§ Mr. Speaker
I have selected the amendment in the name of the Prime Minister.
Before the right hon. Member for Lanarkshire, North (Mr. Smith) begins his speech, I should remind the House that those of us in the Chair do our best to see that as many hon. Members are called as possible, but that depends on the length of the speeches.
§ 4.4 pm
§ Mr. John Smith (Lanarkshire, North)
I beg to move,That this House believes that in the interests of consumer safety and service the British Gas Corporation should not be forced to end or curtail the selling and servicing of gas appliances or to dispose of its gas showrooms.The motion arises from a serious apprehension on the part of the Opoosition and many other people that the Government may decide to embark upon what is called the radical and extreme option in the recent Monopolies and Mergers Commission report on the gas industry, which would involve forcing the British Gas Corporation to end its retailing arm, its huge sales of retail gas appliances, and force it to withdraw from that market, presumably without compensation, leading in turn to the inevitable closure of 900 gas showrooms, which provide excellent service to the public.
The Opposition believe that such a move would not only be unfair and wounding to the British Gas Corporation, which is one of our most successful publicly owned industries, but would have serious consequences for public safety and service. The matter arises because the Monopolies and Mergers Commission, acting on a reference by the Director General of Fair Trading irk 1977, produced a report in July last year which, among other things, considered the so-called extreme option to which I have referred.
Having read the report in detail, I am not much impressed by it. It is a superficial examination of a complicated problem. The commission does not appear to have gone into it in much depth or to have taken evidence on a wide front. The argument throughout appears to be confusing, and the conclusions are muddled and almost incoherent. [HoN. MEMBERS: "No."] That is not normally a conclusion that one comes to about a Monopolies and Mergers Commission report, because frequently such reports are valuable. I shall seek to demonstrate to the satisfaction of the hon. Member for Enfield, North (Mr. Eggar) and others why I think that the report has sadly departed from the high standards that it should seek to attain.
Having found the British Gas Corporation to be a monopoly —that is not difficult, because it requires only 25 per cent. of the market to be a monopoly under the Fair Trading Act —and having also found a foreign gas appliance manufacturer, Chaffoteaux Ltd., a private sector company, to be a monopoly, the report goes on to consider the competition in the industry. It reaches the conclusion that there is not enough activity in the private sector, and 1035 therefore it says that it does not know whether the gas corporation is cost-effective. It believes that the present system somehow threatens the gas appliance industry.
Part of the difficulty with the report is that in paragraph 13.86 it almost reaches the conclusion that it should perhaps make no recommendation. Later, it lurches towards the proposition that there should be the so-called extreme option. It considers the possibility that the British Gas Corporation should have its retail activities amputated, or a lesser option that there should be a reorganisation of the retailing arm to allow separate accountability.
The report does not make a recommendation. In a curious paragraph at the end the report says that it would make a recommendation but that it realises that there are "political considerations upon which the Commission does not normally form a view …In view of all the circumstances, we do not think fit to express any recommendation between these courses."
It is most odd to find the commission in such a muddle. The report is further muddled because two out of the six members of the commission who compiled the report actively argue in subsequent notes against the so-called extreme option.
Before dealing with competition, I should like to consider the nature of the industry. It is no accident that the gas industry is highly integrated in the supply of energy and gas appliances. It is also no accident that the organisation that supplies gas has become the dominant supplier of gas appliances and has the major responsibility, which it discharges well, for ensuring safety and servicing.
It is inherent in bringing gas into the home that the organisation responsible for that should also have the responsibility for ensuring that appliances are correctly and safely installed. There is all the difference in the world between buying an electrical appliance over the counter and plugging it in at home, and installing a gas appliance. Unskilled operators can endanger the safety of the consumer and many others in the neighbourhood. Everyone who knows about the gas industry recognises that that is an important consideration.
If the BGC is forced out of the retailing side, the standards of safety and service over the whole industry will inevitably decline and seriously deteriorate.
§ Mr Tim Eggar (Enfield, North)
The right hon. Gentleman makes absurd accusations. What shred of evidence has he to justify his statement?
§ Mr. Smith
I have the evidence of the Monopolies and Mergers Commission report, which pays tribute to the high standards attained by the BGC. In addition, many of those in the gas appliance industry have repeatedly drawn the matter to our attention. If that is not enough for the hon. Gentleman, he should read the letter that the National Gas Consumers Council has sent to every hon. Member expressing its serious concern.
§ Mr. Speaker
Order. This is an abbreviated debate, and I have reason to believe that the hon. Member for Enfield, North (Mr. Eggar) will try to catch my eye later.
§ Mr. Smith
I am not giving way. I knew that I was being too kind in giving way to the hon. Member for Enfield, North (Mr. Eggar). He asked for evidence, and when he was supplied with an amplitude of it his only recourse was to try to bluster his way out.
The British Gas Corporation spends £27 million a year on servicing and safety work to ensure customers' safety. In 1980 alone, the corporation's staff discovered 196,000 potentially lethal installations, which they put right. About 20,000 people are engaged in servicing and safety, and the BGC recruits 1,000 apprentices each year who are trained to become highly skilled gas fitters with responsiblity for servicing and safety. Apart from anything else, if the BGC is forced out of that end of the market those 1,000 new jobs every year will be put at risk.
The BGC has to service 8,500 different appliance models. Part of the difficulty is that, of the 34 million appliances in use, 24 million are no longer in production, but the BGC has to carry spare parts and service those appliances, which it does on a wide scale throughout the country.
The major work of safety and servicing could not be maintained at present levels if the BGC did not have the retailing arm that justifies it. As is made clear by the NGCC and many others who have considered the matter, there is no way in which the 900 gas showrooms could be maintained on the present basis if the BGC were forced out of the retailing side. The showrooms are not used only for the sale of appliances. Their staffs give advice on energy matters, and the showrooms are used for the paying of bills —£800 million a year is paid to the corporation across the counter —for dealing with hardship cases, through the payment of accounts that have fallen into arrears, as a point of contact for consumers when emergencies arise, for the sale of energy stamps and for a range of other activities.
The gas showroom is an excellent place in which the public can get advice and consultation about the installation and purchase of gas appliances. Nearly every sector of the population has indicated its serious concern at the prospect of that beneficial public activity being brought to an end.
On safety and service grounds alone there is an overwhelming case for maintaining the present capacity of the BGC. In normal circumstances that ought to be enough for the Government to desist from considering the course of action on which they are embarked. I hope that they will not adopt the extreme option, but our fears were raised by the Chancellor of the Exchequer, who said in Swansea on 5 April:The Monopolies Commission has recommended that the British Gas Corporation should dispose of its showrooms and the Government is considering the best way in which to carry this out.That is not true for a start. The commission recommended no such thing. The Chancellor of the Exchequer 1037 misapprehended the commission's recommendation, but his speech showed that the Government were considering the extreme or radical option. One of the purposes of the debate is to dissuade the Government from that course.
The argument that seems to be thought to be more important than the good record of safety and servicing is the need for competition. It may have escaped the attention of some hon. Members, but there are already 2,000 private retail outlets for the sale of gas appliances. I do not know what is preventing the private sector from entering the market in a bigger way if it wishes to do so.
The Monopolies and Mergers Commission report is unconvincing. It says that the BGC sometimes gets discounts from manufacturers because it buys in bulk. What a wicked thing! Marks and Spencer always buys in bulk and gets discounts, but we do not hear Conservative Members running round the country saying "Unfair. It must be stopped." Part of our difficulty is that Conservatives feel that they must do something about successful public sector industry.
During the 1950s and 1960s, when the gas industry was not so dominant and gas appliances were not so popular, the nationalised sector stuck with the industry and many private retailers left because they did not see a prospect for making profits. Now that gas has become much more popular, the private retailers have come back.
The commission noted that there was much more activity in the private sector. The gas appliance manufacturers make it clear that they do not discriminate between the public and private sectors, but supply to both. The notion that the consumer is deprived of freedom of choice is absurd. In the average British Gas showroom there are about 30 different models of cookers. Consumers are lucky if there are 10 cookers and four or five fires on display at the average private retail outlet. That is the case throughout the, country.
One reason why private sector retailers do not wish to go into the market on the same scale as the private sector is involved in the electrical appliances market is that the gas market is much more difficult. A person does not buy a gas appliance, put it in the boot of his car and take it home. Retailers must have some responsibility for the installation and servicing of appliances, in the interests of the consumer and the neighbouring community. That is why the market has been less attractive to those who are interested only in making a quick profit.
The most absurd section of the commission's report says that the present system threatens the gas appliance industry. It is suggested that the industry is held back from development because it is not given enough customers. The gas appliance industry has made it clear in recent months that it does not agree. Conservative Members must give the people who work in the industry and the managers who run the industry some credit for knowing something about it. I think that they know a little more than do vocal hon. Members who interrupt from a sedentary position.
Much more serious is a likely sequence of events in which the BGC will be forced out, with no certainty that anyone will fill the gap, and that private sector retail outlets will sell more electrical than gas appliances. The gas appliance market will then decline with serious consequences for the profits and employees of the manufacturers of gas appliances, faced with much lower demand for their goods. That is not merely a supposition.
1038 It is what the gas appliance manufacturers say themselves, as letters written to hon. Members by those manufacturers show.
There will be a stimulus to imports to fill the gap created by the removal of the British Gas Corporation. That is a serious matter. If imports are stimulated in a market already supplied by British manufacturers, there will be serious consequences for jobs and for the success of industry. So much for the patriotism of the Conservative Party. The first opportunity that Conservatives have to try to erode a successful British industry by encouraging foreign competition, they seize it with both hands. The Opposition take a much more responsible attitude to the jobs and success of the industry.
The great difficulty is that the extreme option in the Monopolies and Mergers Commission report has been seized upon by some prejudiced and biased hon. Members on the Government Benches. They are Right-wing ideologues who cannot allow a successful public industry to operate unscathed. Their continual and perpetual animosity towards successful public sector industry is one of the most crude symptoms of our present political life. If a public sector industry is not successful, it is derided. If it is successful, it has to be attacked and sold off —the most profitable section first —to the private sector.
Those who argue for that course —I hope that they do not constitute a majority in the Government or the Conservative Party —now seek by devious means to do severe harm to the British Gas Corporation under the guise of spurious competition. At no stage in the course of the Monopolies and Mergers Commission report is any evidence adduced for the fact that increasing private sector retail outlets would reduce prices or increase the range of choice available to the consumer. There is no evidence. It is merely a political assumption made and asserted, rather than argued, throughout the report.
§ Mr. John Bruce-Gardyne (Knutsford)
It might help to put the matter in perspective if the right hon. Gentleman will say how many complaints he has received from constituents about the service provided by British Gas for its customers. Is my constituency exceptional in the substantial load of complaints that I receive about the service that this great monopoly provides to the customer?
§ Mr. Smith
I agree with the hon. Gentleman that his constituency is unique in one respect. It has to put up with him for a start.
I get very few complaints. Within the last year, I do not think that I have received one complaint from any constituent about the British Gas Corporation. I have had a large correspondence from many people worried about the closure of gas showrooms. I believe that that is the experience of many hon. Members.
What might be regarded as a case for either some minor adjustment of the retail side of the British Gas Corporation, or no action at all, which I think is just as feasible, has been changed into a debate on an entirely different matter, namely, whether the British Gas Corporation should be allowed to pursue its activities in a particular area. Over the years the corporation has built up an integrated, highly developed system in which safety has been a paramount consideration.
I hope that the hon. Member for Knutsford (Mr. BruceGardyne) will examine the safety record on installations. The ratio of accidents as a result of private sector 1039 installations compared to those of the British Gas Corporation is 15 to one. There are 15 times more accidents in non-BGC installations than in public sector installations. That is one reason why there is not the volume of complaints that the hon. Gentleman alleges. The hon. Gentleman is the most dedicated of all the crude ideologues in the Conservative Party. He spares no time attacking the British Gas Corporation, including the chairman and the staff, on any occasion he can find.
One symptom of the way in which debate has been moved from proper consideration of a report of the Monopolies and Mergers Commission on to the wrong ground is that it must be the first MMC report which says, in relation to a trading situation in which it has some criticisms to make of the trader, that the trader should be forced out of business. I have never heard that argument used previously in terms of a Monopolies and Mergers Commission report. It is one of the possibilities that is canvassed in the report. It is that possibility to which the Opposition seek to draw parliamentary and public attention.
I do not know whether a final decision has been taken by the Government. The terms of the amendment would seem to indicate that it has not been taken. The cautious phrasing of the amendment leaves a number of options open to the Government. I hope that the focusing of attention on the matter in this debate means that the Government will be forced to listen to the voice of Parliament and that a debate will be stimulated in which the voice of public opinion is heard. It is important that the public should be alerted to the dangers inherent in adopting the extreme course that the Opposition motion attacks. As one of the members of the Monopolies and Mergers Commission team commented, it would be a leap in the dark.
§ Mr. Smith
It would be a sad and dangerous course for the Government to adopt. It would be bad for the British Gas Corporation and for the public, who are the shareholders, and who share in the profits of this activity. Even more important, it would reduce the high standards of consumer safety and service, of which we can be proud. I hope that the House will express its confidence not only in the record but in the great potential of the British gas industry and the appliance industry by supporting the motion.
§ The Minister for Consumer Affairs (Mrs. Sally Oppenheim)
I beg to move, to leave out from "That" to the end of the Question, and to add instead thereof:'this House welcomes the fact that the Government, recognising the serious adverse public interest findings in the Monopolies and Mergers Commission's Report on the Supply of Domestic Gas Appliances, and the need to strengthen competition, has accepted its responsibility for examining thoroughly ways of producing the most effective remedy, while maintaining safety standards, availability of supplies and adequate services to consumers.'.I must say that listening to the uncharacteristically intemperate and ill-researched opening remarks of the right hon. Member for Lanarkshire, North (Mr. Smith) one could be forgiven for thinking that the House was debating a proposal hatched up by some extreme Right-wing caucus in the Conservative Party, with the sole aim of dismantling a nationalised industry. We are not.
