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Baroness Byford: Perhaps it would help the Government if we said that we would not accept the amendments, so that they could get it right by Report. That would fit well with what my noble friend said.

Lord Whitty: That would be to confuse ourselves further. There may be infelicities in the drafting now

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but, if we can put them right before the next stage, we could see what the schedule would look like as amended both by the original Bill and the drafting amendments. If we did what the noble Baroness, Lady Byford, suggests, and did not adopt the amendments until then, we would need yet another version of the schedule between Report and Third Reading.

The noble Baroness, Lady Carnegy, is undoubtedly right that it is difficult to interpret. Without committing my colleagues to not producing equally complicated cross-references between different Acts, if we can do so for this Bill, that will be incorporated in the next reprint of the Explanatory Notes, if that would be helpful to the Committee. Without wanting to be churlish, it would be better to adopt the amendments so that any misdrafting can be corrected before the next stage.

Baroness Miller of Hendon: I thank the Minister and my noble friend Lady Carnegy for her comments. It is terrible when we receive letters with "Defra" written across the top and know that something else is coming and they say, "These are all simple drafting amendments". However simple they are, we must quickly look through them in case we are told off because they were not quite so simple or involved more than drafting amendments.

Normally, it is easy for me because I have a lawyer on tap at home and pass it on, saying, "What do you think about this?". I must tell the Committee that he took great exception to looking at this. I was interfering with social events when he wanted to watch various programmes on the television. The document is 10 pages long and refers non-stop to other documents. He pointed out to me that if I really wanted him to give a legal opinion, I would have to pay for it. I did not think that the Government would take that on board.

It is important that we try to make things simple. This is not the first time that this has happened; we get it all the time. Schedules always refer to this, that and the other provision and one must be a knowledgeable lawyer to cope with what is being said.

Lord Roper: I am grateful for what the Minister said, but I feel that the points raised by the noble Baroness, Lady Carnegy, are worthy of greater consideration. Will the Minister give me an assurance that paragraph 312 of the Explanatory Notes, which refers to Schedule 20 at the moment and is rather brief, will be reprinted in extenso incorporating effectively Schedule B1 to the Insolvency Act 1986, as amended by this legislation? If that were the case, and if it were possible to do that by Report, it would clarify the issue and be helpful. I would be grateful if the Minister could give me such an assurance.

Lord Whitty: That is the intention. Clearly, it would probably be produced as an annex and would refer to that paragraph rather than disturbing the literary flow of the Explanatory Notes. That would be our intention, and we could obviously provide it to noble

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Lords in draft in advance of the next stage. The issue before us tonight is whether that incorporates the amendments. It would be clearer if it did.

On Question, amendment agreed to.

Lord Whitty moved Amendments Nos. 127C to 127G:

    Page 220, line 2, leave out "sub-paragraph (6) of that paragraph" and insert "that sub-paragraph"

    Page 222, line 28, at end insert—

"( ) In paragraph 101(3) (joint administrators), after "87 to" insert "91, 98 and"." Page 222, line 29, leave out "for sub-paragraph (2)(a)" and insert "in sub-paragraph (2)—

(a) omit the words from the beginning to "order";
(b) for paragraph (a)" Page 222, line 33, leave out "sub-paragraph (2) of that paragraph" and insert "that sub-paragraph"

    Page 225, line 12, leave out "of the company"

On Question, amendments agreed to.

Schedule 20, as amended, agreed to.

Schedule 21 agreed to.

Clauses 132 to 139 agreed to.

Clause 140 [Modifications of particular or standard conditions]:

Lord Jenkin of Roding moved Amendment No. 128:

    Page 107, line 25, leave out "appropriate" and insert "necessary"

The noble Lord said: In moving the amendment, one can be fairly brief as it speaks for itself. The question is whether, under Clause 140(1), the Secretary of State should be able to make modifications to the,

    "conditions of a gas or electricity licence held by a particular person",

simply if he considers it appropriate. I hope that someone will be able to explain that that means by any person holding any licence, and not only the company that may have had to have an administrator appointed. That seems a wholly subjective test. If we substitute "necessary", as I suggest in the amendment, clearly that would be justiciable. If not, one would have to prove bad faith in order to resist having one's licence amended under the clause. That is the effect of "appropriate". With "necessary", it is clearly open to parties to argue whether a particular licence change affecting any person holding a gas or electricity licence was necessary in the light of the energy administration.

I strongly argue that, because a very wide number of licence holders could be affected—perhaps all the licence holders who supply or draw electricity from the company that has gone into administration—the measure ought to be subject to a fairly clear justiciable test. "Necessary" does that and "appropriate" does not.

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The Government would be wise to accept Amendment No. 129, regardless of whether they agree with Amendment No. 128. To the words in subsection (5):

    "The Secretary of State must publish every modification made by him under this section",

I would add,

    "and shall include a statement of the reasons why he considers each such modification to be necessary".

I am sure that he could do that in a letter. If he is to hold this stringent power with considerable consequences for many licence holders, then when he publishes a statement of what he has done in the modification, the statute should require him to set out the reasons why. I beg to move.

7 p.m.

Lord Triesman: As the noble Lord, Lord Jenkin, has made clear, Amendment No. 128 would reduce the discretion of the Secretary of State to make modifications to licence conditions. I hope that noble Lords will not mind my saying that the proposed change from "appropriate" to "necessary" revisits some of the issues on discretion. I shall not go through all the arguments that we have rehearsed throughout our debates; I shall deal with the amendment. Rather than allow the Secretary of State to make modifications where "appropriate", it is proposed to allow her to do so only where she considers it "necessary".

I understand the concern and I have been attentive to the arguments made in its support at other points in our discussion of the Bill. There is concern that the power should not be overused. Although the term,

    "Where the Secretary of State considers it appropriate",

may sound too loose for the noble Lord, Lord Jenkin, it is none the less standard legal terminology with a considerable number of precedents. In saying that, I am fully aware that Members of the Opposition have objected to the fact that the number of precedents has been growing. Indeed, that is part of their objection. However, the fact is that that is how legal terminology is now constructed. Furthermore, the powers exercisable by the Secretary of State to make those modifications would be construed in accordance with administrative law. The modifications made would need to be reasonable and for the purposes of this particular provision, not wider.

It may assist Members of the Committee if I point out that we intend to use this power to make such modifications as are required to secure the recovery of costs of energy administration. That is its purpose. We do not at present envisage any wider exercise of the power. I should add that in consideration of that, we have had no adverse representations from the industry about the provision as stated and with those purposes in mind.

I hope that I have it right that the noble Lord, Lord Jenkin, asked about "discussion with any person". That may well be a wide requirement, but plainly the Secretary of State will need to make a judgment about who should be consulted in such circumstances.

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Amendment No. 129 would require the Secretary of State to make a statement outlining the reasons for making a licence modification. In effect it is an appeal for transparency and is one of a number of such appeals that have been made. I understand the point and I take note that it has been urged throughout.

However, we believe that the amendment is unnecessary because there is an existing duty on the Secretary of State to give reasons for modifications to the conditions of a licence. Section 49A of the Electricity Act 1989 and Section 38A of the Gas Act 1986 require the Secretary of State to publish reasons as soon as reasonably practicable after modifying the conditions of a licence. That will include modifying the standard conditions. So that is an obligation currently in legislation.

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