Small Business, Enterprise and Employment Bill
Debate between Lord Whitty and Lord Deben
Lord Deben
I did not intend to speak on this but the noble Baroness has referred to me so often. I had better explain to her that I think that this is nonsense. It is nonsense from beginning to end because it misunderstands how business works and what the Government should do. The last thing we want is the establishment of a collection of people who professionalise the representation of consumers. Any of us who have ever had to deal with the double standards which some of them put forward about their own businesses and the way that they are never quite sure whether they are representing the consumer or some business operation which they have, which is part of the way in which they support themselves, recognise that this is not sensible. What is sensible is to have a proper organisation whose job is to ensure proper competition.
The Government ought to be concerned about having proper competition. I would be strongly opposed to the idea that the only people concerned with proper competition are the consumers. Government and the competition authorities should both be committed to ensuring competition. Decent companies, of course, can be very much in favour of competition until they see that there is an advantage if they are monopolistic. I do not blame them for that: it seems to me perfectly simple that everybody would like to have a nice, comfortable life in which they do not have to compete with anyone else. You therefore need a balance in society where you constantly refresh the market; you constantly make the market work. However, the idea that you do that by way of consumer representatives misses the point; we have to make government do it. That is what the Government are there for; it is not what Which? is there for. Which? is there precisely to be outside the system and to shout. Government is supposed to run the system so that there is proper competition. I do not want government to be excused from that.
Therefore, I do not agree with these amendments. I hope that the Minister will recommit the Government to ensuring proper competition. They should ensure, too, that the Competition Commission has the powers, the resources and the intent to achieve the best level of competition possible. We should also begin to have a bit more of the philosophical background to this, which is essential if we are to win the battle. If we cannot have competition as we ought to have it, frankly, the argument for the free society is difficult to maintain. If that is important, let us make it the purpose of government and the Competition Commission, and not say that it has to be run on a sort of old-fashioned, tripartite basis, which is to allow the Government to get off the hook. They should be on that hook firmly for promoting competition.
Lord Whitty (Lab)
My Lords, I apologise to the Committee for having joined your Lordships so late that you seemed to have made good progress without my help and I shall try to focus on this amendment. I do so partly because I was going mildly to support my noble friend but also because the noble Lord, Lord Deben, has provoked me to say how much I disagree with what he has just said, including going into the wider philosophical and ideological areas right at the end, because a free society requires representation of people’s views as well as mechanisms, legislation and regulations and so on.
At various stages, the Government have recognised that consumer organisations of one sort or another are important in ensuring that competition is delivered. I am very happy to see that this clause gives the CMA the ability to comment on draft legislation, which is absolutely right, but, in doing so, it has to pay attention to its prime objective, which is not to create competition full stop but to create competition in the interests of consumers. Since in various contexts successive Governments have recognised that there needs to be some focus on that consumer input, it is important that we have some requirement on the CMA at least to consult such organisations when it is making an assessment of future legislation.
For example, many of us, including the noble Lord, Lord Deben, sat through lengthy proceedings on the previous Energy Bill, which sets up a whole new system of energy regulation and government interventions, with state and consumer subsidy of various bits of the energy system. It does not look entirely like a free market; I think that the noble Lord, Lord Lawson, at one point referred to it as Gosplan. It is not quite that, but it is a whole range of things to ensure delivery and availability of energy ultimately in the interests of the consumer, but it will change the nature of our whole energy system.
Lord Deben
There is a fundamental difference between saying that the CMA should consult with a range of bodies, which is what the noble Lord says, and the way in which the noble Baroness presented it, which suggested that it was a kind of duo or tripartite, or some sort of system where they do all this together as part of the same thing. There is a difference between saying that the CMA has a responsibility, which it carries out by, of course, taking into account the views of all these people, and saying, on the other hand, that it is a kind of function where they are part of the actual operation. Doing that second—and that is the point I was trying to make—removes the fundamental responsibility of both Government and the CMA to do this job properly.
Lord Whitty
My Lords, we have limited time as we are in Committee so I will only take a moment. It is certainly true that, at the end of the day, this report will be the CMA’s report and all it says is “in consultation” with these bodies. My noble friend and I both argued that the internal proceedings of the CMA should reflect a different structure of relationship with consumer bodies. That is now past. However, we are now saying—as I understand my noble friend’s amendment—that the CMA has a responsibility for producing this report, but it should do so clearly and explicitly and in the Bill, in consultation with the bodies that represent consumers and which the Government have recognised as so doing.
