Flooding: Somerset
Debate between Baroness Northover and Lord Jenkin of Roding(10 years, 2 months ago)
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Lord Jenkin of Roding (Con)
My Lords, while applauding the work that is being done to try to help people in the stricken areas, particularly the Somerset Levels, can we look for a moment at the longer term? My noble friend told us last Thursday that,
“the Secretary of State has asked for a clear action plan for the sustainable future of the Somerset Levels and moors to resolve the problem for the next 20 years”.—[Official Report, 6/2/14; col. 264.]
Can I draw my noble friend’s attention to a recently published article by Dr Colin Clark, who is an extremely well known hydrologist, in charge of the Charldon Hill research centre in Somerset? The article is entitled, “Floods on the Somerset Levels: a Sad Tale of Ignorance and Neglect”—over the past 20 years. While having to deal with the crisis now is obviously absolutely crucial, I hope that the action plan will take account of the extremely important points made in Dr Clark’s article, where he identifies in some considerable detail—
Lord Jenkin of Roding
He says in considerable detail what actually should be done.
Energy Bill [HL]
Debate between Baroness Northover and Lord Jenkin of Roding
Baroness Northover
My Lords, we are grateful to my noble friend for raising this important issue, which enables us to clarify further and to put the arrangements on the record. We understand that there might be concerns that the tests for insolvency set out in these provisions appear to be rather wide, but they are statutory tests for insolvency as set out in the Insolvency Act 1986. As my noble friend has indicated, it is also a matter of balancing the interests of the companies, consumers and the public interest.
Administration under the Insolvency Act 1986 is a business rescue procedure, with the survival of the company as its primary objective. If entry to administration were available only to a company that could not pay its debts at the date of commencement, the rescue of viable businesses might be jeopardised. For this reason, administration can also be entered when a company is likely to become unable to pay its debts, which was the focus of what my noble friend said.
The clauses on special administration in the Bill follow these principles. When seeking to bring an energy supply company administration to an end, the administrator’s primary objective will be to rescue the company as a going concern. Therefore, these provisions apply the same tests for insolvency as the Insolvency Act. My noble friend argued that the process is different. As he has already picked up, the Secretary of State and Ofgem will no doubt want to discuss with the company’s directors in advance any application for an energy supply company administration order. However, enshrining in the legislation a duty to consult directors could lead to delay. This is significant; the Secretary of State needs flexibility to act quickly if the company’s position poses a threat to the rest of the market. That is extremely important to remember in this case.
The amendment would require the court to apply a stricter test for insolvency when considering applications for energy supply company administration than it does for applications for ordinary administration. It is therefore conceivable that an application by the Secretary of State for an energy supply company administration order could be dismissed, while an application for ordinary administration by a creditor of the company could succeed. This could lead to the very situation that the provisions in the Bill are intended to address.
The fact that a court process is required provides an important safeguard for companies, as the directors of the company have the opportunity to contest the order in court. They will no doubt use the kind of material that my noble friend has just mentioned.
My noble friend mentioned Railtrack. In October 2001, the High Court granted a railway administration order in relation to Railtrack. When granting the administration order, Mr Justice Lightman said:
“This is clearly a case where the making of a railway administration order is not only appropriate, but absolutely essential”.
If my noble friend would like, I can fill him in at another time on the reason for that judgment being made. The company was put into administration to ensure that the railway network continued to operate and was properly maintained and managed, and that it was done in the public interest.
I make it absolutely clear that it is intended that the Secretary of State would apply for an energy supply company administration order only as a last resort and to prevent the risk of financial failure spreading to other companies. It is important to balance duties to the public with the rights of the companies. Energy supply is vital to the public and to the economy. It is therefore very important that this matter is looked at in the context of the public interest. The balance must be right. What we have seen recently in the banking industry, for example, shows how important it is to be very careful in this area.
I hope, therefore, that I have sufficiently reassured my noble friend and that he will now withdraw his amendment.
