Water Bill

Lord Moynihan Excerpts

Monday 27th January 2014 Lords Chamber

[Lord Moynihan (Con)]

My Lords, 25 years ago I had the privilege of being one of the Ministers taking the original water privatisation Bill through the Commons. I spent over 100 hours in Committee defending a measure widely reported at the time as being the most unpopular privatisation to be undertaken by the late Lady Thatcher’s Government. As soon as the 10 existing water authorities were replaced with 10 public limited companies and the National Rivers Authority, the debate about abstraction licensing began in earnest. Like my noble friend Lord Crickhowell, I note that it shows little sign of abating 25 years on.

I make no apology for having spent many hours during 1988 and 1989 seeking to persuade colleagues in another place of the merits of a new economic theory—the much debated mechanism of comparative competition—which, once on the statute book, Ofwat successfully brought to life by measuring and comparing the efficiency of each integrated water company, incentivising the least efficient companies to narrow the gap. The Bill before the House today builds on the discipline of the marketplace by providing a positive incentive to the industry to continue to be efficient and competitive. It provides a constant pressure to innovate. Market reform is welcome and timely, and I congratulate officials and the ministerial team on making significant progress in that direction.

However, as my noble friend Lord Selborne and the noble Lord, Lord Whitty, have mentioned, one market inefficiency is the current proposal to prevent retail market participants from exiting the market. Successful markets require the right of both entry and exit. The argument that incumbent companies will focus less on their household customers if the non-household customers are separated out is just not borne out by the experience in Scotland, where Scottish Water has markedly improved its services to households and reduced its wholesale costs since non-household customers were separated into a retail subsidiary.

The Water Industry Commission for Scotland, which is the economic regulator in Scotland, has demonstrated that there has been a net benefit to Scotland from that worth over £140 million. Adding estimates for dynamic efficiency savings, WICS estimated that legal separation of Scottish Water’s retail business and non-household competition has a positive net present value of around £330 million. Business Stream has improved both the quality and the price of retail services: one-third of customers have tendered their water contracts and almost 60% of customers have secured price discounts. Many more customers receive new and enhanced services, in particular, helping them to save water.

If you extrapolate that across England, the indicative net benefits could be well over £1 billion. JP Morgan has gone further, estimating that Severn Trent Water’s non-household retail business alone could be worth around £116 million. Scaling that figure up across both household and non-household retail businesses across England and Wales would imply that separated retail businesses could be worth over £4 billion.

What are the benefits? They are clear: for example, increased productivity efficiency through renegotiating contracts and streamlining processes; and increased dynamic efficiency, with the development of new and better ways of working—for example, through developing new billing systems and introducing smarter meters and through the growth of more efficient companies and the replacement of the less efficient ones. The ability of multi-site customers to contract with one or two national retail service suppliers could lead to a reduced number of bills and administration costs and improved comparability of consumption information. For example, reducing one customer’s 4,000 paper bills each year to a national electronic bill could save in the region of £80,000 to £200,000 for that customer alone.

There are environmental benefits through competing water retail service companies having new incentives to give customers what they want, including helping customers to make savings by using less water, identifying leaks rapidly and, above all, reducing water consumption. By reducing water demand and providing the knock-on benefit to the country for water conservation, this therefore delays the need for new water supply infrastructure. Similar benefits are possible on the wastewater side by encouraging customers to make use of water harvesting and sustainable drainage solutions, which would free up capacity in our sewers and makes them more able to cope in extreme weather conditions.

However, for all this to succeed, there must be market provision for the failing expensive retailers to exit the market. What other private sector industry restricts exit, as proposed in the Bill? I hope that at an early point in Committee the Minister will respond to the rare alliance of the water companies, academics and commentators, the regulators and the Defra Select Committee, to allow for exit in the retail services market.

Given that the noble Lords, Lord Selborne and Lord Cameron, have both raised a number of points I wanted to cover, including the importance of de-averaging, I would be interested to know of the Minister’s views on two further issues. First, I am concerned by the desire of both the Government and the Opposition to add additional duties to Ofwat’s remit. The sectoral regulators exist to perform specific functions that are generally economically focused. Ofwat was first established to protect customers, because of the natural monopoly nature of the water and sewerage sectors after privatisation, and to ensure the continued delivery of the essential services those companies provide. In contrast, organisations like the Environment Agency exist specifically to protect the environment. Ofwat’s primary statutory duties therefore require it to balance keeping customers’ bills down with service quality at an acceptable standard while still securing that companies have enough money to continue to operate and deliver those essential services.

