Select Committee on Delegated Powers and Regulatory Reform Twelfth Report



Memorandum by the Department of Trade and Industry

This memorandum is concerned with delegated powers within the Electricity (Miscellaneous Provisions) Bill.

The principle aim of the Bill is to facilitate the Government's response to the financial difficulties of the nuclear generating company, British Energy (meaning the British energy group of companies, including British Energy plc and its various subsidiaries). It allows the Government to play its part in the solvent restructuring plan put forward by the company, or to acquire the nuclear business if the plan fails and the company goes into administration.

Clause 2 contains the only delegated power in the Bill. This is a power to repeal Part 2 of the Electricity Act 1989. This Part of the 1989 Act was concerned with the reorganisation of the then publicly-owned electricity industry and its subsequent sale to the private sector. As such it contains a large number of provisions for transferring assets from the old bodies to the new companies, provisions to abolish the old bodies, provisions to finance the successor companies while they remained in the public sector, and ultimately provisions to sell the shares in those successor companies into the private sector. As such the majority of those provisions are now considered redundant and long since spent.

Two of those provisions in that Part - sections 72 and 74 - are still active and act as a block on the purchase of shares in certain privatised electricity companies. Clause 2(1) of the Bill directly repeals those two sections of the 1989 Act.

Clause 2(2) gives a delegated power for the Secretary of State to repeal the rest of Part 2 of the 1989 Act. This is in part to ensure that there are no unforeseen interactions between the remainder of Part 2 and the repeal of sections 72 and 74. A further motivation is the question of good legislative housekeeping - removing provisions that are no longer are needed.

The reason for a distinction being drawn between the treatment of sections 72 and 74 of the 1989 Act and the remainder of Part 2 is a simple matter of timing. The Bill is being taken forward quickly in response to the problems with British Energy. On that timetable, the only clear need for rapid repeal is in relation to sections 72 and 74 and this is dealt with in clause 2(1). The repeal of the rest of Part 2 can proceed on a slower timetablewhich will enable a thorough check of each provision in Part 2 ,in discussion with relevant stakeholders in the electricity industry, to check whether any element of it is still "live" in the sense that it continues by being in force to impact upon any participant in the industry and, if so, whether it should remain.

Clause 2(3) allows for consequential, transitional or saving provisions. This might be used:

(iv)  to delete cross references in both the Electricity Act and other enactments to provisions that are being repealed; and

(v)  in the unlikely event that any provision does still have a continuing effect, to provide for any necessary period of transition to facilitate the smooth repeal of that provision or to preserve the effects of a particular provision in certain specific circumstances or instances.

Clause 2(4) specifies that the power to make an order under clause 2(2) is exercisable by statutory instrument and subject to annulment by a resolution of either House of Parliament. The negative resolution procedure is considered appropriate in this instance given the limited and specific use which it is envisaged will be made of these powers, ie the repeal of spent provisions and the removal of statutory cross-references to these.

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