In addition, smaller energy companies would be most likely to shoulder the burden of the increased costs of insurance premiums that could arise from these amendments, as companies seek to cover their liability for events prior to the enactment of the Bill. My noble friend Lord Deben touched on some of these concerns more generally when we debated an earlier group of amendments. The combination of these factors may push up costs for energy consumers, impacting the very people we seek to protect. The potential unintended consequences of these measures mean that, while I am entirely sympathetic to the intentions behind the amendments, it could be counterproductive to accept them. For those reasons, I hope that at this stage the noble Lord will feel able to withdraw his amendment.

Lord Whitty: My Lords, I am afraid that I do not accept those arguments at all. New entrants will not be affected. If they are not operating in the market at the moment, they will be operating under the very process that is prescribed in the Bill. There is therefore no uncertainty for them. Furthermore, the only retrospection will be in how compensation is delivered. Any breach will have been under a contract or licence that already existed at the time that the breach occurred. Any breach of consumer law would have been a breach of the law at the time, and therefore susceptible to a court case brought by one or more consumers at that point. This is not retrospective legislation. It is simply tying up the delivery of existing legislation and existing licensing conditions.

If the Government continue to resist this, they will need better arguments. There is no retrospection in the sense that the noble Lord, Lord Deben, talked about earlier. He perhaps had a point. This simply concerns consumers who are currently under investigation. We also have to bear in mind, when talking about the detriment to consumers, that some of them might have started a court case had it not been for the fact that they knew that Ofgem was beginning to investigate the situation and that they might be precluded from bringing such a case.

The idea that resisting the amendment is in the interests of consumers, or that it should be resisted because it implies a breach of the principle—which I fully support—of not legislating retrospectively, is wrong. I hope that the Government will look at this again before Report. At this point, I beg leave to withdraw the amendment.

Amendment 51ZEA withdrawn.

Amendment 51ZEB

Moved by Lord Whitty

51ZEB: Schedule 14, page 204, line 44, at end insert “unless one or more consumers have suffered loss or damage greater than this value”

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Lord Whitty: My Lords, this is a straightforward question. The size of any compensation is limited to 10% of the company’s turnover, which is a fair amount. For some of these companies, it would be about £1 billion, which is a fair whack of compensation. Therefore, the possibility of awarding that compensation to an individual consumer would arise very rarely. However, it is of course possible that a serious breach of an industrial contract could lead to a loss to an operator of that order. My principal point here is that, in most sector regulations, a 10% limit applies to the fine that the regulator can impose. It is a reasonable limit on the enforcement and sanctioning powers of a public body. If Ofwat, Ofcom and Ofgem have the ability to impose fines of this order, the 10% limit is not unreasonable, but it is irrelevant to any potential compensation. The Minister may say this will never arise, and he may well be right, but in principle, if you have suffered detriment, should there be a limit on the degree to which you can seek redress for that detriment? That is the principle I am trying to establish. I beg to move.

5.30 pm

Lord Gardiner of Kimble: My Lords, Amendments 51ZEB and 51ZEC, 51ZFB and 51ZFC are designed to amend Schedule 14 and permit unlimited liability for energy companies by seeking to ensure that the amount of compensation that can be required through a consumer redress order is not limited. I am aware that these amendments were debated both in Committee and on Report in the other place.

Our aim in drafting the powers in the Bill has been to ensure that the overall interests of the consumer are put first. With this in mind, we have sought to achieve a balance between the need for consumers to get speedy access to the redress they are due and an appeal process which is proportionate to the potential liability faced by energy companies and which does not present a barrier to entry for the small suppliers that we need to ensure a healthy competitive market.

In response to previous amendments, I mentioned that consumers can obtain redress through the courts under existing arrangements. However, the legal process is lengthy and does not offer a typically quick remedy for consumers who have lost out. This is largely because the legal process is necessarily equal to the potential sums at stake, where compensation is unlimited. Schedule 14 sets out powers which contain appeal mechanisms that are proportionate to the potential penalty. These are also limited to 10% of an energy company’s annual turnover and offer a relatively straightforward resolution of cases.

