premises at which electricity is being supplied under a contract with an authorised supplier or a deemed contract with an electricity supplier").

My Lords, I shall reply to opposition Amendments Nos. 28 and 32 and I shall then speak to my Amendments Nos. 30, 77, 78 and 103. I should like first to say a few words about an amendment which we propose to make at Third Reading on rights of entry to premises.

We have recently received—within the past few days—representations from electricity distribution companies which are concerned to ensure that they have sufficient rights of entry to premises in cases of emergency. We have listened to their arguments and are persuaded that we should act. Therefore, we will be tabling at Third Reading a small amendment to Schedule 4. As is my usual practice, I shall write to noble Lords to explain the amendment when it has been tabled. The reason I mention this now is both to inform the House and to underline that we are always ready to accept the industry's proposals to amend the drafting of the Bill where its proposals are well founded. That is not the case for Amendments Nos. 28 and 32.

Amendment No. 28 was originally proposed to us by the Electricity Association. It expressed concern that paragraph 4 of new Schedule 6 to the Electricity Act, as inserted by Schedule 4 to the Bill, appeared to place responsibility on distributors to recover the value of electricity illegally abstracted from their distribution networks, whereas in their view all responsibility for energy used by consumers should be the responsibility of suppliers. I am happy to give to the House the response we gave to the association explaining why its concerns were unfounded and why, therefore, this amendment is not appropriate.

First, paragraph 4 of new Schedule 6 gives distributors statutory rights to recover the value of illegally abstracted electricity. It does not place obligations on them to do so. In practice, I understand that there are agreements within the industry itself which may assign such a role to distributors. That would normally only be in cases where there was no supplier to whom the role could appropriately be assigned; for instance, if someone were illegally to connect into a distribution line in the street. The sole purpose of paragraph 4 is to make the distributors' lives easier in these cases by allowing them to use civil legal procedures to recover the value of the electricity so taken.

Secondly, new Schedule 6 has been drafted so that paragraph 4 applies only in cases where paragraph 3 does not. Paragraph 3 provides that a contract shall be deemed to be in place with a supplier where someone takes a supply of electricity without there being an express contract in place. That could cover a number of circumstances, but what is relevant here is that it would cover electricity taken illegally, always provided that a supplier can be identified as being responsible for the supply taken. If not, and only if not, the statutory rights—not obligations—under paragraph 4 would be available to distributors.

I turn to Amendment No. 32. Again, this proposal was first made by the Electricity Association. We considered it carefully but were unable to accept it. This is not a safety issue, despite what the noble Baroness, Lady Buscombe, says. It is a competition issue. The amendment does not improve safety but it does undermine competition. Certainly, it is usually the distributor who needs statutory rights of entry in an emergency. We have made proper statutory provision for that. But a distributor does not need rights of entry, except in case of emergency, to inspect, repair or replace my deluxe all-singing, all-dancing electric rice-steamer with an egg poacher side attachment. By the same token he does not need them for a meter. It is irrelevant that the distributor might happen to own the meter.

At present it happens that the public electricity suppliers own most of the meters in this country. It may be that these will pass to and remain with their distribution arm after the separation of supply and distribution. That is a matter for the public electricity suppliers and in the longer term also for the authority, which continues to consider the implications for competition of meter ownership. However, the Bill assigns statutory rights and responsibilities for meters and metering to suppliers, not distributors. Suppliers will not have to own meters or provide services for themselves, but may procure them from third parties, who may, of course, include distributors. That is because metering of electricity supplied to premises is a supply not a distribution matter. It also ensures that customers may deal with their supplier for metering as for all other aspects of their electricity supply—the one-stop shop principle. Distributors will continue to be responsible for line and plant. So it is right that they should have various rights of entry related to those, including emergency access. But there is no reason for them to have privileged access to meters for which they are not responsible.

The way we have structured the legislation allows for full competition in metering services. By giving all matters relating to metering to suppliers, we have quite rightly removed the distribution companies, which may well continue to have associated supply companies under the same ownership, from statutory access to meters operated by their supply competitors. Equally, we place distributors on the same statutory footing as independent providers of meter services who have no statutory rights. Both could nevertheless exercise the supplier's rights of entry on his behalf and with his agreement.

