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Energy Bill

moved Amendment No. 58: 58: After Clause 83, insert the following new Clause— ““Licensing of activities relating to smart meters Schedule (Smart meters: licensable activities) contains amendments to the Gas Act 1986 (c. 44) and the Electricity Act 1989 (c. 29).”” The noble Lord said: My Lords, I shall speak also to the other government amendments in this group. At the Report stage, my noble friend Lord Dubs proposed an amendment to the Bill related to the type of market model that will underpin the rollout of smart meters to all households. As we recognised during our debate on that amendment, our current competitive metering market offers certain advantages when proceeding with a smart meter rollout. However, the scale and complexity of delivering 47 million smart meters—to all homes in Great Britain—may mean that we will need to consider centralising some or all metering services in order to ensure an efficient and well managed rollout. I think that our earlier debates recognised the magnitude of this task. The type of market model used to roll out smart metering to the domestic sector will be a key determinant of the project’s costs and benefits. As such, the Government have already undertaken a considerable amount of analysis of the various market model options. That work will conclude by the end of the year. As I made clear on Report, at this stage our objective is to ensure that we have a legislative basis to deliver a range of future options—something that noble Lords also identified during our previous debates as being of great importance. I believe that that was also the motivation behind the amendment of my noble friend Lord Dubs. Having considered the existing smart meter provisions in the Bill, and having looked, as we indicated we would do, very closely at my noble friend’s amendment, we have tabled a number of amendments which we believe better enable us to deliver a range of market model options in future. Providing for centralisation of services in a competitive market is a challenging and complex issue, as the House will readily appreciate, and it touches on important matters such as competition law. The amendment seeks to take account of these types of complexities while delivering the overall aim of the amendment tabled by my noble friend on Report. The new clause and schedule amend the Secretary of State’s powers under the Gas Act 1986 and the Electricity Act 1989 to create new licensable activities. This amendment ensures that, by affirmative order, the Secretary of State can create new licensable activities in connection with providing, installing or operating smart meters or the related communications infrastructure. The clauses include a power to restrict the geographic scope of the licence to enable centralisation of activities on a regional or national basis. The power also provides that the Secretary of State may make regulations so that he or Ofgem will be able to award these licences following a competitive tender process, the detail of which is outlined in Schedule 4. I recognise that the noble Lord, Lord Jenkin, has tabled an amendment to the Government’s proposals and I shall listen to his case with the greatest interest. We believe that this type of power is the best way to ensure that we can deliver a range of market model options while ensuring that, whatever model is finally chosen, we retain an appropriate element of competition. These amendments will help to ensure that we can select the most appropriate market structure to deliver a successful rollout of smart meters to the domestic sector. All sides of the House appreciate the significance of this massive task. We are seeking through these amendments to reflect the concepts advanced on Report by my noble friend Lord Dubs, supported by other noble Lords. At the same time, we are providing a structure which the Government can make workable in the future in a challenging environment. I beg to move.