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Standing Committee Debates
Energy Bill [Lords]

Energy Bill [Lords]

Column Number: 495

Standing Committee B

Tuesday 22 June 2004


[Mr. Bill O'Brien in the Chair]

Energy Bill [Lords]

Clause 181

Adjustment of transmission charges

Amendment proposed [this day]: No. 198, in

    clause 181, page 138, line 38, leave out from 'must' to end of line 46 and insert—

    '(a) publish a draft of any scheme proposed to be established by the order;

    (b) publish an assessment of the costs likely to be incurred by different persons in consequence of the order; and

    (c) consult authorised suppliers and such other persons likely to be affected by the order as he considers appropriate.

    ( ) An assessment published under subsection (7)(b) must set out, in particular, the Secretary of State's assessment of the likely effect of the order on charges for electricity in Great Britain.

    ( ) Subsection (7) may be satisfied by publications and consultation taking place wholly or partly before the commencement of this section.'.—[Nigel Griffiths.]

2.30 pm

Question again proposed, That the amendment be made.

The Chairman: I remind the Committee that with this we are discussing Government amendment No. 199.

Miss Anne McIntosh (Vale of York) (Con): I welcome you back to the Chair most warmly, Mr. O'Brien; it is a pleasure to see you. Before the Committee adjourned this morning, we were hoping for more illumination from the Minister on the background to the amendments. I would like to refer to his ministerial colleague's letter to the Committee—[Interruption.]

The Chairman: Order. I am trying to listen to the hon. Lady.

Miss McIntosh: I am referring to the Minister for Energy, E-Commerce and Postal Services, who is a very busy Minister. It is nice that we have weaned him off his laptop for at least the next hour or so. He was kind enough to write to the Committee on 3 June to explain some of the background to the amendments. Without going into a clause stand part debate, which I hope will be allowed shortly, I shall say why I prefer the original text, which the Government amendments will strike from the Bill.

Amendment No. 198 will remove clause 181(7) and (8), but I believe that the requirement in those subsections should be imposed on the Government. The Minister spoke briefly this morning about the cost of the requirement. He would be the first to accept, because we have said this at length in this Committee and it has been said from the top to the bottom of the

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Conservative party on every possible occasion, that we are wedded to deregulation. In fact, the current deregulation provisions were introduced by the last Conservative Government. The Minister need have no concern in that regard. However, I cannot believe that the cost of a requirement to draft and prepare an annual report would be of such an order that it would trouble his Department.

In the interlude following the adjournment, I was fortunate enough to hear the Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster say that every regulatory office has been instructed by the Government to prepare, for every regulation and Bill, a regulatory impact assessment like the one before us this afternoon. They are probably not all so extensive. However, I cannot see in this RIA what, in the view of the Department of Trade and Industry, the precise cost of preparing an annual report would be, so it would be most helpful if this Minister told us.

I would like to take issue with a couple of the Minister's other remarks. He did not like the fact that the Lords amendment referred to an affirmative resolution. That is in the context of amendment No. 198. I believe that, if scrutiny stands for anything—it is incumbent on Members of Parliament, whatever position we hold and whether or not we are part of a legislative scrutiny Committee, to ensure that it does—the affirmation resolution procedure provides much more opportunity for scrutiny, a matter that we have pursued in the context of other Bills. The negative resolution procedure is not subject to the same scrutiny and I am disappointed that the Minister is minded to reverse that decision. I hope that he will see fit to stick with the original wording.

It is amazing that I have found three issues in the Minister's short remarks with which I disagree, without even trying; I am not usually so disagreeable. The general tendency—[Interruption.] I shall ignore such remarks from a sedentary position. I shall not be baited. The Minister said that the tendency was for energy prices to decrease, but the thrust of every representation that has been made to me, and a careful reading of the Department's RIA, point out clearly that the tendency is for energy prices to increase. I should be interested to know on what factual evidence the Minister reached his conclusion.