Accepting amendments to remove the cap could deny consumers timely compensation, as they would require us to make changes to the appeal mechanism, which could result in a more lengthy resolution of cases. Given how unlikely it is that consumers would lose out on a scale that went beyond the level of the 10% cap, we do not consider such a change is justifiable. As the noble Lord, Lord Whitty, has mentioned, for the very largest domestic energy suppliers to exceed a cap of 10% of annual turnover would mean penalties and compensation of over £1 billion. This contrasts

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with the largest penalty imposed by Ofgem to date of £15 million. We therefore believe that the proposed cap on redress is unlikely to hamper Ofgem’s ability to impose appropriate redress orders.

As I have mentioned in relation to previous amendments, removing the cap on liability could also have adverse impacts on smaller energy companies and, in turn, on consumer bills, due to the increased cost of capital and insurance premiums for energy companies. I assure your Lordships that the approach set out in the Bill does not let companies off the hook. The combined 10% cap on penalties and redress will apply to each separate regulatory breach, so that any company breaking the rules on a number of occasions will face correspondingly larger payouts. For the reasons I have set out, I hope the noble Lord feels able to withdraw his amendment.

Lord Whitty: My Lords, I thank the Minister particularly for that last point, because it indicates that it would not apply to a single breach—a single act of mis-selling or whatever—that applied to a large number of people. I am grateful for his explanation but I still think there is a difference between a limit on the ability of the regulator to impose a fine and a limit on compensation. However, although I am not in favour of a limit on compensation, he is right to say it is pretty unlikely to be applied and therefore it is not an issue to which I intend to return. I beg to withdraw.

Amendment 51ZEB withdrawn.

Amendments 51ZEC to 51ZFC not moved.

Schedule 14 agreed.

Amendment 51ZG not moved.

Amendment 51A

Moved by Baroness Verma

51A: Before Clause 133, insert the following new Clause—

“Feed-in tariffs: increase in maximum capacity of plant

In section 41 of the Energy Act 2008 (power to amend licence conditions etc: feed-in tariffs), in subsection (4), in the definition of “specified maximum capacity” for “5” substitute “10”.”

Baroness Verma: My Lords, in moving Amendment 51A I will also speak to Amendment 57; I hope that noble Lords will welcome them. The issue of increasing the scale of the feed-in tariff scheme was debated in Committee and on Report in the other place. It has also been raised by a number of noble Lords, both at Second Reading and outside the Chamber, including my noble friends Lady Maddock, Lord Teverson and Lord Stephen, as well as the noble Baroness, Lady Worthington, the noble Lords, Lord Whitty and Lord Cameron, and the right reverend Prelate the Bishop of London.

Having carefully considered the options, the Government agree that there would be a benefit to a limited extension of the feed-in tariff scheme. We intend to limit this support to community energy

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projects only. For developers of commercial projects larger than 5 megawatts, we continue to believe that larger projects are best supported through market-based incentives such as the renewables obligation and, shortly, contracts for difference as part of the electricity market reform process. This approach also offers the best value for money to the taxpayer.

Since the start of the FITs scheme three years ago, many communities have installed solar panels, wind turbines or hydro schemes. However, until now, they have been limited to a maximum capacity of 5 megawatts. We have listened to the compelling arguments of Co-operatives UK and others, and are convinced that the certainty of the feed-in tariffs scheme is a more appropriate way of helping community groups to deliver locally generated energy at scale and at the heart of their communities. We want to see communities up and down the country raising their ambition, and consider community-owned wind and solar schemes the most likely to benefit from this change. We hope that these amendments pave the way to support this greater ambition for community energy.

Amendment 57 is a procedural requirement which explains when this enabling power to amend the feed-in tariff scheme should come into effect. We will consult on how we intend to enable this change in secondary legalisation following Royal Assent. The current FITs scheme includes a definition of “community” which will form the basis of our consultation. We know that many will want to apply for this new support. However, we want to ensure that only genuine community energy schemes are permitted to benefit, so it is important that we create robust legislation which provides confidence to the public that subsidies are being delivered only to the intended recipients.

