Infrastructure Bill [HL]

Lord Judd Excerpts

Monday 10th November 2014 Lords Chamber

[Lord Judd (Lab)]

My Lords, I thank the noble Baroness for introducing the amendment. I do not need to tell the House that I am a passionate defender of the areas of outstanding natural beauty and the national parks. We have to be vigilant all the time on that. There is no room for complacency because the pressures against what we believe in are always there and we have to beware of erosion. The point she has made about a wider application of those principles is very important.

As I listened to the previous debate, I felt my blood pressure rising because it is a travesty to suggest that environmentalists are against economic progress. Of course we are in favour of economic progress. We want to see it effective and driving as hard as it can. But we are equally determined, as custodians and trustees of all that we have inherited in terms of the environment, scenic beauty, biodiversity and the rest, to keep those issues as equally important. Therefore, it is a matter of rational, strategic decision-making about how you have clear areas for driving ahead, so that people are not worried about constraints of one kind or another but know that they have got green lights going all the way, and areas where we are saying, “Yes, but there are other considerations to be taken into account and if we want a Britain worth living in and if we want our children and grandchildren to inherit a country worth living in, these other issues are crucial”.

When I listened to the noble Lord, Lord Deben, in the previous debate, my feeling was that, yes, I do believe that the market has a key part to play in our economic affairs, of course it has. I happen to believe, rather traditionally—and I am not ashamed of that—in a mixed economy. But having said that, I believe in a managed market and I will take the opportunity to say why. The trouble is that the market operates from a short-term time perspective and these other issues of the environment, scenic beauty and the inheritance by our children of a country worth living in do not have the same immediacy in play in the market as other factors of a more essential economic character. Therefore, one must make sure that those points are on the table, being seen to be taken seriously and being given the muscle to be taken seriously. From that standpoint, I am very glad indeed that the noble Baroness has raised the point that what we want to apply to parks and areas of outstanding natural beauty should not be exclusively limited to them.

[Lord Jenkin of Roding]

My Lords, neither the noble Baroness who has moved this amendment nor the noble Lord, Lord Judd, appears to have recognised that what we are talking about in Clause 32 is developing land 300 metres below the surface. Looking at the list of the various sites in the noble Baroness’s amendment, I cannot of think of one of them which could remotely be affected by horizontal drilling 300 metres below the surface. I am surprised that neither the noble Baroness nor the noble Lord seems to have acknowledged this. We are not talking about actually drilling down in a special area of conservation or a site of special scientific interest which implies development on the surface. We are talking here about horizontal drilling 300 metres below the surface and I just cannot understand how either the noble Baroness or the noble Lord can think that this could affect these important sites. Perhaps I have missed something.

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[The Earl of Caithness]

My Lords, I rise to oppose these amendments. I understand the principle behind them but, as my noble friend Lord Jenkin has reminded us, we are talking about something that is going to happen well below the surface. Having taken that into account, and while I agree with him that the amendment is in the wrong place, I also think that the principle of the amendment is quite important. However, what the noble Baroness has totally failed to do, and what the noble Lord, Lord Judd, has failed to do, is to explain why the present system of controls is not adequate.

I do not class myself as an environmentalist; I class myself much more as a countryman. I have a much broader range of interest than an environmentalist would have. The house that I used to own very recently up in Caithness was right beside an SSSI, and on that SSSI there wintered whooper swans and lots of geese and ducks. Around us there are now eight wind turbine farms. This is a huge area—an important one for nature—but the argument was looked at for every single one of those turbines. More recently, a planning application was made for four wind turbines to be sited much closer to the SSSI. My house was perhaps one of the nearest that was going to be affected by that and I lodged my objection on the grounds of nature and what effect the four wind turbines—which are considerably bigger than anything we are talking about in the fracking process and would be at a higher level for much longer—might have on the flight path of geese and swans.

The planning process worked perfectly and the decision was turned down. It has gone to appeal and I do not yet know what the result of that is, but my point is that the existing procedures are there now to protect such sites as these. I used the existing procedures and the planners looked at the existing procedures and agreed with all of us that had objected to these four wind turbines. I believe that what we have got in place is sufficient and we do not need any more.

[Lord Judd]

Before the noble Lord sits down—

[Lord Gardiner of Kimble (Con)]

My Lords, I am looking at the Companion in terms of rules of debate on Report. We are getting quite close to contravening them and I would just like to say to noble Lords that we should be cautious of that.

[Lord Judd]

Before the noble Lord sits down, would he not agree that, whatever the value of the regulations and the means of implementing them that exist at the moment, it would be of considerable assistance to industry and those behind this important and vital initiative for the British economy to see clearly on the face of Bills such as this the areas on which they can and cannot concentrate their attention?