1040 What we are debating is an extremely thorough report, following an extremely thorough examination by a completely independent body free of any party political identity —the Monopolies and Mergers Commission —in response to a reference made under the previous Government, published last year after three years of exhaustive investigations. It is hardly the superficial report represented unfairly by the right hon. Gentleman.
The report concludes that the corporation's monopoly has acted against the public interest by restricting competition in the retailing of appliances, by vin[...]ue of its ability to demand advantageous terms from the manufacturers and to subsidise sales of appliances from the sale of gas. This, the commission suggests, has limited the number of independent outlets, suppressed competition, and possibly increased prices.
The commission considered, too, that the manufacturers had given undue weight to the BGC's views on design, have accorded delivery and price preference to the corporation, and are over-dependent on the BGC's marketing of their appliances, and that indirectly this has restricted and distorted competition, deprived consumers of the benefits of competition, reduced incentives to improve efficiency, depressed investment, and led to poor performance on the part of the manufacturers.
There are also criticisms of the monopoly enjoyed by some manufacturers of gas appliances, but the recommendations in this regard were far less trenchant than in relation to the BGC.
So —we have the evidence before us —consumer choice has been limited, prices have been higher than they might otherwise have been, and the competitiveness and investment policies of manufacturers and, more importantly, their readiness to respond to consumers wants and needs, have all been seriously undermined by the dominant and dominating position of the BGC, in the opinion of the MMC.
That is what we are debating —those very disturbing findings and the Government's and the Opposition's reaction to them. We have just heard the Opposition's reaction. It is quite plainly to reject the consumer interest in favour of the entrenched public sector monopoly. I welcome this occasion to discuss the Government's reaction and to deal in greater detail than did the right hon. Gentleman with some of the MMC's findings.
First, however, I wish to express my concern and that of my right hon. Friends at the reprehensible scare campaign waged by the BGC, reinforced this afternoon by the right hon. Gentleman, about the possible consequences of certain courses of action —if they were to be decided upon by the Government —on safety, service, availability of gas appliances and convenient access for consumers to advice and account-paying facilities.
This propaganda campaign —that is what it is —is quite unwarranted, as I shall show, and was clearly calculated to evoke unjustified fears on the part of the public. Moreover, it is a campaign —perhaps this is the most damning part of it —that has made no attempt to answer the criticisms made by the commission. My hon. Friend the Under-Secretary of State for Energy has already roundly condemned it in the House.
Let me make it absolutely clear at the outset, and in response to that campaign, that no solution that failed to maintain safety, at at least its present level, that limited availability of supplies, that generally inconvenienced 1041 consumers, or that was seriously damaging to manufacturers, would be acceptable to the Government. I shall go further into these matters in detail shortly.
§ Mr. Bruce-Gardyne
I warmly agree with every word that my right hon. Friend said about the disgraceful and reprehensible campaign by the British Gas Corporation, but that is not untypical of the present management of the corporation. I wonder why, in these circumstances, we decided to renew the chairman's mandate for a further five years.
§ Mrs. Oppenheim
I know that my hon. Friend will be aware that that was not a decision for me, but it is a decision that, as a member of the Government, I uphold.
§ Mrs. Oppenheim
No, I cannot give way.
I shall return to some specific matters in the report that the right hon. Member for Lanarkshire, North found it convenient to slide over.
§ Mrs. Oppenheim
No. This is a short debate. I am telling the House the Government's position, and I cannot give way at this stage in such a short debate.
I should like to set out for the House the three important findings that the Commission made and that the Government have accepted and feel bound to act on. First, the commission found that the British Gas Corporation was monopolist in relation to the retail supply of specified gas appliances and that this had operated, and might be expected to operate, against the public interest. Secondly, it found that some gas appliance manufacturers enjoyed a monopoly position in relation to the supply of cookers and that this was against the public interest. Thirdly, it found that all the manufacturers belonging to the Society of British Gas Industries had so conducted their affairs as to restrict or distort competition, and that that had operated against the public interest.
These conclusions are set out at length in the report and, taken together, they offer an impressive and depressing testimony to the power of a monopoly buyer —in this case a public sector corporation —to institutionalise lack of competition in an industry, and to an inadequate response to consumer needs. In the Government's view, it is essential from the point of view of competition policy that a vigorious remedy should now be found.
This was also recognised by the commission, which considered that the adverse effect of the manufacturers' monopoly that it had identified would be remedied by modifying the corporation's position. In this respect the commission identified two main options but, as the right hon. Gentleman said, it did not choose between them. The first was the "radical" course, by which British Gas should discontinue its retailing function over the space of a suggested three years. The second was the "gradual" course, in which the corporation's accounting and other procedures would be changed with a view to reducing its dominance in the retailing sector and thereby influence over the manufacturers. The BGC would be obliged to avoid obtaining an unfair price advantage in purchasing and to allocate showroom and other costs scrupulously.
These are two widely differing recommendations, and the Government have considered them very carefully, with other possibilities that give a comprehensive range of options. But however varied the range of possibilities, one 1042 conclusion from the report is inescapable —that the dominant position of the British Gas Corporation in this market must be, at the very least, substantially reduced —although no final decision has yet been taken on the precise means.
I think that it will help the House if I am as candid as I can be on the types of choice that face the Government in considering a solution.
At one end of the spectrum is the "radical" course suggested by the MMC. There is no doubt in the Government's mind that this course would rapidly resolve many of the problems in the market as identified by the commission. But the problem with this course is that it has an extremely compressed timetable. No option that includes a timetable so compressed that essential services were disrupted and the consumer interest suffered would be acceptable.
Wider than that, there is a legitimate interest by the domestic gas appliance industries in ensuring a minimum market disruption in any transition to a new market structure from the cosy structure that they have enjoyed with the gas corporation in the past.
The Government are considering several options. I am sure that the House would agree that the Government should research as fully and consult as widely as possible before reaching a decision, so as to be fully informed of all the practicalities of each suggested approach. Two options are among those currently under consideraton, including the MMC's options. The first is that the British Gas Corporation should be required to withdraw from gas retailing, but over a longer period than that proposed by the commission, subject to ensuring the retention of convenient accessibility for consumer advice and bill paying, and that safety standards for the installation and maintenance of gas appliances were also maintained, by means of either a statutory or a voluntary code.
Another option that the Government are considering is that the BGC itself should set up the retail sale of gas appliances in a separate subsidiary. In addition, the corporation would sell to reputable dealers appliances on the same terms as they are made available to showrooms.
In considering those options the Government have to bear in mind certain points made in the MMC report in arriving at the serious conclusions that it did. The report highlights a number of damaging contributory abuses, which serve as almost classic examples. Manufacturers have had pressure put on them by the corporation to offer progressively higher discounts to the corporaton, but not to others. Manufacturers dominated by one purchaser, and at the mercy of its purchasing policy, have been reluctant to invest.
Consumers have suffered, because the range of appliances available has been more limited than it would have been and is in other countries. Manufacturers have been slow to anticipate and respond to consumer demand —a situation that itself could provide a ready market for imports.
Manufacturers' spares and supplies systems have been adapted to the requirements of the BGC, while private sector retailers have been made to suffer delays in the supply of goods and spares and, in some cases, have been denied access to certain models.
The whole far-too-cosy relationship between the BGC and the manufacturers has disadvantaged private retailers, driven some of them out of the field altogether, discouraged new entrants, and certainly harmed the 1043 consumer interest. Very importantly, numerous complaints were received by the commission from independent retailers that deliveries from certain British manufacturers were unreliable, because the BGC had the first call on appliances.
Moreover, the independent sector, although buying appliances at prices substantially higher than the BGC, was already selling those appliances at prices below —sometimes substantially below —the selling prices in the BGC's showrooms. While in some cases aggressive tactics were employed locally in some regions, in one case a retailer reported to the commission that local showroom staff attempted to undermine public confidence in the private sector retailer, as does the BGC propaganda, and as did the right hon. Gentleman in today's debate. Finally, the report says:The consumer has suffered from the fact that the Corporation has become in practical terms the sole decision taker. Even if all its decisions have been prudent and public spirited (we have no reason to doubt that over the entire field of its activities the majority have been both) they are no adequate substitute for the choice provided in a competitive situation.That is a massive indictment of the status quo, which no Government could ignore.
§ Mr. John Smith
Does not the right hon. Lady agree that she is a great tiger against the public sector monopolies but is very quiet about private sector monopolies, some of which are mentioned in the report? More important, where does she see the restriction on consumer choice, when in the average gas showroom up to 30 cookers are available, while one is lucky to see 10 in private sector showrooms? On that basis, surely the BGC is giving a very wide consumer choice.
§ Mrs. Oppenheim
I hope that I am as much a tigress about private sector monopolies or anything that undermines competition as I am in the case of the public sector. The right hon. Member for Lanarkshire, North asks why more appliances are available in the BGC showrooms than in private sector showrooms. It is because private sector showrooms do not have access, and they do not have access because of the agreement that the BGC forces on its suppliers. That is the answer to the right hon. Gentleman's question.
I turn now to some of the points raised by the right hon. Gentleman this afternoon, and to other points that appear in the motion that may lead to misunderstanding and groundless fears. The right hon. Gentleman, with noticeable "Rooke-ability" —in terms of the gas showrooms' own advertising slogan —referred a number of times not only to the possible consequences of the various options outlined in the MMC report, which contained two alternatives, but, by inference to those that might ensue following any disruption of change in the retail supply, installation and maintenance of gas appliances, arising out of any of the options or whatever course of action was chosen by the Government.
I remind the House that as yet no decision has been taken by the Government, but, whatever decision the Government take, it is only fair to those already operating in the private sector, who, by implication, have been impugned by such remarks as those of the right hon. Gentleman this afternoon and by the BGC's campaign, to set out some of the facts, while in no way anticipating the Government's final decision.
1044 First and foremost is safety. Obviously, it is understandable that there should be fears on this score. The Government fully appreciate and accept the importance of this aspect of any solution that they reach, but it is important, too, to dispel any unwarranted fears aroused by the right hon. Gentleman's remarks among consumers already purchasing appliances, or about to purchase appliances, from private sector retailers, and at the same time to set the record straight about the status quo in terms of the sales and service of the British Gas Corporation itself.
The implication made by the right hon. Gentleman is that the installation and maintenance of gas appliances by anybody other than the BGC is necessarily less safe and less reliable. I remind the House that there are 9,000 Corgi-approved member firms in the private sector. The BGC itself sub-contracts, particularly in the case of central heating installations. It sub-contracts, so far as it knows, to Corgi-approved installers, but it does not know to which firms those Corgi approved installers will sub-contract. Does the right hon. Gentleman object to that?
In an emergency such as a gas leak in the night, does the consumer rush down to the local showroom and beat on the door? He cannot even get his local showroom on the telephone. Of course, he does not. He picks up the telephone and rings the gas board emergency service, not the showroom.
During the period of conversion to North Sea gas, which many right hon. and hon. Members will remember, did the BGC, which sub-contracted widely on that occasion, find it necessary to express its public concern about the firms to which they were sub-contracting? Of course it did not, although the potential dangers of that conversion in the minds of many people was far greater than with the installation of a mere gas appliance. The BGC did not find it necessary to wage a campaign against sub-contractors on that occasion.
§ Mrs. Oppenheim
I must make one point clear because it is very important, as I am sure the right hon. Gentleman will agree. By no means do the Government say that safety is unimportant. On the contrary, It is very important. But even without the present publicity campaign —which, as I have told the House, I regret and deplore —safety would rightly be a matter of public and essential concern in any decision that the Government reached.
Anyone could be forgiven, listening to the right hon. Gentleman and reading the BGC's advertisements and propaganda, that the BGC's services were above criticism. But the National Gas Consumers Council receives over 30,000 complaints a year about the corporation. Fifteen thousand of those complaints are about its sales and service. Possibly as many complaints again are received by the citizens advice bureaux on the same subject, so the corporation's standards are themselves hardly beyond criticism.
§ Mrs. Oppenheim
I regret to say that it has been brainwashed by a highly misleading document. The association must look to its own complaints and the evidence that I am now presenting before it makes its final 1045 decision. It is easy to instill fears in people. It is the easiest thing in the world to stir up fears, particularly in an unwarranted campaign. Anybody could be forgiven for being made fearful by such a campaign.
Let us look at the reality behind the campaign. I am informed that gas appliance installation technology is comparatively low technology. On the "Today" programme this morning we heard a prominent retailer say that the after-sales service of gas appliances was much simpler than that of electric appliances. Nobody simply delivers an electric cooker and pushes a plug in. That is quite a different matter. It must have special installation. I am not making value judgments about one type of appliance or the other, but the technology of installation of electric household appliances is much higher than that for gas appliances.
Those selling gas appliances in the private sector have found, as has the corporation, that they can easily adapt the skills of their electrical engineers to those of the relatively low technology in installation. We are discussing not the fundamental installation of the gas supply but merely the connection of appliances to it, which is very different.
I turn to a number of the fears expressed about availability and continuity of the supply of gas appliances to consumers if any changes are made in the present structure. It is already clear that under the present system in certain areas choice in the range of appliances available is far too limited —very limited indeed when compared with similar electrical appliances.
§ Mrs. Oppenheim
The right hon. Gentleman has only to see, in any department store, the size, range, and flexibility of the electric cookers on offer in the market compared with gas cookers. Perhaps he has not been to such stores.
§ Mrs. Oppenheim
I shall not give way again. It is not fair to other hon. Members who want to take part in the debate.
More emphasis on the private sector avenue for retailing these appliances would inevitably lead, as a result of response to demand, to wider choice and more availability, and that is what consumers want.
