House of Lords
Monday, 7 September 2015.
Prayers—read by the Lord Bishop of Peterborough.
Deaths and Retirements of Members
My Lords, I regret to inform the House of the deaths on 30 August of the noble Lord, Lord Williamson of Horton, on 31 August of the noble Lord, Lord Montagu of Beaulieu, and on 4 September of the noble Lord, Lord Moser. On behalf of the House, I extend our sincere condolences to the noble Lords’ families and friends.
I should also like to notify the House of the retirements, with effect from 23 July, of the noble Viscount, Lord Montgomery of Alamein, and the noble Baroness, Lady Wilkins, and, with effect from 30 July, of the noble Lord, Lord Simpson of Dunkeld, pursuant to Section 1 of the House of Lords Reform Act 2014. On behalf of the House, I should like to thank the noble Lords for their much-valued services to the House.
I should also like to notify the House of the resignation of the noble Lord, Lord Sewel, with effect from 30 July.
Debt Management Advice
My Lords, the Government are very concerned about the problems in the debt management market, including the quality of advice, which was highlighted by the Financial Conduct Authority’s thematic review. This is why we reformed debt management regulation, transforming responsibility to the FCA’s more robust regime to better protect consumers. Debt management firms are currently going through the FCA authorisation process. Firms that do not meet the FCA’s threshold conditions will not be able to continue in the market.
My Lords, the Government are right to be concerned. The fact is that the FCA found that a staggering 60% of fee-charging debt advice cases posed a high risk of harm. The requirement to disclose the availability of free debt advice at first contact was often not done or was rushed, not impartial or not sufficiently prominent. It is not even clear whether cold-calling lead generators are obliged to disclose the availability of free debt advice at all. Cold-calling lead generation is banned for mortgages. Will the Minister agree to meet me to discuss banning it for debt advice as well?
My Lords, although lead generators are independent and not regulated, the FCA requires debt management firms accepting leads from lead generators to satisfy themselves that the business has been procured fairly and in accordance with data protection privacy in electronic communication laws. The FCA is going through the authorisation process at the moment, as I said, and that is one of the things that will be taken into account. It has to ensure that the lead generators do things such as signpost to consumers the availability of free debt advice. The FCA has committed to undertake a review of its rules on unsolicited marketing calls, emails and text messages from consumer credit firms. Lastly, of course I am always pleased to meet the noble Lord.
My Lords, the House will remember that the Government dithered on tackling the abuses by payday lenders until the noble Lord, Lord Sassoon—the Minister in the Lords at the time—took personal action and drove the change. Will Ministers today consider doing the same, because cold calling is making victims of vulnerable people on a daily basis?
My Lords, on the broader issues of debt, will the Minister confirm that household debt is on course to reach a new level of 183% of GDP by 2020? That is above any level that it reached under 13 years of the last Labour Administration. Is it not clear that this faltering economic recovery that the Chancellor boasts about is being backed by household debt, with serious consequences in the longer run for the economy and for all households?
My Lords, the noble Lord opposite has decided not to mention that household debt as a proportion of income has fallen to 145% in Q1 of 2015—down from a peak of 169% in 2008 under the Labour Government. We accept the forecast that household debt will rise by 2020, but this is driven by households investing in financial and housing assets. At the moment, three-quarters of debt is secured by property.
My Lords, given that the FCA report discovered that not-for-profit organisations were better at giving impartial debt advice, will the Minister tell us what plans Her Majesty’s Government have to ensure that those organisations have sufficient funding to be able to offer that service to the 8.8 million people in the UK who are in need of debt management advice?
The Government have increased funding to the management advice service to £47 million —an increase of nearly 23%—this year. We also accept that there is a position for fee-paying debt advice, but it has to be regulated properly and to treat consumers fairly. That is what the FCA is in the process of doing. The authorisation process will make some decisions on those individual firms by the end of this year. I should mention that the FCA’s thematic review took a sample of eight firms out of approximately 200.
House of Lords: Membership
My Lords, our manifesto recognised that the House cannot keep growing indefinitely, but we must refresh our expertise and experience. My first priority is promoting the purpose of the House and enhancing our accountability to inform our individual responsibility as Members. I also intend to make every effort to build cross-party support in finding the right solution to addressing the size of the House.
Does the Leader of House agree that there should be a moratorium on further appointments to this House until sensible measures are agreed to reduce its size and that seeking consensus through a constitutional convention, involving all parties, is the best way forward for reform of this House in the long run?
I find it a little surprising that the noble Lord suggests—particularly from his Benches—that there should be a moratorium on appointments to this House. It is very important that we continue to refresh the membership of the House, and the new Peers who will be joining us over the next few weeks will add greatly to the work it does. I do not agree with the way forward proposed by the noble Lord: radical reform was tried in the last Parliament. We stood on a clear manifesto and I am now looking forward to talks with other party leaders, informed by things like the debate on this topic scheduled by my noble friend the Chief Whip for next week.
My Lords, the Question is very similar to one I already have down on the Order Paper. I am looking for brevity and accuracy. The brevity applies to the Minister as much as it does to the questioner. Can the Minister, as well as those who are asking questions, be more brief in future?
The noble Lord points to something which was in the coalition agreement. We are no longer in coalition; this is a Conservative Government and we therefore stand by what was in the Conservative manifesto. I have already made clear my view on the size of the House. The noble Lord directs an interesting point to the Liberal Democrat Benches.
My Lords, could not the noble Lord, Lord Rennard, and his colleagues lead by example? Believing, as they do, in proportional representation, and having just been inflated into the most unrepresentative party in this House, if he and 40 of his colleagues took retirement, under the advantages of the 2014 Act, then the problem would at least begin to be addressed.
My Lords, perhaps I may ask the Leader of the House to act as a channel to the Prime Minister from this House, initially to tell us whether he was accurately reported when it was implied, at least, that he felt that the political majority in the Commons should in one way or another be reflected as a political majority in the Lords. If that is the case, will she ask him to reflect on the fact that in 1997 when the Labour Party had a majority of some 170 in the House of Commons, it was in a significant minority in the Lords; ditto in 2001 after the 2001 election; and ditto after the 2005 election? It was not until 2006 that the Labour Party became the biggest single group in the House of Lords, which was quickly reversed of course by the coalition after 2010? Will she at least make sure that the Prime Minister is aware of those facts?
I can certainly reassure the House that the Prime Minister is not seeking in any way to make a government majority in this House. We recognise that the importance of this House is that it holds the Government to account and that the party in government should not be in a majority. The House should also understand that, even after the introduction of the new Peers announced the week before last, the Government still face a combined opposition of 80 Peers, which is twice the size faced by the last Labour Government when they were in power.
Will my noble friend clarify the position in respect of the appointments of new Peers who are also special advisers to the Government and, in particular, whether it is correct that they will be appointed to this place but not able to speak? That surely would make a nonsense of the importance of the role played by Peers on both sides of the House.
There is a convention that if a new Peer is a special adviser, they will be able to participate in the Division Lobbies but not contribute to debates. We do not necessarily know what decisions those individual special advisers will make as far as when they will make changes that will allow them to make a contribution, such as the most recent special adviser to join your Lordships’ House, my noble friend Lady Helic, who I am sure all noble Lords will feel has been a very welcome addition to our ranks.
My Lords, given that there are now many more people who favour the total abolition of your Lordships’ House than support its retention on an appointments basis, do the Government recognise just what a dangerous game they are playing by resisting all serious democratic reform? Do the Government also recognise that the previous Government succeeded in getting a Bill through Second Reading in the House of Commons with a very large majority? Does the Leader of the House think that the Prime Minister, who says that he regrets the lack of progress of that Bill, has the guts now to reintroduce it?
The noble Lord and I had exchanges on this matter only recently just before the Recess, when I reminded him that the Bill to which he refers did not succeed in leaving the House of Commons. In our manifesto, we made it clear that that is not a priority for this Parliament. We see it as a priority to address the size of the House, and that is where we will focus our energies
My Lords, the noble Baroness will have heard the views expressed from across your Lordships’ House about size. I have to say that it is not enough to suggest, as she did in her recent article, that Peers should turn up less often. If we are effectively to address this matter, which we believe we should, it cannot be against a backdrop of more and more appointments. This Prime Minister has appointed more Peers per year than any other Prime Minister, with a greater proportion of Peers to the government Benches and fewer Opposition and Cross-Bench Peers. What discussions has the noble Baroness had with the Prime Minister on this issue? Did they discuss the constitutional convention? Does he recognise that if meaningful change is to be made, he cannot continue with the scale and number of his appointments?
The noble Baroness knows my party’s position on a constitutional convention. We do not feel that that is a priority at this time. For me, as Leader of the House, it is important that we are an effective Chamber and that we make a very important contribution to the legislative process. It is right to focus on attendance rather than absolute numbers because the average rate of attendance is under 500. As effective Peers, we make our contributions when our experience and expertise are relevant to the matter at hand.
Disabled Children: Sexual Exploitation
My Lords, the Government’s report, Tackling Child Sexual Exploitation, sets out the steps that the Government are taking to protect children from sexual exploitation, including children with learning difficulties and disabilities. For example, we are exploring how personal, social, health and economic education training and resources for schools might be tailored for staff and special schools, and have provided £4.85 million for services supporting child sexual abuse survivors, including vulnerable children with learning difficulties.
My Lords, I thank the Minister for that Answer. This week the report “Unprotected, Overprotected”, by Barnardo’s and other organisations, concludes that children with learning difficulties are particularly vulnerable to sexual exploitation. The Rochdale serious case review showed that five out of six children who were sexually exploited over a long period had learning difficulties and disabilities. What action have the Government taken to improve the support for this group of children, who often miss out on the information and advice they need to keep safe? Will they issue new guidelines on how sex and relationship education should be taught to vulnerable young people who suffer from learning disabilities? I hope they will show that they take this case really seriously.
My Lords, there are few things that we take more seriously. Existing guidance and training for safeguarding professionals includes reference to the particular vulnerability of children with learning difficulties and disabilities. We are currently revising the 2009 Safeguarding children and young people from sexual exploitation guidance, and we will strengthen it so that professionals are better equipped to support children who are particularly vulnerable to CSE, including those with learning difficulties and disabilities. As I mentioned in my earlier Answer, we are considering how PSHE materials might be best adapted and used by staff in special schools. This Thursday my honourable friend the Home Office Minister Karen Bradley will be speaking at the event hosted by Barnardo’s in connection with the report mentioned by the noble Baroness—I pay tribute to Barnardo’s for its work in this field—and she will reiterate the Government’s commitment to supporting vulnerable children.
My Lords, I commend the Government for the work they are doing in education, but education alone will not improve the welfare of children. I would like the Minister to say something about what he is doing to support social workers, the people in the front line of this work, who have to pick up such cases and take them forward.
My Lords, it is true that this problem is a multidisciplinary one, and involves not only social workers but the police, teachers and the health service. We are trying to co-ordinate that across the piece, and the Prime Minister has appointed a task force chaired by Nicky Morgan, who is going to take the whole issue of child protection and try to bring to bear the necessary government resources, including social workers. That will continue to be a high priority.
My Lords, I declare an interest, in that I have an adult son with autism. In the light of the Barnardo’s report, what is the Minister doing to make sure that all educational institutions ensure that independent advocates are available, particularly to those with learning difficulties, when a child or a parent reports sexual abuse? In my experience there are still serious shortfalls in many of our institutions.
The noble Baroness has highlighted a particular instance. The training is constantly being reviewed, and that could of course be taken into account: the ministerial task force will also take such things into account. For example, the Ministry of Justice has just recruited 100 more registered intermediaries to help especially vulnerable children and witnesses go through the criminal justice process, which is a difficult but necessary part of dealing with this problem.
My Lords, I declare my interest as vice-president of Mencap on a UK-level and in Wales. Are the Government giving any attention to the possible need for an augmented level of punishment for those guilty of such crimes against people with learning disabilities?
My Lords, given that abused children often do not show symptoms for some years, and that children with learning disabilities tend to show symptoms in different ways that are not as easily recognised, does the Minister agree that all children who are subject to sexual harm prevention orders or sexual risk orders should receive assessment of their needs and therapeutic support even before signs or symptoms are shown?
That is a very sensible suggestion. These symptoms take time to manifest themselves. However, we realise that people with special needs have needs which go on beyond the conventional age of adulthood. The relevant statutory guidance for young people with special educational needs and disabilities extends to the age of 25.
My Lords, will the noble Lord reflect on the question from the noble Baroness, Lady Howarth, and tell us what impact he thinks cuts to local authorities will have on the services that are necessary to link up the various agencies helping with child protection that he mentioned?
As I said, this is one of the Government’s highest priorities. Across the piece, we are spending more money on social services and the police to deal with this problem, so I do not expect a difficult situation to arise. I could give a list of additional money that we have spent in this area; it is one of our highest priorities.
My Lords, up until the end of August 2015, the cost of the Airports Commission is around £13.4 million across 2012-13 to 2015-16. This covers buildings, staff and IT costs, consultancy, publishing, travel and hosting public consultation events. The final cost will be known once the commission secretariat has been dissolved, following which we intend to publish the final figures. We do not hold estimates of the cost of commissioning or reviewing the findings and conclusions of the Airport Commission’s report.
My Lords, would it not therefore be a terrible waste of money if the Government were to reject the unanimous advice of the commission to go ahead with developing Heathrow through a third runway in such a way as to make it again the No. 1 international airport in the world, which it certainly was when I was Minister for Aviation?
My noble friend makes a very valid point about the detailed work done by the Airports Commission. I again put on record our thanks to Sir Howard Davies and his fellow commissioners for their work. As I said before the Recess, the Government have received the report. As my noble friend will be aware, the Prime Minister has established a Cabinet sub-committee on this issue and will announce the way forward by the end of this year.
My Lords, is it the Government’s view that the Davies commission’s remit gives sufficient consideration to the impact of a third runway on the Government’s plans for a northern powerhouse? Are the Government convinced that the development of Heathrow will not have an adverse impact on, for instance, Birmingham and Manchester Airports?
The Government believe very strongly in the regional airport network. As I am sure the noble Baroness is aware, Manchester announced earlier this year—at the beginning of the summer in June—a £1 billion investment over the next 10 years. Indeed, we have seen further investment in, for example, road surface improvements around Birmingham, Bristol and Doncaster Airports, so various investments are being made which will reinforce the northern powerhouse.
My Lords, Sir Howard Davies and his commission have put a lot of work into coming up with their recommendation, which has been decided as the one to go forward with. Why do the Government now have to appoint another sub-committee and take even more time? There is probably need for expansion of both Heathrow and Gatwick, but let us get on with Heathrow because it is affecting our competitiveness as a nation. Could the Minister assure us that this is going to be taken quickly and it will be established and put in place really fast?
The noble Lord is quite right. I agree with him that this has been a detailed report, which the previous Government, under the current Prime Minister, commissioned in 2012. The report has been received, and I am sure the noble Lord would agree with me that it is time now to give the detailed report considered opinion. It is quite right that there should be a sub-committee of the Cabinet to take this decision forward. I reiterate the point that the Prime Minister has made quite clear: a decision will be made by the end of the year.
My Lords, does the Minister recall that I spent the first two years of the last Parliament dodging this very issue? The reason was the helpful policy input from the Liberal Democrat party. Does the Minister recognise that the Government really will have to make a decision on this matter this year?
I would never accuse my noble friend of dodging anything. If he did so that was his assessment; I thought he handled questions in this respect very ably from the Dispatch Box. I reiterate that the Government—and indeed the Prime Minister—have made it clear that a decision will be made and it will be made by the end of the year.
Whatever option is pursued, is it not clear that the cost will be enormous? Is not the real issue this: how best and how quickly we can advance British aviation in the best possible way? Surely it is apparent that there is only one answer and it is becoming blindingly obvious—Heathrow.
Again, I feel I am repeating myself. The Government have made their position very clear. The report has been received, it is being considered and a decision will be made. Of course the Government recognise the importance of Heathrow as well as other airports around the country. We continue to regard the importance of aviation in developing, furthering and strengthening the British economy.
My Lords, as well as the noble Earl, Lord Attlee, presumably the Secretary of State for Transport from time to time considered the issue of Heathrow and answered one or two questions on it in the other place. It is inconceivable that the Government are acting as if they are in total ignorance of the main features of what the report has been considering. I cannot understand—nor can the House, I believe—the additional delay in either endorsing that conclusion or saying that, in fact, the Government had an alternative strategy all along.
There is no dithering. Let us be quite clear here: it was the previous Government under the current Prime Minister, the same Prime Minister, who commissioned the report. The report was commissioned in 2012. The findings were received—very detailed analysis I am sure the noble Lord recognises—and there were 70,000 responses contained within the commission’s report. Therefore, it is quite right that a considered opinion is given to the commission’s recommendations, and that decision will be made not in due course, as I say again, but as the Prime Minister—the head of the Government—has made clear, by the end of this year, that is 2015.
Order. It is actually the turn of the Liberal Democrat Benches.
My Lords, in making the decision on Heathrow or Gatwick, depending on which it is, will the Government publish after the decision the considerations of the legal delays that might occur depending on which decision is taken? It would seem to me that the advocates of Heathrow should surely want for the first spades to start the construction work as soon as possible. However, Gatwick seems more plausible in terms of fewer political and legal interventions.
The Government have already made clear that they wish to proceed on whatever option is pursued on a speedy basis. That is why we set up the commission report in the first place and the Government have made clear that they will take a decision. In terms of the proposal about legal issues or whatever, it would be speculative for me to comment on those on this occasion because that decision has yet to be taken.
Chairman of Committees
Motion to Appoint
Energy Bill [HL]
Committee (1st Day)
Relevant documents: 6th Report from the Delegated Powers Committee, 4th Report from the Constitution Committee
My Lords, I rise briefly before the House commences Committee to raise a very serious objection and concern that relates to the Bill. At present we do not have the impact assessment for the Bill, which we were promised before our deliberations began, and they begin now. I would like to hear from the Minister why this delay has happened—in fact, why the Bill was not published with an impact assessment in the first place. I also seek assurances that when the impact assessment is published, it will contain full details of the assumptions on which the Bill is based. Namely, there is the Government’s continued assertion that we are on track to meet our renewables targets, which relates to Part 4. That is incredibly important and sensitive, since we have had many representations from industry about the impact of the Bill. It should be recalled that those elements of the Bill were not subject to public consultation, so the impact assessment is incredibly important for us to be able to consider the impact of the Bill. The other assumption that the Government now seem often to quote is that the levy control framework is spent and there is no more money left. We need to see details of those assumptions and the figures that underlie them but we do not have an impact assessment. I am very concerned about this issue and I look forward to a response from the Minister.
My Lords, I should like to say a word in support of my noble friend Lady Worthington because this is not just an isolated example of the Government treating this House, and Parliament, in a cavalier fashion. If I may give another example, next week we were due to have a debate on English votes for English laws. It was promised again and again by the Leader of the House, the noble Baroness, Lady Stowell—I notice that she has disappeared—yet it has been switched. We are to have a debate on the size of the House, which is not an immediately urgent matter, yet the Commons will make a decision at some point about English votes for English laws and we were given the assurance that we would be able to feed into that. My understanding—I hope that the Chief Whip will answer this—is that the decision to move the debate on English votes for English laws off the agenda for next week was taken unilaterally by the Government and that when the Opposition were consulted, we said that we did not want to change. We wanted to have the English votes for English laws debate because it was promised to this House. That is another example of the cavalier way in which the Government treat this House, wanting to bulldoze their business through. It is about time that some people in this House stood up and said that Parliament has a responsibility to challenge the Government. The Leader of the House may think that we should come in only one day a week when we want to say a few words but we are here to hold the Government to account.