Taken together, these two amendments will drive a step change in the deployment of community energy. I hope your Lordships will support these amendments. I beg to move.

Lord Roper: My Lords, can I be the first to welcome the amendment? Those of us who have read the debates that took place in the other place in Committee and on Report are certainly very pleased that the move to assist communities to produce 10 rather than 5 megawatts has been agreed to. It will, however, be rather important that we watch carefully the secondary legislation which will define what is a “community activity”. Quite clearly, if it were to move into the commercial area, the increase to 10 megawatts would be resented by those who generate a little more than 10 megawatts. As it has been defined by the Minister today, however, it is an important step forward and will help a lot of micro-microgeneration in communities.

Lord Grantchester: My Lords, this is an important government amendment and we welcome the group, which replicates amendments tabled by Labour in Committee in the other place to increase the feed-in tariffs to at least 10 megawatts. This comes as a welcome acknowledgment of the gap that exists in the Bill on community energy. I also pay tribute to the personal enthusiasm of the Minister of State in the other place, Mr Greg Barker, both for these schemes and for the

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work that he has done since the debate in order to secure the amendment. We welcome the progress the Government have made in this respect.

On Report in the other place, we pushed the Government to introduce a minimum threshold for the fixed feed-in tariff of 10 megawatts. The Community Energy Coalition of NGOs, including the Centre for Sustainable Energy, the Forum for the Future, the National Trust, the Low Carbon Communities Network, Co-operatives UK and many more have called for the threshold to be raised even higher to 20 megawatts to allow community energy schemes a guaranteed income and enable them to participate effectively in the energy market in the future.

Already in the UK a number of community energy schemes exceed 5 megawatts, such as Westmill Wind Farm Co-operative in Oxfordshire of 6.5 megawatts, the Lochcarnan Community Wind Farm on South Uist of 7 megawatts and the Neilston Community Wind Farm near Glasgow of 10 megawatts. Community schemes are not necessarily small. The mid-size market can attract the participation of the wider population in renewable energy and the attainment of our 2020 targets. These schemes should also be given the signal that there is support to develop further.

The Energy and Climate Change Committee has argued that medium-sized projects of up to 50 megawatts are disadvantaged because they cannot access the feed-in tariff, yet often lack the financial capability to deal with the complexities of the renewables obligation and, in the future, contracts for difference. In the interim, until contracts for difference come into play, the gap remains. They may also struggle to obtain the reference price under the CFD regime, meaning that they would lose out financially. Why is the threshold fixed at 10 megawatts? What will the Government do to support mid-sized community energy schemes which are not eligible for the FITs but have difficulty accessing the contracts for difference? Community and co-operative energy schemes can be hugely beneficial in helping to meet our renewables targets that must be met by 2020.

Research reported by Co-operatives UK estimates that there is the potential for at least 3.5 gigawatts in UK community energy schemes by 2020—the equivalent of four conventional coal-fired power stations. Looking overseas, Germany, where 15% of renewables are community owned, is a good example of how community energy generation helps to diversify the market and increase its resilience. Locally owned and locally targeted strategies for energy generation and saving can be better tailored to local needs, such as helping to tackle fuel poverty, and can increase community awareness and engagement in a way that leads to lower bills and greater sustainability. We welcome the Government’s call for evidence on community energy launched last month. Indeed, the Secretary of State has said that he wants,

“nothing less than a community energy revolution”.

While it is disappointing that this proposed new clause is in many ways an afterthought to the Energy Bill, nevertheless it is welcome that it may become an integral part of the Government’s vision for the future electricity market.

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FITs are a user friendly, bankable mechanism to encourage easy investment and engagement from people and organisations for whom energy is not their core business and who do not want the complexity of the renewables obligation. So far the mid-size market has failed due to excessively low FIT tariffs and unfair capacity constraints. However, the constraints on many applications of non-domestic solar are unfair. First, the FIT tariffs were set too low for many of the non-domestic FIT bands. Secondly, the degression mechanisms under budgetary constraint measures that come into play at relatively early stages are having the effect of leading to an imbalance between technologies.