In any change, whichever option is finally decided upon by the Government, there will have to be a transition period. That is what appliance manufacturers fear, and those fears must be taken fully into account by the Government in deciding upon any option. However, the fundamental fact remains that if consumers want to buy gas appliances, retailers will sell them. The reality is that market demand will dictate, as it should, what retailers sell.
There is a considerable hard core of consumer loyalty to gas cooking. For example, many consumers want only to cook on gas appliances, despite the fact that those appliances are more limited than electrical appliances. Retailers would surely respond to that demand. Under the present regime they are prevented from doing so as fully as many would like. Indeed, if the status quo were allowed to continue without any change they would turn increasingly to imports, frustrated as they are today by some British manufacturers because of the manufacturers' relationship with the corporation.
1046 I have already dealt with the points that have been made about consumer access to advice. I must now turn to the consequences that would follow the adoption of any of the options that I have outlined —either those put forward by the commission or any of the alternatives that the Government are considering. I fully appreciate the concern about employment. However, under any of those options the corporation would retain its fundamental role in the installation and maintenance of the primary gas supply. Clerical and administrative staff dealing with billing, inquiries and advice would not be affected.
Here, I should like to pay tribute to the staff in the gas showrooms throughout the country. [HoN. MEMBERS: "Oh."] The right hon. Gentleman did not pay tribute to them. Many of them give excellent service. Much of their work in providing consumer advice and bill-paying facilities is essential, whatever the future shape of the gas appliance market. [Interruption.] I hope that instead of making those primeval noises hon. Members will join me in recognising that work.
At the end of the day the Government have to take a very difficult decision. Their objective and their first responsibility must be to respond to and remedy the adverse findings in the commission's report in a way consistent with the need to give consumers wider choice, better service, safety, availability and convenience, and at the same time to minimise as far as possible any adverse effects of any changes on our own manufacturing industry and on the employees of the British Gas Corporation.
The Government are ready to honour their responsibilities and obligations in this respect. It would be nice, but no doubt unrealistic, to think that the Opposition would join us in a constructive and responsible approach and support the Government's amendment and thus the British consumer in the Lobby tonight.
§ Mr. David Ennals (Norwich, North)
We have listened to a very disappointing and prejudiced ministerial speech. It was disappointing in that, although the report was presented nearly 12 months ago, the Government have not been able to reach their conclusion —even the sensible one of rejecting the "radical" proposal that is the principal proposal before us. As for prejudice, what the Minister said suggests to me that, although she made no announcement, she has made up her mind what the Government will do.
The right hon. Lady went through all the criticisms of the British Gas Corporation and none of the tributes to it. She then accused it of defending itself, it having been attacked. Is it not human nature, and is it not natural, for a body, whether a public or a private corporation, to defend itself if it is attacked? I believe that it was right for the corporation to defend itself and to tell the public what would be some of the consequences of the radical proposal if it were implemented. I believe that if it were, it would be a disaster for the gas supply industry.
The right hon. Lady and other Conservative Members referred to the countless criticisms that hon. Members receive. I do not receive such criticisms of the services provided by the corporation. The criticisms that I receive in countless numbers are of the prices —and those result from the decisions taken by the Government. They cannot be laid at the corporation's door.
The Government would be well advised not to allow their passionate commitment to private enterprise at all 1047 costs to sway their judgment. Their judgment must be based upon the public interest. They should reject the radical proposal. It would be an act of political madness were they to go down that route.
We are considering today not the profits in the manufacturing industry —large profits are made by the private sector so I do not know what the complaints are about —but the radical proposal. We must begin by recognising what the Monopolies and Mergers Commission has to say about the present service.
I listened to the Minister going through the litany of criticism. I wish to quote from page 103 of the report:It must be acknowledged that the present practices of the Corporation have provided the public with a nationwide retail and advice service which the public has found of high value and which has concerned itself, to the great advantage of all, with ensuring that the supply of gas is safe.
§ Mr. Ennals
I shall not give way. If the hon. Gentleman wishes me to read on, I shall do so. The report continues:Nevertheless we discern in particular two overriding defects in the present situation. Of these the first is that the public is losing the benefits of competitionthat is nonsense. It continues:and thereby that we cannot know whether or not the Corporation's retailing system is indeed cost-effective or whether it provides a range of appliances meeting consumer demand at the cheapest price. The second is that the present retailing system threatens the longer-term efficiency and viability of the appliance industry.Those are two speculations with no evidence to justify them—[Interruption.]
§ Mr. Ennals
I shall not give way to the hon. Gentleman, who is always making sedentary interruptions. We must concentrate on the proposals before us.
With regard to the second alternative considered by the commission —it was only given two —the British Gas Corporation said it was prepared to consider some change in the acounting system. However, in this debate we are simply dealing with the radical alternative.
The commission has not only paid tribute to the corporation for its services, but has shown some of the grave damage that could result from the radical proposal. It did not reach the conclusion that the radical proposal should be carried through, but played into the hands of the political prejudices of the Conservative Party by saying that it was a political judgment. Its report states on page 105:We are, at the same time, very much aware of the problems that would be created by such radical change of policy as the cessation of the Corporation's retailing.It continues:Almost certainly (unless other showroom businesses were substantially increased) there would be some loss of employment. A number of other jobs might also change and some be lost.The corporation believes that up to 40,000 people could be put out of work. The unions put the figure at between 30,000 and 35,000. Why do not the Government 1048 automatically reject a proposal that could add another 30,000 to 35,000 to the already monstrously long list of unemployed? I find that amazing.
The commission saw other difficulties. It said:the discontinuance of retailing might lead to the closing of some showrooms.It would lead to the closure of many showrooms. The report added:and thereby the lessening of their functions as centres for advice on energy saving. If so, this would be a loss to the public. It is also likely that showrooms with only a modest turnover might be closed, but that the towns where they were located might not have enough trade to offer to attract alternative retailers of substance with large stocks. Hence, such towns would lose by the closing of their local gas showroom both its advice centre functions and the wide range of stock it held, without any evident offsetting benefit.The Minister did not mention energy. Perhaps she did not think it important. The report went on:Finally, independent retailers are unlikely to commit substantial resources and goodwill, and particularly the necessary investment in specialised staff training to a market the future of which is uncertain, at least in the medium term.
§ Mr. Ennals
This is a short debate and I do not wish to take much longer because many of my hon. Friends wish to speak. The radical proposal would be a demolition job on a fine public service. The Government today should have rejected that radical proposal. We could then have considered a number of other serious proposals contained in the report. I do not believe that the radical proposal would help the private sector. The Government think that if we close down or squeeze the public sector all of a sudden there would be a great burgeoning of the private sector. That does not appear to be the case. I do not believe that that would happen.
If the British Gas Corporation was no longer involved, the range of appliances that manufacturers produce and that retailers display, stock and sell would shrink. Manufacturers' costs would increase, sales would fall because of reduced promotion, advertising and the nature of independent retailing. Gas would compete with electricity at point of sale, and the problems of installation, ventilation and flueing that are unique to gas would place gas appliances at a disadvantage.
I do not believe for one moment, from anything that has been said either in the report or by the Minister in her speech, that it would be in the interests of the public to carry through the proposal. The task of the House is to be concerned with the interests of the public. The interests of 14 million showroom customers would not be better served by the wholesale closure of gas showrooms and the forcible withdrawal of British Gas from appliance retailing.
I said that I regretted the fact that the Minister was not prepared to make a statement today. Thank heavens the Opposition decided to hold the debate so that our concerns could be properly aired, not only to the House, but to the public at large. I hope that the Government will listen to what is said before they reach their final conclusions.
§ 5.8 pm
§ Mr. John Hannam (Exeter)
I shall speak briefly in this important debate on the future of the gas showrooms and on the importance of the report that has been presented to the House. I disagree with the remarks of the right hon. Member for Lanarkshire, North (Mr. Smith), who described the report as superficial. Much work went into producing the evidence.
I support the Government's amendment to the Opposition motion, which, as usual, represents a blind determination to maintain the statue quo regardless of the circumstances. Nationalised industries continue to fail to realise the effects of the recession. They show a certain inflexibility. Their objective response to any report is to put their arms around themselves to protect themselves from any sensible streamlining or improvement. We must consider the report in a cool and calculated manner. My right hon. Friend the Minister did that in her opening speech.
Whether it is by British Telecom responding to the competition of the market by producing newer models and better service, or by British Rail responding to the challenge of lower fare coach services, it is that sort of competition that begins to produce real benefits for the consumer. That is the objective of the Monopolies and Mergers Commission's report. We are considering a valuable report and endeavouring to ascertain the methods by which we can make improvements for the consumer.
The commission found that monopolies exist and that they are against the national interest. It found that they have resulted in lack of investment, poor research and development and a failure to provide exports. It is the same old story, and most consumers recognise the symptoms. As we are dealing with a State monopoly, the Government and Parliament have to find the solution. That is not the responsibility of the market outside the House.
We begin by taking account of the views expressed throughout the country by consumers, consumer organisations, representatives of the industry and representatives of the British Gas Corporation. That is the method by which we as Members of Parliament approach this sort of debate. Following that, we try to come to some conclusions based on a natural desire, as expressed by my right hon. Friend, to protect the safety of and service to the gas consumer, while overcoming the monopoly deficiencies that we now know exist.
There are about 900 showrooms offering sales of cookers and appliances, accounts departments and service and installation advice facilities. I do not believe that a change in the accounts system would have an adverse effect on gas consumers. There will always be a gas corporation presence in the high street and there will always be corporation offices. They will always exist, given the nature and size of the industry.
§ Mr. Stephen Ross (Isle of Wight)
Will the hon. Gentleman accept that about 100 showrooms have already shut in many towns, especially in my constituency? If the sales and retailing sector is removed, there will be many more closures.
§ Mr. Hannam
I am describing the accounts side of the business, and not necessarily the closure of all the retail outlets. If the showroom-retail part of the business were taken away, or if the accounts side of the business were taken away from the showroom, facilities would still be 1050 provided through the Post Office for the paying of accounts. We all know that. How many hon. Members in the Chamber go to their local gas showroom to pay their gas account? I should be interested to know how many use the showroom for that purpose. The argument that we must maintain highly expensive central high street showrooms for the payment of accounts does not hold water. Facilities for paying accounts will be provided in other directions.
Do we need the showrooms to effect the sale of appliances? The report tells us that one in four gas showrooms had a turnover in 1978 of less than £25,000. That is about two cookers a week on average. Therefore, I do not consider that a large range of expensive showrooms is necessary for retail sales.
We begin to move into an area of argument and concern when we come to consider a careful approach to servicing, safety and emergency services. My right hon. Friend stressed her awareness, and that of the Government, of these factors. At present, a large range of spares and equipment is stocked by British Gas. A full, if somewhat uneconomic, servicing and back-up service is provided.
The right hon. Member for Lanarkshire, North implied that lower safety standards are observed and provided by private sector installers. I refer him to paragraph 13.72 of the report, which states:However, the purpose of CORGI is to maintain satisfactory levels of competence among installers, and there is no evidence that gas central heating installations are less safe because they are normally installed by private sector firms".The right hon. Gentleman implied that there was a general acceptance and assumption on the part of the members of the commission that a lower standard of safety was inherent in private sector installations. Having heard the representations made by the National Gas Consumers Council and its chairman, Sheila Black, I am prepared to accept that the Government must approach carefully any change in the gas retailing system. A great deal of adjustment will be necessary on the part of consumers, manufacturers, retailers and installers if we are to avoid serious disruption in a vital energy supply system.
§ Mr. John Smith
I think that the hon. Gentleman has read the representations made by the British Gas Corporation. It observed that in 1979 there were five explosions in domestic premises due to faulty workmanship arising from British Gas installations, and 146 from other installers. Of a total of 151 explosions, only five were attributable to the corporation. As the corporation is responsible for the vast bulk of installations, is it not clear that it has a much better safety record than has any other organisation?
§ Mr. Hannam
That is evidence presented by the corporation. I should wish to consider it carefully. The right hon. Gentleman will be aware that the Confederation for the Registration of Gas Installers represents a protective mechanism, which should be strengthened to deal with what might be an expansion of installations by the private sector. It would be ludicrous to pretend that one monopoly organisation has a better standard of service and technology than that provided by all the expertise that is available throughout the industry. That argument does not apply. It is not the only expert system that exists. I do not accept evidence that is presented by the one organisation that is in a defensive position. I believe that we can require and effect the necessary safety requirements and precautions through the mechanism of the 1972 regulations.
1051 When representatives of the National Gas Consumers Council came to the House, they said that we must ensure that we have strong safety requirements that are backed by law. The main thrust of their representations was essentially that fair competition should be established initially through separate accounting systems. Even the guardian of the monopolistic gas corporation, the chairman, has accepted that as the first requirement as laid down by the report of the Monopolies and Mergers Commission. The representatives of the NGCC require stronger safety requirements, and that would be part of the changed system. They require fair competition, including the opportunity for British Gas to compete with the private sector, with discounts being based on the quantity of goods supplied.
The council went on to suggest that the Confederation for the Registration of Gas Installers should become an independent self-financing federation that is able to enforce standards of safety for installations. It suggested that the 1972 gas safety regulations should be reviewed by the Government to strengthen gas safety in the home. This might include mandatory inspection of gas installations. That would be a sensible and feasible step to take, regardless of any dramatic or radical changes in the system of gas appliance retailing.
The number of accidents occurring inside homes where the corporation does not have statutory rights underlines the need to strengthen the provisions that allow for interior inspections. In the South-West there are about 71 showrooms, and without doubt some of them are larger and more grandiose than they need be. The number of independent retail gas outlets increased from 19 in January 1980 to 140 a year later, and is still increasing. There is a natural evolution towards provision in the retail sector. If we carry out the recommendations contained in the report, that will create the right balance between the two sectors.
