HL Deb 12 April 1976 vol 369 cc1980-2021

Committee stage, on Clause 8, resumed.

Lord CAMPBELL of CROY moved Amendment No. 20J: Page 8, line 34, after ("of") insert ("(a)").

The noble Lord said: This Amendment, and Amendment No. 20K, could suitably be discussed together because Amendment No. 20J is simply a paving Amendment. I would say straight away to the noble Lord, Lord Lovell-Davis, that this Amendment has been put down in order to give the Government an opportunity to present their views to your Lordships' Committee. It is not an Amendment which I intend to press, but it has an important point.

Amendment No. 20J, which I now move, paves the way for Amendment No. 20K which would enable ethane, propane and butane mixtures to be supplied and used as chemical feedstocks without the need for ministerial consent. It would be a major change from the present situation if this Bill were to introduce discrimination and for industrial non-fuel use of natural gas. Ethane, propane and butane are petrochemical feedstocks which are in common use, and their supply for chemical use can have no conceivable detrimental effect on the needs of the British Gas Corporation. The British Gas Corporation can continue to serve its statutory obligations without any embarrassment on that score. I cannot believe that the British Gas Corporation has asked for this provision in the Bill.

Therefore, the only possible reason for a consent procedure being introduced appears to be to enable the Government to discriminate between suppliers or between users. This is difficult to follow, and I would be glad if the noble Lord, Lord Lovell-Davis, could explain why the Bill should not be amended in the way suggested.


These Amendments seek to establish a different régime for the heavier natural gases than for methane which dominates the gas used in most of the supply system of British Gas by removing the supply and use for non-fuel purposes of such heavier gases from the requirement to obtain the consent of the Secretary of State. The present legal position is that supply and the licensees' use of these gases require consent under Section 9 of the Continental Shelf Act. Clause 8 proposes only two changes to that position: consent would also be required for the use of these gases by persons other than the licensee and the Secretary of State would no longer be obliged to give his consent for gas for non-fuel purposes. Whatever one's views may be of these proposed changes, it is not possible to see how these gases could be exempted altogether from the requirement for consent; that must be needed if only to check initially that the use to which it is proposed they be put is indeed a non-fuel use. It was For this administrative reason that a Government of a rather different hue introduced in the Continental Shelf Act the notion of requiring a consent that had to be given.

It is true that not all gases are equally relevant to the requirements of the public supply system. But there have been two major changes in the nature of the gas used in that system within the last 15 years. Until about 1960 nearly all the gas supplied by the predecessors of British Gas was derived from coal and consisted mainly of carbon monoxide. During the early and middle 'sixties, this gas was gradually replaced by gas derived from oil and of very different chemical composition. Then at the end of the last decade and the beginning of this natural gas from the North Sea, again of very different chemical composition, replaced the old gas which was of only half the calorific value. It is not possible to foresee how the chemical composition of the gas used in the public supply system may change in future. Indeed, even now, while British Gas supplies most parts of the country with a gas consisting predominantly of methane, in some parts it supplies a butane/air mixture. I therefore strongly advise noble Lords not to accept these Amendments.

However, the Government recognise that there are differences in the kinds of use to which different kinds of gas are at any one time put to the greatest advantage. That is why it has proposed, in subsection (6), a power to give class consents by means of orders of general application. If, for instance, it could give a general consent, say, to all supplies of ethane for the manufacture of ethylene, a lot of administrative work could be saved by both Government and the suppliers, and petrochemical companies and feedstock suppliers could plan on a firmer basis. Accordingly, the Government will be very willing to consider suggestions for orders of general applications for particular gases used for particular purposes.


This Amendment has enabled the noble Lord, Lord Lovell-Davis, to make a statement on behalf of the Government. He has sought to explain why it should be necessary to have the provisions in the Bill and not to make a change of the kind proposed. I am sorry the noble Lord was not able to be, very forthcoming on this, but I am grateful to him for stating what is the Government attitude. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

8.7 p.m.

Lord CAMPBELL of CROY moved Amendment No. 20L:

Page 8, line 37, at end insert— (c) the use of any offshore natural gas in the process of separation and intermediate distribution within any facilities owned or controlled by a single company.")

The noble Lord said: I beg to move Amendment No. 20L. This would insert a paragraph (c) which would exempt from the consent procedure the use of offshore natural gas in certain processes within the control of a single company. These gases could be passed through pipes as a small or an incidental part of an operation within a company, but because they are passing through pipes during that operation, the Bill and this clause would appear to apply to those gases. This cannot really be the objective of the Government. I do not believe it can be the aim of the Government to seek to bring that kind of situation within Clause 8. I will give your Lordships an example of this.

There could be a system of distribution of LPG butane or propane by bottle. It is quite normal for that distribution to be carried out by rail or road, or by sea, and the bottles would proceed from a bottling plant. But the gas may have gone into the bottling plant by a length of pipe, and the passage of the gas through that pipe would appear to bring it within the ambit of this clause. But the transit by pipe could be incidental, or only a small part of the distribution operation within the single company. So that is an example of the kind of thing which we do not believe this clause is intended to cover, and which this Amendment would exempt. I recognise that this is a point the Government may not have taken on board, and that they may not like the terms of the Amendment we put forward. But we think it is a point that the Government should recognise. I hope the noble Lord will consider it, and in due course bring forward an Amendment of its own.


I cannot recommend noble Lords to accept this Amendment. It could, for instance, be interpreted as excluding from control the use of gas in the separation of the components of crude oil within a refinery; such separation requires considerable amounts of energy and the Amendment might lead to the removal of a large part of the nation's resources of natural gas from the Secretary of State's control. Indeed the Amendment could even be construed as removing from control gas used by a licensee or offshore buyer to separate off impurities, for instance, in the case of metals. It seems to me, however, from what the noble Lord has said, that he is concerned lest under the proposed provisions of this clause consent be required to the internal operations needed for storing, transporting and generally handling the gas. We do not think that such operations could be treated as uses if no gas were consumed in them. He referred, for instance, to pipeline transmission within a single company's operations. This would not be a supply and would therefore not be subject to control. There may, however, be some other similar operations in which some gas is consumed. Provided they do not involve British Gas's first-offer position under subsection (4) of the clause, they may be very suitable candidates for orders of general application and the Government would be ready to consider them as such. But, as I say, in view of the implications of this Amendment, I cannot recommend noble Lords to accept it. I should point out, however, that we should be willing to consider the position of gas supplied by pipe for subsequent bottling in LPG plant.


I am grateful to the noble Lord. If I can summarise very briefly his reply, he has indicated that the Amendment itself is defective because it would open the way for other cases than those that I have described, and I started by conceding that my Amendment might not necessarily be perfect. He went on to say that his interpretation of the Bill would in fact mean the exemption which I sought by this Amendment, and that internal operations of the kind I describe would not fall within the Bill according to the Government's interpretation. We will examine what the noble Lord has said, and this may be something which ought to be considered at a later stage to see whether something needs to be written in to make that interpretation clear. His last remark, indicating that the example I gave was one he would wish to consider, is, naturally, welcomed. In view of that, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

8.13 p.m.

Lord STRATHCONA and MOUNT ROYAL moved Amendment No. 20M: Page 8, line 40, leave out ("and").

The noble Lord said: Amendments Nos. 20M and 20N are both paving Amendments to Amendment No. 20P, which is really the substantial one of this group. With the permission of the Committee, I should like to speak to all three together. Your Lordships will be happy to hear that I think I can be brief, although it is an important point. Before I do so, could I just ask the noble Lord whether he can tell us the meaning of this strange phrase in line 2 on Page 9, "or otherwise howsoever". Could he give us some indication of the significance of those words, which presumably mean, "Anything I have not thought of is covered by this Bill and I reserve the right to come back to it when it suits me". I ask him that now to give him a chance to be briefed on the point while I come to the Amendment proper.

This Amendment seeks to do some, thing that has cropped up before. It tries to remove the element of retroactivity in some of the clauses of the Bill. The Government may be prepared to go along with us in this Amendment, because I hope they will be persuaded that they do owe this to the companies in common equity. What this Amendment is seeking to do is to protect the value of existing supply and investment commitments. The companies have entered into commitments in markets for natural gas which have been developed; supply commitments have been entered into on the basis of the freedom to supply which they have at the present time.

