Instruments drawn to the special attention of the House
Draft European Union Referendum (Conduct) Regulations 2016
Date laid: 25 January 2016
Parliamentary procedure: affirmative
Summary: These Regulations set out all the mechanics of how the EU referendum is to be run, including the wording of the ballot paper. The proposed administration of the referendum broadly follows the pattern of polls since the Parliamentary Voting System and Constituencies Act 2011. Further instruments will be required to specify details such as the date on which the poll will be held, the referendum period and the designated organisations.
These Regulations are drawn to the special attention of the House on the ground that they give rise to issues of public policy likely to be of interest to the House.
1.These Regulations are laid by the Cabinet Office under the European Union Referendum Act 2015 and are accompanied by an Explanatory Memorandum (EM). No Impact Assessment or estimate of the approximate cost of the poll has been provided.
2.This instrument sets out all the mechanics of how the EU referendum will be run. The proposed administration of the referendum broadly follows the pattern of polls since the Parliamentary Voting System and Constituencies Act 2011 (including the minor changes made by the Electoral Registration and Administration Act 2013). A specific modification is required to enable the Referendum to take place in Gibraltar as well as the United Kingdom.
3.The text of the ballot paper is set out in Schedule 4 to the Regulations, it offers two alternatives:
- to “remain a member of the European Union” or
- to “leave the European Union”.
4.Paragraph 4.2 of the EM states that further statutory instruments will be required to set the appointed day on which the referendum will be held, the referendum period (that is the period prior to the vote in which campaign expenditure is regulated) and the process by which the Electoral Commission will designate the main referendum campaigners (the “designated organisations”).
Draft Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016
Date laid: 19 January 2016
Parliamentary procedure: affirmative
Summary: The Order gives effect to an intergovernmental Agreement on a Unified Patent Court (“the UPC Agreement”) and a related EU Regulation. In particular, the Order implements provisions of the UPC Agreement that give the Unified Patent Court jurisdiction to decide some issues in relation to certain patents valid in the UK. We received comments from Baroness Bowles of Berkhamstead on certain aspects of the UK’s implementation of the UPC Agreement, and we have in turn obtained clarification of these aspects from the Department for Business, Innovation and Skills.
We draw this Order to the special attention of the House on the ground that it gives rise to issues of public policy likely to be of interest to the House.
5.The Department for Business, Innovation and Skills (BIS) has laid this draft Order with an Explanatory Memorandum (EM) and three Impact Assessments (IAs). In the EM, BIS states that, in amending the Patents Act 1977 (“the 1977 Act”), the Order gives effect to the intergovernmental Agreement on a Unified Patent Court (“the UPC Agreement”) and a related EU Regulation (“the Unitary Patent Regulation”).1 In particular, the Order implements provisions of the UPC Agreement that give the Unified Patent Court jurisdiction to decide some issues in relation to certain patents valid in the UK, and ensures that the new European patent with unitary effect (“Unitary Patent”) is reflected in the 1977 Act.
6.In section 7 of the EM, BIS says that the Order makes changes to the 1977 Act to reflect three general themes, namely: jurisdiction; effect of the Unitary Patent; and infringement. In respect of the last of these themes, BIS says that the UPC Agreement includes provisions on what rights are given to owners of unitary patents and European bundle patents within its jurisdiction to prevent the use of their invention, and also what exceptions to those rights are available; and that these rights and exceptions are the same as are currently provided in UK law, apart from the introduction of two new exceptions. Those exceptions are, firstly, in relation to the ability of plant breeders to use patented biological material to create a new plant variety without infringing a patent for that material; and, secondly, in relation to the use of a lawfully acquired computer program for certain purposes without the permission of the patent owner, and without that use being an infringement of any patent covering that program.
7.As regards the plant breeding exception, BIS has told us that the plant breeding industry is very supportive of introducing it for all patents valid in the UK. The UK has the fourth largest plant breeding industry in Europe after Germany, France and the Netherlands. The exception already exists in Germany, France and the Netherlands and applies to all patents valid in those countries. The introduction of this change is intended to put the UK industry on a level footing with major competitors in other parts of Europe.
8.The Committee has also received representations about the draft Order from Baroness Bowles of Berkhamstead. In particular:
- as regards the computer program exception, Lady Bowles commented that this appeared to be an acceptable decision and compliant with the European Patent Convention (EPC); but also that, while the Government had been reasonably transparent over why they made the decision, it would have been good to have the EPC argument laid out and also to receive more information about the review of the UK’s implementation of the UPC Agreement, mentioned in section 12 of the EM;
- as regards contributory infringement (where one person knowingly provides another with the means to infringe a patent), Lady Bowles commented that it should have been extended to bundle patents (as that is what the UPC says); that a counter-argument over the meaning might be possible using an ‘or’ interpretation which, in her view, was not intended; and that case-law already existed in the UK that took account of cross-border activity, and so to pre-empt judges’ decisions was probably wrong. Here too, more explanation about the decision should have been given.