Economic regulation works best when the focus of the regulator is narrow and targeted: to protect consumers and to ensure that investors can earn a fair return from an efficient company. To introduce a new primary duty around resilience, or, as we have heard proposed, to elevate the sustainable duty to a primary duty, could suggest that the Government wish to water down those core functions. That was precisely why a similar change to Ofgem’s duties was resisted during the passage of the Utilities Act 2000. My concern is that the new duties and greater role for the Secretary of State will inevitably increase the level of political involvement in the activities of the regulator and will water down Ofwat’s focus on protecting customers.

To be effective, a retail market needs all participants to have access to clear and accessible prices, clearly defined and common levels of service and standard terms and conditions. We must ensure that incumbent water companies are obliged to deliver a genuinely level playing field and that the market codes are common for all participants in any particular appointed area and do not have to be negotiated separately. Some licence changes will inevitably be required to promote a level playing field in the market between exiting companies and new entrants.

My second concern is that existing legislation does not provide Ofwat with the ability to modify water company licences on the basis of majority agreement, as occurs in other regulated utilities. Instead, there is a requirement for the individual agreement from all monopoly companies—an approach which allows monopolies in the sector to block sensible changes that would deliver a more effective market and benefit customers.

The impact of this absence is perhaps best illustrated by my example about retail exit. The OFT recently described “exit” as a vital part of an effective market. This perhaps explains why 76% of water companies support voluntary retail exit. However, this statistic is important, because it also reveals that 24% of companies are indifferent or opposed to something that will support the effectiveness of the market. The point I want to make is that, under the current arrangements, 24% of companies could stop progressive changes. This is because each individual company would have a substantial influence over the provisions that Ofwat needs to put in place to establish a level playing field for all market participants. This change was a specific recommendation made by David Gray to the Government when he reviewed Ofwat in 2011. It is disappointing to see that the recommendations of a regulatory expert have not been taken forward in this Bill.

I agree with the view of the noble Lord, Lord Whitty, that the proposals for Flood Re are a much needed and important step forward. I hope that, when we look at the detail, my noble friend the Minister will be able to reflect on some of the key issues surrounding the recommendations being made to the House. Initially promoted as all embracing, the Flood Re scheme was expected to exclude only a few households, but the latest estimate is that some 9,000 households in England and Wales will not be covered by the Government’s flood insurance scheme because their properties are either too expensive or were built after 2009.

The exemption for council tax band H opens the scheme to the same criticism levelled by many in your Lordships’ House against the putative wealth tax, whereby an increasingly elderly population, including many living in large houses on modest incomes, are excluded not on their income but on the size of their properties. That “mansion tax” was covered by Anna Walker’s review in 2009—which, by the way, I recommend to your Lordships as essential reading in this context—which recognised that the rateable value of a property bears little relation to a customer’s ability to pay. For this reason I hope we will be able to explore the band H exemption in Committee.

All of us are interested in parliamentary accountability. For example, the decision to require the setting of the primary levy at £10.50 to be subject to affirmative resolution, but the setting of the potentially far higher top-up levy for the one in 200 year flood—costed at £2.4 billion—to happen without parliamentary scrutiny is surprising. Surely a flood of such magnitude would warrant full parliamentary scrutiny? For that reason amongst others, I believe we should seek a requirement on the face of the Bill that an affirmative resolution should be required in both cases.

Then there is the apparent lack of a well considered water abstraction framework. In this context, further debate is needed both on the Environment Agency’s powers to review applications for such licences and on the conundrum—highlighted by the noble Lord, Lord Whitty—of the impact of introducing competition before abstraction reform.

Turning to small businesses, I note that none is to be protected, on the grounds that they face a more sophisticated market in which to buy insurance cover than households face. Yet many insurance businesses, serving communities in flood-prone areas of the country, can equally ill-afford exorbitantly high premiums, if indeed any insurance cover is available to them at all. As John Allan, national chairman of the Federation of Small Businesses, recently warned, one in five small companies were hit by the flooding in 2012, and many more have been battered by nature into financial submission over recent weeks. The British Insurance Brokers’ Association has understandably called for newly built and expensive properties to be covered rather than face the 2009 cut-off.

Also, who is to define which domestic properties will fall into the category of those “at the very highest risk”. From the introduction of the new scheme, how regularly do they need to be flooded over time to be excluded from Flood Re?

