Appendix 7: Energy Bill — Government Response
Letter to the Chairman from Malcolm Wicks, Minister of State, Department for Business, Enterprise and Regulatory Reform
1. Thank you for your very helpful comments and recommendations on the delegated powers contained within the Energy Bill. My Department recognises the important work of the Committee in ensuring the appropriate balance between delegated powers and Parliamentary scrutiny in proposals for Primary Legislation.
2. I am pleased to confirm that we accept your recommendations on inspectors (clause 13) pertaining to importation and storage of combustible gas, on inspectors pertaining to carbon dioxide storage (clause 27), and on transfer of functions (clause 34) pertaining to carbon dioxide storage. My Department is planning to table amendments to implement these changes at the forthcoming Bill committee stages. The details of the amendments are set out below.
3. The Committee also recommended that we restrict the application of the power in clause 93(4) or provide further justification for its extent. We believe the power in its current form is justified and have taken the option of providing further explanation on that basis.
Clauses 13 and 27 - Inspectors
4. Clause 13 allows the Secretary of State to appoint (and make payments to) inspectors to assist him in carrying out his functions with respect to the importation and storage of combustible gas. Clause 13(3) enables the Secretary of State, by regulations subject to negative procedure, to specify the powers and duties of inspectors so appointed, as well as of other persons acting on his directions in that regard, and the facilities and assistance that they are to be accorded,
5. Clause 27 makes equivalent provision in relation to the functions of the Secretary of State with respect to the storage of carbon dioxide, and also gives corresponding powers to the Scottish Ministers (who exercise the same functions in relation to activities within Scottish territorial waters). However, in the case of the Scottish Ministers the procedure in question of course takes place before the Scottish Parliament.
6. In paragraph 6 of its report, the Committee recommended that either the delegation should be limited to conferring the powers specified in section 108 of the Environment Act 1995 or that the regulations made by the Secretary of State made under clauses 13 and 27 should be subject to affirmative procedure.
7. We are accepting the Committee's recommendation to subject the making of the regulations to affirmative procedure as we agree that, due to their open-ended nature, they would benefit from more detailed parliamentary scrutiny. The Department is content that such a power would be used infrequently, and as such, the change in procedure would not be unduly burdensome. We have chosen this option (rather than the option of restricting inspectors' powers to those specified in section 108 of the Environment Act 1995) so as to ensure that the necessary flexibility in matters concerning the marine environment and the emerging carbon dioxide storage technology is retained.
Clause 34 - Transfer of functions
8. Clause 34 enables the Secretary of State (or, in relation to their functions, the Scottish Ministers) to transfer, by order subject to negative procedure, his functions relating to the storage of carbon dioxide (with the exception of regulation or order-making functions).
9. As currently drafted, the provision does not specify the nature of the person or body to which such functions may be transferred. In paragraph 9 of its report, the Committee recommended either the Bill limits the scope of the delegation to provide only for a transfer to a public sector body or that the power should be subject to affirmative procedure.
10. We accept the Committee's recommendation to limit the power so that functions could be transferred to a public body only. The Department is content that such a limitation would not affect future policy decisions in this regard, as the transfer to a private sector body is not envisaged. Consequently, this amendment will provide regulatory clarity on the face of the Bill without necessitating further parliamentary scrutiny that the second option recommended by the Committee would have entailed.
Clause 93 - Subordinate legislation
11. Clause 93(4) provides that orders or regulations made under the Bill may make incidental, supplementary and consequential, transitional, transitory or saving provisions; and that such provision may include amending an Act of Parliament or Act of the Scottish Parliament "whenever passed or made", subject to affirmative procedure.
12. In paragraph 14 of its report, the Committee identified a concern about this power extending to amending future Acts, and recommended that the Government should either justify the extent of the power in clause 93(4) or restrict its application to Acts passed before the end of the current session.
13. It is true that the power could enable the amendments of future Acts of Parliament. However, much of what is in the Bill, for example the provisions on natural gas and carbon dioxide storage, relate to important new technologies. As such, it is particularly difficult at this stage to predict the categories of other legislation which it might be appropriate to amend as a result of the exercise of the powers in the Bill.
14. In theory, it might be possible to address the interaction of future primary legislation with the Energy Bill powers at the time of the passage the future legislation itself. However, because of the pace of change in energy technologies and the energy market as a whole, it would be difficult to ensure that the relevant provisions in future Bills which interacted with the Energy Bill powers were accurately identified and the necessary action taken to ensure compatibility. It would not be possible to know this with any degree of certainty until the time at which the Energy Bill powers come to be exercised. This may well be too late.
15. The challenges of climate change and ensuring secure supplies of energy, which the Energy Bill will help to address, are urgent. It is therefore important that consequential changes to legislation which has a bearing on provisions in this Bill are made quickly. Restricting the power under clause 93(4) may delay changes to future legislation, and frustrate the operation of the regimes proposed in the Energy Bill. As such, it would reduce the speed with which the Secretary of State can respond to the changing energy market.
16. In these circumstances, the Department feels that the flexibility provided by the power in clause 93(4), bearing in mind the affirmative procedure, which would provide Parliamentary scrutiny of the exercise of such a power, and the fact that the power may only be exercised for relatively limited purposes, is justified. As the Committee itself noted in its report, there are other precedents in legislation, which I believe reflect similar concerns elsewhere in Government, to our own as outlined in this letter.
17. I hope the Committee is satisfied with the explanation provided and the proposed amendments.
June 2008
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