My conclusion is that the Government should make a decision in principle to separate the retailing and maintenance sections as distinct and accountable parts of British Gas. The monopoly of supply and purchase should be removed so that a more modem gas appliance section is encouraged and is available through all retail outlets.
My hon. Friend the Member for Knutsford (Mr. BruceGardyne), who is no longer in his place, referred to the chairman of the corporation as the king of the monopolists, or the No. 1 monopolist, in the United Kingdom. In his determination to remain not only a monopoly seller, but a monopoly buyer, both with the natural commodity of gas and with appliances, he will need to be given the extra title of king of the monopsonists as well. That is another definition.
I do not blame the chairman for fighting the battle to keep his empire intact. It is inevitable that he would do so, but I do not think that he should be allowed to get away with a vast advertising campaign paid for out of the gas supply budget and not from the budget of the showrooms. In his lovely, cosy monopoly, that is the sort of thing that he is allowed to do.
The Government should move carefully and progressively towards a more efficient and cost-effective retail operation, with a programme over a few years of an orderly changeover to a fully competitive market. I do not believe the scare stories of a massive loss of jobs. The gas 1052 appliance market is so vast, and is increasing so rapidly, that there is a guaranteed future for those genuinely engaged in servicing that market. That is certain.
In the interests of the safety of supply and maintenance for the consumer, I support a phased changeover to private competition with immediate separation of accounts within the British Gas Corporation. The question of gas safety in the home should be reviewed as soon as possible. By her speech my right hon. Friend has shown that she takes a most responsible attitude to safety regulations. Therefore, I support the amendment.
§ Mr. Terry Davis (Birmingham, Stechford)
Although the Minister has said that she has not yet made up her mind about the action to be taken by the Government, it was clear to those of us who listened to her speech, from her choice of language and from the emphasis in her speech, that she had already made up her mind about what she would do. She said that she wanted the Government to take action to reduce the market share of the British Gas Corporation in the sale and marketing of domestic gas appliances. It is worth repeating again and again that the Monopolies and Mergers Commission made no such recommendation.
The commission's report puts forward two options. The first would change the activities of the British Gas Corporation so that the marketing of domestic gas appliances would be done through a separate profit centre. It would be possible for people to see whether the profits from the sale and supply of gas were subsidising the sale and marketing of domesic gas appliances. There is a strong case for changes in the accounting procedures of the British Gas Corporation. But when I listened to the Minister, it was clear to me that she favoured the second option, described as the extreme option, which would insist that the British Gas Corporation withdrew from the supply of domestic gas appliances.
The right hon. Lady painted a picture of the manufacturers of domestic gas appliances being dominated by the British Gas Corporation. I have had discussions with representatives of Parkinson Cowan, part of the Thorn group, which is in my constituency. I have a different view of its behaviour. It does not seem to me like a group of little boys bullied and dominated by the British Gas Corporation. Those people seem capable of standing up for themselves in negotiating with the British Gas Corporation. The company's profit record suggests that it negotiates successfully with British Gas Corporation. It cannot be denied by the Government that manufacturers of domestic gas appliances are opposed to the extreme option which the Minister favours. They do not want the right hon. Lady's protection against the British Gas Corporation. They do not want to be dictated to and told whom they shall supply and what prices they should charge. They are willing to negotiate and sell to the British Gas Corporation and to independent retailers. The picture painted by the right hon. Lady is not fair, in my experience.
It is understandable that most of the speeches have concentrated on the effect the extreme option on the British Gas Corporation, the people who are employed by it, and the interests of consumers. Another group of people is also affected by the debate —those people employed by the manufacturers of domestic gas appliances. As I have 1053 already said, one of the largest of those manufacturers —Parkinson Cowan —is in my constituency.
What disturbs me about the Government's favour for the extreme option is that I believe it may lead to increased imports. In other industries, the increase in imports has taken place as a result of a distribution network being available for importers. I make no bones about my position. I advocate a policy of import controls. With our membership of the Common Market it is difficult to prevent imports, but the British Gas Corporation is an effective invisible barrier against imports of cookers and space heaters.
One part of the market of domestic gas appliances has not had this protection. That is the market for water heaters. Between 1973 and 1979 we have seen an increase in the import share of the market for water heaters from 10 per cent. to more than 40 per cent.
§ Mr. Davis
I would not describe it as a monopoly. The report does, but it also says that it is not against the interests of the consumer.
I am concerned about the tremendous increase in the volume of imports in the market to which I have referred. A French company called Chaffoteaux has increased its share from 10 per cent. to 40 per cent. Commensurate with that increase, we have seen a wave of redundancies at British factories making water heaters. One of the firms which was dominant in that market was Ascot. It has now declared massive redundancies at its factories here.
If the Government insist on a dogmatic approach to the Monopolies and Mergers Commission's report and on bulldozing through the extreme option, we shall also see rising imports of free-standing cookers and space heaters.
Fifteen years ago, imports of motor cars stood at a negligible figure. The real increase in imports of foreign cars began when the number of franchised outlets was reduced by the motor manufacturing industry. The fashion, which was begun by Ford, was adopted by the three other companies. The retail outlets were available and the importers took advantage of those outlets.
At present, the independent retailers have such a small share of the market for space heaters and gas cookers that it is difficult for importers to obtain a share of the sales of those appliances. However, if the Government insist on boosting the share of independent retailers, there is nothing to stop the independent retailer turning to a foreign supplier for domestic gas appliances. That is my concern. That is what I fear will happen as a result of the right hon. Lady's policy.
The hon. Member for Exeter (Mr. Hannam) said that the gas appliance market was increasing. I believe that he may be out of date. My understanding is that the market for domestic gas appliances is not increasing in 1981. On the contrary, the British manufacturers of domestic gas appliances face a difficult situation. The depression has reduced the size of the market. The threat of redundancy is hanging over us. That threat could become a reality if the policies pursued by the Government are carried through and especially if they adopt the extreme option.
§ Mr. Stephen Dorrell (Loughborough)
The most depressing aspect of the speeches of Opposition members 1054 so far is the unwillingness of all three speakers —though to a lesser extent by the hon. Member for Birmingham, Stechford (Mr. Davis) —to answer the questions and to confront the problems that are set out in the Monopolies and Mergers Commission's report. A ritual response is trotted out by the Labour Party whenever anyone chooses to criticise a nationalised industry. That response is the more depressing because the report was initiated when the Labour Party was in power. It has set out a series of problems that confront all of us as politicians, regardless of which party we happen to belong to.
I could stomach the Labour Party's opposition to the recommendations if it gave a rational analysis of its disagreement and proposed alternatives, but I find its refusal to face the problems that the Monopolies and Mergers Commission has isolated difficult to stomach. The Labour Government allowed the inquiry to go ahead, and we are entitled to ask what Labour Members would like to see happen in response to the commission's conclusions.
It is not a problem about who owns what in the industry. The problem is that the industry is not producing the results that we are entitled to expect. We should ask how we can reorganise the gas appliance industry for the benefit of those who work in it and for the consumers.
I have read several Monopolies and Mergers Commission reports, but I do not remember any other that slates the total picture in an industry as hard as this report slates the gas appliance industry. I should like to read one or two extracts from the report that put the commission's concerns firmly on the record.
In dealing with the manufacturers of gas appliances, the report says:13.20 In the case of most of the companies the buildings, plant and machinery devoted to the manufacture of reference goods are relatively old …13.21 …British manufacturers do not appear to have made sufficient effort to surmount these obstacles …13.22 …It is our impression that the manufacturers …have come to rely too greatly on the Corporation for research and development, basic design, market research and marketing …13.23…This has not stifled all innovation …but we are in no doubt that it has deterred manufacturers' own research and development …13.29 …The manufacturers have for most of the time, been reluctant to do anything that would disturb their easy relationship with the Corporation.Together, those remarks add up to considerable criticism of the status quo in the gas appliance supply industry. They add up to a picture of an industry that has failed to have any impact in any export market. Almost all its production is devoted to the supply of goods within the domestic market, 90 per cent. of which is controlled by the BGC. Because of that control, orders are apportioned by the BGC on the basis of what is bureaucratically comfortable, without the industry facing the hard facts of its failure over the years to be internationally competitive, of which there is ample evidence in the report.
There cannot be a clearer indication of the industry's failure to be internationally competitive than the concern expressed by the hon. Member for Stechford, who said that if the market were opened up it would be a sitting duck for imports. If we cannot compete in export markets, of course the domestic market is in danger of import penetration. That is a clear criticism of the status quo.
§ Mr. John Smith
It is true that the Monopolies and Mergers Commission made a number of assertions, but the evidence on which they are based is not very convincing.
1055 What has stopped our gas appliance manufacturers exporting to markets such as France, where there are different cooking habits and types of cookers? That has nothing to do with the BGC. Should not the hon. Gentleman criticise the manufacturers for not making the effort?
§ Mr. Dorrell
I said at the outset that I was not concerned to argue about ownership. I am criticising the picture within the industry. A series of options are open to stimulate a more internationally competitive domestic gas appliance industry. The failure of the industry to exploit any export market—
§ Mr. Dorrell
It is partly the industry's and partly the result of a cosy relationship that has been built up over a long period between appliance manufacturers and the BGC.
We were told earlier that appliance manufacturers were opposed to the change. For example, Thorn Gas Appliances Ltd. has written to hon. Members stating that it is opposed to the radical solution adopted by the commission. That surprises me not at all. If I were a monopolist with a cosy relationship with a corporation that controlled the major part of the market, I should want to do nothing less than to break up a relationship that had over the years given me a relatively easy living. The inevitable conclusion from the report is that over a period the industry has been allowed to become sleepy, with a secure home market and without any need to become internationally competitive. I find that unattractive.
Retailers come out of the report only marginally better than do manufacturers. It states:13.64 …Whilst it is impossible for an allocation of costs to be precisely accurate, in our judgment the allocations made in drawing up the appliances marketing account amount in effect to subsidies from the sale to gas account. Hence private retailers compete with the Corporation from a disadvantaged position…13.66 …the Corporation has been, in our view, perhaps too ready to see independent gas retailers not as allies but merely as 'discount houses and corner shops', with no longer-term commitment to the prosperity of the gas industry".There can be no clearer indication of the way that the corporation sees independent retailers than the use of the phrase, which comes from its own evidence, that independent retailers are seen simply as discount houses and corner shops. Those are perhaps the two most pejorative terms that the corporation could summon to describe the independent retail sector.
There is prima facie evidence in the report that the BGC has abused its market dominance in the retail of gas appliances.
§ Mr. Bruce-Gardyne
The epithets may be highly pejorative from the view point of a privileged monopoly, but they are extremely attractive from that of the customer.
§ Mr. Dorrell
I entirely agree. Presumably, by "discount houses" the BGC means firms such as Trident, in the electricity appliance supply industry, and Comet, in the gas appliance supply industry, which offer a wider and more competitive service to the customer than was possible—
§ Mr. Dorrell
The evidence is against the right hon. Gentleman. Over a short time those discount houses have built up a substantial trade. The consumers vote with their feet. The corner shop has a different section of the market, and many consumers prefer it to glossy showrooms in the town centre, which may sometimes be inaccessible.
The evidence about the retailing of domestic appliances shows that the BGC is using accounting techniques to underprice and aggressively price, and particularly to insist on lower prices from suppliers, on uncommercial terms, which is unfair to the private sector retailer.
The right hon. Gentleman is always asking for examples. I cite the example of a particularly damaging arrangement benefiting neither the consumer nor the gas appliance manufacturing industry. The "Superflame" scheme was extremely restrictive in the way in which the consumer and the manufacturer could take advantage of the technological advance which undoubtedly took place at that time.
The British Gas Corporation argues that it is the only body committed to the long-term future of the gas industry. I can only say that many others would be grateful for the opportunity. The most objectionable thing about that comment is its failure to appreciate that independent retailers can be just as committed to the future of gas as the corporation and to see them as allies fighting with it to increase the market share of gas, rather than as competitors who must always be defeated.
One of the Labour Party's most common themes is that the market economy must be subject to checks and balances, because without them it would impose unreasonable costs and social strains on individuals. The oldest example of checks and balances in market economies throughout the world, however, is the checks introduced in almost every Western country against monopolies. Anti-trust legislation in the United States dates from the beginning of the century. Since the war we have erected substantial and sophisticated checks on the abuse of monopolies to try to ensure that the consumer interest has an adequate say and that monopolies cannot abuse their position.
I concede that some monopolies are inevitable. The supply of gas is one —[HoN. MEMBERS: "No."] Some of my hon. Friends disagree, but to me the supply of gas is a natural monopoly that makes sense. I do not concede, however, that the manufacture or the retailing of gas appliances is in any way an inevitable monopoly.
In those circumstances, I believe that the Government are right to seek ways to break up a cosy market, which over a long period has become inefficient, and which has been allowed to remain inefficient, to the detriment both of people working in the manufacturing industry and of the consumer.
§ Miss Betty Boothroyd (West Bromwich, West)
A good deal of prejudice seems to be emanating from the Conservative Benches this afternoon, but that is not unusual. Yesterday afternoon, the hon. Member for Enfield, North (Mr. Eggar) bounced up in his usual jolly way and asked the Prime Minister to confirm the Government's objective in reducing the operations of State enterprise. True to form, the Prime Minister did so, without any caveat as to whether the enterprise involved was efficient, profitable or providing a service for the community.
1057 Having tabled the motion and arranged this debate, we have a duty to warn the public about the Government's hard-line attitude because the outcome of the inquiry, depending upon whether the Government apply common sense or dogma, could have an adverse affect upon the vast majority of families in this country, either through job losses or through the reduction of services to consumers who at present enjoy such services through British Gas.
