My Lords, here we are at Third Reading debating an issue of such fundamental importance that it merely serves to illustrate the point that, although this Bill is considerable in size and breadth, it fundamentally fails to do what it says it is going to do: that is, reform the market.
Although I am sympathetic to the defence of this amendment that has been put forward, it simply is not enough. It hinges on whether one believes that a review undertaken by Ofgem will deliver anything. On this side of the House, we are absolutely certain that it will not. We have had numerous reviews from Ofgem, and Ofgem has clearly demonstrated that it is not fit for purpose. That is why the Labour Party and the leader of the Opposition have been absolutely crystal clear that under a Labour Government we would have a complete restart of that regulatory body to refocus it on putting the consumer first and bringing genuine competition across the market, not just in supply, tariffs and the consumer-facing parts of the industry, but all the way through the chain. That includes the generation market and the wholesale market, but also, importantly, the regulated aspects of this industry.
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Throughout the passage of the Bill one part of the energy sector has gone almost without mention. That is the regulated aspects of the industry: the distribution
network operators and the transmission grid operators. I inform noble Lords that on Friday Ofgem will be issuing a consultation on the business plans of the DNOs. We raised this issue in Committee. They are now extended to eight-year regulated periods. Starting in 2015, they will sign off on a business plan that will last eight years to 2023—just think how many Governments that covers—and that essentially ties the hands of future Governments who want to look at that aspect of industry. It is an important issue because these regulated industries are going to change; they will see changes arising from the Bill. If the Bill does what it says it is going to do, which is to decarbonise and to help us move to a more sophisticated demand-management system through capacity mechanisms, it has significant implications for those regulated aspects of the industry and yet we have heard scarcely a word about that. We have a price review which is completely out of synch, and the business plans have been drawn up before the Bill has even received Royal Assent.
It is evident to me that the regulator is not fit for purpose. I have heard anecdotally that various parts of Ofgem, not the whole thing, have gone completely native and are now merely rubber-stamping what the industry wants. Therefore it is deeply regrettable that we are, at this very late stage, having such a fundamental discussion. It reflects very badly on the Government. This would not even be an issue if the leader of the Opposition had not made it such a political centrepiece of his conference speech, and here we are, several months later, discussing it and still we have no cohesive or comprehensive answer from the Government.
I support the principle behind the amendment, but I fear that it is simply too little, too late. We need a fundamental resetting of the market to rebuild the trust which, it is clear, has been lost. We must look at all aspects of the industry again to ensure that we put the consumer first and, as we strive to meet the many challenges involved in energy policy, that we put the consumer and value for money centre stage as we also seek to achieve the very important aims of keeping the lights on and addressing climate impacts. I am grateful to the noble Lord, Lord Jenkin, for raising this at this time, however it is, as I said, too little, too late. We really need a fundamental review of this, and that can happen only under a new Government.