Whilst the issues raised are relevant to our consideration of the Bill, it is nevertheless welcome legislation capable of delivering substantial benefits to customers. However, buried in the 230 pages of this Bill are many areas which I believe require close scrutiny in your Lordships’ House. I look forward to hearing my noble friend the Minister’s reflections.

Pesticides: Bees

Lord Moynihan Excerpts

Wednesday 13th March 2013 Lords Chamber

Asked By

[Lord Moynihan]

To ask Her Majesty’s Government whether they intend to support European Commission proposals, to be discussed at the Standing Committee on Phytopharmaceuticals on 14 March, to reduce the use of a range of neonicotinoid pesticides hazardous to honey bees.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley)]

My Lords, the Government take very seriously the need to protect honey bees and other pollinators. We are completing our scientific assessment of neonicotinoids and have carried out new field trials. We have urged the Commission to base any proposal on a proper assessment of the science and not to make a hasty decision which might have significant knock-on impacts. We have concerns about the Commission’s current proposal as it does not appear to follow this course.

[Lord Moynihan]

My Lords, given that the European Commission is not proposing an outright ban on neonicotinoids but recommending their suspension, under the precautionary principle of using just three pesticides on crops attractive to honey bees as further research is undertaken, will my noble friend the Minister explain to the House why France, Germany, Italy and other European countries will support the recommendations of the European Food Safety Authority, which has concluded that these insecticides pose “an unacceptable danger” to bees? If we vote against this proposal tomorrow, there is scientific evidence that British bees, already in serious decline, will suffer.

[Lord De Mauley]

My Lords, I am grateful to my noble friend not only for his Question today but for his long-standing interest and for initiating a recent debate in your Lordships’ House on bees. I assure noble Lords that, contrary to what they may read in the press, we approach this question with an open mind. We are, indeed, doing further analysis on fieldwork we have had carried out specifically to address this issue because it is vital that what we do is proportionate and based on the science.

Bee Population

Lord Moynihan Excerpts

Thursday 10th January 2013 Lords Chamber

Moved By

[Lord Moynihan]

That this House takes note of the decline in honey bees in 2012 and of measures to combat the prevalence of disease in bee colonies.

[Lord Moynihan]

My Lords, in preparing for this debate, I would like to place on record my thanks to Phil McAnespie, president of the Scottish Beekeepers Association; Dr Stephen Palmer, a master beekeeper with over 30 years’ experience; Professor Ratnieks from the University of Sussex; Professor Poppy and Dr Newman from the University of Southampton; the British Beekeepers Association; Dr Peter Neumann from the Swiss Bee Research Centre; David Wootton, whose Bee Keeping: A Novices Guide is invaluable to the beginner and expert alike; and Richard Carlile, Bob Bridle and Robert Stovell, who assist me with the hives we manage for the love of beekeeping and no commercial gain at our home in East Sussex.

First, I have some positive news. Since I had the good fortune of securing a debate on this subject in 2009, in which my noble friend Lord Patten made a memorable and impressive speech, beekeeping has undergone a dramatic increase in popularity. The number of beekeepers has doubled in the past 10 years, with impressive developments in urban areas. There has been a corresponding growth in awareness and public concern regarding honey bees. However, I have tabled this Motion for debate because there is real and serious cause for concern about the plight of bees in recent years, as well as wider concerns about pollinators and pollution.

Before focusing on the situation in the United Kingdom, it is timely to remind ourselves of what is happening elsewhere in the world, summarised best in the findings of the United Nations Environment Programme Report, published as we headed into 2012, and well covered by Michael McCarthy, the environment editor of the Independent. That report demonstrated the decline in managed bee colonies, seen increasingly in Europe and the US in the past decade and now also being observed in China and Japan, with the first signs of African collapses.

The authors, who include some of the world’s leading honey bee experts, issued a stark warning about the disappearance of bees, which are increasingly important as crop pollinators around the globe. Without profound changes to the way human beings manage the planet, declines in pollinators needed to feed a growing global population are likely to continue. The scientists warn that a number of factors may now be coming together to damage bee colonies around the world, ranging from declines in flowering plants and the use of damaging insecticides to the worldwide spread of pests and air pollution. They call for farmers and landowners to be offered incentives to restore pollinator-friendly habitats, including key flowering plants near crop-producing fields, and stress that more care needs to be taken in the choice, timing and application of insecticides and other chemicals. Although managed hives can be moved out of harm’s way, wild populations of pollinators are completely vulnerable, the report states.