In the words of the Minister for Energy, E-Commerce and Postal Services, the amendments would strike out the requirement for an annual report, which I find deeply regrettable and disappointing, as it won the support of the majority of the House of Lords. The Minister, in his letter to the Committee of 3 June, said that the Government's amendment

    ''does not seek to alter in any way the spirit of the original amendment made in the Lords, but simply seeks to improve upon its drafting.''

I hope that the Committee is clear that what is proposed is a direct contravention of that statement, as the amendment would reverse the requirement for the publication of a report by affirmative resolution procedure making it a negative resolution procedure.

The Minister's letter states that the Government are seeking to overturn the requirement for an annual report,

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    ''as it is considered to be an unnecessary burden on the grounds that we do not believe that the cost of the scheme to consumers will change significantly from year to year and the costs of any scheme will be laid out at the time of applying for it in an impact assessment.''

The Minister continued:

    ''It is also worth noting that any scheme can only have a total duration of five years''

and it can be extended for another five years after that, which is already 10 years. In the interests of transparency and close scrutiny, it is advisable to have an annual report. I await further clarification from the Minister, because there is an assumption that an annual report is not needed, and because earlier he referred to the cost as excessive. What is the cost of preparing an annual report? I should also like to know the basis on which the Minister concluded that energy costs would go down, whereas all the evidence is that they will go up.

Mr. Andrew Stunell (Hazel Grove) (LD): The amendments relate to three subsections of the clause and there are different considerations to be made in respect of each of them. The first of the two amendments would remove subsections (7) and (8) and substitute a new subsection (7). From the Liberal Democrats' perspective, there is no objection to the inserted words as a replacement for subsection (7), as a sensible and useful tidying-up job. However, we object to the removal of subsection (8), and the hon. Member for Vale of York (Miss McIntosh) made a number of the points that I would have made about needing to keep track of what the Secretary of State is up to.

It is a constant theme of mine, particularly with energy matters, that only so much can be done by announcement and slogan, but real progress is monitored by seeing reports of what has happened and how a scheme is proceeding. I understand the reasoning in the letter that the Minister circulated to us that, in any case, the scheme can last for only five years, but Parliaments last for five years and that does not mean that we do not expect to hear from Ministers in the meantime. That is not the best argument that I have heard for removing an accountability proposal. Therefore, although the new wording of subsection (7) is fine, the absence of wording for subsection (8) is a difficulty.

Amendment No. 199 tinkers with the words of subsection (14), and the Minister has contrived to create a misunderstanding between my interpretation and that of the hon. Lady. If I am reading the amendment correctly, the subsection would read: ''The power to make an order containing provision authorised by this section is subject to the affirmative resolution procedure.'' Therefore, it seems to me that the order would be subject to affirmative resolution procedure, but the hon. Lady has put forward an equally plausible argument that it would mean exactly the opposite.

It would be helpful if the Minister would tell us whether the subsection is as the House of Lords wanted or whether he has advertently or inadvertently

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reversed that decision. His letter took a good deal of reading, and I fully understand why the hon. Lady had a different interpretation from mine. I want to hear from the Minister a better reason for omitting subsection (8) from the Bill, and I want clarification about the precise intention of subsection (14).

Mr. Laurence Robertson (Tewkesbury) (Con): I welcome you back to the Committee, Mr. O'Brien. I shall be brief because, as ever, my hon. Friend the Member for Vale of York made a comprehensive speech and advanced many reasons to resist the Government's amendments. The fact that the clause is a diversion from the free market—I am not criticising it for that reason—through the adjustment of transmission charges means that there should be a report about the charges and costs of the scheme. That is not unreasonable. There is a requirement on many authorities, including local and police authorities, to produce reports and strategies. One wonders how they deliver services when they have so many reports and strategies to produce.

Given the enormous number of civil servants amassed by the Government, I am sure that they can publish a report on the matter. The adjustment of transmission charges is an important issue. It is not asking too much for a report to be produced. Therefore, I am persuaded to vote against the amendment and shall ask my hon. Friends to do the same, unless the Minister comes up with a more convincing argument in his winding-up remarks than he did in his opening remarks.

2.45 pm


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