Energy Bill
Debate between Lord Whitty and Lord Deben
Lord Whitty
My Lords, we really are at the end now. I shall try to be brief but make no apology about turning to a subject that affects the deliverability and credibility of the entire Bill. When we had a discussion on the establishment of an expert committee, the Minister referred me to the clause to which this amendment applies. Clause 139(2)(c) provides for resources to be raised for the employment of advice. I have no objection to that, but ad hoc advice, as we said the other day, is not sufficient for delivering such a complex project. We are now horribly aware of that, having been through nine days in Committee. Apart from a few serious experts in DECC and possibly Ofgem, a few very sharp lawyers sitting in the big six and other interested parties that may be on the other side of these deals, we probably know as much as is likely to be known at this stage about the nature and process of the contracts, the difference in the process of investment contracts and to a lesser extent, given that a lot still is fairly obscure, about capacity mechanisms.
The public know nothing, the potential participants know nothing and consumers know nothing. DECC, the counterparty and Ofgem will face a complex process. They will have to deal with extraordinarily complicated and novel arrangements that do not reproduce anything extant anywhere in the rest of the world when it comes to electricity supply. They will be dealing with companies who are very sophisticated, who employ the very best advice and who, necessarily and rightly, are looking for a deal which will profit them as well as helping the long-term future of our energy security.
Delivering what is in the Bill, even though it is not that thick a Bill, will be an extremely complex process. Parliament and the public would expect departments and others representing the Government and the public in this process to have very solid advice. Some of that can be dealt with on an ad hoc basis, contract by contract and aspect by aspect. However, as was made clear in a previous debate, you need an institutionalised body which is clearly publicly known and respected, consisting of people with deep experience of the legal, financial, technological and economic issues which it is tackling. Above all, you need consistency. You need corporate memory and a body to oversee the individual officials and Ministers who, whether we like it or not, are not there for ever. They are often there only for a few months or years and cannot take full responsibility for negotiating these contracts.
The expert panel is an advisory panel, but it is an important strengthening of the whole process. I do not expect the Minister to change her mind today, but unless the Government recognise that they need something like this—they may want to call it something else—the deliverability of this whole process, on which so much depends, will look extremely shaky. I therefore hope that the Government will at least take on board that they ought to look at this concept again. I beg to move.
Lord Deben
My Lords, I very much oppose the amendment, which seems unnecessary. A great deal of advice is available and it is not necessary to have yet another committee. A committee has been proposed with a different role, which seems to me to have a much more sensible and wider view. That was in an earlier amendment—which has been withdrawn but which I have no doubt will come back—proposed by the former chairman of Shell UK, the noble Lord, Lord Oxburgh. That seems to be a much better proposal than this one. It is not necessary to shove this in at this point. The Secretary of State will have at his behest a whole range of people on whose advice he can rely. This gives him permission to do that, and although I am all in favour of giving him that permission, I do not want him to have yet another committee. I think that this is the wrong way to do it and I very much hope that my noble friend will resist the amendment. I rather suspect that she will, and it is always a pleasure to end such an afternoon, now almost evening, by entirely supporting my noble friend.
Energy Bill
Debate between Lord Whitty and Lord Deben
Lord Whitty
My Lords, I find the explanation on the five-year period extraordinary. I think it was my noble friend Lady Liddell who mentioned that the notorious recent Scottish and Southern case had gone on for four years. It would not have needed to go on for more than another six months for it to fall foul of this restriction. There may be something in the argument of the noble Lord, Lord Deben, that you need some restriction. Indeed, that is why I proposed a 15-year period rather than delete the provision entirely. I do not accept that there should be a shorter jurisdiction for energy than there is for financial services, nor do I accept the argument put forward by the noble Lord, Lord Deben, that it is a bad thing for people to be entitled to redress for the mis-selling of, for example, PPI and pensions in the financial services sector which happened a long time ago, albeit that continued until relatively recently. As for confidence, there is no consumer confidence in the energy sector. It is all very well saying there will be no business confidence if companies think they are going to be fined for something which happened 15 years ago, but at the moment there is almost nil consumer confidence. The energy sector has the worst record among the allegedly competitive markets in terms of consumer confidence. That is partly because over time consumers have had difficulty understanding whether or not they have been misled or mis-sold products and have faced grave hurdles in trying to remedy that. Sometimes they have—
Lord Deben
For the correction of the record, the problem is that the further you extend something, the less you can prove the case, the greater the chance that the people who are now involved had nothing to do with it and the less the chance that the circumstances in which it took place can reasonably be identified. You have to have a balance; that is all. There are many examples of cases where the conditions that obtained 15 and 20 years ago are unprovable and very different from the conditions obtaining now. In the end, you have an unfair circumstance. Therefore, some way or other, you have to have a decent balance—otherwise, you find that people’s confidence and willingness to invest in industry reduces. That is the experience and that is why so many fewer people now provide services to the public than used to be the case. We have destroyed confidence. You have to have confidence on both sides; that is all.