The noble Lord has asked that I say something about the decision to change the agenda for the coming two weeks to allow the House to discuss the whole business of its membership. I think the House is acutely conscious of the issues raised in the media and by other noble Lords. I felt it was right and proper, as did the Leader of the House, that we should have an opportunity to debate this while we are here. As the noble Lord will know, we had promised a debate on EVEL. He made a point about that. Subsequently, this House decided to support very strongly a Motion from the noble Lord, Lord Butler, for a Joint Committee of both Houses to consider this matter. There has been no reply to this Motion from the House of Commons and, in the absence of a reply, if I am honest, there is not much that the Government could say in this House on this issue at this time.
I felt it was proper that we should deal with something of immediate concern to this House. That is why the Leader informed all sides of the House. There were consultations and there were reservations about changing business, but nobody does this freely or without proper consideration of what is right and proper. I am sure all noble Lords are pleased that we will have the opportunity to debate in full the future of this House and its future reform in terms of the Motion tabled by the Government and the Motions of the noble Lord, Lord Pearson, and the noble Lord, Lord Steel, which will be debated at the same time next Tuesday.
My Lords, perhaps I may address the points raised quite fairly by the noble Baroness, Lady Worthington, in relation to the Energy Bill and the impact assessment. I had anticipated that we would have an impact assessment on the Bill by this stage, to be published ahead of Committee. I have been chasing the matter through the Recess, including this morning. I heard just before I came in that it has now been cleared on the Oil and Gas Authority. We have instructed that it be separated because the issue that caused the delay was the dialogue about the grace period on wind. No later than tomorrow, we will publish the impact assessment, which the noble Baroness has rightly been chasing. I hope that satisfies the noble Baroness.
Clause 1 agreed.
Clause 2: Transfer of functions to the OGA
1: Clause 2, page 2, line 5, at end insert—
“( ) The Secretary of State shall, within one year from the date of coming into force of this section, undertake an assessment of the fitness for purpose of the OGA’s powers in relation to relevant activities, and shall lay before each House of Parliament a report of the findings.”
My Lords, I thank the Minister for his response and for chasing the impact assessment. Can I take it that the full impact assessment will be published tomorrow, or will it be just the oil and gas part? Perhaps he could clarify that point for me.
Looking at Clause 2, our Amendment 1 is essentially a probing amendment but it is intended to enable us to debate this part of the Bill. At Second Reading, several noble Lords raised the fact that things are changing fast in the North Sea and in the oil and gas sector more generally. We have an undertaking to implement the findings of the Wood review and I am sure the cross-party consensus on that remains strong. However, the Wood review was published in June 2013. Here we are in September 2015 and the pace of change since that date has been quite remarkable.
We are seeing a steady decline in North Sea production. Outputs of oil and gas are already around 40% lower than in 2010 and lower than at any time since 1977. The first quarter of this year marked the seventh consecutive month in which the UK has been a net importer of petroleum, after having been a net exporter since 1984. The figures for 2014 show that the oil and gas sector as a whole lost £5.2 billion—its worst figure since the 1970s—and total revenues were lower than at any time since 1998 at £24 billion. I quote these figures, which were sourced from DECC’s own analysis, to highlight how things are changing in this sector and in the North Sea specifically.
The other new element is that decommissioning is now a reality and is starting to incur costs. There was a feeling a few years ago that decommissioning was the beginning of the end. Now it is being seen as the beginning of a new industry and there is considerable decommissioning activity going on, not least because many of these assets have been in place for decades, perhaps well beyond their imagined timespan. They are therefore reaching the end of their usable lives, even if we wished to keep using them. The purpose of the amendment, then, is to ask for a report to Parliament on the fitness of the powers now being created for the OGA. We have suggested that it should be produced within six months but we do not have a fixed view; a year would be equally fine. However, we must make sure that we set off on the creation of this new quango or arm’s-length body with the right set of objectives.
We will debate amendments later today where we will talk more about the need to update the objectives, particularly in relation to the storage and transportation of waste greenhouse gases. It seems clear that, as we look at the implications of climate change, which are now uncontested—I think it is settled that we need to decarbonise our energy systems—that will change the economics of all fossil fuel activity. If we are to meet our targets, either we will be forced to decarbonise our use of fossil fuels using CCS or we will see a drastic reduction in the demand for those products. Either of those has significant implications for the UK economy and for the oil and gas sector, hence the desire to table an amendment that enables us to have this debate and to require that the OGA be kept up to date with the most recent developments in this sector.
As I have said, oil and gas prices have fallen and there seems to be no sign of their coming back up again any time soon—of course these prices fluctuate but this now seems to be a systemic drop—so we must have a body with the right remit and objectives to do the job of making sure that, while we maximise the economic return from the North Sea, we accept that this may not be solely through the recovery of hydrocarbons but might, of necessity, require a completely new industry that not only extracts hydrocarbons but returns the waste gases to under the sea. We are blessed with a natural repository for many billions of tonnes of waste greenhouse gases, which I am certain we will need if we want to keep the costs of decarbonisation under control and ensure that we are decarbonising cost-effectively.
I shall speak also to Amendment 3 in this group. Amendment 1 requires a report to be made on the fitness of purpose of these powers, but Amendment 3 is more specific and seeks to change the primary objectives of the OGA to include CO2 transportation and storage. It would negate the need for many of the subsequent amendments that we will talk about today because it would bring about a high-level change which would mean that we would not have to catch lots of subsequent clauses and add references to CCS and storage and transportation to the powers being taken here. Many amendments that we will come to today relate to how, as drafted, there is reference back to the principal objective of the Bill and the fact that currently that principal objective does not include the transportation and storage of CO2. Therefore, many of the amendments are trying to reinsert it. We could take another approach, such as the one set out in Amendment 3, which is simply to change the primary objective. There is merit in our discussing that, particularly as CCS offers a lifeline for the future development of hydrocarbon use in the UK by being able largely to decarbonise our use of those fuels.
CCS is essential in that it will enable us to keep using hydrocarbons but, as I alluded to earlier, it is equally important to keeping the costs of decarbonisation contained. At the global level, the Intergovernmental Panel on Climate Change has stated that if we do not have CCS on a global scale, we are likely to see the costs of decarbonisation being double what they would be otherwise, while in the UK the Energy Technologies Institute has estimated that without CCS, by 2050 the costs of decarbonising to reach our targets could be in the order of £40 billion to £50 billion a year more than if CCS is deployed.
This is an important and timely subject. We are seeing projects in the UK moving forward to deployment to enable us to make use of the North Sea. I am sure that the OGA will say, “We would rather have our remit nice and narrow; please leave us alone”. That is fine, but we are moving to a time when the social contract between the citizens and taxpayers of the UK and the offshore oil and gas operators is changing. The oil and gas industry largely used to get on with what it was doing—delivering us rather nice, large sources of tax revenue—and everyone was happy. That is shifting. The revenues are falling, as we have seen in recent years, decommissioning costs are rising and the OGA itself, as we will come to debate later this afternoon, will potentially receive public funding to go about its business. This is no longer purely a commercially focused sector and it requires government to intervene to help it. It has the opportunity to receive public funding—the oil and gas operators already receive generous tax breaks that enable them to offset their decommissioning costs. The social licence between us, the citizens of the UK, and the offshore oil and gas operators is shifting. We need to make sure that the OGA reflects that change of balance and takes on a role fit for the 21st century.
We should always consider very carefully when we create new public sector costs. The Government have pointed out on numerous occasions that we are living through a time of austerity, and it seems a bit strange that we should be creating a new area of public spending here without requiring this to be a comprehensive body that takes into account a whole range of views and issues and keeps pace with current events. As good as it was, the Wood review—which I am sure will continue to receive cross-Bench support—is over two years old, and two years has been shown to be quite a long time in the oil and gas sector, hence the need for these two amendments. I look forward to the Minister’s response and I beg to move.
My Lords, I will say a few words in support of the spirit, at any rate, of this amendment from the noble Baroness, Lady Worthington. I declare an interest as chairman of the Windsor Energy Group, adviser to various energy companies, as in the register, and president of the Energy Industries Council. As the noble Baroness has rightly said, this is a sensible requirement for the future because, as she has also said, the North Sea is a mature province and the industry is clearly undergoing huge change—probably the biggest period of change since the 1970s and early 1980s. Most of the talk in the industry at the moment is about the impact of the halving of the oil price. Even in this morning’s papers, we see some pronouncements by experts on the possibility of whole areas of the North Sea shutting down unless completely new arrangements and management structures can be devised to cope with the new situation.
Obviously, behind this lies the question of whether the price will stay down. My own view is that, barring high-impact events like huge new political upheavals beyond the ones we already have in the Middle East, there will be no obvious bounceback in the price for a very long time. People talk as though the OPEC countries had some choice of policy—they could just cut production and the price would go up. Well of course that would not happen. They have lost control of the price. Russia has no intention of co-operating, and the shale industry in America, although there have been a few bankruptcies, will come back again and increase production as soon as the price rises. So the OPEC countries would gain nothing. Iran of course may be coming on stream as well. All this means that the industry in the North Sea is now facing a period when, on the supply side, there will be a lot more oil. On the demand side, there will probably be rather flat demand, whether from China, from Japan—which is going back to nuclear so will not need so much—or, indeed, from the United States or us, where the demand for oil is flat or even falling.
This is a completely new management challenge. We must have some reassurance, at least in a year’s time but preferably from the start, that the new regulatory authority—the OGA, with its expanded powers into a separate agency, as is now proposed—has the facilities, opportunities and abilities to manage completely new requirements. We have to see a province that is going to adapt to low prices, that develops completely new opportunities and new technologies, not unrelated to the points made by the noble Baroness about the possible disposal of carbon dioxide through CCS techniques, and that learns from other countries. Norway in particular may have a lesson or two for us on how to maintain a mature province and develop new opportunities at sea.
When I had some responsibility for these things in the 1980s, I was told that the oil in the North Sea was going to run out in 1989. That was the experts’ forecast, but it turned out to be spectacularly wrong. Today we have seen a fantastic triumph of UK engineering over 20 or 30 years, a vast contribution to our revenue—I think it is estimated in today’s money at about £330 billion—and we have seen the ability of the industry to cut costs in the face of new challenges. It will have to cut costs dramatically in the immediate future if many areas are to stay in business. It will need major help with decommissioning, which would have arisen whether or not the oil price had fallen because a lot of the platforms and infrastructure in the North Sea are coming to the end of their life.
We will need to see much greater emphasis on and encouragement for rapid and extensive new drilling. We are not drilling nearly enough in the North Sea, and again the Norwegians could teach us a thing or two about this. The incentives for new drilling seem to be much too targeted and fussy, and perhaps should be more general and allow all kinds of new innovations in drilling and discovery to go on. Various figures are given but there are said to be between 12 billion and 24 billion barrels of oil still in the North Sea. This is big money, and that oil could still contribute a vast amount to both our revenues and our national production.
Against that background, we certainly need to see in a year’s time another very close review of how the new Oil and Gas Authority is getting on. I hope therefore that either the amendment or its spirit can be accepted and incorporated by Ministers.
My Lords, I shall speak to Amendments 7, 22 and 23 in this group. The main purpose of the Bill is the more efficient and effective management of the remaining resources in the North Sea, and it seems sensibly directed towards that end. However, it is important to remember, as others have touched on, that the Bill has enormous implications for the fledgling CCS industry. CCS is able to use the same infrastructure that was used for production and the same subsurface analysis, and it is important that it has access to those.
Before I go any further I should declare an interest as president of the Carbon Capture & Storage Association. Perhaps it is worth pointing out that I helped to establish this association around 10 years ago, just as I retired from Shell, because I saw no alternative to CCS—no other way of managing the emissions that were going to be produced by the continuing use of hydrocarbons over the coming decades, and avoiding the damaging climate change associated with those, unless we had something like CCS. For that reason, it is important that we bear this in mind today.
I hope that the Government will regard the amendments as helpful; they are certainly intended to be. Their main aim is to ensure that CCS is not inadvertently inhibited or prevented through the application of regulations and procedures that were not designed for those purposes. The Bill is based around the pre-existing Energy Act, by which CCS was not envisaged.
Amendment 7 is designed to remind the OGA that, over time, its priorities may change. The OGA is primarily staffed by people whose backgrounds are in a variety of aspects of hydrocarbon exploration, production, management and regulation. It is not beyond the realms of possibility that CCS is not at the forefront of their thinking. It is quite important that this should be made clear, and that is what the amendment of the noble Baroness, Lady Worthington, does.
Amendments 22 and 23 are both intended to ensure that practitioners of CCS have the appropriate standing and access in order to operate efficiently and effectively when doing their business. It is apparent from the amendments tabled by the noble Baroness, Lady Worthington, and other noble Lords that this concern is fairly widely held. Had this debate not been held today there might have been much more opportunity for Members with such concerns to consult with each other, with officials and with Ministers and we might well have ended up with fewer and more coherent amendments. We are where we are, but this is a real concern.
Given that CCS is a central plank in the Government’s energy strategy I hope that they will view these amendments positively. The amendments can certainly be improved and if the same objectives can be achieved in a more efficient way, I and, I am sure, others would be very happy to discuss this matter with Ministers and officials.
My final point is a trivial one in one sense but not in another. The Bill refers in a number of places to existing legislation—earlier energy Bills. It would be enormously helpful if officials preparing Explanatory Notes, who must have immersed themselves in the existing legislation, were able to include links in the Explanatory Notes to the online sources where that existing legislation can be found. We could all save a great deal of time and probably quite a lot of paper by following such links directly.
My Lords, I will not delay the House long because what I wanted to say has been said much more eloquently by my noble friend Lady Worthington and by the noble Lords, Lord Howell and Lord Oxburgh. To echo the last point made by the noble Lord, Lord Oxburgh, giving us some indication of the reference points in previous energy legislation really would make life a lot easier for all of us.
My primary point is that this is an opportunity for some lateral thinking. For those of us who have been listening to the trailers for Jim Naughtie’s programme about the North Sea over a period of 40 to 50 years of exploration, it is astonishing to recognise the change that has taken place just in the past two to five years, or slightly longer. The major change has been that many of the larger oil companies have reduced their footprint in the North Sea and we have seen the entry of a number of independents. As the Wood report set out the case for setting up a regime of collaboration, it is important to bear in mind that for the independents, who are competitors one with another, it can be harder to get that degree of co-operation at the moment, when the North Sea is becoming more difficult. So would it not make sense to review where we are in a year’s time to make sure that we do not have to have yet another energy Bill before both Houses? The change is phenomenal, and we must be prepared for it at every opportunity.
I greatly admire the work of the noble Lord, Lord Oxburgh, on carbon capture and storage. It is the holy grail for this country, which has so much fossil fuel. I am very concerned about the environmental impact of the continuing use of fossil fuels, but I am also concerned about security of supply issues. The flexibility that fossil fuels can give us when there is a potential security of supply crisis is very important, and we will take a lot of the sting out of the tail if we have operational carbon capture and storage.
This is not a political issue—it should not be a partisan issue across this House. This is a common-sense group of amendments that allows us a bit of lateral thinking and allows us to make legislation at a time when considerable change is still going on, not just in the UK continental shelf but across the energy industry.
My Lords, I declare an interest as chairman of the Committee on Climate Change. I echo the words of the noble Baroness that this is not a party-political issue but is much wider than that.
As was clearly shown by my noble friend, we live at a time in which the issue of energy, in particular oil and gas, is changing so fast that we have to be extremely careful that we do not set up systems that are not capable of easing alteration to meet new circumstance. It may be that the major Amendment 1, which was proposed by the noble Baroness, Lady Worthington, is not something that the Government will wish to be tied to; the particular time and so on might well be better expressed. However, I hope that the Government will take seriously the need to have within this legislation the means whereby this House can address the speed with which these things are changing and have the opportunity to make such alterations as become necessary—because we all know that however well one writes legislation, it is surprisingly easy to move to a situation in which you wonder why on earth you did not put that in, or why on earth that was not there.
Secondly, it would be very odd to produce legislation that did not allow specifically for the transportation and storage of greenhouse gases. This will not change in the future; it is central at the present time. The Committee on Climate Change has advised the Government of the importance and centrality of carbon capture and storage for many of the reasons that have already been addressed. However, the noble Baroness was right to say that there may well be an interim period in which we will need to use more fossil fuels than we would like, and the only way we can do that without having a damaging effect on the climate is of course by using carbon capture and storage. Britain has a leadership role in that and has already committed significant amounts of money to seek to ensure that we can do it. It would be simply odd to produce a Bill at this moment without enabling ourselves specifically to talk about carbon capture and storage.
Thirdly, it is important that this is in the Bill itself. I spent a long time as a Minister—some 16 years—and one thing I learned very rapidly was that it is very easy for institutions to say, “It’s nothing to do with us because it isn’t in the Act; that’s not where our responsibility lies”. I remember very nearly having a stand-up row with the person who was then responsible for the gas industry, because what should be done seemed so obvious, and she was determined to say that she could not do it because it was not in the Act. I thought that with a bit of imagination she would be able to do it, but that is a different issue. I do not want the need for imagination to be required here. It is one of the rarest talents and therefore it is a quite a good idea to make sure that we put into the Bill the ability—and also insist that it is part of the responsibility—of the new institution.
Lastly, I want to echo the comment about the people who will naturally be at the heart of this process. All of us are creatures of our experience and knowledge and all of us find ourselves more at home with the things with which we are at home. In this particular area it is easy to have reached the sort of level that would mean that we would be suitable for work in this new authority without perhaps spending a great deal of time on carbon capture and storage. So there is a serious reason why we should add to the Bill in this way and I hope that my noble friend, if not necessarily agreeing to any of these amendments—and, like others, I say that it is a collection that might well have been brought together more effectively—will say, to benefit the Committee, that he will bring forward amendments to at least ensure that the transportation and storage of greenhouse gases becomes a serious part of the activities that we are discussing today.
My Lords, we on these Benches very much share the concerns voiced in all parts of the House today about this Bill. It may have two main parts—on the oil and gas industry, and onshore wind—but I agree with the noble Lord, Lord Oxburgh, that we have been asked to deal with it in a very unsatisfactory way. We had Second Reading on the last day of Parliament before the summer recess, and here we are in Committee today. I find that quite difficult.
In addition, amendments were tabled in the middle of last week and we still do not have some of the information we need to look at the Bill properly in Committee—and it is not just me saying this. Other people may have big offices to help them, but the beauty of this House is that we have lots of Back-Benchers with expertise who would like to take part in debates such as this; if we treat Bills in this way, it is very difficult for them to take part. I feel particularly strongly about energy Bills. Some of us have dealt with several energy Bills in this House, and we often find that very few people take part. That is partly because such Bills are often technical and, if Back-Benchers are going to take part, they need time to look at what the amendments mean and to get advice on them. I hope the House authorities will look seriously at this issue. I can understand some of the reasons why this has happened, but the situation is very unsatisfactory.