I turn to the government amendments, Amendments Nos. 30, 77, 78 and 103. Amendments Nos. 30 and 78 are technical amendments to do with meters, in particular pre-payment meters, and the rights that licensed companies have to enter premises related to meters and pre-payment meters. Amendment No. 77 reflects government policy that pre-payment meters should not be used to recover charges other than those owed for the supply of gas or electricity. For example, hire purchase payments for cookers or fridges should not be charged through a pre-payment meter.

Amendment No. 77 aligns the provisions implementing this policy for gas with the provisions relating to electricity set out in paragraph 8 of Schedule 5 to the Bill. First, the amendment ensures that the restriction on non-supply related charges applies to suppliers authorised by exemption as well by licence. This is achieved by the reference to an authorised supplier, which is defined in Section 48, as amended, as meaning a licensed or exempt supplier. Secondly, as metering is part of the process of supply, the costs of providing the pre-payment meter itself should be recoverable.

Amendment No. 30 corrects an omission by giving a power of entry to a licensed supplier to install a pre-payment meter. In order to reduce the number of disconnections, the Bill gives companies a right to fit a pre-payment meter instead of disconnecting, but the associated right of entry was omitted. Amendment No. 78 corrects a similar omission in gas by creating a right of entry corresponding to the right to fit a pre-payment meter in the first place. This is achieved by the reference to paragraph 7(3)(a). Amendment No. 78 also deals with an issue which arises in gas but not electricity. There is a risk of an explosion if gas mixes with air in a service pipe or in an appliance such as a cooker. This can occur when a meter is fitted. So if a company fits a pre-payment meter it needs to purge gas from the system and then test it.

In the absence of the right of entry to premises covering this purging and testing, the licence holder would be forced to leave the pre-payment meter in the "off' position if the consumer was not present, and the consumer would then have specifically to request another visit from the company before he could use his cooker or boiler, doubling the "waiting for the gasman" excuse which employees are known to give from time to time. The amendment would make such a visit unnecessary. We propose extending the right of entry with the words at the end of new paragraph 23(2)(c). As paragraph 3(5) also deals with installing or replacing a meter it is preferable that the power to test and purge the system also applies in relation to paragraph 3(5). I must emphasise that only licensed companies, and not exempt ones, have rights of entry. Licence conditions apply, including the requirement to have a regulator-approved code of practice on access to consumers' premises.

Amendment No. 103 changes the Rights of Entry (Gas and Electricity Boards) Act 1954 in respect of rights for electricity suppliers and distributors to reflect the abolition of the concept of public electricity supplier and to provide for electricity what the Gas Act 1995 provides for gas: namely, that a person who is authorised by an agent of a licensee, to whom the rights of entry in the Electricity Act apply, may apply for a warrant to exercise the right of entry. For the reasons given, I cannot support Amendments Nos. 28 and 32.

My Lords, I shall read with care in Hansard what the Minister said about Amendment No. 28. We may well return to that matter at Third Reading. With regard to Amendment No. 32, I am sorry that the noble Lord feels that what we suggest does not impinge on safety but damages competition. I would say that the contrary is true. At one point I thought that we were talking about different amendments. We are talking about the right of access to meters in cases of emergency. We are talking about the responsibility on the part of the industry to serve the customer in cases of emergency. We strongly believe that the amendment deals with that situation. When we raised the issue in Committee the Government were not willing to respond to our amendments. They still feel unwilling to respond to what we believe is a commonsense, practical amendment. I intend to test the opinion of the House on Amendment No. 32. I beg leave to withdraw Amendment No. 28.

moved Amendment No. 29:

Page 127, line 34, leave out ("belonging to") and insert ("provided by").

moved Amendment No. 30:

Page 128, line 22, leave out from beginning to ("an") and insert ("Where an electricity supplier is authorised by paragraph 2(1) to install a pre-payment meter on any premises, any officer or other person authorised by the supplier may at all reasonable times enter the premises for the purpose of installing such a meter.

(5) A power of entry for the purpose of removing or installing").

moved Amendment No. 31:

Page 128, line 44, at end insert ("provided by the distributor").

moved Amendment No. 32:

Page 129, line 16, at end insert ("; or

(c) in the case of emergency, inspecting, repairing or re-installing any electricity meter").

moved Amendments Nos. 33 and 34:

Page 131, line 2, leave out ("inserted") and insert ("substituted").

Page 131, line 3, leave out ("inserted") and insert ("substituted").