9.We put these concerns to BIS, and we have received a letter of 27 January 2016 from Baroness Neville-Rolfe, Parliamentary Under Secretary of State in that Department, which we are publishing at Appendix 1. Baroness Neville-Rolfe expresses her regret that a full explanation of the issues raised was not given in the information laid in support of the draft Order, and deals with the concerns about the software exception, contributory infringement, and the intended review of the legislation.
10.As the Minister herself writes, these issues are both complex and technical; but the Government’s decisions on implementation of the UPC Agreement will no doubt have an impact on patent-holders and others, as the EM and IAs demonstrate. The House may find it helpful to draw on the clarification provided by the Government when it considers the draft Order.
Draft Renewables Obligation Closure Etc. (Amendment) Order 2016
Date laid: 25 January 2016
Parliamentary procedure: affirmative
Summary: The Order proposes that from 31 March 2016 the Renewables Obligation (RO) should be closed to solar photovoltaic generating stations where the generating capacity of the station is below or equal to 5 megawatts (MW) in size (“small solar pv stations”). The Department for Energy and Climate Change (DECC) says that current estimates suggest significantly more potential deployment of such stations than was anticipated a year ago, and that early closure of the RO to these stations is proposed as part of wider action to control Levy Control Framework costs.
The Explanatory Memorandum laid with the Order gives an account of consultation responses which fails both to indicate the level of opposition to, and paucity of support for, the proposed changes and to acknowledge the concerns expressed by large numbers of respondents about the methodology used by the Department to justify its proposals.
We draw this Order to the special attention of the House on the ground that the explanatory material laid in support provides insufficient information to gain a clear understanding about the instrument’s policy objective and intended implementation.
11.The Department for Energy and Climate Change (DECC) has laid this draft Order with an Explanatory Memorandum (EM) and Impact Assessment (IA). The Order proposes that the Renewables Obligation (RO) should be closed to solar photovoltaic generating stations where the generating capacity of the station is below or equal to 5 megawatts (MW) in size (“small solar pv stations”). DECC states in the EM that the small solar pv closure date is intended to be 31 March 2016.2
12.DECC says that the RO was closed early to large solar pv stations (those above 5MW) on 1 April 2015 because such stations were being deployed more rapidly than previously estimated, and because it was necessary to control the cost of large solar pv generation in order to ensure that it was affordable within the Levy Control Framework (LCF) - which places limits on the aggregate amount levied from consumers by energy suppliers to implement Government policy. We brought the relevant statutory instrument–the draft Renewables Obligation Closure (Amendment) Order 2015 - to the special attention of the House in our 26th Report3 of the 2014–15 Session (HL Paper 113). We commented that the Department’s estimates made at the end of 2012 of the likely growth in large solar pv deployment had clearly been well off the mark.
13.In the EM to the latest draft Order, DECC says that information available in early 2015 suggested that projects of 5MW and below formed a relatively small part of the expected future solar pv deployment under the RO, with the rate of deployment of these smaller solar pv projects posing a lower risk to the LCF. However, the Department says that current estimates suggest significantly more potential deployment and that, as part of wider action to control LCF costs, it proposes to close the RO early to these small solar pv stations.
Consultation, and information provided to Parliament
14.DECC states in the EM that it carried out public consultation on the early closure of the RO to small solar pv stations over six weeks, from 22 July to 2 September 2015. We note that this largely coincided with the August holiday period, but that DECC makes no mention of having considered any mitigating action, as Departments are expected to do under the Government’s Consultation Principles. Despite setting a consultation deadline of 2 September, it was only on 25 January 2016, almost four months later, that the Department laid this Order.
15.The EM summarises consultation responses in a single paragraph (8.2), noting that 94 responses were received; that “a majority of respondents was opposed to the small solar pv closure but believed that if implemented the grace periods should be consistent with those provided for the large solar pv closure”; and that respondents pointed to repercussions for investor confidence, and to increased financial risks and potential losses from investments made in developing project pipelines.
16.On 17 December 2015, DECC published a summary of consultation responses;4 this is considerably more informative than the EM. It states that, of the 94 responses, only six agreed with the proposed closure while 63 disagreed (21 offered no comment, and four were “indeterminate”). The summary also notes that respondents questioned the rationale for the proposal because no evidence had been provided to detail the breakdown of the LCF overspend: and that respondents were concerned that solar deployment was not the cause of the LCF overspend, and suggested that early closure would make little difference.