Lord Jenkin of Roding
I am extremely grateful to my noble friend Lady Northover for the care with which she has replied to this amendment. I have no doubt whatever that the industry will wish to study very carefully what she has just said. I have entirely accepted the case, and I think the industry accepts the case, that there is a need for the authorities to intervene. Our problem is that that might happen when the companies’ assets and liabilities appear to be in balance but someone has thought it unlikely that they will be unable to pay their debts in the future. This seems to me and to others to be an uncertain test. It would behove the Government to try to find some alternative form of words that would allay the undoubted feeling of insecurity and unnecessary risk that the companies are running under the process of the Bill.
However, as I made clear last week to my noble friend Lord Marland, it is not my intention to divide the House on this amendment but to make sure that the arguments are on the record and can be referred to in another place if that appears to Members of another place to be appropriate. Having said that, I beg leave to withdraw the amendment.
Energy Bill [HL]
Debate between Baroness Northover and Lord Jenkin of Roding
Baroness Northover
I remind the noble Lord that he will have the opportunity to respond to all the points made in this mini-debate at the end of the debate, after the Minister has replied.
Lord Jenkin of Roding
I shall finish my speech, as I gave way to the noble Lord to allow him to make his intervention.
I am not complaining that the amendment is placed at the end of the Bill. Of course the noble Lord has placed his amendment where it appears to fit. I am concerned that he is proposing a major series of changes to the whole way in which all the organs of government—the Treasury, the Office for National Statistics and all the others—should conduct themselves, and a new forum to examine the assessments. With the greatest respect, I do not think that this can be added to a Bill of the very specific nature that we have before us.
Energy Bill [HL]
Debate between Baroness Northover and Lord Jenkin of Roding
Lord Jenkin of Roding
I have some sympathy with the objectives of this amendment, but what strikes me as a problem is the structure of the Green Deal, which requires suppliers of energy to recover the debt that will have been advanced for the improvement of the house and transmit it to the providers. If one is talking about gas, electricity, and, I think, fuel oil, that would not be difficult, but in relation to LPG, a great deal of which, particularly in rural areas, is delivered to individual householders in individual canisters that have to be replaced from time to time, this fits rather uneasily into the main structure of the Green Deal. If this amendment is to be accepted, it will be incumbent on my noble friend on the Front Bench when she replies to explain how the debt would be recovered in relation to supplies of gas in canisters. It is not quite the same as gas and electricity supplied through the mains. It may well be that when she winds up the noble Baroness, Lady Gibson, will be able to explain what Calor Gas has in mind.
Baroness Northover
My Lords, I thank the noble Baroness for raising this issue and I also thank other noble Lords for contributing. The amendment moved by the noble Baroness, Lady Gibson, seeks to include in the Green Deal measures that save liquid petroleum gas. As she and my noble friend Lord Deben indicated, this goes to the deeper question of how we tackle properties that are not connected to the main gas supply and ensure that the Green Deal is as inclusive as possible. I can assure the noble Baroness that it is our intention that the Green Deal is flexible enough to allow appropriate measures to be installed in the maximum number of properties. I assure her that the provisions in the Bill are already wide enough to allow this. This may also reassure my noble friend Lord Teverson. We are even now working with stakeholders to ensure that this can include measures that save energy in buildings that are not on the main gas network. In these discussions, some of the issues that my noble friend Lord Jenkin has raised will no doubt have to be addressed. I hope that the noble Baroness found my explanation reassuring and that on that basis she will withdraw her amendment.
Lord Jenkin of Roding
Before my noble friend sits down, perhaps I may say that these issues will have to be addressed, but are we not entitled at this stage to know what might be in the Government’s mind as regards people buying cylinders of gas from ordinary retailers, as is often the case? If there are powers in the Bill that cover this, that is fine. I would be happy to accept that, but one needs to know how this is going to fit into the main structure of the Green Deal.
