Energy Bill

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Clause 47

Time when modification takes effect
Question proposed, That the clause stand part of the Bill.
Malcolm Wicks: This clause sets out the time when a modification to a programme takes effect. In the clause, the time when the modification will take effect is defined as the “relevant time”—[Interruption.] The hon. Member for Wealden can tell that I write all my own speeches. It is important, technically, that I spell this out at this relevant time.
This is the date that is specified in the notice issued by the Secretary of State that confirms his decision to make the modification. Once the “relevant time” specified in the notice has passed, the modification takes effect as if it had been part of the programme that had originally been submitted for approval under clause 42. This means that from the “relevant time” onwards the clauses in this chapter apply to the programme as modified.
Question put and agreed to.
Clause 4 7 ordered to stand part of the Bill.

Clause 48

Provision of information and documents
Question proposed, That the clause stand part of the Bill.
Malcolm Wicks: Clause 48 enables the Secretary of State to require by notice in writing, information and documentation from the operator and other persons—including associated companies—who already have or will have obligations under a programme once a programme, modification or condition comes into effect.
When making the request, the Secretary of State must specify when the information and documentation is to be made available and the manner in which it is to be provided. This is to ensure that the information is provided in a useable and timely manner. The request for information is limited to two circumstances. The first instance is referred to as Condition A. This applies where the information is necessary for the purpose of the Secretary of State deciding whether or not to approve a funded decommissioning programme submitted by an operator for approval.
The second instance, which can be found in subsection (3), is referred to as Condition—
Steve Webb: B.
Malcolm Wicks: I thank the hon. Gentleman. Condition B applies where the information is necessary to the Secretary of State for the purpose of deciding whether to make a proposed modification or impose an obligation that is subject to clause 44 and the full modification procedure under clause 45. If condition B applies, the Secretary of State can request the information or documentation from any of those persons who would have an obligation under the programme if the modification were to be made. If an operator fails to comply with a request for information, the Secretary of State can make an application to the High Court for an order. If the order is granted, it may require the person to take such steps as the High Court may direct in order to comply with the Secretary of State’s notice. If the person failed to comply with the court order, the normal penalties for contempt of court would apply.
Will the Minister also tell us whether the information, once it has been provided, will be made public? Will it be there for all to see or will it be provided simply to him and his Department? How does the Freedom of Information Act 2000 relate to information provided in this way?
Malcolm Wicks: The hon. Gentleman asks two important technical questions. Will he agree to my returning to them in a short while, so that I can be absolutely exact in my answers to him?
Charles Hendry: While I am thinking about it, the Minister is getting inspiration. It seems rather strange to ask us to approve a clause when he has not been able to answer the questions on it. I hope that now that he has received enlightenment, he will share it with the Committee.
Malcolm Wicks: I was mindful that we might be occupied elsewhere in a few moments. I think that the hon. Gentleman is asking what the Secretary of State can do with the information. Can it be made public? Is it made available to others in the group? It is not our intention to release the information, as most of it is likely to be commercial in confidence. This is one of the difficulties that we are grappling with in these situations. Let us always remember that we are talking about private companies and that there will be competition between those companies. Issues about commercial confidentiality are therefore very important. However, information will, of course, be subject to normal freedom-of-information procedures. On the other issue, I will need to return to the hon. Gentleman as soon as I can.
Question put and agreed to.
Clause 48 ordered to stand part of the Bill.

Clause 49

Power to review operation of programme
Martin Horwood: I beg to move amendment No. 46, in clause 49, page 42, line 7, after ‘may’, insert
‘at any time and at least once every five years’.
The Minister has already acknowledged some of the difficulties facing funded decommissioning programmes. We have discussed the possible variability in the costs. Under the previous few clauses, we have discussed the necessity of modifications and how those are likely to take place. We have talked about the changing circumstances that might apply, which might even change the foundation on which some of the funded decommissioning programmes were established. They might change the whole nature of the companies with which the programmes had been established. Some might be facing liquidation or merger and there might be fundamental changes in the financial and commercial arrangements underpinning these arrangements.