Furthermore, one can imagine the position of a company executive, a managing director, justifying to his board an investment which has then been committed for production and use of offshore petroleum on the existing basis with regard to the freedom of disposal of the associated natural gas coming ashore with the oil. So any new restrictions which are brought in under this Bill would have a retroactive effect upon an investment already committed. I have used this expression before and I regret having to use it again; but it upsets the companies and it undermines the confidence of the industry in the merit of their investments in the North Sea. Investments have been committed for the use of this natural gas, and the effect of the Bill as it stands would be to place in jeopardy the viability of the investments which have already been committed. This Amendment seeks, so far as possible, to say that commitments which have already been entered into may continue to be honoured under the legislation as it then was. I beg to move.


In replying to these three Amendments, Amendments Nos. 20M, 20N, and 20P, I will gladly, first, answer the noble Lord's question about "otherwise howsoever". I think it means, "Do with it what you will; you accepts the Bill and you takes your choice!" Having said that, the purpose of Amendment No. 20P, which is the most significant one here, is to prevent companies who have committed themselves to investment, or to contracts, before the enactment of the Bill, from suffering financial hardship under new provisions. This might happen if consents previously granted were revoked or if new consents were made subject to more rigorous conditions. Amendments Nos, 20M and 20N are, as the noble Lord said, paving Amendments.

I am aware of the very large sums of money which companies may have to invest in connection with the kind of operations envisaged, and I have some sympathy with their desire to safeguard their investments in any way. I think, however, that Amendment No. 20P is perhaps wider than is necessary. For example, the phrase, "in connection with a contract" seems to me to be particularly vague. I cannot therefore, recommend noble Lords to accept the Amendment in its present form, but I am prepared to consider further to what extent it may be possible to allay the understandable fears of the companies in this respect.


I am grateful to the noble Lord, We are not by any means wedded to the wording of this Amendment. If the noble Lord accepts the general underlying point here, it would be churlish of me not to agree to withdraw the Amendment at this juncture. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Lord CAMPBELL of CROY moved Amendment No. 20Q:

Page 9, line 2, at end insert— (d) shall be given or withheld without unreasonable delay;

The noble Lord said: I beg to move Amendment No. 200. This Amendment deals with the question of possible delays. It would insert paragraph (d), requiring that consent or withholding of consent should take place without unreasonable delay. I am sure that from all sides of the Committee it will be recognised that delays should be avoided because these delicate plans that industries have to make, not only on-shore but also in their offshore plans, will be interrupted or in doubt if consent, or lack of consent, is not announced within a reasonable time.

Therefore we suggest that something should be put in either in the form of this Amendment or something similar. If the Government do not feel that this suggestion commends itself to them, could they give us an indication of what they regard as a "reasonable time". Can the noble Lord give any indication of the number of months in which he thinks that, in normal circumstances—unless there is something extraordinarily difficult—the Government should be able to provide consent or the lack of it, veto the proposal? We should be glad to have the Government's views on this. I beg to move.


I appreciate that companies who have applied for consent will be anxious to receive an answer as quickly as possible in order to know whether or not they should proceed with their plans. The Government, however, could not accept an Amendment which would make every exercise of their powers under the clause a possible subject of litigation. A provision of this kind could, in my view, present more problems than it attempts to solve.

May I turn the noble Lord's question, when he asked me what is a reasonable time, by asking what is an unreasonable delay in this context? A month? A year? Ten years? I must ask noble Lords to reject this Amendment, and I shall consider what may be done to relieve anxieties of undue delay. I hope that that will satisfy the noble Lord.


I am grateful to the noble Lord for saying that he will consider this point. Certainly if there is anything that can be put in the Bill I think that it will give assurance to those who have to operate under the terms of this clause. I am sorry that the noble Lord, as the instigator of the procedure on behalf of the Government, should not be able to give us some indication of timing as regards the average time, or normal time, in which he would expect consent to be given or withheld, but in view of what he has said I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

8.24 p.m.

Lord STRATHCONA and MOUNT ROYAL moved Amendment No. 20S:

Page 9, line 5, at end insert: ("(6B) Notwithstanding anything else contained in this Act, the Secretary of State shall not withhold his consent under this section if the effect would be to substantially reduce the economic benefit to the person applying for consent from the offshore natural gas which is the subject of such application") The noble Lord said: This is an embarrassing Amendment. It is frankly a kite, and a kite with a split infinitive in it, so in any circumstances it does not deserve to succeed. It is essentially a probing Amendment. What we are after here is to point out to the Government that if they exercise their powers in a discriminating and an unfavourable manner they can cost industry dear, and if they cost industry dear this inevitably has a discouraging effect on what happens next. This is the essential point which has been lying behind a number of Amendments we have moved.

By and large, the industries using North Sea gas as a feedstock have done a remarkably good job in this country, I think it is fair to say, and they would seek assurances that a reasonable and lenient view will be taken by the Government, and acceptance of the principle that industry needs to be able to earn a reasonable profit if it is to continue to invest and operate in the interests of the nation. Subject to the disclaimer about the wording, I beg to move this Amendment.


Like the previous Amendment, this one is concerned with the financial well-being of companies which may be affected by the provisions of this clause. We, too, are very concerned with this—after all it has been estimated that some 70 per cent. of the companies' profits will accrue to the Government as a result of corporation tax, royalty, and PRT. We therefore have a definite interest in ensuring that companies' economic benefits are not substantially reduced. Having said this, I must say that we do not see the best interests of the country being served by tying the hands of the Secretary of State in the way suggested. I am, as noble Lords opposite will I am sure agree, now being the soul of reasonableness and co-operation, but I must ask noble Lords to reject the Amendment and to rely here on the good sense of the Government.


At this stage of the evening perhaps we should be prepared to accept that the good sense of the Government is something we should rely on. I am not sure that we should have accepted that earlier in the day. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Lord CAMPBELL of CROY moved Amendment No. 20T:

Page 9, line 5, at end insert— ("(6C) If any person shall feel aggrieved by the withholding of a consent under this section or if at any time any dispute, difference or question shall arise between the Secretary of State and any person as to any consent or any matter related thereto then the same shall be referred to arbitration. Such arbitration shall be in accordance with the Arbitration Act 1950 by a single arbitrator who, in default of an agreement between the Secretary of State and the person concerned as to his appointment, shall be appointed by the Lord Chief Justice of England for the time being (or the Lord Advocate for arbitration in Scotland). Such arbitrator shall have power to award against the Secretary of State compensation in respect of the losses suffered by any person consignent upon the withholding of a consent under this section.")

The noble Lord said: I beg to move Amendment No. 20T, which comes to the question of compensation. The Amendment is designed to provide for compensation and for some machinery in order to regulate the situation where an enterprise using gas has been injured by the Secretary of State in exercising his powers under this clause. This may be something which the noble Lord, on behalf of the Government, is not prepared to accept. I am reminded of similar debates we had last year on the Petroleum Bills which were before your Lordships then. I must make the point again that the Government may decide to exercise their new powers under this clause and, in the course of doing so, damage a plan and a programme which the industry had entered into; individual companies would be injured by it, and there does seem a case for compensation and for some fair machinery for dealing with it.

The clause is itself based on that covering the licences for on-shore and offshore production under the Petroleum Production Act 1934 as amended by the Petroleum and Submarine Pipe-lines Act 1975—one of the Bills with which we were dealing last year. Of course the Arbitration Act 1950 mentioned is the general Arbitration Act. So we are putting forward in this new subsection proposals for dealing with the compensation when an injury has occurred. The Government at the time will have taken a decision which they consider to be in the national interest; the company concerned, through no fault of theirs, has suffered an injury; should there not be some remedy in that situation? Again on this Amendment I repeat what I said on earlier ones, that if the drafting does not commend itself entirely to the Government, then of course this can easily be put right at a later stage. I beg to move.


