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Orders of the Day — Utilities Bill

Part of the debate – in the House of Commons at 6:10 pm on 31st January 2000.

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Photo of Mr Bill Tynan Mr Bill Tynan Labour, Hamilton South 6:10 pm, 31st January 2000

Speaking in debates is a new experience for me, and I am glad to have the opportunity to speak in such an important one. The Bill relates to the essentials of life for my constituents. The range of issues it covers will affect utility shareholders and consumers. The Bill is the product of two years of extensive consultation, and the House should recognise the credibility that its proposals gain from that process.

The Bill's main principles deserve our support as they address some of society's problems. We must produce legislation that ensures the best delivery of service at the right price. However, we must also be committed to achieving the highest safety standards. Reducing prices at the cost of lower safety causes enormous problems. Recently, just four miles from where I live, a massive gas explosion destroyed a house, killing a family of four. The case is being investigated by the Health and Safety Executive, but pipes were known to have corroded. Concern remains that pipes on new estates in my constituency, which were recently laid, have the same problem. We must ensure that health and safety are not compromised by price reductions.

The Bill seeks to establish a fair balance between the interests of consumers and shareholders. The radical changes proposed will be welcomed by many. The establishment of an independent consumers council has prompted considerable debate, but unless we make the council powerful, we shall create a regulatory body that achieves nothing. Consumers' fears must be addressed. If consumers have problems or complaints, there must be a central point to which to take them. I welcome the introduction of a powerful council.

Regulators will have regard for the Government's social and environmental objectives. That approach is both sensible and desirable. It has not been taken in the past. I particularly welcome the Bill's provisions for increased transparency, accountability and consistency of regulation. There will be greater scope for consultation on key decisions in the various utilities, which will provide opportunities to examine what must be done and how it should be done.

It is inherent in that process that regulators should have more powers to publish information in the interests of consumers. I welcome openness. I recall that the distribution price review was based on a consultative report commissioned by Ofgem. The report assessed labour costs and possible savings, but its findings remain confidential despite their having been a key factor in the regulator's decision-making process. We never gained access to that report. Information is vital to the achievement of accountability, giving workers in industries and consumers the chance to see important facts that affect their lives. I would welcome an assurance from my hon. Friend the Minister for Competition and Consumer Affairs that reports of that nature will be accessible to the public when the Bill is enacted.

The final proposal that would benefit the consumer by creating a fairer system lies in the trading arrangements that other hon. Members have mentioned this evening. Making the market more competitive is the intention behind those arrangements. That would offer the prospect of lower electricity prices, which all of us should welcome. However, concerns remain about the Bill, arising principally from the proposal to reduce prices by 10 per cent. Consumers would welcome that, but I sound a slight note of caution. Reducing prices must not mean that utilities shed labour without regard for safety. It is easy for employers to decide that cutting labour should be the first way to reduce costs, but they must recognise the value of employees and search for greater efficiency and delivery of service.

Recent periodic price reviews in the electricity and water industries resulted in massive redundancies. Regulation should promote careful, constructive management of change rather than encouraging the short-termism shown by some electricity and water companies.