Enterprise and Regulatory Reform Bill

Debate between Lord Marland and Lord Berkeley

Tuesday 18th December 2012 Grand Committee

[Lord Berkeley]

My Lords, this is a very quick, probing amendment. It gives the CMA powers to seek information in support of a market study. That is useful. I imagine this is where one occasionally reads about dawn raids on companies that allegedly may have transgressed—it makes interesting reading. However, when one talks about the sector regulators, it is not clear to me whether they would also have the same powers of investigation in Clause 30 as the CMA would have.

I have been talking to one or two of them and will bring some of the issues up in a later amendment. It would be useful to know the position on this. I think they would find it useful to have such powers in the initial stages of their investigations. It certainly is not clear to me whether they do have these powers and I look forward to the Minister’s comments.

[Lord Marland]

My Lords, we are trying to streamline the processes, as the noble Lord, Lord Berkeley, would acknowledge. We are trying to speed them up, as we have already debated. That is central to the Bill. As a result the CMA needs access to the relevant information, which it has. There have been a number of cases where the OFT has had difficulty getting to the information that it requires from the market-study stage, so this is being done to make sure that it does. The clause extends the powers to request the information and ask parties to give evidence so that consistent powers will cover the whole piece. They are subject to statutory limits. The most important thing is that business has clarity of vision and knows the direction of travel, and that is why speed, time limits and penalties send a clear message to business.

The noble Lord, Lord Berkeley, asked quite rightly if sector regulators have Clause 30 powers. We need to look at this more carefully. We have not come to a firm landing on it, but we could perhaps have dialogue on this together before Report. If we can bottom that out we will, but if we cannot we will make a commitment to look at it in secondary legislation. I commend this clause.

[Lord Berkeley]

I am grateful to the Minister for his comments. As we discussed in a previous amendment, one of the objectives of the Bill is to streamline things and reduce the costs of activities connected to investigations. I am sure that he is aware that the better sector regulators—I will talk about them later—are probably able to undertake this work cheaply and quickly, and with sectoral special knowledge that you would not expect the CMA to have. I welcome his interest in looking at this, and perhaps we will be in touch before the next stage. On that basis, I am happy to see the clause stand part.

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[Lord Marland]

I have to disagree with my noble friend Lord Eccles because I believe that you should have deterrents. I think that the general public would want us to impose deterrents for those who do not comply with statutory rules, so I am afraid that he and I do not converge on that.

The noble Lord, Lord Whitty, is right to talk about deterrents. First, I point out that this is not just £30,000, it is £30,000 or 10% of turnover, so that deals with some of those companies that did not fall into the net that he was talking about. For very large companies, the Competition Commission can fine a daily rate of £15,000 per day with no limits, which is a serious deterrent.

The other point that I emphasise is that the Competition Commission has never had to impose a fine for non-compliance with a request, which shows that the system is working and has worked. I hope that on that basis the noble Lord will withdraw the amendment.

[Lord Berkeley]

Before the noble Lord sits down, I was interested in his comments about the £30,000, the £15,000, or whatever it is plus the 10%, plus a daily rate of £15,000 or something.

[Lord Marland]

Can I just clarify that? I did not say plus. It is £30,000 or 10% of turnover, and the Competition Commission can charge a daily rate of £15,000.

[Lord Berkeley]

I am grateful to the Minister. I am wondering why the daily rate should not be a percentage as well. One is talking about a big range between small companies and multinationals. Frankly, £15,000 a day for a big company is really nothing.

[Lord Marland]

I have made a mistake. It is not “or 10% of turnover”; it is a fixed rate of £30,000—not 10% of turnover—and £15,000 per day. The noble Lord, Lord Berkeley, asked where the deterrents are. The deterrents are the £15,000 per day, which has no limit on it unless the Competition Commission determines that it should have. So it lies within its power, if the noble Lord understands me.