This Amendment would allow any dispute between the Secretary of State and any person regarding a consent to be referred to arbitration. I am sure that, on reflection, noble Lords will agree that the question of granting or withholding a consent depends solely on the Secretary of State's view of the national interest, and this is not a justiciable issue. Decisions of this nature are entirely for Government and cannot be referred to arbitration as if they were matters requiring adjudication under a contract. As regards compensation, I have already dealt with the Government's real anxieties concerning those who have already incurred expense in reliance on the present law. But this particular Amendment seems so generally distrustful of Government, of no matter what Party, and so to question the right of Government to make decisions in the national interest, that I would hardly expect it to be raised here. I cannot recommend noble Lords to accept this Amendment.


The noble Lord has criticised the drafting of the Amendment and, as I said, I expected that he would not necessarily find the drafting to his taste. However, he has not, as I understand it, dismissed the question of compensation altogether and I hope that he will take that point into consideration and that we will be able to revert to the subject at later stages of the Bill. Meanwhile, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 8, as amended, agreed to.

Clause 9 [Disposal of gas by flaring]:

8.31 p.m.

Lord STRATHCONA and MOUNT ROYAL moved Amendment No. 20W: Page 9, line 20, at beginning insert ("Subject to subsection (3)(c) below").

The noble Lord said: The grouping of the Amendments to which we now come is somewhat complicated and I will, with the leave of the Committee, discuss with Amendment No. 20W, Amendments Nos. 20Z and 20YA, and then my noble friend will deal with Amendments Nos. 20X and 20Y. We are now on the subject of flaring, which we discussed at some length during our debates on the Petroleum and Submarine Pipe-lines Act. The purpose of this Amendment is to remove the requirement to obtain consent from the Secretary of State for routine startup and shutdown operations in industrial plant and to allow flaring for safety measures in the operation of industrial plant. This is a somewhat complicated matter, but I promise the noble Lord that I am in no sense attempting to generate any smokescreens in dealing with it.

The basic requirement for obtaining consent for flaring concerns natural gas. This is supposed to exclude gas made from other sources—such as gas produced in the process of distilling oils in a refinery—but in any plant which takes in natural gas as one of the feedstocks for processing into chemical products or petroleum, it is impossible to identify the natural gas from the other gases produced by the processes of converting feedstocks into other end products. Thus, the first objection to the clause as it stands is that it is simply not realistic to restrict flaring to natural gas which is not distinguishable from other forms of gas. But the really important point is the safety one. In the course of operating these complicated plants, the balance of the plant at any one time can alter quite radically and frequently many times during the course of a day. This is particularly true of start-up and shutdown processes, but at any time the balance in a chemical plant is a delicate matter and to relieve pressures which build up the normal practice is to flare the gas.

It is contended that it is less damaging to the environment—I mention this in case we come on to that point—to flare rather than simply to discharge it into the atmosphere in the unflared condition. This is the important issue; that is, that companies operating a complicated chemical process should be allowed to relieve pressure buildups, where they have them, for safety purposes. In any case, as I have said, it is the most sensible thing so far as possible to redigest any gases that are generated into the plant, so that all the incentives before the operator are to use any gas he generates. I understand from those who operate these plants that they consider it a much less damaging operation to flare the gas rather than to vent it into the atmosphere in an unflared condition.

The starting up and the shutting down of these plants, while a routine matter, is something that happens quite frequently to maintain the balance of the output required, and starting up or shutting down is the moment at which the balance of the whole process can be thrown out. In practical terms the only way to maintain this balance is occasionally to flare the surplus gas which is generated. I do not want to elaborate on this at length, but the industry assures me that it is not only impracticable but also not sensible to impose conditions of this kind on a process as complicated as this, which traditionally has always got rid of its surpluses in this way. I beg to move.


Let me say at the outset that I agree with the noble Lord, Lord Strathcona and Mount Royal, that the grouping of the Amendments at this point is somewhat complicated. I had hoped to cover Amendments Nos. 20W, 20X, 20Y, 20YA and 20Z, so if I do something of that kind I think that I would be more or less in line with the noble Lord's thinking, although perhaps not stopping off at one of the points he mentioned earlier. I think that there has been a certain amount of confusion about the need for Clause 9, under which the Secretary of State's consent is required for flaring United Kingdom natural gas either at source or elsewhere. The confusion has arisen because there are already similar provisions in the Petroleum and Submarine Pipe-lines Act 1975, and at first glance there appears to be duplication. The main purpose of these Amendments is, I believe, to clarify the issues and to try to avoid duplication, and this gives me the opportunity to explain with as much clarity as I can the position of the Government. Noble Lords may find it helpful if I were to explain the background to the clause and then discuss the Amendments in the light of what I have said.

To prevent the waste of natural gas, the licence terms as set out in the Petroleum and Submarine Pipe-lines Act require that the consent of the Secretary of State must be obtained before the licensee flares gas from the licensed area, whether onshore or offshore. This requirement will, therefore, bite only so far as it is possible to prove that the gas comes from the licensed area. Moreover, it has been suggested that the control may apply only to flaring in the course of activities controlled by the licence, such as the searching for, getting or landing of petroleum. Clause 9 will apply to all United Kingdom natural gas from whatever source, whether it is to be flared at sea or in the United Kingdom It will also apply to anyone, such as an offshore buyer as well as to the licensee, so this matter is, in part, a legal concept.

Amendment No. 20X seeks to leave out, "whether at source or elsewhere". I think noble Lords might now agree that, because of deficiencies in the Petroleum and Submarine Pipe-lines Act, these words are required. That is the view of the Government. Amendment No. 20Y seeks to avoid the situation where a licensee who has already received consent to flare under one Act is required to apply again under a second Act. I accept that we must do everything to prevent duplication of this kind and my noble friend Lord Lovell-Davis will consider how best to give effect to this.

Amendment No. 20Z and the first part of Amendment No. 20Y cover cases where, in the view of the noble Lords proposing the Amendments, automatic consent for flaring is necessary. I accept that there will be cases in this category. For instance, the noble Lord mentioned the question of safety and it is for this reason that subsection (3) allows consent to be given by order. I hope that the companies will be able to provide us with as much detail as possible so that the necessary orders can be made without delay. But I give this undertaking to the House. We on this side could look again at the question of controls over the escape of flared gas into the atmosphere and we should be prepared to give that our further consideration.

The Earl of KINTORE

I do not want to be tiresome, but I have a particular interest in this. Provided that I can be assured that the companies operating plants will have previous permission to flare when they think it necessary, I shall be happy. One may have only two minutes in which to decide whether or not to flare. If a company has to get the permission of the Secretary of State or any other permission at all except from a purely operational basis, half the town of Peterhead could blow up when the NGL plant goes there. These gases or liquids—whichever one likes to call them—are stored in very large tanks and are refrigerated. If refrigeration is lost because something goes wrong with the refrigeration plant, pressure will build up and they will blow up in five minutes. Flaring is a safety valve and must, under those conditions, be considered as such. I do not pretend to understand the Amendments but, if I have an assurance that there will be complete freedom of operation to the plant operators to flare if companies require to do so, I shall be quite happy.


Can the noble Lord say what is happening at the present moment? It is a little difficult to follow and the question raised by my noble friend is a very interesting one. Did I understand the noble Lord to say that, under existing legislation, there is something similar in operation? What is the present method of giving the facility which companies clearly require?


The noble Earl, Lord Kintore, has raised a most interesting point and one which, in his and my case, has a certain geographical significance. I assure him that, to enable speedy flaring to take place in an emergency, advance permission would be available under the General Order provisions. To reply to the noble Lord, Lord Hawke, the distinction is between permissions which can be granted under the Petroleum and Submarines Pipe-lines Act relative to oil generally and the fact that, on this specific point of flaring, we must make sure that, if necessary, others apart from the licensee can also receive permission.


It is clear that the Government are not closed-minded about these Amendments and that the issue will largely turn on the nature of the orders which they are proposing to make. I believe that the sensible course will be to leave the matter open until Report stage. My instinct tells me that there will be discussions behind the scenes and that we may be able to get a clearer picture of where we are. Listening to the discussion, I ask myself what will happen if a company in extremis, says, "To hell with the regulations, we are jolly well going to flare, anyway!" I imagine that that is what companies will tend to do and, if my noble friend Lord Kintore is right and the choice is between blowing up Peterhead or incurring the wrath of the noble Lord, Lord Lovell-Davis, I know which way my decision would go. However, if we are saying that the Government have hoisted this point aboard and that they recognise that there is a degree of concern that, as the provision stands, it may be rather rigid, I am content to leave this to a later stage.