The solar industry especially feels that it is subject to unnecessarily harsh measures. The consequences of these low capacity triggers is that any significant national deployment of solar power in schemes over 50 kilowatts in size—about the size of a school roof—will result in major cuts to the tariff that will make developing further schemes uneconomical. The solar industry contends that between 50 kilowatts and 5 megawatts it is cheaper than other renewables supported under the renewables obligation. I ask the Minister: why does it feel that it is subject to constraints beyond those that utility-scale renewables are subject to under the renewables obligation? Can the Minister clarify whether this Energy Bill could be used to correct the situation or could this be achieved through secondary legislation? Would there be any repercussions to correcting her department’s imbalance in the energy mix between technologies? Would there be an increase in the total budget before degression or would it result in reducing payments to some other technologies?

5.45 pm

As I debated with the Minister yesterday when we were discussing the RHI order, these degressions are set very stringently at quite low levels, which can choke off investment from coming forward to help the UK get near to the 2020 targets, which are still a long way from being attained. No doubt in future we will debate at greater length the barriers faced by smaller generators to participating in the market and taking advantage of the new CFDs in terms of the technical knowledge required. Access for smaller participants is vital to extend the energy market to be as widely inclusive as possible. I would welcome the Minister’s comments at this stage so that these amendments can be assessed in the round with others due to be debated in Committee.

Baroness Verma: My Lords, I am extremely grateful for my noble friend Lord Roper’s warm welcome for these amendments and I think I sensed a warm welcome from the noble Lord, Lord Grantchester, as well. He said it was an afterthought. It was actually because we considered really hard what people had been saying and took that advice on board so I hope that the noble Lord has welcomed it with open arms. I agree with my noble friend Lord Roper that we must ensure that we have in place robust legislation, which will provide confidence that these subsidies will be delivered only to the intended recipients.

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As always, the noble Lord, Lord Grantchester, raised a number of searching questions. Although I tried very hard to keep up with him, I suspect that I will end up having to write to him in response to one or two. The noble Lord asked why we should stop at 10 megawatts. Supporting generation through the FIT scheme is more expensive than market-based mechanisms such as the renewables obligation. We value community energy and are willing to extend the FIT scheme to support the ambition of the sector. Community developments larger than 10 megawatts will still get support but at that scale they will need to apply for the renewables obligation.

The noble Lord also mentioned that we had a call for evidence around the benefits of and barriers to community energy access. The community energy strategy will be published in the autumn and will identify the potential of community energy projects in the UK to bring benefits to communities while, very importantly, still helping tackle climate change and maintain energy security. The strategy will go further than renewable electricity generation projects. It will also include community energy-efficiency schemes, community renewable heat projects, smart grids and collective energy-purchasing and switching schemes.

On degression, the non-domestic solar PV sector is supported by the renewables obligation and the FIT scheme, so some schemes are receiving both. But degression is a necessary tool. As we discussed yesterday, we do not want to put an unfair balance in favour of one technology over another while technologies are developing. The mechanism of degression assists us in ensuring that some technologies do not get an overexposure to subsidies while other technologies try to reach up and compete on an equal basis. On that note, I commend these amendments.

Amendment 51A agreed.

Amendment 51AA

Tabled by Lord Hunt of Chesterton

51AA: Before Clause 133, insert the following new Clause—

“Energy information

(1) The Secretary of State shall make adequate provision for the universal availability of information to enable domestic energy consumers to make effective decisions about their energy usage, including information relating to—

(a) installation;

(b) running costs;

(c) monitoring equipment.

(2) Measures under subsection (1) should include physical demonstration and comparison in collaboration with industry providers.”

Lord Hunt of Chesterton: I was astonished by the Minister’s remarks. She does not sound as if she goes shopping before she buys something. The whole point of this is that you want to see things—you cannot get a custom service. I do not know what the Minister’s life is like but it is not like most people’s lives.

The Deputy Chairman of Committees (Lord Faulkner of Worcester): The noble Lord can move his amendment if he wishes and then he will get a response. However,

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he must move the amendment in order to get the response. The noble Lord is entitled to degroup if he wishes to.

