House of Commons - Explanatory Note
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Part 6 - Supplemental provisions of Schedule 9

     544.     Paragraph 35 enables the NDA to be treated as a company for the purposes of the capital gains tax rules applying to groups of companies. Similarly it enables the NDA to be a company for the purposes of the intangible fixed assets rules. This confirms that the NDA is to be taxed as if it were an ordinary company - subject to the special rules that are in this Bill.

545.     Paragraph 36 has the effect of removing the possibility of re-basing elections being made for assets held by an entity as at 31 March 1982 to the extent a disposal is made in accordance with paragraph 3 or 17 of this Schedule to.

546.     Paragraph 37 provides a list of definitions of terms used in this Schedule.

547.     The paragraph also clarifies that Schedule 9 should be construed as one with the Corporation Tax Acts and the 2001 Act in respect of capital allowances.

548.     The paragraph provides that the Board of Inland Revenue is to determine whether an asset is part of BNFL's 'Nuclear Liabilities Investment Portfolio' after consulting the Secretary of State. This is for the purpose of subparagraph 4(1) of the Schedule (the exclusion of Portfolio assets from the nil acquisition cost rule for capital gains). It does not apply for the purpose of Part 4 of the Bill. The term, "Nuclear Liabilities Investment Portfolio", which is defined in here is not used in the body of Part 4. For the purpose of Part 4 the Portfolio is determined under the definition in subsection (6) of clause 45.

Schedule10: The Civil Nuclear Police Authority

549.     This Schedule is described in the notes to clause 54.

Schedule 11: Removal and suspension of senior officers of Constabulary

550.     This Schedule is described in the notes to clause 56.

Schedule 12: Planning and reports about Constabulary

551.     This Schedule is described in the notes to clause 64.

Schedule 13: Directions by Secretary of State about Constabulary

552.     This Schedule is described in the notes to clause 66.

Schedule 14: Minor amendments relating to Constabulary

553.     This Schedule is described in the notes to clause 72.

Schedule 15: Amendments of 1993 Act

554.     This Schedule is brought into effect by clause 78.

Schedule 16: Applications and proposals for notices under section 96

555.     Schedule 16 sets out the process for applying for a notice in regard to a safety zone under section 96. The process is essentially the same as that set out in Schedule 8 of the Electricity Act 1989 (c.29) in regard to an application for a consent under section 36 of that Act to construct, extend or operate a generating station.

Schedule 17: Conversion of existing transmission licences: licensing scheme

556.     This Schedule is described in the notes to clause 135.

Schedule 18: Property arrangements schemes

557.     This Schedule is described in the notes to clause 138.

Schedule 19: Consequential amendments relating to Chapter 1 of Part 4

558.     This Schedule is brought into effect by clause 140.

Schedule 20: Conduct of energy administration

559.     This Schedule is described in the notes to clause 156.

Schedule 21 : Energy transfer schemes

560.     This Schedule is described in the notes to clause 156.

Schedule 22: Procedure for appeals under section 170

Application for permission to bring an appeal.

561.     Paragraph 1 sets out the procedure for making an application for permission to appeal to the Competition Commission within 15 working days of GEMA's decision being published and gives the Commission power to grant permission subject to conditions.

Addition of persons to application

562.     Paragraph 2 allows an additional person to become party to an appeal (an "intervener"), for the purpose of supporting the appeal or opposing it, if they apply to do so within 20 working days of the initial application for permission to appeal or within a longer period if the Competition Commission allow, and are materially affected by the decision or represent persons who are so materially affected. An intervener may not rely on grounds of appeal which are not contained in the appellant's application for permission to bring an appeal. The Competition Commission cannot give a direction that the person become party to the appeal if it will prevent determination of the appeal within the prescribed time limits. The Competition Commission, in giving its direction that a person is to be a party to an appeal, may impose conditions on its direction. These conditions include conditions which limit the matters to be considered on an appeal, and conditions for the purpose of expediting the determination of the appeal.

Suspension of decision

563.     Paragraph 3 allows the Commission to "stop the clock" on the implementation of a decision once permission to appeal has been granted. This will only be an option where an application has been made for this to happen, the applicant will incur significant costs by the decision taking effect before determination of the appeal and the balance of convenience has been considered. An application may be made by the appellant or another person with interests or functions that entitles him, or would have entitled him, to appeal against GEMA's decision.

