Pollution Prevention and Control (Fees) (Miscellaneous Amendments) Regulations 2025
Debate between Earl Russell and Lord Wilson of Sedgefield
Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)
My Lords, these regulations were laid before the House on 23 April and were debated and agreed by the House of Commons on 20 May. I am most grateful for the opportunity to join the Grand Committee’s proceedings.
Before outlining the provisions made by this draft instrument, I will briefly provide some context. The DESNZ Offshore Petroleum Regulator for Environment and Decommissioning—OPRED—minimises the impact of the offshore sector on the environment by controlling air emissions and discharges to sea and by reducing disturbances over the life cycle of operations, from seismic surveys through to post-decommissioning monitoring. OPRED recoups the eligible costs of its regulatory functions from industry in the offshore oil and gas sector—which I shall refer to as the offshore sector—rather than from the taxpayer.
OPRED’s recoverable costs are covered in two ways: first, by using regulations that are covered by the fees regulations; and, secondly, by five charging schemes that do not require legislative change and will be amended administratively. OPRED’s average annual fees income is about £6.7 million and is recovered from around 100 companies. Currently, the fees that it charges are based on hourly rates of £201 for environmental specialists and £104 for non-specialists. Environmental specialists are technical staff who carry out the functions of the Secretary of State and non-specialists are support staff.
I turn to the details of this instrument. The current hourly rates have been in force since June 2022. Having reviewed the cost base, OPRED concluded that the existing rates need revising to reflect today’s costs for regulatory services. The fees regulations will therefore amend the charging provisions by increasing the existing hourly rate for environmental specialists to £210 and increasing the hourly rate for non-specialists to £114. This will allow OPRED to recover its costs but not to make a profit.
OPRED’s fees are determined by adding together the recorded number of hours worked per person on cost-recoverable activities, multiplied by the hourly rates for both environmental specialists and non-specialists, respectively. The new hourly rates were approved by His Majesty’s Treasury in December 2024 and calculated in line with the Treasury’s Managing Public Money guidance. They cover the expenditure on all resources used by OPRED to support its activities—for example, staff salaries, accommodation, IT and legal services.
There is no formal requirement to consult on the proposed changes. However, OPRED informed the offshore sector of the planned revisions to the hourly rates in February 2025, and no representations were received. OPRED’s fees regime guidance will be revised to reflect the new hourly rates.
I conclude by emphasising that the revisions to the hourly rates introduced by the fees regulations will allow OPRED to recover the eligible costs of providing regulatory services from those who benefit from it, rather than passing those costs on to the taxpayer. I beg to move.
Earl Russell (LD)
My Lords, we are in favour of and support these proposed changes. The original regulations allowed the Department for Energy Security and Net Zero’s Offshore Petroleum Regulator for Environment and Decommissioning—OPRED—to recover the eligible costs of providing regulatory services from the offshore sector rather than the taxpayer. It is entirely appropriate that those who benefit from these services bear the associated costs.
The regulations before us simply propose to increase the hourly rate for offshore workers: for environmental specialists from £201 to £210, and for non-specialists from £104 to £114. As the Minister said, the current rates have been in force since June 2022 and these regulations have been updated in the past. OPRED has reviewed its cost base and concluded that these revised rates are necessary to reflect today’s costs for regulatory services, calculated in line with His Majesty’s Treasury’s Managing Public Money guidance.
I have had a chance to look through the statutory instrument, the methods used to calculate the costs and the chargeable hours calculations, and they all look fine to me. This is basically an inflationary upgrade, and we are happy to support it to ensure that people who fulfil these specialist, vital jobs are adequately recompensed for their work. I made the mistake of looking at the debate in the other place on this, and I was a little surprised that a simple fees increase managed to be described as ideological and destructive madness driving us closer to economic decline. I wish to make it clear from these Benches that nothing could be further from the truth.
Since we are here, I will ask the Minister a couple of very quick questions. The changes are minor. I recognise that there was no need to consult this time, that industry was informed and that there were no responses, but can I confirm that there is a process for consultation if there are larger changes in future? I notice that a lot of micro and minor industries are associated with this, so will the Minister confirm that, as far as the Government are concerned, there is no cumulative impact of such fee increases on them? I assume that there is not, but I take the moment to check. However, these Benches fully support this basic upgrade in people’s wages.
Social Energy Tariff
Debate between Earl Russell and Lord Wilson of Sedgefield
Lord Wilson of Sedgefield (Lab)
That is a good question, and the Government keep this under review at all times. We find ourselves in very difficult times; since the fuel crisis in 2022, we have been dealing with a very difficult situation, and this is under review all the time.
Earl Russell (LD)
My Lords, some 16% of our energy bills are made up of levies, which the MCS Foundation has found could be costing bill payers some £300 per year. Does the Minister agree with the call of Make UK, Energy UK and the Climate Change Committee for policy actions to remove levies from electricity bills to better incentivise people to switch to low-carbon energy? What actions are the Government taking on this?
Lord Wilson of Sedgefield (Lab)
There is a levy for the warm home discount, but that works out at only £1.50 a month per household, which is not that high considering how many people it takes out of fuel poverty.