We talked much earlier about the importance of establishing the whole fund for decommissioning and any risk premiums having been paid, before the operation of new power stations even begins, so it is very likely that the circumstances surrounding funded decommissioning programmes will change. I think that we all agree with the clause that it will be necessary to review regularly the funded decommissioning programmes, but all Governments tend to put off awkward considerations and awkward reviews if they possibly can.
4.29 pm
Sitting suspended for a Division in the House.
4.43 pm
On resuming—
Martin Horwood: As I was saying, all Governments are inclined to dodge difficult debates and questions sometimes, as is the case with referendums and the updating of council tax valuations. In the fullness of time, the Secretary of State might not exactly rush to the Dispatch Box to explain how things are getting along if funded decommissioning programmes become somewhat controversial and Members, perhaps from my party, suggest that the programmes are not working as well as they might— that is pretty likely, given the history of the nuclear industry.
The Minister’s adviser, Dr. Higson, suggested in evidence that there would be a specific time period. Replying to me, he said:
“there is provision for that in the Bill through regular monitoring and quinquennial reviews”.——[Official Report, Energy Public Bill Committee, 19 February 2008; c. 116, Q228.]
That was an eloquent way of saying that we should have a review every five years, but I have struggled to find that in the Bill. Amendment No. 46 specifically states that that may occur
“at any time and at least once every five years”.
We are therefore hoping to hold the Government to their stated promise to review funded decommissioning programmes every five years, and that seems to us to be the least that will be required.
Malcolm Wicks: Before I turn to the amendment, perhaps I could give a late answer to the question asked by the hon. Member for Wealden. Essentially, he was asking why we needed to request information. The answer is that the Secretary of State’s powers to refuse to approve a proposed funded decommissioning programme would act as a strong incentive for any operator to provide information on request. However, where the Secretary of State is considering a modification and does not have information to help him to decide, this same strong incentive would not exist. Such a power, therefore, ensures that the Secretary of State can get the information that he requires. I apologise to the hon. Gentleman for not answering in a more timely way.
The Chairman: I advise the Committee that it is not normal to suspend a Committee in order for the Minister to obtain information. The Committee ordinarily proceeds to discuss and vote on each clause.
Malcolm Wicks: I can understand the hon. Gentleman’s frustration, but I hope that he will understand the practicalities. From time to time a member of a Committee will ask a perfectly reasonable but also detailed, technical question and it is not always possible, either off the top of one’s head or from a glance at a note, to give a detailed answer. It is one of the difficulties of our Committee system. Given that what we say in Committee can be cited later, we need to be as correct as possible, so rather than answer in a broad brush way, I choose sometimes to say that I will deal with a question in another way. It is also why, when I do occasionally get things wrong, I try to correct the record as soon as I can.
Dr. Stephen Ladyman (South Thanet) (Lab) rose—
Malcolm Wicks: It is part of the frustrations of Committee sittings. A seasoned veteran will now say why he understands my predicament.
Dr. Ladyman: I was just going to defend my hon. Friend. One of the reasons why we have Report stage is so that the Opposition can return to a matter later if necessary.
Malcolm Wicks: Now to the amendment, which raises the important issue of reviewing a funded decommissioning programme. The purpose of clause 49 is to allow the Secretary of State to acquire information at any time from the operator on the operation of the programme and the ability of the programme to meet the operator’s future liabilities. Given the power contained within clause 49 and what we have said in the draft guidance about our intention to review programmes, the amendment does not add anything further to the Secretary of State’s powers. Therefore, we feel that the amendment is unnecessary.
We have stated in the draft guidance that the operator will be expected to carry out both annual and quinquennial—as the Committee now knows, this means every five years—reviews of the programme. Reports of such reviews should be submitted to the Secretary of State. Under the guidance, the persons responsible for managing the independent fund will also have to report to the Secretary of State on an annual and quinquennial basis. Therefore, the amendment would duplicate this requirement.
