General Duties Under 1986 Act

Orders of the Day — Gas Bill – in the House of Commons at 9:15 pm on 15th May 1995.

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Mr. O'Neill:

I beg to move amendment No. 45, in page 2, line 19, at end insert—

'(2A) The Director, in performing his duty under subsection (2)(c) above shall—
  1. (a) have regard to official estimates of the amount of discovered and recoverable reserves of gas, from onshore and on the United Kingdom Continental Shelf;
  2. (b) have regard to the target reductions in carbon dioxide emissions agreed at the United Nations Conference on Environment and Development, held at Rio de Janeiro in June 1992;
  3. (c) in conjunction with the Secretary of State, support an energy savings trust for the promotion and monitoring of energy efficiency.'.

Photo of Miss Janet Fookes Miss Janet Fookes , Plymouth Drake

With this, it will be convenient to discuss amendment No. 51, in clause 8, page 12, line 41, at end add— '(3) Standard conditions for gas suppliers shall included a duty on licence holders to ensure that details of how to obtain free energy efficiency, bill payment and gas appliance servicing advice is clearly displayed on all written material produced by a gas supplier for use by its customers.'.

Mr. O'Neill:

The two amendments were in some respects mentioned in Committee, when we discussed matters relating to energy efficiency and conservation. We considered that it would be useful to bring the matter back to the House.

We realise that the hour is somewhat against us, but we want our responsibility for conservation matters and energy efficiency to be more explicitly expressed than the legislation does. It is important that the Director General of Gas Supply has regard to the amount of recoverable reserves of gas offshore and onshore.

The figures on gas reserves are produced annually in the Brown Book. They appear in several categories: proven, probable, proven plus probable, possible and then a maximum. We can sum up the position briefly in respect of gas reserves. The consensus is that between 20 and 35 years' supply of gas is available to us.

It is often said that, in the past 20 years, people have always assumed that there was only 20 years' supply left. That assumption has been due partly to the ingenuity of explorers and partly to the efficiency of companies in extracting gas, but we cannot always assume that there will be an infinite supply of a finite resource simply because of what has happened in the past 20 years. We therefore consider it important that the director general take account of those reserves of gas when advising on specific schemes or when considering systems of generation and the like.

Recently, in the case of electricity, when insufficient attention was given to the construction of gas-fired power stations, some of our coal reserves were lost to the extent that, when certain power stations that depended on specific coal mines closed, the mines in turn closed and we were denied access to supplies of coal. There is a link between the regulatory function and the conservation function. We would like to think that the director general would have an explicit duty to take account of the estimates that are produced annually in what has become known as the Brown Book.

There is also the environmental consideration required of us by the Rio summit. We are committed to reducing our emissions of carbon dioxide. One of the major factors in the production of carbon dioxide is the pattern of our energy consumption. It would be appropriate for the director general to take account of the success or otherwise of our attempts to meet our internationally agreed targets for emissions.

9.30 pm

The issue of most basic concern to energy consumers in the United Kingdom is probably the establishment of an Energy Saving Trust that has some legislative basis. At present, the Energy Saving Trust exists in a sort of vacuum. It has been created and is the recipient of moneys, but it does not have the proper status that it merits. The amendment is an attempt—perhaps not a wholly adequate attempt—to give proper legislative recognition to the trust.

It is important to have a national agency that gives leadership on the promotion and monitoring of energy efficiency. If we were to have a competitive market and prices were to fall, it would matter little to those who did not have proper access to information about energy efficiency. We know from the experience of many of our constituents that living in draughty houses that are not properly insulated means that much of the money that residents lay out on electricity bills follows the heat out of the windows into the cold and the money is wasted. It is vital that the Energy Saving Trust enjoys enhanced status, which is why we have referred to such a body in the amendment. There is a clear link between the director general's responsibility for energy efficiency and the trust's work.