The way that humanity manages or mismanages its nature-based assets, including pollinators, will in part define our collective future in the 21st century. The fact is that of the 100 crop species that provide 90% of the world’s food, more than 70 are pollinated by bees. Some human beings fabricate the illusion that, in the 21st century, they have the technological prowess to be independent of nature. Bees underline the reality that we are more, not less, dependent on nature’s services in a world of 7 billion people.

Declines in bee colonies date back to the mid-1960s in Europe, but have accelerated since 1998. In North America, losses of colonies since 2004 have left the continent with fewer managed pollinators than at any time in the past 50 years. Chinese beekeepers have recently faced several inexplicable and complex symptoms of colony losses in both species. It has been reported elsewhere that some Chinese farmers have had to resort to pollinating fruit trees by hand because of the lack of insects.

The report lists a number of factors which may be coming together to cause the decline. They include: habitat degradation, including the loss of flowering plant species that provide food for bees; some insecticides, including the so-called systematic insecticides, which can migrate to the entire plant as it grows and can be taken in by bees in nectar and pollen; parasites and pests, such as the well-known varroa mite; and air pollution, which may be interfering with the ability of bees to find flowering plants, and thus food. Scents that could travel more than 800 metres in the 1800s now reach less than 200 metres from a plant.

“The transformation of the countryside and rural areas in the past half-century or so has triggered a decline in wild living bees and other pollinators”,

said one of the lead authors, Dr Peter Neumann of the Swiss Bee Research Centre. He continued:

“Society is increasingly investing in ‘industrial-scale’ hives and managed colonies to make up the shortfall and going so far as to truck bees around to farms and fields in order to maintain our food supplies. A variety of factors are making these man-made colonies vulnerable to decline and collapse. We need to get smarter about how we manage these hives, but perhaps more importantly, we need to better manage the landscape beyond, in order to recover wild bee populations”.

Moving from the international scene to the United Kingdom, the awful weather of 2012 has compounded the problems. The honey crop of 2012 was dramatically reduced, and there are concerns about how bees are currently over-wintering because of poor queen-mating during last season, leaving some hives queenless or with the real risk of becoming drone laying queens. The incidence of beekeepers resorting to regular feeding is known to have increased to record levels. As the BBKA honey survey found, the productivity of the average hive has dropped by 70% to eight pounds of honey compared to the more typical average of 30 pounds in the past. Losses have also occurred through starvation.

Of course, one bad year can ultimately be reversed, but the trend is disturbing, with a reduction in the British honey bee number of 75% in the past 100 years. Honey bees are in serious decline and that should be a matter of concern to all of us. For with their decline come wider issues around the importance of pollination for food production. It is incumbent on government, working with the beekeepers, to reverse this trend and to maintain high levels of pollination.

Diseases are important, but in my opinion the biggest challenge facing honey bees and much of British wildlife is agricultural intensification. Agricultural land makes up 75% of the United Kingdom. Despite the growth of beekeeping in urban areas and a welcome variety of flora in back gardens, it is on and around agricultural land where bees mostly forage and live. Even if we could cure all bee diseases, bees still have to eat. Of course, food production, at a time of rising demand, meteorological unpredictability and change, is vital, but in the coming decades we have to look for win-win situations in which we can make farming more wildlife-friendly, yet still satisfy growing consumption. One way we can do this for bees is to have more flowers in grazing land.

The use of pesticides has long been recognised as a serious problem. The neonicotinoid group of chemicals is widely used and may be having a serious and deleterious effect on honey bees, as was highlighted in the report provided for your Lordships before this debate. There will be those contributing to this debate who have far more expertise on this subject than I, but I would proffer one observation. My reading of the situation is that the use of insecticides in the UK is probably not the principal cause of the decline in honey bees or bumblebees. The increasing loss of biodiversity also affects the state and health of the insect population. Despite the greater awareness among the farming population, farming practices remain which are highly damaging to the welfare of honey bees. Widespread monoculture is a vector for disease and decline.

