Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) (No. 2) Order 2001 (Hansard, 23 July 2001)

§ Lord McIntosh of Haringey
My Lords, the first order is made under Section 63 of the Scotland Act which provides for circumstances where it is appropriate for the Scottish Ministers to exercise executive powers in areas where primary legislation continues to be a matter for this Parliament. That is commonly known as executive devolution.
The House will have seen the Executive Note to which I have already referred, which explains in some detail what the entries in this order are about. However, I hope it will be helpful if I give a brief resume.
Noble Lords will be aware of the Government's commitment to increase our use of renewable energy to 10 per cent of consumption by 2010. The Scottish Executive have committed themselves to putting in place measures to contribute towards that by setting the target for a substantial increase in Scotland. That is in recognition of the tremendous potential for further renewables development that exists in Scotland. That commitment sits at the heart of the Executive's climate change programme.
The powers to allow Scottish Ministers to impose a renewable obligation on electricity suppliers have already been transferred. As in England and Wales, it will be put in place by order, in this case a Scottish statutory instrument that will be subject to affirmation by the Scottish Parliament. The obligation itself is still to be the subject of a formal consultation.
The transfer of the further powers in this order is also required, to allow the Scottish Executive to carry this programme forward. Those relate to the Electricity Act 1989 and the Utilities Act 2000.
The powers under Sections 32B and 32C of the Electricity Act 1989, as amended by the Utilities Act 2000, will enable the Scottish Executive to arrange for the issue of certificates to qualifying generators of 1797 renewable energy. Those certificates, which will be issued by the industry regulator, will allow suppliers to prove that renewable energy subject to the obligation has been supplied within Great Britain and that they have consequently met the requirements under Section 32 of the Act. Section 32C provides powers to enable suppliers to meet their obligations by means of a buyout mechanism.
The draft order also transfers to the Scottish Ministers powers to make certain savings orders in respect of the now replaced Section 32 of the Electricity Act 1989. Under the Electricity Act Ministers exercised powers to make orders (known as the Scottish Renewable Obligation) to promote renewable energy.
Although these powers have been superseded by the new Section 32, the orders are still in place and Section 67 of the Utilities Act makes provision for savings orders to be made in respect of them. The order that we are considering this evening transfers the power to make such savings orders to the Scottish Ministers. As with the Section 104 order, to which I shall shortly turn, the House will perhaps agree that it is an interesting feature that the result of this order is expected to be uniformity with England and Wales.
I turn to the draft Transport (Scotland) Act 2001 (Conditions attached to PSV Operator's Licence and Competition Test for Exercise of Bus Functions) Order 2001. This is made under Section 104 of the Scotland Act. Section 104 provides for subordinate legislation to be made in this Parliament which contains provisions that are necessary or expedient in consequence of any Act of the Scottish Parliament.
Towards the end of last year both Parliaments debated and passed separate Transport Acts, which both include provisions to improve the quality and efficiency of bus services and to encourage greater use of public transport in general. This order makes provision consequential on provisions in the Transport (Scotland) Act 2001. This is an Act of the Scottish Parliament, which received Royal Assent on 25th January 2001. The exercise of these provisions requires functions to be conferred on bodies responsible to this Parliament and not to the Scottish Parliament. This requires an order to be made by the Secretary of State and debated by this Parliament.
The order has two purposes. First, it gives the Traffic Commissioner in Scotland the same enforcement powers as are available to his counterparts in England and Wales under this Parliament's Transport Act 2000. These powers will allow him to attach conditions to a public service vehicle (PSV) operator's licence where that operator has failed in its obligations under the Transport (Scotland) Act in relation to quality partnerships, quality contracts, ticketing schemes or the provision of information.
The order also confers additional functions on the Director-General of Fair Trading. The Section 104 order confers similar powers on the Director-General of Fair Trading in relation to Scotland, as do the 1798 provisions made in Schedule 10 of the Transport Act 2000 for England and Wales. These powers are a little more complex to explain than those of the Traffic Commissioner that I have just described.
The provisions of both Transport Acts enable the consideration of wider public interest objectives, including those of bus users and the community in general, when assessing whether a local authority has used powers anti-competitively. This is in relation to powers given to local authorities to introduce measures under the Transport Acts to improve public transport.
This consideration of the wider public interest has been achieved by establishing a new competition test in relation to certain actions that can be taken under each of the Acts. This new competition test applies to quality partnership schemes, subsidised bus services and ticketing schemes alone. It does not impact on other areas of competition or transport law.
The new test, tailored to the circumstances of bus operations, is based on "proportionality". It recognises that when putting in place measures to drive up quality standards, or to improve local services, or to take account of environmental considerations, there may be an impact on competition. The test requires that the effect on competition of any such measures taken should not be disproportionate to the public interest objectives.
This new competition test will enable local authorities to secure the benefits of the new bus powers within the Transport (Scotland) Act 2001, including better vehicles, better facilities and service improvements without falling foul of existing competition legislation.
But in order to give effect to the new competition test, the Director-General of Fair Trading must be given a role, and a procedural framework, within which to enforce these provisions. Competition law and the functions of the Director-General of Fair Trading in terms of the Fair Trading Act 1973 are wholly reserved matters. It is therefore necessary to make this Section 104 order, to enable him to enforce this new competition test in Scotland.
Finally, I should make it clear that, although this order will extend the Director-General of Fair Trading's functions to Scotland, it will not extend powers to the Scottish Parliament to consider competition matters.
This order is necessary and expedient in consequence of the Transport (Scotland) Act 2001. In practice, it will provide an enforcement and competition regime that is consistent across Great Britain as regards very similar provisions in the respective Transport Acts to allow proper account to be taken of public interest objectives.
I hope that noble Lords will feel able to support both of these orders. I beg to move.