Baroness Northover
I am assured that there are indeed provisions in the Bill that will cover this. It may very well be that my noble friend Lord Marland would like to explain them in greater detail to my noble friend Lord Jenkin, to assure him that all is as it should be.
Energy Bill [HL]
Debate between Baroness Northover and Lord Jenkin of Roding
Baroness Northover
This is a minor and technical amendment to ensure consistency of statutory reporting to Parliament under the Energy Act 2004 and the Bill with public expenditure rules. The amendment to ensure consistency will apply both to the special administration regime for electricity transmission and distribution companies and gas transporters created by the Energy Act 2004, and to the provisions for a special administration regime for energy supply companies under the provisions in this Bill. I beg to move.
Lord Jenkin of Roding
My Lords, I of course accept the amendment that the Government have moved, but I return to the issue that I raised in Grand Committee about the uncertainty created by the third of the three tests of whether a company can be put into administration, which is that the company is likely to be unable to pay its debts. Under the original Act, that was a decision to be taken by the company. Under this Bill, it is a decision that will be taken by the Secretary of State. Despite what my noble friend said in reply to that debate in Grand Committee, it seems to me that this still leaves a substantial area of uncertainty for the industry. My noble friend said at the time that there would be consultation with the company and its directors. What I would like to suggest and, indeed, if we were going to reach this clause next Tuesday—we have made such haste this afternoon and evening that in a sense I have been a little bit caught short—I would have tabled an amendment to say that it should be done only with the consent of the company. That would make the case. I wonder whether my noble friend can say something about this now or whether this is a point I could raise again at Third Reading.
Baroness Northover
I thank my noble friend for that comment. I think the best way to take this forward is by consultation. If he would like to discuss the details with officials, we could see what, if anything, needs to be addressed.
Energy Bill [HL]
Debate between Baroness Northover and Lord Jenkin of Roding(13 years, 2 months ago)
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Lord Jenkin of Roding
I understand from the impact statement on this that some possible competition issues will need to be addressed as to whether the Coal Authority will have, in some way, a preferred position as against other contractors that may compete for the business. I hope that my noble friend can give me some assurance that that will be taken account of.
Baroness Northover
My Lords, I am delighted to have been assigned this clause stand part debate, because therefore I am by proxy receiving congratulations that are not deserved, which is a great pleasure. My noble friend has raised another issue on the substance of the clause, so I shall spell out what it seeks to do.
This simple clause extends the Coal Authority’s powers in England and Wales, which would enable the Coal Authority to use, and charge for, its existing expertise in remediating coal-related environmental and safety liabilities in non-coal related contexts. For example, it could assist other public bodies and private landowners in dealing with mine-water treatment and subsidence or surface hazard remediation outside the coal-mining sphere, but that would not take precedence over the authority’s existing statutory duties.
On whether we are talking here about non-flat playing fields again, I assure my noble friend Lord Jenkin that the clause enables the Coal Authority to work in the area without cutting across its statutory duties, but it does not give it precedence in the area. It does not even place an obligation on the Coal Authority to act in this way or on others to use it; it is just an enabling power. I hope that that reassures him. We will return to the Public Bodies Bill—maybe not, depending on what happens with the AV Bill—and no doubt we will get into further discussions on what it says. In the mean time, I hope that the noble Baroness will be happy not to oppose the Question that the clause stand part.
Energy Bill [HL]
Debate between Baroness Northover and Lord Jenkin of Roding(13 years, 3 months ago)
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Baroness Northover
My Lords, I must say that I am incredibly impressed at the thoroughness with which my noble friend Lord Jenkin has read this Bill and that I hope that he very much liked Clause 78, which indeed consolidated and hopefully improved existing provisions.
Lord Jenkin of Roding
I had intended to say just that, because I was checking the Bill and saw that, indeed, the earlier clauses had been repealed.
