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Energy Bill

moved Amendment No. 67: 67: Clause 80, page 73, line 17, leave out subsection (3) The noble Lord said: It is worth rehearsing the history of the amendment, because there is a somewhat misguided exclusion in the Bill. Some Members of the Committee will remember the Energy Bill of March 2004, when this House voted in support of an amendment to impose a legal duty on the Secretary of State to, "““ensure the integrity and security of gas and electricity supplies””." I remember that clearly; it was my amendment. It went to a Division and was carried with a majority of two, but then went to the other House, where it stood as Clause 1 within a new Part 1 of the Energy Bill. The Government resisted the amendment during the later Commons proceedings, arguing that a legal duty would make ad hoc government intervention more likely and undermine the independence of Ofgem. Therefore they introduced an alternative, which another place supported—a clause to establish an annual reporting framework, saying that it would secure greater public and political transparency for the longer term prospects of security of supply. In the proceedings on this Bill, we have dealt at some length with security. That alternative was then accepted by this House and became Section 172 of the Energy Act 2004. It is that section that Clause 80(3) seeks to remove. It is worth looking at Section 172. It requires the Secretary of State to publish and lay before Parliament a report every year on the availability of gas and electricity for meeting all reasonable consumer demands. In other words, the section imposes an annual statutory reporting requirement on the Government in relation to the security of the country’s energy supplies. In a little more detail, the section stipulates that the annual report must be prepared jointly by what is now BERR and Ofgem. It must deal with both the short-term and the long-term view and cover, in particular, electricity generating capacity, the availability of capacity in electricity transmission and distribution, the availability of capacity in licensed gas pipeline systems, and the availability of capacity in gas infrastructure. That annual report, which the Government are required by law to lay before Parliament, is an important mechanism for reflecting both a strong public and political interest in the provision of secure energy supplies and the reality that, if markets are to continue to deliver security, they must be able to receive and share as much information as possible—a point made in the letter that the noble Lord, Lord Bach, recently circulated. The reason given by BERR for wanting to delete Section 172—it is set out in the Explanatory Notes—is that it overlaps with reporting requirements imposed by the EU electricity and gas liberalisation directives of June 2003. A problem with that immediately strikes one—2003 was before 2004, so the directives already existed. The Government introduced Section 172 in the other place and it became law here so, if the directives were more important and made it unnecessary, why did they do so? There would have been no need to enact Section 172 in the first place. However, a more important point is that the requirements of the articles in the European directives are neither as specific nor as strong as those in Section 172. Looking at a direct comparison of the drafting—I shall not weary noble Lords with that—makes that clear. In addition, the directives would allow BERR to pass the monitoring responsibility for security of energy supply to Ofgem, thus negating one of the purposes of Section 172 that I am sure that we all agree with: that the Government must ultimately take responsibility for such monitoring. Finally, deleting Section 172 in favour of the European directives would remove the Government’s obligation to lay security of supply reports before Parliament and would allow the frequency of reports to be reduced from one to two years. I suggest to the Committee that these are all unwelcome outcomes. Considerable fuss has been made about Clause 80(3) and the Government must think about it again. Given the history and the comparison of the European directives with Section 172, the section is valuable. It should remain on the statute book, and I hope that the Government might agree. I beg to move.