The noble Lord can rest assured that the North-East Scots will see him all right.


I think we can rely on the good sense of the North-East Scots, whatever else may happen, so I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

8.45 p.m.

Lord CAMPBELL of CROY moved Amendment No. 20X: Page 9, line 21, leave out ("(whether at source or elsewhere)").

The noble Lord said: I suggest that it would be for the convenience of the Committee if Amendment No. 20Y were taken together with the present Amendment. Amendment No. 20X seeks to take out words which do not appear to add anything of substance to the clause unless the Minister can show that they are essential. Amendment No. 20Y has as its purpose the removal of the requirement to obtain the consent of the Secretary of State in order to flare natural gas either in an oil refinery or under a production licence.

To deal first with the oil refinery, we recognise that the purpose of the clause is to ensure that natural gas is not needlessly wasted by flaring. In an oil refinery, operations and safety require gas to be flared in certain circumstances. Furthermore, it is immaterial whether the gas is natural gas or some other kind of gas. Once it has entered the oil refinery it is very difficult to identify where natural gas is as opposed to other gases in the refinery.

As regards the Continental Shelf and the production of oil and gas there, this House last year discussed at some length the whole question of flaring under the Petroleum and Submarine Pipe-lines Bill, as it then was. As a result, that Bill, when enacted, contained some special provisions which covered action to be taken in an emergency. There were also other provisions concerning production licences which were not the same as in the present Bill. Since the situation concerning production licences has so recently been covered by that Act, it seems unnecessary to cover the area again by the provisions in this clause. I have mentioned the particular point of emergency flaring which can be carried out without consent under the 1975 Act. There is also, I am advised, the point that the legal position is different. Under the present Bill, a criminal liability arises if there is flaring in contravention of the Secretary of State's direction whereas, under the Petroleum and Submarine Pipe-lines Act, the offence is one arising under civil law and it constitutes a breach of contract rather than a criminal offence.

These are two examples of the differences and it will only cause confusion if the Government try in the course of proceedings on the present Bill to cover an area which has already been dealt with. So, whether or not the Government happen to like the wording of Amendment No. 20Y, I hope they will take into consideration the points which I have made regarding, first, oil refineries and, secondly, production licences. I beg to move.


First, I wish to refer to the legal situation which the noble Lord, Lord Campbell of Croy, has just outlined. Certainly I, or my noble friend Lord Lovell-Davis, could give further consideration to this point, but I do not feel that I can usefully add to my earlier remarks on Amendments Nos. 20X and 20Y, when I attempted my omnibus reply to the noble Lord, Lord Strathcona and Mount Royal. There is nothing more that I can add. The points that I made earlier were, I felt, made explicitly, and so at this time I rest on what I have said.


I appreciate that, with the leave of the Committee, the noble Lord was earlier replying to a group of Amendments, including these two Amendments which we are now considering, on the basis that I would move them later, and I listened to what the noble Lord then said. That course was taken in order to save the time of the Committee, which is something with which I fully concur. None the less I hope that, with his advisers the noble Lord will consider what I have said on these points. Clearly he is not in a position to add to what he said earlier—


May I interrupt the noble Lord for a moment to add that I have been advised regarding the point regarding criminal liability. Under Clause 16(3), it is stated that, "criminal proceedings do not lie…" I thought that this might be a useful piece of information for the noble Lord.


I am grateful to the noble Lord for giving such a quick response to that point. But I do not think that it detracts from my general argument that the Bill is seeking to impose another pattern on one which we went into in considerable detail when considering the last Bill, and for which we think (though we have differences with the Government) Parliament as a whole has produced what was thought to be a suitable pattern; that is to say, the production licences system. It would be untidy and would cause confusion if there were to be imposed on that yet another pattern under this Bill. Unless the Government can show at a later stage of the Bill that there is something seriously missing—which we did not think of last year, and which the Government themselves did not think of when dealing with flaring in connection with production licences—then we cannot see why it should be necessary to duplicate, and go over that ground again. In the meantime, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn. Clause 9 agreed to.

Clause 10 [Refinery gas]:

8.55 p.m.

Lord STRATHCONA and MOUNT ROYAL moved Amendment No. 20AA:

Page 9, line 38, at end insert— ("( ) The Corporation's consent shall be given if the supply is for industrial non-fuel purposes and no conditions shall be attached to such consent.").

The noble Lord said: Here again we are trying to make some nice distinctions. I must go into the background to this matter as I understand it. Clause 8, which we have dealt with at some length, sets up a number of very constricting controls. We have been at some pains to say that we regard them as unnecessarily restrictive. Under Clause 8(5) there is a specific exemption from controls for, …gas obtained in an oil refinery from offshore crude brought in by sea transport… It allows it to be used in that refinery, or to be subjected there to any process of liquefaction. This is an important exception: otherwise oil refineries would have been in the curious position that the Clause 8 control would have applied to North Sea crude, but the Gas Acts would have applied to them only in respect of imported crude. It does not need much imagination to see the difficulty that there would have been in distinguishing between what emerges at one end from the things put in at the other.

The difficulty is that this exemption, I understand, does not apply to North Sea crude delivered to the refinery by pipeline. I gather that the Government take this view because, for safety reasons, there is an upper limit to the proportion of gas which can be included in crude transported in this way, whereas this restriction does not apply to crude conveyed by pipeline. So the refineries receiving North Sea crude would be subject to Clause 8 controls. The existing controls are subject to the control that gas supplied by pipeline for non-fuel purposes is subject to consent given by the British Gas Corporation. This is a mandatory consent, which has to be given if the company can show that the gas is not required for fuel purposes. In practice, this means that oil refineries are free to supply other companies, or their own associates, with gases used to make chemicals.

We have addressed ourselves to this point a number of times this evening, and I do not need to elaborate upon it unduly. The change now proposed under Clause 10 would make the consent of the British Gas Corporation discretionary, rather than mandatory, and there is a right of appeal to the Secretary of State; in other words, whereas the companies could rely on getting consent, if they were able to show that it was a non-fuel use for which they were applying (and there was no argument about it), now the situation will be that they can apply, and they would hope to get consent; and if they think that the British Gas Corporation is not being reasonable in not giving its consent, they can apply to the Secretary of State.

This is a provision which worries the commercial organisations engaged in this class of business. It is desirable to them that gases piped in liquid form should be free of all control, whatever purpose they are to be used for. We have argued several times this evening that if liquid petroleum gases are to be free of control—if being conveyed by ship, road, or rail—it is anomalous to control them if they are being conveyed by pipeline. Thus Amendment No. 20AA is an attempt to restore the present position with respect to consent for the supply of gases for industrial non-fuel purposes whereby consent has to be given if it is demonstrated that this is the purpose for which they are required.

Having embarked upon this argument, it might be as well if I pursue the arguments for Amendments Nos. 2OBB and 20CC which are all addressed essentially to a similar point. Amendment No. 20CC is re-establishing the right which exists at present for refineries to supply gases for use in their own, and associated, companies without the need for any consent for the purpose for which the gases are to be used.

It may be said that the Government would always give consent if the cast, was at all a reasonable one but here we are back to the argument which, again, we have employed a number of times. If consents are always to be given, why bother to provoke the companies and the industry by bringing in regulations the very existence of which, even if they are not going to be used, is bound to frighten the people who are operating within this industry? There does not appear to be any economic case for these controls being taken by the Government, and they do not appear to be needed to ensure those ordinary controls which we have all conceded are necessary to protect the British Gas Corporation's monopoly for the sale of piped gas—that which has always been understood as being a right to supply piped gas for fuel purposes. We have therefore put down these three Amendments to see whether the Government accept that there is a problem here, and whether they are prepared to go any way to meet the situation which, frankly, is creating a good deal of disquiet in the industry. I beg to move Amendment No. 20AA.


I am obliged to the noble Lord for taking this Amendment together with Amendments Nos. 2OBB and 20CC. Incidentally, I note that we are here once again very close to "otherwise howsoever", but perhaps might give a slightly more serious explanation of this from the brief. It really does mean that the Corporation's consent may be given subject to conditions or in any other way. There is thus freedom for the Secretary of State to impose such conditions as he thinks most appropriate in the circumstances.