I share the view of my right hon. Friend the Member for Lanarkshire, North (Mr. Smith) about the report. I find it a very shabbily argued document. It is certainly not short on contradictions. It is studded with admissions about the high standard of service to the public and the great advantages which flow from high safety standards. Those admissions, supported by a great deal of evidence, greatly weaken the force of many of its conclusions. Before seizing upon the conclusions, therefore, I hope that the Government will examine closely the responses received since the report was published from the various organisations interested and involved. These indicate the wide-ranging implications for manufacturing industry, employment prospects and the quality of service provided on a national basis to millions of people.
I take first the manufacturing and employment implications. The demand for restructuring has not come from the trade unions, nor from the appliance manufacturers. In fact, the commission dismissed trade union evidence estimating that about 30,000 jobs would be lost. It did this without examining in depth the resulting job losses. It is a scandalous omission for the Monopolies and Mergers Commission not to have considered the impact of this proposal upon employment prospects.
The manufacturers made it clear that any major rejigging of distribution outlets and closure of showrooms could result in chaos in the industry. I hope that the hon. Member for Enfield, North is listening, as he claimed a short time ago that that was not the case. They say, too, that it would encourage import penetration and could result in 50,000 job losses in the industry and British Gas combined.
A few weeks ago, the president of the Society of British Gas Industries spoke on a public occasion in the presence of a very senior Cabinet Minister. He said:Precipitate action based on political dogma, and without a real understanding of the particular circumstances relating to the retailing of domestic gas appliances, could lead to a total and catastrophic collapse of a profitable sector of the industry. Such a collapse could leave the way clear to the foreign importer, unencumbered by either safety or performance requirements, to come into the UK. It is this, and the resultant unemployment and the lowering of standards of installation and service to the consumer, which we are seeking to avoid.Few sectors of manufacturing industry today have not had cause to complain about the destructive effects of imports. In gas appliances, however, out of total sales of about 150 different models, only 17 are manufactured abroad. Here is a sector relatively untouched by foreign imports. Yet there is evidence from professional sources of the rush to reduce the authority of the distributive State sector, which would reduce the standard of service, and lead to import penetration, the collapse of the industry, and further job losses.
There is always a first time for everything in life. I believe that this is the first time that the Monopolies and Mergers Commission has reported in a manner that would put firms out of business and further increase unemployment in this country.
1058 I turn to the role of the independent retailer in selling and in providing a service to the consumer. The report seems to suggest that restructuring should take place in a relatively short period. We are grateful that the Minister for Consumer Affairs has put on record in the Official Report the fact that this will not now be five years. But, whatever the period of time, the Government should consider what has taken place in the last 30 years or so since the nationalisation of the energy-supplying industries.
I take as an example electric cooking appliances. Today about 60 per cent. of all electric cookers are still purchased by customers through the area boards. In over 30 years the degree of penetration into the sales market by private retailers has been only about 1 per cent. each year. Although there is technology involved in the installation and after sales service, it is not a difficult problem, as is gas installation. But the rate of 1 per cent. per year penetration shows how slow the private sector has beer in seeking to penetrate that market.
Taking that background into account, it would seem to be highly improbable that those same retailers will be capable of taking up, or will even have the initiative to take up, the market share of gas appliances in the foreseeable future. Today 90 per cent. of all gas cooking appliances are purchased through showrooms. In a period of over 30 years, the penetration into the market by the independent retailers has been even less than it has in the case of electric appliances. It has been minute in that period. Had the private sector seriously wished to enter the market, there would have been nothing to stop it. But for many reasons, some traditional, and because of a lack of expertise in dealing with the wide scope of appliances and the levels of safety demanded, there has never been any profound move in that direction.
There is no history of appliances being sold in volume through independent retailers. I well remember as a girl at home that we bought our gas appliances not through a private outlet but from the gas showroom in the town. That was over 30 years ago. We bought our gas appliances from the people who supplied the gas. A sort of municipalisation applied, whether in town or city.
There is another reason why the private sector has never taken up retailing to any extent. It cannot cope with the wide market and with the burden that would be placed on it in offering to the consumer the wide choice that is currently available in the high street from the gas showrooms. British Gas does not simply sell gas appliances. It advises on safety and on the efficient use of a very combustible material in the home. It is an integrated business, and if it is fragmented it cannot succeed.
The Minister for Consumer Affairs seemed to try to give the House the impression that it was not only the Opposition who were out of step with her but that organisations outside this House were also out of step with her. She spoke about appliances not being available to the private retailer. In that respect she was wrong. They are available. The reasons why the 2,000 independent outlets do not accept all the appliances is that they have to do battle for scarce space in the showrooms with television sets, video recorders, and a whole paraphernalia of consumer goods. As a result, as my right hon. Friend the Member for Lanarkshire, North said, only one-third of the cookers available on the market are on display. They are competing for space and for expertise in the private sector. 1059 Therefore, the freedom of choice for the public —that freedom of choice that the Government talk so much about and are so desperately anxious to enhance —will be denied as showrooms close and as choice becomes restricted. It is far from clear how the vital high standards of advice on the use of combustible material and on installing equipment, together with the supporting service, will be maintained.
If the cost has to fall on manufacturers, with each of them setting up a nation-wide facility, or even sharing a facility, it will in turn bear heavily upon the price of the product. It will have to be met in increased prices to the consumer. There will, indeed, be little choice for the consumer, because British Gas appliances will gradually be replaced in independent retailers' showrooms by electrical appliances. They are easier to sell and easier to install, and the after-sales service is easier to provide. The gas appliances will be squeezed out and their place will be taken by the products of electrical manufacturers.
I do not have to select a source which is sympathetic to my own philosophy for support of the view that the independent trade would not be able to absorb the British Gas market share. My view is shared by the president of the Society of British Gas Industries, who says:The bald fact is that there is no retail independent organisation capable of taking on the scope of the retail outlets and services of the BGC; such an organisation does not exist." That is what the president said a few weeks ago.If the Government will not listen to voices inside the House, perhaps they will not show such a commendable fortitude for prejudice and will listen to voices outside. My own union, the General and Municipal Workers Union, will lose thousands of jobs if this fundamental restructuring takes place. I hope that the Minister who replies to the debate will say whether he has seen the unions concerned or intends to see them before a decision is made. Equally, I hope that the Minister will say whether he has seen the manufacturers or intends to see them before a decision is made.
Monopoly practice usually implies that prices higher than necessary are being charged. Whatever else the report is intended to achieve, it is not lower-priced gas appliances. The British Gas Corporation is not accused in the report of charging unnecessarily high prices. Paragraph 13.70 acknowledges that the break-up of the monopoly will not reduce prices to the consumer; in fact, the report is careful to make clear that the ban on sales at gas showrooms would not necessarily result in lower prices to the consumer. The report does not say what would be the price structure resulting from the break-up. But from the evidence available, and the responses to it, it is clear that costs would be bound to rise, because of the multitude of distribution points, the transport of goods to those points, the administration costs and, above all, the advisory service, the cost of installation and the after-sales service.
For the Government to fly in the face of professional and expert evidence and to attempt to restructure the retailing of the appliances in a fundamental way is like saying to everybody involved in the industry —the manufacturers, the work force, those employed by British Gas, and the millions of consumers up and down the country —"We are going to do you a favour. We are going to give you a face-lift. But before we give you that facelift we are going to cut your throat." This draconian 1060 measure is unacceptable to us, to organisations outside this House, to industry and to the trade unions. We shall do all that we can, in the best interests of the public, to oppose it.
§ Mr. T. H. H. Skeet (Bedford)
The hon. Member for West Bromwich, West (Miss Boothroyd) always makes interesting speeches. I regret that I cannot pursue her arguments. She said that she was a member of the General Municipal Workers Union, which is the union relevant to the industry.
§ Miss Boothroyd
I made it clear that I was a member of the General and Municipal Workers Union because I wanted it on the record.
§ Mr. Skeet
I understand that if the Government pursue their policy of hiving off a segment of the industry the union will strike. That is wrong. Let us get to the crux of the problem. The British Gas Corporation is the largest producer of appliances for both wholesale and retail sale. It produces 93 per cent. of the total number of gas cookers, 88 per cent. of space heaters and 67 per cent. of water heaters. It also dominates the supply of such appliances through retail outlets. It is responsible for the supply of 97 per cent. of cookers, 92 per cent. of space heaters and 97 per cent. of instant water heaters. Opposition Members argue that if the monopoly is good for 93 per cent. of the market, the corporation should have a complete monopoly. They argue that, if safety is good for that 93 per cent. of the market, why should the BGC not have a complete monopoly? Why should we concede that? [Interruption.] The Opposition want the monopoly to be further aggrandised. That is why my right hon. Friend the Minister is right to suggest that we should partly dismantle the monopoly, or do something about it. There is a 100 per cent. State monopoly in the sale of piped gas. There is a monopoly in the supply of natural gas from the North Sea. We have learnt from the report that manufacturers tend to be subservient to the BGC. The unions are prepared to use their industrial muscle to enforce compliance with their ideas. However, that is not true only of those involved with the BGC. The Financial Times stated that the Iron and Steel Trades Confederation was also threatening strikes. There was a demand to keep off British Steel.
In the United States of America competition reigns supreme. There, such matters would be referred, under the Clayton and Sherman Acts for anti-trust operations. In such circumstances, a divestment would be ordered. It would be demanded that over a period of years or months, part of BGC's monopoly should be transferred to those who are prepared to abide by recommendations of the covers. A similar operation should prevail in the United Kingdom.
I pay tribute to the BGC for its high safety standards. There is no reason why other firms should not conform to the standards of the British Standards Institution. There is no reason why CORGI should not be restructured on an independent basis. In addition, there is no reason why retailing should not be encouraged over a three year period. It is worth citing the following observation:Nevertheless we find it surprising that advertising should be charged entirely to the sale of gas account when appliances feature prominently in the advertisements, and also that only 25 per cent. of the costs of premises should be allocated to the appliance marketing account irrespective of the amount of space which appliances occupy in the showroom.1061 In order to thwart competitors, the BGC has ensured that they are squeezed. It has ensured that competition cannot grow up. We are trying to dismember the monopoly, to support the small man and his business, and to give him an opportunity. We are trying to prevent the BGC from manipulating its accounts in such a way as to provide funds from the sale of gas to other areas, which can then be utilised for this section of British Gas.
Hon. Members should not think for one moment that the BGC depends on the sale of appliances for its profits. According to the British Gas Corporation consolidated accounts, the sale of gas accounts for 85 per cent. of turnover. Its subsidiary activities make little impact on the total. However, the BGC does not mind utilising their funds for such purposes. I am against that.
It has been said that the relationship between the BGC and manufacturers has not been good, because manufacturers do not want to disturb the cosy situation. The report mentions subservience. Manufacturers have supported the BGC's monopoly and the idea that it should be the principal arbiter of the models to be offered to the public. The position is not good, and my right hon. Friend the Minister wishes to alter it. There could be no more damning indictment of a corporation than the small summary included on page 97 of the report. It states:We are left in no doubt that these monopoly situations have largely contributed to the manufacturers' lack of investment, inadequate commitment to technical or market research and development and failure to promote exports. The manufacturers accepted a position of subservience to their chief customer.There could be no more damning indictment than that. Therefore, I hope that something will be done at an early date.
We have not yet discussed what can be done. The Under-Secretary of State for Energy will have to introduce a direction under section 7 of the Gas Act 1972 or change the scope of the monopoly under section 2 of that Act. Under section 2(2)(h) there is a powerto manufacture gas fittings, to sell, hire or otherwise supply gas fittings, and to instal, repair, maintain or remove gas fittings.One option would be to strike out that provision. However, I believe that we should reduce this sphere of the BGC's monopoly to 20 to 30 per cent. of its present operations. That would allow the BGC to remain in the market. If the reduction were phased over several years, the provision would enable other competitors to evolve into the corporation's place.
Private enterprise has the largest share —about 60 per cent. —of the ventral heating market. If private enterprise can extend into that sphere it can also extend into the others. Therefore, we could keep that provision, but we could ensure that the monopoly was reduced to 20 to 30 per cent. of its present operations. Another option is available. Section 7 of the Gas Act 1972 states that directions of a general character may be given to the corporation. Without prejudice, subsection (2) states:the Secretary of State may, after consultation with the Corporation, direct the Corporation—(a) to discontinue any activity either wholly or to a specified extent, …to dispose of any part of their undertaking or of any assets held by them, or to call in any loan made by them".Under that subsection, perhaps a direction could be given fairly rapidly. I hope that my right hon. Friend will consult the Department of Energy and let us know when legislation is likely to be introduced. On that basis, we shall consider what further should be done.
1062 To sum up, the crux of the case is a monopoly, which in part must be dismantled. Over the years we should ensure that private enterprise is allowed to grow by preventing the British Gas Corporation from manipulating its accounts, which the report has clearly shown has happened. The safety standards of the BGC have been commendable. We must ensure that those standards are maintained by ensuring that CORGI is maintained as an independent body and that the British Standards Institution's standards of safety are also secure over the entire industry.
The Government are correct to do what they are doing. I am surprised at the Opposition's arguments. We now know who supports monopolies. We know that they will countenance any argument to maintain, in being and sacrosanct, a monopoly which should be dismantled as not in the national interest.
Mr. R. C. Mitchell (Southampton, lichen)
When the Minister was speaking I gained the impression that she did not like the British Gas Corporation very much, and that she did not like the chairman of the corporation, probably because he is an outspoken fellow. I wonder why. Perhaps it is because the BGC makes a profit. In the Conservative philosophy, any nationalised industry that makes a profit is suspect. The poor, publicly owned industries do not have a chance. If an industry makes a loss it is because it is inefficient. If it makes a profit it is because it indulges in unfair trading. In Conservative eyes, the public corporation cannot win.
It does not necessarily follow that all monopolies are bad —some are, but not all. Nor does it follow that competition is always beneficial to the consumer. It may be in some circumstances, but in others it may not. There are many areas of competition —especially competition from subsidised industries overseas —that are not beneficial to the British consumer.