Lord Hunt of Chesterton: I wanted to move my amendment and thought that we had done that before. I just wanted to make my point.

Amendment 51AA not moved.

Clause 133 agreed.

Clause 134 : Fees for services provided for energy resilience purposes

Debate on whether Clause 134 should stand part of the Bill.

Baroness Worthington: My Lords, I have proposed that this clause should not stand part, partly because this is a very odd part of the Bill. I read it and then read it again. Then I thought that I would go to the Explanatory Notes as they would help explain what it is all about. However, the Explanatory Notes simply repeated what was written in the clauses in the same language but with the numbers taken out. So that was absolutely hopeless. I then turned to the debate in the Commons when this clause was introduced. I was seeking some sense of why this was needed, how it was going to operate and what it was for. My colleagues in the other place pressed the Minister quite hard but, I am sad to say, I am still a little confused as to why this power is being taken.

It did not appear in the draft Bill, so it was not subject to any pre-legislative scrutiny. There is very little background information on it and there seems to have been no consultation. It introduces quite extraordinarily wide-ranging powers with almost no definitions at all. It allows the Treasury and the Government to raise money, but the amounts that are allowed to be raised do not even need to pass before Parliament; they can simply be determined by the direction of the Secretary of State. It is quite a profound, if small, piece of legislation. I was curious to know what it was for and I still am. Perhaps the noble Lord can provide us with his account. Is the noble Lord, Lord Jenkin, going to tell me that there is lots of background information that I have not read?

Lord Jenkin of Roding: I will wait until the noble Baroness is finished.

Baroness Worthington: In the other place, the Minister did try to give some explanation as to what these fees for energy resilience might be. My colleagues in the other place did press him quite hard, because one reading could see it as a way to discourage strike action in those sectors that deliver fuel or are connected with the energy sector. We were pleased to receive quite emphatic reassurances that these fees would not be applied to unions that sought to take strike action.

What seemed to emerge was that the fees are going to be levied on business in response to extreme events that it was almost impossible to predict. That could be anything but some examples were given. The Government

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might need to step in and provide personnel to companies in the event of an outbreak of a flu pandemic and would want to recover the cost in fees. Then there was the potential for equipment or vehicles that the Government own to be deployed in the event of extreme weather or of a clean-up. Then there are the unspecified assets that might need to be provided in the short term to business. Really, this is the Treasury seeking a power to regain costs for that. What have we come to? Is the government budget so tight that we are introducing powers to claw back money for disaster situations? In reality, if a disaster strikes you want the Government to be able to respond. You do not want there to be any quibbling about costs being passed on or who will pay for what. Why do we—and companies—pay taxes? The Government are there to provide a service in the event of national security issues.

Maybe I am wrong and there are plenty of precedents for the Treasury introducing specific powers to recover money for specific unintended events. If there are, I stand corrected. However, my reading of this is that it is an extraordinarily broad power with almost no definition and very little accountability. For that reason, it does not have a place in this Bill. Obviously, as we go forward we know that there will be an increase in natural disasters that could potentially interrupt energy supply. In fact, we have quite a resilient system for dealing with that. The power companies and National Grid are on the front line. Their licence requirements mean that they have to reconnect customers as soon as they can. When the large storms hit the Isle of Arran, SSE men in vans were out there fixing that problem. The Government were not involved. I suspect that the Government do not have the skills to address these issues.

It strikes me that this must be about military personnel. It can only be about military deployment because the department certainly does not have skilled engineers who can go and fix transmission lines. That is all done in the private sector. If it is about concerns about the military and the budget, this is quite a strange precedent to set, that there will somehow be fees applied to businesses. Are those fees voluntary or mandatory? How will they work? Does a company have to pay? As I said, when will all this be negotiated? If there is a natural disaster I would hope that we got on with fixing the problem and that the Government would be sufficiently robust and well resourced to do that, not that we would be quibbling about collecting these fees.

As I said, we are going into a world where there are likely to be more natural disasters. We should not shy away from that, but the Treasury would better spend its time getting to grips with climate change rather than preventing us from tackling it and introducing apparently innocuous but quite powerful bits of legislation that enable it to collect costs. It should be thinking about how it can act to stop the excessive increase of natural disasters and it should start taking climate change seriously.

