Date laid: 1 February 2018
Parliamentary procedure: affirmative
Date laid: 1 February 2018
Parliamentary procedure: negative
Summary: These two instruments relate to the role of Ofgem in investigating possible breaches of EU legislation on energy market integrity and transparency. As regards SI 2018/104, the Explanatory Memorandum (EM) serves its purpose adequately; but we were disappointed that the EM to the draft Criminal Justice and Police Act 2001 (Powers of Seizure) Order 2018, as originally laid, provided significantly less information than is required for effective Parliamentary scrutiny.
We draw these instruments to the special attention of the House on the ground that that they give rise to issues of public policy likely to be of interest to the House; and that that the explanatory material laid in support of the draft Order provides insufficient information to gain a clear understanding about the instrument’s policy objective and intended implementation.
1.The Department for Business, Energy and Industrial Strategy (BEIS) has laid both these instruments, in each case with an Explanatory Memorandum (EM). Both instruments relate to the role of the Gas and Electricity Markets Authority (“Ofgem”) in investigating possible breaches of EU legislation on energy market integrity and transparency, namely the “REMIT” Regulation.1
2.In the EM to this Order, BEIS says that, under Regulations made in 2013,2 Ofgem can search premises under a warrant and remove relevant documents, when investigating suspected breaches of REMIT. It adds, however, that it is sometimes not reasonably practicable to determine at the time of carrying out a search whether material is relevant, and that the additional powers conferred by the Order would allow Ofgem to investigate market abuse more effectively by allowing it to remove documents from premises and sift these elsewhere to establish whether they are relevant.
3.In the EM to this Order, BEIS explains that the Enterprise Act 2002 restricts the disclosure by a public authority of information which it has obtained under that Act or other specified legislation. The purpose of the Order is to permit a public authority to disclose specified information to Ofgem for purposes related to the investigation by Ofgem of possible breaches of the REMIT.
4.BEIS says that it published a consultation paper in December 2015 seeking views on changes to Ofgem’s powers under gas and electricity legislation and the REMIT Regulation.
5.As regards the change made by SI 2018/104, 15 responses were received. Nine respondents supported arrangements for the passing of information from the Competition and Markets Authority to Ofgem; one respondent was opposed because of concerns that the additional information might risk additional, unwarranted investigations; other responses were neutral. BEIS states its view that existing provisions that specify the circumstances in which Ofgem may carry out investigations will ensure that the new proposed powers are used proportionately.
6.As regards the draft Order on powers of seizure, BEIS says that some energy companies expressed support for the initially proposed “seize and sift” powers, but the majority of companies and representative groups argued that these were disproportionate, unnecessary or gave Ofgem too much leeway on which information to remove. BEIS adds, however, that it considers that the aim of the policy, to increase the effectiveness of enforcement of REMIT by Ofgem, justifies the additional burdens identified by industry.
7.We considered that the EM to the draft Order gave an incomplete picture of the consultation process, and we obtained additional material from BEIS, which we are publishing at Appendix 1. We are struck by the fact that, while consultation respondents were given only six weeks over Christmas 2015 to submit their views, the Department published a Government response to the consultation only two years later, in February 2018.3 We regard so long a gap as regrettable and likely to damage the Department’s reputation among respondents. We also considered that, since the EM made no reference to publication of the Government response to the 2015 consultation, its description of the outcome of that process was too cursory. We have now received additional clarificatory material, but we are disappointed that the Explanatory Memorandum as originally laid provided significantly less information than is required for effective Parliamentary scrutiny.
Date laid: 1 February 2018
Parliamentary procedure: negative
Summary: These Regulations require the Secretary of State to ensure ongoing reductions in the emission of key air pollutants, over the period to 2030. The reductions are specified in EU legislation and an international convention promoted by the United Nations Economic Commission for Europe. The UK’s withdrawal from the EU raises questions about enforcement of these commitments in the longer term. The House may look for answers in the proposals for a new “advise and challenge” body which the Government intend to publish for consultation later this year.
We draw these Regulations to the special attention of the House on the ground that that they give rise to issues of public policy likely to be of interest to the House.
8.In our 15th Report of this Session,4 we drew to the House’s attention the draft Environmental Permitting (England and Wales) (Amendment) Regulations 2018, which served to transpose the EU Medium Combustion Plants Directive.5 We noted that the Regulations were intended to tackle air pollution, and that, in the accompanying Explanatory Memorandum (EM), the Department for Environment, Food and Rural Affairs (Defra) set these measures in the context of the EU’s National Emissions Ceilings Directive (“the NEC Directive”),6 which had to be transposed by mid-2018. The latest Regulations (SI 2018/129), also laid by Defra, have been laid in order to transpose the NEC Directive.7
9.In the EM to SI 2018/129, Defra says that the UK is a Party to the 1979 Convention on Long-Range Transboundary Air Pollution (“the Convention”) of the United Nations Economic Commission for Europe (“UNECE”) and the original 1999 Gothenburg Protocol (“the 1999 Protocol”) to the Convention which sets emission limits for four air pollutants. In 2012, an amendment to the 1999 Protocol was agreed among Parties (and supported by the UK), to establish emission reduction commitments for five air pollutants, to be achieved by 2020.8 The NEC Directive implements the emission reduction commitments agreed under the 2012 amendment to the 1999 Protocol into EU law.
