Energy Bill

Lord Oxburgh Excerpts

Tuesday 23rd July 2013 Grand Committee

[Viscount Ridley]

My Lords, I sympathise with a great deal of what the noble Lord, Lord Whitty, said, but I worry that the amendment would be counterproductive and produce a worse result. We had an interesting debate last week about the importance of competition in keeping capitalists honest. We are all agreed about the danger of setting up a system that will be extremely prone to crony capitalism, which will be such an oligopolistic system that it will be easy to game and to lobby the Government in ways that can be helpful. I am worried that this panel of experts will probably make the problem worse and will remove accountability from Parliament, which is ultimately where we will be able to scrutinise this. As the scientist Richard Feynman once said,

“Science is the belief in the ignorance of experts”.

We have to bear in mind that experts get things badly wrong quite often.

We have heard a great deal, even today, about the need to help producers of energy. I am sorry if I sound like a cracked record on this, but we are not here to help capitalists. We are not here to give certainty to investors or to make producers of energy comfortable. We are here to get the best deal for consumers of energy, whether they are pensioners, single parents or indeed the owners of small businesses. We will not do that by offering these extremely high strike prices and then leaving a group of experts, who will be easily captured not just by the industry but by other pressure groups, to monitor the system. We therefore have to be careful when handing responsibility away from Parliament and the Government to a panel of experts who, as I say, will be easily captured by industry or pressure groups.

[Lord Oxburgh]

My Lords, I support the general thinking behind the amendment, which is different from the amendment that we debated a week ago about a higher-level advisory committee. I am not sure that I agree with the noble Viscount, Lord Ridley, in his pessimistic approach to this. I do not see the amendment as taking power away from Parliament or diverting interest in that way. It could provide the kind of information and scrutiny that makes Parliament’s role easier.

The one point that I would make, which has not yet been made on the amendment, is that the most important thing about a panel is not just its expertise but its continuity. At the moment, there is very little corporate memory within DECC, and bodies such as an expert panel can indeed provide continuity. I agree that it has previously been very important to solve things in this way. I therefore hope that the Government will take on board the broad intention of the amendment.

[Lord Jenkin of Roding]

My Lords, my mind goes back to the group set up last year under the chairmanship of the noble Lord, Lord Oxburgh, to look at the draft Energy Bill. My recollection is that as a result of the evidence we received, which was very good and knowledgeable, our main worry about the contents of the draft Bill was the huge powers being given to Ministers. Some of that has now been modified. For instance, there is now an infinitely better counterparty arrangement than existed previously in the draft Bill, in which there was almost nothing. There have also been other changes.

However, certainly in the initial stages of the operation of this contract for difference, one is going to be almost entirely in the hands of Ministers. They are of course accountable to Parliament, and I entirely accept the point made by my noble friend Lord Ridley that that is the main avenue of accountability. What worries me is the question of whether the panel that has been proposed by the noble Lord, Lord Whitty, would actually make any difference. When you have so much power concentrated in the hands of Ministers—and one has to say that there is not all that much public faith in Parliament at the moment or in whether parliamentary accountability would be effective—one is running the risk of endless cases of judicial review. The growth of judicial review in our system over the past 20 years has been absolutely colossal. Everyone finds it possible in some way or another to take a complaint against authority to judicial review. Some of it has no merit at all but is enormously time consuming, very expensive for those who have to defend it, and a great absorber of the judicial power of the courts. I worry, given all these powers in the Bill, whether accountability to Parliament will be enough.

I listened carefully to the noble Lord, Lord Whitty, and there are obviously some attractions in what he was saying. On the other hand, the point made by my noble friend Lord Ridley about the way that any panel such as this could be got at is not without substance. We are all familiar with situations of that sort. In relation to another amendment, which I may not be here to move because I shall not be here in August and we will not reach it tonight, the power of very large corporations such as the big six generators and distributors, when contrasted with the power of very much smaller bodies that might be affected by their activities, is something of which people are very well aware. What is your remedy? You can go for judicial review, and a panel of the sort suggested may be subject to the same pressures.

All this is inherent in the nature of the new electricity market reform, which is the main purpose of this Bill. I agree with those who say that there is a great deal of hope about it on the part of the Government that it will work. I studied the paper sent to the Delegated Powers Committee of this House, in response to its request for more information, and wondered how anybody could make that system work. That is my great anxiety on this issue—and I am not sure that a panel would have any impact.

For the remainder of the time we have to scrutinise the Bill, we must do as much as we can to try to get the regulations in a form in which the authorities can be made accountable to Parliament as to whether they are in breach of regulations or not. Everybody has to do their best to make it work, but I shall listen with great interest to what my noble friend the Minister says in answer to the suggestion of a panel. I think that we shall hear what we heard before—that there are a great many advisers already in the department and they do not want any more, thank you very much. I understand that argument. But the more I hear about how the system is intended to work, the more we have these huge volumes of paper that are churned out by the department, which is doing its best to keep us informed. It fills me with great foreboding. I hope that I am wrong, but I have a horrid suspicion that things are not going to turn out quite as has been hoped for by everybody who has expressed themselves, as I have, in favour of this Bill.

I shall listen to my noble friend on the question of whether a panel would help or not. At the moment, my mind is not yet clear on this.