Energy Bill [Lords] – in a Public Bill Committee at 11:00 am on 2 February 2016.

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Question proposed, That the clause stand part of the Bill.

Photo of Alan Whitehead Alan Whitehead Shadow Minister (Energy and Climate Change)

We come now to the last part of the Bill. It is always worth having a look at a Bill’s final provisions and at how they make the rest of the Bill work. Clause 81 relates to the powers to make regulations under the Act, which can famously include so-called Henry VIII clauses effectively enabling the Secretary of State to amend parts of a Bill that has just been passed by orders of various kinds, whether or not the intention of such orders actually featured on the face of the Bill. There has been a tendency in legislation in recent years to backload Bills so that the Secretary of State is given rather a lot of power to change something that might otherwise have been in a Bill.

Although I would not say that this particular Bill falls prey to that temptation to any great extent, there are nevertheless provisions for regulations either under the affirmative procedure or the negative procedure, which require prayers to annul, relating to effectively all the Bill’s clauses. There is a distinction between what regulations can be passed on an affirmative basis, therefore requiring a debate and a vote, and what can be made by negative statutory instruments, which are just laid and—not to put too fine a point on it—no one notices unless someone is sharp-eyed enough to come forward with a prayer to annul, leading to an instrument being subject to the provisions in subsection (4), which governs the instruments that must be made by a draft being laid before and approved by Members of both Houses.

First, why has a distinction been made between those clauses of the Bill which may be amended, effectively, by affirmative resolution and those clauses which may be amended simply by statutory instruments being laid before the House and therefore subject to a motion to annul? There is then a further question about the distinction made between the regulations in this clause. Under subsection (4), do statutory instruments that may be moved, positive SIs approved by resolution of each House of Parliament, which specify particular regulations and clauses of the Act—a number of which relate, for example, to the organisation of the OGA—cover the amendment of previous SIs that relate to the conduct of the Bill?

I have in mind an SI passed in September 2014, the Renewables Obligation Closure Order 2014, SI 2388, which contains a number of very interesting provisions. It provides for the closure of the renewables obligation on or before 31 March 2017 and states:

“No certificates to be issued in respect of electricity generated after 31st March 2017.”

This is, indeed, the statutory instrument that defines the date of closure of the renewables obligation. It is derived from the Energy Act 2013 which, while it envisages in chapter 7 the closure of support under the renewables obligation does not specify a date at which that support should be taken away. The statutory instrument of September 2014 provides a date for that closure. The question is, in what circumstances under this clause might the Government change this statutory instrument?

The statutory instrument can be read in two ways. The heading of article 3 of the SI,

“No certificates to be issued in respect of electricity generated after 31st March 2017”,

can be read as the statutory instrument giving effect to what is set out in very general terms in the Energy Act 2013. Conversely, it could be read as saying that up to 31 March 2017 in certificates in respect of electricity generated should be issued. In that particular clause, the Bill changes the point at which the renewables obligation will cease for onshore wind. Of course, the 2014 SI deals with forms of renewable generation other than onshore wind, and they are not affected by the changes in the Bill. Onshore wind is eligible for renewables obligations up to 31 March 2017—that is pretty clear under the SI—and that will be changed at a stroke to a year earlier. We will debate that particular detailed question this afternoon. By the way, the 2014 SI has provision for particular grace periods, and we might touch on that later.

The point about the SI is that it specifically sets out not just the point at which that renewables obligation requirement will stop, but the period during which that renewables obligation requirement has to continue. As we can see with what the Secretary of State can do under the clause to amend legislation, subsection (5) of the clause allows statutory instruments based on any of the Bill’s provisions to be made under the negative resolution procedure, with the exception of those measures specified under subsection (4). Subsection (5) states:

“A statutory instrument containing any other regulations under this Act is subject to annulment in pursuance of a resolution of either House of Parliament.”

Subsection (6) states:

“Subsection (5) does not apply to a statutory instrument containing regulations under section 83.”

We have not yet discussed clause 83, but it relates to the commencement of the Bill and when it becomes an Act. As I have said, the Bill changes the date by which the renewables obligation should cease to be available to developers under the terms of the statutory instrument from March 2017 to March 2016. Clause 81(6) relates to the change to the renewables obligation, and clause 83(1) states that the Bill,

“comes into force on the day on which this Act is passed.”