At present, gas supplied from a refinery, if derived from imported crude, is subject to Section 29 of the Gas Act 1972; if derived from North Sea oil, it is subject to Section 9 of the Continental Shelf Act 1964. So far as supply for non-fuel purposes is concerned, the effect is the same: the consent (of British Gas in the former case, of the Secretary of State in the latter) is mandatory, as the noble Lord, Lord Strathcona and Mount Royal, has said. But the provisions of Clause 8 will make consent for supply for non-fuel purposes discretionary, and so the gas supplied from the refinery, depending on its origin, would be subject to two separate and different regimes. To add to the confusion, which the noble Lord has described in a way I shall not recall, the gas is so mixed in the refinery that it would be impossible to tell its source.

It has therefore been considered that it is right that all such gas should be subjected to a single régime of controls. The Department of Energy has not the resources to cope with the many cases of refinery gas supply that may arise, and so it seems sensible to treat these supplies as coming under the Gas Act régime and therefore subject to the consent of British Gas rather than of the Secretary of State.

But in the case of supplies for non-fuel purposes the provisions allow an appeal to the Secretary of State, who would then apply controls in a manner analogous to that of Clause 8. The first Amendment would therefore breach one of the major aims of Clause 8—to bring all off-shore natural gas under discretionary control. I cannot therefore recommend noble Lords to accept this Amendment. The second Amendment is really consequential on the first, and I assume that if the first Amendment were to be rejected the noble Lords proposing the Amendments would then prefer subsection (4) to be retained.

The third Amendment seeks to remove from the control of British Gas gas provided through pipes from a refinery for the person's or company's own use, or for the use of an associated company in the same group. I think there are grounds for not subjecting to control supply by one company to another in the same group; and, while I ask noble Lords to reject the first two Amendments, I am prepared to consider whether we can accommodate the third in any way without disturbing the scheme of control established by Clause 8 and by this clause.


It is a complicated matter, and it is quite evident to me that the Government feel very strongly about it. I think the best thing we can do at this juncture is to read carefully what the noble Lord has said. I do not pretend that I find this issue, which we have had so often, of trying to separate the particular purposes of the particular gases which we are dealing with, a very easy one. I think the best thing I can do at this stage is to beg the leave of the Committee to withdraw this Amendment, while reserving the right to examine carefully what has been said with a view to coming back on this matter at Report stage. I therefore beg leave to withdraw Amendment No. 20AA.

Amendment, by leave, withdrawn.

On Question, Whether Clause 10 shall stand part of the Bill?


May I correct something which I have been informed I said when replying to the noble Lord, Lord Strathcona and Mount Royal? In once again being so unwise as to discuss "otherwise howsoever", I mentioned the consent of the Secretary of State, but in this case it would actually be the consent of the British Gas Corporation. I apologise to noble Lords.

Clause 10 agreed to.

Clauses 11 and 12 agreed to.

Clause 13 [Passenger car fuel consumption]:

9.6 p.m.

Lord LUCAS of CHILWORTH moved Amendment No. 20EE. Page 11, line 24, leave out ("different").

The noble Lord said: In moving the next series of Amendments, which stand in my name, may I first of all thank the noble Lord, Lord Lovell-Davis, for having written to me about two points; and may I also make an apology to him as to my criticism of the Government, concerning the lack of consultation in the early stages, although I understand that, so far as the retail industry are concerned, the consultations confined themselves to the principle of testing and did not extend to some of the after-effects of this. That is not of great moment now, but, nevertheless, I should like him to know that I am grateful.

Amendment No. 20EE, which is to leave out the word "different", is there particularly to inquire of the Government exactly what is meant by "different cars in standard conditions". I am also going to ask a further question in connection with "different cars", and that is this. When we are talking about fuel consumption, are we talking only about liquid fuel consumption? In other words, can the Minister shed any light on the position with regard to electric cars? Can he also shed any light on a car which is designed and manufactured specifically to run on LPG? I understand that "different cars really should mean cars of a particular make, a particular model and a particular mark of that model.

While I understand from Lord Lovell-Davis's letter that it is not intended to test every car—that is quite understood—presumably, it is intended to test every car of the type that is offered for sale. Indeed, if it were not so, there would be little point in having a comparative test situation. Could the noble Lord explain exactly what is meant by "different" if he wants to leave it in? Obviously, if he accepts my Amendment, it means all cars of all makes, models and marks. What do we mean by cars in standard conditions? Are we talking about motor cars in standard conditions or test circumstances being of standard condition. I beg to move.


The noble Lord, Lord Lucas, has proposed a number of Amendments to this clause. To put them into perspective, I propose to comment briefly on the clause as a whole. The purpose of this clause is to create a better awareness of the importance of the motor car in the energy conservation scene and to encourage over a period of time the greater development and use of cars which offer the advantage of relatively low fuel consumption. Road transport is responsible for something like one quarter of our total consumption of oil; the motorist is using high cost petroleum products most of which are imported at the expense of great strain on our overseas trade balance. Therefore, the importance of encouraging the greatest possible economy in this area of energy usage cannot be over-stressed.

In our proposed scheme of standard testing of fuel consumption of cars and publication of data which enables true comparisons to be made between different types and models, we are not seeking to prevent the individual motorist from choosing the car he prefers, but only to make sure that where his preference is in the direction of a car of relatively heavy fuel consumption, he exercises this preference with full knowledge of relative fuel economy performances. Nor are we imposing anything unreasonable upon the industry and the trade. For example, in the United States arrangements of this kind have been in operation for some considerable time. So far as our proposed arrangements are concerned, they have been fully discussed with and accepted by the principal national organisations representing the manufacturers, distributors, retail traders, the motorist and the consumer.

With that general comment, which I think it is apposite to make, I would respond to the noble Lord's first Amendment by stating to the noble Lord that the intention of the paragraph now under consideration is that the orders made under the clause may provide for the recording and publication of the results of tests made on single samples of each particular model or range of models in order that ready comparisons might be made of fuel consumption performance of different makes. The inclusion of the word "different" was certainly not designed to enable the Secretary of State to require testing of different cars of the same basic type. In the light of the noble Lord's comments and to remove any doubt as to whether our wording is exactly in line with our intention, I am prepared to have another look at this question.


I am grateful to the noble Lord for his early comments regarding the purpose of the whole clause. I am quite sure that the basic intention is not in dispute by anybody. It is how we arrive at the information and what the public do with it. In view of his remarks in regard to the Amendment, I beg leave to withdraw it.

Amendment, by leave, withdrawn.

Lord LUCAS of CHILWORTH moved Amendment No. 22: Page 11, line 31, after ("cars") insert ("and coachbuilders").

The noble Lord said: This Amendment was inserted particularly in relation to the previous one in that where we are having tests administered by manufacturers or importers it seems to me rather important to consider those people who, with the full knowledge and acceptance of the manufacturers, convert a car to a different purpose. I am thinking, for instance, at the present moment, of the British Leyland model Princess which, ex-manufacturer, has no estate conversion.

This work is being undertaken by an outside contractor, in my terminology a coachbuilder. This will completely alter the motor vehicle. If the testing arrangements were restricted to—and I use this model merely as an example—the Princess, ex-British Leyland, it would have little bearing on the estate conversion authorised by the manufacturer; in that the body is altered, the springing may be altered and the rear axle ratio might be altered. Therefore the petrol consumption could be marginally altered. It would not be sufficient under the earlier clause for there to be a different car, make, model or type, and then have excluded what may amount to a sizeable portion of the market. That is the sole reason for adding this description "and coachbuilders". I beg to move.


Under subsection (2)(a), orders made under the clause may provide for tests to be made by the manufacturer or, for foreign cars, the importer. By "manufacturer" is meant the concern which markets the car in its own name. Thus if a firm of coach-builders takes an engine and chassis from another manufacturer, builds on to this a special body, and then sells the car in its own name, our intention is that this firm should be regarded as the manufacturer, just as a car sold under the name of the producer of the engine and chassis would be regarded as manufactured by that producer even if the body work is made by someone else.


I am perfectly happy with that explanation which completely clarifies the situation. I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

9.16 p.m.

Lord LUCAS of CHILWORTH moved Amendment No. 23: Page 11, line 32, leave out ("from time to time") and insert ("at prescribed periods").

