I am extremely grateful to my noble friend. I thank the noble Lord, Lord Whitty, for his amendment, which would set up an expert panel to advise the Secretary of State on the exercise of his powers relating to CFDs, investment contracts and capacity payments. I reassure the noble Lord that we are working hard to ensure that the process through which final contracts for difference and strike prices are set is transparent, robust and informed by a full range of expert input. The consultation on the draft delivery plan, as well as workshops and events with stakeholders, will allow industry, consumer groups and all other stakeholders to scrutinise the figures, and the evidence used to develop them, and provide us with feedback to inform the final plan.
Prior to the consultation, the draft strike prices were also informed by two pieces of independent advice: the analysis provided by National Grid, which helped the Secretary of State understand the potential impacts that different strike prices could have on the Government’s objectives and, of course, the independent scrutiny of that analysis by the panel of technical
experts. Both these reports were published alongside the draft EMR delivery plan and copies have been deposited in the Libraries of both Houses. The panel of technical experts in particular, which consists of experts in relevant areas such as economics and generation costs, was appointed through an open competition. It is impartial and independent of any particular viewpoints. I do not therefore think that we need to create another expert advisory panel. We have used existing powers to appoint the current interim panel of technical experts and, following Royal Assent, we intend to establish an ad hoc advisory group. Clause 139(2)(c) provides the spending authorisation to support this work.
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We will use the strike prices published in the final delivery plan to set strike prices for investment contracts for renewable technologies. As such, they will be informed by the analytical process and independent panel that I have described. For investment contracts that are bilaterally negotiated, specialist advice will be sought as appropriate and there will be rigorous scrutiny of proposals. For example, the Government have appointed technical and financial specialists to scrutinise a developer’s plans and proposals. We will publish summaries of reports from these advisers and a value-for-money appraisal in the event that agreement is reached alongside the contract when it is laid before Parliament.
Let me reassure the Committee that the Government have listened to concerns of Parliament. Similar concerns to those being raised now were voiced in the other place, and that is why we made amendments to this Bill in response. We removed the discretion of the Secretary of State to withhold information when publishing an investment contract, beyond what was explicitly agreed as confidential in the contract negotiations. For information agreed as confidential and thus withheld, we have committed to publishing a description of that information and the reasons for doing so. In relation to EMR more widely, we introduced a statutory reporting duty at Clause 5(4) which requires an annual report on how the Secretary of State has exercised his functions under Part 2.
In relation to scrutiny of contract terms, I agree that this needs to take place but believe that it would be better done by industry and consumer groups at large. This is why, over the past year, we have been working with an expert group consisting of industry and consumer group representatives in the development of key terms. We will also shortly be publishing the CFD contract spine, which builds on the draft contract terms published alongside the operational framework in November 2012. This will allow industry and other stakeholders to examine the terms of the contract and discuss them further with my officials. Because investment contracts for renewables will be based on the final standard form CFD, they will benefit from the same scrutiny that I have set out.
I therefore hope that the noble Lord is reassured that the Government are listening to the concerns of Parliament and have taken steps to ensure adequate scrutiny and consultation. On that basis, I hope that he will withdraw his amendment.