As I said, we agree with many of the things that have been said today. In setting up the Oil and Gas Authority, the Government are proposing, as we heard at Second Reading, to give some of their powers to this body. The Oil and Gas Authority will have ownership of carbon dioxide storage licensing but the responsibility for policy and strategy is going to remain, as I understand it, with DECC. The problems associated with this were highlighted by the noble Lord, Lord Deben. I understand from briefings I have received that DECC and the Oil and Gas Authority have been rather reluctant to consider applying the authority’s expertise to support future strategy development. I hope the Minister will tell us a little more about that. As the noble Lord said, the main reason seems to be that it is beyond the authority’s licensing remit. The problem is that if people do not think that something is within their remit, they do not think outside the box and they will not do anything else. The authority said that it was not very keen on that happening; it thinks that it is outside the scope of its remit and it is not willing to fund it. I hope the Minister will reassure us on this issue and that, as we scrutinise the Bill not just in Committee but on Report, we can deal with some of these matters. I have also received a rather interesting letter from Professor Stuart Haszeldine of the University of Edinburgh on how we might go forward, and perhaps there will be a chance to discuss that at a future date.
It seems to me and my colleagues on these Benches that there is a danger—I am not the only person to say this today—that the Bill might create institutional barriers to the development of carbon capture and storage. Other noble Lords have said today that that does not help us with the purpose of the Oil and Gas Authority, which is to make sure that we make the best of what is in the North Sea. I am sure that the Minister will try to respond to that.
Many of the amendments before us today cover these issues—as everybody has said, we have a whole series of amendments on the same area—and had we not been so rushed into considering the Bill, we might have been able to address them more logically. However, I hope that the Minister will sense the feeling of the Committee and be able to respond positively. I hope he will assure us that he and the department are considering these matters, so that we can put such concerns to rest and come forward with something a bit more sensible on Report.
My Lords, perhaps I may first pick up on a point made by the noble Baroness, Lady Worthington on the impact assessment. It is only by splitting the impact assessment between the parts of the Bill dealing with oil and gas, and those dealing with wind, that we are able to publish tomorrow the impact assessment relating to the Oil and Gas Authority. I will update the Committee on Wednesday on where we are on the wind issue and on the dialogue about grace periods.
I thank noble Lords for the amendments and for the non-partisan way in which points have been made. I do not think there is a material difference—certainly not from the speeches I have heard today—between the Government’s position on the importance of CCS and points made by noble Lords today. The best way forward might be if I go through where we stand at the moment in relation to the various amendments, and where we might be by Report.
My noble friends Lord Deben and Lord Howell, the noble Lord, Lord Oxburgh, the noble Baronesses, Lady Worthington and Lady Liddell, and various others spoke about the non-partisan nature of getting it right on energy for this country and for the planet—that is a very useful way forward and we certainly have a shared interest in it.
Let me address the pot pourri of amendments in this group. On Amendment 1, I acknowledge that it is important that regulatory measures be kept under review and for Parliament to be informed of the outcome of such activities. I also acknowledge the point made about the rapid nature of change in this area and in many other areas.
The noble Baroness’s amendment would require a review to be undertaken within one year—rather than the six months that she mentioned; perhaps I misunderstood her—of the coming into force of Clause 2. Neither I nor the department think that such a period is sufficient to enable an effective review of the Oil and Gas Authority’s activities, it being a new body in a new area. For this reason, I am not able to accept the amendment. However, the noble Baroness and others have raised interesting and valid points about a review which my officials are already considering, and we will return to this topic on Report. I hope that that addresses the immediate concerns. It is clear that we need to see how the legislation is working, how effective it is and whether there may be a need for a touch on the tiller or more. I accept that there is some need to look at how the legislation is working.
I thank those noble Lords who spoke to Amendments 3 and 23, which are significant and would extend the maximising economic recovery principal objective and, in the case of Amendment 3, the subsequent strategy to include transportation and storage of carbon dioxide. I accept that CCS is central to what we are seeking to do on decarbonisation, but I reassure noble Lords that things are happening—it is not as though we are not doing anything on this issue. The Office of Carbon Capture and Storage is already committed to comprehensive programmes on CCS, perhaps the most comprehensive anywhere in the world, to support the commercialisation of the technology and develop the industry.
My noble friend Lord Howell mentioned Norway, which is indeed important. However, Canada—where it is working on a commercial basis—is especially important in this context. Officials from DECC are going out to look at this on a fairly regular and sustained basis.
It is not as though no work is happening on carbon capture and storage. We are committed to a competition with up to £1 billion capital—that is current, and we will make an announcement on it early in 2016—plus operational support for large carbon capture and storage projects and a £125 million research and development and innovation programme. That is already happening.
I accept that we need to ensure that this dovetails with the work done by the Oil and Gas Authority. From my study of it, the Wood review—I accept that things move very quickly—said only two things about CCS, which perhaps illustrates how quickly it is moving, and both those are being picked up. The review suggested that the Oil and Gas Authority should work with industry to develop a technology strategy that will underpin the UK strategy of maximising economic return, and should include enhanced oil recovery and carbon capture and storage. A draft is already being prepared on that, and it is going to happen. Page 49 of the Wood review goes on to say that the Office of Carbon Capture and Storage should continue to work closely with the Oil and Gas Authority and oil and gas licensees,
“to examine the business case for the use of depleted reservoirs for carbon storage and possibly EOR”—
or enhanced oil recovery. That, too, will be happening. I am sure that that provides some reassurance to the noble Lords who raised this issue.
If I may, I will come back to the purpose of the Bill, which seeks to incorporate all the key proposals of the Wood review into legislation. The Wood review has therefore to some extent tested and explored the new regime envisaged for the oil and gas industry, and the justifications for such changes are set out in the document. There has been no such exploration of how such an extension would affect carbon capture and storage, so I believe that more time is needed to consider fully how the OGA can take forward its role—it does have a role—in supporting carbon capture and storage.
Would it not therefore be valuable if we give the new authority specifically the powers to do precisely that, rather than say that we will work on it and then do it? After all, if we give it those powers, work on it, and then find that it is not necessary, it will not do any harm. I always wonder why we do not do the things that will not do any harm when they might do some good.
As my noble friend I think knows, I am always in favour of doing things that would do good and against things that would do harm. Therefore, I will, I hope, be coming on to some points that may provide some reassurance.
Amendments at this stage could cause delays to the strategy that is set out in the Wood review and the legislation enabling the Oil and Gas Authority to carry out the vital functions that we have set out in regulating and stewarding the United Kingdom continental shelf. That said, the Oil and Gas Authority will have a key role in relation to carbon capture and storage. It will issue carbon dioxide storage site licences and approve carbon dioxide storage permit applications. We are also considering—this is important—how carbon capture and storage may be considered as part of a proposed decommissioning plan. The Oil and Gas Authority will take into account the viability of utilising captured carbon dioxide in enhanced oil recovery projects. I am very happy to engage with noble Lords between Committee and Report, along with officials, to see how we can do that. I hope that that provides some reassurance.
In addition, the transfer and storage of carbon dioxide is an important technology, which is why it is likely to form a key element of the technology and decommissioning sector strategies that will be developed by the Oil and Gas Authority in consultation with industry. These strategies will help to underpin the overarching strategy related to maximising economic recovery. I can therefore reassure noble Lords that we are certainly open to looking at how we move this forward, but I do not want to give the impression that we will change the principal thrust of the primary object of the Act, which is to maximise economic recovery. Certainly, we can explore ways of seeing how we can ensure that carbon capture and storage is incorporated within the remit of the work done by the Oil and Gas Authority.
I hope that I have covered the key points. One point was made by my noble friend Lord Oxburgh and echoed by the noble Baroness, Lady Liddell, which as a Minister I have much sympathy with. That is making sure that we have some clear reference points on legislation. I hope that we can let noble Lords have that because it is a point well made in this area as no doubt in many others—taxation, company law and pensions spring to mind as just three areas that would benefit very clearly. With my assurance that we are happy to look at how we can move this forward on both of the points made—a timely look at the legislation and how we can ensure that carbon capture and storage is not forgotten, and we certainly do not intend that it should be—I hope that the noble Baroness will be willing to withdraw her amendment.
Can I press the Minister a shade more on something that we tend to forget when we debate these great issues of carbon capture and the future of the industry, and that is cost? It has been estimated that about £40 billion will be required to handle the decommissioning of outdated, redundant infrastructure in the North Sea. This whole process may be greatly accelerated if, as I earlier predicted, oil prices stay well down or go very much further down than they are already in the next four or five years. There is a huge cost there.
There is obviously vast cost involved in the piping of CO2 into the North Sea, if that is the technology used, although brilliant minds like those of my noble friend Lord Oxburgh have thought of new ways of handling carbon without having to pipe it away into the North Sea into reservoirs. In some cases, reservoirs have to be suitably designed both to enhance oil production and to store the CO2. All of these involve huge sums, which have not been mentioned. On top of that, the Government appear to be thinking in terms of further tax reliefs of all kinds in the North Sea, and I hope a great simplification of tax—it has been obvious that we have needed that for the past five or six years and I am glad that it is coming now, but again that is a lost revenue. Should we not give a little attention, as we push forward with this major reorganisation of the administration of North Sea and UK continental shelf affairs, to the enormous sums and where they will come from? I imagine that the answer is probably from the consumer and energy prices, but the Government have a duty to the public to explain some of the implications of what is now unfolding before us, including that colossal figure for decommissioning.
My Lords, my noble friend makes a valid point about the decommissioning costs and costs in general, which are very much at the forefront of the Government’s thinking. He will be aware that the Oil and Gas Authority is essentially being paid for by the industry. Other than initial seed- corn support of a small amount from the Government and the Government conceivably stepping in in an emergency situation, it is self-financing. But there are aspects that we will come to later in the legislation that talk about the public purse, this being one consideration that has to be borne in mind in relation to relevant activities. I need no persuading that costs are central to what we are looking at here.
My Lords, the Minister has said that he is unhappy about having a review within a year, which is too soon. I can understand that, but can we press the Minister to come back with a suggestion of two years? Having followed other Bills through, I fear that this period will get extended. I hope that serious thought can be given, between now and Report, to putting forward a time before the final stages of the Bill are considered.
I thank my noble friend. I do not want to give a figure on the hoof; I am sure noble Lords would appreciate that that would be dangerous. We can look at this clearly between now and Report. If we are going to have a review we will have to say when it should take place. I would not anticipate coming back without a definitive idea of that.
My Lords, I thank all noble Lords who have contributed to this debate, which has demonstrated the breadth of opinion and the cross-party consensus on the need for the Bill to be amended to ensure that carbon capture and storage—or certainly the storage and transportation elements of it—is on the face of the Bill, for the avoidance of all doubt. On these Benches, we will not be content for the Bill to leave this House without that issue being addressed. That said, I am grateful to the Minister for his response. I look forward to sitting down and engaging in the discussions he offered with officials and interested parties to see if we can come to an agreement on the review period for the legislation and the objective of the OGA. I understand the points that have been made, but if you create a body that has licensing powers over the storage of CO2, which may well involve itself in meetings in relation to storage and transportation and which may be charging fees, how can this all be possible unless its primary objective includes a reference to that? The potential for judicial reviews or objections from industry would be much wider if we do not make it crystal clear from the outset that this is what we intend the OGA to do. The noble Lord has referenced the fact that this will be self-financing, but government amendments to be tabled today would mean that public money was potentially being given to the OGA. I reiterate that we will not be content unless something appears on the face of the Bill, but I look forward to sitting down with the Minister and his officials and, on that basis, I am happy to withdraw the amendment.
I join the noble Baroness, Lady Worthington, in thanking those who have participated in the debate and the Minister for his reply. I have one final question for him. Have the officials in his department conducted a study of how the Bill might impact CCS? There are serious questions there: if they have not done that, could they do so? It would be extremely useful as a lead-in to the next stage.
In answer to the noble Lord, officials have certainly been looking at how CSS fits in and dovetails with the Bill. We will continue to consider that and look at it if we are able to engage in discussions between now and Report. I am grateful for the noble Lord’s comments.
Amendment 1 withdrawn.
Clause 2 agreed.
Schedule: Transfer of functions to the OGA
1A: The Schedule, page 38, line 37, at end insert—
“( ) Omit paragraph 1(2).”
My Lords, Amendments 1A to 1F and Amendment 43 seek to amend the Schedule to the Bill to make amendments to other Acts and the Title of the Bill. Because the power for the Oil and Gas Authority to charge fees is provided for in Amendment 16, Amendments 1A to 1D are required. In particular, we amend the power to charge in Section 188 of the Energy Act 2004 and remove some other powers to charge fees. This illustrates the points that were made about the need for a destination table.
Amendment 1E amends the Schedule to insert a definition of the Oil and Gas Authority into the Energy Act 2011. This is consequential on government Amendments 33 and 34 relating to access to upstream petroleum infrastructure and on the transfer of functions to the Oil and Gas Authority in relation to access to upstream petroleum infrastructure. Amendment 1F amends the Schedule to remove the levy provisions from Section 42 and Schedule 7 of the Infrastructure Act 2015. These will be set out with amendments to this Bill—noble Lords should see Amendments 17 and 18—so that those using the legislation can find all the Oil and Gas Authority provisions in one place. I hope that that is helpful.
Amendment 43 amends the Title to include,
“to make provision about rights to use upstream petroleum infrastructure”,
in consequence to Amendments 35 and 36, which insert new clauses on this topic. I beg to move.
Amendment 1A agreed.
Amendments 1B to 1F
1B: The Schedule, page 40, line 7, at end insert—
“Energy Act 2004(1) Section 188 of the Energy Act 2004 (power to impose charges to fund energy functions) is amended as follows.
(2) In subsection (7), omit paragraphs (b), (h), (m) and (n).
(3) In subsection (8), omit paragraphs (da), (db) and (f).
(4) In subsection (12), in the substituted subsection (7A)(b), for “mentioned in subsection (8)(db)” (in both places) substitute “for which a licence under Chapter 3 of Part 1 of the Energy Act 2008 is required”.”
1C: The Schedule, page 40, line 12, at end insert—
“( ) In that subsection, omit paragraph (e).”
1D: The Schedule, page 41, line 15, at end insert—
“(c) subsection (2)(d) does not apply.”
1E: The Schedule, page 43, line 9, at end insert—
“In section 90(1) (interpretation), after the definition of “gas processing facility” insert—
““the OGA” means the Oil and Gas Authority;”.
1F: The Schedule, page 43, line 9, at end insert—
“Infrastructure Act 2015The Infrastructure Act 2015 is amended as follows.
Omit section 42 (levy on holders of certain energy industry licences).
In section 55(4)(b) (statutory instruments subject to affirmative procedure), omit “or 42(11)”.
Omit Schedule 7 (the licensing levy).”
Amendments 1B to 1F agreed.
Schedule, as amended, agreed.
Clause 3 agreed.
2: After Clause 3, insert the following new Clause—
“Report to Parliament on decommissioning costs
Within one year of this Act coming into force, and annually thereafter, the Secretary of State shall report to each House of Parliament on estimated decommissioning costs for North Sea oil and gas infrastructure.”
My Lords, I shall speak to Amendments 2 and 9. Amendment 2 is the requirement on the Secretary of State to report to Parliament on an annual basis on the,
“estimated decommissioning costs for North Sea oil and gas infrastructure”.
This amendment has been tabled because an important facet of this debate is that the costs involved are hugely important, which the Minister mentioned earlier. Decommissioning is under way, it is likely to increase over time and we will see bits of infrastructure being removed, which will cause considerable costs to be borne. The upside is that we may well be about to invent a wonderful new industry in which we can get a global lead. The engineering excellence that we have demonstrated in the North Sea will be repurposed and we will apply that knowledge and expertise to the task of decommissioning, which I am sure will stand us in good stead both here and overseas.
However, through the course of my engagement with this Bill, it has come to light that those decommissioning costs will now partly fall on the taxpayer. The Treasury produced an estimate of the costs of decommissioning and how much will be expected to be a burden on the taxpayer. In the five years from now until 2020, HMRC estimates that something in the region of £9 billion will be expended, half of which will fall on the taxpayer. That is not an insubstantial amount of money, particularly as we hear, in the context of energy, an awful lot is made of the cost of the renewables subsidies and the green energy contracts. A levy control framework is applied to those costs. But here we have a liability on the taxpayer for essentially finishing off the job in the North Sea and assisting the oil and gas sector in bearing those costs.
Those costs are quite generous and the way in which they are calculated is that tax can be claimed back through the petroleum revenue tax, the PRT, and the ring-fenced corporation tax, the RFCT. Both provisions are very generous and enable costs to be claimed dating back throughout the time of the activity. They allow the use of retrospective taxation that has been paid to claim tax back against decommissioning costs. This evidently means a loss of revenue to the Exchequer, and therefore extra pressure on taxpayers to make up the difference somewhere else.
I am not saying that the oil and gas sector has not been a great contributor to the British economy. However, as I said in my opening comments, although the oil and gas sector used to be left to its own devices, by and large, and generated a lot of tax revenue, the social contract between us and it is changing, and from now on we will revisit the topic of decommissioning often. The total cost is, of course, an estimate; it may be higher.
The purpose of the amendment is to require some transparency and give us an opportunity to debate the subject. The decommissioning costs would be regularly reported and we could debate the rightness, or otherwise, of continuing the arrangement whereby taxpayers foot the bill for a substantial amount of decommissioning, with a liability that appears—although I would be happy to be contradicted on this—to be relatively unlimited. Perhaps the Minister could clarify that. Is there a back-stop? Is there a point at which we say, “No, we will not pay”?
My second question on the amendment, to which I would welcome an answer from the Minister, is about what happens if a company goes bankrupt. It is unlikely that the big oil majors will disappear overnight—it might take a little longer than that—but we will probably see assets being transferred from some of the big oil majors to smaller organisations, perhaps companies with more appetite for risk or different funding profiles, which can continue to act when the majors might choose otherwise. That raises a risk: what happens if those entities are no longer with us, or get themselves in too deep and find themselves on the point of liquidation? Who will then take on the costs of decommissioning, and what provision is being made to protect the taxpayer in those circumstances? I hope that that will not be the case, but unfortunately we have to imagine the worst—these are turbulent times, and things are changing fast. Amendment 2 is designed to probe on those issues, and I hope I can look forward to some words of reassurance from the Minister.
The second amendment in the group, Amendment 9, relates to the matters that the OGA must take into account under Clause 4. Many more amendments have been tabled to those provisions, and we will debate them in the next group, but Amendment 9 has been grouped under the heading of decommissioning, because it raises an important issue. Obviously some parts of the infrastructure will be able to be reused, both by people seeking to extend the lives of the wells and by those wishing to repurpose them and use them for storage of waste gases, but timing will be an issue. With lower oil prices, decommissioning may be more rapid than we first expected, which could mean infrastructure being removed sooner than we thought it would. We could then be out of step with what we hope will be a new industry to invest in to do with the transportation and storage of waste greenhouse gases.
We want to avoid a situation of accelerated gas decommissioning and possibly delayed carbon capture and storage, although I hope we shall not see that anyway because CCS has been rather slow to start with and should not be delayed any further. Such projects may well come on stream after the decommissioning decisions have been taken, which would be regrettable. I am sure that the Minister will say, as he said about the Wood review, that the OGA is fully cognisant of CCS, but CCS does not appear to be one of the key things to which it has regard. That is the problem. Where we want the OGA to focus on an issue, we should specify that issue in the Bill. A hierarchy of consideration, which requires it at least to think about potential reuse for carbon capture and storage before people press ahead with decommissioning, should be listed as one of the matters to which the OGA must have regard, and that is the purpose of Amendment 9. I beg to move.