Baroness Northover
The clauses on special administration in the Bill largely follow the tests and procedures for ordinary administration laid down in the Insolvency Act 1986. If a party applies to the court for an ordinary administration order, the court may grant it if it is satisfied that a company is unable to pay its debts or is unlikely to be able to pay them. Administration under the Insolvency Act 1986 is a business rescue procedure with the survival of the company as its primary objective. If entry to administration were available only to a company that could not pay its debts at the date of commencement, the rescue of viable businesses might be jeopardised. For this reason, administration can be entered also when a company is likely to become unable to pay its debts. The provisions in the Bill apply these same principles to energy supply company administration. They follow the same tests for insolvency as the Insolvency Act. My noble friend’s amendment would require the court to apply a stricter test for insolvency when considering applications for energy supply company administration than it does for applications for ordinary administration.
I make it clear that the Secretary of State would apply for an energy supply company administration order only as a last resort and to prevent the risk of financial failure spreading to other companies. I hope that I have reassured my noble friend that we are seeking simply to keep the procedure in line with that which applies elsewhere for other companies. I hope that he will withdraw his amendment.
Lord Jenkin of Roding
My Lords, I am grateful for my noble friend’s explanation, but I have to say that I do not think that she has taken account of what I said. Under the Insolvency Act, which introduces this third test, the directors of a company can apply to put the company into administration. After all, they are the ones who are best able to decide whether the company is likely to be unable to pay its debts in the future. In this case, that does not apply. The directors are forbidden to do it; only the Secretary of State or Ofgem can make the call. I see that my noble friend has been given an explanation. It would nice if the Committee could hear it, too.
Baroness Northover
It is amazing what enlightenments can come when one listens to one’s noble friends. Funnily enough, I have come to this conclusion: the Secretary of State will no doubt wish to discuss any application for an energy supply company administration order with company directors in advance. Directors will be able to contest the application in court. However, enshrining a duty to consult directors in the legislation could lead to delay. The Secretary of State needs the flexibility to act quickly if the company’s position is posing a threat to the rest of the market. When we see what has happened recently in other areas, we realise why this is extremely important. I hope that that helps to elucidate why this is in this provision.
Lord Jenkin of Roding
My noble friend has made a persuasive case and I am grateful to her. This has caused anxiety, particularly in the light of the Railtrack case. However, having heard her, I beg leave to withdraw the amendment.
Energy Bill [HL]
Debate between Baroness Northover and Lord Jenkin of Roding(13 years, 3 months ago)
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Baroness Northover
I am grateful to the noble Lord for tabling these amendments. They relate to the secondary legislation that we will be making under some of the powers that we are proposing and to whether provision made using such powers should be subject to affirmative or negative resolution procedures in the House.
This is not about the majority of the provisions which may be made under this part of the Bill, as most are clearly for the affirmative procedure. It relates to certain specific provision that we might make on more technical aspects, such as the precise qualifying actions or measures which will be eligible for inclusion within the scheme. The Government’s proposal was that issues of this sort should be set out in secondary legislation which is subject to negative procedures. The noble Lord, through his amendment, proposes that this should be affirmative.
I am delighted to say that there is a compromise position, which has the support of the Delegated Powers Committee. In its considered report on the Bill, the committee suggested that it may be appropriate for the first use of these powers to be affirmative, with subsequent uses—in effect, later amendments—being subject to negative procedures. That seems to us an excellent suggestion. It has the virtue of maintaining a very strong degree of parliamentary oversight over the essentials while leaving more flexibility for changes to be made over time. We therefore propose to come back at a later stage with an amendment in line with the Delegated Powers Committee’s suggestion, and on that basis I hope that the noble Lord will feel able to withdraw his amendment.
Lord Jenkin of Roding
I can only say that I am extremely grateful. However, before I withdraw the amendment, I want to raise one other brief point which was mentioned by the noble Lord, Lord Davies of Oldham. It is the question of the constant amending of previous legislation. Anyone wanting to look at the current state of the Gas Act 1986 or the Electricity Act 1989—as I am certain the noble Baroness, Lady Smith, will have tried to do—will find it an extremely difficult job. There are now commercial legal publishers who will provide what they consider to be the up-to-date version as amended in perhaps four or five different Acts, as we are doing again here. There must come a time when these Acts will have to be consolidated, because it is becoming a matter of very grave difficulty not only for hapless Members of the two Houses of Parliament but for their advisers. Some of them are extremely good and know their way about. They keep their own copies very carefully annotated but most of us do not. There is therefore a case for consolidating these Acts and I hope that that message is taken back. Having said that, I beg leave to withdraw the amendment.
