My Lords, I do not for a moment suggest that Clause 26 should not be in the Bill. I have adopted the device of having a debate on it in order to explore its intention a little more. I remind noble Lords that at one point we expected that we would reach this point last week. We have been a little delayed. I could have tabled an amendment. I would have been perfectly simple: “Page 17, line 1, leave out subsection (3)”. So I wish to ask my noble friend some questions about subsection (3).
What is the use of the four powers which the Government are proposing to take to require generating plants to operate differently? They relate to: the manner in which functions are to be exercised; restricting the use of generating plant; the way in which a plant may participate in a capacity auction; and the inspection of plant or property. These are very broad points. I am given to understand that some generators are increasingly apprehensive that the becoming involved in the capacity market could well have undesirable operational strings attached to it. There is no indication that any of the powers would be limited even once they had ceased to
be part of the market. I have to warn my noble friend that I am told that this could potentially undermine the appetite of generators to become involved, which manifestly is not the Government’s intention. Here again, we have a clause which is drafted in very broad terms and we have to wait until we see the regulations and subordinate legislation that will come from it. I do not want to repeat what has been said so often, but in advance of our seeing the draft regulations, it would be helpful if the Government could explain how they intend to use the powers, especially those relating to the use of generating plant or the manner of participating in an auction. They want to ensure that generators which may be looking to participate in the capacity market can understand and have confidence in what it may mean for them in terms of plant operation once the Act comes into force.
We have heard a great deal in these debates about the problem of uncertainty and the need to engender confidence. That is hugely important if you are going to attract the necessary investment. I always come back to the meeting that we attended some weeks ago chaired by the noble Lord, Lord Oxburgh, when a lot was said by different categories of potential investor. We have got to have the Bill otherwise we will not get investment. At the end, the question was asked: if we have the Bill, will we get the investment? That was followed by a long silence. Nobody is able to guarantee this. Therefore, we must do our very best to make sure that any cause of uncertainty, any anxiety about the likely consequences, is treated as very important.
Clause 32 again gives the power by regulation to amend or repeal existing legislation. I shall not read it all out because everybody can see what is in it, but I am particularly worried about paragraph (d). Here again we have regulations that will give very wide powers of direct legislation—in a sense, Henry VIII provisions—if they are connected to the development of a capacity market, including the annual reports made by the authority on the security of electricity supplies and the report on the security of energy supplies as a whole. As I said, paragraph (d) provides for wide amendment of existing enactments. It is very broad and, here again, concerns have been raised by the industry—I am sure that it has made its views known to my noble friend’s officials—that that it may take effect unpredictably. Therefore, there is increasing uncertainty and, to that extent, reducing confidence.
My amendment is simply to ask my noble friend to give an explanation. What are the likely uses of this power? How widely would it range, bearing in mind that it includes amendments to primary legislation and is consequential on provision which itself is made in secondary legislation. I understand the desire of the Government to cover every possibility, but the more they seek to cover with very wide powers of this sort without adequate explanation of how they are going to be used, the more they increase the uncertainty which undermines the possibility of investment. I hope that my noble friend will be able to give us some further information which may help to reduce that uncertainty and increase confidence.
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