The failing in the Monopolies and Mergers Commission's report is not that it has been critical of the British Gas Corporation. Many of those criticisms may be true. There may be much truth in the criticism of the arrangements that have been made with manufacturers. It may be true that the arrangements between the BGC and manufacturers mean that the gas appliance export market is not as thriving as it should be. However, the Monopolies and Mergers Commission's report does not prove that the present operation has an adverse effect on the British consumer. As one of my hon. Friends said, there is no evidence in the report suggesting that if the corporation were forbidden to retail there would be a reduction in the price of gas appliances. Most of us suspect that it would be the other way round.
There is no evidence in the report to the effect that if the corporation could no longer retail there would be a greater variety of product available. All the indications are that the variety of product will be decreased, for the reason mentioned earlier by the hon. Member for West Bromwich, West (Miss Boothroyd), namely, that most other retailers would not have room in their showrooms for all the competing products, the variety of goods and the choice that the gas showrooms have.
The Minister mentioned conversion. When we converted to North Sea gas, I suspect that every hon. Member who was a Member at that time had masses of complaints —because the regional gas boards had to use 1063 outside labour, much of it consisting of cowboys, to carry out the mass job that had to be done. The cowboys were dismissed as quickly as possible when the gas boards discovered who and what they were, but that still resulted in complaint after complaint. The boards were not only using their own trained staff; they were forced by circumstances to use outside people. The hon. Lady should not mention conversion. The evidence from the report is that there will be a threat to safety.
The second point concerns contact. As has been said, the showroom is not only a retail outlet. It combines a place for payment of bills, advice on safety and installation, and other matters. I understand that this year 60 million visits have been made to gas showrooms.
One aspect that has not been mentioned is that one can purchase gas stamps from a showroom. The stamps enable customers to spread the cost of paying bills. Every hon. Member knows the number of people who have moved below the poverty line under this Government. They find great difficulty in paying their bills, be they gas or electricity. In parenthesis, I should add that gas prices now are higher than they need be, because of the Government's insistence and not because of the wish of the corporation. The Government compelled the gas corporation to increase prices more than necessary.
If the gas showrooms, as outlets for gas stamps, disappear, individuals will find it more difficult to pay their bills. It is nonsense to say that if the retail outlets disappear the showrooms will remain. They will no longer be an economic proposition. The retailing aspect makes them an economic proposition. If anyone believes that the regional gas boards will be able to maintain the same number of outlets to enable people to pay their bills or receive advice, he is living in cloud-cuckoo-land.
I must declare an interest, in that in my constituency I have the headquarters of the Southern Gas Board. It is interesting that on this subject I have had more letters than on any other issue except abortion. A good job has been done. All the staff of the showroom have written to me and to other hon. Members in the area. Their jobs were threatened, so I do not blame them. The Minister said that we must pay great tribute to those who work in gas showrooms. Is it not typical Conservative policy to pay tributes to employees one week and to sack them the next?
If the Government persist and decide to go for the major option, as suggested by the commission, it will be a bad day for this country. The gas consumer will suffer in the long run.
§ Mr. Tim Eggar (Enfield, North)
This has been an interesting debate, not least for the opening speech of the right hon. Member for Lanarkshire, North (Mr. Smith). He is the same man who came rushing to the House on frequent occasions urging my right hon. Friend to refer the purchase of The Times to the Monopolies and Mergers Commission. Indeed, we had to listen for days on end to his pleadings. Yet when he receives a Monopolies and Mergers Commission's report that he does not like, or that he finds politically inconvenient, he dismisses it as rubbish, ill-founded and badly thought out. I am sorry that he has not had the courtesy to remain seated on the Front Bench throughout the debate.
1064 There is one clear conclusion from any objective reading of the report, namely, that the present position is unsatisfactory. That was the unanimous conclusion of the six members of the commission who put their names to the report. The report showed that the BGC's retailing monopoly was a text book case of a monopoly operating to the detriment not only of the consumers but of the producers. The only organisation that benefits from the monopoly is the British Gas Corporation. We may disagree about the remedy, but we should be honest and accept that fact.
It is worth considering the BGC's response to the report. It has been "To the ramparts. Defend the empire whatever the cost, but be sure that taxpayers' money is used, along with any devious means and any cheap publicity or downright lies that help the case." I should like to hear from the Government how much the advertising campaign to persuade us to keep the showrooms has cost the BGC. The campaign is being financed by the money of taxpayers and gas consumers. It is disgraceful that a monopolist such as Sir Denis Rooke can use public money in that way.
§ Miss Boothroyd
Sir Denis has to defend from the Government the corporation and the interests of those whom it serves.
§ Mr. Eggar
I take the hon. Lady's point. A person in Sir Denis's position, with a marvellous monopoly, will do anything he can to defend it. I do not blame Sir Denis, but I object to the fact that he is using the money of taxpayers and gas consumers to pay for the campaign.
Most of the BGC's venom has been directed against the radical solution proposed by the commission, but we must recognise that the BGC also opposes the less radical solution. I am sure that all hon. Members have received evidence from the corporation, which states:The less radical option was complex and would be difficult to implement. Moreover, the main principles were already embodied in the Corporation's current practices and assurances that this will continue to be the case have been given to the Government".That is rubbish; it is not true. In 1971 the Department of Trade and Industry urged the corporation to separate the accounting practices of the retailing arm, but, because of lack of pressure from the Department under the then Conservative Government and the succeeding Labour Government, the BGC got away with avoiding the spirit of that direction.
It is worth examining the corporation's reasons for objecting to the radical solution. The first is that standards of safety and servicing will drop. There is nothing in the commission's report that suggests that the BGC monopoly in servicing should be reduced. If the assertion that safety standards would suffer were true and there were convincing supporting evidence, it would be a matter of considerable concern. But we have to pay attention to the commission's report, which says that there is no evidence of a deterioration in safety standards in the private sector. The BGC's claim is not well founded.
The corporation's next argument is that it would be a blow to British industry if the retailing monopoly were removed. But there has been no bigger blow to British industry than the practices followed by the BGC over the past 20 years. The commission used some trenchant language in its report: 1065we are left in no doubt that these monopoly situations have largely contributed to the manufacturers' lack of investment, inadequate commitment to technical or market research and development and failure to promote exports.That is a formidable indictment and it is extraordinary to hear the BGC talking about a blow to British industry.
The BGC also claims that customers would lose their point of contact. What is the point of contact? First, it is the payment of bills, but accounts could be paid more easily through sub-post offices. The hon. Member for Southampton, Itchen (Mr. Mitchell) referred to the advantages of gas stamps, but it would be much more convenient if such stamps —I should prefer to call them energy stamps —were more readily available through the sub-post office network, which is much more widely spread than British Gas showrooms.
We are also told that the showrooms act as a contact point in emergencies and for servicing. But showrooms are often not listed in phone books, because the corporation prefers inquires to be directed to the regional depots.
We are told that showrooms are necessary because their staffs provide advice. That may be true, but there is no need for advice to be given on plush, high-cost, High Street sites. It could be done as easily in cheaper premises off the main streets.
The BGC claims that customer choice would be curtailed if the more radical option were adopted. Of course private retailers offer less choice. They have to buy appliances at a higher cost than does the BGC and, in order to be competitive, they often have to sell at a lower price. Their mark-up is, therefore, much lower than that of the corporation and they cannot afford the same stocks and diversification, especially since British Gas, as the commission made clear, effectively fiddles the accounts of the showrooms to try to make them appear profitable. If the more radical solution were followed, we would soon find private retailers offering more choice.
The last and, in many ways, most worrying assertion of the BGC is that up to 40,000 jobs would be lost if the Government adopted the more radical solution. It is understandable that many in the industry are worried about that claim, but the House should recognise that the BGC has waged a disgraceful and misleading campaign. It is extraordinary that the management should have rushed to the unions and used them in its campaign to retain the monopoly.
Only about 3,500 of British Gas employees are actually employed in showrooms. Many of them would be employed by private retailers if the more radical solution was to be followed. Even if there was a diminution in servicing personnel those people would be able to find jobs, probably with little difficulty, in private service companies which always complain of a shortage of qualified gas fitters.
The British Gas estimate is higher than that given by the TUC to the Monopolies and Mergers Commission. The commission's comment on the TUC's evidence was that it appeared to have given an extremely high estimate. What should the Government do? There should be no attempt to replace a public monopoly by a private monopoly. I would not want to see the chain of British Gas showrooms sold off to one private sector purchaser. That would get us nowhere. I am delighted that the Monopolies and Mergers Commission takes the same view.
Unlike some of my hon. Friends, I am sceptical of the less radical solution. The Department of Trade and 1066 Industry originally intended in 1971 that there should be separate accounting principles and that there should be separate profit centres. That was never achieved. Ten years later, a report of Monopolies and Mergers Commission is needed to point out that it was never achieved. I do not believe that the less radical solution, given the attitude of the British Gas Corporation management and workers, would succeed, even over a relatively long period, say, a decade, in reducing the corporation's effective monopoly power and dealing with accountability.
We have to go for the radical solution. I accept, however, the point made in the commissions's report that the radical solution would impose a considerable shock on manufacturers as they shifted from patterns to which they had grown accustomed. For that reason, I hope that the Government will adopt a two-stage approach. I hope first that they will implement immediately separate accounting principles and that a separate subsidiary will be set up, responsible for the showrooms under independent management, and, it is to be hoped, from outside the British Gas Corporation. That separate and newly formed company should be given clear instructions about the disposals in which it was to indulge over a five-year period with amounts to be realised through asset disposals in each year clearly stipulated. I believe that the total value of High Street assets is about £ ½ billion —not an inconsiderable amount.
At the end of the transitional period of five years —I would not want it to be longer —the remaining assets of the British Gas showroom subsidiary should be sold off and privatised, leaving a separate, independent retailer specialising only in gas appliances with perhaps 20 to 25 per cent. of the gas retailing market. That would be a step very much in the right direction.
I hope that the Government will act courageously in the matter. It would be only too easy for the Government to cop out and adopt the less radical solution. If that happened, we would face, in 10 years' time, exactly the problems we now face.
§ Mr. Speaker
I understand that the Front Benches have agreed not to seek to wind up the debate until 6.50 pm. That will permit three five-minute speeches in the time still available.
§ Mr. Norman Hogg (Dunbartonshire, East)
There has been much talk in this debate about the British Gas Corporation's management and chairman. I should like to make some remarks on behalf of the industry's work people. NALGO has 50,000 members in the gas industry. It is a major union in the industry. Its members would be in the front line if the Monopolies and Mergers Commission's most radical proposal were to be implemented. I was an officer of the union. I act now as its parliamentary consultant. I have long experience of public utilities. My view is that it is not in the interests of consumer safety and service to curtail the functions of the British Gas Corporation.
The present integrated system of the British Gas Corporation works in the best interests of the consumer in relation to safety, service and prices. The corporation's safety record is outstanding in both national and international comparative terms. I have gone to the trouble of checking the figures for several West European countries. 1067 The service provided by the British Gas Corporation goes beyond the sale of appliances. It includes installation by trained installers and engineers, assessment of the appropriate appliance for different situations, advice on flue-ing and safety arrangements, maintenance and repair work and the provision of spare parts. Prices compare favourably with those for the range of appliances sold by any other gas appliance retailer as well as with the other competitive elements of electricity, oil and coal.
The Monopolies and Mergers Commission was unable to prove that the British Gas Corporation had unfairly exploited its monopoly power. Paragraph 13.84 says:It must be acknowledged that the present practices of the Corporation have provided the public with a nationwide retail and advice service which the public has found of high value and which has concerned itself, to the great advantage of all, with ensuring that the supply of gas is safe.The commission goes on, in the same paragraph, to justify its recommendations by reference to some unproven, unsubstantiated theory, and states:Nevertheless we discern in particular two overriding defects in the present situation. Of these the first is that the public is losing the benefits of competition, and thereby that we cannot know whether or not the Corporation's retailing system is indeed cost-effective or whether it provides a range of appliances meeting consumer demand at the cheapest price. The second is that the present retailing system threatens the longer-term efficiency and viability of the appliance industry.This is nonsense. There is no proven economic theory that equates competition to consumer benefit per se.
Similarly, in paragraph 13.70, the commission recognises thatIt is not possible to judge with any degree of certainty what the level of prices payable by the consumer would have been had there not always been a monopoly in the hands of the sellers of gas.The remainder of the paragraph draws upon the art of assertion against the background of limited evidence to conclude that some magic element of competition would have benefited the consumer. Again, that is economic nonsense. One has to compare the real world situation, whereby the British Gas Corporation provides an integrated sales, installation and maintenance service, including the holding of about 2½million spare parts, with the situation of the private retailer who merely sells appliances and provides no installation or after-sales service.
One must also consider the situation in terms of safety. Explosions related to faulty installations by private installers in this country have accounted for more than 90 per cent. of all explosions in recent years. The figures offered by my right hon. Friend the Member for Lanarkshire, North (Mr. Smith) confirm what I say. Overall, it must be concluded that the only justification for interfering with the present structure of the British Gas Corporation is one of political and economic dogma, and not one of economic rationale.
The people who will suffer from this dogma are the consumers, who will face higher prices, poorer service and less safe installations, and the 35,000 British Gas Corporation employees, who will be declared redundant as a result of this serious situation. The hon. Member for Bedford (Mr. Skeet), who is no longer present, referred to the possibility of a strike in the gas industry. I say with some regret that the nation will face the loss of gas supply as a result of the industrial action which the gas unions will take to defend their employment.
1068 Last week I attended the annual conference of NALGO, when Mr. David Stirzaker, the national officer of NALGO for gas staffs, asked me to meet delegates of his union at the conference. They left me in no doubt about how worried they were about the future of the industry. They expressed deep concern for safety and service, and worry about their jobs. I am a training officer of some experience, and I was left in no doubt that serious industrial unrest would be created if Government accepted the most radical proposals before them.
