Eleventh Report Contents

Appendix 1: Digital Economy Bill: Parts 1–4

Extract from the Delegated Powers and Regulatory Reform Committee’s 6th Report of 2015–16 Session about the Energy Bill

Clause 40(2)—Amount of financial penalty

10.Chapter 5 of Part 2 of the Bill confers extensive powers on the OGA to impose civil sanctions for the purpose of enforcing compliance with various obligations, including the requirement to provide information and samples to the OGA; and clause 39 would allow the OGA to issue a financial penalty notice obliging the recipient of the notice to pay to the Authority an amount not exceeding £1 million.

11.Clause 40(2) requires the OGA:

The First-tier Tribunal, upon an appeal against a penalty, would also be under a duty to have regard to that guidance (see clause 47(7)).

12.We note that there is no Parliamentary procedure associated with the guidance. Indeed, there is not even a requirement to lay it before Parliament. The memorandum (paragraph 39) explains that the Bill follows the approach of section 38 of the Competition Act 1998 under which there is no Parliamentary procedure in relation to guidance issued by the Competition and Markets Authority on the exercise of its power to impose financial penalties.

13.It fails however to mention more recent examples which do not support its case! These include:

14.We note that the guidance will be highly influential in determining the amount of what could be a substantial financial penalty imposed by the OGA—up to £1 million (with provision for this maximum to be increased to £5 million (see footnote 2)). We further note that the OGA is a brand new institution and even the memorandum refers to its “nascent enforcement framework” which is “as yet untested” (paragraph 41). In the light of this, the Committee has concluded that the guidance should be subject to some Parliamentary oversight.

15.We therefore recommend that guidance under clause 40 should be laid in draft before Parliament, and that the affirmative procedure should apply to the order bringing the initial or any revised guidance into force.

© Parliamentary copyright 2016