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Session 2001- 02
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Delegated Legislation Committee Debates

Draft Scotland Act 1998 (Transfer of Functions to the Scottish Ministers Etc.) (No. 2) Order 2001, Etc.

Third Standing Committee on Delegated Legislation

Monday 16 July 2001

[Mr. John Cummings in the Chair]

Draft Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.)

(No. 2) Order 2001

4.30 pm

The Minister of State, Scotland Office (Mr. George Foulkes): I beg to move,

    That the Committee has considered the draft Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) (No. 2) Order 2001.

The Chairman: With this it will be convenient to consider the draft Transport (Scotland) Act 2001 (Conditions attached to PSV Operator's Licence and Competition Test for Exercise of Bus Functions) (Order) 2001.

Mr. Foulkes: Thank you, Mr. Cummings. It is a privilege for me to serve under your chairmanship, having known you for many years as a Member of the House. It is a pleasure that you are chairing a Committee that is discussing Scottish matters.

This is the second occasion on which I have addressed a Committee of the House on orders under the Scotland Act 1998, but it is the first time in the new Parliament. I welcome to the Committee the hon. Member for Hertford and Stortford (Mr. Prisk) and my hon. Friends the Members for East Lothian (Anne Picking) and for Central Fife (Mr. MacDougall). The other members of the Committee are old lags, or old hands, and it is a pleasure to have three new Members serving on the Committee.

As on the previous occasion, I have continued the practice of making the Executive notes available to hon. Members. Executive notes, as the old lags know, are prepared for the Scottish Parliament by the Scottish Executive for the guidance of its Members on orders that are debated there. There is an Executive note for the Transfer of Functions Order because section 63 of the Scotland Act 1998 requires it to be debated in the Scottish Parliament as well as here. However, the section 104 order is of a type debated only in this Parliament, so there is no Executive note.

The section 63 order provides for circumstances in which it is appropriate for Scottish Ministers to exercise Executive powers in areas in which primary legislation continues to be a matter for this Parliament. That is commonly known as Executive devolution. Hon. Members will, I am sure, have read carefully the Executive note that explains in detail the entries in the order, but it may be helpful, especially for the hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore), if I give a brief resume.

Hon. Members are aware of the Government's commitment to increase our use of renewable energy to 10 per cent. of consumption by 2010 and I am sure that they support that. The Scottish Executive have also committed themselves to putting in place measures contributing to the achievement of that target by a proportionate increase in Scotland. That recognises the tremendous potential for further development of renewables and is at the heart of the Executive's programme on climate change.

The powers to allow Scottish Ministers to impose a renewable obligation on electricity suppliers have already been transferred. As in England and Wales, this will be put in place by a Scottish statutory instrument that will be subject to affirmation by the Scottish Parliament. The obligation itself will be subject to a formal consultation process. The transfer of the further powers in this order is required to allow the Scottish Executive to carry the programme forward. The powers under sections 32B and 32C of the Electricity Act 1989, as amended by the Utilities Act 2000, will enable the Scottish Executive to arrange for the issue of certificates to qualifying generators of renewable energy.

Those certificates, to be issued by the industry regulator, will allow suppliers to prove that renewable energy subject to the obligation has been supplied within Great Britain, and that they have consequently met the requirements under section 32 of the 1989 Act. Section 32C provides powers to enable suppliers to meet their obligations by means of a buy-out mechanism; an extra opportunity.

I turn to the Utilities Act 2000. The draft order transfers to Scottish Ministers the power to make certain savings orders that relate to the now-replaced section 32 of the Electricity Act 1989. Under that Act, Ministers exercised powers to make orders—known as the Scottish renewable obligation—to promote renewable energy. Although new section 32 supersedes those powers, the orders are still in place. Section 67 of the Utilities Act makes provision for such savings orders to be made. The order that we are considering this afternoon transfers to Scottish Ministers the power to make those savings orders.

As with the second order to be discussed today, to which I will turn in a moment, the result of the order is expected to be uniformity with England and Wales. Hon. Members may agree that that is an interesting, and even ironic, feature of the orders.

I hope that I have explained the first order clearly, but I will happily answer any questions on it. The second order is made under section 104 of the Scotland Act, which provides for this Parliament to make subordinate legislation containing provisions that are necessary or expedient in consequence of any Act of the Scottish Parliament.

