Clause 154 - Powers of court
Energy Bill [Lords]
4:00 pm

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

We are discussing applications for energy administration orders. Under subsection (2)(a) to (c), the Government have three grounds for taking over a company—that it cannot pay its debts; that it is likely not to be able to pay its debts; or that

''it would be just and equitable . . . to wind up the company in the public interest.''

The latter is a wide-ranging provision. Will the Minister explain how that fits with the other provisions of the clause, which is about companies going into liquidation or administration?

The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen Timms): I am pleased that you are chairing our deliberations this afternoon, Mr. Gale.

The clause sets out the powers of the court when hearing an application for an energy administration order. An application may be made by the Secretary of State or, with her consent, by Ofgem. The court may make the order only if it is satisfied that one of three situations applies, each of which is taken from existing insolvency law. First, the company must be unable to pay its debts. Secondly, it is likely to be unable to do so—that is, it is facing insolvency. Thirdly, on the point raised by the hon. Gentleman, the company could be wound up in the public interest on petition by the Secretary of State under section 124A of the Insolvency Act 1986.

The third situation is tied back to existing powers in the Insolvency Act that allow the Secretary of State to wind up a company if it is in the public interest to do so. Section 124A applies if a company is being investigated under various pieces of legislation, including the Financial Services and Markets Act 2000, the Companies Act and the Criminal Justice Act 1987. When it is expedient and in the public interest, the Secretary of State may seek a winding-up order in respect of the company if it is just and equitable to do so. However, if the company in question is a protected energy company, that could lead to an interruption in supply. The provisions will therefore allow the Secretary of State, in situations of that kind, to apply for an energy administration order instead of a winding-up order. The purpose is to protect the public interest.

Question put and agreed to.

Clause 154 ordered to stand part of the Bill.

Clauses 155 and 156 ordered to stand part of the Bill.

Further consideration adjourned.—[Charlotte Atkins.]

Adjourned accordingly at fourteen minutes past Four o'clock till Tuesday 22 June at five minutes to Nine o'clock.