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Lord Gray of Contin: I am grateful to the Minister for that full explanation of both amendments. We will study carefully what he said but, in the mean time, I seek leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 118E not moved.]

Clause 111 agreed to.

Clause 112 agreed to.

[Amendment No. 119 not moved.]

Clause 113 agreed to.

Schedule 18 [Property arrangements schemes]:

5.45 p.m.

Lord Gray of Contin moved Amendment No. 119A:


The noble Lord said: Again, these are essentially short-term measures. Schedule 18 itself is essentially short-term, in that there is only a three-month window in which to apply for a property arrangement scheme. However, the start of that window is not specified, in that the clause that refers to the schedule—Clause 113—comes into force on such a day as the Secretary of State may by order appoint. It is at least theoretically possible that there may be a great deal of time available to ponder, design and produce all manner of property arrangement schemes.

The schedule makes clear that an element of compulsion may be involved. In those circumstances, I am concerned to know what property rights or liabilities would be liable to be transferred—especially those which would not otherwise be capable of being transferred. Does the use of the word "transfer" mean

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that money, as in buying and selling or compensation, will not be involved? Will the Minister give examples of possible property arrangement schemes, highlighting the circumstances in which they might be appropriate and including an instance of transfer that would not otherwise be possible?

Amendment No. 119B would, after "shall", insert, "within three calendar months". Under the provisions of the schedule, the application for a property arrangement must be made in a given period of three months. There are 21 days' grace between the making of the scheme and its implementation. Seven days are allowed for applying for review of a GEMA decision, and there is a further seven days in which someone who has applied for review may apply for an interim arrangement.

It seems unreasonable that no limit is set on the time GEMA takes to determine an application. How long would GEMA normally be allowed? Do the Government expect any sort of a backlog to arise because of the three-month window for making applications? Would GEMA recruit extra temporary staff to deal with any such backlog? If so, which departments or organisations would be approached for help?

I hope the Minister will be able to reply to these amendments as fully as he replied to the first set I put to him. We shall wait and see. I beg to move.

Lord Whitty: I am not sure that I can give detailed replies with the same level of erudition as my noble friend Lord Triesman. In essence, the issue is straightforward. I understand why anxieties are raised; we are talking about transfer of property and, as the noble Lord said, there could be an element of compulsion involved without the agreement of a third party. I emphasise that that would be used as a last resort and that there is provision for compensation, but the provision is vital. If it were removed, that could be detrimental to the introduction of BETTA.

To answer the questions asked by the noble Lord, Lord Gray, about what kind of property we are talking about, for the most part, we are almost certainly discussing property such as leases, licences of intellectual property, contractual rights and so forth, rather than cash. Nevertheless, that is property and the provision could involve compulsory purchase of property.

Obviously, in the first instance, we would hope that all parties concerned—the transmission asset owners, the transmission system operator and so on—would be able to agree on how the new system will operate and how the parties will interact and arrange their affairs. But that may not occur. It will be necessary to use the property arrangement scheme only if agreement cannot be reached and if that would result in BETTA failing or being undermined.

In order for that provision to be used, an application to use the property arrangement scheme would, as the noble Lord said, have to be made within three months of BETTA's introduction. Were the provision not

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there, we would be in danger of allowing the BETTA system not to operate in practice. On the procedures, I understand that GEMA intends to publish the procedures that it intends to follow when the Act is in force.

On the second amendment and the question of a timetable, it is important that we allow time for all the parties' interests to be fully considered. That requires some flexibility. Some of the matters on which the authority may have to decide may be straightforward—a simple assignment of a single software licence, for example, where the main licence could not otherwise be assigned. But other issues may be much more complicated.

Whatever the application, it is incumbent on the authority to consider whether the proposal is necessary or expedient for the implementation of BETTA, as well as deciding what arrangements to impose. In that context, it is important that all affected licensees' and third parties' interests must be considered. The authority needs to act as rapidly and as expeditiously as possible, but it will be operating in a system in which its decisions can be challenged under administrative law.

That cuts both ways. On the one hand, if it fails to take all those issues into consideration, it can be challenged. On the other hand, if it takes too long about it and there is detriment as a result of the delay, it could also be challenged. So it is not easy to define a fixed period or even a normal period in the sense in which the noble Lord, Lord Gray, asked me to do.

