Pollution Prevention and Control (Fees) (Miscellaneous Amendments) Regulations 2021

Lord Grantchester Excerpts

Tuesday 8th June 2021 Grand Committee

[Lord Grantchester (Lab)]

I, too, thank the Minister for his introduction to the regulations before the Committee. It was necessarily detailed. The Explanatory Memorandum was fulsome in listing all the various regulations under various Acts of legislation where cost recovery is now embraced as part of government policy and fee schemes are introduced. His department is to be commended for the coherent analysis of fees payable by the offshore hydrocarbon industry and Ofgem to the Offshore Petroleum Regulator for Environment and Decommissioning—OPRED—for certain activities. I now understand better the Treasury’s Managing Public Money guidance on the methodology of cost-recoverable activities.

I have very few questions about these regulations. However, to start with, can the Minister confirm whether OPRED is entirely cost neutral to the taxpayer and that all its costs are recoverable? I thought I heard him say that its full budget of £6.2 million was recovered from industry. I think that is correct and that OPRED prevents a lot of possible pollution occurring.

The cost recovery system appears entirely non-judgmental—that is to say, there appears to be no analysis of the cost increases against any parameter. The noble Baroness, Lady Jones, called the increase negligible. However, I note that the cost increase of £7 per hour for both specialist and non-specialist staff in tandem is slightly above the rate of inflation. As the increase is in tandem to two different rates, it is not by any defined percentage consistently. Will the cost recovery system in the department in this instance be reviewed on any regular basis? I would not expect the policy to be changed into a profit centre.

From this, it can be asked whether and by what means costs are controlled. No doubt it is by the wages policy undertaken by public bodies such as OPRED and under the influence of HM Treasury. I am sure that any validation of cost increases across any organisation is not necessarily a smooth process. As the noble Lord, Lord Bourne, expressed, the future of the infrastructure on the continental shelf will become very important for the urgent development of CCUS and hydrogen. With that, I am happy to approve the regulations today.