The noble Lord said: The purpose of this Amendment is to remove this rather indeterminate description "from time to time". This is similar to earlier descriptions in the Bill such as "howsoever" and "maybe". If we are going to subject a mark of motor car for tests from time to time as the Bill suggests, let us know exactly when we are going to do it otherwise it is upsetting to set down a production run not knowing whether that is going to be subjected to a test. Certainly if a model is changed during a production run—the introduction of a different carburettor, for example—then it may be necessary to call for that later mark to be tested. If it is intended on a long production run to have a quality test during the run, it may be more reasonable for a manufacturer to know exactly at what period in a production run—whether numerically or in date terms—this second test is to take place. "From time to time" has certain meaninglessness about it.


I consider this Amendment as being helpful because it enables me to explain the intention behind subsection (2)(b), which is that there should be no regular system of repeating tests, but only that the Secretary of State should have the right to require a check test in the exceptional case where there are circumstances of doubt about the accuracy of the original test. The Government have no wish to impose any regular system of repeated check tests for all models of cars covered by the arrangements. Under the paragraph as it stands, the order made under the clause will have to make quite clear of course—and I emphasis this—what are the circumstances and conditions under which tests may be required to be repeated, and there will be full consultations on these points, as required by subsection (5), before the orders are settled. The noble Lord has that assurance.


I am grateful for those assurances. I do not wish to be difficult about this; but I must confess that I still do not like that expression, "from time to time". It does not mean anything at all. If we are going to subject a motor car for a specific purpose to a second test, then I suggest that it would be better if we found words so to describe that requirement. The noble Lord has been very generous so far. I wonder whether he would care to think of an alternative and perhaps more acceptable form of words. If not, perhaps he will allow me to put some forward at a later time.


I understand the difficulty as the noble Lord, Lord Lucas of Chilworth, sees it. Part of the problem in a case of this type is to get the exact form of words which best fits the Government's position at this stage. Thus far we cannot improve on the phrase "from time to time" for the reasons that I have been explaining. I would, as of now, resist the Amendment.


I am certainly not going to press this Amendment, but as I still do not like the form of words to fit the description, perhaps I might be allowed, if I can think of something better, to offer it to your Lordships at a later stage. I beg leave to withdraw this Amendment.

Amendment, by leave, withdrawn.

Lord KIRKHILL moved Amendment No. 24: Page 11, line 34, leave out ("and").

The noble Lord said: The proposed scheme of testing fuel consumption of cars and publishing the results will apply to cars marketed in this country, whether of British or foreign manufacture. In the case of foreign-made cars which have been tested in the country of origin under the same internationally agreed testing conditions as we shall be applying, it would clearly not be economical to repeat the tests in this country. Equally, a repeat in other countries of our tests on British-made cars would be wasteful and unnecessary. The purpose of this additional subsection, therefore, is to enable us to make reciprocal arrangements with other countries which have adopted fuel consumption testing based on the same standard test conditions. The first such arrangement would be with the French, who have introduced a scheme parallel to the one we propose and indicated their desire to conclude an agreement with us. I am sure that there will be general agreement that what we propose is sensible, avoids a waste of resources and is consistent with the maintenance of harmonious relations with our international trading partners.


I think the noble Lord is possibly confusing us a little here. Would I be right in thinking that Amendment No. 24 is really a paving Amendment to Amendment No. 26 and that the noble Lord has spoken to both Amendments at the same time?


I apologise. Of course, Amendment No. 24 is a paving Amendment to No. 26.

On Question, Amendment agreed to.

9.23 p.m.

Lord LUCAS of CHILWORTH moved Amendment No. 25: Page 11, line 5, after ("payment") insert ("by the Secretary of State").

The noble Lord said: In moving this Amendment No. 25, I am hoping to clarify two points: first, who is to pay and, secondly, how much is to be paid? It is important that we should know at the outset who is expected to pay. If it is the Secretary of State, as I have suggested—he seems to be the person it is reasonable to expect to pay—then the repercussions flow only through general taxation. If, however, it is the manufacturer, then that amount of money, however much or however little it may be, must be added into the product. If that is done, the car tax, which is an immovable tax based upon the wholesale price of the car, will have reflected in it that proportion of the wholesale cost represented by the test.

Your Lordships will know that at the end of the line comes the value added tax, and value added tax is based upon the car tax and the retail price and the whole inbuilt set of costs. Therefore, if the manufacturer, the importer or concessionaire who offers the car for purchase is to bear the cost, the ultimate cost will be borne by the consumer through tax, and I think it is important that we should know here and now who is to pay and what kind of sum is envisaged. It may well be that, on the question of the amount, the Minister is not able, for reasons one can easily understand, to put a figure on it. But with the multiplicity of makes, models and marks on the market today, both of English-made cars and of imported cars, and with the ever-changing scene, there are a considerable number of motor cars to be tested. Whatever organisation undertakes this kind of work, which must be fairly accurate because it has to conform to international standards, the amount will not be inconsiderable. If it is said, "If the cost is spread over 1 million motor cars it becomes a very small amount for each car, so why are you very worried about it?", I would say that I do not think I am very worried. I just say that before we embark upon this, let us know exactly what we are doing. It is for that reason that I beg to move this Amendment.


This Amendment which has been put down by the noble Lord, Lord Lucas of Chilworth, gives me an opportunity to explain clearly the Government's view on this point, although after having listened to the noble Lord I doubt whether that is necessary, because he has more or less given my position in a number of rhetorical questions which he put to me. But I can confirm that following full consultation of organisations representing the interests concerned, including the manufacturers, a scheme of testing fuel consumption of motor cars has been worked out, based on arrangements for self-testing by the manufacturers. During these consultations, the manufacturers' representatives—that is, the Society of Motor Manufacturers and Traders—did not raise the question of cost with the Government. Many manufacturers, of course, already have test facilities and they already make measurements of fuel consumption and publish their results, regarding the cost as a normal component of total production costs. The intention is that a test of one sample only will apply to all cars of that model, and also to all cars of related models which are variants of essentially the same car. Each test will therefore be applied generally to a large number of cars sold; the cost per car, as the noble Lord acknowledged, will generally be very small, and there will be no significant burden on the purchaser, although I cannot give the exact cost. Manufacturers already meet the costs of tests on exhaust gas emission which are required for environmental purposes. I do not think there is anything unreasonable in expecting the producer to bear the cost of testing now required under this clause. Nor can I see any basis for the suggestion that the taxpayer should pay for something which, in the Government's view, is for the benefit of the individual purchaser of motor cars.


I am not in the least surprised to have received a reply in those terms—a reply which I am quite happy to accept. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

9.28 p.m.

Lord KIRKHILL moved Amendment No. 26:

Page 11, line 35, at end insert ("and (d) for official approval to be extended to tests carried out in other countries, and for the results of such tests to be adopted, certified and published in the United Kingdom.")

The noble Lord said: I formally move Amendment No. 26, having previously spoken at length. I beg to move.


Obviously, we would find this Amendment quite acceptable but I should like to ask one question. Are we completely satisfied that the arrangements made through the EEC harmonisation schemes, and through the ECE, will be exactly the same as ours, because some motor cars will be tested in climatic conditions which are quite different from our own? As I understand it, the test might be one of actual usage rather than one of a mechanical nature, using, for example, a rolling road in enclosed, almost laboratory-like, circumstances. If we may have an assurance that the tests will be absolutely similar so that there can be no bias for or against a motor car, particularly an imported one, I am sure that we would be quite happy.


At this stage I am unable to give an unequivocal assurance to the noble Lord. My information, thus far, is that so far we have negotiated satisfactorily only with the French. In further negotiations we would, to use the noble Lord's own phrase, unquestionably wish to be in as much harmony as possible with international agreements, so that there would be a true comparison of like with like. However, I shall pursue the point and undoubtedly I shall be able to let the noble Lord know at a later date.


Earlier we talked about the IEA and the EEC. Is this a matter which will be addressed to either of these international bodies, and will there be a degree of harmonisation between the European countries about the way in which this matter is approached?