My Lords, in case any eyebrows were raised over the apparent difference between the noble Baroness’s figure of £9 billion and my figure of £40 billion, which are slightly different, I should make clear that I think the noble Baroness was talking about the next five years whereas I was talking about the next 25 years, over which time it is estimated that £40 billion will have to be spent removing redundant platforms and pipelines as well as plugging spent oil wells.
My noble friend said that the companies would fund all this. I wonder whether that makes reassuring sense in the light of what the noble Baroness, Lady Worthington, said about these companies being increasingly strapped for cash. If we are only half right about the evolution of world oil and gas prices—and it looks as though we are going into a period of prolonged glut in that field—the North Sea companies will have very tight budgets. This additional cost—whether it is £9 billion over five years or £40 billion over 25 years—will have to be found from somewhere. As we advance into this era and ask the OGA to take on these new responsibilities, and as we work out the practicalities of CCS, which have not yet all been solved, and the costs of it, we must be careful that we do not store up colossal financial problems for the future that will lead people in years to come to ask why we did not make clearer preparations. I wish to make clear the difference between the two figures of £9 billion and £40 billion and suggest yet again that we focus very carefully on where the money will come from.
My Lords, I thank the noble Baroness for her amendment and my noble friend Lord Howell for his comments. Without wishing to be too much of a doomsayer, I appreciate that there is always the chance of any business going into bankruptcy or company going into insolvency. The legal position is that decommissioning costs are picked up by industry under the Petroleum Act 1998—and industry does, of course, get tax relief.
I will address the noble Baroness’s points on Amendments 2 and 9. Minimising the costs of decommissioning in the North Sea to both industry and the taxpayer will be a central focus of the new legislative landscape. It is essential that we create an environment that encourages collaboration and co-operation in order to bring down overall costs. The reuse of viable North Sea infrastructure is a top priority for the Oil and Gas Authority. As I outlined earlier, the Wood review suggested that the Office of Carbon Capture and Storage would work closely with the Oil and Gas Authority in moving this forward. That, indeed, is what is happening in line with the recommendations made by Sir Ian Wood in his review.
That said, I understand the thrust of what is being said and can confirm that decommissioning is high on the Government’s agenda. Obviously there are costs associated with it and it is essential that we do it in the most cost-effective way, bringing in the possibility of reusing decommissioned sites in relation to CCS. I hope that noble Lords have had a letter indicating that the Government will bring forward amendments on decommissioning on Report. Unfortunately, it has not been possible to bring them forward earlier, but it is my intention that these amendments will address the issues of decommissioning costs and the viable reuse of infrastructure in the North Sea. On that basis, I hope that the noble Baroness will feel able to withdraw the amendment. I look forward to debating decommissioning in more detail on Report when government amendments on these issues will be brought forward.
My Lords, I thank the noble Lord, Lord Howell, for his clarification. He is absolutely correct that, obviously, over a longer time period we will incur higher costs. I thank the Minister for his response. Possibly I did get the letter about the decommissioning amendments. I have to confess it has been a rather chaotic last few weeks so I will look again in my inbox. I would welcome that and I think that this issue must be addressed in the Bill. It is clearly a subject that we are going to see a lot of parliamentary time devoted to. Could the Minister write to me or give me clarification, as soon as possible, about the nature of the liability that taxpayers will face and about any safeguards that will be put in place to prevent it becoming an unlimited liability?
I notice from the industry side that the tax breaks that were granted have been underwritten by private law contracts to avoid any reverses being introduced by subsequent Governments. That seems to be quite a nice safeguard for the industry. As we know, Finance Bills are famous for being quite changeable. In fact, we saw quite a shift from the 2011 Budget where what were described as disastrous tax regimes brought in for the oil and gas sector were rapidly reversed and changed over subsequent Finance Bills. Therefore, one can see why the industry is keen to have these things underwritten and uses private law contracts now for those tax breaks. However, where are the reassurances for the public purse that this will not be a ballooning cost for us over decades to come?
I understand that it should be the industry that pays, but it does receive tax breaks, which amounts to a subsidy from the public purse. However, on the basis that there are amendments coming forward and that we will have another opportunity to debate decommissioning in full, I beg leave to withdraw my amendment.
Amendment 2 withdrawn.
Amendment 3 not moved.
Clause 4: Matters to which the OGA must have regard
3A: Clause 4, page 3, line 12, after “from,” insert “its existence and”
My Lords, I begin by declaring my interests, which are in the register, and I have shares in oil companies. I also record my thanks to the Minister and his team for the briefing that they gave us prior to Committee and, indeed, for the follow-up work that I have received from them since. My amendment is a very simple probing amendment. The Minister in his letter stated that minimising public expenditure will be limited to that which arises from the relevant activities because this is the only area in which the OGA can have influence. He further stated that in due course a levy and fees will mean that the industry will pay the OGA’s full costs. Indeed, our discussions earlier were about costs.
However, my concern remains. I do not feel that either the wording of the Bill or the Minister’s interpretation mean that those working in and managing the OGA will have a duty to keep their costs as low as possible. As we said this afternoon, the amount of money coming into oil companies at the moment is so low that it is imperative that the OGA sets the standard of making sure that it does its work efficiently but keeps its cost as low as possible. I am concerned, for example, about the nature of office accommodation—it seems very simple—about location, travel, hotels, publicity and all the other parts that go into making the new OGA work properly.
I also share with colleagues that I have been assured that Treasury rules insist that fees should recover full costs and no more. That, however, does not explicitly cover a levy: nor does it limit spending levels. Therefore, in moving the amendment I still seek assurance that the OGA will have a duty to minimise expenditure on its internal operations. I beg to move.
My Lords, I thank the noble Baroness for introducing her amendment. I shall speak to amendments also in this group: Amendments 5, 6, 8, 20 and 21 in my name and Amendments 4, 10 and 11 in the names of my noble friends Lord Whitty and Lord Grantchester. This could be described as another pot pourri of amendments. I echo the noble Lords who mentioned that, had we had a bit more time and not been caught trying to table all our amendments in the last week of the Recess, we might have come forward with a slightly different grid with different groupings. However, we are where we are. What all these amendments have in common is that they relate to Clauses 4 and 9, which set out the core functions of the OGA and—Clause 9 in particular—the matters to which the OGA should have regard.
I do not intend to go over again the importance of CCS and the need to facilitate development of storage and transportation, as we have obviously rehearsed those arguments. However, if we do not change the primary objective, as set out in the Petroleum Act and amended by the Infrastructure Act, we will probably have to amend the Bill in numerous other places to ensure that CCS is properly taken into account. Clauses 4 and 9 are two places where we would expect something in the Bill to reassure us that this will be taken with due seriousness, and that the OGA will have the right legal backing needed to do its job properly.
Amendment 4, which is in my noble friend Lord Whitty’s name, refers to the need for decarbonisation strategies. Having spoken to him, I know that the purpose of probing on this is that it is absolutely clear that, as we face climate change and start to absorb the implications of what we need to do, there is a great need for a holistic view of our pursuit and extraction of hydrocarbons. We are either going to change drastically our demand for hydrocarbons by moving into other sources of energy, or we will be capturing and storing the waste gases and putting them somewhere where they are not released into the atmosphere. I think both have quite profound implications and it is right that the OGA must have regard to the meeting of climate change targets and carbon budgets, and to the need for decarbonisation of energy. This is meant to be a Bill for the 21st century, not for the last century. Therefore, if we are to list specific areas to which the OGA must have regard, it would seem odd if climate change mitigation and decarbonisation were not specifically mentioned.
Amendment 5, which is in my name, is, as I said, an alternate way of ensuring that geological carbon storage is included within the matters to which the OGA has regard. Amendment 6 is similar to Amendment 4 in that it asks for consideration of the Climate Change Act and the targets within it.
We then turn to Amendment 10, which is in the name of my noble friend Lord Whitty and refers to energy efficiency. I think I am right to say that my noble friend would have preferred to write a wider amendment about energy efficiency in general, because that is a long-held area of great interest to him. There is certainly a need for any energy Bill to consider the role of demand reduction and energy efficiency but, as the scope of this Bill is relatively narrow as it stands, this amendment relates to increasing energy efficiency within the areas of extraction of oil and gas, as related to the OGA. Amendment 11 relates to carbon capture and storage policy again.
The last two amendments in this group, Amendments 20 and 21, relate to Clause 9. They seek to make sure that the interpretations in the Bill are sufficiently clear that when we talk about licensees and operators, and data sharing and meetings—all the various powers being given to the OGA—we know it is explicit that those powers include those activities that relate to CCS. As I say, this could be made a whole lot simpler if we were to change the primary objectives but it seems that there are many ways of skinning this particular cat, and many of them are presented here today. That is the purpose of tabling these amendments and I look forward to the Minister’s responses to these matters relating to Clauses 4 and 9.
My Lords, I support the comments of the noble Baroness, Lady Worthington, on the amendments tabled by the noble Lord, Lord Whitty, particularly regarding climate change, carbon-reduction targets and energy efficiency. I compliment the noble Lord, Lord Whitty, on trying to get energy efficiency into the Bill because it is something that he, I and others on all energy Bills have tried to make the Government look seriously at always including. If we are concerned about reducing demand, which is another area we had to pursue energetically in the previous Energy Bill, we need to look at this if we are to meet a lot of the targets we have signed up to, not only in Europe but internationally. I support the thrust behind this and I admire the noble Lord, Lord Whitty, for getting energy efficiency into the Bill.
My Lords, I also support Amendments 4 and 6 in respect of the matters to which the OGA must have regard, particularly climate change. The Climate Change Act set a statutory target to reduce greenhouse gas emissions by at least 80% from 1990 levels by 2050. In the shorter term, the Committee on Climate Change, under the noble Lord, Lord Deben, has recommended that the UK should have a virtually carbon-free electricity sector by 2030. We are clear that many of these targets will not be met under current scenarios, and this is an area in which it will be pretty strenuous to try to achieve them. Every tool in the toolbox will need to be used.
However, we are at a point where the Government seem to be removing some of the tools from the toolbox. We see in the Bill proposed changes to planning for onshore wind, changes to planning for low-carbon homes, the feed-in tariff support and the renewables obligation, and changes to proposals on tax incentives for low-emission vehicles. There is a concern, certainly in my mind, that if we remove too many tools it will become an even more strenuous and difficult task. That is why management of the oil and gas industry in the future is absolutely vital. It is important that the matters to which the OGA must have regard take account of UK and international obligations for greenhouse gas reduction, decarbonisation of energy and the carbon budgets set by the noble Lord, Lord Deben.
The Minister may say that the OGA already has a prime objective of maximising economic recovery, although I have not heard it put quite that way before. Indeed, one of the matters to which the OGA must have regard is minimising future public expenditure. It would be a bit of a stretch to say that that was a nod towards climate change. So, I ask the Minister to consider whether an explicit reference to having regard to climate change should be added to this list. If we do not make sure that all bodies involved in the energy business also have climate change at their heart, we will see huge effects on public expenditure from the impact of climate change in the future.
My Lords, I thank noble Lords who have spoken on this group of amendments, which seek to amend Clause 4, in Part 1, and Clause 9, in Part 2, of this Bill. Those amendments are Amendments 3A to 11—excluding Amendments 7 and 9 which are grouped separately—and Amendments 20 and 21.
Amendment 3A, moved by my noble friend Lady Byford, seeks to insert provision into Clause 4 of the Bill which would require the Oil and Gas Authority to have regard to the need to minimise public expenditure relating to, or arising from, its existence. Clause 4 already places an obligation on the Oil and Gas Authority to have regard to,
“The need to minimise public expenditure relating to, or arising from, relevant activities”.
The concept of “relevant activity” is intended to capture activities such as petroleum extraction or gas or carbon dioxide storage in relation to which the Oil and Gas Authority has statutory functions and functions under licences. For example, when taking decisions under licences, it is intended that the Oil and Gas Authority should have to consider whether a licence holder will be able to meet liabilities under a licence if these are liabilities that might otherwise have to be met by the taxpayer.
The question of how the Oil and Gas Authority should spend its own resources is dealt with by other means. However, there are arrangements in place to ensure that the OGA’s spending is controlled. As accounting officer, the OGA’s chief executive is responsible and accountable to Parliament for the organisation of, and quality of management in, the authority, including its use of public money. The chief executive has responsibility for ensuring that the OGA operates in accordance with the guidance set out in the Cabinet Office’s Managing Public Money.
Furthermore, the Department of Energy and Climate Change is establishing a robust governance framework to oversee its relationship with the OGA. This will ensure that any issues which may have a financial impact on government are reported to the Secretary of State at the earliest opportunity. The framework requires the OGA to have the prior written consent of the Secretary of State before it takes any action which will, or is likely to, give rise to an additional funding requirement from the department or gives rise to obligations or liabilities which are not expected to be affordable in terms of expected levy income. The Secretary of State will be the sole shareholder of the OGA and her role in this regard includes assessing and approving the business plan developed by the authority, among other things, to ensure its long-term viability and sustainability and its ability to deliver value for money in light of the strategies of the department and wider government. I hope that this explanation is reassuring.
I turn now to Amendments 4 and 6, which each make reference to responsibilities under the Climate Change Act 2008. While the OGA will be bound by any environmental legislation that relates to the exercise of its functions, it is purposely not an environmental regulator. Perhaps I may refer noble Lords to Clause 4, which refers to those matters to which the OGA must have regard—
“include the following, so far as relevant”—
so, obviously, any pre-existing legislation would be binding in relation to the OGA, and that would include the Climate Change Act.
Environmental regulation responsibilities under the Climate Change Act 2008 will continue to sit within the Department of Energy and Climate Change, which has expertise and experience in this field. There are synergies between the two forms of regulation, and the existing strong relationships between the OGA and DECC will continue. However, it is important that these regulatory functions remain separate, ensuring that the correct focus is placed on each by the different regulators. Noble Lords will also be aware that the amendments raise issues of compliance with the offshore safety directive, which requires a separation of oil and gas licensing and environmental functions, so I am not sure that it is legally possible either. I cannot agree that it would be appropriate to provide the OGA with additional environmental functions, and I hope that noble Lords will not press the amendments.
Amendment 5 includes reference to the development of carbon storage. I thank noble Lords for proposing these amendments because, as I have indicated, between now and Report I should like to look at the whole issue of carbon capture and storage to ensure that there is dovetailing between the existing regime for control of carbon capture and storage and the way that the Oil and Gas Authority will move forward on the matters in the Bill. Clause 4, as I have said, sets out a non-exhaustive list of matters to which the OGA must have regard when exercising its functions. The functions of the OGA include functions relating to carbon capture and storage. A number of the matters refer to “relevant activities”, which is defined as activities in relation to which the OGA has functions. As things stand, the relevant activities therefore include CCS. These matters include the need to collaborate with industry and foster innovation, which should help the CCS sector to achieve its aims. In addition, reference is made under the heading “System of regulation” to encourage “investment in relevant activities”, which once again should include CCS. No other sectors in relation to which the OGA has functions are explicitly referenced by this clause. Making the OGA’s mandate and associated powers on CCS explicit when other sectors are not mentioned could have the effect of prioritising CCS over other areas, which the Government would be against. An example would be maximising the delivery of economic recovery. I hope that on that basis, and with the assurance that we will look at the whole issue of CCS between now and Report, the noble Baroness will be content not to press the amendment.
I thank the noble Baroness for proposing Amendment 8 on behalf of the noble Lord. This amendment makes similar provision to Amendment 5 and would require that the OGA has regard, when exercising its functions, to the need to encourage innovation and working practices,
“with particular emphasis on the development and promotion of carbon transport and storage”.
As I have said, the OGA has functions that relate to the CCS sector and is already required to have regard to the matters referred to in Clause 4 when exercising functions that relate to that sector, so far as relevant. This amendment, like Amendment 5, places too great an emphasis on carbon capture and storage and would have the effect of prioritising it over other areas. The Wood review specifically highlighted the potential of enhanced oil recovery—EOR—as something the Oil and Gas Authority would need to promote, as part of its remit to maximise the economic recovery of oil and gas from the continental shelf. As carbon dioxide can be used for enhanced oil recovery, this would potentially make a substantial contribution to lowering the cost of CCS projects, as well as benefiting North Sea revenues and jobs.
Clause 4 sets out that the OGA must have regard to the need to “work collaboratively” with industry and government in carrying out all activities in relation to which it has functions and to encourage innovation in technology and working practices. These legal requirements underpin the way we expect the authority to work with the department and the carbon capture and storage industry. If needed, there are other powers that DECC may use to force the OGA to do this, for example through the Secretary of State’s power of direction. I hope that noble Lords have found these comments reassuring and will not press their amendment.
I thank noble Lords for proposing Amendments 10 and 11. The Oil and Gas Authority has been established to deal with the real and severe challenges facing the United Kingdom continental shelf and the United Kingdom’s important oil and gas industry. Its primary role relates to oil and gas. The Oil and Gas Authority will have some functions in relation to carbon dioxide storage sites and permits, and will therefore be required to take account of the needs of CCS as it carries out its role. We acknowledge the benefits that carbon capture and storage can offer the continental shelf. No barriers which might inhibit active consideration of CCS are being put in place in the Energy Bill, and making the OGA’s mandate and associated powers on CCS more explicit might compromise delivery of the goal of maximising economic recovery, if additional duties were overly onerous or distracting.
Further to what I have said, we do not propose to give the OGA a new objective relating to CCS through the Energy Bill. This is because there is uncertainty at the moment over the desired role on carbon capture and storage, which is also acknowledged by the Carbon Capture & Storage Association, which wants regulation to be proportionate to the emerging nascent state of the CCS industry. There is also a strong likelihood that further legislative opportunities could be forthcoming. I hope that noble Lords have found these explanations reassuring.
Turning to Amendments 20 and 21, I once again thank noble Lords for proposing the amendments. As has been the case elsewhere, these amendments seek to broaden the definition of “licensee” throughout Part 2 of the Bill to include carbon capture and storage licensees. Part 2 creates a raft of further regulatory functions for the Oil and Gas Authority relating to offshore petroleum. As I have said previously, the Wood review carried out a thorough assessment of the oil and gas industry in the North Sea and of what was needed to support this mature and well-established industry. The result was the recommendation for a raft of new and significant regulatory powers, part of which is seen in Part 2 of the Bill.
These amendments would considerably widen the scope of these new regulatory powers beyond the realms envisaged by the Wood review and would extend the powers of the Oil and Gas Authority significantly, without consultation or full consideration of the impacts. These amendments subject carbon capture and storage licensees to the whole raft of new obligations and requirements imposed by Part 2 of the Bill. This includes the obligations in relation to information and samples, and the requirements imposed by the access to meetings provisions. It would also bring carbon capture and storage licensees within the scope of the Oil and Gas Authority’s sanctions regime.
The Government recognise the role of the United Kingdom’s carbon capture and storage industry. However, I suggest that the full impact of the widening of the regulatory scope that these amendments would create has not been thoroughly considered. This is particularly in the context of whether the regulatory burdens that would be imposed on the nascent CCS industry are necessary or justifiable. We do not want to impose these new obligations.
