Legislative Scrutiny: Children and Families Bill; Energy Bill - Human Rights Joint Committee Contents


2  Energy Bill

111. The Energy Bill was introduced in the House of Commons on 29 November 2012 and received its Third Reading on 4 June 2013. The Secretary of State for Energy and Climate Change has certified that, in his view, the Bill is compatible with Convention rights.

112. The Explanatory Notes to the Bill introduced in the House of Commons provided little detail of the Government's analysis of the human rights compatibility of the Bill.[59] We asked the Department to provide us with a human rights memorandum, which we received on 18 February 2013.[60] We also received a supplementary human rights memorandum from the Department on 12 March 2013, which addressed the new clauses added to the Bill in the Public Bill Committee of the House of Commons.[61] These documents are published on the Department's website.[62] We are grateful to the Department for producing a detailed and helpful human rights memorandum. We reiterate our view that it is best practice to publish a detailed memorandum on introduction of a Bill, which is based on the ECHR memorandum prepared for Parliamentary Business and Legislation Committee. We welcome the Department's proactive approach in providing us with a supplementary human rights memorandum to accompany amendments to the Bill at Commons Committee Stage. We are also grateful for the additional information provided to us by the Department in correspondence, which assisted us further in our scrutiny of the Bill.

113. The Government's detailed human rights memoranda allowed us to focus on two specific questions in our scrutiny of the Bill concerning powers to obtain and share information, and access to an appeal hearing in relation to capacity incentive payments. We wrote to the Secretary of State on 26 March 2013 requesting further information in relation to these issues.[63] We received a detailed response on 17 April 2013.[64]

Proposed use of secondary legislation in relation to information powers

114. The Bill contains broad powers to make secondary legislation allowing the Secretary of State to obtain and share information.[65] The Government's human rights memorandum said that safeguards in relation to the use of these powers would also be set out in secondary legislation.[66]

115. These powers engage the right to respect for the home and correspondence, guaranteed under Article 8 of the European Convention on Human Rights. The Government states that the aim of the information provisions is to ensure the effective implementation and operation of the schemes set up under the Bill, which are designed to protect the security and efficiency of the national energy supply. The Government states that this is in the "economic wellbeing of the country", which is a legitimate aim under Article 8(2) of the Convention.[67]

116. Our concern about these provisions related to the Government's position that suitable controls would be placed upon the use of information in secondary legislation.[68] It was therefore not possible to assess whether the powers provided for in the Bill would be proportionate and exercised in such a way which is compatible with Article 8 of the Convention. The Committee wrote to the Government to ask for further information in relation to these powers.

117. The Government's response provided a detailed analysis of each instance in the Bill where there is a power to make secondary legislation allowing the acquisition and dissemination of information (which the human rights memorandum did not do). In each instance, the Government sets out the purpose for which information may be required under the powers. The purposes are:

  • Encouraging low carbon electricity generation;
  • Providing capacity to meet the demands of consumers for the supply of electricity in the UK;
  • Facilitating participation in or promoting liquidity in the electricity market;
  • As part of a relevant licence condition (i.e. imposing obligations relating to the disclosure and publication of information as part of a licence condition); and
  • In relation to a number of energy investment schemes created by the Bill, such as the Investment Contracts scheme and the Certificate Purchase scheme.

118. The Government's response also sets out the parties that are likely to be required to provide information, which are relevant public authorities, a person who holds a relevant licence in relation to energy generation or supply, or who voluntarily enters into a relevant contract under the Bill's energy schemes (e.g. the Contracts for Difference scheme or Investment scheme). The Government further states that it is "unlikely" that information relating to individuals could be acquired and transferred using the regulations made under the Bill's information powers.[69] However, if this is the Government's intention, we consider that this could be made clear on the face of the Bill by expressly excluding information relating to individuals from the scope of the power to obtain and disclose information. We recommend that the Government provides clarification as to whether or not any of the powers contained in this Bill, or any other relevant powers, could be used to obtain information relating to individual consumers.

119. There are two instances where there is specific provision allowing regulations to make provision for the protection of confidential or sensitive information.[70] However, in relation to other information powers, the Government's response states "we would expect to incorporate safeguards in secondary legislation for the protection of confidential information".[71] However, we consider that this could be dealt on the face of the Bill in the same way as clauses 13(2)(f) and 27(2)(e).