Lord Jenkin of Roding: I apologise for appearing to interrupt the noble Baroness in mid-flow. I just have one question. I had the same problem as the noble Baroness did. I thought, “Why has this clause stand

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part question been put down and what does the clause say?”. I turned up the Ofgem consultation letter published on the same day as its recent capacity assessment report, which has of course shown that the margins will, by the middle of this decade, become very much smaller. It goes on making hopeful remarks that perhaps there will not be interruptions but an increasing number of people think that there might be. The letter consults on additional balancing measures for the grid. It proposes two of them. I will not go into this in great detail at this hour of the night—we are due to rise in two minutes—but does that have anything to do with this clause? There is nothing in the letter about fees so there may be no connection, but it proposes new methods to achieve resilience to avoid power cuts. It seemed that there might be a connection. The noble Baroness, Lady Worthington, seems not to think so. We will listen to my noble friend replying in due course.

Lord Roper: My Lords, I want to raise a slightly narrower point, but one related to that raised by the noble Baroness, Lady Worthington. The report of the Delegated Powers Committee raised very clearly a point about subsection (3)(b), where money can be specified or determined by the Secretary of State without any reference to Parliament. Your Lordships’ Delegated Powers Committee is very clear, and concludes:

“We accordingly do not find persuasive the explanations in the memorandum that the power conferred by clause 134(3)(b) is appropriate; and we recommend that, unless the House can be satisfied to that effect by further explanations from the Minister, paragraph (b) should be removed from clause 134(3)”.

I would be most grateful if the Minister could give us such a reply.

Perhaps, as I am dealing with the Delegated Powers Committee, I could raise a slightly wider question. We have, of course, had a new report from the Delegated Powers Committee this morning, based on a further memorandum submitted by the department to that committee. It is impossible to find a copy of that memorandum on either the department’s or the committee’s website. I would be grateful if it could in due course be made available to Members who have attended this Committee.

6 pm

Lord Gardiner of Kimble: My Lords, I am particularly grateful to the noble Baroness for this opportunity to consider this clause, which will enable the Secretary of State to charge fees for providing energy resilience services in the event of a disruption or threatened disruption to energy supplies. It will allow the Government to recoup some or all of the costs of the services provided to businesses, and to set appropriate fees for these services.

The clause does not set the rate of any fees or charges. It will enable the Secretary of State to set fees either through secondary legislation or through administrative means and, as such, to recoup some or all of the costs of providing the service. It cannot and will not be used as a revenue-raising measure; that is not the purpose of this provision. The services will be

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provided on a discretionary basis, because businesses can choose to take advantage of them or not, based on balancing the effect on revenues and meeting contractual obligations against cost of the service.

The services which the Government may provide, to help improve the resilience of the energy sector, are those such as making available personnel, supplies, equipment or other assets, to businesses. Examples of where the Government could provide a service for which it might be appropriate to charge businesses include: provision of personnel in event of widespread impacts on workers due to flu or industrial action; equipment or vehicles which have greater flexibility in extreme weather conditions, allowing companies to carry out repairs or clean up more effectively; and provision of assets to enable a critical component of the supply chain to remain viable in the short term and until alternative options are identified.

The need for this power became apparent last year when there was a threat of industrial action by drivers, which would have caused widespread disruption to fuel supplies across the UK. As a result of that, the Government have set up a military fuel school to train military personnel to drive commercial fuel tankers. Drivers could be deployed to haulage companies in the event of a future dispute of this nature, and this power would enable us to charge those companies for some or all of the costs incurred by Her Majesty’s Government—which is to say, the taxpayer.

My noble friend Lord Roper raised the Delegated Powers and Regulatory Reform Committee, and the recommendation for the removal of subsection (3)(b) which enables the Secretary of State to set the levels of the fees by means of a direction to be laid before Parliament, as well as by means of regulation. The Government are considering all the committee’s recommendations very carefully and will respond in due course. However, I take this opportunity to clarify why we feel that this provision is important.

