EXEMPTIONS FROM ELECTRICITY LICENSING (Hansard, 27 July 2000)

§ Mrs. Liddell
I beg to move, That this House agrees with the Lords in the said amendment.

§ Mr. Deputy Speaker (Sir Alan Haselhurst)
With this it will be convenient to discuss Lords amendments Nos. 56 to 69, 102 to 106, 108 to 118, 121 to 124, 164, 165, 167, 169 to 171, 176, 177, 179, 182, 188, 198, 199, 204, 213 to 216, 218, 223, 224, 230, 231, 236 and 244.

§ Mrs. Liddell
In an attempt to assist the House, I will not speak at length on all those amendments.
Amendments Nos. 55, 56, 121 and 213 introduce a requirement for the Secretary of State to go out to consultation before granting an exemption under clauses 28 or 85. They require him to produce a notice that sets out the exemption that he proposes to make, together with the reasons why he proposes to do so. A copy of the notice should be served on the Gas and Electricity Markets Authority and the Gas and Electricity Consumer Council. It should be published so as to bring it to the attention of those likely to be affected by the exemption, so that those who wish to make representations have a minimum of 28 days in which to do so.
1342 In the context of the new obligation to consult, amendments Nos. 67, 68, 122 and 123 remove the granting of exemptions from the list of decisions that triggers the duty to give reasons under clauses 41 and 86.
6.15 pm
That will avoid setting an unfortunate precedent, as exemptions are granted by statutory instrument and it is not usual practice to require the giving of reasons for the making of legislation. This can be distinguished, however, from the giving of reasons for a proposal to grant exemptions, as required by the new consultation procedure.
Amendments Nos. 68 and 123 have two further effects. First, in the context of the general requirement introduced for the first time by clauses 41 and 86 to publish reasons for key decisions, they clarify the matters that the authority or the Secretary of State should consider excluding when publishing those reasons. The amendments require that matters should relate to the affairs of a particular individual or body of persons before the requirement to consider exclusion is triggered.
Secondly, they ensure that the subsection (5) exception to the duty to give reasons—a decision subject to a disapplication direction by the Secretary of State—applies whether the decision itself was taken by the authority or by the Secretary of State.
Taken together, this package of amendments represents a strengthening of the provisions of the Bill. I commend them to the House.

§ Mr. Forth
I want to say a few words about three of the amendments. The first is amendment No. 56. The Minister said that it referred to the Secretary of State giving notice of those likely to be affected. Although that phrase does not appear in the amendment, it requires some explanation. How does the Minister imagine that the Secretary of State will determine those "likely to be affected"? The phrase is so wide and loose that it could mean a great deal or not much at all. As the matter is so important, I should be comforted if she told us a little more about what she thinks those words mean.
The amendment states: Before making an order … the Secretary of State shall give notice … and shall consider any representations which are duly made in respect of the proposals and not withdrawn. That might give comfort to some people, but does it take us much further? Of course, one might say that a sensible and responsible Secretary of State—I exclude the present incumbent—would naturally consider any representations; but how much protection does the provision really give? What does "shall consider" mean? Does it mean "glance at", "give a quick look at", "momentarily pause while officials give a summary of? It could mean almost anything.

§ Mr. John Bercow (Buckingham)
Ponder?

§ Mr. Forth
I would not go that far. I do not think that any pondering will be done.
Will the Minister tell us to what extent the Secretary of State will give consideration under that provision? What effect is that likely to have on the view that the Secretary of State will take?
1343 Amendment No. 66 contains the potential for much more substantial problems. I could dwell on them at some length, but I sense that my colleagues want to make progress, so I shall mention them only briefly. The amendment states that where, in consequence of a reference under section 12(1 A), the Commission modifies under subsection (4)(b) the standard conditions of licences of any type, the Authority may make such incidental and consequential modifications as it considers necessary or expedient. Two bodies will be acting simultaneously on much the same matters. It is possible for the Competition Commission to modify the standard conditions of licences—an important enough function—while the authority may make such incidental and consequential modifications as it considers necessary. The questions that I want to ask the Minister are: if the commission and the authority were to be in conflict over that sort of matter, (a) who would take primacy or priority and/or (b), what kind of conciliation process might be envisaged; and when the authority is making incidental and consequential modifications, is it at the sole discretion of the authority to determine what is incidental or consequential? If the amendment allows only incidental or consequential modifications to be made, that implies that something that is beyond the incidental or consequential would be beyond the powers of the authority in terms of the amendment. Is it solely the judgment of the authority as to what falls into that category?
All I want to say about Lords amendment No. 204 is: is it not astonishing that at this stage we have before us, presumably in all seriousness and with a straight face, four pages of very important provisions, entitled "Secretary of State's licensing schemes" and going into very considerable detail? I could detain the House, if I was doing my job properly, and go through this in very great detail.

§ Mr. Bercow
Go on

§ Mr. Forth
I will not on this occasion; I should probably feel a bit guilty as a result. I just want to obtain the Minister's view as to how proper it is, at this stage of the legislative process, to introduce four pages of very detailed provisions without so much as an explanation or a "by your leave" or anything of the kind. Therefore I want to give the Minister the opportunity to tell us something more about the four pages of Lords amendment No. 204 and what it does or does not do, in addition to answering the more detailed questions that I have asked her about Lords amendments Nos. 56 and 66.

§ Mrs. Liddell
I shall deal with Lords amendment No. 204 first, because there is quite a simple answer to the right hon. Gentleman's question. I am sorry that he does not want to go into greater detail; it would suit me and other Labour Members to have an opportunity for a fuller debate on the subject. We enjoyed debating it in Committee—again, the right hon. Gentleman was not able to join us at that stage.
Lords amendment No. 204 replaces the existing part I of schedule 7; that is why it is so long. It provides for the Secretary of State to make licensing schemes in order to 1344 ensure continuity of licensing for all those who hold gas and electricity licences at the time the licensing provisions of the Bill come into force. That is to ensure that, in the transition, everything can pass over.
Licensing schemes will be used to ensure smooth transition from existing licence types in electricity to new licence types, and to incorporate the new standard condition of licences in all existing electricity and gas licences. Therefore, in effect, this is a transitional arrangement to ensure that there is no dislocation.
In relation to Lords amendment No. 56, the right hon. Member for Bromley and Chislehurst (Mr. Forth) asks who would be likely to be affected. Generally, the Secretary of State would seek as wide a consultation as necessary. In a case that was essentially local, that might reasonably be restricted to a local consultation. In larger cases, it may be sensible to issue a press notice or to publish the Department's proposals on its website. The phrase used is common in legislation; it allows the precise scope of consultation to be adapted to the circumstances of the case.
The right hon. Gentleman also asks about representations not withdrawn, and how much protection is given. Representations will have to be properly considered. In the absence of a proper consultation, there will have been a procedural irregularity, which of course is challengeable in the courts.
On Lords amendment No. 66, on the modification of licences, if the commission and the authority are in conflict, the commission takes primacy. The authority's incidental and consequential amendments can only be those that flow from the commission's modifications. I hope that that answers the right hon. Gentleman's questions.