The diseases and pests of bees are also on the increase and the use of medicaments may be becoming less effective as the result of resistance. In addition, the British beekeepers have much to learn from a new generation of pests and parasites, previously unknown to these shores, which are making their way here. In the past few decades some additional pests and diseases of honey bees have been transferred from an Asian honey bee species, Apis cerana, which is very similar to the western honey bee, Apis mellifera. The best known of these is the varroa mite, but, even with varroa, existing diseases are not fully understood, and problems such as CCD—colony collapse disorder—are as yet not fully explained or resolved.

The solution to these challenges comes through research and education, and that is my key point today. In this context, the report of the Public Accounts Committee, published soon after our debate in 2009, is telling. It states:

“Despite their importance to the agricultural economy the Department has given little priority to bee health”.

In 2007-08, research expenditure in this field was just £200,000. In 2009, the department announced that this sum was to be supplemented by an extra £2.5 million over the following five years. However, this additional work to support the department's new bee health strategy will be diluted by including research into other pollinator insects as well as honey bees.

Regular inspections of colonies are also very important and enable the department to monitor the health of colonies and the incidence of disease and parasites. Nearly 80% of cases of notifiable disease in England are identified through such inspections, but the effectiveness of these inspections is hampered because around half of the estimated 37,000 active beekeepers in England have not joined the department's voluntary register, BeeBase. In marked contrast to registered beekeepers, very few reports of notifiable disease are made by previously unregistered beekeepers.

I ask my noble friend the Minister to provide an update on the current position and to confirm that the Government attach priority to ensuring that UK research councils and government-funded initiatives continue to support research into the health and welfare of both honey bees and other classes of pollinators. For example Professor Ratnieks, who has been undertaking considerable research on the Sussex Plan for Honey Bee Heath and Well-Being at the Laboratory of Apiculture and Social Insects at the University of Sussex, and who inspired me to keep bees as a hobby, is looking at ways to control or reduce honey bee diseases. In particular, he is working on hygienic honey-bees.

The word “hygiene” in this context requires a brief explanation. Hygiene is a natural disease resistance mechanism in which the bees themselves remove dead or sick brood, thereby reducing the incidence of brood diseases in a colony, including varroa. Hygiene occurs in British bees but is rare, so we have to look for hygienic colonies and breed from them. Hygiene is inherited and, as at least 92 noble Lords therefore understand, it is in the genes. Bees do not learn to do it; they do it instinctively if they have the genes. Only 10% or less of British bees are hygienic, so with focused research there is substantial potential to increase their contribution to healthy hives.

I hope the Government will look favourably on supporting research of this type, for such research is not a cost on the Exchequer. It is an investment in the future—an investment which will see returns well in excess of the sums under consideration. Healthy pollinators are the building blocks for high-quality food production. The seasonal bee inspectors do a great job and this is not the time to cut back their numbers or their workload.

As Tim Lovett of the British Beekeepers Association wrote in preparation for this debate, in general the BBKA and its member associations are cautiously optimistic about the future of the honey bee here in the UK. It believes there remains much practical applied research to be done to give beekeepers better tools to improve their bee husbandry skills and funds should be provided to fill these data gaps. It is hoped that the planned Defra public consultation on honeybee disease legislation and control will emphasise the need for effective measures to help the beekeeper to manage the health of their colonies and provide the necessary resources. Education and training are high priorities in the work of the BBKA and its member associations and it is hoped that the current modest contribution of funding from the public purse will improve the skill of bee-keepers and will continue.

However, poorly maintained hives can compound the problems we are considering today and well informed beekeepers are critical to the future welfare of honey bees. Relatively inexperienced beekeepers may also be a factor as diseased colonies, if not dealt with effectively, may act as reservoirs of infection. Current evidence is that, rather than there being a single smoking gun underlying bee declines, the cause is multifactorial. Factors include availability and a lack of diversity of forage crops. There is evidence that the immune systems of honey bees are impaired if they do not forage on a sufficiently broad range of flowers. This in turn may contribute to the prevalence and impact of particular pests and pathogens, such as the varroa mite and deformed wing virus.

While no single factor is, in my view, the cause of decline or poorer honey bee health, steps to control and understand the impact of the individual factors will contribute to improved hive and colony health. I urge my noble friend the Minister and the Government to redouble their efforts to support research in this sector and reverse the trends which are decimating populations of honey bees in this country and abroad.

--- Later in debate ---

[Lord Moynihan]

My Lords, it would be invidious and inappropriate for me to comment individually on the many contributions to this important debate. Suffice it to say that the quality of all contributions could not have been of a higher standard. We have achieved our collective objective, which is to provide the Government with an agenda, to keep them busy at least until our next debate which on current form comes round, like the Olympic Games, once in a quadrennium.

