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Lord Davies of Oldham: The noble Baroness is right; not all details with regard to BETTA have been completely worked through. It is a tight timetable to meet the objectives by Royal Assent. What has occurred is that the DTI and Ofgem have worked to ensure that documents describing the details of the BETTA project are in the public domain while the Bill is being discussed. So far, 35 such documents have been published.

All the main planks of the BETTA project framework have been established and, for the most part, only details remain. However, a few issues of significance remain. The DTI and Ofgem expect to resolve those in the coming weeks. The detailed implementation arrangements will be resolved only during the final phase of BETTA. It is for that reason that the Bill seeks enabling powers rather than detailed provisions. I recognise the justifiable anxiety of the Opposition and the accuracy with which they identify the fact that some details have not been worked through, which is why we need powers in such terms.

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However, I hope that it will be recognised that the area is very complex and that work is ongoing. That is why we are not able to accept Amendment No. 118.

Lord Jenkin of Roding: I may have misheard the Minister, but I got the impression that, when he drew the distinction between licence holders and other parties who were not licence holders, he used a phrase along the lines of "proceeding by agreement". If the Government's intention in making changes to the codes and licences to which the schedule refers is to proceed by agreement—there is provision for consultation, but that is not the same thing—many of our anxieties would withdraw. However, if I misheard that, it would be quite appropriate to ask the Minister to make it clear that the Government might have to overrule some of the parties not prepared to agree.

Lord Davies of Oldham: It will be recognised that we hope to achieve agreement of the parties concerned for BETTA, in all aspects of it. The noble Lord will recognise that the broad structural framework has been achieved against a background of extensive consultation and agreement, but there are one or two outstanding points. There are also matters of detail on which the amendment would make it extremely difficult for us to achieve the objective of establishing BETTA within the time frame that we have. Of course we recognise that we cannot implement BETTA without the main structural positions being agreed with the parties, and that is the basis on which we are working.

Baroness Miller of Hendon: I would like to come back on one point. There are so many in the group that, if I waited until the end and we had gone through various other matters, it would be terribly confusing for us as well as for the Minister. As he knows, I always try to help him when at all possible.

I see that the Secretary of State obviously needs some power to vary agreements and codes. However, my noble friend tabled an amendment to remove paragraph 2, which is headed:


    "Consequential amendment of related codes and agreements".

The amendments are not merely consequential—let us say that straight out. We are talking about a major power that drastically affects the commercial interests of the licensee. That is a very serious matter.

Paragraph 2 states:


    "The Secretary of State may include in a scheme under paragraph 1 provision amending a code or agreement relevant to the conditions of an existing transmission licence if it appears to him desirable to do so in consequence of anything for which the scheme makes provision".

I emphasise,


    "if it appears to him desirable to do so".

We do not agree; we think that that wording is far too wide and allows the Secretary of State to do anything on a very important matter.

If the Minister is now saying that there will be some kind of agreement, we will not press the relevant amendment. We could not do so in any case, as this is

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Grand Committee. However, it is important that we know in detail what the Minister means by the words about which my noble friend asked him. As it stands, the provision is not appropriate to be left in, and nor is it consequential. We are slipping into giving the Secretary of State quite wide powers. We do not think that whether he believes that it is "desirable to do so" is the appropriate way to move forward, particularly when the Minister is talking about transparency. How transparent is the provision if it is merely based on what the Secretary of State thinks desirable at the time?

Lord Davies of Oldham: I have to give a fairly general answer to the noble Baroness, who is obviously not entirely satisfied with my answer thus far. I am seeking to establish that the licensing scheme is the means by which existing transmission licences are changed to licences to participate in transmission. It is also used to incorporate new standard conditions for transmission. Amendment of a code or agreement under paragraph 2 is limited by the nature of the licensing scheme. The Secretary of State may exercise the power only if that is helpful to the scheme. I hope that I am allaying the noble Baroness's anxiety. The power is not an eccentric one for the Secretary of State, but is restricted very much to being helpful to the licensing scheme and is within that framework.

I recognise that "desirable" is a softer test than that used to change licence conditions in Clauses 106 and 109, which require the change to be "necessary or expedient". We had aspects of that debate a little earlier. However, the power is to be used to amend agreements that have been entered into by non-licence holders such as traders. It is intended to be wide enough to ensure that such persons are not able to delay the BETTA timetable. I put it to Members of the Committee that that is a reasonable position for the Government to take with regard to a tight timetable. The power is restricted to a very limited area.

On that basis, I hope that the noble Baroness will consider withdrawing the amendment, although I recognise that I have not thus far addressed several other amendments. I agree with her that it has been necessary for the clarity of our proceedings to get the issues clear on amendments about which there are some difficulties.

On Amendment No. 118A, I reiterate the case that I made a little earlier. It is not impossible that errors could be made in the transmission licensing scheme. Therefore, a power to modify the scheme including retrospective modification is necessary. An error in the term of a licence would be capable of amendment only if a power were provided to amend the scheme itself. For example, one cannot amend the term of the licence by exercising the power to modify licence conditions.

I recognise that the subject is difficult. One example of when the provision might be used is where we use the licensing system to amend the term of an existing licence to set out where that licensee can operate. For example, let us say that an error was made in the scheme and NGC was licensed to operate in England only, whereas currently it operates in England and

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Wales. We would wish for NGC to continue to undertake its activities in England and Wales, and a modification to correct the error in the licensing scheme would need to be capable of having retrospective effect. I recognise what has been said on that subject. We would need a retrospective effect to ensure that NGC was not found to have committed a criminal offence while it continued to undertake its activities in England and Wales.

I want to stress how seriously the Government take retrospective modifications. I recognise the proper anxiety about them.

Lord Tombs: Can I make an observation that might help the Minister? Amendment No. 118 is extremely modest. It does not challenge the point to which the Minister is replying. It simply seeks to delete words in paragraph 2 that are already included in paragraph 1.

Lord Davies of Oldham: I am grateful to the noble Lord. However, as the subject has been raised, I was seeking to allay anxieties about aspects of retrospective consideration in the schedule. Concern has been expressed, so I seek to identify how narrow the definition is, but how essential it is in the circumstances in which we are placed.

We have had debates that cover Amendments Nos. 117A, 118B and 118C on previous occasions in Committee—certainly one occasion is very vivid in my mind, given the contributions of a number of noble Lords—as we have talked about the costs incurred by Scottish generators following the introduction of BETTA. The GB system operator has been charged with developing a GB charging methodology that is cost-reflective and non-discriminatory. That means that generators whose connection to the system imposes the greatest cost will pay the highest charges.

As generators in Scotland and the north of England are located furthest from centres of demand, they will face the highest charges. However, as we discussed previously, the Government intend to take measures to mitigate the impact on renewables. At the same time, it should be recognised that Scottish generators will no longer have to pay any inter-connector charges or a separate charge for access to the England and Wales market. It would not be fair for Scottish generators to receive the benefits of BETTA on day one, but, as the Opposition argue for, to receive transitional relief from the costs of BETTA. As I emphasised in the previous debate on the issue—I was not greeted with overwhelming enthusiasm from the Opposition—our analysis of the costs and benefits ended up in a fairly neutral position so far as Scottish generators were concerned.

5.15 p.m.

Lord Gray of Contin: I hate to spoil the Minister's speech, but I shall write to him within the next day or two to point out that the information that he gave in reply to the amendment that I moved a week last

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Thursday, to which he again referred just now, is not as accurate as he might believe it to be. However, I shall not spoil the rest of the evening for him.


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