Climate Change Bill [HL]
Introduction
12. This bill was preceded by a draft bill published
last session and considered by a pre-legislative scrutiny Committee
of both Houses. The Joint Committee invited this Committee to
comment on the delegations in the draft bill and our memorandum
is both printed in their evidence volume[3]
and as Appendix 3 to this Report. The Department for Environment,
Food and Rural Affairs (DEFRA) and the Department for Transport
have prepared a memorandum for the Committee, explaining the delegated
powers in the bill as now introduced and that memorandum is printed
at Appendix 4.
13. In this Report, we first address how the
Government have responded to the issues we raised on the draft
bill and we then consider the new provision in the bill.
MATTERS RAISED ON THE DRAFT BILL BY THE DELEGATED
POWERS COMMITTEE
Alteration of carbon budgets — clause 16
of the bill
14. When considering the draft bill, we noted
that clause 13 envisaged that a carbon budget might be amended
by order more than a year after the end of the budgetary period
and we considered that no case had been made for the power to
make retrospective changes of this nature. This concern was reflected
in paragraph 77 of the Report from the Joint Committee, which
recommended that the bill be amended to prohibit alterations to
a carbon budget after the end of the budgetary period. Provision
for altering carbon budgets is now contained in clause 16 of the
present bill which, according to paragraph 76 of the departments'
memorandum, now omits the provision about which the Committees
had expressed concern. However, the omission of the provision
in question merely removes a limitation which the draft bill had
placed on retrospective amendment of a budget; it does not clearly
have the effect of prohibiting the amendment of a budget after
the end of the budgetary period. We recommend that clause 16 be
amended to make it clear that such an amendment is not permissible.
International aviation or international shipping
— clause 25
15. Under clause 15(2) of the draft bill (clause
25 of the bill) the Secretary of State had power to define by
order (subject to negative procedure) what was to be regarded
as "international aviation or international shipping"
for the purposes of the clause. This definition serves to determine
the scope of the clause as a whole and the extent of the power
to make regulations conferred by subsection (3) and is thus in
effect a Henry VIII power. We suggested that the order-making
power should (like the regulation-making powers conferred by that
clause) be subject to the affirmative procedure.
16. In relation to what is now clause 25 of the
bill, the departments state at paragraph 4(b) of their memorandum
that they "remains to be convinced" that the negative
procedure is not appropriate and emphasise (at paragraphs 127-129)
- as did we when commenting on the earlier clause - that the exercise
of the power will be constrained by public law and international
agreements. Nevertheless, the extent to which Part 1 of the bill
should apply in the case of international aviation remains a matter
of considerable controversy, and we recommend that the order-making
power at clause 25(2) should be subject to the affirmative procedure.
Carbon units and carbon accounting — clauses
21 to 23
17. Under clauses 16 and 17 of the draft bill,
the arrangements for "carbon accounting", the amounts
which could be set off against or added to the net UK emissions,
were by way of a system of "carbon credits" and "carbon
debits", provision for which was left almost entirely to
regulations. While we were persuaded that the delegation itself
was not inappropriate, we recommended that the level of scrutiny
(set by the draft bill as the negative procedure, except where
an Act was being amended) should be the affirmative procedure
on the first exercise of the powers. The Joint Committee went
further and recommended that regulations under clause 16 should
attract a super-affirmative procedure[4].
The present bill gives effect, in clause 23(2), to our recommendation
but we note that the departments' memorandum (paragraph 114) does
not mention the recommendation of the Joint Committee.
Trading schemes — Part 3
18. The provision for trading schemes (to govern
particular sectors of industry in their production or consumption
of particular materials in the course of their business) was,
in the draft bill, and remains now, the most significant range
of delegated powers conferred. We expressed concern to the Joint
Committee about the scope of the powers conferred by Part 3 of
the draft bill and the extent of the provision which could be
made under the powers conferred in Schedule 2. While acknowledging
that the delegation might itself not be inappropriate, we were
not persuaded that even the affirmative procedure would afford
an adequate level of parliamentary scrutiny of the powers, given
their scope.
SPECIFIC CONCERNS
19. In our comments on the draft bill, we expressed
concern that only the negative procedure would, by virtue of clause
31(3) of the draft bill, apply to the exercise of powers in that
Schedule to provide for intrusive enforcement arrangements; and
that it included powers to impose apparently unlimited financial
penalties, to create offences without constraint as to mode of
trial or maximum sentence, and to provide for appeals to the Secretary
of State.