Time limit for representations and observations by GEMA.

564.     In Paragraph 4 GEMA is given a period of fifteen working days from the original application or last joined application for an appeal within which to make its representations to the Competition Commission on an appeal.

Consideration and determination of appeal by group

565.     Paragraph 5 provides for a group of three Commission members, with one appointed as chairman, to consider and determine an appeal with decisions effective only if all three are present and two members of the group are in favour of the decision. It also gives the group flexibility to set its own procedural rules within the bounds of the rules outlined by paragraph 12.

Timetable for determination of appeal

566.     Paragraph 6 requires the Commission to reach its decision within 30 working days following the last day on which GEMA could have made its representations on an appeal though it is enabled to extend this period by a maximum of 10 working days if it is satisfied there are good reasons for doing so. Where the Commission extends the deadline it must notify every party to the appeal.

Matters to be considered on appeal

567.     Paragraph 7 gives the group discretion to disregard matters raised by parties which were not included in their initial application for appeal or, in the case of GEMA, its representations.

Production of documents

568.     Paragraph 8 gives the Commission power to require the production of documents or types of documents and take copies of those documents.

Oral hearings

569.     Paragraph 9 gives the Commission power hold an oral hearing and to require oral evidence under oath, in respect of (i) an application for permission to appeal, (ii) a person seeking to intervene in an appeal, (iii) a direction to suspend GEMA's decision and (iv) for the purpose of determining the appeal. The Commission may also require a person to attend an oral hearing for the purpose of giving evidence. A person who attends an oral hearing may be cross-examined by or on behalf of any party to the appeal.

Written Statements

570.     Paragraph 10 gives the Commission power to require a person to produce a written statement at a specified time and place to the person considering suspending GEMA's decision or a group determining an appeal, and for that statement to be verified by a statement of truth.

Defaults in relation to evidence

571.     Paragraph 11 provides an enforcement power for Paragraphs 8, 9 and 10. A person can be held in contempt of court by the High Court or Court of Session for failing to comply with a notice requiring production of documents, failing to comply with a notice requiring attendance at an oral hearing or failing to comply with a notice requiring production of a written statement. A person may also be held in contempt of court if he makes a statement which is false in any material sense in a written statement, or if he provides information which is materially false in the course of providing information which is otherwise verified by a statement of truth. It also provides for altering, suppressing or destroying a document requested by the Commission to be a criminal offence.

Procedural Rules

572.     Paragraph 12 allows the Chairman of the Competition Commission to make and publish rules for the conduct and disposal of appeals.


573.     Paragraph 13 gives the group power to make an order in respect of costs incurred in connection with the appeal. Sub-paragraphs (2) and (3) of paragraph 13 require that the costs incurred by the Competition Commission in connection with the appeal shall be paid by the losing party to an appeal, allocated as the group see fit where an appeal brought by two or more appellants is dismissed. Sub-paragraph (5) of paragraph 13 allows the group to require one party to an appeal to make a payment to another in respect of the costs borne by the other party. Sub-paragraphs (6) and (7) of paragraph 13 provide that sums required to be paid by an order must be paid within 5 days and sums which are outstanding after this period shall bear interest at a rate determined in the order.

The Secretary of State's power to modify time limits

574.     Paragraph 14 gives the Secretary of State power to amend the time limits set in Schedule 22 by order. It is envisaged this may be necessary if on review it is judged that the current time limits have proved inappropriate.

Schedule 23: Repeals

575.     This Schedule is described in the notes to Part 5.


Part 2: The Civil Nuclear Industry

576.     The Bill will transfer to the NDA the financial responsibility for the decommissioning or clean-up of the nuclear sites under its authority. This is expected to amount to a total of around £50 billion over 100 years. This expenditure was announced in the White Paper, "Managing the Nuclear Legacy" (Cm. 5552).