§ The Earl of Mar and Kellie
My Lords, before I speak to these two orders, I should declare two interests. First, I have a son-in-law who works in the oil extraction industry and, secondly, I have a stepson who works in the bus industry in Scotland.
I should also like to praise the usual clarity of the Executive Note prepared for the Scottish Parliament—a model for this Parliament.
The devolution order obviously transfers functions within the Electricity Act, as modified by the recent Utilities Act, from Westminster to the Scottish Ministers. I welcome those changes on two counts. First, I am always in favour of increasing autonomy for Scotland. Secondly, the issue of energy generation in general, and the use of renewable energy in particular, are both important issues for Scotland to wrestle with. I rather suspect that little happens now in the minds of the public about the need to switch over to renewable forms of energy and energy use reduction. So I expect that the crisis will not be upon us until the North Sea and the eastern Atlantic continental shelves have run out.
Despite this pessimism, I firmly believe that Scotland must begin to prepare itself for this medium-term energy crisis, so that when the oil and gas run out Scotland will have in place competent, proven and established methods of renewable energy generation. We must not let ourselves be caught out. Scotland's under-populated terrain and extensive coastal waters provide an excellent medium for renewable generation. It is entirely right that this particular aspect of energy policy should be placed in the lap of the Scottish Parliament and on the desks of the Scottish Ministers. I hope that our elected members and Ministers will seize the opportunity to be creative and positively promotional with these new powers. I suspect, however, that Scotland's planning system may hinder the progress that is necessary.
I observe that an electricity generator who does not meet the renewable target on the certificate will be able to buy out the obligations. I hope that the buy-out rate will be sufficient positively to encourage that generator to greater efforts in the next year.
In conclusion, I refer to two examples that bear on this issue. First, Scotland could swap agricultural set-aside for the production of bio-diesel. Secondly, we could learn from the hydro-electric experience of our Norwegian neighbours. Just to prove that not everything is bad, excessive rain last year led to Norway not having to import electricity from Denmark, as the hydro dams could absorb and make use of the otherwise unwelcome increase in rain.
I now turn to the transport order. First, I point out that a Westminster order in consequence of an Act of the Scottish Parliament is a rare legislative phenomenon. Constitutional anoraks will be completely animated by this! I also welcome this order within the context of the Great Britain transport policy. It deals effectively with the issue of cross-border uniformity. Fortunately, the recent Transport Acts passed by this Parliament and by the Scottish 1800 Parliament seem to have achieved similar outcomes. In this case, cross-border uniformity is easily achieved. It will not always be so, nor should it. For this order to be judged useful, the outcome has to be the identifiable improvement of bus services in Scotland. Of all the sectors of public transport, this is the one that the public seek to avoid. The industry must work to present itself as acceptable in all respects and the public need to make the effort to appreciate improvements when they are made. Bus services are the most flexible of all public transport systems. I wish both the orders well.

§ The Duke of Montrose
My Lords, I thank the Minister for giving such a detailed explanation of the two orders. I was particularly interested in that relating to the creation of renewable energy. Are the Government expecting Scotland to produce more or less than 10 per cent of renewables by 2010?
Furthermore, I was interested to hear the Minister say that the certificates will be "tradable" across the Border. Does that mean that the target in England and Wales will be adjusted to take up the balance of the variation introduced by the Scots?

§ The Earl of Northesk
My Lords, I, too, thank the Minister for his explanation of the orders. Like the noble Earl, Lord Mar and Kellie, we are content to welcome and endorse their purpose, the more so because it has been made clear that the intention is to deliver uniformity of the competition regime, particularly in the context of the second order.
Also like the noble Earl, we applaud the practice of making the Executive Notes available to the House. I cannot help feeling that it would be advantageous if the practice could be extended. My noble friend the Duke of Montrose has far more expertise and experience in these matters than I and I look forward to the Minister's clarifications of the point he raised.
Subject only to that, we on these Benches happily support the two orders.

§ Lord McIntosh of Haringey
My Lords, I am grateful to all noble Lords who have spoken in this brief debate. I acknowledge immediately that the Executive Notes provided to the Scottish Parliament have set a high standard which it should be incumbent on us to match in this Parliament. It is fair to say that the Explanatory Notes to legislation which are available in this country have been greatly improved in the past five years. It has become the practice—and it was confirmed by the report of the Offices Committee which was agreed by the House today—that according to the procedures of the House the Explanatory Notes should be made available with the Bill. However, it is true that we have a way to go and that the Executive Notes which are provided in Edinburgh should be an example to us all.
It will be agreed by all noble Lords who have spoken that the last thing I should be doing in responding to a debate on the orders is talking about energy or transport policy. Such matters are for the Scottish Parliament and the two orders facilitate that either 1801 under Section 63 or Section 104 of the Scotland Act. Although I acknowledge what was said by the noble Earl, Lord Mar and Kellie, about the Scottish planning system and by the noble Duke, the Duke of Montrose, about its commitment to the increase in renewable energy to 10 per cent of consumption, those matters are strictly for the Scottish Parliament. The orders merely make it possible under the Scotland Act for it to take account of them. It would therefore be inappropriate for me to intervene in its spheres of responsibility. In those circumstances, I commend the orders to the House.

§ The Duke of Montrose
My Lords, before the Minister sits down, I was asking merely whether the Government envisaged that they would be able to adjust their policies in England and Wales to balance whatever happens in Scotland.

§ Lord McIntosh of Haringey
My Lords, that is exactly so: the tradable limits policy enables one to balance across the Border.