Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) (Amendment) Regulations 2014

Lord McKenzie of Luton Excerpts

Monday 10th February 2014 Grand Committee

[Baroness Parminter (LD)]

As the noble Lord, Lord Bichard, said, there are not many people here, but this issue is incredibly topical, particularly given that Cuadrilla announced last week that it intends to apply for planning permission for two new sites in Lancashire for fracking. As the noble Lord mentioned, the Secondary Legislation Scrutiny Committee considered this statutory instrument alongside another one, which would amend the requirements for applicants to notify owners and tenants of land individually of applications for such development. I shall not repeat the apposite and pertinent comments that the noble Lord has made—I echo them entirely—but shall pick up on one of them and make one further, final remark.

As he said, the Government failed to publish a detailed analysis of the consultation when they laid these instruments before Parliament. That reluctance is probably understandable when we look in detail at that analysis. As the noble Lord said, only seven of those responses were in favour, with 155 against. That is really important, and not just in terms of how we take forward the issue of fracking; it is about how we have a process for planning that involves the local community. The broader principles of what planning is for were debated at length by many of us in this House in the context of the Localism Bill and the National Planning Policy Framework. It is to be deeply regretted that the views then expressed about what the purpose of the planning system should be—it is about balancing the competing demands to achieve truly sustainable development for our country—appear not to have been heeded.

I am particularly grateful to the Secondary Legislation Scrutiny Committee for highlighting the shortcomings in the Government’s procedure on this matter. It highlighted to those of us in this House who care deeply about ensuring that we have a fair planning process that we will have to watch developments even more closely in future. Again, this is particularly topical, given that it is likely that there will be announcements in Europe this month about the future of GM crops. It will be interesting to note what the department might be planning for in terms of applications in that new area of development.

[Lord McKenzie of Luton (Lab)]

My Lords, I thank the Minister for introducing these regulations. As we have heard, they are concerned with planning arrangements for onshore operations for the winning and working of oil or natural gas, including exploration drilling. Onshore oil and gas activities are of course not new to the UK, but the more recent development of hydraulic fracturing or fracking is contentious and, as the noble Baroness, Lady Parminter, said, certainly topical.

The Government sought to address the regulatory regime for onshore oil and gas in the publication of planning practice guidance in 2013. At that time, they indicated that proposals would be brought forward to address issues relating to the application process and the level of fees payable to local planning authorities.

The first of these was the subject of a negative instrument that was slipped through Parliament over the Christmas period, giving, as we have heard, scant opportunity for debate; the second is the one that is before us today. So far as process is concerned, the department has been justifiably criticised by the Secondary Legislation Scrutiny Committee for laying these instruments without proper impact assessments and a proper analysis of the related consultation exercise, which itself attracted criticism for being over just a six-week period. The noble Lord, Lord Bichard, thoroughly expressed the concerns of that committee. Indeed, we share those concerns. Why does the department continue to get these matters so horribly wrong, showing scant respect for Parliament, as the noble Lord said? This is probably not the occasion to enter into a full-scale debate about future energy policy and energy security, but we are clear that gas has a role to play in the future balanced energy mix, along with renewables, nuclear and carbon capture and storage. Within that, there is a prospect for shale gas, but with a precautionary approach that needs to address legitimate environmental concerns.

The instrument before us today, which came into effect in January, represents easements for the extraction industry, although perhaps modest ones. These appear to go against the grain of the September 2013 consultation exercise, although the Government’s response does not provide us with details, numbers or percentages of those supporting or opposing the three broad propositions that were canvassed, including the third one, which is the standard application form. Please can these be provided to us?

Specifically, this instrument addresses how planning fees are calculated when there are drilling activities both above and below ground. This is pertinent because activity below the surface will take place horizontally as well as vertically, thereby spreading out much wider than the surface area. It is asserted that the basis of fees for oil and gas applications has long been intended to be related to the area of the surface works only, and that what is before us is a clarification to achieve that objective. That clarification comes with a general 10% fee uplift for all oil and gas applications, which was apparently offered by the offshore industry. Perhaps the Minister could clarify the basis of that calculation and how it relates to the costs that local planning authorities are likely to incur in dealing with applications. Was 10% the industry’s first offer, and what was the range of the negotiations that might have ensued?

The Minister in another place suggested that statutory planning functions are financed from a combination of fees, government grant and locally raised revenue. Indeed, the Minister reiterated that this afternoon. Perhaps she can advise us as to what grants are involved and the future trajectory of grant levels. The Minister in the other place told the Seventh Delegated Legislation Committee:

“Statutory planning functions are not only financed through the fees set, but subsidised by Government grant and locally raised revenue. Our approach to setting fees in England is that they are set nationally and grouped into broad categories such as housing, business and commercial, and onshore oil and gas, approximating to the amount of work involved. The fee is based on the average cost of determination across all local authorities in England. The principle underlying the planning fee regime is that would-be applicants should meet the majority of the costs incurred by planning authorities in determining planning applications”.—[Official Report, Commons, Seventh Delegated Legislation Committee, 5/2/14; cols. 3-4.]

Given the relatively small number of mineral planning authorities it is estimated might be involved in fracking applications, what work has been done to evaluate whether the average for oil and gas applications is appropriate?

The Explanatory Note sets out the government view that planning authorities should concentrate mainly—not exclusively—on the surface impacts of onshore oil and gas development and rely more on the regulatory regimes to manage sub-surface issues. Can the Minister give us some information on the necessary involvement of planning authorities in the non-surface impacts and on how this differs between applications involving hydraulic fracturing and those involving other onshore oil and gas applications, whether concerning exploration, appraisal or production?