I hope that the House will support the motion.
§ Mr. John Bruce-Gardyne (Knutsford)
The House has heard a great deal about the report of the Monopolies and Mergers Commission. I do not intend to go over that ground again, because it has been thoroughly covered by my hon. Friends and rather curiously covered by some right hon., and learned, Gentlemen on the Opposition Benches.
I wonder what the right hon. Member for Lanarkshire, North (Mr. Smith) would have done if the commission had delivered to him the report that he had commissioned. Presumably, he would have thrown it down a manhole. It provides a devastating indictment of the damage done by a monopoly supplier and the relationship that it has with the gas appliance industry. Of course, the gas appliance industry does not want the arrangements upset. The reason was demonstrated by the comments made by the hon. Member for Birmingham, Stechford (Mr. Davis). He described the devastating effect on the gas appliance manufacturers that would be caused by the Government if they were to act in the spirit of the clear conclusions of the report. Alas, under the umbrella of this cosy monopoly relationship with the gas boards, the corporation has shown itself to be increasingly debilitated and unable to compete in international markets. It might have problems in competing in the domestic market as well.
The House should be concerned about the interests and rights of consumers. I find nothing surprising in the attitude of the gas unions. On the whole, those who work in the nationalised industries have been encouraged for many years to believe that those industries exist to serve them, and not the customer, and it is hardly surprising that they should take the attitude that they do.
I find profoundly offensive the attitude of top management of the corporation. It passes my understanding why we have chosen to renew the mandate of Sir Denis Rooke for another five years. I do not know what came over us. His reputation as an entrenched and bigoted champion of monopoly privilege is unrivalled throughout the nationalised industries. At every stage he has resisted any attempt to introduce competition into his industry. He talks about the profits he makes. Anyone who is in a position, as a monopoly buyer, to fix the price of his product, and who fixes that price so low that for years it is rendered artificially unattractive to exploit the gas resources of the North Sea to the extent that might been expected, can make a thumping great profit. That is not proof of competence and efficiency; it is proof of the scale of monopoly privilege that this gentleman has been exploiting.
Sir Denis Rooke has shown himself to be virulently resistant to any suggestion that the corporation should disembarrass itself of such fringe activities as oil exploitation in Dorset. The suggestion that the 1069 Government might be convinced by the arguments of the commission has thrown him into a paroxysm of rage and an indulgence in advertising and publicity techniques on his own behalf that I find profoundly offensive. Above all, I find utterly indefensible the way in which he has sought by scare tactics to suggest to consumers that we would all be at risk in our beds if the commission's conclusions were accepted. It is high time that the Government took a much firmer line with these over-mighty citizens who dominate the nationalised industries and seem to believe that monopoly is a privilege that they can exploit until kingdom come.
§ Mr. Leslie Spriggs (St. Helens)
We should do justice to the report of the Monopolies and Mergers Commission by saying than we are indebted to those who serve on it for the hard work that they have put in, although some of us do not agree with parts of the report.
It just is not true to say, as did the Minister for Consumer Affairs, that gas appliances are not made available to private retail businesses. I wish to give my personal experience, which I hope the House will listen to carefully and accept as the truth.
Some years ago I asked Ben Dale and Company, of Victoria Road, Thornton Cleveleys, to install in my house hot water appliances. That was done, but the equipment failed from time to time, and I had to get Ben Dale and his team back to the house. Unfortunately, I had settled the account when I was asked to do so, and that job was never completed.
I was heavily biased against gas board employees coming into the house to do work, so for years I hung on, winter after winter, with no central heating, although I had paid for it. Eventually, I went to the gas board's offices in Cleveleys and asked that someone should come to see my system to find out whether the equipment provided by the board could be adapted to replace all the equipment in my house, with the exception of the water heater.
The board sent in a team and gave me a price for the job, which I accepted. For the first time in 10 years we had central heating. There were teething troubles after the new equipment had been installed. The appliance failed on two or three counts, but, whereas I could not get Ben Dale or his team to look at the appliances that that company had supplied, the board's representatives came within eight to 10 hours every time I sent for them.
We should be proud of the British Gas Corporation for the service that it gives to its customers. Whatever may be the Government's policy towards the commission's report, I appeal to the Minister to give an assurance that she and her Government will do nothing to impair contracts with the corporation for the maintenance and repair of appliances.
§ Mr. John Smith
We have had a short and interesting debate. It has emerged that the Government have not yet reached a final conclusion, or at least one committed to the so-called extreme or radical option. I am glad about that. The battle has still to be fought. There is perhaps still some hope of persuading the Government to desist from such a foolish course of action. I hope that they will listen, not only to the speeches that have been made by Opposition Members, but to some of the hesitations that were expressed by Conservative Members about following such 1070 an extreme course. The hon. Member for Exeter (Mr. Hannam) made his hesitations quite clear, although he did not write them out in capital letters.
Two things have marred the debate. One was the contemptible attack by the right hon. Lady the Minister for Consumer Affairs on the British Gas Corporation for having the temerity to defend itself against the attacks made on it by the Government. It reminds me of the notice that appears in a Parisian zoo, which says "This animal is naughty. When one attacks it, it defends itself'. That is the Government's attitude to the BGC which, when faced with the amputation of a profitable part of its organisation, has the temerity to fight back, appeal to public opinion, and advertise the strength of its case. I might acid that, whenever the private sector mounts a case, the same people laud it with praise, as they do when shareholders' and customers' money is used to oppose public ownership, or anything of that nature. I think of the building industry campaign that took place before the last election.
The second thing that marred the latter stages of our debate was the intemperate and foolish speech of the hon. Member for Knutsford (Mr. Bruce-Gardyne), who went out of his way to attack Sir Denis Rooke, the distinguished chairman of the BGC. When I think of the years of dedicated public service that Sir Denis Rooke has given to this country —I had occasion to work with him when I was at the Department of Energy —I am appalled that an ideological, idiotic foppet such as the hon. Gentleman, who has done little to serve the public, should attack such a distinguished and expert public servant.
Sir Denis Rooke is probably one of the most successful managers in British industry today, whether in the public or the private sector. He serves the customers and his employees with rare dedication. It is an unfortunate aspect of public life that people like him have to put up with the sort of nonsense that the hon. Member for Knutsford gets paid far too well to write in the Sunday Telegraph and other Right-wing papers, and to which we have to listen in the House.
It is clear from the speeches that have been made by the Government Front Bench that a deep, abiding animosity exists in the Conservative Party against successful public sector industry. That animosity is given an opportunity to assert itself by one of the options canvassed in the report, and I fear that the Government will be sorely tempted to follow some of their prejudiced ideological inclinations. I hope that they will desist from doing so.
More than that, I hope that this timely debate, which has raised the issue and fully aired the arguments, will stimulate greater public interest in the matter. I hope, too, that the public will ask themselves whether they want the safety and service that has been provided in the past to be prejudiced because of one of the ideological spasms of the Conservative Party. Do they want to see gas showroom services dismantled? Do the people who work in the gas appliance industry want their jobs put at risk?
The hon. Member for Knutsford does not seem to worry about imports, but the people who will lose their jobs, either in management or in the work force, do worry about them. There is no reason why there should not be an export market, if that is what is wanted, but simply to remove the BGC from the scene without knowing what will replace it, whether it be British or foreign, is folly. During the past two years, we have become used to seeing the 1071 Conservative Party show a bland indifference to the needs of industry and its disregard for the need to maintain a proper public sector.
Consumer needs are important. It is interesting that the strongest case against the radical option comes from the Consumers Association and from the National Gas Consumers Council. Opposition to the extreme option comes from the National Gas Consumers Council. The right hon. Lady said that those bodies had been brainwashed by the Britsh Gas Corporation. Some of us are tempted to think that that fate is unlikely to befall her.
It is clear that there is animus and prejudice in some sections of the Conservative Party. I hope that sanity will break through. I hope also that the force of public opinion will make itself felt. The more people know about what might be proposed, the more they will seek to resist it. I hope that they will make their views clear and contact their Members of Parliament about stopping the Government from taking this sad and dangerous course of action.
§ Mrs. Sally Oppenheim
We have had an interesting and, above all, a revealing debate —revealing, because it has demonstrated that the Labour Party does not want to know when we talk about abuse of a dominant market position, about the restriction and distortion of competition, and about wider choice. It is clear that the Labour Party is against wider choice and against more competition. The blanket and biased attack on the Monopolies and Mergers Commission's report, which in this instance does not happen to suit Labour Members, was unworthy, to say the least. I exonerate the hon. Member for St. Helens (Mr. Spriggs) from that charge.
Opposition Members were not slow to quote selectively from the report when it suited them. More of them were content to use wholesale chunks of the very literature that I criticized —the scare campaign and the advertising campaign, which —this is in reply to my hon. Friend the Member for Enfield, North (Mr. Eggar) —cost the British consumer some £2 million.
We had excellent and constructive speeches from my hon. Friends. I regret that I cannot reply to them in detail. As I said earlier, the MMC report is very serious, and no responsible Government could fail to act upon it. However, the Government are determined that whatever course of action is adopted there will be no lowering of standards in safety and installation and maintenance, and that the standards of consumer advice offered by the British Gas Corporation will be maintained.
If the introduction of greater competition into the gas appliance market were to bring with it the need for new rules and standards on safety, it would be imperative to introduce such rules and standards to safeguard consumers. At the end of the day, the MMC report cannot and should not be ignored. As the leading article in the Financial Times said today, this matter has to be decided not in response to bullying from entrenched forces within the industry but in the public interest.
That is the view that the Government take. In seeking a constructive, realistic, practical and effective remedy, the Government are pursuing the public interest, and I believe that they should be supported in the House tonight. I call upon the House and the Labour Party to support the 1072 Government's constructive, thoughtful and well-researched attitude —not precipitate decisions, not biased decisions, but careful and thoughtful attitudes —and the British consumer in the Lobby tonight.