My sincere thanks to all noble Lords who participated in this debate; there is urgent and important work to be done, and I am grateful to my noble friend for his support as the new self-appointed chief bee inspector. We will hold him to that role, but I am particularly grateful once again to everyone who contributed today to what I believe has been a very useful and informative debate.

Motion agreed.

Queen's Speech

Lord Moynihan Excerpts

Wednesday 2nd June 2010 Lords Chamber

[Lord Moynihan]

My Lords, I warmly welcome the noble Baroness, Lady Wilcox, to her portfolio and congratulate both her and the ministerial team on the Front Bench today.

On the subjects of energy and environment raised by the Minister, I should like to address the specific question of the oil and gas business on the United Kingdom continental shelf, particularly in UKCS waters offshore, taking into account the recent Macondo oil well disaster and the loss of life in the Gulf of Mexico, and the previous disastrous Ixtoc 1 blow-out in 1979. In so doing I declare an interest: I have been a non-executive director of the Rowan group of companies based in Houston and today chair its HSE committee. Although we operate in the jack-up business, we are principally focused in natural gas, which is a very different market to the semi-submersible fleets used in ultra deep-water drilling such as BP’s Macondo oil well in the gulf.

It is clear that this is going to be an important issue for the Government and, in considering changes to our offshore oil and gas industry practice, I hope that in the light of the disaster we will all proceed with caution, consult widely and look to the industry as coalition partners when considering new measures for implementation on the UKCS, the vital objectives we should share for safe offshore working and the high priority to be given to environmental protection. The coupling of ultra deep-water oil drilling—in the case of the oil field operated by BP, 5,000 feet down in the Gulf of Mexico—with near-shore drilling projects would be unwise.

In this context, the US Government’s announcement of a moratorium on the approval of all new offshore oil and gas drilling permits failed to take into account some crucial issues which should be the subject of our attention in the North Sea—namely, that shallow-water drilling involves well developed and simpler processes for the extraction of energy resources. Notably, it has surface blow-out preventers. Jack-ups and shallow rigs in shallow water employ blow-out preventers above the surface of the water. These surface BOPs, which are so critical to safety offshore, are accessible for constant inspection, maintenance and repair and in emergencies can be controlled either remotely or by physical or manual manipulation. Access to their positioning above the water is very different from when the blow-out preventer is 5,000 feet down under water.

In the North Sea we focus extensively on clean natural gas. Shallow-water drilling sites predominantly involve clean natural gas resources with fewer environmental risks. The distinction between oil and gas in developing policy on this front is important. Also in the North Sea, wells in the shallow-water regions are drilled in predictable and mature reservoirs, and the reservoirs of greatest concern to us are the high-pressure wells. On the subject of lower pressure in the North Sea, a large percentage of the shallow-water rigs require positive external stimulation to produce the flow of oil and gas, significantly limiting risk or loss of control.

However, some key issues require consideration by the Government if we are consistently to ensure that our offshore drilling activities strive for improved safety levels. All safety cases now need to be reviewed, as should the legal and reporting processes to which they currently conform. These should cover both proactive and reactive issues in the context of safety, health and the environment and always be live documents and up to date. Detailed consideration could also be given to the design, capability and efficiency of the blow-out preventers I have mentioned. Their failure was the common denominator in both the BP well disaster and the Ixtoc 1 blow-out in 1979.

The time is now right for well control equipment and control systems to be further regulated. The HSE requirement in our country of a full inspection of all equipment every five years is too long—for example, Saudi Arabia has a three-year process—and well control training and certification should be regularly reviewed. An independent audit of the training programmes of the International Association of Drilling Contractors would also be welcome. Above all, absolute clarity in drilling operations as to who controls the well and who should shut it in is essential; the driller not the operator should always be responsible in this area.

Some of the measures I have proposed today would add additional costs to drilling companies, but these costs are surely worth investing in so that the oil and gas industry in the United Kingdom can work closely with government to ensure a safer, technically stronger and environmentally responsive energy sector both onshore and offshore.

In closing, I hope that BP’s chief executive, Tony Hayward, will not be sacrificed on the altar of American political expediency. He is a leader of exceptional quality and has reacted with authority, expertise and perseverance to an unprecedented disaster in ultra deep water. I wish both him and his colleagues well in resolving the technical and environmental challenges ahead.