Energy Bill

Lord Roper Excerpts

Tuesday 9th July 2013 Grand Committee

[Lord Oxburgh]

Returning to the amendment, the message here for the Government is that with this Bill they are taking quite extraordinary powers, and those powers are going to have to be exercised to a degree that was probably not anticipated when the Bill was originally drafted, simply because we have run out of time to do things in a more orderly way. Whether or not we need annual reports, the important message for the Government to get is that, given that these extraordinary powers are there and will be required, that also imposes on the Government a requirement for an extraordinary and conscientious degree of reporting over that period.

[Lord Roper]

My Lords, like the noble Lord, Lord Oxburgh, and indeed the noble Baroness, Lady Worthington, in moving her amendment, it seems to me that, given that we have an annual energy statement, which is a useful document, it is not as if we are inventing a demand for a new document. The argument is always made that there would be costs involved, but on this occasion what is being asked is merely that something which already appears should become a statutory document. I therefore await with interest what the Minister has to say.

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Moved by

[Lord Roper]

50G: Clause 127, page 99, line 34, at end insert—
“( ) An order under subsection (1) or (10) is subject to annulment in pursuance of a resolution of either House of Parliament.”

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[Lord Roper]

My Lords, Amendment 50G is tabled in my name and that of my noble friend Lord Teverson. This amendment is parallel to some discussions that we had during our previous day in Committee when we were considering a nuclear regulatory organisation and taking up references in the report of your Lordships’ Delegated Powers and Regulatory Reform Committee. Two paragraphs of the report discussed the possibilities of modifying licences under Clause 127(1) and orders about domestic supply contracts in Clause 127(10).

As the noble Lord, Lord Whitty, has made clear, this gives power to the Secretary of State to intervene in an area that until now has been the responsibility of the regulator. The argument put forward by the department in the memorandum that it sent to the Delegated Powers Committee was that there was no need for any form of parliamentary scrutiny because all that we are giving the Secretary of State power to do is something that could already be done by Ofgem. That needs to be examined rather more carefully, which was also the view of the Delegated Powers Committee. This is the single instance in the Bill when the Secretary of State is given power to modify the licences without parliamentary scrutiny; in each of the other six cases, the negative procedure is indicated. We have already seen the discussions. This is an area of considerable public and political interest. Therefore, if the Secretary of State is to intervene and in some sense override the position of the regulator, it appears to the Delegated Powers Committee that he ought to be answerable to Parliament and that, as in other cases under powers conferred elsewhere in the Bill, it should require the draft negative procedure. As on the previous occasion, we have not seen the reply from the department to the Delegated Powers Committee so we would like an assurance from the Minister about how she is going to reply to the report.

Clause 127(10) is a very complicated power to make orders about domestic supply contracts. Similarly, it seems surprising that this order-making power is subject to no parliamentary control. Although paragraph 358 of the memorandum that the department submitted to the Delegated Powers Committee explained why the definitions could not appropriately be included in the Bill, it did not really explain why there is no provision for parliamentary scrutiny. This amendment is put forward by my noble friend and me in order to give the Minister an opportunity to explain what the reaction of the department to the report of the Delegated Powers Committee is likely to be.

I tabled a request for a debate on clause stand part before I had had a chance to see the amendments tabled by the noble Lord, Lord Whitty. In view of the long discussions that we have had on them and on the amendments tabled by my noble friend Lady Maddock and me, I have no intention of pursuing that debate. I beg to move.

[Lord Grantchester]

My Lords, Amendment 50G would require the Secretary of State to present proposals to Parliament before making any changes to the terms of licence conditions under powers in Clause 127. However, while the Secretary of State is obliged to consult suppliers and Ofgem as well as any other person he thinks relevant, he is not obliged to present the proposals to Parliament for scrutiny. The Delegated Powers and Regulatory Reform Committee questioned the appropriateness of this in its report on the Bill, and drew attention to Clause 127(10). It stated:

“As is candidly acknowledged in paragraph 358 of the memorandum, the distinction between discretionary and principal terms ‘is central to the function of the clause’. It therefore seems to us surprising that the order-making power is subject to no Parliamentary control, and that paragraph 358 -while explaining why full definitions could not appropriately be included in the Bill - does not explain why there is no provision for Parliamentary scrutiny”.

Why do the Government deem it necessary to consult the industry and Ofgem but not Parliament or consumers?

Throughout the Committee’s scrutiny of the Bill, several noble Lords have highlighted the extensive enabling powers given to the Secretary of State. This fifth report of the Delegated Powers and Regulatory Reform Committee is also highly critical, rather uniquely for that committee, in stating that there is little provision in many chapters in the Bill,

“that does not involve the delegation of legislative powers”.

We offer our support to this amendment in order to ensure that any such order is given appropriate scrutiny by Parliament by the negative resolution procedure, as recommended by your Lordships’ Delegated Powers and Regulatory Reform Committee.

[Baroness Verma]

My Lords, I am extremely grateful to my noble friend Lord Roper for raising the issue in Amendment 50G that would make the use of powers set out in this clause subject to annulment resulting from a resolution of either House. Noble Lords will be aware that the Delegated Powers and Regulatory Reform Committee has recommended that the power of modification conferred by Clause 127(1) and the order-making powers in Clause 127(10) should require the draft negative procedure. We are looking at these recommendations, along with the others made by the committee, and will respond to it in due course. I therefore hope that my noble friend will withdraw the amendment.

[Lord Roper]

My Lords, I am grateful to the Minister for that reply. We await with interest the full response from the department to the Delegated Powers and Regulatory Reform Committee. I understand that it has already received a substantial response from the department that it will consider at its meeting tomorrow, and that it is possible that when we meet on Thursday we will have the results of its report and the department’s response, which will perhaps be of value to us. I shall withdraw the amendment at this stage, but if we do not have a satisfactory response on Report then it will be necessary to return to it. I beg leave to withdraw the amendment.

Amendment 50G withdrawn.