§ Question put, That the original words stand part of the Question: —
§ The House divided: Ayes 228, Noes 283.1075
|Division No. 225]||[6.57 pm|
|Abse, Leo||Fitch, Alan|
|Allaun, Frank||Flannery, Martin|
|Alton, David||Fletcher, Ted (Darlington)|
|Anderson, Donald||Foot, Rt Hon Michael|
|Archer, Rt Hon Peter||Ford, Ben|
|Ashley, Rt Hon Jack||Forrester, John|
|Ashton, Joe||Foster, Derek|
|Bagier, Gordon A.T.||Foulkes, George|
|Barnett, Guy (Greenwich)||Fraser, J. (Lamb'th, N'w'd)|
|Barnett, Rt Hon Joel (H'wd)||Freeson, Rt Hon Reginald|
|Beith, A. J.||Freud, Clement|
|Bennett, Andrew(St'kp't N)||Garrett, John (Norwich S)|
|Bidwell, Sydney||George, Bruce|
|Booth, Rt Hon Albert||Gilbert, Rt Hon Dr John|
|Boothroyd, Miss Betty||Ginsburg, David|
|Bottomley, Rt Hon A.(M'b'ro)||Graham, Ted|
|Bradley, Tom||Grant, George (Morpeth)|
|Bray, Dr Jeremy||Hamilton, James (Bothwell)|
|Brown, R. C. (N'castle W)||Harrison, Rt Hon Walter|
|Brown, Ron (E'burgh, Leith)||Hart, Rt Hon Dame Judith|
|Brown, Ronald W. (H'ckn'y S)||Hattersley, Rt Hon Roy|
|Buchan, Norman||Haynes, Frank|
|Callaghan, Rt Hon J.||Healey, Rt Hon Denis|
|Callaghan, Jim (Midd't'n & P)||Heffer, Eric S.|
|Campbell, Ian||Hogg, N. (E Dunb't'nshire)|
|Campbell-Savours, Dale||Holland, S. (L'b'th, Vauxh'll)|
|Canavan, Dennis||Home Robertson, John|
|Cant, R. B.||Hooley, Frank|
|Carmichael, Neil||Horam, John|
|Carter-Jones, Lewis||Howell, Rt Hon D.|
|Clark, Dr David (S Shields)||Howells, Geraint|
|Cocks, Rt Hon M. (B'stol S)||Huckfield, Les|
|Cohen, Stanley||Hughes, Mark (Durham)|
|Concannon, Rt Hon J. D.||Hughes, Robert (Aberdeen N)|
|Conlan, Bernard||Hughes, Roy (Newport)|
|Cowans, Harry||Jay, Rt Hon Douglas|
|Craigen, J. M.||John, Brynmor|
|Crowther, J. S.||Johnson, James (Hull West)|
|Cryer, Bob||Johnson, Walter (Derby S)|
|Cunliffe, Lawrence||Jones, Rt Hon Alec (Rh'dda)|
|Cunningham, G. (Islington S)||Jones, Barry (East Flint)|
|Cunningham, Dr J. (W'h'n)||Jones, Dan (Burnley)|
|Dalyell, Tam||Kaufman, Rt Hon Gerald|
|Davies, Rt Hon Denzil (L'lli)||Kerr, Russell|
|Davies,Ifor (Gower)||Kilroy-Silk, Robert|
|Davis, Clinton (Hackney C)||Kinnock, Neil|
|Davis, T. (B'ham, Stechf'd)||Lambie, David|
|Deakins, Eric||Leighton, Ronald|
|Dean, Joseph (Leeds West)||Lestor, Miss Joan|
|Dempsey, James||Lewis, Arthur (N'ham NW)|
|Dewar, Donald||Lewis, Ron (Carlisle)|
|Dixon, Donald||Litherland, Robert|
|Dobson, Frank||Lofthouse, Geoffrey|
|Dormand, Jack||Lyons, Edward (Bradf'd W)|
|Douglas, Dick||Mabon, Rt Hon Dr J. Dickson|
|Douglas-Mann, Bruce||McCartney, Hugh|
|Dubs, Alfred||McElhone, Frank|
|Dunn, James A.||McKay, Allen (Penistone)|
|Dunnett, Jack||MacKenzie, Rt Hon Gregor|
|Dunwoody, Hon Mrs G.||McNally, Thomas|
|Eastham, Ken||McNamara, Kevin|
|Ellis, R. (NE D'bysh're)||McTaggart, Robert|
|English, Michael||Magee, Bryan|
|Ennals, Rt Hon David||Marks, Kenneth|
|Evans, loan (Aberdare)||Marshall, D(G'gow S'ton)|
|Evans, John (Newton)||Marshall, Dr Edmund (Goole)|
|Ewing, Harry||Marshall, Jim (Leicester S)|
|Faulds, Andrew||Martin, M(G'gow S'burn)|
|Field, Frank||Mason, Rt Hon Roy|
|Maxton, John||Skinner, Dennis|
|Maynard, Miss Joan||Smith, Cyril (Rochdale)|
|Meacher, Michael||Smith, Rt Hon J. (N Lanark)|
|Mellish, Rt Hon Robert||Snape, Peter|
|Mikardo, Ian||Soley, Clive|
|Millan, Rt Hon Bruce||Spearing, Nigel|
|Mitchell, Austin (Grimsby)||Spriggs, Leslie|
|Mitchell, R. C. (Soton Itchen)||Stallard, A. W.|
|Morris, Rt Hon A. (W'shawe)||Steel, Rt Hon David|
|Morris, Rt Hon C. (O'shaw)||Stewart, Rt Hon D. (W Isles)|
|Morris, Rt Hon J. (Aberavon)||Stoddart, David|
|Moyle, Rt Hon Roland||Stott, Roger|
|Newens, Stanley||Strang, Gavin|
|Oakes, Rt Hon Gordon||Straw, Jack|
|O'Halloran, Michael||Summerskill, Hon Dr Shirley|
|O'Neill, Martin||Taylor, Mrs Ann (Bolton W)|
|Orme, Rt Hon Stanley||Thomas, Dafydd (Merioneth)|
|Park, George||Thomas, Jeffrey (Abertillery)|
|Parker, John||Thomas, Dr R.(Carmarthen)|
|Parry, Robert||Thorne, Stan (Preston South)|
|Pendry, Tom||Tilley, John|
|Penhaligon, David||Torney, Tom|
|Powell, Raymond (Ogmore)||Varley, Rt Hon Eric G.|
|Prescott, John||Walker, Rt Hon H.(D'caster)|
|Price, C. (Lewisham W)||Watkins, David|
|Race, Reg||Weetch, Ken|
|Radice, Giles||Wellbeloved, James|
|Rees, Rt Hon M (Leeds S)||Welsh, Michael|
|Richardson, Jo||White, Frank R.|
|Roberts, Albert (Normanton)||White, J. (G'gow Pollok)|
|Roberts, Allan (Bootle)||Whitehead, Phillip|
|Roberts, Gwilym (Cannock)||Whitlock, William|
|Robertson, George||Wigley, Dafydd|
|Robinson, G. (Coventry NW)||Willey, Rt Hon Frederick|
|Rodgers, Rt Hon William||Williams, Rt Hon A.(S'sea W)|
|Rooker, J. W.||Wilson, Gordon (Dundee E)|
|Ross, Ernest (Dundee West)||Wilson, Rt Hon Sir H.(H'ton)|
|Ross, Stephen (Isle of Wight)||Wilson, William (C'try SE)|
|Rowlands, Tec||Winnick, David|
|Ryman, John||Wolfson, Mark|
|Sandelson, Neville||Woodall, Alec|
|Sheerman, Barry||Wrigglesworth, Ian|
|Sheldon, Rt Hon R.||Wright, Sheila|
|Shore, Rt Hon Peter||Young, David (Bolton E)|
|Short, Mrs Renée|
|Silkin, Rt Hon J. (Deptford)||Tellers for the Ayes:|
|Silkin, Rt Hon S. C. (Dulwich)||Mr. George Morton and|
|Silverman, Julius||Mr. James Tinn.|
|Adley, Robert||Brotherton, Michael|
|Aitken, Jonathan||Brown, Michael (Brigg & Sc'n)|
|Alexander, Richard||Browne, John (Winchester)|
|Amery, Rt Hon Julian||Bruce-Gardyne, John|
|Arnold, Tom||Bryan, Sir Paul|
|Atkins, Rt Hon H.(S'thorne)||Buchanan-Smith, Alick|
|Atkins, Robert (Preston N)||Budgen, Nick|
|Baker, Kenneth (St.M'bone)||Bulmer, Esmond|
|Baker, Nicholas (N Dorset)||Burden, Sir Frederick|
|Banks, Robert||Butcher, John|
|Beaumont-Dark, Anthony||Butler, Hon Adam|
|Bendall, Vivian||Cadbury, Jocelyn|
|Benyon, W. (Buckingham)||Carlisle, John (Luton West)|
|Best, Keith||Carlisle, Kenneth (Lincoln)|
|Bevan, David Gilroy||Carlisle, Rt Hon M. (R'c'n)|
|Biffen, Rt Hon John||Chalker, Mrs. Lynda|
|Biggs-Davison, John||Channon, Rt. Hon. Paul|
|Blackburn, John||Chapman, Sydney|
|Blaker, Peter||Churchill, W. S.|
|Body, Richard||Clark, Hon A. (Plym'th, S'n)|
|Bonsor, Sir Nicholas||Clark, Sir W. (Croydon S)|
|Boscawen, Hon Robert||Clarke, Kenneth (Rushcliffe)|
|Bottomley, Peter (W'wich W)||Clegg, Sir Walter|
|Bowden, Andrew||Cockeram, Eric|
|Boyson, Dr Rhodes||Colvin, Michael|
|Braine, Sir Bernard||Cope, John|
|Bright, Graham||Cormack, Patrick|
|Brinton, Tim||Corrie, John|
|Brittan, Leon||Costain, Sir Albert|
|Brooke, Hon Peter||Cranborne, Viscount|
|Critchley, Julian||Langford-Holt, Sir John|
|Crouch, David||Latham, Michael|
|Dean, Paul (North Somerset)||Lawrence, Ivan|
|Dickens, Geoffrey||Lee, John|
|Dorrell, Stephen||Lennox-Boyd, Hon Mark|
|Douglas-Hamilton, Lord J.||Lester, Jim (Beeston)|
|Dover, Denshore||Lewis, Kenneth (Rutland)|
|Dunlop, John||Lloyd, Peter (Fareham)|
|Dunn, Robert (Dartford)||Loveridge, John|
|Dykes, Hugh||McCrindle, Robert|
|Eden, Rt Hon Sir John||Macfarlane, Neil|
|Edwards, Rt Hon N. (P'broke)||MacGregor, John|
|Eggar, Tim||MacKay, John (Argyll)|
|Elliott, Sir William||Macmillan, Rt Hon M.|
|Emery, Peter||McNair-Wilson, M. (N'bury)|
|Eyre, Reginald||McNair-Wilson, P. (New F'st)|
|Fairbairn, Nicholas||McQuarrie, Albert|
|Fairgrieve, Russell||Madel, David|
|Faith, Mrs Sheila||Major, John|
|Farr, John||Marland, Paul|
|Fell, Anthony||Marlow, Tony|
|Fenner, Mrs Peggy||Marshall, Michael (Arundel)|
|Fisher, Sir Nigel||Mates, Michael|
|Fletcher, A. (Ed'nb'gh N)||Mather, Carol|
|Fookes, Miss Janet||Mawby, Ray|
|Forman, Nigel||Mawhinney, Dr Brian|
|Fowler, Rt Hon Norman||Maxwell-Hyslop, Robin|
|Fox, Marcus||Mayhew, Patrick|
|Fraser, Rt Hon Sir Hugh||Mellor, David|
|Fraser, Peter (South Angus)||Meyer, Sir Anthony|
|Fry, Peter||Miller, Hal (B'grove)|
|Gardiner, George (Reigate)||Mills, lain (Meriden)|
|Gardner, Edward (S Fylde)||Mills, Peter (West Devon)|
|Garel-Jones, Tristan||Miscampbell, Norman|
|Glyn, Dr Alan||Mitchell, David (Basingstoke)|
|Goodhew, Victor||Moate, Roger|
|Goodlad, Alastair||Monro, Hector|
|Gow, Ian||Montgomery, Fergus|
|Gower, Sir Raymond||Moore, John|
|Gray, Hamish||Morris, M. (N'hampton S)|
|Greenway, Harry||Morrison, Hon C. (Devizes)|
|Griffiths, E.(B'y St. Edm'ds)||Morrison, Hon P. (Chester)|
|Griffiths, Peter (Portsm'th N)||Mudd, David|
|Grist, Ian||Murphy, Christopher|
|Grylls, Michael||Myles, David|
|Gummer, John Selwyn||Neale, Gerrard|
|Hamilton, Hon A.||Needham, Richard|
|Hamilton, Michael (Salisbury)||Nelson, Anthony|
|Hampson, Dr Keith||Neubert, Michael|
|Hannam, John||Newton, Tony|
|Haselhurst, Alan||Nott, Rt Hon John|
|Hastings, Stephen||Onslow, Cranley|
|Havers, Rt Hon Sir Michael||Oppenheim, Rt Hon Mrs S.|
|Hawksley, Warren||Page, Rt Hon Sir G. (Crosby)|
|Hayhoe, Barney||Page, Richard (SW Herts)|
|Heath, Rt Hon Edward||Parris, Matthew|
|Heddle, John||Patten, Christopher (Bath)|
|Henderson, Barry||Pattie, Geoffrey|
|Heseltine, Rt Hon Michael||Pawsey, James|
|Higgins, Rt Hon Terence L.||Percival, Sir Ian|
|Hogg, Hon Douglas (Gr'th'm)||Peyton, Rt Hon John|
|Holland, Philip (Carlton)||Pink, R. Bonner|
|Hooson, Tom||Porter, Barry|
|Hordern, Peter||Prentice, Rt Hon Reg|
|Howe, Rt Hon Sir Geoffrey||Price, Sir David (Eastleigh)|
|Howell, Rt Hon D. (G'ldfd)||Prior, Rt Hon James|
|Hunt, David (Wirral)||Proctor, K. Harvey|
|Hunt, John (Ravensbourne)||Pym, Rt Hon Francis|
|Irving, Charles (Cheltenham)||Raison, Timothy|
|Jenkin, Rt Hon Patrick||Rathbone, Tim|
|Johnson Smith, Geoffrey||Rees, Peter (Dover and Deal)|
|Jopling, Rt Hon Michael||Rees-Davies, W. R.|
|Joseph, Rt Hon Sir Keith||Renton, Tim|
|Kaberry, Sir Donald||Ridley, Hon Nicholas|
|Kimball, Marcus||Ridsdale, Sir Julian|
|King, Rt Hon Tom||Rifkind, Malcolm|
|Kitson, Sir Timothy||Rippon, Rt Hon Geoffrey|
|Knox, David||Roberts, M. (Cardiff NW)|
|Lamont, Norman||Roberts, Wyn (Conway)|
|Lang, Ian||Rossi, Hugh|
|Royle, Sir Anthony||Townend, John (Bridlington)|
|Sainsbury, Hon Timothy||Townsend, Cyril D, (B'heath)|
|St. John-Stevas, Rt Hon N.||Trippier, David|
|Scott, Nicholas||Trotter, Neville|
|Shaw, Giles (Pudsey)||van Straubenzee, W. R.|
|Shaw, Michael (Scarborough)||Vaughan, Dr Gerard|
|Shelton, William (Streatham)||Viggers, Peter|
|Shepherd, Colin (Hereford)||Waddington, David|
|Shepherd, Richard||Wakeham, John|
|Shersby, Michael||Waldegrave, Hon William|
|Silvester, Fred||Walker, Rt Hon P.(W'cester)|
|Sims, Roger||Walker, B. (Perth)|
|Skeet, T. H. H.||Walker-Smith, Rt Hon Sir D.|
|Speed, Keith||Waller, Gary|
|Spence, John||Walters, Dennis|
|Spicer, Michael (S Worcs)||Ward, John|
|Squire, Robin||Warren, Kenneth|
|Stanbrook, Ivor||Watson, John|
|Stanley, John||Wells, John (Maidstone)|
|Steen, Anthony||Wells, Bowen|
|Stewart, Ian (Hitchin)||Wheeler, John|
|Stewart, A.(E Renfrewshire)||Whitelaw, Rt Hon William|
|Stokes, John||Whitney, Raymond|
|Stradling Thomas, J.||Wickenden, Keith|
|Tapsell, Peter||Williams, D.(Montgomery)|
|Taylor, Robert (Croydon NW)||Winterton, Nicholas|
|Taylor, Teddy (S'end E)||Wolfson, Mark|
|Tebbit, Norman||Young, Sir George (Acton)|
|Temple-Morris, Peter||Younger, Rt Hon George|
|Thatcher, Rt Hon Mrs M.|
|Thomas, Rt Hon Peter||Tellers for the Noes:|
|Thompson, Donald||Mr. Spencer Le Marchant and|
|Thorne, Neil (llford South)||Mr. Anthony Berry.|
§ Question accordingly negatived.
§ Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 32 (Questions on amendments), and agreed to.
§ Mr. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.
'That this House welcomes the fact that the Government, recognising the serious adverse public interest findings in the Monopolies and Mergers Commission's Report on the Supply of Domestic Gas Appliances, and the need to strengthen competition, has accepted its responsibility for examining thoroughly ways of producing the most effective remedy, while maintaining safety standards, availability of supplies and adequate services to consumers.'.