The administrator

Question proposed, That the clause stand part of the Bill.

In our debate on clause 4, the Minister said—we all welcomed it—that the intention should be set out in the Bill so that it is clear. I would hope that the same could be said about clause 5, but I fear that its intention is not clearly set out, and therein lies my concern.

Under the clause, the Government intend to change the authority that is responsible. I accept that, and it seems sensible that we should have an authority responsible for the whole clean coal issue. I think that we would all welcome that, but what changes have the Government thought about? What is the time frame for the changes, and what sort of authority will it be? Will it be a regulator? We need to know more about that.

My real concern, however, is the explanatory notes, which state that the clause gives the Secretary of State power, through regulations, to transfer the function of administrator to another body, “including to himself” or, indeed, herself—a further growth in ministerial power over a rather sensitive area. Does that give the Secretary of State the right to increase or change the levy, and, if so, in what way? We need to understand that, because “levy” is simply another word for taxation. What powers would it give a Secretary of State? I assume that it would give all the powers given to the authority, but I want that to be clarified. What do the Government envisage if the measure is enacted? If they do not have a view, I wonder why this provision is in the Bill.

My hon. Friend makes a very interesting point about this quite complex situation. If someone is unhappy about the operation of the authority, to whom do they appeal if the powers have been given back directly to the Secretary of State?

Given the questions that I am asking, I fear that I am not competent enough to answer my hon. Friend’s question, but no doubt the Minister has taken it on board and will be kind enough to respond. There are serious concerns about the inclusion of the phrase in the Bill. The Government must believe that there might be a need to transfer power to the Secretary of  State. Therefore, we need to know why that might be necessary. Will the Minister be kind enough to make the clause’s intentions clear?

The provisions relate to the administrator of the CCS financial support mechanism. A number of elements make up the financial support mechanism: the raising of funds through a levy on electricity supplies, the making of incentive payments to CCS projects and the monitoring of the assistance schemes under which assistance is provided. The elements clearly create a need for an administrator to carry out the functions necessary to administer the levy and payments to projects. We believe that Ofgem, the regulator of the electricity supply industry, is well placed to carry out that role.

The clause therefore appoints Ofgem as the administrator. At the same time, it provides, as the hon. Gentleman said, that the Secretary of State has the power to transfer the functions of the administrator to another public body if required. That will enable the Secretary of State to take account of any future change in circumstances that might make it appropriate to transfer the function of the administrator to another body.

In our evidence sessions, we discussed whether a new body would be necessary in the future; I think that the Conservatives had proposed that new body. At the time, I said that the creation of such a new body was premature, but this is a long-term programme that takes us to 2020, conceivably with levy payments and conceivably adding retrofit payments. We are therefore probably talking about a period of potential financial support of, say, 15 years. Therefore, it is clear that we need to have an open mind about what might be necessary in the future. However, let me be absolutely clear that it is our settled view at the moment that Ofgem has the appropriate expertise, and indeed Ofgem is being appointed under this clause.

Does the Minister not accept our concern that this measure makes the Bill rather narrow? We understand that the funding mechanism will be fundamental to the projects being developed. However, there are many other aspects, in terms of organising the funding mechanism and its strategic deployment, that will have to be overseen, and there will have to be an organisation to do that. Therefore, does it not make sense to make provision for that, rather than perhaps needing new primary legislation to set up another body when the matter becomes much more urgent? I think that we can all see the need for that new body. Industry sees the need for it, so would it not be sensible simply to have the power to create it available?

I will be happy to consult officials outside the Committee, but I am not aware that there would be need to be primary legislation to set up another body that might have the functions that the hon. Gentleman has just referred to. This measure is narrow and specific for good reason: to ensure that the moneys can be raised and disbursed appropriately and that monitoring can take place. We believe that Ofgem is the appropriate body to do that. Indeed, we have no plans at this time to make any subsequent transfer of functions.

Given the time for which we expect the projects, and what follows from them, to run, we believe that it is reasonable to have this flexibility, should it be required, although we do not currently anticipate that it will be needed. Indeed, some of the other functions that the hon. Gentleman has referred to could probably be covered by means that did not require primary legislation nor the transfer of these particular powers, because they are specific powers.

The Minister is being immensely generous in giving way and I hope that we are reacting in that spirit.

The Minister will remember that we scrutinised a Mrs. Jenny Saunders, or a Miss Jenny Saunders—I do not know her marital status, actually. I questioned her on the efficacy and efficiency of Ofgem. In particular, I asked her whether she felt Ofgem was doing a reasonable job. I think that the information that I got back was that she felt that it could improve considerably.

Is the Minister therefore happy to give this power to Ofgem, or does she intend to ensure that Ofgem ups its efficiency in respect of the task she is giving it?

My hearing of most of the witnesses, including Ms Saunders, was that they were saying that Ofgem’s functions may have left a lot to be desired in the past. However, I think they all said that it was now on a better track and had improved in recent years. We will debate at a later stage the ways in which Ofgem might take on board climate change and energy security.

I think that we are all of the view that Ofgem has perhaps not always performed as we have wished it to, but considerable improvements in performance have occurred and new directions are being pursued that are in line with Government wishes. We are therefore confident that Ofgem, which has already set up a new unit to cover a number of functions—of which the issue under discussion will be one—is equipped, experienced enough and able to do the job.

I repeat that the provision is narrow, as it needs to be; it is the task that Ofgem needs to carry out. It is the body that we are appointing through the Bill to do the relevant tasks. We do not have plans at present to change that, but we will allow ourselves the flexibility. Whether there is a need for a different public body with much wider functions—the kind to which the hon. Gentleman has referred, perhaps—and whether that would require primary legislation, will be part of our considerations in the rolling review.

I am sure that, as we progress, we will be able to make those decisions subsequently; they do not need to be taken in this Bill at present. I think that I have indicated clearly enough that the clause’s provisions are required, as they specify who will carry out the central function of administering CCS financial support.

My apologies, but I did raise the issue of the information in the explanatory notes. Will the Minister refer to them? The possibility of transferring the power to the Minister, whoever that Minister might be, is a pretty important factor in this discussion.

The hon. Gentleman and I will share the view that it is always better not to transfer additional powers of this kind to Ministers, but we have to have  that flexibility should it be necessary. I have, however, indicated that we have no such plans. We could have gone along with the proposed contractual arrangements for the first project where the relationship is directly with the Secretary of State and the developer for CCS projects. We have put Ofgem in the position to do the work involved, which is important to us. We think that Ofgem is the right organisation to do it and we did not include the provision to suggest that we want to make a transfer. It is there as a protective clause for the future.

I welcome the Minister’s answer, but I did ask about what sort of circumstances she envisaged the power being used in. If there are no such circumstances, why is the power in the explanatory notes and why does it exist?

It is in the explanatory notes because it is in the Bill. I have no idea what sort of circumstances might arise, but the hon. Gentleman will understand that the expert civil servants who advise us on the issue believe that we should have such a clause. The drafters of Bills often advise that, too. I am content with that and I am not ashamed to say that I cannot enlighten the hon. Gentleman on this point at this time.

Clause 5accordingly ordered to stand part of the Bill.