We would expect the annual reports to set up those changes that have occurred during the year and have an impact on the operator’s liabilities. The size and performance of the fund should also be reported on. The reviews that take place every five years will ensure that the cost estimates of the operator’s liabilities remain accurate and up to date and that the funding arrangements remain capable of yielding sufficient funds to meet the operator’s liabilities. We believe that that approach fits with the Government’s intention to create a principles-based framework in which the Government set the parameters for the operator to work within. By placing that type of prescription in the Bill, we would be directly undermining our principles-based approach. I am confident that setting out our approach for monitoring and reviewing programmes in guidance is the right way ahead.
For the programme to be approved at the outset, the Secretary of State will need to be satisfied that the reporting structure proposed by the operator is acceptable. Once approved, should the operator fail to comply with the reporting requirements agreed with the Secretary of State, it will have failed to comply with the approved programme, and proposed sanctions under this chapter of the Bill will apply. I therefore ask the hon. Gentleman to consider withdrawing his amendment.
Martin Horwood: On balance, I would rather have it in the Bill than in draft guidance, but the Minister has made it very clear that he is giving an assurance that these reviews will happen every five years. I know that he is a man of his word, so I am happy to trust it to him and hope that his heirs and successors are similarly committed to five-year reviews. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Malcolm Wicks: I beg to move amendment No. 27, in clause 49, page 42, line 18, leave out ‘the Secretary of State determines’ and insert
‘the Secretary of State has reason to believe’.
This is an amendment that I can accept because it is a Government amendment. The Government have laid this technical amendment. I hope that, by setting out what clause 49 proposes, I can explain to hon. Members why the amendment is necessary and why the Committee should accept its inclusion in the Bill. Clause 49 allows the Secretary of State to require information to allow him to review an approved programme. The clause allows the Secretary of State to issue a notice in writing to obtain information for the express purpose of determining whether a programme is being complied with, whether it will be possible for future obligations to be complied with and whether the programme makes prudent provision for technical matters and certain designated technical matters. Where the Secretary of State decides, on the basis of the information submitted as a result of the notice issued by him, that the programme is not being complied with, that it will not be possible for future obligations to be met or that the programme no longer makes prudent provision for technical and certain designated technical matters, then the clause allows the Secretary of State to require further information from the operator, persons with obligations under the programme or any associated body.
The further information will help him to decide whether to modify the programme. Where an operator fails to comply with an initial notice from the Secretary of State requiring information or with a subsequent follow-up notice, the Secretary of State can make an application to the High Court for an order. Further detail on the content of reviews by the Secretary of State and the information that the operator will submit is set out in the draft guidance.
I shall now, if I may, turn to the technical amendment that I have tabled to this clause. The amendment adjusts the threshold that the Secretary of State needs to reach for him to require additional information by issuing a second notice. The Bill uses the word “determines” and we consider that it sets a higher threshold than we think appropriate. Without the amendment, the Government believe that the Secretary of State would be inappropriately constrained in his powers to require information, since he would have to be more or less certain that a modification needed to be made, in which case he would not need to obtain further information under the following provisions.
It therefore makes sense to reduce the “determines” threshold to one in which the Secretary of State has “reason to believe”. That will make it easier to request further information, helping to ensure that the Secretary of State has the necessary information that he needs to decide whether to propose a modification, thereby ensuring that the programme continues to make prudent provision for the relevant matters. The amendment strengthens the regulatory framework, improving the Secretary of State’s ability to make informed decisions on modifications. I duly ask hon. Members to consider accepting this technical amendment.