Towards the end of last year, both Parliaments debated and passed separate Transport Acts. Both included provisions to improve the quality and efficiency of bus services—which we would all approve of—and to encourage greater use of public transport. The order makes provision consequential on provisions in the Transport (Scotland) Act 2001, an Act of the Scottish Parliament that received Royal Assent on 25 January 2001.

Mr. Brian H. Donohoe (Cunninghame, South): Very appropriate.

Mr. Foulkes: As my hon. Friend says, that is very appropriate, as it was Burns night. It was also the day on which I was appointed to my present job, so it was a red letter day.

Mr. Donohoe: Even better.

Mr. Foulkes: I am grateful to my hon. Friend.

The exercise of the provisions requires functions to be conferred on bodies responsible to this Parliament, not to the Scottish Parliament. That requires an order to be made by the Secretary of State and debated by this Parliament. The order has two purposes.

First, the order gives the traffic commissioner in Scotland the same enforcement powers that are available to his counterparts in England and Wales under our own Transport Act 2000. Those powers will allow him to attach conditions to a public service vehicle—PSV—operator's licence where that operator has failed in its obligation under the Transport (Scotland) Act 2001 concerning quality partnerships, quality contracts, ticketing schemes or the provision of information.

Mr. Donohoe: Who will appoint the commissioner for transport in Scotland?

Mr. Foulkes: That is entirely outwith the terms of the order. It will be dealt with separately, and not today. I am sure that my hon. Friend, being one of the foremost transport experts in this Parliament—I hope that he will soon be re-appointed to the Select Committee—knows better than anyone the arrangements for appointing traffic commissioners, both in Scotland and England.

The second purpose of the order is to confer additional functions on the Director General of Fair Trading. It confers similar powers on him, in relation to Scotland, to those made in schedule 10 of the Transport Act 2000, in relation to England and Wales. These powers are more complex than those that I described in relation to the traffic commissioner, so I shall take some time to explain them.

The provisions of both Transport Acts enable the consideration of wider public interest objectives, including those of bus users and the community in general, when an assessment is made of whether a local authority has used its powers anti-competitively. That is in relation to powers given to local authorities to introduce measures under the Transport Acts to improve public transport.

Consideration of the wider public interest has been achieved by establishing a new competition test in relation to certain actions that can be taken under each of the Acts. The new competition test applies to quality partnership schemes, subsidised bus services and ticketing schemes. It does not impact on other areas of competition or transport law.

The new test, which is tailored to the circumstances of bus operations, recognises that when putting in place measures to drive up quality standards, to improve local services or to take account of environmental considerations, there may be an impact on competition. The measure is based on proportionality; ensuring that the proposed measures are proportional to the effect they would have on competition in terms of achieving the stated objective.

The new competition test will enable local authorities to secure the benefits of the new bus powers within the Transport (Scotland) Act 2001—including better vehicles, better facilities and service improvements—without falling foul of existing competition legislation.

In order to give effect to the new competition test, the Director General of Fair Trading must be given a role and procedural framework within which to enforce those provisions. Competition law and the functions of the Director General in terms of the Fair Trading Act 1973 are wholly reserved matters. It is necessary to make the order to enable him to enforce the new competition test in Scotland.

Mr. Dominic Grieve (Beaconsfield): One reason why we kept those issues as reserved matters was to ensure uniformity throughout the United Kingdom in terms of competition regimes and their impact. Does this measure enable or facilitate a situation in which different tests may be applied north and south of the border? What impact would the order have if it were capable of biting on cross-border bus services?

Mr. Foulkes: The hon. Gentleman, who speaks for the Opposition, has raised an important point. My understanding is that the order does not allow different tests, arrangements or criteria to exist north and south of the border. Indeed, the situation is quite the reverse. Once the order is agreed, tests will be the same north and south of the border. In relation to cross-border routes, of which there are many, the problem will not arise.

I should make it clear that although the order will extend the Director General of Fair Trading's functions to Scotland, it will not extend powers to consider competition matters to the Scottish Parliament. The order is necessary and expedient in consequence of the Transport (Scotland) Act 2001. In practice it will provide an enforcement and competition regime that, as I said earlier, is consistent across Great Britain as regards similar provisions in the respective Transport Acts, which will allow proper account to be taken of public interest objectives.

4.44 pm


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