Again the noble Lord's question advances my state of knowledge beyond its present position. However, as a general proposition I can say that if this position were to obtain in future, it would be covered, so far as this Bill is concerned, by its enabling provision. In part that also answers the question asked by the noble Lord, Lord Lucas of Chilworth.

On Question, Amendment agreed to.

Lord LUCAS of CHILWORTH moved Amendment No. 27: Page 12, line 6, leave out from ("compiled") to ("issued") and insert ("and").

The noble Lord said: I beg to move Amendment No. 27. I stated the purpose of this Amendment during the Second Reading of the Bill when I think I described the phraseology of this subsection as "rather sloppy". I wish to have removed the words "with a view to a copy of it being". If, as is the usual practice, a handbook is supplied with a new motor car, whatever its make or model, and whatever its country of origin, it seems to me that if the information is put into that manual it will be issued. I cannot see that it helps the manufacturer, the dealer, or the user to have this expression which leaves to them the option of giving a manual or handbook to the first purchaser. If we removed these words, it would be obligatory to include the information in the handbook compiled for and issued to the first purchaser, and that is the purpose of this Amendment. I can see no point whatever in these wishy-washy words which are rather meaningless.


The Amendment has the merit at first sight of shortening and simplifying the wording of subsection (3)(b), an intention to which the noble Lord has just referred. I am afraid, however, that it is unsatisfactory because it appears to have the effect of putting the obligation on the retailer to see that the manual or handbook provided with the car includes the required information about the result of the fuel consumption test. The retailer has no hand, of course, in the compilation of the handbook and the intention was that the responsibility for carrying out the requirement to include necessary fuel consumption data must rest on the producer of the car who produces the accompanying handbook or manual. None the less, in the light of the remarks made by the noble Lord, I am prepared to look again at the drafting of this subsection to see whether the intention can be more clearly expressed.


I am most obliged to the noble Lord. Of course he will accept that, if he does not want the retailer to carry the responsibility, a responsibility which he says the retailer should not carry because of the earlier wording, it makes a nonsense of the whole piece. So that unless it can be improved one might as well remove this as it is not even obligatory; it is merely a casual requirement upon somebody. However, the Minister has kindly said that he will look at it, so we will see what comes up at the next stage.


I wish merely to say that at this stage the noble Lord perhaps underrates the sheer inventiveness of the Ministerial intervention on this side.


I am sure the Minister is absolutely right about that. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

9.36 p.m.

Lord LUCAS of CHILWORTH moved Amendment No. 28: Page 12, line 8, leave out paragraph (c).

The noble Lord said: This Amendment to leave out paragraph (c) is really quite important, and I think it would be helpful to the Committee if I spoke also to Amendment No. 30, because that offers the alternative. The objections to paragraph (c) are three-fold. First, the paragraph suggests that, at any place where he causes cars to be offered for sale, or regularly transacts business with customers relating to the sale of cars, keep posted up".

This implies that anybody who deals in motor cars—that is a franchise holder or a non-franchise holder, a used car dealer, a repairer who now and again sells a motor car—has to keep information posted up. Also by the very words, "posted up" the inference is that there is to be a poster or a chart of some kind. There might be 900 motor cars with test information, so it would be a very large poster that had to be kept posted up. Those are the first two points. Anyone who deals in motor cars, new or used, or even a repairer who sells only occasionally, has to do this and, secondly, he has to deface the walls of his showroom or workhop with another large poster. Incidentally, how is he to alter or amend his large poster? At least that is how I understand the words, "posted up".

The other and perhaps the really important point in this paragraph is contained in the last two and half lines: …including not only cars which he deals in or offers for sale, but also those which he does not".

I have discussed this with a number of individuals within the industry and I understand that the Motor Agents Association, who represent certainly the large majority of sellers of new motor cars, have written to the Department of Industry putting forward objections to this paragraph.

It is quite wrong that the seller of a piece of merchandise should be required by law to display information regarding his competitor's product. It is grossly unfair that he should have placed upon him a responsibility to make known those points of his competitor's product as specified in Clause 13. I may be quite wrong, but I do not know of any other industry that is so required to display pertinent information relative to a competitor's product. This seems to me a very serious incursion into his liberty to sell free. If your Lordships' Committee accept what I have said and think this is right, I have provided an alternative in Amendment No. 30. I will accept that the noble Lord the Minister may say, "Now, look here, we are going to all this trouble to have tests and certificates; they really must be made available to The public. It is no good putting all this in a handbook which the customer gets after he has bought: he wants to know this particular relevant point before he has bought. Where better place than the showroom of the dealer he goes to see? "

Amendment No. 30 provides a far better place; that is, where the public go for information. They go to a great extent to citizens' advice bureaux, to the consumer advice centres, to public and reference libraries. Indeed, so far as motor cars are concerned, I understand that the public are going to consumer advice centres and the departments of consumer protection more and more frequently. Therefore, it seems to me that these are quite obviously the places to put this information: where there are no pressures to be brought upon the intending purchaser; where the facts are plainly to be seen, offered by a clerk in that department or on that library bench.

It is insufficient, and it would be unfair, for a customer to go into a showroom for discussion about the purchase of a motor car and for him to look at a chart and to see alongside it one which apparently has a similar description, with a better fuel consumption. He would then say to the salesman, "Ah, well, this product will do two miles more to the gallon". Let us deal with what is going to happen in practice. The salesman immediately comes with a series of arguments. The consumer is then left even more baffled, because the obvious thing that would come to my mind would he to say, "Well, if you are really thinking about this motor car that does X miles to the gallon as against my motor car which does X minus miles to the gallon, suppose I fit for you a different type of air filter. I am quite sure that we could then get to a fuel consumption equal to this." Here is the client being torn and twisted by perfectly legitimate forms of salesmanship.

I suggest that we delete the requirement that all and sundry who deal in motor cars should have posted on their walls a big poster, very difficult to handle. I suggest that we put all the relevant information in booklet form in places where consumers go for advice. I beg to move Amendment No. 28.


The Question is, That this Amendment be agreed to. I should here point out that if this Amendment is agreed to, I shall not be able to call Amendment No. 29.


It is a fundamental part of the scheme for which this clause provides, and which has been worked out in consultation with the industry, the trade, and the motoring and consumer organisations, that comparative information about the different cars on the market should be readily and clearly available at all car showrooms or other places where cars are sold. The intention is, of course, that in making choices the purchaser should know how his choice of car compares in fuel consumption with all other makes based on tests of samples made under strictly comparable conditions. May I say at this point that it is envisaged that about 106 tests would probably be made. The customer is perfectly free, of course, to choose a model with relatively high fuel consumption if he prefers it for other reasons, but he should have the opportunity to make his decision with full knowledge of comparative fuel consumption performance. It is not sufficient that information is provided about a limited range of models at a particular place. There should be an opportunity to compare any particular model with comparable models of other makes which are also on the market. I cannot agree that this is unreasonable, and I would think that to ask that this should be so would indeed be a fair position for the Government to adopt.

Although there were some expressions of doubt during consultations with the industry and trade on the scheme, the proposed arrangements were in fact—contrary, I think, to the point the noble Lord was attempting to make—accepted with the inclusion of this requirement. The Motor Agents' Association in a letter dated 12th January, and the Society of Motor Manufacturers and Traders in a letter dated 12th March, both accepted the scheme, which includes the following passage: An official list of all models of new cars offered for sale in the United Kingdom will be published, using the data obtained from the standard tests, and distributors and retailers will be required to display the most recent copy of the official list at each point of sale. The National Consumer Council and the Consumers' Association, not surprisingly, attach importance to this requirement. The intention would not, in the Government's view, be fully met by the lines on inclusion of the data for particular cars in relevant advertising material.

The noble Lord, Lord Lucas of Chilworth, has spoken to Amendment No. 30 and perhaps I might turn to that. Again I have to emphasise to him that in the Government's view it is quite fundamentally a part of the scheme that the information should be clearly and readily available wherever purchasers of cars are taking decisions of choice. This is the concept behind the Government's view. The whole purpose would be lost if a decision to choose car X is taken without the advantage of being able to compare it in respect of relative fuel consumption with other makes which are on the market. It is, of course, in the car showroom, in the Government's view, not the library, nor the Citizens' Advice Bureaux, nor yet in the consumer advice centre, that practically all these decisions are taken in practice. I think that is as fair a summation of the Government's view as I can give the Committee.