20. Clause 40(3) of the bill now requires the
affirmative procedure where regulations confer new powers of enforcement,
and paragraph 30 of Schedule 2 now imposes extensive constraints
as to mode of trial and maximum penalties where offences are created.
The bill has not however addressed our concerns about provision
for civil penalties. While paragraph 187 of the memorandum suggests
that the affirmative procedure would apply to regulations increasing
all forms of penalties, clause 40(3)(f) of the bill in fact applies
only to penalties for offences. The departments have not made
out the case for the breadth of this power. We note that the provision
in paragraph 29 of Schedule 2 differs considerably from the approach
taken in the Regulatory Enforcement and Sanctions Bill and we
consider the former to be inappropriate in its complete lack of
detail.
21. Neither does the bill deal with (nor does
the memorandum mention) our comments about provision for appeals,
which under clause 40(3) could be made by regulations subject
only to the negative procedure. We recommend that the first
exercise of the powers conferred by paragraph 31 of Schedule 2
should be subject to affirmative resolution.
LEVEL OF PARLIAMENTARY SCRUTINY
22. The Joint Committee responded to our concerns
about the adequacy of parliamentary scrutiny and control over
provision for trading schemes generally by recommending that a
super-affirmative procedure should apply to the exercise of all
powers of a kind listed in clause 31(3) of the draft bill (now
clause 40(3) of this bill)[5].
The super-affirmative procedure is a two stage procedure: the
Secretary of State first lays before Parliament a proposal for
a draft order, to which either House may suggest amendments. He
then lays the draft order itself for affirmative resolution. The
draft order may or may not include any of the amendments (if any)
suggested by either House.
23. The departments' memorandum does not refer
to the Joint Committee's recommendation when dealing with the
procedural safeguards which are to apply to the exercise of powers
conferred in Schedule 2 (paragraphs 183 to 194). While referring
to our concerns about the adequacy of arrangements in the draft
bill for parliamentary control, the departments' memorandum merely
welcomes our acknowledgment of the difficulty of requiring primary
legislation for trading schemes, and summarises new requirements
for consultation before regulations may be made under Part 3 (the
additional requirement now in clause 40(1)(a)) and the obligation
within Government to produce an impact assessment before making
regulations of this nature (paragraph 183).
24. The legislative mechanism for the establishment
of trading schemes is a difficult issue. We continue to acknowledge
that the likely number and detailed content of trading schemes
makes them unsuited to primary legislation, so that some delegation
of powers for their provision is not inappropriate. But we remain
concerned at the extent of the powers, given the possible consequences
of such a scheme for economic performance in the sector to be
regulated. We consider that the right balance would be struck
if the super-affirmative procedure were required for regulations
making provision about the matters referred to in clause 40(3)(a),
(b) and (d).
25. In making this recommendation, we remind
the House that the super-affirmative procedure has its limitations:
i) unless the House sets up a specific scrutiny structure for
such a provision, the proposal for the draft instrument lies on
the Table without the House performing any specific scrutiny;
ii) whether or not scrutiny takes place, the House has no power
to amend the instrument - rather it suggests amendments to the
Minister who makes the instrument; and iii) there is no mechanism
for reconciling differences between the two Houses. If the
super-affirmative procedure is to be used effectively, it is essential
that the House sets up a mechanism to scrutinise the first-stage
proposal for the draft regulations.
26. The powers conferred in Part 3 of the bill
are now made exercisable by 'the relevant national authority'
(defined in clause 39) rather than the Secretary of State (as
in the draft bill). Clause 41 of, and Schedule 3 to, the bill
introduce new arrangements for the procedural arrangements which
are to apply in Parliament and in each of the devolved legislatures
when an instrument subject to either the affirmative or the negative
procedure is to be made by a single relevant authority or more
than one such authority, or an Order in Council is to be made
that (for instance) extends to two or more jurisdictions. We
draw this to the attention of the House so that, if the House
adopts the course recommended at paragraph 24, it can consider
what the implications might be for procedures in the devolved
legislatures.
SIGNIFICANT NEW DELEGATIONS
'Greenhouse gases' — clauses 2(1)(b), 2(2)(b)(i),
19, 20 and 64
27. Whereas the main duty to be imposed on the
Secretary of State with respect to the target for 2050 by clause
1(1) of the draft bill was by reference to a 1990 baseline defined
by reference to "UK carbon dioxide emissions", that
baseline under clause 1(2) of the Bill relates to "targeted
greenhouse gases". "Greenhouse gases" is now defined
in clause 64(1) by reference to the same list of gases as in the
draft bill, but clause 64(2) contains a power enabling the Secretary
of State to add further gases to the list by order subject to
the negative procedure. "Targeted greenhouse gases"
is defined in clause 19(1), as "carbon dioxide" or any
other greenhouse gas designated by the Secretary of State by order,
subject to the affirmative procedure.
