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

Lord Oates Excerpts

Tuesday 8th June 2021 Grand Committee

[Lord Oates (LD)]

My Lords, I thank the Minister for introducing this statutory instrument with his customary clarity. My starting point is a certain scepticism about this SI similar to that expressed by the noble Baroness, Lady Jones of Moulsecoomb. Personally, I think the SI should be unnecessary, because the industry should be paying all the costs of the Offshore Petroleum Regulator for Environment and Decommissioning. If it were not for the activity of the industry, that regulator would not need to exist, and given the profits which the companies concerned have made over the years it is unclear to me why the taxpayer is picking up any of the cost. I note that the description of the role of OPRED on the GOV.UK website includes

“protecting the taxpayer from bearing the full cost of decommissioning”.

Can the Minister tell us why we are paying any of this cost?

I also note the contrast between the way in which the oil and gas companies are treated, paying only part of the cost, and the way in which, for example, people who wish to become British citizens are treated; they pay not only the full cost of processing their application but many multiples of it, because for some reason they alone of British citizens are regarded as an easy touch to pay a supercharge for the cost of our border and immigration system as a whole. The oil and gas companies must have some very important friends to have achieved an outcome where they not only do not pay the full cost of decommissioning but they continue to receive huge subsidies to exploit fossil fuels that imperil the future of our planet.

On the increase in fees to which this statutory instrument gives effect, can the Minister clear up some issues? First, can he clarify the total amount of revenue raised by the fees which the SI relates to? The Minister gave us a figure of 1,243 hours as the figure representing an average of hours per annum spent on potentially cost-recoverable activity. If we take the average of the specialist and non-specialist hourly rates, it comes out at £152.50 per hour. If that was multiplied by the number of hours, it would come to—if my maths is correct—about £189,557. Is that the correct figure raised by the fees levied under this SI? If it is not the correct figure, can the Minister tell us what it is and how it is calculated between specialist and non-specialist hours, because the Explanatory Memorandum and the SI do not give the breakdown?

The Explanatory Memorandum tells us that the calculation of the costs charged to the industry

“removes the hours spent on leave, bank holidays, staff management etc.”

Why are those excluded given that they are clearly staffing costs?

Can the Minister also tell us the total cost of running the Offshore Petroleum Regulator for Environment and Decommissioning? I think he told us in his introductory remarks that the fees and other charges outside the ones we are discussing in this SI raised £6.2 million. Does this cover the entire cost of running the regulator? If not, what is the deficit?

Can the Minister remind us of the total level of subsidies provided by Her Majesty’s Government to the oil and gas industry in the last year for which figures are available? I hope that the noble Lord will not try to tell us that the Government do not provide any subsidies, because that sort of dissembling is exactly what has got the UK ranked joint bottom for transparency on these issues among the G20 nations.

The noble Baroness, Lady Altmann, raised some important issues about how we get the industry moving towards transition rather than the existing policy of maximum economic recovery, which makes no sense in the context of our climate goals. The noble Baroness, Lady McIntosh of Pickering, raised some interesting issues about wind farms and the marine environment.

I await with interest the Minister’s response on those and his response to my questions. I do not oppose the increase in charges set out in this SI, but I strongly object to the continued subsidies that are pumped annually to an industry that poses an existential threat to life on this planet.