[Lord Berkeley]

I am grateful to the Minister for that clarification. I still think that £15,000 a day for a big company is chicken feed; they will not notice it, even if it goes on for several years. I am no expert at levelling fines but I have been investigating the potential level of fine, admittedly on the Government, but it concerns the Thames Water tunnel outside here. The figure being bandied around there is £1 billion if we are lucky. That is a project that is worth £4 billion, and maybe there is a company with a turnover of £4 billion involved in this competition issue. The figure seems to be slightly low and out of proportion. I do not know whether it is a deterrent. Perhaps the Minister could reflect on whether a percentage for a daily rate would not be an additional deterrent.

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[Lord Marland]

I cannot tell the noble Lord why not; I asked the very same question of my officials. It is a perfectly reasonable comment for him to make. If we can work together to see where the dynamics exist, we might be able to see if it is practical to improve this a little. I do not think that we will be able to do anything too dramatic, but the noble Lord makes a good point. We have said all along that this is all about speed of process. As I have agreed with his overall point, I hope that the noble Lord will agree for the moment to withdraw his amendment so that we can discuss this later.

[Lord Berkeley]

Before the noble Lord sits down, I have a question in relation to these time periods. I have had a little experience of trying to do something like this in the railway sector. My recollection is that a long time is taken between when the notice is issued saying that the authority will conduct such a study and when it has sufficient information to allow the clock to start running. Reading the Bill and my noble friend’s amendments, I am not sure whether these numbers—from six months to four months—apply to the time between the notice being issued or where the clock starts ticking and the authority believes that it has sufficient information. Maybe my noble friend has more information on this, but it is a point worth looking at when we come back to it.

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[Lord Marland]

The noble Lord, Lord Berkeley, gets to the point. I am grateful for his brevity. I am reliably informed that the rules under Section 51 will apply to the sector regulators. The same principles will apply but the rules may differ a little in detail. Of course, as he would say, the devil is in the detail but I am sure that within the detail there is quite a wide canvas. I hope that clarifies the situation for the noble Lord.

[Lord Berkeley]

I am grateful to the Minister but I wonder whether, within his broad canvas, or whatever, he has any views about whether any secondary legislation will be introduced on the issue which may or may not be helpful. I noticed that within this group there is the Question that Clause 40 stand part and Amendment 26BF, in the name of my noble friend Lord Whitty. I would be pleased to hear what he says about that because I have some comments on it too.

[Lord Whitty]

My Lords, I was going to leave that because my Amendment 26BF is an attempt to tidy up the provisions on review, along with another amendment that I cannot find immediately. There are separate provisions on the mergers, the markets and the anti-trust provisions, as to when we review them. I am in favour of the Government’s policy that we review legislation every so often but I think that it should be done simply and that we should look at the whole of the legislation. Essentially, that is what Amendment 26BF to Clause 48 is about. I was not going to move it today because I think that it requires the interplay of other parts of the Bill but I think a review of the totality of the Bill, all at the same time, would be helpful and should be built into the Bill in some way at a later stage.

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[Lord Marland]

The noble Lord, Lord Whitty, indicated that he was minded not to support our amendment and what I am about to say is therefore largely academic because I will not support his amendment. However, let me explain, because there is not an awful lot between me and the noble Lord, Lord Berkeley.

We expect the CMA to work closely with the regulator. That is best, and we totally agree that government would be wrong to intervene in that process, as the noble Lord rightly said. That is something in which I strongly believe. Most organisations are better when government does not interfere in them. They are full of competent people, as the noble Lord, Lord Bradshaw, said, who have served us well over a period of time. We are a very well regulated society, certainly compared with most other countries.

However, there needs to be a clear signal that if this does not work or there is abuse of the system, the Government have the opportunity to invade in this area, and that is exactly how it should be. In that way you are protecting the consumer—the customer—against bad practice, not interpreting the rules properly and so on. If the Secretary of State were to intervene, he would almost certainly have to put that before Parliament to seek its approval. We are all on the same side as regards the spirit of the amendment. “We are all in this together” is the phrase that we like to use most.