Amendment No. 51 states that, in the standard conditions for gas suppliers, the licence holders should be required to provide information on energy efficiency, bill payment and gas appliance servicing advice. That information should be available and should be included in all written materials. We know that certain steps have been taken. British Gas has often given information and sources of information, but that information should be in the standard conditions and should be part and parcel of the companies' responsibility, even if they themselves do not provide that information. It could be argued that, if they do not provide the information, that is all the more reason why organisations such as the Energy Saving Trust and neighbourhood energy action should be drawn to the attention of gas consumers.

Energy efficiency and conservation measures should lie at the heart of the new energy market which is developing. It is not enough merely to deal with matters of price. We should be considering environmental considerations and issues involving energy efficiency—one of the best ways of improving our constituents' quality of life.

I am happy to propose the two amendments in the hope that the Minister will give greater weight to the energy efficiency and conservation responsibilities that he carries, but that really should be shared between him and the director general and her staff.

Photo of Mr Timothy Eggar Mr Timothy Eggar , Enfield North

The director general and my right hon. Friend the Secretary of State already have a duty to exercise their functions in the manner that is best calculated to promote the efficient use of gas. The director general also has a specific power to set standards of performance for gas suppliers in connection with the promotion of the efficient use of gas. The licence also sets out minimum requirements for the provision of energy efficiency advice to consumers.

We believe, as distinct from Opposition Members, that the introduction of competition will itself provide a spur to the promotion of energy efficiency, because different suppliers will want to supply gas in the most appropriate way and many consumers will want to buy that gas in an energy-efficient mode; in other words, suppliers will be competing to supply warm houses as against merely therms of gas.

On the specific points that have been raised, the United Kingdom CS point, or the reserve, is fine. In practical terms, the effect of the amendment would be completely to disregard energy efficiency, because gas reserves have gone up year on year. Gas discovered on a proven basis has exceeded gas consumed. We do not believe, therefore, that it is an appropriate factor that the regulator should take into account.

The hon. Gentleman referred to the Energy Saving Trust. He did not say that my right hon. Friend the Secretary of State for the Environment announced last week that his Department was making available an additional £25 million a year to the Energy Saving Trust to promote energy-efficient measures. Had he focused on that, he would have welcomed that move.

Photo of Michael Clapham Michael Clapham , Barnsley West and Penistone

I am grateful to the Minister for giving way. He referred earlier to the fact that the director general should not have to concern herself with gas reserves. Given that we are using more gas for energy production, and that by the end of century we are likely to be using 40 million tonnes of coal equivalent, will there not be more pressure on prices and, therefore, should the director general not be concerned with these matters?

Photo of Mr Timothy Eggar Mr Timothy Eggar , Enfield North

It is true that the domestic consumption of gas is rising; so is the amount of success with gas discoveries. Imports of gas are near their lowest level since we first started importing from Norway. Gas prices are probably at their lowest level in real terms, but we cannot be confident that will continue.

The hon. Member for Clackmannan (Mr. O'Neill) raised the issue of what would be disclosed on bills for domestic customers. The list of disclosures required is long, going far beyond what British Gas is required to do or does as a matter of practice. However, it is reasonable to expect that when gas suppliers are competing for customers they will wish to make people fully aware of the services that they offer. It is best to leave it up to them to decide the best way to do that. For those reasons, I feel unable to accept the amendment.

Mr. O'Neill:

The Minister has had a brief run around the track, and we recognise the points that he has made. We feel that there is some complacency about the view that, simply because we are getting more gas into Britain and because prices are cheaper, somehow the regulator should not take account of the levels of supply and the reserves.

We do not wish at this stage to push the amendment to a vote. We raised the matter in Committee. Everyone in the House will be grateful that money is now being put in the way of the Energy Saving Trust, because we recognise that it is an important body. I hope that the legitimacy that the funding will afford the trust will be only the first stage of putting it on a proper footing.

The Government have spent a lot of time attacking quangos, although they have created many of them. I am not sure whether the Energy Saving Trust is a quango in the true sense of the word, because it does not have a statutory basis. Although it is vaguely answerable to the Secretary of State for the Environment, a more appropriate person for that role might be the President of the Board of Trade, with his responsibility for trade and industry. However, I do not think that we need to debate that matter this evening. To avoid any further temptation to do so, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.