Energy Bill [HL]
Debate between Baroness Northover and Lord Jenkin of Roding(13 years, 3 months ago)
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Baroness Northover
This is not the first Bill that I have worked on, but my previous role in international development was not exactly legislation-heavy, so I can also claim inexperience. It is also outside the remit of all the other areas that I am working on. Therefore we will have to look to the noble Lord, Lord Davies, to guide us.
Clause 2 defines an energy efficiency improvement. This is one of the important criteria for determining the eligibility of works to be financed by a Green Deal plan. The clause is deliberately broad; it allows for a range of measures to be covered by the new framework, including certain energy generation measures as well as measures concerned with reducing energy consumption. It enables the Secretary of State to specify within this broad definition which types of measure will be eligible for Green Deal finance. This will provide the clarity and certainty that industry and consumers need. Green Deal installers will also be required under Clause 7 to adhere to any requirements in the installers’ code of practice regarding the standards of products installed.
I am grateful to the noble Lord, Lord Whitty—who is not in his place, but who has vast experience in this area—for tabling Amendment 2, which seeks to ensure that measures which reduce energy consumption are installed before those which generate energy.
Amendments 1D and 2A, tabled by the noble Baroness, Lady Smith, and the noble Lords, Lord Grantchester and Lord Davies, seek to ensure that renewable and low-carbon energy sources and energy generation are covered by the Green Deal.
Amendment 2AA is a technical drafting amendment tabled by the noble Lord with the sharp eyes, the noble Lord, Lord Jenkin, which is designed to correct a citation made to the wrong subsection.
On Amendments 1D and 2A, it is clearly important to get the right measures in the right buildings in the right order. For example, making improvements to the fabric of buildings to improve air tightness means that if renewable heat and energy technologies are installed at the same time, or further down the line, the energy is not wasted. We would therefore like to consult colleagues on the detail of the proposed amendments and report back at the next stage of the Bill. We need to be clear on what the implications are of these amendments for, among other things, the possible impact on consumer demand.
I should point out to noble Lords who referred to the renewable heating incentives that, in addition to this Bill, they are designed to incentivise people to generate energy. The noble Lord, Lord O’Neill, may be encouraged by that—it sounds as though he is. As he was speaking, the noble Lord, Lord Marland, was making welcoming noises about what he was saying. The schemes are designed to be complementary and I hope that in discussions we can take the ideas further forward.
We will also want to satisfy ourselves that Amendments 1D and 2A do not duplicate existing provisions, as I believe they may. I thank my noble friend Lord Jenkin for his incredibly sharp eyes and for correcting the reference in subsection (5) to subsection (7). His sharp eyes may note a spelling error in his second amendment on the manuscript list, but I am incredibly impressed by his thoroughness.
I invite noble Lords to meet my colleague the noble Lord, Lord Marland, and officials to discuss the proposed amendments in more detail. I hope that noble Lords will be satisfied with this approach and, on that basis, I move that this clause stand part of the Bill.
Lord Jenkin of Roding
I am not quite clear where we are. As the amendments have not been moved we cannot yet have the question on stand part.
Baroness Northover
I think the relevant ones were moved. I am accepting Amendment 2AA and ask that the others be withdrawn.
Lord Jenkin of Roding
I am sorry; we have not yet reached Amendment 2AA and I have not moved it.
Baroness Northover
I am asking that Amendment 1D be withdrawn and that Amendment 2AA, when we come to it, is accepted, and that the objection to the clause standing part is rejected and the clause accepted.