The requirement for the services proposed is likely to arise in the event of a significant unexpected disruption. This may be necessary to plan and provide services in a situation of emergency and urgency. There may well be situations where it would be appropriate and feasible to set out the level of fees to be charged for a particular service in secondary legislation, and the Government would aim to do so in those circumstances. However, it is likely that there may also be circumstances where it is not feasible to work within the timetable required for secondary legislation, and the flexibility afforded by ministerial direction would be required for those sorts of situations. Lack of this flexibility may make the services difficult to deliver within the optimum timescale. At worst, it could render timely delivery completely unfeasible, with the consequential loss of benefit to businesses, the economy and consumers.

My noble friend Lord Roper mentioned other matters in relation to the publishing of the department’s reply. We will be happy to make it available. It will be published on the department’s website as promptly as is possible. That is in hand.

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My noble friend Lord Jenkin made some points. I will say that these powers are not connected with, and would not apply to, provisions elsewhere in the Bill on the security of electricity supplies and capacity market provisions.

For the reasons I have set out, and given the importance of the provision for improving national resilience, the clause should stand part of the Bill.

Lord O'Neill of Clackmannan: Will the Minister clarify one point? If there is an official strike, for which due notice has been given, and military personnel are used as strike-breakers, companies will have to pay the Government for the use of the strike-breakers. In that event, what would the companies have to do to recoup the money that they had been forced to lay out to pay for the strike-breaking? Would they have recourse to the courts? Would they be able to sue the unions for the money involved in the strike-breaking activity?

Lord Gardiner of Kimble: My Lords, this provision is not designed to interfere with the normal relationships between employers and employees. Wherever possible, the Government’s preference is for the supply of fuel to be maintained by the normal, civilian supply chain. Military personnel would be deployed only where this is not possible. Ministers will take a decision to deploy military personnel only where there is a threat of significant disruption to fuel supplies. Industrial action in this sector can have a very serious impact on the UK economy, as well as endangering the health and safety of our citizens.

Lord O'Neill of Clackmannan: The Minister did not answer the question. If the Government impose a charge on companies in the event of an industrial dispute where military personnel have to be responsible for driving tankers, what redress will the companies have to recoup the money that they will have to pay to the Government to fund the strike-breaking exercise?

Lord Gardiner of Kimble: We do not anticipate that the companies could recoup in those circumstances.

Baroness Worthington: It seems to me that we have got to the bottom of this. It is a very narrow thing that is needed, yet the Government have created an incredibly enabling piece of legislation with no scrutiny. It is poor legislative drafting to have taken such a wide-ranging power. The Minister says that it will not apply to electricity, or will be used only in certain circumstances—which boils down to the Army learning how to drive fuel tankers. That is very narrow, but this is not a narrow provision. It almost sounds as if one could interpret this as the Government going into the energy supply business. It is that broad. I am glad and encouraged that we are not. I am also reassured to hear that this is discretionary, although how that would play out I am not sure. Either you deploy or you do not deploy.

Is the Minister saying that we would not deploy unless the company agreed to pay? That would be a reduction in the security of the country. The company might say, “No, we’re not paying for that”. Who in their right mind would say yes? If you are an oil

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company, you will not have factored into your bottom line unexpected payments to the Government for people to drive your tankers. The money has to be recouped from somewhere, and a company would be perfectly within its rights to refuse to pay. In that case, the Government will have to deploy their personnel anyway, or risk an interruption in our fuel supply. This needs to be narrowed in its application. It needs more definition in law.

I absolutely agree with the noble Lord, Lord Roper, who pointed to the delegated powers recommendation that subsection (3)(b) does not deserve to be here. It is

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far too wide-ranging. The whole thing is ill conceived. As I pointed out, in a disaster situation the last thing you want to be doing is negotiating around who is paying who. We have a Government. We pay taxes for a reason. That is what we expect of government. This is penny-pinching from the Treasury and it does not deserve to be in the Bill.

Clause 134 agreed.

Clauses 135 and 136 agreed.

Committee adjourned at 6.10 pm.