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[Lord Jenkin of Roding]

My Lords, when I saw the noble Lord’s amendment, my immediate reaction was to say, as he has done, “Look at what’s happened in other industries, notably the nuclear industry, and then look at what has been happening recently in relation to offshore oil and the measures that are now being taken there”. That led me to approach the trade association that covers the fracking industry, which was extremely helpful. My noble friend’s department has produced a very long paper of financial guidance on the whole question of petroleum licensing. At this hour of the night, when there is further business to come, I will not go into that in great detail, but the fact is that, having read that and the paper that has been produced by the trade association, UKOOG, I am satisfied that the difficulties that the noble Lord, Lord Whitty, has raised are in fact being addressed very positively. It is not only the question of whether the company that will get a licence will have the resources to carry out the work and continue to operate any shale gas well that it constructs. The papers address very specifically the questions that the noble Lord has made most of—the decommissioning of plant and financial liability if things go wrong. The existing regime provides for the remediation of environmental damage and contaminated land, and that includes water. If we take all the regulations together, if a company causes damage, harm or pollution to the environment, it can be required under the regimes in force to remediate the effects and prevent further damage, which is the same approach as applies to other industries.

Furthermore, the Government appear to have very clear powers: they can require financial evidence that there are resources available to pay for that. UKOOG has relieved my anxieties in that regard. Unlike the earlier industries to which the noble Lord, Lord Whitty, referred, the approach to this industry, which is still at a very early stage of its development, as he rightly said, has been extremely responsible. I shall be very interested to hear from my noble friend what those measures are. I am satisfied, but I will listen to my noble friend’s reply.

[Lord Judd]

My Lords, I have been glad to put my name to this amendment, which is very wise and prudent. It has been suggested in recent years that the interpretation of welfare capitalism has changed. The original concept was that capitalism had a social responsibility that it should discharge for the well-being of society as a whole. It seems that quite a lot of people have come to believe that perhaps welfare capitalism is about ensuring that while wealth generation and profit is privatised, risk is nationalised and is the responsibility of the taxpayer. The point in the amendment that is particularly important in this context is what happens in the case of insolvency, when all the best predictions can be blown away in the wind in the chaos that follows.

If a scheme is put forward and is being properly costed, the cost of dealing with potential damage, closure or the consequences of that is an essential element in the calculations. We are concentrating today on this new and exciting aspect of shale development but we are beginning to see infrastructure across the country in connection with power generation and its distribution that is no longer required. We need to be very careful that we are ensuring that any adverse results of that are not left just for the taxpayer to settle, but that they are the responsibility of the people who, while they are operating, are receiving the profits that come from that.

[Baroness Worthington]

My Lords, I am grateful to my noble friend for tabling his amendment and for continuing the discussion that we started in Committee. I am sympathetic to the intention behind these amendments and am particularly interested in the aspect of liability arising from orphaned sites. We are talking about a potential new industry that will see a large number of distributed sites developed. We may well see smaller companies that perhaps do not have the assets or deep pockets of more traditional extractive companies, and there would be considerable potential for orphaned sites. I am very interested to hear from the Minister how we would address any liability arising from such orphaned sites.

I think my noble friend Lord Whitty said that he is seeking for the Government to demonstrate foresight. It strikes me that the Government are demonstrating foresight in some respects of fracking, in imagining the future benefits and future economic wealth that will come. Over the weekend, we even heard comments about the imagined spending of all this great tax revenue. We shall debate that aspect shortly. That foresight is possible, but perhaps we should apply it in the slightly more realistic context of learning from previous experiences of extractive industries in trying to plan for what happens if everything does not go according to plan. I would have thought that companies would be able to take out insurance against some of these liabilities. Again, I would be interested to hear from the Minister about what type of insurance she might expect companies to undertake and what liabilities would be insured. We are entering uncharted territory in the types of company, the types of project and their distribution across the country. It is right that we should proceed with caution.

There is a lot of merit in the amendments tabled by my noble friend Lord Whitty. He started by saying that he was trying to help out the Government. A number of us have tried to help out the Government during tonight’s debate. However, I suspect that the Government are not listening and do not want to be helped out, but there we are. I look forward to the comments from the Minister in response to this amendment.

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I hope I have been clear on other issues that the noble Lord has raised. Given the reassurance that we already have a very robust framework in place—

[Lord Judd]

I am sure that my noble friend shares my gratitude for the full way in which the Minister is replying. However, there is just one point she made which intrigues me. She said that the regulator has powers that he can use in these contexts. However, if the taxpayer is faced with the possibility of having to foot the bill, why is it not compulsory to require that these things are covered?

[Baroness Verma]

My Lords, I hoped that I had reassured noble Lords that we do not wish to see the taxpayer foot the bill or any bill, and that there will be processes in place to ensure that that is the case. Having gone through the amendment of the noble Lord, Lord Whitty, and his concerns, I hope that he will see fit to withdraw it.