Energy Bill

As the hon. Gentleman says, we will discuss feed-in tariffs later, but I thank him for his congratulations. My endeavour now is to answer a question that even he has not yet formulated in his mind. I turn now to Government new clauses 8, 9 and 10, and the consequential amendments Nos. 50, 58 and 59. I want to explain why we believe that they provide the most appropriate legislative route forward, given the context that I have just outlined. New clause 8 allows the Secretary of State to modify relevant electricity and gas licences, or other documents made under licence conditions, to require or facilitate the installation of smart meters. As I have indicated, our intention is that this power will underpin the roll-out of smart meters to medium-sized business in the first instance. As is common practice with technical issues in the energy sector, the intention is to specify the detail of the requirements being placed on licensees, and other relevant arrangements, through modifications of licence conditions or other relevant industry documents rather than including that detail on the face of the enabling legislation. Examples of the type of detail that I am referring to would include the specification of the meter, or the speed of a roll-out. At this stage, we need to maintain flexibility in defining those details, as they could have significant cost implications. Small changes to the assumptions that we make can have significant impacts on the overall costs, as well as on the potential benefits. We need the flexibility to specify these issues in modifications so that we can identify the optimum, most cost-effective roll-out. The new clause also recognises that smart metering is an issue of significant interest to Parliament. It is also potentially one of major national importance, with direct implications for business and consumers. Usually, the Secretary of State would make this type of modification without further recourse to Parliament. The new clause proposes going further by providing a mechanism for additional parliamentary scrutiny. More specifically—in addition to the usual requirements for the Secretary of State to consult relevant licensees, Ofgem and any other appropriate persons—new clause 9 requires the Secretary of State to lay the draft modifications in Parliament and allow a period of 40 days in which either House of Parliament may reject them. I believe that that additional parliamentary scrutiny is appropriate and that it will be welcomed. Our amendments will allow the Government to move forward now with smart metering for medium-sized business and, subject to further analysis and informal consultation, to be in a position to act as quickly as possible to roll out smart meters to the small business and domestic sectors, should our final analysis support that. That is the most sensible approach, given the inherent flexibility needed in developing and implementing the licensing and other arrangements in this evolving regulatory area.