Clause 28 - Government guarantees for NDA borrowing
Energy Bill [Lords]
3:15 pm

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

I beg to move amendment No. 101, in

clause 28, page 25, line 9, at end insert—

'(2A) Before making such a guarantee under subsection (2), the Secretary of State shall assess the ability of the NDA to meet its commitments as contained in section 26(4), and shall not give a guarantee under subsection (2) unless satisfied that the NDA can meet those commitments.'.

Mr Bill O'Brien (Normanton, Labour)

With this it will be convenient to discuss the following: Amendment No. 102, in

clause 28, page 25, line 10, leave out

'as soon as practicable after'

and insert 'Before'.

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

A moment ago, we heard about NDA borrowing. Clause 28 refers to Government guarantees for NDA borrowing. Does the Minister think that guaranteed borrowing falls in the same category as grants to the NDA? It seems to me that the two are slightly different, because there is no specified amount that the NDA can borrow.

I am not saying that the NDA should not borrow. I am saying that, if the Secretary of State gives a guarantee to the NDA

''in such manner, and on such terms, as he thinks fit'',

she should assess the ability of the NDA to meet its commitment before giving the guarantee. I do not know the exact figure that we are talking about, but it is alarming that the taxpayer could be asked to underwrite sums of the magnitude that we are talking about without any reference to Parliament.

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

The arrangements set out in the clause are the normal ones for such circumstances. The Bill sets out an overall framework of parliamentary oversight and public accountability at what is, I think, an appropriate level considering the NDA's strategy.

The annual planning and the annual reporting process give Parliament the opportunity to consider the big picture of the organisation.

I have again considered whether there is a case for strengthening the arrangements for parliamentary oversight, and I do not think that there is a strong case for doing so. As the hon. Gentleman said, amendment No. 101 would require the Secretary of State to be satisfied that the NDA can meet any commitments entered into before guaranteeing NDA borrowing. That is unnecessary, because the NDA is entirely dependent on the Secretary of State for its funding. Any income that the NDA generates must be returned to the Secretary of State.

The Secretary of State will need to fund the NDA to meet its obligations and carry out its functions, including meeting any debt repayments. The ability of the NDA to meet its commitments will flow from the funding provided by the Government. Any guarantee provided by the Secretary of State about NDA borrowing would simply recognise that.

The question of whether the NDA should be allowed to borrow money from third parties is covered in clause 26. The NDA requires the consent of the Secretary of State and the Treasury before it can do so. At that point, the Secretary of State should decide whether the borrowing is appropriate, whether the Government should fund it and whether a guarantee, if necessary, should be given.

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

The issue is different from that of making grants, which are more controllable by the Secretary of State. This is a borrowing guarantee. Borrowing can run out of control, so I stress my concern about the clause. However, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 28 ordered to stand part of the Bill.

Clauses 29 and 30 ordered to stand part of the Bill.

Schedule 4 agreed to.

Clauses 31 to 40 ordered to stand part of the Bill.