Energy Bill
Debate between Lord Whitty and Lord Deben
Lord Whitty
My Lords, I am grateful to the Minister for that. I am very satisfied with at least one and a half and possibly two out of three. I certainly accept her assurance that the provisions in Amendment 38U are not necessary. I was concerned that the Bill should not affect a scheme which provides a set level of damages for minor radiation activities and which has run for 30 or 40 years. I was party to the negotiations that set it up. Although there will now be very few people claiming under that scheme, there are some, and I hope that it will not be affected by the change of jurisdiction. Therefore, I am grateful for the Minister’s reassurance, which I hope is sufficient.
I do not expect the Government to change their mind about civil liability but I think that it was right for me to table this amendment because it draws attention to the consequences. The noble Lord, Lord Deben, says that we should not treat such sites any differently from any other sites. However, for all sorts of reasons, nuclear sites are dealt with differently, and the whole of this legislation deals with them differently. There is a highly subjective dimension to it and, in effect, he referred to that. If there is an incident on a nuclear site, it gets blown out of all proportion. I think that all sides of this Committee are in favour of an extension of the provision of our nuclear energy sources in this country.
We also know that it would not take a lot to turn public opinion in the wrong direction—we need only look at Germany—and for the whole strategy to fall flat on its face. It would be quite wrong if that arose because of a health and safety issue that was not provided for in the nuclear regulations, whether it concerned an omission regarding nuclear waste or nuclear material, or some other breach by the management at a nuclear plant. The reality is that the level of safety on nuclear sites, not only in respect of nuclear issues but on all others, has to be—the industry recognises this—of the highest order, and any breach must lead to a sanction.
Lord Deben
I would not want the noble Lord to mistake what I said. Of course a nuclear site, by its very nature, has to be treated seriously and differently. The Bill has a great deal of that difference in it. The issue I raised was this. The noble Lord referred to something that was not about nuclear sites but was a general statement of workers’ rights, and in particular of their ability to sue. The ability to sue here is based on a failure to meet responsibilities in a way that all of us would deplore. However, it has nothing to do with nuclear matters. Any failure in the nuclear area is already covered.
I know that the noble Lord wanted another go at what we discussed before. That is all well and good, and I would not for one moment stop him. I have done it myself and no doubt I will do it again. It takes one to see another; let us be perfectly clear about that. However, I say to the noble Lord that it is not sensible, even in his delicate way, to give people fears that are not reasonable. This question is dealt with fully in the Bill, and in other Acts. What the noble Lord is asking for has nothing to do with nuclear sites. If we were to agree to it, it would suggest that somehow or another it did. As it does not, it would be a faulty suggestion.
Lord Whitty
My Lords, I did not expect to convince the Minister, but before he stood up I had a slight hope of convincing the noble Lord, Lord Deben. Clearly, I have none whatever now. However, on a site such as Sellafield there are things that can go wrong that are not related to the handling of nuclear material but that could be fairly disastrous not only for objective reasons in terms of the damage they might do to workers and others on the site, but for the general reputation of the site. The fact that that would then lead to an inability to sue for a breach of statutory duty seems wrong. As the noble Lord, Lord Deben, indicated, I think that it is wrong in other sectors as well. However, we have special responsibility in going through the Bill to make sure that the nuclear sector is not vulnerable to things that government lawyers have changed in other respects that will have a disproportionately negative effect on the image of the nuclear industry. For that reason, I am not happy with the Minister’s reply, but I beg leave to withdraw the amendment.