28. Although the power conferred by clause 64(2)
is a Henry VIII power, as the departments explain in paragraphs
267 and 268 of their memorandum, the power to add another gas
to the list of greenhouse gases is constrained by subsection (3)
in that it can only be exercised where it appears to the Secretary
of State that the gas is recognised by an international or European
agreement as contributing to climate change. We therefore consider
the negative procedure to be adequate in this instance.
Waste reduction schemes — Part 5
29. Part 5 of the bill introduces entirely new
provision for schemes to provide for incentives to occupiers of
domestic premises to produce less waste and to recycle more of
what they produce (clause 51 and Schedule 5), and includes provision
requiring the piloting of such schemes in five local authority
areas (clause 52) before any decision may be taken for the purposes
of clause 54 about whether the schemes should be rolled out nationally;
and, if they are not, Part 5 is to be repealed by order (clause
54(4)).
30. The provision which may be made by a local
authority in its scheme is set out in a new Schedule 2AA inserted
into the Environmental Protection Act 1990 by Schedule 5 to the
bill. New Schedule 2AA confers powers on the Secretary of State
to amend by order the pre-conditions for a scheme, the definition
of "domestic premises" in paragraph 16(1) for the purposes
of the Schedule, and the requirement in paragraph 7(1) that charges
must not exceed the total cost of rebates and payments under the
scheme. These Henry VIII powers are rightly subject to the affirmative
procedure. There is also power (paragraph 12) for the Secretary
of State to make regulations about the determination, collection
etc. of charges in any case, which are to be subject to the negative
procedure, including power in paragraph 12(2)(b) to make modifications
of enactments. We consider that this power should be subject
to the affirmative procedure where it is used to amend an Act.
Paragraph 6(1) enables the Secretary of State to limit by order,
subject to the negative procedure, the maximum level of charge
in any financial year. In view of the controversial nature of
the schemes generally, we consider that the power at paragraph
6(1) should be subject to affirmative resolution on its first
exercise and thereafter subject to affirmative resolution if it
is exercised to increase charges other than to take account of
changes in the value of money.
31. An order under clause 54(2)(b) amending new
Schedule 2AA before national 'roll-out' attracts the affirmative
procedure, as does one which repeals Part 5 of the bill should
the Secretary of State decide not to apply the waste disposal
scheme provisions nationally. Clause 54(3) enables amendments
to Schedule 2AA to confer power on the Secretary of State to make
subordinate legislation and we consider that any such amendments
should require any such subordinate legislation to be subject
to a parliamentary procedure.
Renewable transport fuels — Schedule 6
32. Schedule 6 to the bill amends Part 2 of the
Energy Act 2004 to insert new provisions about renewable transport
fuel ("RTF") obligations, including (at paragraphs 2-4)
new powers relating to the appointment of the administrator of
the RTF scheme. These include provision about the establishment
of a body corporate to act as administrator, its constitution,
staff, expenditure and functions, and amplify and supplement existing
provision presently in section 125 of the 2004 Act (which is replaced).
Subject to one exception, the powers continue to be exercisable
in an "RTF Order" under Part 2 of that Act, which attracts
the affirmative procedure. The exception is the provision in new
section 125C for the Secretary of State to appoint a new Administrator,
whether himself, an existing body or a new body established for
the purpose. Unless the order establishes a new body corporate
(in which case it may include the same kind of provision for its
constitution etc. as could be made by an RTF Order under section
125) or it amends primary legislation, it is to be subject only
to the negative procedure. Neither the Explanatory Notes (paragraph
259) nor the memorandum (paragraphs 251-9) fully explain the circumstances
in which it is envisaged that such a change of Administrator might
be made and this concerns us, particularly because the original
appointment by order under section 125 will have been approved
by Parliament. We draw this provision to the attention of the
House as we consider that the case for an order under new section
125C to attract the negative, rather than the affirmative, procedure
has not been made out.
3 Joint Committee on the Draft Climate Change Bill
(2006-07), HL Paper 170-II, Ev182-3. Back
4
Report from the Joint Committee on the Draft Climate Change Bill
(2006-07), HL Paper 170-I, paragraph 87. Back
5
Report from the Joint Committee on the Draft Climate Change Bill
(2006-07), HL Paper 170-I, paragraph 191. Back
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