That is important in defining when the Act is passed. I understand that that happens when the Act receives Royal Assent. In clause 83, there are not only definitions of when the Act is passed, but when other parts come into force. For example, one part

“comes into force two months after the day on which this Act is passed.”

That is important, because while we trust that the Bill will be passed in the not too distant future, it is more than possible that that will be after the date that the renewables obligation ceases to be available to developers, which will be foreshortened from March 2017 to March 2016—not that one needs to indulge in a great deal of speculation. Obviously, I am not privy to Government legislative timetables, but we are here in Committee at the beginning of February. We have parliamentary sitting time until the end of March, minus a week. The Bill has to go back to another place, at which point there will undoubtedly be discussion about its provisions, and it will come back to this House for final consideration before the process of Royal Assent is undertaken. By the time Royal Assent has been obtained, we could be past the date by which the Bill’s provisions come into force.

The problem is that the Bill does not make provisions that come into force where nothing existed previously. However, in the statutory instrument passed at the end of 2014, there is provision already in place for renewables obligations certificates. If the Bill does not become law until after March 2016, it is not the case that nothing will happen; according to the 2014 order, renewables obligations certificates will continue to be given out after March 2016. That is quite an interesting problem.

I return to clause 81. It is technically possible, once the Bill becomes law, for the Government to amend the statutory instrument by another statutory instrument. It could be a positive or a negative one, but I would hope for a positive one. My reading of the legislation is that it should be a positive one, because it relates to when the Bill comes into force. If clause 81 is used to put that right in the case of the continued issue of renewables obligations under the statutory instrument concerned, it would probably be necessary to legislate under statutory instrument retrospectively to put that singularity right.

I can see nothing in the clauses that enables the Minister not only to legislate to make regulations, but to legislate to make regulations that have retrospective effect. In addition to my question about whether she has considered the difference between the negative statutory instruments that apply to certain parts of the Bill and the positive instruments that apply to other parts, and why they cannot all be positive instruments, I ask the Minister whether she can clarify whether either of those arrangements enable her to amend statutory instruments that are retrospective in function. I am sure she will understand the convention in this House that legislation should not apply retrospectively, whether it is primary or secondary legislation. Perhaps she will help not only me but the industry generally by clarifying this point. Should the Act have those provisions in it, will the provisions apply to further amendments to the statutory instrument? If so, can the secondary legislation act retrospectively as far as the original statutory instrument is concerned? I would value the Minister’s clarification of those points.

Photo of Andrea Leadsom Andrea Leadsom The Minister of State, Department of Energy and Climate Change 11:15, 2 February 2016

I am in awe of the hon. Gentleman’s knowledge of Bill provisions and so on. I just have to tell him, light-heartedly, that I was told, “No one will talk about this clause,” to which I replied, “I wouldn’t bet on that.” [Laughter.] That is very much off the record, if the hon. Gentleman knows what I mean, but I pay tribute to his assiduousness. He is absolutely right to raise whatever points he wants. Although the clause is a standard Bill clause, he has managed really to do it justice—[Laughter.] I mean that sincerely; I am not laughing at him at all. I think it is brilliant—I really do.

The hon. Gentleman essentially asks why some provisions are subject to the affirmative procedure and some to the negative procedure. He will know that some provisions delegate or give further reaching powers and therefore require greater parliamentary scrutiny. The clause provides that a statutory instrument containing measures relating to any of the following must be made under the affirmative procedure: clause 2, on the transfer of functions to the OGA, regarding amending or repealing any Act or provision of an Act; clause 46(7), which contains the power to amend the maximum amount of financial penalty chargeable by the OGA; clause 64(6), on disclosure by the OGA to certain persons; and clause 67(1), which determines the confidentiality periods that are to apply to protected material before it can be published or made public. Any other statutory instrument—other than those dealing with commencement—made under the Bill will be subject to the negative procedure.

In answer to the hon. Gentleman’s well-made points about the time at which the legislation receives Royal Assent, I assure him that we are confident that the Bill will get that assent in time for us to meet our manifesto commitments.

Question put and agreed to.

Clause 81 accordingly ordered to stand part of the Bill.

Clause 82 ordered to stand part of the Bill.

Clause 83