I would be disappointed if the noble Lord, Lord Whitty, could not agree to our amendment and invited me to withdraw it. However, we are all singing from the same hymn sheet, and I totally respect the views of noble Lords who have spoken because this issue is important. It is absolutely fundamental that the system works without government intervening aggressively in it.

[Lord Berkeley]

Can the noble Lord expand a little on the reasons for when this would happen? He quoted bad practice and lack of interpretation of the rules, but it is not moving far away from the reasons for sacking, for example, the chairman of the board of the rail regulator if they have not behaved properly. If things have got that bad, one would expect them to resign anyway if this kind of thing came about. On that basis, I should have thought that there are already enough powers to change what the regulator is doing if it is really so ineffective. Given the proposed MoUs, the system would probably work much better. I am still not persuaded that there is a good enough reason for going through all this. Perhaps I have got it wrong.

Electricity and Gas (Internal Markets) Regulations 2011

Debate between Lord Marland and Lord Berkeley

Monday 17th October 2011 Grand Committee

[Lord Marland]

Yes, they will get the ECO through the Green Deal. A whole amount of measures was issued at the energy summit today, with which I will be very happy to furnish the noble Baroness. As for the issue of PRS and Green Deal, I think that we have debated that quite extensively and I really do not want to go over the old ground. We share a significant problem and concern, and in the end I think that we were all singing off the same hymn sheet in that debate.

Lastly, on the question of whether Ofgem has the right resources, it is important that it has. It has a task to manage this enormous amount of legislation in front of us, and we will watch very carefully to ensure that it is up to the task. The noble Baroness was quite right to raise that issue now, because it is important that customers at all levels are protected. I believe that the legislation goes a long way to doing that. As I said earlier, it is legislation that we have inherited, but there is a lot of good stuff in it. Would we have done everything to the letter of the word? Perhaps not. Are you pleased with everything that we have done to the letter of the word? Perhaps not. But it is legislation, and good legislation with the consumer in mind, and I think that we would all applaud that.

[Lord Berkeley]

I am very grateful to the noble Lord for the answers that he gave me on ports, airports and the bulk tariffs. My question applies equally to some of the examples from my noble friend Lord Whitty on the bulk suppliers of power to tenants, as we could call them, who opt to go to another supplier. As a result, the bulk supplier may lose the level of discount that he would have got if he had been selling to the whole lot. My impression from the Minister’s answer was: “Well, tough on the bulk supplier”. It could be a not-for-profit organisation; it does not have to be a commercial port. Is my interpretation of that correct and, if so, is there anything that Ofgem could do to mitigate the effect with a little bit more discussion? I would be grateful for his response.

[Lord Marland]

I am concerned to give the right answer about not-for-profit organisations, so I shall write to the noble Lord on that rather than ask him to whisper more in my ear. I do not know the answer, and it is an important question.

I should clarify one point about the switch to Citizens Advice. The detail is being worked out and no decision has therefore been made, but that is the likely intention of the transfer. With that in mind, I commend the regulations to the Committee.

EU: Emissions Trading Scheme

Debate between Lord Marland and Lord Berkeley

Thursday 3rd February 2011 Lords Chamber

[Lord Marland]

As I said earlier, my Lords, the reality is that we have a pretty tried-and-tested system. We should not be complacent, but there is no point in going backwards in reviewing things. I want to look forward in our review to make sure that in the current environment we have an even more secure process. For your Lordships’ information, BarCap, one of the major traders in this scheme, has said that this is the best scheme in Europe. That is a very good starting point for us.

[Lord Berkeley]

My Lords, do the Government have any plans, with the European Union, to widen this scheme to other industries as part of their commitment, which I assume is still there, to reducing the carbon emissions in this country by 80 per cent by 2050?