That said, as I have indicated previously in relation to other amendments, we are happy to sit down and look at how the whole CCS issue dovetails with the Oil and Gas Authority, because we have a shared interest across the House in ensuring that we maximise the important role of the CCS industry in helping us to decarbonise and reach the targets that we need to reach. I respectfully ask my noble friend to withdraw her amendment.
Before the Minister sits down, although I thought that we had been making quite good progress in this debate in recognising the need to address the OGA’s powers in relation to CCS, I felt that the comments in response to this amendment seemed to be very narrow in their interpretation of what we are going to be considering before Report. I reiterate that our not moving the amendments in this group does not preclude the fact that we want a full and deep discussion about which of those OGA powers need to be amended to address CCS. As we will come on to discuss, that will involve access to meetings, information samples and a whole raft of things that will be needed to facilitate CCS. Although I will not be moving those amendments, I reiterate that we should not be sliding back and we should be looking at the whole issue holistically before Report.
I thank the noble Baroness for that intervention. I am happy to do that, as I have indicated, but I do not want to give the impression—I do not want to commit us to this—that we are undermining the focus of the Oil and Gas Authority, which is to maximise the economic return from the North Sea.
Amendment 3 withdrawn.
Amendments 4 to 11 not moved.
Clause 4 agreed.
Syria: Refugees and Counterterrorism
My Lords, with the leave of the House, I will now repeat a Statement made by my right honourable friend the Prime Minister in another place. The Statement is as follows.
“Mr Speaker, before making a Statement on counterterrorism, let me update the House about what we are doing to help address the migration crisis in Europe and, in particular, to help the thousands of refugees who are fleeing from Syria. This issue is clearly the biggest challenge facing countries across Europe today.
More than 300,000 people have crossed the Mediterranean to Europe so far this year. These people came from different countries and different circumstances. Some are economic migrants in search of a better life in Europe; many are refugees fleeing conflict. It is vital to distinguish between the two.
In recent weeks we have seen a vast increase in the numbers arriving across the eastern Mediterranean from Turkey. More than 150,000 have attempted that route since January. The majority of these are Syrian refugees fleeing the terror of Assad and ISIL, which has seen more than 11 million people driven from their homes.
The whole country has been deeply moved by the heart-breaking images we have seen over the past few days. It is absolutely right that Britain should fulfil its moral responsibility to help those refugees, just as we have done proudly throughout our history. However, in doing so we must use our head and our heart by pursuing a comprehensive approach that tackles the causes of the problem as well as the consequences. That means helping to stabilise countries where the refugees are coming from, seeking a solution to the crisis in Syria, pushing for the formation of a new unity government in Libya, busting the criminal gangs that are profiting from this human tragedy and playing our part in saving lives in the Mediterranean, where our Royal Navy has now rescued over 6,700 people.
Britain is doing, and will continue to do, all these things. We are using our aid budget to alleviate poverty and suffering in the countries where these people are coming from. We are the only major country in the world that has kept its promise to spend 0.7% of GDP on aid. We are already the second largest bilateral donor of aid to the Syrian conflict, including providing more than 18 million food rations, giving 1.6 million people access to clean water and providing education to a quarter of a million children. Last week we announced a further £100 million, taking our total contribution to more than £1 billion. That is the UK’s largest ever response to a humanitarian crisis. Some £60 million of this additional funding will go to help Syrians still in Syria. The rest will go to neighbouring countries—Turkey, Jordan and Lebanon—where Syrian refugees now account for one quarter of the population. More than half of this new funding will support children, with a particular priority given to those who have been orphaned or separated from their families.
No other European country has come close to this level of support. Without Britain’s aid to these camps, the numbers attempting the dangerous journey to Europe would be very much higher. As my right honourable friend the Chancellor said yesterday, we will now go much further in the spending review, significantly reshaping the way we use our aid budget to serve our national interest. We will invest even more in tackling the causes of the crisis in the Middle East and north Africa and we will hold much larger sums in reserve to respond to acute humanitarian crises as they happen.
Turning to the question of refugees, Britain already works with the UN to deliver resettlement programmes and we will accept thousands more under these existing schemes. We have already provided sanctuary to more than 5,000 Syrians in Britain and have introduced a specific resettlement scheme, alongside those we already have, to help those Syrian refugees particularly at risk. However, given the scale of the crisis and the suffering of the Syrian people, it is right that we should do even more. So we are proposing that Britain should resettle up to 20,000 Syrian refugees over the rest of this Parliament. In doing so, we will continue to show the world that this is a country of extraordinary compassion, always standing up for our values and helping those in need.
So, Britain will play its part alongside our other European partners. However, because we are not part of the EU’s borderless Schengen agreement or its relocation initiative, Britain is able to decide its own approach. So we will continue our approach of taking refugees from the camps and from elsewhere in Turkey, Jordan and Lebanon. This provides refugees with a more direct, safer route to the United Kingdom, rather than risking the hazardous journey to Europe which has, tragically, cost so many lives. We will continue to use the established UNHCR process for identifying and resettling refugees and when they arrive here we will grant them a five-year humanitarian protection visa. We will significantly expand the criteria we use for our existing Syrian Vulnerable Persons Relocation Scheme. As we do so, we will recognise that children have been particularly badly affected by the crisis in Syria.
In most cases the interests of children are best met in the region, where they can remain close to surviving family members. In cases where the advice of the UNHCR is that their needs should be met by resettlement in the UK, we will ensure that vulnerable children, including orphans, will be a priority. Over recent days we have seen councils and our devolved Administrations coming forward to express their willingness to do more to take Syrian refugees. This has reflected a wider generosity from families and communities across our country. I commend, in particular, the Archbishop of Canterbury for the offer made by the Church of England. My right honourable friends the Home Secretary and the Communities Secretary will now work intensively with local authorities and the devolved Administrations to put in place the necessary arrangements to house and support the refugees that we resettle. The Home Secretary will update the House on these plans next week.
Finally for this part of the Statement, in full accordance with internationally agreed rules we will also ensure that the full cost of supporting thousands of Syrian refugees in the UK will be met through our aid spending for the first year, easing the burden on local communities. This will be a truly national effort, and I know the whole House will come together in supporting these refugees in their hour of need.
Turning to our national security, I would like to update the House on action taken this summer to protect our country from a terrorist attack. With the rise of ISIL, we know that the terrorist threats to our country are growing. In 2014 there were 15 ISIL-related attacks around the world. This year there have already been 150 such attacks, including the appalling tragedies in Tunisia in which 31 Britons lost their lives. I can tell the House that our police and security services have stopped at least six different attempts to attack the UK in the last 12 months alone.
The threat picture facing Britain in terms of Islamist extremist violence is more acute today than ever before. In stepping up our response to meet this threat we have developed a comprehensive counterterrorism strategy that seeks to prevent and disrupt plots against this country at every stage. It includes new powers to stop suspects travelling and powers to enable our police and our security services to apply for stronger locational constraints on those in the UK who pose a risk. It addresses the root cause of the threat—the poisonous ideology of Islamist extremism—by taking on all forms of extremism, not just violent extremism. We have pursued Islamist terrorists through the courts and criminal justice system. Since 2010, over 800 people have been arrested and over 140 successfully prosecuted. Our approach includes acting overseas to tackle the threat at source, with British aircraft delivering nearly 300 air strikes over Iraq, and our airborne intelligence and surveillance assets assisting our coalition partners with their operations over Syria.
As part of this counterterrorism strategy, as I have said before, if there is a direct threat to British people and we are able to stop it by taking immediate action, as Prime Minister I will always be prepared to take that action. That is the case whether that threat is emanating from Libya, Syria or anywhere else. In recent weeks it has been reported that two ISIL fighters of British nationality who had been plotting attacks against the UK and other countries have been killed in air strikes. Both Junaid Hussain and Reyaad Khan were British nationals based in Syria who were involved in actively recruiting ISIL sympathisers and seeking to orchestrate specific and barbaric attacks against the West, including directing a number of planned terrorist attacks right here in Britain, such as plots to attack high-profile public commemorations, including those taking place this summer. We should be under no illusion. Their intention was the murder of British citizens. So on this occasion we ourselves took action.
Today I can inform the House that in an act of self-defence and after meticulous planning Reyaad Khan was killed in a precision strike carried out on 21 August by an RAF remotely piloted aircraft while he was travelling in a vehicle in the area of Raqqa in Syria. In addition to Reyaad Khan, who was the target of the strike, two ISIL associates were also killed, one of whom, Ruhul Amin, has been identified as a UK national. They were ISIL fighters, and I can confirm there were no civilian casualties.
We took this action because there was no alternative. In this area, there is no Government we can work with. We have no military on the ground to detain those preparing plots, and there was nothing to suggest that Reyaad Khan would ever leave Syria or desist from his desire to murder us at home. So we had no way of preventing his planned attacks on our country without taking direct action. The US Administration have also confirmed that Junaid Hussain was killed in an American air strike on 24 August in Raqqa. With these issues of national security and with current prosecutions ongoing, the House will appreciate that there are limits on the details I can provide. However, let me set out for the House the legal basis for the action we took, the processes we followed, and the implications of this action for our wider strategy in countering the threat of ISIL.
First, I am clear that the action we took was entirely lawful. The Attorney-General was consulted and was clear that there would be a clear, legal basis for action in international law. We were exercising the UK’s inherent right to self-defence. There was clear evidence of the individual in question planning and directing armed attacks against the UK. These were part of a series of actual and foiled attempts to attack the UK and our allies. In the prevailing circumstances in Syria, this air strike was the only feasible means of effectively disrupting the attacks planned and directed by this individual. It was necessary and proportionate for the individual self-defence of the UK. The United Nations Charter requires members to inform the president of the Security Council of activity conducted in self-defence. Today the UK Permanent Representative to the United Nations will write to the president of the Security Council reporting this specific military activity in Syria and explaining that this action was taken in the individual self-defence of the United Kingdom.
Turning to the process, as I said to the House in September last year,
“it is important to reserve the right that if there were a critical British national interest at stake or there were the need to act to prevent a humanitarian catastrophe, you could act immediately and explain to the House of Commons afterwards”.—[Official Report, Commons, 26/9/14; col. 1265.]
Our intelligence agencies identified the direct threat to the UK from this individual. They informed me and other senior Ministers of this threat. At a meeting of the most senior members of the National Security Council, we agreed that, should the right opportunity arise, the military should take action. The Attorney-General attended the meeting and confirmed that there was a legal basis for action. On that basis, the Defence Secretary authorised the operation. The strike complied with international law and was conducted according to specific military rules of engagement, which always comply with international law and the principles of proportionality and military necessity. The military assessed the target location and chose the optimum time to minimise the risk of civilian casualties. This was a sensitive operation to prevent a very real threat to our country.
I have come to the House today to explain in detail what has happened and to answer questions about it. I want to be clear that this strike was not part of coalition military action against ISIL in Syria. It was a targeted strike to deal with a clear, credible and specific terrorist threat to our country at home. The position with regard to the wider conflict with ISIL in Syria has not changed. As the House knows, I believe that there is a strong case for the UK taking part in air strikes as part of the international coalition to target ISIL in Syria as well as Iraq. I believe that case only grows stronger with the growing number of terrorist plots being directed or inspired by ISIL’s core leadership in Raqqa, but I have been absolutely clear that the Government will return to this House for a separate vote if we propose to join coalition strikes in Syria.
My first duty as Prime Minister is to keep the British people safe. That is what I will always do. There was a terrorist directing murder on our streets and no other means to stop him. The Government do not for one moment take these decisions lightly but I am not prepared to stand here in the aftermath of a terrorist attack on our streets and have to explain to the House why I did not take the chance to prevent it, when I could have done. That is why I believe our approach is right. I commend this Statement to the House.”
My Lords, that concludes the Statement.
My Lords, I thank the noble Lady for repeating the Prime Minister’s statement, which raises the most serious issues of humanity, moral obligations and national security. I would first like to ask about the refugee crisis. I think it fair to say that, until recently, many people were not even aware of the scale of the terror, the crisis and fear facing millions who have been forced to flee Syria. They are not people who want to leave their homes or their country. They are people from all walks of life, forced out in fear of their lives and those of their families. This is a defining moment for our country and for the Government.
The body of a child washed up on a beach has shocked, upset and horrified everyone, but such deaths of those abused by traffickers in seeking sanctuary is not new and has been debated in your Lordships’ House on a number of occasions. We must be strong, confident and proud in reaching out to those seeking refuge on our shores.
Among the Syrian children whom we will now take in will be the future hospital consultants at our bedsides, the entrepreneurs who will build our economy and the professors in our universities. They will also be among the strongest upholders of British values, because that has always been the story of refugees to this country, whether it was the Jewish children of the Kindertransport, including the noble Lord, Lord Dubs, or the Asian families whom I knew when I was younger, driven out of east Africa more than 20 years ago, or Sierra Leoneans fleeing a brutal civil war. The Prime Minister said last week that it would not help to take more refugees because it would not solve the problems in Syria, but that is a false choice. Helping those Jewish children was not part of our efforts to end the Second World War; helping east Asian families did not bring down the brutal dictatorships; but it was the right thing to do. It was a natural, human response.
We welcome the Prime Minister’s announcement that our country will provide sanctuary to 20,000 refugees. I appreciate that it will be over this Parliament, but can the noble Baroness reassure me on the need for urgency, because people are losing their lives today? Can I suggest that it would be helpful now to convene local authority leaders from all over the country to discuss what they are prepared for, what they are able to do to settle those refugees into their areas, and the regional and local distribution to ensure that all areas can play their part—rural as well as urban, towns as well as cities? Many local authorities have already indicated that they are keen to step forward and play their part, which is greatly to their credit. They will need reassurances on additional resources, given the level of cuts they have already faced.
The Government have said that they plan to use the international aid budget for this purpose. Why did they not just use the reserves? Ensuring that refugees can be welcomed, supported and integrated is an issue not just for local government or the Home Office but for transport, education, health, business, tourism and, as we have heard, the devolved authorities. It is an issue also for churches, community groups and so many individuals who have cried out for action from the Government. Beyond what the Prime Minister has told the other place, can the noble Baroness tell us what discussions are planned to guarantee a nationwide, cross-government strategy that will co-ordinate the efforts of those who want to help and have asked the Government to help?
We support aid to existing refugee camps. Does the noble Baroness accept that desperate conditions in those camps have contributed to far too many people risking their lives trying to bring their families to Europe, and that this reinforces the need for greater co-operation across the EU and with the United Nations?
I turn to counterterrorism, because the scale of the threat posed by ISIL is clear. We have witnessed its brutal torture and murder of British citizens abroad and the sickening attacks that it has inspired and sought to organise here at home. The security services, the Armed Forces and our police do immensely important work to try to keep us safe. It is a difficult and dangerous task, and we are grateful to them for their efforts. This is the first time that Parliament has heard of the specific operation on 21 August, when the Government authorised the targeting and killing of a British citizen in Syria, a country where our use of military force is not authorised. We understand that a meeting of senior members of the National Security Council agreed that, should the right opportunity arise, the military should take action, as the noble Baroness said in the Statement. The Prime Minister said that the action was legally justifiable under the doctrine of national self-defence because, first, the man was planning and directing armed attacks in the UK; secondly, there was no other way of stopping him; and, thirdly, the action was necessary and proportionate. The evidence on each of these points is crucial to the justification for the action. Is it significant that the Attorney-General did not authorise this specific action but confirmed that,
“there was a legal basis”,
for it? Was the Attorney-General’s advice given or confirmed in writing, and will it be published? The Statement informs us that the Defence Secretary “authorised the operation”. Why was it not the Prime Minister himself who gave the authorisation?
I want to ask the noble Baroness about the specific target of this attack, although I understand that there may be things she cannot disclose to the House. Inasmuch as she can, can she say what it was about this individual and his action that singled him out, given some of the other reports we have had? Did he represent an ongoing threat, or was the threat based on a specific act that he was plotting? Does she accept that there is a need for independent scrutiny of government action, perhaps by the CT reviewer and the Intelligence and Security Committee? Can she tell me whether they have been asked to look at this?
We are already engaged in the use of force against ISIL in Iraq. However, it is vital that the UK continue to play its part in international efforts to combat ISIL across the region. What is clear from the Statement is that, if the Prime Minister is to propose to join coalition strikes in Syria, he will return to the House of Commons for a vote on authorisation. Although your Lordships’ House will not have a vote, it may be helpful to reiterate the position as set out by the acting Labour Party leader and shadow Secretary of State for Defence on 2 July. She made it clear when she said that ISIL,
“brutalise people, they murder people, and they are horrifically oppressive”.
We will carefully consider any proposals in relation to military action in Syria that the Government bring forward, but we all need to be clear about what difference any action would make to our objective of defeating ISIL, the nature of any action and its objectives, and the legal basis. Potential action must command the support of other nations in the region, including Iraq and the coalition already taking action in Syria.
I am grateful to the noble Baroness for repeating the Statement and thank her for ensuring that there is additional time for questions from Back-Benchers today, given the level of interest in this issue. We look forward to her response.
My Lords, I also thank the noble Baroness the Leader of the House for repeating the Prime Minister’s Statement on these very profound and serious issues. I also endorse what the noble Baroness the Leader of the Opposition said—we appreciate the fact that there will be an extended period for Back-Bench questions.
Probably nothing is more important than the Government’s primary responsibility of security of the realm and its citizens. The Prime Minister acknowledges that in his Statement. Clearly, we do not have the evidence, nor would it be appropriate to share that evidence publicly, and therefore we must accept the judgment of the Prime Minster in responding to perhaps one of the most serious calls that has been made on him. However, it would be interesting to know whether this is a matter that the Intelligence and Security Committee will be able to look at.
There is also reference in the Statement to the legal basis. Having worked closely as a law officer with the present Attorney-General, I know that his judgment would be made with considerable rigorous legal diligence and bringing to bear his considerable personal and professional integrity. I do not call for the publication of law officers’ advice; that is not something that, as a former officer, I would readily do. However, the noble Baroness will remember that before the House debated chemical weapon use by the Syrian regime and a possible UK government response, and before we debated last year the position on military action in Iraq against ISIL, the Government published on each occasion a statement setting out the Government’s legal position. If it is felt possible to elaborate on what was said in the Statement by a similar note, I think that we would find that very helpful.
The images of migration that we have seen on our screens and in our newspapers over recent days have certainly touched our common humanity. There has been an outpouring of the view that we must welcome refugees, and that is one that we certainly endorse. The Statement says that,
“the whole country has been deeply moved by the heart-breaking images we have seen over the past few days”.
However, will the noble Baroness the Leader of the House tell us whether any of those travelling across Europe at the moment will be accommodated in any way by what was set out in the Statement? We have heard of 20,000 refugees—said very loudly; “over five years” is probably said more sotto voce—but these are people in camps in countries bordering Syria. That is not to dismiss what is being done in that regard, and it is welcome in as far as it goes. However, what the people in this country have been crying out about are the scenes on our television screens of people walking across Europe, fleeing terror and destitution. Yet can the Minister point to one sentence in this Statement that indicates that for those people there is some glimmer of hope that the United Kingdom will be a welcome haven?
We have a common problem and it requires a common response. There are problems in the Mediterranean, on Europe’s borders and in coming across Europe and we should be promoting a common European response. The European Union system has its failings. The Dublin system is not by any stretch of the imagination perfect, but by our stand-offish stance we seem to have forfeited any real or moral authority in being able to give the lead in trying to improve or work out a more coherent European approach to this. Will the Government commit themselves to taking a more active role in co-operating with our European partners, as well as in participating in European Union efforts on relocation?