Thus far the Government have not been convincing on how they have brought forward these proposals or how they have arrived at the new fee levels. Of course, there are much bigger issues around energy policy, hydraulic fracturing and how communities should be involved and share in the benefits of other developments, but consideration of these matters is not helped when relatively small issues such as this are not dealt with effectively and openly.

[Baroness Stowell of Beeston]

My Lords, I am grateful to all noble Lords who have contributed to the debate. As the noble Lord, Lord McKenzie, acknowledged, these regulations are not about energy policy or the planning process more widely. However, important issues have been raised by noble Lords which I shall seek to clarify and respond to. The noble Lord, Lord Bichard, echoed some of the concerns expressed by the Secondary Legislation Scrutiny Committee. I very much regret—my colleagues in the department share my view—that that committee felt moved to comment on the process that we followed in bringing forward these regulations. As I said in my opening remarks, we recognise the importance of providing Parliament with sufficient time and evidence to scrutinise the documentation and the responses to the consultation. In laying the material before Christmas, we did not expect the significant delay that then transpired between that happening and the consultation responses being provided. I assure noble Lords that there is no conspiracy here but I very much take on board the criticism and will reflect on it for the future.

The noble Lord’s remarks on the length of the consultation exercise and the consideration of responses to it were echoed by my noble friend Lady Parminter and the noble Lord, Lord McKenzie of Luton. It is important for me to stress again that these regulations are very narrow in their purpose. They clarify the existing law and ensure that the Government’s long-standing intention is clear. The other regulations, which are not before us today but were referred to in the scrutiny committee’s report, are important as far as a change around notification is concerned. Those regulations focus very narrowly on notification prior to an application being made by a relevant organisation and certainly do not affect the ongoing process of consultation, which is very important to the process that will be followed if exploration is continued. Therefore, we thought it right to follow the principles set out in the Cabinet Office code, and we felt that six weeks was an appropriate and proportionate amount of time for the consultation period.

As regards analysing the responses, we considered them very carefully but, not surprisingly, because shale gas is a contentious matter, many of those who responded to the consultation, and certainly those who opposed these regulations, used it—this is perfectly understandable and I am certainly not criticising anyone for doing this—to express their opposition in principle to shale. Once the responses were carefully analysed, the number of those who opposed the regulations were opposed less to what was being proposed in the regulations than to the principle of shale itself. They were therefore addressing a different matter in their responses. We have published the consultation responses, albeit belatedly. The noble Lord, Lord McKenzie, asked for further detail on this, and our analysis of the consultation is already available in the public domain.

--- Later in debate ---

The noble Lord, Lord McKenzie, asked some specific questions about the regulations before us. He asked what work has been done to assess the average costs of processing oil and gas exploration applications. As I think I have already explained, we have not made a separate analysis of the costs of handling oil and gas consultations in isolation. The fees are not calculated in that way. They are based on the average cost of determination across all local authorities in England.

[Lord McKenzie of Luton]

My Lords, perhaps I may deal with this point before it slips my memory. As I understand it, the fees relate to the averages of different categories, of which oil and gas is one category. My question was whether the average in respect of oil and gas is fairly representative when you have an oil and gas operation that involves fracking; that is, whether the nature of that operation means that the average for that subset of what is happening across England is fair and reasonable.

[Baroness Stowell of Beeston]

I am sure that my colleagues will confirm if I am wrong, but I would say that it is. This is about being clear that the fee is for the planning application and that that application, even if it is for shale or other forms of oil and gas, should apply in the same way. The relevant area is the surface area, so the process of determining the fee is the same; the fee is for the planning process rather than for carrying out the work that will take place. However, I gather that it is difficult to assess the averages of such applications, given the small number of applications so far.

The noble Lord, Lord McKenzie, asked about the 10% offer from the oil industry in terms of an increase in fees. This proposal came from the industry in response to the consultation exercise. It was not something on which the Government entered into negotiation with the industry. The noble Lord also asked about the role of planning authorities in surface and non-surface input and applications. The planning practice guidance published in July provides clarity on the role of the planning system and other regulatory regimes. The planning role is largely focused on surface impact, while the sub-surface matters are largely assessed by the Environment Agency, the Health and Safety Executive and DECC.

[Lord McKenzie of Luton]

I promise not to interrupt again. The Explanatory Note makes reference to surface impact being mainly involved, but opens up the possibility that it is not exclusively surface impact. I am trying to understand, having looked at the guidance, what specifically might be involved in other aspects of the process.

[Baroness Stowell of Beeston]

Does the noble Lord mean in terms of the planning application fee?

[Lord McKenzie of Luton]

In terms of what is involved in dealing with a planning application.

[Baroness Stowell of Beeston]

I will see if something further comes for me on that while I am on my feet, but I may have to follow it up in writing to the noble Lord.

The noble Lord also asked—this may also answer the point he has just raised—whether the planning fees should cover wider issues than processing an application. The planning legislation is clear that fees may be payable to the planning authority for considering an application; their use for any other purpose would not be possible. Other regulations already exist to ensure that the operator is liable for any damage or pollution that operations may cause. The operator is also responsible for safe abandonment of the wells and for restoring the well site to its previous state, or a suitable condition for reuse. If that is where the noble Lord was coming from, my point is that if there were other costs involved, they are already covered by other regulations. As I do not seem to be receiving any signal that I will be able to answer the noble Lord’s question while I am on my feet, I hope that he will accept my offer of following that up in writing.

In conclusion, I stress again that I hear loudly and clearly the concerns that have been expressed by the scrutiny committee, which have been echoed by the noble Lord, Lord Bichard, and others today. However, I emphasise again that these regulations clarify a point of law so that the Government’s long-standing policy intention is clear. They are nothing more substantial than that in terms of the contentious but important issue of shale exploration. On that basis, I hope that noble Lords will feel that I have answered all their points.