[Lord Marland]

The short answer, obviously, is yes. As I referenced earlier, the airline industry—as the noble Lord will know as an expert in the transport field—will join it in 2012. We must look further to reduce our greenhouse gas problem.

Revised Draft National Policy Statement for Nuclear Power Generation, volumes I and II (EN-6)

Debate between Lord Marland and Lord Berkeley

Thursday 13th January 2011 Grand Committee

[Lord Marland]

There are two erroneous statements there, if I may say so. First, we are not predicting that the demand for electricity will be as the right reverend Prelate is suggesting; we are predicting that it will be between two and three times what it is now in 2050. So we know the task ahead. We are also not sitting here and saying that there are eight sites and that is all there are going to be—and I want noble Lords to go away and understand that. We must obviously endeavour to have more sites. The Government will not sit back and say that all we have are eight sites. At the moment, I am answering his question about capacity. I was saying what capacity would be if we had eight sites and one reactor on each site; that is what we hope to achieve from those eight sites. Clearly, if we have 10, it will be more.

The noble Lord, Lord Broers, gave one of the finest speeches that I have heard—he was remarkably to the point, and talked about fusion. As he knows, that is a subject for BIS, which is fully supportive of the development of this particular form of future generation.

I do not want to disappoint the noble Baroness, Lady Smith of Basildon, by not answering a number of her questions. She rightly asked how we quantified the cost of waste and its disposal when the Government say that the private sector is responsible for paying for it. Of course, over 100 years we cannot predict that, which is why there is a system for reviews of the mathematics, which will happen frequently, and I can give her more detail of that because it is published somewhere in our documents. She asked whether the Secretary of State would take advice on the decision. Of course he will—but the point is that this country and its electors will want the Secretary of State to be responsible for a decision on something as complicated as this, and he will make it. She asked whether the IPC would have a role in deciding adequacy of interim storage on site. Yes—and that is clarified in the draft of the NPS in paragraph 2.11.6.

[Lord Berkeley]

Before the Minister winds up, can he answer the question about process put by my noble friend Lady Smith? After the consultation period on this draft statement, can the process be changed? If so, will it have to be consulted upon again and will there be a delay? What will happen?

[Lord Marland]

I am no expert on these matters as I have only been here for five minutes. I would expect noble Lords to be able to answer that. I have been passed a note, which is very helpful. I wish that noble Lords would not ask questions to which they know the answer. The answer is: if there are no substantive or material changes, there is no reason to reconsult or repeat scrutiny. However, my overriding point—

Energy: Electricity

Debate between Lord Marland and Lord Berkeley

Tuesday 11th January 2011 Lords Chamber

[Lord Berkeley]

To ask Her Majesty’s Government what will be the financial impact on consumers of the changes proposed to the United Kingdom’s private electricity networks.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)]

My Lords, the provision of third-party access to unlicensed networks will enable customers of those networks to take advantage of the competitive energy market by having the right to choose their energy supplier. As such, where alternative suppliers can offer a more competitive price than the incumbent supplier, customers will be able to make savings on their energy costs.

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[Lord Berkeley]

I am grateful to the Minister for that reply, but is he aware that in the solution that he has just set out, it will require all the operators—the landlords of these private networks—to upgrade their supplies to grid standards at the cost of many millions? This applies to railways, airports, ports, sports centres—anywhere where there is subcontracted electricity. Does he agree that the Government should look at an alternative, which would be for the landlord to get competitive quotes, and so avoid this enormous cost on British business?

[Lord Marland]

My Lords, this is a complicated issue, and we have been in consultation with all the ports, airports and railways. That has been an extensive consultation. If the noble Lord wishes to meet with officials for further explanation and briefing on the consultation, I will, as always, make my officials available. I agree with him: it would be perfectly acceptable, if private network customers are satisfied with their private network suppliers, to go out to tender to obtain cheaper electricity. The fundamental point, however, is that in these difficult times, it is important that the customer has the cheapest and fairest electricity supply that is available.