17.The summary also sets out responses to a question posed in the consultation paper about DECC’s projections for the deployment of new solar pv projects of 5MW and below, estimated to be in the range of 800MW to 2 Gigawatts (GW) in both 2015–16 and 2016–17. 22 respondents agreed with these projections. However, an almost equal number, 21, disagreed, and they voiced concern about the absence of methodology or evidence to explain how the numbers were reached, and about the flaws in the Renewable Energy Planning Database (REPD) used by DECC. They also expressed a lack of trust in DECC’s deployment forecasting, based on previous experience.
18.Both the summary and the IA laid with the Order state that “no information was received during the consultation that challenged our assessment of future deployment” and that DECC had revised its estimates in both 2015–16 and 2016–17 based on updated information from the REPD. DECC now states that, without RO closure, smaller-scale solar pv deployment in 2015–16 is estimated at 1.2 to 1.8 GW and in 2016–17 at 1.2 to 2 GW.
19.We do not expect Departments to replicate all the detail from summaries of consultation responses in the consultation sections of EMs. In this case, however, the account given in paragraph 8.1 of the EM fails both to indicate the level of opposition to, and paucity of support for, the proposed changes and to acknowledge the concerns expressed by large numbers of respondents about the methodology used by the Department to justify its proposals.
Energy costs
20.DECC has based its decision to bring forward these proposals on the need to act to control LCF costs, and hence to limit the impact on consumers through their energy bills. In view of wider concerns about the level of these bills, we asked DECC about their view of reports that “energy firms’ costs have hit a five-year low”5 without corresponding reductions in their charges to consumers. DECC has responded as follows:
“Energy prices are not regulated—they are set by energy suppliers in competition with each other. The price consumers pay for their gas and electricity is not the same as what their supplier pays. Firstly, because suppliers buy energy in advance of delivery to reduce volatility. Secondly, because wholesale costs only make up around half of energy bills and therefore movements in other costs also have an impact on bills (for example transmission and distribution costs). All the major energy suppliers reduced their standard gas tariffs at least once last year and three large suppliers have recently announced a further cut of around 5% in their gas prices for customers on standard tariffs. This is a good start, but the Government wants to see more suppliers cutting their standard tariffs.”
21.In the context of this Order, we also asked DECC whether it had considered the extent to which support to small solar pv installations could continue and costs to consumers could be stabilised, if energy firms were required to reduce their charges to consumers in line with reductions in their own costs. DECC has given us the following response:
“Solar PV is a UK success story, with rapid deployment over last 5 years: over 99% of the UK’s solar PV capacity has been deployed since May 2010. But when costs come down, as they have with solar, so should support; hence we have taken steps to control the costs of support schemes and put solar on a path to delivering without subsidy.”
National Health Service Mandate Requirements (SI 2016/51)
Date laid: 27 January 2016
Parliamentary procedure: negative
Summary: In the last Parliament the Government established the Better Care Fund (BCF) to improve out-of-hospital care. This requires every clinical commissioning group (“CCG”) to hold a pooled fund with a local authority, and agree a joint plan to commission services. The mandate to NHS England for 2016–17 focuses on the creation and management of the BCF, in particular by requiring NHS England to ring-fence £3.519 billion within its allocation.
These Regulations are drawn to the special attention of the House on the ground that they give rise to issues of public policy likely to be of interest to the House.
22.The Department of Health (DH) has laid these Regulations under sections 13A (9) and 272(7) of the National Health Service Act 2006 (“the 2006 Act”) together with an Explanatory Memorandum (EM).
23.DH is required to publish an annual mandate for the National Health Service Commissioning Board (NHS England) which sets out objectives that NHS England must seek to achieve, and any requirements with which it must comply. Under section 13A(9) of the 2006 Act, requirements in the mandate must be underpinned by regulations. In the last Parliament the Government established the Better Care Fund (“BCF”) to improve out-of-hospital care. The BCF requires every clinical commissioning group (“CCG”) to hold a pooled fund with a local authority, and agree a joint plan to commission services. The mandate to NHS England for 2016– 17 establishes key requirements in relation to the creation and management of the BCF.6 In particular NHS England is to:
- ring-fence £3.519 billion within its allocation to CCGs to establish the BCF, to be used for the purposes of integrated care;
- consult the DH and the Department of Communities and Local Government (DCLG) before approving spending plans drawn up by each local area; and
- consult DH and DCLG before exercising powers in relation to areas failing to meet specified conditions attached to the BCF as set out in the BCF Policy Framework.
24.Individual allocations of the BCF for 2016–17 to local areas and the detailed formulae used are published on the NHS England’s website.7
1 Regulation (EU) No 1257/2012 for the creation of unitary patent protection.
2 However, DECC adds that, if the Order is not made by 31 March 2016, the closure date will be the last day of the month in which the Order comes into force.
4 See: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/486091/20151216_Small_scale_solar_PV_government_response_FINAL.pdf.
5 See, for example: http://www.bbc.co.uk/news/business-35308022.
6 For further detail see BCF Policy Framework.