Energy Bill [HL]
Debate between Lord Whitty and Lord Deben
Lord Whitty
My Lords, my Amendment 6 in this group provides the Minister with an option. I agree with my noble friend that in many respects what goes in the Act, and therefore in the regulations, would benefit from the Bill stating “must” rather than “may”, but my proposal would leave discretion to Ministers because of what I spoke about in the first group of amendments today. We are in a situation where the Green Deal is being developed fast and furiously but without total clarity as to how it is to be structured and how different groups or different types of building can benefit from the terms of the Green Deal.
My amendment therefore gives the Secretary of State the option to put into those regulations, or codes, provisions that address the particular circumstances of particular groups. If, as I suspect, the fuel poor, in particular the tenanted fuel poor, will be difficult to deal with on the same basis as the bulk of the Green Deal arrangements, the Government will need some special regulations to address the problem, and to deal in particular with the relationships of the landlord and the tenant, who actually pays the energy bill.
For example, as we have just debated in considering my noble friend Lady Gibson’s amendment, in rural areas there will be a lot of houses off the gas network that rely on either Calor gas or heating oil. For those people, there will be no attraction in the central mechanism of the Green Deal, as was rightly spelt out by the noble Lord, Lord Deben, and others who reflected on that. In some areas, such as the south-west of England, over 50 per cent of people are off the gas network. A larger number of people have houses which are difficult to heat because of structural reasons and which, again, will require a larger investment than is easily repayable through the normal level of energy bills.
Therefore, I suggest that the Government recognise that they may need to make some special provision for chronic fuel poverty, chronic hard-to-heat or locational difficulties, which make the normal run of Green Deal structures and Green Deal arrangements, and the financial arrangements that lie behind it, not applicable. There is no reason why the householders in that situation should not benefit from something akin to the Green Deal. The power would, as I say, be discretionary, so I hope that the Government will recognise the necessity of having such a power, which would give them a little bit of elbow room down the line. They could either adopt my amendment today or promise to come up with something similar in subsequent parliamentary proceedings on the Bill. I think that they will find they will need it.
Lord Deben
My Lords, I hope the Minister will notice that the noble Lord, Lord Whitty, in that very interesting speech, gives the key to why “may” is better than “must”. It is simply that this is supposed to be a Bill that Ministers can apply most effectively to the particular circumstances. In many ways one of the reasons the Bill has had common support is that it is a brave Bill; it is an attempt to make a big change and to make a big change in partnership. It seems to me that to have “must” without any prioritisation or the like is a very difficult thing to have. You have to decide at any given time which provisions you are going to go for. Somebody could come back to you and say, “Well, you may have provided the first, second, fourth and seventh sets of regulations, but you have not provided the third”. You have not done so because until those regulations go into operation you cannot do the other things. There is a question of practicality that makes “may” much more sensible, which is why the noble Lord, Lord Whitty, has raised his particular proposal in the form that he has.
However, it appears to me that the noble Lord’s proposal may well be covered in other parts of the Bill. If he is right and it is not, it would seem sensible to make sure that it is possible for Ministers to make specific arrangements, which will reach out to people in peculiar circumstances.
One of the things that has happened in the course of discussion of the Bill is to recognise how many people are in peculiar circumstances. This is not an area where you have simple programmes, where you can say that everybody is like this. I listened to my noble friend talk about Calor gas. We have a totally different view of what Calor gas is. For me, it is a very large tank with a delivery, not these little pot things, which relate to a different circumstance. It is perfectly possible to deal with the very large pots where perhaps it is not so easy to deal with the small pots. I merely make the point because there is a fundamental difference in the ways these things happen.
I hope the Opposition will accept that, on this occasion, I am afraid that we will have to depend on the good will of Ministers, because otherwise they will be unreasonably constrained in how they implement these matters. I hope, therefore, that my noble friend will resist the amendments, not in a curmudgeonly way, but simply because it is better to do it this way. However, perhaps he could explain to the House whether the concern of the noble Lord, Lord Whitty, to make sure that this reaches into all the tiny corners is addressed. Many of us who have dealt with particular areas of the country will know how easy it is for decisions made in metropolitan London not to work in the back kitchen of a cottage in a small village near Saxmundham. That is a different world and we must be absolutely sure that we cover it. In my former constituency, the poorest people living in the most acute fuel poverty were to be found in what looked like idyllic cottages at the end of lanes. It is very important not to forget them.