I would support my noble friend up to a point here. It seems to me that the noble Lord's reply is a little unhelpful. I would go along with him in agreeing that this is the proper place to have this information available. It struck me that there was a strange anomaly in his reply. The noble Lord, Lord Lucas of Chilworth, suggested that there were 700 models, and if I heard the noble Lord aright he was saying there might be 100 tests. That would seem rather a wide discrepancy between what the two sides think is going to be required here. The relevance of that is this. The noble Lord, Lord Lucas, is talking about a big chart. Like the Duke of Wellington and the famous story of the rat in the bottle of wine, he did not say how big the print was going to be.

It seems to me that the case might be met if we considered at a later stage some kind of Amendment which simply said that the information is available and possibly at the point of sale there should be a notice indicating that the information is available on request. If one could envisage some small leaflets, like the information at the back of one of these magazines, for example, which would be available to the customer if he asked for it, this would possibly get over the point that is worrying the noble Lord about showrooms, although I am bound to say that most showrooms I have been in would not be seriously disfigured by a chart giving fuel consumptions. I thought the noble Lord was making a serious point and it seemed to me that the Government were saying, "Well, it's up to you to produce a good answer. We are quite satisfied with what we have done". I think we ought to encourage them to try to be a little more helpful in reply to what seems to me to be a perfectly reasonable request.


I hope that noble Lords do not feel that the Government are in any way being arrogant on this point. The Government's position is that they have consulted very widely. I would not re-quote the various organisations. I have already mentioned them, and they are on the Record. There has been prolonged consultation and now there is agreement. The Government consider that to meet a reasonable consumer point, this kind of structure is necessary. If I might just conclude on this point, the discrepancy to which the noble Lord refers comes about because there are many variants on the one test, and it is really as simple as that.

9.51 p.m.


I cannot take any comfort whatsoever from what the Minister has said. Indeed, he started off by really saying exactly what he said before in his earlier remarks. I missed one point. He said something about "100 tests". Could the noble Lord remind me about what he said about 100 tests, because, as I see it, with the variations as between overdrive and automatic transmissions on the same engine models there would be many more than 100 tests.


My point was that the Government think that about 100 tests will cover the range of variants as these relate to the various models.


It is obviously late because I have not quite taken that in, and perhaps I can look at it again. Notwithstanding what the noble Lord said, I do not like what he said. On this consultation, I have a copy of this letter of 12th January and the reply from, for example, the Motor Agents' Association, which was signed by the acting director-general, in which he said, "Yes, of course any information that comes from your Department is likely to be believed". I do not quite know what the inference was should the information come from anybody else, because in fact the road test reports that are given in both the Autocarand the Motorare held in very high regard, particularly in terms of their fuel consumption. Therefore, already people are beginning to look outside manufacturers' claims and the advertised claims to such magazines as I have mentioned. The consultations which may have taken place with other bodies have not, I think, been taken in depth in so far as the Motor Agents' Association is concerned, and they are the people, the retailers, who have to provide the information, and who have to sell the motorcars.

When I came back from the war in 1948 I started selling motor cars, and I think I know how to sell motor-cars, and I think I know where motor cars are sold. They are sold at home. They are not sold in a showroom. They never were sold in a showroom. Acceptance of a motorcar may be made in a showroom; the trial run may be made from the showroom; the standard of finish may be examined in a showroom. Nine times out of ten the buyer has thought it out at home; using all the ordinary daily Press, the motoring correspondents, the specialist trade, the specialist Press. Today a consumer is much more knowledgeable about what he is expecting out of a car in terms of steering circle, load capacity, fuel capacity, range, and so on and so forth. He then thinks, "It looks like it will be between 'A' and 'B'. Mother will go down, and we will have a look on Saturday". It is the last clinching. It is where the last £5 note is given on the part exchange, which clinches the deal. Specification was done a long time before.

Certainly if the information is to be available to the consumer, let it be so and let it be in those places where consumers go for general information, or let it be at an advisory centre. After all, if a man wants to buy a bathroom suite, for example, he does not go to a builders' merchants and expect to see all the relevant information about all the bathroom suites on the market. If he wants to compare all those sort of things he will more likely go to the regional building centre where samples are on view.

From what has been said, the noble Lord will see that I am not satisfied with the answer. I do not think it is fair to burden the retail industry with this responsibility, be it in chart or book form. However, in view of what the Minister has said, particularly regarding consultations, and in the light of the letter which I received last Friday from the Motor Agents' Association—I will consult with the Association and perhaps return to this matter on Report—I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Lord LUCAS of CHILWORTH moved Amendment No. 29: Page 12, line 8, leave out ("he") and insert ("a person or persons").

The noble Lord said: This Amendment refers quite simply to the business of "he", "she" and "persons". It seems to me rather wrong that we should designate just, "he" in this provision when earlier in the Bill we talk about, "persons". There are, of course, many ladies who run motor businesses, happily most successfully. Are they to be excluded. In the Amendment I suggest the words "a person or persons" to make sure that nobody gets upset by wrong nomenclature.


If the noble Lord thinks that "he" excludes "she" or "they" then that is not so, I am advised, because of the provisions of the Interpretation Act. I must, therefore, resist the Amendment.


That is a resistance which it is quite easy to fall in with, and I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Lord LUCAS of CHILWORTH moved Amendment No. 31: Page 12, line 21, leave out ("trade") and insert ("industry").

The noble Lord said: This may not be a terribly important point and it is perhaps a matter more of pride than anything else. We are here speaking of a number of organisations—of manufacturers, importers, distributors and retailers

—and it seems to me that this mass make up an industry as distinct from a trade. One normally thinks of the motor trade as being dealers in motor cars whereas in fact the whole of the motor industry includes coach builders, painters and all the people who I am sure it is intended to consult. I think it would be a better description and a much more satisfactory one to the industry to be known as "the industry" rather than "the trade".


Had the noble Lord but known it, he could have spoken at half the length in moving the Amendment because the Government are aware that this is a choice of a portmanteau term to cover a combination of production, distribution and retailing of cars. The term "motor industry" is possibly preferable to "motor trade" and I am therefore ready to accept the Amendment.

Several Noble Lords

Hear, hear!

On Question, Amendment agreed to.

Lord LUCAS of CHILWORTH moved Amendment No. 32H:

Page 12, line 32, leave out paragraph (1d).

The noble Lord said: The Amendment is of an inquiring nature. I should particularly like to know what purpose knowledge of the date of manufacture, date of issue or date of importation will serve. All I can think of is that it will positively identify a motor car and a time of manufacture as offered for test. If it has any other meaning, I should rather like to inquire into the matter a good deal further. Can the Minister satisfy me as to what is meant here?


This, too, is a helpful Amendment because it enables me to state that the inclusion of date of manufacture and date of issue from the factory or date of importation into the country as features which the Secretary of State may wish to use for identification or classification purposes in orders made under the clause is necessary in order to enable ready distinctions to be made between, for example, the 1976 and 1977 versions of a model of car bearing the same type designation. It does not, therefore, follow that, taking the same example, the test carried out on a sample of the 1976 version will have to be repeated on a sample of the 1977 production.


I am much obliged to the noble Lord for that explanation. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 13 shall stand part of the Bill?


Before we leave the clause, can the Minister say whether it is the Government's intention that these officially approved tests shall extend to include comparisons between a given model of car without such drag-producing extras as spoilers, spotlights, wing mirrors and roof racks, and the same model with such extras? The difference in fuel consumption between the two could be considerable.


My reply to that is that, if these are considered to be optional extras, there can of course be no test. The test will have to be a comparison of like with like.


The Minister did not say anything at all about electric cars. I asked at the beginning whether we were talking about fuel consumption in terms of liquid fuel or whether we were at any time thinking about electric cars. I understand that this is of some importance to the manufacturers.


I confirm that the Minister did not say anything about electric cars, because he does not know anything about electric cars. He freely admits that he does not know anything about electric cars, but he will pursue the point and communicate with the noble Lord.

Clause 13, as amended, agreed to.

Clauses 14 and 15 agreed to.


I suggest that this would be a convenient moment to defer further consideration of Amendments until tomorrow. I therefore beg to move that the House be resumed.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.