Lord Roper
Main Page: Lord Roper (Liberal Democrat - Life peer)
Lord Crickhowell
My Lords, I have not intervened before now, on hearing this afternoon’s proceedings, but the reference to the Delegated Powers and Regulatory Reform Committee has prompted me to get on my feet. I am a member of the Constitution Committee, which I think would agree with everything that has just been said about these clauses. Indeed, I am prompted to think that I must go back to the Constitution Committee and make sure that before this comes before the House at Report we will have had a look at the constitutional implications of the way in which this matter is being handled. So I have every sympathy with the points that have just been made.
I make a wider point. I have been quite astonished— although I have been a very long time in Parliament, in one House and the other—as I do not believe that I have ever seen a Bill come to this stage in its proceedings with so much information still unavailable; after all, it has been through the other place and been examined by countless committees. Indeed, if this Committee stage had been held on the Floor of the House, the Government would have been in deep trouble. In Grand Committee, we go along with it—we probe and press questions and so on—and say that we will bring things back at Report. The House as a whole would have been far more impatient with the Government about the way in which they have handled this matter.
If at times my noble friend the Minister finds there are interventions from both sides, including from the noble Baroness who speaks for the Opposition, she must not be entirely surprised. If the department has not yet addressed many of the issues that one would have expected it to address at this time or to have answers to and provide information to the Committee, it must not be surprised if it gets into trouble. Therefore, as we go through the final stages in Committee, my noble friend would be extremely wise to understand the feeling of irritation and frustration that is widespread in the Committee and temper her remarks accordingly. I am not suggesting that it is her fault; it is a nightmare for Ministers in this House who have to handle Bills of this sort, since many key issues are decided elsewhere and by others. But she must understand that, as a Committee, we face the most extraordinary difficulties. We do not know half the regulations that are going to appear; we have clauses such as this one, which give extraordinary powers; and the Committee is naturally suspicious.
I hope that, as we go further down the proceedings this afternoon, my noble friend will simply accept that the Committee is faced with serious difficulties and will be prepared to say, again and again, that she understands the concerns, will listen to them most carefully, and will be prepared to discuss them as widely as possible before getting to the next stage. I hope that she will try to avoid the sense of irritation and conflict that crept in at an earlier stage this afternoon.
Lord Roper
My Lords, I do not intend to delay the Committee unduly on this point, but I echo what has been said by the noble Lord, Lord Grantchester, and my noble friend Lord Crickhowell. I have spoken before on the remarkably trenchant language which the Delegated Powers and Regulatory Reform Committee used in its fifth report—and, in its sixth report, as we have heard from the noble Lord, Lord Grantchester, it is still very concerned, particularly on the regulations on the capacity market that we are considering. Therefore, it is essential that we have detail of the regulations that are going to be introduced well before we come to Report.
Baroness Verma
My Lords, I am extremely grateful to my noble friend Lord Jenkin and the noble Lord, Lord Grantchester, for prompting this debate on the delegated powers within the capacity market and contract for difference provisions.
Clause 26 enables the Secretary of State to make provision to impose requirements, via electricity capacity regulations, in addition to those stipulated in capacity agreements. The requirements can be imposed on persons including licence holders, other persons carrying out functions in relation to capacity agreements and current and former capacity providers.
I understand that my noble friend Lord Jenkin is concerned that the provisions in this clause are too broad. However, the Government consider that the ability to address this provision in secondary legislation is needed as the requirements may change with time. The need to consider certain matters when preparing advice regarding the operation of the capacity market may also change as the market evolves, as has been the experience in international capacity markets, such as those in the United States.
With regard to Clause 26(3)(b) about placing restrictions on the use of generating plant, certain requirements may need to be imposed to ensure a fair and transparent auction and to mitigate or close off gaming opportunities that could otherwise drive up costs for consumers. In particular, it is imperative that we know the range and type of capacity, irrespective of whether the capacity operator intends to bid at auction, and we need to ensure we can address gaming opportunities, such as a plant operator notifying its intention to close in order to drive up the capacity price. Clause 26(3)(c) allows the Secretary of State to impose requirements relating to participation in a capacity auction. An example of how we envisage using this power is that we may wish to require a plant to participate in a capacity auction if it has notified the delivery body during the pre-qualification process that it is its intention to do so.
It may be necessary to place other requirements on those who have ceased to be capacity providers—that is to say, they have assigned or traded their capacity agreements—in order to determine whether they complied with their obligations while they held the agreement. For example, requirements relating to the inspection of plant or property other than as a condition of entry into a capacity auction, as described in Clause 26(3)(d), may be imposed by the Secretary of State.
The powers in Clause 32 allow the Secretary of State to amend or repeal certain sections of the Electricity Act 1989 and the Energy Act 2004 and to make subsequent amendments to any other enactment as the Secretary of State considers appropriate as a result of provisions made by electricity capacity regulations or capacity market rules. I recognise that my noble friend has particular concerns over the provisions in paragraph (d), which allows the Secretary of State to make consequential amendments to any other enactment that he considers appropriate. I should emphasise that our intention is to limit the use of the power in Clause 32(d) to making amendments that are consequential on, or to avoid duplication and contradiction of, existing primary or secondary legislation on implementing the capacity market. For example, if we modify the standard conditions of licences under the provisions of the Electricity Act, the powers for which are set out in Clause 31, it may be necessary to make a consequential amendment to Section 33 of the Utilities Act 2000. This contains general provision about standard licence conditions and includes in Section 33(1) a list of powers under which licence modifications have been made. Furthermore, any provisions to amend primary legislation through the powers in this clause will be subject to a proper level of parliamentary scrutiny through the affirmative resolution procedure.
I now turn to the amendments proposed by the noble Lord, Lord Grantchester, relating to the level of parliamentary scrutiny of regulations made under Chapters 2 and 3 of this Bill. These amendments would make all regulations subject to the affirmative resolution procedure, aside from those relating to electricity capacity regulations: information and advice and those under Clause 7(10) which set out how long a person who has ceased to be a CFD counterparty is continued to be treated as such. These would be subject to the negative procedure. The amendments are consistent with the recommendations of the Delegated Powers and Regulatory Reform Committee. As I have said in previous debates, the Government welcome the committee’s report and I can reassure the noble Lord that it is being given careful consideration. I commit to consider the amendments further and will respond in due course. I commend that Clauses 26 and 32 stand part of the Bill, and hope that the noble Lord will feel content to withdraw his objection.