We do not expect a backlog. We hope and expect that in almost all instances, the parties will reach agreement without resorting to that last resort provision. The staffing issues will therefore probably not arise. In any case, they will be an administrative matter for GEMA rather than for the Ministry, so I cannot answer that question. We do not anticipate that that will lead to any serious pressure on staffing.

However, if we removed the provision or imposed a timescale that would prevent the authority from carrying out its duties, that could in certain circumstances lead to delay in BETTA's introduction or compromise the ability to implement BETTA at all. The deletion proposed by the first amendment would clearly lead to that consequence. Were we to place too tight a timescale on the authority, the same problem could arise. We must ensure that the process is pursued, taking into account the interests of all parties concerned. It would be unhelpful to those parties were a tight timescale to be imposed on them in all cases.

Baroness Byford: Before my noble friend replies, as my name is linked with the amendment, perhaps I could ask a couple of questions. The Minister said clearly that the provision would be enacted only if agreement were not reached. That is the second amendment on which a Minister has said "only if". Would it not make more sense to include those words? At present, as my noble friend clearly spelt out, the provision is open-ended.

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The Minister went on to say that there would be guidelines about the length of time, that the response would be as rapid as possible or that a normal period would be used. Other Members of the Committee may know, but I should be grateful if he would tell me whether there is a recognised normal period. He said that it may be possible to respond in three months. I know that this is a DTI Bill rather than a Defra Bill, but the Minister will be well aware that I am still concerned that, for example, payments due from the foot and mouth outbreak have still not been completed two years later.

We all want to get the system up and running, but what do the Government anticipate that a normal period may be? Earlier, we were referred to the Utilities Act. We raised similar concerns before it was passed. Is there anything in that Act to help my noble friend by giving him some idea of the sort of period anticipated?

If there is a major challenge that may go to the courts, that will obviously take some time, but at present, reading the provision to which the amendments refer, it seems open-ended. It could take a considerable time, but no guidelines have been given. In his response, the Minister did not define the period at all; he gave us only a generality. Is there any provision in previous Acts that would help my noble friend and me to be more satisfied about the Bill's wording?

Lord Gray of Contin: I am grateful to my noble friend for that intervention and I entirely agree with her. I take the points made by the Minister, but I still believe that deadlines are not a bad thing for concentrating the mind. I only suggested three months to see what would be the Government's reaction. If they could argue a case for six months, we would listen.

The Minister said that they do not expect delays. Surely in legislation we should provide for the unexpected as well as the expected. Delays could have a serious effect. As a safeguard I would like a time limit to be imposed, but I shall listen to the Minister's further remarks on that. In any case, we will certainly consider carefully what he has already said, but we may want to return to the matter on Report.

Lord Whitty: In response to the point about last resort, the process is triggered not by the regulator but if a transmission licensee applies. In other words, it can effectively be used only if no agreement is reached. So it is not a question of the regulator becoming irritated and deciding on the last resort; someone must decide that they cannot agree with the other parties. In that sense, it does not need to be spelt out that it is a last resort; it is a last resort because negotiations must have broken down before it can operate. That is not at the regulator's discretion.

I understand what was said about the timescale, but we do not know how complex the issues that arise will be. GEMA may set out an idea about timescales in its procedures, but it would be unwise to lay down a statutory limitation at this point. The assurance that parties to such agreements will have is that if the authorities delay unreasonably they are challengeable

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in law. Equally, they would be challengeable if the opposite were to take place and by hurrying it through they ignored or did not take into account the interests of one of the parties.

Although I understand why people may want some reassurance, it would be unwise to put that in statute. There may be something in the guidance that the regulators themselves may issue, but at this stage I would resist the building into the Bill of a statutory timetable. There are not many areas where in similar circumstances involving potentially complex negotiations the regulator is under a specific timetable to resolve matters.

6 p.m.

Lord Gray of Contin: I thank the Minister for that explanation. We shall give the issue a little more thought. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 119B not moved.]

[Amendment No. 119C had been withdrawn from the Marshalled List.]


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