Pollution Prevention and Control (Fees) (Miscellaneous Amendments) Regulations 2025
Debate between Lord Jamieson and Lord Wilson of Sedgefield
Lord Jamieson (Con)
My Lords, this may appear to be a narrowly focused measure but it speaks to some wider strategic choices being made—or not being made—by this Government on energy, the environment and industry. It revises the fees charged by OPRED for its regulatory oversight. The current fees have been in place for a while and are being updated in line with revised cost assessments and Treasury guidance for full cost recovery, with the new rates being £210 for specialists and £114 for non-specialists, with the aim of ensuring that the industry, rather than the taxpayer, bears the cost of its own regulation. We on these Benches accept the principle that the polluter pays, and we recognise the importance of cost recovery where it is applied fairly and transparently.
However, although we do not oppose the principle of updating these fees, there are several areas where greater clarity from the Government would be welcome in the broader sense. First, there is strategic clarity. This comes at a time when the Government are shutting down the North Sea oil and gas industry. A windfall tax remains in place and the long-term future of the basin is uncertain. In this context, even modest fee increases risk sending mixed signals. How do these changes align with the Government’s stated ambitions on energy security, net zero and investment in our own homegrown energy?
Secondly, there is investor confidence. The Government may argue that this is a minor adjustment but, for businesses already navigating a complex mix of fiscal and regulatory pressures, predictability matters. Offshore Energies UK has said that the sector could invest up to £200 billion this decade across offshore wind, hydrogen and carbon capture. Can we be confident that the regulatory framework and its associated costs are evolving to match that ambition?
Thirdly, there is the role and future of OPRED. OPRED was designed to regulate the offshore hydrocarbons industry, yet its remit is expanding to include the regulation of net-zero activities, such as offshore wind, hydrogen storage and carbon capture. How will OPRED be restructured and resourced to meet this broader role? Are the cost recovery mechanisms fit for that future?
Fourthly, on fairness across the sector, the Government invoke the “polluter pays” principle, and rightly so, but is this principle being applied consistently across the offshore space? Are our non-hydrocarbon actors, such as offshore wind developers or electricity interconnectors, contributing equitably or is the hydrocarbon sector being left to shoulder a disproportionate share of the regulatory cost?
Fifthly, on employment and skills, the offshore energy sector supports approximately 120,000 jobs across the UK. To preserve and grow the workforce through the energy transition, we need continuity not just in investment but in regulation. What assurance can the Government give that the fee policy is not operating in isolation from the broader industrial skills strategy?
Finally, on transparency, the Explanatory Memorandum notes that OPRED reviewed its costs and consulted with the industry in February 2025 but no responses were received. Should this be interpreted as assent, or does it point to confusion—even disengagement—from an industry uncertain about what to expect from the Government?
In conclusion, although the SI may be modest in scope, it prompts important questions about how we fund and structure environmental regulation in a rapidly evolving energy system. We on these Benches do not oppose the measure, but we urge the Minister to place it within a broader strategic vision—one that balances accountability with long-term investment, climate ambition and energy resilience. I look forward to hearing the Minister’s response.
Lord Wilson of Sedgefield (Lab)
My Lords, I thank noble Lords for their valuable contributions to this debate, which reflected the relatively uncontroversial— I would have thought—nature of the regulations.
As I said, these fees regulations will enable OPRED to recover its costs for the provision of regulatory services under the offshore oil and gas environmental regulatory regime, as opposed to such costs being passed on to the taxpayer. The change to the hourly rates will increase OPRED’s annual fees from £6.7 million to around £7.3 million per annum, reflecting the current cost of providing environmental regulatory activities to the offshore sector.
On chargeable activities, OPRED considers the environmental implications of all offshore oil and gas operations before issuing permits and consents covering areas as diverse as seismic surveys, marine licences, oil pollution, emergency plans, chemical permits, oil discharge permits and consent to locate permission for offshore isolation. This SI is not ideologically based. In essence, it is the specialists putting up the fees by £9 and the support staff doing so by £10. The work that OPRED undertakes is very important for the rest of the industry and the North Sea.
I want to answer some of the points noble Lords raised. As far as micro industries are concerned, these regulations will affect only about 100 companies working in the North Sea. As far as consultation is concerned, any further fee increases will be subject to industry consultation and strategic clarity; that is important. None of those who were consulted this time round responded, but I think that this means that people were content with the fact that they were seeing these fees go up by £9 and £10, which increased the burden on the whole of the industry by £500,000. OPRED’s costs ensure that we can continue both to provide effective environmental regulatory services and to adapt to changing requirements, such as changes to the environmental impact assessment guidance.
As far as the North Sea basin is concerned, I do think that it has a future; we are going to be taking fossil fuels out of the basin for decades to come. It will also be an area where we can transform from taking fossil fuels out of the sea to wind and carbon capture, to ensure that we progress to net zero and that our energy is homegrown. As noble Lords know, gas prices are sorted out internationally, so if we have homegrown energy, we will have more control over it. That is what we want to see. With that, I hope that the Committee can agree to the fees going up by £9 and £10. I beg to move.