Climate Change Bill [HL]

The noble Lord twice mentioned the Joint Committee, and he was quite right in his second reference that we agreed with the Government on that particular point. However, he did not make it clear that we did not agree with the Government on the first point. We listened to the explanation of why paragraph 5(3)(a) of the schedule was in the draft Bill, but we also pointed out that it appeared to be contradictory to the Government’s intention to decide on auctioning case by case. The Government’s argument was that there were good reasons for auctioning, and I agree with that. We were told that the Government’s legal advice was that this provision would not be an impediment to provision in the Finance Bill. However, we said in paragraph 196 of our report: "““Notwithstanding this assurance, we continue to have some doubts. The wording of paragraph 5(3)(a) does not limit the powers of the regulations that can be made under the draft Bill, but rather asserts those powers over the method of allocation, and states that this method must be free of charge. Moreover, while paragraph 5(3) states explicitly that ‘Paragraph (a) does not affect the power to require the payment of a fee’ (which we understand to relate to administration fees, rather than the purchasing of allowances), it does not contain an equivalent clarification that the paragraph does not affect the power to auction allowances under other legislation. At the very least, the current wording could cause confusion. We note that some industrial groups have welcomed this provision, potentially under the misapprehension that it was ruling out the use of auctioning for any trading schemes that would be set up in the future. Most importantly, there does not appear to be any need for the provision in paragraph 5(3)(a) at all: were the draft Bill to remain silent about whether allowances would be auctioned it would achieve precisely the Government’s intention, simply through failing to provide the power to introduce auctioning through secondary legislation. Given that the provision in paragraph 5(3)(a) appears to be superfluous as well as problematic, we recommend that it be deleted””." I have listened to the Minister, but no argument has been produced that counters the Joint Committee’s conclusion. I simply do not understand why the Government insist on leaving this provision in the Bill. It adds nothing and retracts nothing. We think that there should be the power to auction, and that it is perfectly appropriate that that is done through the Finance Bill. Why on earth should we have a provision in the Bill that is likely to cause confusion and appears to deny the very principle that the Government want to pursue?