With regard to those who are coming, we welcome the steps have been taken. Many local authorities have indicated a willingness to take refugees. The Leader of the Opposition asked what would be done to bring these local authorities together, and it would be useful to know what consultations had already taken place. What consideration has been given as to whether there should be a dispersal programme or whether it is better to keep communities together for mutual support? I do not pretend that I have the answer to that, but real issues are involved. What has been done to ensure that there are interpretation services, counselling and support services for English as a second language?
We have heard about the international aid budget being used for the first year to support local authorities, but surely in a situation such as this there is something in reserve that we could use. The Statement itself refers to holding “larger sums in reserve”. Has this been taken from the overseas aid budget for future years or has a separate reserve been taken up?
The Statement says that,
“we will ensure that vulnerable children, including orphans, will be a priority”.
Just before we went into recess, there was a report about 600 young Afghans who had arrived in the United Kingdom as unaccompanied children who were deported after their 18th birthdays because their temporary leave to remain had expired. Many had already established strong roots in the communities where they were living. When we hear about the fact that we will give priority to vulnerable children including orphans, can we have some reassurance from the Government that they will not be summarily sent back after their 18th birthdays?
We will not resolve the Syrian refugee crisis unless there is a wider resolution to the Syrian problem. What steps have the Government taken to try to promote broader engagement with countries that might not at first instance appear likely to help, such as Russia and Iran, whose engagement will be necessary if we are to get a long-term lasting diplomatic settlement and tackle some of the root causes?
There is an immediate crisis on our doorstep. There are 2 million refugees in Turkey, 1.4 million in Jordan, and over 1 million in Lebanon. According to the UNHCR, there are 60 million displaced people worldwide, 46 million of whom are assisted and protected by the UNHCR. Developing countries host 86% of the world’s refugees. While we have an immediate problem, there is a much wider global problem. We have to play our part in the funding that we have given to the UNHCR but we should be trying our best to engage more countries, such as the Gulf states and the United States of America. Are we in a position to give some leadership to look to the future and tackle the global problems that will exist? We will return time and again to this issue, I suspect, because of its global nature.
The Prime Minister said earlier this week that Britain is a moral country. I believe that. I believe from what we have seen from communities and people across the country that we are a moral country, but I rather fear that this Statement falls short of a moral response.
My Lords, I am grateful to the noble Baroness and the noble and learned Lord for their responses to the Statement. I will start by responding to comments that were made about the refugee situation. I certainly agree with the noble Baroness about the contribution that refugees have made to this country over decades. I share her assessment of the positive aspects that we have gained as a country because of our approach to accepting refugees historically.
The noble Baroness asked me quite a few questions about this situation, including whether we would be starting off the new, expanded approach, which the Prime Minister announced today, by treating the matter as urgent. I can confirm that this is indeed urgent. The Prime Minister is right to say that accepting a specific number of refugees will not solve this crisis. We must make a contribution to assisting the people who have been affected so devastatingly in Syria. The country can be proud of what we have done over the last few years in assisting refugees who have been displaced there. Our approach to the numbers who arrive here will be very much informed by the UNHCR process. We will work very closely with them, as they are the experts in this area who will be able to advise on the people we should be accommodating. We will clearly be co-operating with local authorities and we have been in contact with the Local Government Association today. As my right honourable friend the Prime Minister has said, the Home Secretary and Communities Secretary will be leading a new Cabinet committee to make sure that we are co-ordinated, across government, in our proper response and in the way we support the refugees as they arrive.
The noble Baroness and the noble and learned Lord asked about how the aid budget will be used to support local authorities in their efforts to assist the refugees when they arrive, and there were questions about the use of reserves. The use of the aid budget to support refugees who are given support in the UK is compliant with the rules on the use of that budget. As to whether we would use reserves to do more in this area, the Chancellor will return to this when he looks at the spending review. It is important to stress that the aid budget will increase, in monetary terms, because our GDP is increasing. As I said in the Statement, this will be used to greatest effect where we feel we can make the most positive impact. There will be discussions with the devolved assemblies, via the committee to which I have already referred.
My right honourable friend the Prime Minister spoke today to Chancellor Merkel about what he was going to announce in Parliament and she gave her support to our measures. The British Home Secretary was one of the early voices calling for the meeting of European Justice and Home Affairs Ministers which will take place next week and will look at this matter again. I made it clear in the Statement that the UK is not a party to Schengen and that we believe our approach is the right one. In answer to the specific question from the noble and learned Lord, we do not feel it is right to offer refuge in the UK to the refugees who are currently in Europe, but we want to see greater co-ordination within Europe and the countries which operate within the Schengen agreement. We will provide and continue to provide our support to Europe in making sure that its borders are properly policed. The noble and learned Lord asked a specific question about how the rules would apply to refugees when they arrive in this country. The same rules that exist now will apply.
I am grateful to the noble and learned Lord, Lord Wallace, for his comments about the Attorney-General, his approach to his judgment and its being compliant with international law. The noble and learned Lord and the noble Baroness asked about publication of the Attorney-General’s advice. As the noble and learned Lord acknowledged, it is not our practice to publish that advice. He also asked me whether we would publish a statement on the general legal position. There is a distinction to be drawn between when we published the legal position that was informing our proposal to take military action in Syria and Iraq, and this occasion when we are informing Parliament of action that was taken to deal with a planned counterterrorism atrocity. A distinction is to be drawn there, but I certainly will look at that.
The noble Baroness asked about the person in question and what distinguished them from others who may be proposing terrible attacks in the United Kingdom. The point to emphasise is that this person was operating in a place where we had no other option as regards the action that we decided to take. We are clear that that action was legal, proportionate, legitimate and the right thing to do.
The noble Baroness and the noble and learned Lord asked about scrutiny. By making this Statement and by making himself available to answer questions today, the Prime Minister is being held to account and is subject to some scrutiny. Further scrutiny that might apply—whether that be by the Intelligence and Security Committee or the independent reviewer—is something that we would want to consider. Certainly, we accept that we have undertaken action which is new and has not happened in this way before. Therefore, it is understandable that Parliament will ask questions about the scrutiny of this action.
My Lords, the noble Baroness, Lady Smith, and the noble and learned Lord, Lord Wallace, mentioned that the time limit for Back-Benchers has been extended from 20 minutes to 40 minutes. That is to allow more questions and is not an excuse to make speeches. I remind noble Lords that the Companion is very clear that,
“brief questions from all quarters of the House are allowed”,
and that a Statement,
“should not be made the occasion for an immediate debate”.
My Lords, in the summer of 1939, I came to Britain by good fortune on a Kindertransport. At that time, Britain was the only country taking children who came in that way. It showed enormous generosity, which is not being equalled by what the Government have announced today. Will the Government show greater generosity, both in the number of vulnerable people this country accepts and in ensuring that those who come here are given the same welcome and wonderful opportunities that I have had?
Clearly, the noble Lord is a great example of this country’s generosity and of the great contribution that people who have arrived here as refugees can make to this country. I do not accept his description that the Government, in the actions that they have set out today and have taken over the past few years in Syria, are not equalling what they have done in the past. This country has given a huge amount and will continue to do so. The noble Lord is right to emphasise children in this context but it is also right for me to remind the House, and to refer to the comments I made in the Statement, that we will be led very much by advice from the UNHCR. It would argue that in many cases it is not always the right course of action to give refuge to unaccompanied children and that sometimes it is better for the children to remain in the countries in which they are being looked after, rather than being given refuge somewhere else. We will be driven by the experts in this matter.
Will my noble friend draw the Secretary of State for International Development’s attention to the bad conditions, through no fault of the Kurdish people, for those Iraqis who have taken refuge in the Kurdish area of Iraq? They are potentially a further stream of refugees. The conditions in the camps are one of the reasons that so many people have set out to take perilous journeys and cause the great difficulties we have within Europe at present. While I welcome the Statement, it is not enough to look just at what has happened in Syria and the camps that have taken Syrians. We have to look at the whole area. There is certainly capacity to disrupt those camps, which causes other people to flee.
I am grateful to my noble friend and I know how much she does to support refugees. She is very experienced in international aid and assistance. While Syria is the priority, we do not give refuge just to Syrians. There are refuge programmes, of which this country is proud, which ensure that others from other countries get assistance, but we are giving priority to those to whom the UNHCR says we should give priority at this time.
My Lords, I welcome the extent to which we are increasing our help for Syrian refugees. Is it not time, however, for us to put our considerable diplomatic weight behind serious attempts, with our European partners, to find a political solution to the Syrian crisis that might ultimately enable many of these migrants and asylum seekers to return to their homes? Should we not now accept that there can be no political solution to the Syrian civil war without the involvement of the regime in Damascus? Should we not be telling our Saudi, Gulf and Turkish allies that there are more important priorities than regime change in Damascus? Is it not time to accept that both the Russians and the Iranians can play an important part, not only in encouraging Damascus to work for a political solution but in helping the regime to confront ISIS, which has tragically occupied large swathes of Syria’s sovereign territory? Is there any logical reason why the Russians, who still enjoy a treaty of friendship with Damascus, do not have a right equal to that of the western coalition to protect their own interests in Chechnya and central Asia?
I note that the Statement describes the Syrian refugees as fleeing the terror of Assad and ISIL. We ought to consider more closely the differing objectives of our coalition allies in arming and supporting the Syrian rebels, whether it is the removal of Assad’s Government, part of a wider Sunni conflict or attempts to destroy the PKK. Is continuing our present policies seriously in our national interest?
The noble Lord has covered a lot of ground in that contribution. Briefly, I would say that he is, of course, right that there has to be a political solution to the crisis in Syria. We agree that that requires the involvement of many, many actors in that region and other powerful regions around the world. I do not agree with his assessment of Assad. As he may recall from my responses to questions on previous Statements before the Recess, the UK is in dialogue with the Russians in order for them to use what influence they have over Assad, but we are very clear that the way in which we progress will not be one in which we are willing to work with Assad.
My Lords, I wonder whether the Minister realises what a discreditable attempt at press management it is to bring these two Statements together to us this afternoon. On the question of refugees, may I ask her to confirm what I think she said a moment ago—that any child or orphan brought in under this scheme will, as is the case under present legislation, be deported at the age of 18? That is what she seemed to say. Is that correct? And can she please explain the logic whereby the Government say that they will help refugees who are already housed and secure, and already being fed, in refugee camps outside Europe, but will do nothing for refugees who are desperate, and in some cases dying, for want of those things inside Europe? Is the difficult thing, which the Government cannot say, the words “inside Europe”?
I am not going to dignify the noble Lord’s comments about press management with a response. In response to the specific questions he asked, the point I was trying to make about the way in which we will support refugees who come to us who are children is that there is a clear legal framework that applies when people arrive here as refugees, which includes, after so many years, people being entitled to residency in the United Kingdom. I am not suggesting that there is a new set of rules, or a change to existing rules, because of this expanded refugee programme at this time. As for those seeking refuge who have already arrived in Europe, I agree with the noble Lord that we have seen harrowing evidence of suffering not just over the last few days but over the last few weeks, but we are very clear in our mind as a Government that the best policy is the one that we are pursuing: to support people in Syria and to offer refuge to those in the camps in the countries on the borders of Syria, in order to prevent more people risking their lives by crossing the Mediterranean to seek refuge. We really believe that that is the right way forward.
I warmly welcome this start in the response of domestic hospitality, which comes in addition to the very considerable work that we have done overseas through the overseas aid budget and the work of the Royal Navy. It is on that basis that, challenged by this, the churches, starting this morning, are working urgently to add to what they have already been doing locally, and to work together to achieve and support a coherent, compassionate and credible public policy. I have spoken today to Cardinal Nichols about this. Does the Minister accept, however, that 20,000 is still a very slim response in comparison both to the figures given by the UNHCR and the European Commission, and to the other needs we see, and that it is likely to have to rise over the next five years, unless of course the driver, which I hope she accepts is local conditions in the camps, is dealt with significantly? Does she also accept that within the camps there is significant intimidation and radicalisation, and that many of the Christian population, in particular, who have been forced to flee, are unable to be in the camps? What is the Government’s policy about reaching out to those who are not actually in the camps? Finally, does she accept that, regardless of membership of Schengen, a problem on this scale can only morally and credibly be dealt with by widespread European collaboration?
I am very grateful to the most reverend Primate for being here today and contributing on this Statement, and for his leadership, and that of other faith leaders, over the last few days and the recent period while we have been observing such terrible scenes. He raises some important points. He described our response as a slim one; he will not be surprised that I do not accept that definition. As I have said, we do not believe that this is just about providing refuge to individuals here in the United Kingdom; we must support people who are in and around Syria and are very much in need, and we have been doing that in a substantial way. No other European country has contributed as we have over the last few years, and I really believe that we should be proud of what we have done to support people in that part of the world. We want to continue doing so, and we are targeting our aid in that area—using the increase, in monetary terms, in the aid budget because of the rise in GDP—so that we can ensure that, as the most reverend Primate highlights, local conditions in the camps are addressed. As for the Christians being among those who are most in need because they are not receiving the support that others are, this is something for us to discuss with the UNHCR. It is important that when the UNHCR considers the criteria for those who are most vulnerable, those should include Christians who are not receiving the kind of support that others may receive.
My Lords, since the Prime Minister’s harder line last week, we have seen the tragic photographs of that drowned little boy. Recalling that his family fled from Syria to Turkey and were trying to get to Greece rather than go into a camp, will the Minister confirm that that family would not have been helped in any way by this Statement? Secondly, does the status of the five-year humanitarian protection visa mean that people would be in danger of being deported at the end of the five years, if conditions were to change? Does that accord with our obligations under the refugee convention? What is the legal advice on that? Finally, I want to ask about the letter to the President of the UN Security Council that is said to justify action in respect of a named individual. Does that letter just give a bare assertion that this man was planning action, or has planned action, against the UK, or was evidence supplied that came from our intelligence services? Clearly it would be wrong for this House to ask for the evidence, but surely there must be some evidence, rather than a bare assertion, if we are to convince the UN Security Council that we are acting in accordance with proper legal principles.
I will have to come back to the noble Lord on his last question about the letter to the UN. I am not clear about the specific terms in which a sovereign nation has to inform the United Nations and the detail it is necessary to set out. However, I am confident that we will have complied with the necessary requirements in informing the United Nations. As the noble Lord acknowledges, it is not possible for me to go into the detail of the evidence as that would compromise our security procedures. On his questions about our existing arrangements for refugees, as I am not familiar with the detail of how refugees are supported when they come to the United Kingdom in terms of their status, residency and so on, and as this question has been raised a couple of times, I will place a letter in the Library outlining the situation. However, I reassure the House that the existing arrangements will continue to apply. I am happy to outline that in a letter.
My Lords, has my noble friend seen the reports that ISIL boasts that it will infiltrate thousands of jihadists into the tens of thousands of refugees leaving Syria? Will she therefore give a cast-iron guarantee that we will concentrate our priorities on women, children and the vulnerable, and that they will all be thoroughly screened before coming to this country? Will she therefore treat with extreme caution demands that we take some of the fit and well-fed young men we saw fighting Hungarian police, because it seems to me that, if they are willing to do that, they might not be the best fighters for British values?
My noble friend makes an important point. One of the reasons why we believe that the policy we have adopted of giving refuge to people via a resettlement programme that includes a very thorough screening process by the UNHCR is the right one is that it offers us a much better assurance that we do not risk people coming to this country to attack us. We cannot have the same assurances in respect of those fleeing Syria who have been accepted through routes adopted by others in the European Union.
The Statement is a Statement, is a Statement, and the Leader has my support and sympathy. There are many things in the Statement with which I agree. However, I am puzzled by what it does not say. In particular, I am puzzled by the noble Baroness’s answers to the question asked by the noble and learned Lord, Lord Wallace, and the noble Lords, Lord Ashdown, Lord Dubs and Lord Anderson. We are saying that we will not help one of the 366,000 people who are now in continental Europe and that had the little boy on the beach at Bodrum lived, he would have been no concern of ours. Unlike our friends in Dublin, who are not bound by Schengen any more than we are but are voluntarily taking some of these tragic refugees, we are saying that we will take not one of them, however awful their case, and that is what we will say at the European Union meeting this week. Are we sure that reflects the spirit of the country? Are we sure that is in the national interest? Are we sure that a little magnanimity might not come in handy?
The Government have—
If your Lordships prefer, I will say “Government”. This democratically elected Government have decided that this country will support those in need through the approach that I have outlined. Indeed, that has been our policy for a considerable time. We have given refuge to 5,000 people from Syria since the crisis started. Alongside the refuge that we are offering, we have made a huge contribution to support those people affected by this crisis in the region. That is not something that can be said about all the other member states in the European Union. We think that our approach is the right one for the refugees, and the right one in the long-term interests of achieving stability in that area and supporting people in need.
My Lords, I regret deeply the absence of any reference in the Statement by the Government to co-operation with other countries. At least in July before we rose, the Prime Minister’s Statement referred to the need for Britain to operate within a broad international coalition. Does not the noble Baroness accept that this is a common problem that we share above all with our neighbours on the European continent and that there has to be common action, particularly European action? Does she not accept, for example, that what is happening in Calais, which directly affects us, is part of this same movement of peoples across Europe; that we depend on co-operation with the French and others in this respect; and that co-operation, not unilateral action by Britain alone, is where we have to take things forward from here?
The noble Lord makes a good point about Calais. Clearly, we have co-operated with the French over the summer to address the situation that worsened earlier in the summer. The Home Secretary was one of the Home Affairs and Justice Ministers who called for the meeting that will take place next week because we think it right that Europe should co-operate more. However, those within the Schengen agreement are not operating in a co-ordinated, coherent way. We want to support them but we are very clear that we do not believe it is in the best interests of this country or those who are most in need to join the action that has been taken by other member states. We are co-operating all the time with our partners in Europe by helping them strengthen their operations on the borders and trying to provide them with the expertise they need. However, in the end they have decided that they want to pursue the course they are following. We believe that by pursuing that course they are increasing the flow of refugees from Syria and that is putting people’s lives at risk unnecessarily. We think that a much better approach is the one we are pursuing, which is to provide refuge but to do so for people from the camps directly.
My Lords, can we please have order? I am afraid that the noble Baroness, Lady Kennedy, arrived in the Chamber not only after the Statement had been read but also after the contribution had been made from her own Front Bench. In the circumstances she ought to follow the Companion and not speak. It is the Labour Party’s turn and the noble Lord, Lord Davies, is on his feet.
My Lords, on the basis of the admittedly limited evidence that we have, the Government were absolutely right to take a decision to eliminate those three terrorists. I think that in similar circumstances they will have the support of almost the whole country in taking action when it is necessary and clearly called for in instances of that kind.