10.We obtained additional information from Defra, which we are publishing as Appendix 2. Defra has told us that the most recently published data (the 2015 National Atmospheric Emissions Inventory)9 show that the UK meets all current emission ceilings which have applied since 2010 (under the previous version of the NEC Directive).
11.In the EM, Defra says that, after withdrawal from the EU, the UK will continue to be a member of the UNECE and Party to the Convention. We asked what arrangements existed for oversight and enforcement of the UNECE Convention. Defra has said that oversight is carried out by the Convention’s Implementation Committee, which meets twice a year and reports annually to the Executive Body, and that the Executive Body makes decisions on recommendations by the Committee.10 Defra has also said, however, that some existing mechanisms which allow scrutiny of the achievement of environmental targets by Government will not be carried over into UK law, and that it intends to consult on a new, independent and statutory body to advise and challenge Government and potentially other public bodies on environmental legislation.
12.The role and powers of the proposed new body are matters of considerable interest to the House. In the debate on the “Environment: 25-year Plan” on 29 January of this year, Lord Gardiner of Kimble, Parliamentary Under-Secretary of State in Defra, acknowledged the widespread concern about “metrics and an independent body”, and said: “It is very important that we do not set these metrics in isolation and that they are consulted on. By definition, a statutory body requires legislation. I will be very straightforward and say that consultation on the precise vehicle by which that manifests itself is yet to be determined, but clearly it needs a statutory footing. The role of the statutory body will be designed through the consultation, and I very much look forward to your Lordships participating in a rigorous response to that consultation, because we expect and want it to have a strong role in holding the Government to account on the achievement of the metrics.”11
13.In the EM to SI 2018/129, Defra says that the NEC Directive also sets further emission reduction commitments for 2030 for the five main air pollutants, with commitments for each pollutant set individually for each Member State for 2020 and 2030. The Regulations require the Secretary of State to draw up a National Air Pollution Control Programme setting out the measures that will be taken to meet the respective national emission reduction commitments in 2020 and 2030. Defra states that the UK will publish a Clean Air Strategy for consultation in 2018 setting out the steps to be taken towards the 2020 and 2030 targets. In the debate on 29 January, Lord Gardiner also referred to this forthcoming strategy, noting that implementation of the Environmental Permitting (England and Wales) (Amendment) Regulations 2018 “will take us a significant way to achieving our 2030 air quality targets, but there is more work to be done”.12
14.These Regulations require the Secretary of State to ensure ongoing reductions in the emission of key air pollutants, over the period to 2030. The reductions are specified in EU legislation which, in turn, reflects commitments made under an international convention promoted by the United Nations Economic Commission for Europe. The UK’s withdrawal from the EU raises questions about the effectiveness of oversight and enforcement of these commitments in the longer term. The House may look for answers in the proposals for a new “advise and challenge” body which the Government intend to publish for consultation later this year.
1 Regulation (EU) No 1227/2011 of the European Parliament and of the Council on wholesale energy market integrity and transparency.
2 The Electricity and Gas (Market Integrity and Transparency) (Enforcement etc.) Regulations 2013 (SI 2013/1389).
3 See BEIS, Consultation on proposed changes to Ofgem’s enforcement powers under the EU Remit regulation: Government Response, 1 February 2018: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/678241/REMIT_consultation_response.pdf [accessed 20 February 2018]
4 15th Report, Session 2017-19 (HL Paper 59).
5 EU Directive 2015/2193 of the European Parliament and of the Council of 25 November 2015 on the limitation of emissions of certain pollutants into the air from medium combustion plants.
6 EU Directive 2016/2284 of the European Parliament and of the Council of 14 December 2016 on the reduction of national emissions of certain atmospheric pollutants.
7 In our 20th Report of Session 2016-17 (HL Paper 91), we also published information about the Air Quality Standards (Amendment) Regulations 2016 (SI 2016/1184), noting that in April 2016 limits on nitrogen dioxide (NO2) set by the EU Ambient Air Quality Directive were exceeded in 38 out of 43 UK areas. The Clean Air Strategy which Defra intends to produce in 2018 will also be relevant to compliance with that Directive.
8 The five pollutants are: nitrogen oxides (NOx); non-methane volatile organic compounds (NMVOCs); sulphur dioxide (SO2); ammonia (NH3); and fine particulate matter (PM2.5). PM2.5 was added by the 2012 amendment to the 1999 Protocol.
9 See: http://cdr.eionet.europa.eu/gb/eu/nec_revised/inventories/envwjyo9g/ [accessed 20 February 2018]
10 See: https://www.unece.org/environmental-policy/conventions/envlrtapwelcome/convention-bodies/implementation-committee.html [accessed 20 February 2018]
12 Ibid.