577.     It is difficult at this stage to be precise about the NDA's staffing needs but current planning is based on an organisation of some 200 people and operating costs in the range of £25-30 million per annum. That cost needs to be set against the £1 billion plus currently spent annually on clean up - assuming on-going expenditure at that level, a 5% overall reduction would represent annual savings of over £50 million. Current expectations are that, over the medium and longer term, savings could be significantly higher. Expenditure on the operation, decommissioning and clean up of the BNFL and UKAEA sites for which the NDA will be responsible once it is established is already either directly funded by Government or constitutes part of overall public expenditure.

578.     When implemented in the UK, the increased provision for supplementary compensation from public funds under the terms of the Brussels Convention will increase the contingent liability on public funds.

579.     When the NDA is established, the DTI's Liabilities Management Unit (currently 25 posts) will be wound up and there is expected to be a net saving in other DTI posts associated with nuclear clean up. Overall, DTI expects to achieve a saving of some 35 posts. However, these savings will be more than offset by the staff requirements of the NDA. The nuclear regulators - the Health and Safety Executive, the Environment Agency and the Scottish Environment Protection Agency - also believe that, at least initially they are likely to require some increase in resources in order to play their full part in implementing the new arrangements for managing the nuclear legacy under the NDA.

580.     The one off costs of separating the Constabulary from UKAEA are estimated to be £1.1m, and the additional operating costs of operating the new police authority and Constabulary are expected to be of the order of £200k pa more than those of operating the Constabulary as part of UKAEA. This represents a 1.5% increase.

581.     Clause 79 gives the Government the power to amend primary legislation in order to ratify the Paris and Brussels Conventions on Nuclear Liability. Ratification of the Brussels convention will increase the Government responsibility in the event of a serious nuclear incident to £930m (from £260m). In common with current practice, Government does not intend to insure this liability, but it will continue to retain responsibility for this contingent liability.

Part 3: Renewable Energy Sources

582.     Chapters 1 and 2 extend the powers of the police to offshore renewable energy installations. However calls on police resources are likely to be minimal, particularly as renewable energy installations are not likely to be manned during normal operation.

Part 4: Energy Regulation

583.     The costs to Ofgem of designing and coordinating the new arrangements under Chapter 1 of Part 3 are estimated at around £9 million.

584.     Chapter 3, covering a special administration regime for energy network companies, provide for a funding mechanism in the shape of a loan from the Department of trade and Industry. This would be re-paid once the business had been sold on or, in extremis, through a tightly prescribed levy power.

585.     The provisions in Chapter 4, enabling appeals to the Competition Commission against Ofgem decisions on code modifications, provide for the losing party to pay the costs of the hearing. The Competition Commission is funded by the Department of Trade and Industry through grant-in-aid but would be expected to absorb any costs connected with the collection of costs from losing appellants and to underwrite any associated bad debts.

586.     Chapter 4 also includes a power to enable Scottish Ministers to direct GEMA to pay surplus revenue arising under the Fossil Fuel Levy (FFL) in Scotland into the Scottish Consolidated Fund to enable an equivalent amount to be spent on the promotion of renewable energy. This mimics a similar provision, applying to England and Wales, recently enacted in the Sustainable Energy Act 2003 (c.30).

Part 5: Miscellaneous and Supplementary

587.     The Bill also includes a power for the Secretary of State to make regulations to impose charges for specific regulatory functions in relation to the oil and gas and electricity industries. Revenue received from these charges would be used to fund the functions themselves and to make them more efficient and to extend them in line with demand. This is consistent with stated Treasury policy that Departments providing a service should consider recovering their costs by means of a charge.


588.     A full Regulatory Impact Assessment for the Bill has been undertaken and is available on the Department of Trade and Industry website.

589.     The provisions of the Bill generally promote competition (e.g. BETTA), provide new opportunities for business (e.g. underpinning development of offshore windfarms), or offer new optional alternatives (e.g. appeals against Ofgem decisions, or speeding up public inquiries). By far the most significant costs involved will fall on the Government. The only impact on small firms identified is a positive one in relation to BETTA where the new arrangements will increase competition and improve the prospects for smaller companies operating in a market that is at present dominated by larger incumbents. No impacts on charities or voluntary organisations have been identified.


590.     All clauses come into force on such day as the Secretary of State may by order appoint. Different days may be appointed for different purposes.

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Prepared: 23 April 2004