120. We note the Government's commitment to providing safeguards in secondary legislation to regulate the acquisition and handling of information. However, we consider that where there is a need to legislate to require and share information, the Government's intentions should be set out clearly in primary legislation. We therefore recommend that the Government reconsiders whether more detailed safeguards could be included within the scope of the powers to obtain and disclose information on the face of the Bill.

Capacity incentives and the right of appeal

121. The Bill contains provisions which enable the Secretary of State to establish through secondary legislation a scheme called the "capacity market", which is designed to ensure that energy supply meets demand. The capacity market will be administered by a "systems operator", designated by the Secretary of State. The systems operator will have the power to impose financial penalties called "capacity incentives" on energy providers that fail to deliver electricity in the circumstances defined in secondary legislation.[72]

122. The power to levy financial penalties should be accompanied by safeguards such as the provision of a right of appeal, but the Bill does not contain a provision to enable an energy provider to appeal the imposition of the capacity incentive, particularly on grounds of liability or the amount to be paid. In its human rights memorandum, the Government set out its view that judicial review is a "sufficient appeal mechanism against any decision by the system operator as to whether a particular capacity provider [...] must pay a capacity incentive in a particular situation".[73] However, judicial review is a supervisory function and does not provide a full right of appeal on the merits of the decision. The Committee therefore wrote to the Government to request further information about the capacity incentives.

123. In its response, the Government sets out further details about this scheme and reiterates its view that Article 6(1) of the European Convention is not engaged in this instance. However, the Government goes on to set out its intention to make provision in secondary legislation for appeals against the decisions to impose capacity incentives.[74] The Government states that these details have not yet been finalised,[75] but such appeals might be to the Gas and Electricity Markets Authority or to another independent party.[76]

124. We welcome the Government's intention to provide for a right of appeal against a decision to impose a capacity incentive payment. However, we consider that where provisions for appeal are necessary to satisfy the right of access to an independent and impartial tribunal guaranteed by Article 6(1) ECHR, these safeguards should be expressly provided for on the face of the Bill.


59   Bill 126 EN, paras 202-205 Back

60   Memorandum on European Convention on Human Rights Compatibility for the Energy Bill 2012 Back

61   Memorandum on European Convention on Human Rights Compatibility for the Energy Bill 2012 (Supplement on new clauses added in Commons Committee) Back

62   Error! Bookmark not defined.  Back

63   Letter from the Chair, to Rt Hon Edward Davey MP, Secretary of State for Energy and Climate Change, 26 March 2013 Back

64   Letter from Rt Hon Edward Davey MP, Secretary of State for Energy and Climate Change, to the Chair, 17 April 2013 Back

65   Clauses 13(2), 27, 38(3)(c), 41 and paragraph 10 of Schedule 2 Back

66   Memorandum on European Convention on Human Rights Compatibility for the Energy Bill, paras 35 and 68 Back

67   Letter from Rt Hon Edward Davey MP, Secretary of State for Energy and Climate Change, to the Chair, 17 April 2013, p. 2; Memorandum on European Convention on Human Rights Compatibility for the Energy Bill, paras Back

68   Memorandum on European Convention on Human Rights Compatibility for the Energy Bill, paras 35 and 68 Back

69   Letter from Rt Hon Edward Davey MP, Secretary of State for Energy and Climate Change, to the Chair, 17 April 2013, p. 2 & 3 Back

70   Clauses 13(2)(f) and 27(2)(e) Back

71   Letter from Rt Hon Edward Davey MP, Secretary of State for Energy and Climate Change, to the Chair, 17 April 2013, p. 2 Back

72   Clauses 17 to 25 of the Bill, ENs para 82 Back

73   Memorandum on European Convention on Human Rights Compatibility for the Energy Bill, para 61 Back

74   Letter from Rt Hon Edward Davey MP, Secretary of State for Energy and Climate Change, to the Chair, 17 April 2013, p.5 Back

75   During the Public Bill Committee, the Minister of State for Energy and Climate Change stated that a public consultation on the capacity market regulations and industry code is due to take place in autumn 2013. PBC HC Deb, 29 January 2013, c356 Back

76   Letter from Rt Hon Edward Davey MP, Secretary of State for Energy and Climate Change, to the Chair, 17 April 2013, p.6 Back


 
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Prepared 27 June 2013