Is it not the case that we badly need a debate on refugees, not just a Statement, not least because of the longer-term consequences and almost certainly a great increase in the number of refugees and immigration applicants from all sorts of places as a result of the drama of the last few weeks? Is it not however, sadly, really rather nauseating for the Prime Minister to congratulate himself on a policy of “extraordinary compassion”—that is the phrase used in the Statement this afternoon—when, in fact, we are taking none at all of the refugees from Syria who are currently on the move? We are taking only up to 20,000 over five years. Have not the Germans, who have undertaken to take 800,000 almost immediately, thoroughly put us to shame on that? Is there not also the rather unpleasant sense that on this very important issue, as in so many others, the Government’s policies seem driven by a PR agenda? Ten days ago when immigrants or refugees were bad news generally in many people’s minds in the Government, the Government were not prepared to take a single new Syrian refugee. Then the media published pictures of dead children on the beach—
As regards the noble Lord’s request for a debate, my noble friend the Chief Whip has already scheduled time for a debate on the humanitarian situation. That is scheduled for a week on Wednesday. Regarding the other points made by the noble Lord, I can only repeat what I said before. This is a policy that the Government have adopted over the last few years. We believe that the contribution we are making to support people in and around that region is significant. It is much greater than any other European country. As far as expanding the refugee programme, the policy remains the same; we are simply expanding it because we see an increased need at this time.
My Lords, it is very important that migrants in danger of drowning in the Mediterranean should be rescued. However, at present after being rescued they are then disembarked in the European Union, thereby adding to the number of people coming across the borders. Does my noble friend agree that it is not really compatible with our policy that we should continue to do that, because at the moment the traffickers are able to say, “Don’t worry if the boats look unseaworthy. You’ll be rescued by the navy and taken to your destination anyway”? Therefore, they are encouraged even more to take the risk. More broadly, do we not have a definite interest in the Schengen agreement, which results in the situation in Calais, as has been pointed out? Should we not take a much stronger line in persuading our European partners that they ought—at any rate on a temporary basis—to suspend Schengen because it is not compatible with having external borders that are clearly not effective?
My noble friend remarked on those crossing the Mediterranean. I think we were right to provide assistance via the Royal Navy to those who require rescue from the crossings. However, he raised an important point that I do not think I have yet addressed in response. There are criminals involved in taking advantage of these very vulnerable and desperate people. They are making money out of people in great danger. By following our policy, we are trying to make it clear that there is another way to refuge that does not require the risk. It should also mean, therefore, that we are able to disrupt the criminal behaviour of people abusing the weakness and vulnerability of people.
On my noble friend’s point about Schengen, he is absolutely right that it is very important that the borders of the European Union are properly held and policed and that we, although we are not a member of Schengen, should do all that we can to make sure that those borders are strong. That is where we make a very strong contribution, have done for a long time, and will continue to do, because we do not think that Europe is doing all that it should in maintaining its borders.
My Lords, first, I warmly endorse the remarks made by the noble Lord, Lord Wright of Richmond. Both he and I are former ambassadors in Damascus. We have first-hand knowledge of that country and its regime. We have been long concerned about the Government’s policy towards Syria and we think it is time for it to be reviewed. That said, does the Minister agree that the focus of the debate has been entirely on refugees, which of course is right? However, not all migrants are refugees. We have to keep in mind that a significant number—we do not know how many and we will not know until their cases have been considered—are in fact economic migrants.
It is very important that the actions taken by Governments in Europe and in the UK do not have the unintended effect of causing a very large flow of people into the Union and this country who have no right to be here. Does the Minister therefore agree that this is exactly the wrong moment to cut the resources available to the Home Office and the Border Force to distinguish between genuine refugees and economic migrants? They should be doing the exact opposite. We have a new and major crisis on this whole front and that should be recognised in the way we address it.
The noble Lord raises an important point—that not all those arriving in Europe are refugees, and some are economic migrants. That is another reason why we believe that our policy is better than the one that others in Europe are adopting because, informed by the specific advice from the UNHCR, we are able to make sure that those to whom we give refuge are not seeking a better life for themselves for only economic reasons while not at immediate risk. Regarding the other points raised by the noble Lord, clearly it is essential that we maintain our borders and that is something that we continue to do.
My Lords, I would be grateful if the Minister could clarify a couple of points in the Statement. It makes the point that this country has provided sanctuary for more than 5,000 Syrians so far. It goes on to say that we will settle up to 20,000 Syrian refugees over the Parliament. Are we in total proposing to settle 25,000 or are the 5,000 already subsumed in the 20,000 mentioned later in the Statement?
The Statement also says that we will play our part,
“alongside our other European partners”,
and then goes on to say that we will decide our “own approach”. While I did not altogether welcome the tone of the point made by the noble Lord, Lord Ashdown, he does have a very strong point indeed. Surely a child who has drowned on a beach in Europe does every bit as much to excite our compassion as a child washed up on a beach outside our borders. The response of the British public in the last 10 days or so has shown that actually people are not that concerned whether we are taking people solely from the refugee camps pinpointed in the Statement. Surely it is right that if we really are demonstrating compassion we extend it to people who are suffering every bit as much in the countries of Europe of which we are a part. I hope the Minister can assure us that that point will be kept under constant review and that the Government will keep listening to what the British people say about this, because I for one do not believe that the Government have quite got the message yet.
I can confirm for the noble Baroness and the House that the 20,000 mentioned in the Statement are in addition to the 5,000 refugees that we have already given sanctuary to, so that number will not be absorbed into the 20,000. As far as her other comments are concerned, I agree that the people of this country do not draw a distinction when looking at the plight of people in desperate need. We are all moved by those in need of help and support, and by the tragic circumstances of those who have sought refuge and, on the way, have lost their own children. But alongside their not drawing a distinction between where people are coming from, at the same time, what people in this country look for—and what we as a Government are trying to do in our response to this situation—is for us to combine two simultaneous requests from the public. They are that we show our compassion by providing support for people in desperate need but do so in a way which is well organised, is actually sustainable and, in the long term, will not make matters worse; and that we have a policy that will ultimately help to bring an end to the situation causing all this desperation. I think that they look for something which is comprehensive, and that is what we are trying to deliver.
My Lords, as we have already said, many local authorities up and down the country have been preparing contingency plans to assist them to make room for the refugees. Many of these local authorities have growing lists of residents who are in temporary accommodation but are nevertheless willing to help. All local authorities should be able to say how many refugees they will accept, and central government must say what it will do to make sure that the refugees get the funding needed. Will the noble Baroness say in what way the Syrian refugees are to be dispersed throughout the country and how their children are to be integrated into our schools and education system?
The discussions between central government and local government are only just starting, although there is already very much a partnership in place with those local authorities that have been giving assistance and refuge to those whom we have already helped over the last few years. I assure the noble Baroness that we will work with the local authorities and, as I say, adopt a partnership approach.
Does my noble friend accept that the words of the most reverend Primate the Archbishop of Canterbury, remarking upon the fact that many Christians cannot stay in the camps because of intimidation, mean that the policy of the Government, which may be logical in every way, ought to be reconsidered in such a way that we can take those refugees who have had to leave the camps and find themselves on the continent of Europe? To refuse to do that would not represent or respect what the British people want.
My noble friend heard what I said in response to the most reverend Primate and I do not really have anything to add to that. I have tried in my responses today to demonstrate that the Government are providing refuge to people in desperate need. We are building on a programme of support that has been extensive and very much at the forefront of what else is being provided by other members of the European Union. We will continue to do all that we can. I am sure we will continue to discuss this on other occasions, and I very much look forward to that.
Energy Bill [HL]
Committee (1st Day) (Continued)
Clause 5: Directions: national security and public interest
12: Clause 5, page 3, line 35, at end insert—
“( ) are necessary in order to inform the OGA’s role in developing and promoting carbon storage,”
My Lords, thank you for returning to Committee. Amendment 12 in Clause 5 relates to the Secretary of State’s abilities to give directions to the Oil and Gas Authority. Again, I fear that we are now retreading familiar territory in our discussion of the Bill and some of the concerns that we have with it. The amendments in this group are probing and designed to give the Minister an opportunity to respond on how he considers that these powers might be used by the Secretary of State. We revisit the two issues that we talked about earlier today, which are that the Oil and Gas Authority should have explicit mention of carbon storage and transportation in its objectives and in the matters to which it has regard. For consistency’s sake, we therefore believe that the Secretary of State should also have those powers.
The purpose of these amendments, particularly Amendments 12 and 14, which are in my name, is to ask the Minister whether he could give us a little more information about the circumstances under which he envisages the Secretary of State needing to use these powers. Perhaps he could also give us an example of what kind of direction he imagines the Secretary of State might be giving the Oil and Gas Authority in relation to its functions under these powers. There is clearly not much in the public domain to help me get a handle on the thinking behind Clause 5, so it really would be an illuminating contribution from the Minister if he were able to give us some examples of the circumstances, particularly the exceptional circumstances referred to in the Bill, and the examples of direction.
We had a discussion prior to the break about the primary purposes of the OGA. I remain convinced that there is a clean and very succinct way of doing this, which is to refer to the Oil and Gas Authority’s primary objectives and to include within them explicit reference to activities that go beyond maximising economic recovery, as it is perhaps formally or informally understood. At the moment, it is interpreted as meaning that we will extract the maximum volume of hydrocarbons from our natural resources which fall within our territorial waters offshore, and indeed onshore. But it may be that that definition of MER, while it still of course has cross-party support, needs to be revisited and revised.
In the previous discussion, we saw reference to new matters to which the OGA should have regard being added to Clause 4. The Minister’s response in that debate was that there is no need to be explicit about these matters and that climate change is taken care of elsewhere, as indeed is the need to decarbonise and CCS. But if that logic were to apply, it is the case that one of the matters stated in Clause 4 is the need to have regard to a secure supply of energy, so if we are being true to ourselves and saying that we should have a narrow focus for the OGA and do not need to reiterate these things, there is no need for any reference to security of supply in that part of the Bill either. However, I do not think that is correct. Indeed it was helpful that the noble Lord, Lord Deben, who is no longer in his place, made reference to the fact that to avoid doubt it is always better to be explicit about these things, for fear that people with slight imagination —he used that phrase but perhaps it should be “lacking in imagination”—might mean that there is a narrow interpretation of what the OGA is created to do and what is within its powers and remit.
That is a very lengthy way of saying that we look forward to hearing more from the Minister on Clause 5, which is clearly an important part of the Bill. However, as I read it, I am left wondering what these exceptional circumstances are and what these directions could look like. I look forward to hearing from the Minister in his response. I beg to move.
My Lords, I have two amendments in this group, but I also want to apologise to the Committee because, due to my attendance at my Select Committee, I was unable to be here for the previous debate, during which, as my noble friend said, the case was made for ensuring that the OGA—while it may well have principal objectives—has to operate in the context of wider energy policies. Issues of climate change, energy security and affordability are relevant to how the OGA fulfils its main functions. Indeed, if its main function is in terms of maximum economic recovery, what happens on those other dimensions of energy policy affects the actual economics in MER. Therefore, it is important that the OGA, as set out in the earlier clauses, has some regard to those broader objectives of energy policy. It is also important that the Secretary of State can intervene in those areas.
Amendment 13 would allow the Secretary of State to give directions where it would be necessary to meet the terms of the Climate Change Act and the budgets promulgated under that Act. Amendment 15 relates to the Committee’s discussion before the break about carbon capture and storage, so that directions could relate explicitly to the storage of gas and oil and the storage of carbon dioxide as part of a carbon capture and storage scheme. The amendments previously discussed relating to Clause 4 need to be complemented with the ability of the Secretary of State to intervene on those same subjects. That is what these amendments would do.
My Lords, I shall speak to the amendments in this group and I thank noble Lords who have participated in the debate for speaking to their amendments. Amendments 12 to 15 relate to Clause 5 of Part 1 of the Bill, which concerns directions the Secretary of State may give to the Oil and Gas Authority. As the noble Baroness, Lady Worthington, said at the outset of our consideration in Committee, most of what we are looking at in the non-government amendments relates to carbon capture and storage. That is certainly a point well made. As I have indicated, we have undertaken that we will look at the issues relating to carbon capture and storage prior to Report.
As has been said, Clause 5 gives the Secretary of State power to direct the Oil and Gas Authority in the exercise of its functions if the Secretary of State considers the directions in the interest of national security or otherwise in the public interest. The noble Baroness, Lady Worthington, asked for examples of that and I will try to provide a couple. First, if a licence is applied for by a person who is suspected of corruption and whose possession of a licence the Secretary of State thinks would lead to reputational embarrassment or political damage to the United Kingdom, the intention is that the Secretary of State should be able to direct the Oil and Gas Authority not to issue a licence to such a person.
Secondly, another instance may be if there are other competing uses for a particular area of the seabed in respect of which the Oil and Gas Authority may grant licences. The intention then is that the Secretary of State should be able to give a direction to the Oil and Gas Authority as to over which areas it should or should not exercise its licensing powers so as not to prejudice those other uses.
Finally, another example may be that the Secretary of State should be able to direct the Oil and Gas Authority not to grant further consents for development in the face of public concern about the scientific evidence in relation to the methods used or a change in government policy. Clearly, that is not an exclusive list but those are some situations that may be covered by it.
The amendment makes it clear that the power in Clause 5 can extend to the Oil and Gas Authority’s functions in relation to the carbon capture and storage sector. We believe that it is unnecessary to do this because the Secretary of State’s power to give directions to the Oil and Gas Authority as to the exercise of its functions already applies to the carbon capture and storage sector in so far as it is in the ambit of the Bill.
I thank the Minister for allowing me to ask a question on this issue. At Second Reading I asked how much the Government had looked at the way Norway had organised its oil and gas industry. When Norway looked at these areas, I wondered how far it looked at carbon capture and storage and whether we have learnt anything from that in relation to what we are discussing at the moment.
I have no direct knowledge about lessons we have learnt from Norway, but I can certainly reassure the noble Baroness that we look closely at the Norwegian experience and the Canadian experience of carbon capture and storage. If I may, I will drop her a line on that and copy it to other Peers who have participated in today’s debate.
We believe this amendment is unnecessary as the Secretary of State’s power to give directions to the Oil and Gas Authority in the exercise of its functions already applies to the carbon capture and storage sector, as I have said. On that basis, we do not see the need for this amendment. Similarly, Amendment 15 makes it clear that the Secretary of State’s directions to the Oil and Gas Authority may include requirements on the development of storage facilities for gas and oil, or storage of carbon dioxide, as part of a carbon capture and storage scheme. Once again, the Secretary of State’s functions of licensing the storage and unloading of gas and the storage of carbon dioxide are being transferred to the Oil and Gas Authority by the Bill. As such, the Secretary of State’s power to give directions to the Oil and Gas Authority in the exercise of its functions already applies to these sectors. Were additional functions to be added to the Bill, they, too, would be covered by this provision and an amendment would not be necessary.
Turning to Amendments 13 and 14, the Oil and Gas Authority will be established formally so that it is an effective, robust and independent regulator. As part of this, it will deliver on the strategy to maximise the economic recovery of petroleum from the United Kingdom continental shelfs. The Oil and Gas Authority is purposely not an environmental regulator and environmental regulation will continue to sit within the Department of Energy and Climate Change, which has the expertise and experience in this field. There are synergies between the two forms of regulation and the existing strong relationship between the Oil and Gas Authority and the department will continue. The department will continue with its vital mission of seeking secure and diverse energy supplies, including renewables, nuclear and indigenous resources. The United Kingdom has adopted ambitious climate change targets, committing us to an 80% reduction in emissions from 1990 levels by 2050. Emissions are already down by 29% on those levels.
As I indicated on a previous amendment that was brought forward on environmental concerns, these amendments also raise issues of compliance with the offshore safety directive, which is legally enforceable against us. This requires a separation of oil and gas licensing from environmental functions. So it may not be legally possible to do this either.
I do not believe that either my amendment or the other amendments intend to designate the OGA as a drafter or an enforcer of environmental legislation. They seek to ensure that anything the OGA does will not jeopardise—preferably, they would further—the broader objectives of the Government. This does not mean that it is a regulator; rather, that the Secretary of State would have the ability to intervene if some of the economic decisions taken by the OGA jeopardise its legal obligations under the domestic climate change Acts, or indeed jeopardise its international legal obligations under EU or any global climate change agreements. We are not arguing that the OGA should be an environmental regulator.
I am grateful to the noble Lord for that clarification. We will have another look at the position, and indeed I am probably using the term “environmental regulator” in something of a shorthand sense. We have legal concerns on this, but I undertake to take a second look and possibly we will come back to it on Report.
In the light of my comments and the undertakings that I have made previously, I respectfully ask the noble Baroness to withdraw the amendment.
I thank the Minister for his reply and my noble friend Lord Whitty for his contribution to the debate. It is helpful to have specific examples of when the Secretary of State may need to take powers to direct the OGA. I have to say, though, that they do not really reassure me. I should like to read Clause 5 again in more detail because it seems that when it comes to the licensing of activities, competition and scientific evidence, it will give the Secretary of State quite a high degree of enabling power. I wonder whether the process as outlined in the Bill, which is just to notify Parliament with no debate, is sufficient in the circumstances. I could fast forward and imagine a time when there might be a part of, shall we say, a constituency which may not wish to have a particular oil and gas activity taking place. It might suit the Secretary of State to exclude that objection, and in these circumstances it seems that the Secretary of State could simply ask the OGA to do so without any debate about it.
The examples are helpful and it may be something we come back to on Report. However, before I withdraw the amendment I should like to reiterate my point that if we are going to take the line of defence that the OGA is narrow and does not need to have all these matters cluttering its mind, this seems to be a situation where it is being expected to have some sort of regard to security of supply, even though it is not a security of supply expert any more than it is a climate change expert. In terms of the trilemma, which we all know and love, of energy security, affordability and decarbonisation, to make explicit reference to security of supply in Clause 4 but not to affordability or climate change issues seems to suggest that one leg of the stool is more equal than the others. Again, we will probably want to come back to that, even if it is just to take out the reference to security of supply, which might be the most obvious solution.
At this stage I am happy to withdraw the amendment, but as I say, I will read Clause 5 with a greater degree of understanding and scrutiny now that we are back from the Recess. I beg leave to withdraw the amendment.
Amendment 12 withdrawn.
Amendments 13 to 15 not moved.
Clause 5 agreed.
Clauses 6 and 7 agreed.
16: After Clause 7, insert the following new Clause—
“Powers of the OGA to charge fees
(1) The OGA may charge fees—
(a) for making a determination under Schedule 1 to the Oil Taxation Act 1975; (b) on an application made to it under section 3, 15, 16 or 17 of the Petroleum Act 1998;(c) on an application of a prescribed description made to it by the holder of a licence granted under—(i) section 3 of that Act (searching for, boring and getting petroleum), or(ii) section 2 of the Petroleum (Production) Act 1934 (licences to search for and get petroleum);(d) on an application of a prescribed description made to it by the holder of an authorisation issued under section 15 of the Petroleum Act 1998;(e) for carrying out or attending any test, examination or inspection of a prescribed description;(f) on an application made to it under section 4 or 18 of the Energy Act 2008;(g) on an application of a prescribed description made to it by the holder of a licence granted under section 4 or 18 of that Act;(h) for the storage by it of samples or information in accordance with an information and samples plan (see section (Information and samples plans: supplementary) (2) of this Act).(2) The fees—
(a) are to be determined by or in accordance with regulations made by the Secretary of State, and(b) are to be payable by such persons as the regulations may provide.(3) The OGA must pay into the Consolidated Fund any amount which it receives in respect of fees charged by it under this section.
(4) Subsection (3) does not apply where the Secretary of State, with the consent of the Treasury, otherwise directs.
(5) Where in relation to any matter the OGA has a function mentioned in subsection (6), that function is treated for the purposes of this section as carried out pursuant to an application made to the OGA (whether or not there is any requirement to make such an application).