Charles Hendry: I hope that the Minister will let us into the secret of how he manages to get all of his amendments accepted by the Committee, but somehow none of ours are. Maybe there will be some clarification in due course and we will manage to persuade him to see the error of his ways and accept some of the ideas that we are putting forward. I shall be grateful if the Minister can give us a legal definition of “has reason to believe”. It seems to be a very vague phrase. Clearly, we do not want to set the threshold too high for the Secretary of State to be allowed clarification on a situation, but this is very woolly indeed. Would it be one letter that might give him reason to believe? Would it be one Westminster Hall debate that might set off that investigation, one article in the media, or whatever? The Minister does need to give us greater clarity for what he has in mind, because he is asking us to accept this and on the face of it, we are willing to do so, but some greater clarity is required.
There does also seem to be a general point, that the Government rather like woolly phrases. I think that is bad law. People should not have to take test cases to find out exactly what the law means. The more detail there can be in the Bill, so that people know if they are complying with the law—the spirit of the law—the better. I hope that the Minister will take that away and try to make sure that we do not have woolly phrases in future.
Martin Horwood: I would like to offer some support to the Minister on this amendment. Given the concerns about secrecy in the nuclear industry, as well as fears about cost overruns and the adequacy of these funded decommissioning programmes, it seems to me that, very far from not setting the threshold too high, we should set it as low as possible in requiring information from site operators. It is clearly difficult for the Secretary of State, in the words in the clause, actually to “determine” that a programme is not being complied with. One imagines the Minister being some kind of detective. It would be rather more easy for him simply “to have reason to believe”. The hon. Member for Wealden seems unduly worried—all that we are asking for is a lower threshold for the release of information, it is not some great imposition on the site operators or some great breach of commercial confidentiality. It seems to me that that threshold should be as low as possible to allow the Government maximum flexibility in holding these site operators to account and making sure that no subsidy means no subsidy.
Malcolm Wicks: Yes, I think it has a common-sense meaning—my Liberal Democrat colleague has helped me out. In other words, I do not think that the Secretary of State needs to be absolutely certain that there is an issue—evidence may have been brought to him, concerns may have been voiced by Members of this House, or there may have been a newspaper report that seemed to have an authority to it. After all, all that we are doing here is making it easier to request information if the Secretary of State has reason to believe, without 100 per cent. proof. All that we are asking for is further information so that he can make his judgment.
I am advised that “reason to believe” is a commonly used phrase in the context of powers to request information in law. It means that the Secretary of State does not have to demonstrate that there is an issue, but simply feels it sensible to obtain further information. I hope that with that explanation, the hon. Member for Wealden will consider supporting the Government amendment.
Mr. Binley: May I cheekily ask if one of those people who gives the Secretary of State information might well be the local authority? Would that be relevant to “sensible information”, or whatever the phrase is?
Malcolm Wicks: Or the local sub-post office.
Mr. Binley: No, I would not go that far.
Charles Hendry: It has been closed.
Malcolm Wicks: I doubt that the local authority would have detailed information about the financial issues relating to nuclear decommissioning, but I am sure that the Secretary of State would want to take any reasonable evidence most seriously.
Mr. Hugo Swire (East Devon) (Con): If it is indeed normal in terms of legal drafting to have the phrase “reason to believe” rather than “to determine”—and certainly the explanatory statement says that
“this amendment alters the threshold that the Secretary of State must meet”
and so forth—why was it in the Bill in the first place? What reasoning has led the Minister to seek to change the Bill in this way? What process did he go through? I am not being pedantic; I am just interested to know, because this is more than just a slight change. This is an emphatic change.
Malcolm Wicks: I think that as our expert lawyers and officials have considered the policy and looked again at it, they thought about how we will present it to Parliament and this Committee and they have had some second thoughts. I am guessing, however. I have not had a full description of the process, but that would be my guess. They feel that the threshold was in the incorrect place. As all we are doing is talking about the Secretary of State gathering more information, I am not sure that it is such a big deal. That is the best explanation that I can give to the hon. Gentleman.
Amendment agreed to.
Clause 49, as amended, ordered to stand part of the Bill.
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