(6) The functions are—
(a) extending the term of a licence;(b) giving its consent or approval in relation to any matter;(c) objecting in relation to any matter.(7) The Secretary of State must consult the OGA before making regulations under this section.
(8) In this section “prescribed” means prescribed by regulations made by the Secretary of State.”
My Lords, I will now speak to the government Amendments 16 to 19, which relate to the funding of the Oil and Gas Authority, including the provision of payments and financial assistance to the authority. The Oil and Gas Authority will be formally established so that it is an effective, robust and independent regulator of petroleum recovery. As part of this, it will deliver on a strategy to maximise the economic recovery of petroleum from the United Kingdom territorial sea and the United Kingdom continental shelf. The new body will be funded by industry. This is consistent with the user pays principle because industry will be benefiting from the work and expertise of the regulator.
The Oil and Gas Authority is providing a range of services to industry. These services include the issuing of licences as well as issuing relevant consents and permits, for example, to begin petroleum production. It is correct and in compliance with the Treasury’s Managing Public Money remit that the costs of these services should be recovered via direct fees rather than via the general levy. This will ensure that only those who require and benefit from the service will bear its costs.
Amendment 16 inserts a new clause into the Bill which will ensure that the costs of the relevant services provided by the Oil and Gas Authority may be recovered via a direct fee. Details of the fee mechanism and the method of calculating the full cost of the service will be set out in regulations. Amendments 17 and 18 insert new clauses allowing the Secretary of State to make regulations providing for a levy on industry to meet the costs of the authority; that is, the indirect costs of administration and so on. These new clauses are in similar terms to the levy provisions set out in Section 42 of and Schedule 7 to the Infrastructure Act 2015, but they reflect the fact that the functions will be carried out by the Oil and Gas Authority as a government company rather than as an executive agency, where in law the functions are with the Secretary of State. We thought it would be more helpful to those using the legislation to find the levy provisions in this Bill, and I hope that noble Lords are reassured by that. The noble Lord, Lord Oxburgh, who is not now in his place, and the noble Baroness, Lady Liddell, both referred to the need to simplify access to some of the provisions in this area, so I hope that the fact that they will all be contained in this Bill rather than in the Infrastructure Act 2015 is helpful.
To allow the regulator to recruit and retain the best candidates, particularly those with specialist experience, we need to ensure that the regulator has financial flexibility and sufficient funding. Amendment 17 enables the Secretary of State to provide by regulation for a levy on the holders of specified licences. The levy will fund the costs of the regulator, but it must not exceed the costs incurred in carrying out the relevant functions. The amendment also allows the levy to be imposed to cover the costs of the Oil and Gas Authority exercising its functions, including those relating to the new powers we are conferring on it, such as dispute resolution, data acquisition and enforcement. Amendment 18 sets out illustrations of the way in which the levy power may be exercised. This is in similar terms to Schedule 7 to the Infrastructure Act 2015. Regulations will set out the detail, including the amount payable by different categories of licence holders. Just by way of explanation, it is intended that those licence holders who are actually exploiting the area will be paying more than those who have not yet taken up the opportunity.
Some consequential amendments to the schedule are necessary, such as Amendment 42, which amends the schedule to the Bill to remove the levy provisions from the Infrastructure Act 2015 as set out in Section 42 of and Schedule 7 to that Act. These amendments are covered separately with Amendment 1, which seeks to amend Clause 2, which introduces the schedule. In fact the amendment has already been dealt with, so I fear that my notes are out of date.
I turn now to Amendment 19, which provides a general power for the Secretary of State to make payments and provide financial assistance to the Oil and Gas Authority. The power is not restricted to the specific functions of the authority, and therefore payments may be made at the discretion of the Secretary of State to fund any of its functions. As well as covering statutory functions, it will cover those which are contracted out to the Oil and Gas Authority. The authority will be funded through a levy on the holders of certain energy industry licences and by fees which will be paid for the carrying out of particular services. The Secretary of State may also need to provide funds to the authority to cover any unforeseeable events. The amendment will allow the Secretary of State to provide financial assistance to the Oil and Gas Authority in the form of grants, loans, guarantees and indemnities. I beg to move.
My Lords, first, obviously the details will be set out in the regulations. Does my noble friend have any idea when those regulations may be available, or if they are available already? That would be helpful to us in our discussions as we go through the Bill. Secondly, I particularly welcome the flexibility that has been given to the Secretary of State to make payments which might unexpectedly be needed. Having that sort of provision makes good sense.
My Lords, I thank the Minister for his introduction of these government amendments and the noble Baroness, Lady Byford, for her contribution. However, I disagree with the noble Baroness slightly on her last comment. It may be necessary for the Government to make financial support available, but I worry that that creates yet another unbounded public spending commitment, and I know that the noble Baroness is very keen to try to constrain such commitments, as are the Government. I question the need for government Amendment 19, but at this stage I am not sufficiently briefed to know how extraordinary these clauses are. Maybe this is a very common thing, and we always create these abilities to give grants to quangos with no further detail, but perhaps we do not. I would be very grateful if the Minister could provide a bit more context, when he replies, about the need to provide for grants, loans and other financial provisions.
I ask because I am concerned about the growing costs of decommissioning, which we have talked about in previous debates. Similarly, I am slightly nervous about unbounded liabilities on the public purse at a time when so many people are being asked to tighten their belts. The profits of the offshore oil and gas industry are well known, and it would seem odd for it to be given special provision while everyone else is seeing their budgets cut. In particular, I am slightly worried that these unforeseeable events are not defined and that there would be, as I read it, very little in the way of opportunity for debate or questioning of the Secretary of State if such financial provisions were made. I would like further clarity on how much scrutiny there might be on that aspect. Those are the main points at the moment, and I look forward to a response from the Minister.
Perhaps I could express myself slightly more fully before the Minister responds. I looked at government Amendment 19 in terms of a national emergency—something out of the ordinary—and I was not quite sure, if it did not come in within the new clause, whether there was another way in which that sort of money can be accessed for the OGA. That was the presumed context within which I raised the issue. The noble Baroness is quite right that I am very keen to make sure that the Government live within their means. However, there are times—as we have seen in the international field when we have had major oil spills or something has gone really wrong—when emergency money has to be made available and I wondered whether that was within the context of the new clause in Amendment 19.
My Lords, I will try to address the points raised by the noble Baroness, Lady Worthington, and my noble friend Lady Byford. The first was about when the regulations for the charging regime will be laid. They will need to be in force when functions transfer to the Oil and Gas Authority next summer, assuming the passage of the legislation. We have an indication of how much the levy will cost industry and the distinction to be made between those that are currently exploiting oil and gas fields and those that are not. The cost of the levy for the first six months for licence holders that are not exploiting is £2,759.30p—which seems pretty precise—and for those that are exploiting, it is £30,422.92p. I am sure we would reserve the right to vary that somewhat, but it gives an indication of how much the levy will cost. I think the regulations relating to the activities that are subject to the direct costs have not yet been laid, but I will restate the point that the aim is to recover the costs: it is not make a profit, but to ensure that the costs are covered. That should provide some reassurance.
The noble Baroness, Lady Worthington, and my noble friend Lady Byford both raised points in relation to Amendment 19, on financial assistance. I think this is intended to cover two situations—if there are others, I will make sure that I deal with them in writing. First, it is intended to cover any shortfall in the levy and charge regime in the short run. I suppose this relates to cash-flow issues and is to ensure that things are kept running. That would presumably be a short-term measure and not involve a great amount of money in the scheme of the authority.
The second point relates to unforeseeable situations. The noble Baroness, Lady Worthington, asked for examples. In a sense, it is difficult to give examples because they are unforeseeable, but it could include some massive oil spillage where immediate funding is necessary or, God forbid, some terrorist incident where money is needed. That is the sort of situation. Those are two examples, but there will clearly be others, as this is about the unforeseeable. The unpredictable nature of the scenarios is clear there, but in addition there is the cash-flow element. I think it is fairly standard in these situations to have something of this nature. I hope that provides reassurance and that I have satisfied the noble Baroness.
Amendment 16 agreed.
Amendments 17 to 19
17: After Clause 7, insert the following new Clause—
“Levy on licence holders
(1) The Secretary of State may, by regulations, provide for a levy to be imposed on, and be payable by, one or more of the following kinds of persons—
(a) persons who hold licences (other than excluded licences) granted under section 3 of the Petroleum Act 1998 (searching for, boring and getting petroleum);(b) persons who hold licences (other than excluded licences) granted under section 2 of the Petroleum (Production) Act 1934 (licences to search for and get petroleum);(c) persons who hold licences granted under section 4 of the Energy Act 2008 (unloading and storing gas);(d) persons who hold licences granted under section 18 of the Energy Act 2008 by the Secretary of State or the OGA (storage of carbon dioxide).(2) The Secretary of State must exercise the power conferred by subsection (1) so as to secure—
(a) that the total amount of licensing levy which is payable in respect of a charging period does not exceed the costs incurred by the OGA in exercising its functions in respect of that period, and(b) that no levy is payable in respect of costs incurred in the exercise of functions—(i) for which fees are charged under section (Powers of the OGA to charge fees), or(ii) which the OGA is authorised to exercise by virtue of an order under section 69 of the Deregulation and Contracting Out Act 1994.(3) In determining for the purposes of subsection (2)(a) the total amount of licensing levy payable in respect of a charging period, an amount of levy payable in respect of that period may be ignored if (during that period or subsequently)—
(a) having been paid, it is repaid or credit for it is given against other licensing levy that is payable, or(b) having not been paid, the requirement to pay it is cancelled.(4) The amount or amounts of licensing levy payable by licence holders must be—
(a) set out in the regulations, or(b) calculated in accordance with a method set out in the regulations.(5) The licensing levy is payable to the OGA.
(6) The OGA must pay into the Consolidated Fund any amount which it receives in respect of the licensing levy.
(7) Subsection (6) does not apply where the Secretary of State, with the consent of the Treasury, otherwise directs.
(8) The Secretary of State must consult the OGA before making regulations under this section.
(9) Section (The licensing levy: regulations) does not limit the provision that may be made by regulations under this section.
(10) In this section and section (The licensing levy: regulations)—
“charging period” means a period in respect of which licensing levy is payable;“excluded licence”, in relation to a charging period, means a licence that, if granted at the beginning of the period, would fall to be granted by the Scottish Ministers or the Welsh Ministers (and for these purposes a licence within subsection (1)(b) is to be treated as granted under section 3 of the Petroleum Act 1998);“licensing levy” means the levy provided for in regulations under this section.”
18: After Clause 7, insert the following new Clause—
“The licensing levy: regulations
(1) Regulations may provide for the licensing levy payable in respect of a charging period to increase or decrease over that period.
(2) Regulations may provide for an amount of licensing levy payable by a licence holder to be calculated by reference to the size of an area to which a licence held by that person relates.
(3) Regulations may provide for different categories of licence holders to pay—
(a) different amounts of licensing levy, or(b) amounts of licensing levy calculated, set or determined in different ways.(4) Regulations may provide for a category of licence holder to be exempt from payment of the licensing levy.
(5) Regulations may provide for interest (at a rate specified in, or determined under, the regulations) to be charged in respect of unpaid amounts of licensing levy.
(6) Regulations may provide for unpaid amounts of licensing levy (together with any interest charged) to be recoverable as a civil debt.
(7) Regulations may confer a function (including a function involving the exercise of a discretion) on—
(a) the Secretary of State,(b) the OGA, or(c) any other person, apart from the Scottish Ministers or the Welsh Ministers.(8) Regulations (including regulations of the kinds mentioned in subsections (3) and (4)) may provide for a category of licence holder to consist of persons who hold a kind of licence that is specified in the regulations.
(9) The regulations may (in particular) specify any of the following kinds of licence—
(a) licences granted under a particular enactment;(b) licences of a particular description granted under a particular enactment;(c) licences, or licences of a particular description (including a description falling within paragraph (a) or (b)), granted—(i) before a particular time,(ii) after a particular time, or(iii) during a particular period.(10) In this section—
“licence” means a licence falling within section (Levy on licence holders)(1);“licence holder” means a person who holds a licence (whether the person was granted it or has, after its grant, acquired it by assignment or other means);“regulations” means regulations under section (Levy on licence holders).”
19: After Clause 7, insert the following new Clause—
“Payments and financial assistance
(1) The Secretary of State may make payments or provide financial assistance to the OGA.
(2) The payments or financial assistance may be made or provided subject to such conditions as may be determined by the Secretary of State.
(3) In the case of a grant such conditions may, in particular, include conditions requiring repayment in specified circumstances.
(4) In this section “financial assistance” means grants, loans, guarantees or indemnities, or any other kind of financial assistance.”
Amendments 17 to 19 agreed.
Clause 8 agreed.
Clause 9: Interpretation of Part 2
Amendments 20 to 23 not moved.
Clause 9 agreed.
Clauses 10 to 18 agreed.
Clause 19: Petroleum-related information and samples
24: Clause 19, page 11, line 25, after “which” insert “were or”.
My Lords, in moving Amendment 24, I will speak to the others in the group. We move on to information and samples. These relatively small amendments are intended to ensure that the information and sample regime takes account of the role of carbon capture and storage: in other words, that it is reflected within this part of the Bill in the way that it should be reflected—the Minister has indicated some sympathy towards this—in the earlier clauses relating to the activities of the OGA.
Amendments 24 and 25 are very small and are intended to ensure that the definition of “petroleum-related information” is kept as broad as possible, so that it is not limited to the fulfilment of the principal objective—it is narrowly defined at present—and not time limited to activities which continue to be relevant to that objective. In other words, it could be used, either in parallel with extraction processes or after they have taken place, to provide samples and information to CO2 licence holders and storage operators. The use of “and” between the two subsections creates an ambiguity here, and if the Government’s intention is to ensure that the information could be provided to and required of CO2 storage operators, they need to make these amendments.
Similarly, on Amendment 25, which relates to the transfer of such information, there are many within the potential CCS market who regard the inability to access samples as one of the barriers to using former gas and oil facilities for carbon storage. In order to ascertain whether the facility is appropriate and can technically be operated as a storage area, information that is held by the OGA as a result of it having been provided by the extraction operators ought to be made available to the CCS operators. Amendment 25 is designed to ensure that that can happen and that the Government have the powers to transfer such data. The Government have already indicated that they hope to be able to transfer such information, and this would give a proper legal base to that and make it enforceable. In addition, Amendment 28 clarifies that the OGA could require information and samples for the purpose of carrying out any of its relevant functions, not just its principal function. Again, that would ensure that storage licensing was included in that provision.
I hope the Government can look at these amendments and, taking account of the points made earlier in Committee about CCS, consider whether these relatively minor amendments to the Bill would help to encourage and give some degree of confidence to potential operators of CCS making use of our North Sea facilities. I beg to move.
My Lords, we are all getting very excited about these amendments so we are anxious to speak. I want to add a couple of sentences. There is a history in the oil and gas sector of not sharing information, for whatever reason: sometimes it is competitiveness but sometimes, although I hate to say it, it is sheer awkwardness. Although CCS technology has been around for a long time and has been proven, there is nervousness about transmission, so it would make a great deal of sense if the OGA had the authority to require the sharing of this information, whether for safety reasons or any other reason. Those of us who have had to deal with the oil and gas industry know that it is very shy about passing on the kind of information that my noble friend Lord Whitty has spoken so eloquently about.
My Lords, I have two amendments in this group, Amendments 26A and 30A. As we discussed earlier, the OGA may well choose to encourage small innovative companies to come into the business. The termination of rights under a licence, for whatever reason, may result in the failure of a company. The wording in the Bill seems to imply that the duty to retain information and samples will continue, but I am not sure how long that continues for. If a company ceases to continue in business for whatever reason, what happens to those samples? Is the implication of the clause that the OGA will be bound not to encourage innovation—which would be regrettable—other than in companies that are part of or allied to others and which would pick up the pieces in the event of bankruptcy? In other words, does this subsection of the Bill in practice restrict the OGA’s duty to have regard to,
“The need to encourage innovation”?
I turn to Amendment 30A, picking up on the comments from the noble Baroness, Lady Liddell, about data sharing. In many businesses, not just the oil business, people are very wary about data sharing, and in many cases I quite understand why. My amendment goes to the other end of the question: what happens to some of these data? Do they get passed on, and what restrictions are there on data being shared and pooled for the benefit of everyone? Over the years, Governments and businesses have been required to release data, which have then been passed on to third companies in a way I am sure the Bill does not intend. My second amendment refers to that. In his letter to me, the Minister stated that,
“information may be disclosed if any one of the factors listed under 27(5) applies”.
However, I still do not understand in what circumstances the OGA would disclose protected material simply because the person who had provided it had consented, although there was no need for disclosure under Clause 27(b), (c) or (d). Is there an implication that permission to disclose will be a standard part of any relationship with the OGA? Really, my amendment comes between the previous contribution relating to the concern that we should share data, which is quite right, and the question of how those data are used, not abused, in future.
These are two very simple amendments, and I am delighted to have spoken to them.
My Lords, I shall speak to the amendments in my name and those of the noble Lords, Lord Teverson and Lord Oxburgh. Here again we have an example of a slight lack of communication at the end of the Recess, but I am certain that by the end of Report we will have all this ironed out.
We are addressing similar points to those addressed by the previous amendments, as described very eloquently by my noble friend Lord Whitty. This gets to the nub of our concern about the OGA’s remit not being sufficiently broad to ensure that it is able to carry out its functions in a rapidly changing world, in which conversations about carbon capture and storage may be happening more often than conversations about the exploration of new wells or life extensions of existing ones. It is about ensuring that there is nothing in the Bill to prevent the very sensible powers that have been taken to enable activities in the North Sea to be well organised from applying to those activities when they relate to carbon capture and storage.
We—and, I am sure, others—have received excellent representations from academics and the CCSA on the issue of information sharing and samples, which requires careful attention. I was very interested to find out about the issue of samples. Over the past 50 years of exploration and production in the North Sea, and indeed offshore all around the UK, the oil and gas sector has acquired rock core data. In the drilling and exploration of wells, a core of rock is extracted and then maintained, curated, labelled and well looked after. That core sample contains all sorts of information that might be relevant for people wishing to repurpose sites in the North Sea or to continue their use in other forms. I believe that at the moment there is an obligation to maintain these physical samples. However, if a company abandons a hydrocarbon field, that requirement is no longer in place, and I am told that those physical samples can therefore literally be landfilled. The samples have cost millions, if not billions, to acquire, and should be valued as such.
We would therefore like to see something in the Bill that acknowledges that, when it comes to information and samples, we are discussing a very great resource that has practical implications for the development of CCS when it comes to understanding rock strata, and this information should be available. The Minister might say that the British Geological Survey retains an archive of these rock cores, but that is only an archive: you are not able to take samples from it and cannot use it to do the kind of sampling or study and research that you might want to, so that would not be sufficient. There is a need for something that will keep these cores that are owned by the oil and gas companies in a good state and available for people who may find them useful in future.
In addition, beyond the actual samples lots of information is held by the oil and gas companies resulting from their operation—for example, understanding of the deep subsurface geology, the injection histories of the hydrocarbon field and the measurement of subsurface pressure in the reservoir and overlying rocks. These are all pieces of information that will, of course, be useful if we are trying to assess our storage capabilities, particularly the borehole data. We need to know how the borehole was drilled and how it was engineered, so we can understand whether it is possible to reuse boreholes and to secure against leakage. The list goes on, so there