Energy BILL [ Lords ] (First sitting) Debate

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Tuesday 26th January 2016

(8 years, 4 months ago)

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None Portrait The Chair
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Copies of written evidence that the Committee receives will be made available in the Committee Room.

Clause 1

The OGA

Question proposed, That the clause stand part of the Bill.

Alan Whitehead Portrait Dr Alan Whitehead (Southampton, Test) (Lab)
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Good morning, Mr Bailey. It is a pleasure to serve under your chairmanship in this Committee.

The first clause of the Bill is about the very existence of the Oil and Gas Authority. In truth, it is a rather odd construction: it is a regulator, but at the same time it is a limited company, albeit one that does not have to use the word “limited”. Essentially, it is a private company with one shareholder—the Government. Presumably, therefore, the Government may sell their share whenever they wish. The OGA’s members, officers and staff are not, as we see elsewhere in the Bill, to be regarded as civil servants, but they do have access to civil service pensions. The OGA is quite an anomaly in the world of regulators.

My understanding of how regulators work across the board is that they have to perform a function that is clearly equidistant between Government, industry and other arrangements. In this instance, the set-up of the OGA does not appear to conform exactly to that principal definition of what a regulator should be. Why was it decided that this should be the formulation of the OGA? It is rather different from the precedent for regulators. An unworthy suggestion could be made that the OGA has been set up as it is to take it off Government books, although as far as staff of the OGA are concerned it will put them, at least in some instances, back on Government books again. However, I am sure that that is not the sole or the main purpose in deciding to set the OGA up in this particular way.

I would be very interested to hear from the Minister why this structure was chosen and what advantages it is thought to provide. Does she think any particular difficulties might arise from the Government company structure that the OGA is to have, and if so, can they be satisfactorily resolved by other aspects of the OGA’s construction?

Andrea Leadsom Portrait The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
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Mr Bailey, it is a great pleasure to play a role in the Committee scrutinising this very important Energy Bill, and I thank all hon. Members for being here this morning. I hope we are going to have some very interesting discussions.

Sir Ian Wood published his review on 24 February 2014. It concluded that the UK continental shelf is a very different and more complex operating environment now than in the past. The review proposed four key recommendations, which the Government accepted in full at the time of publication and reconfirmed in our response published on 16 July 2014. The four key proposals were: first, the adoption of a cohesive tripartite approach between the regulator, the Treasury and industry in developing and implementing a new shared strategy called maximising economic recovery UK, or MER UK; secondly, the establishment of a new arm’s length regulator; thirdly, the introduction of a suite of additional regulatory powers for the new regulator; and fourthly, the development and implementation of new sector strategies on issues such as exploration and decommissioning cost reduction.

The Department of Energy and Climate Change is making strong progress in implementing the recommendations of the Wood review. In particular, the principle of maximising economic recovery of offshore UK petroleum was established in the Infrastructure Act 2015. We also took a power in that Act to charge a levy to fund the OGA. As the hon. Gentleman knows, the OGA was initially established as an Executive agency but will become a Government company as a result of this Bill. Classification as a Government company will enable the OGA to have operational independence from Government and will provide a more suitable platform and the regulatory certainty that the industry requires to invest in exploration and production activity. It will also allow the OGA the necessary operational freedoms to recruit high-calibre individuals in a competitive employment market.

To be very clear, there are very well known precedents for Government companies, including the Prudential Regulation Authority, the Financial Conduct Authority and the Highways Agency. The Government-owned company is a private company under the Companies Act 2006, limited by shares, with the Secretary of State for Energy and Climate Change as the sole shareholder. The Secretary of State will appoint the chair and a non-executive director to the board. Of course as the hon. Gentleman knows, the OGA has a new independent chief executive who is already making strong progress. We absolutely support the establishment of the OGA in the terms in which it has been set up.

Alan Whitehead Portrait Dr Whitehead
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I thank the Minister for that explanation of the set-up of the OGA, but I have to say that the Wood review did not at any point, as far as I can see, refer to the idea that the OGA should be a Government company with a single shareholder. Indeed, as the Minister correctly points out, Wood set out at some length what the activities and scope of the OGA should be—but perhaps that is a debate for another occasion. The issue now is the structure of the OGA in relation to its duties, to the industry and to the question of continuing to maximise the output and return of the North sea. It seems to me that a fairly carefully defined body is required to undertake that regulation.

Sir Ian Wood talked about an arm’s length organisation that would be able to stand between the various interests and make sure that those interests worked collaboratively rather than competitively in securing the success of the North sea. I wonder whether the OGA as constructed will be able to do that in the way that Sir Ian envisaged and all of us in this House want. It is true that, in the past, a few—I emphasise: only a very few—Government agencies have had this construction. I should like to know why the proposed construction is uniquely good for the arrangements of the OGA, in so far as the requirements that Sir Ian Wood set down for the role of the regulator are concerned. What thought have the Government given to other ways of constructing the regulator so that it could provide the best arm’s length arrangement for the industry?

Andrea Leadsom Portrait Andrea Leadsom
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I have to disagree with the hon. Gentleman. It was a clear recommendation of the Wood review that a step change was needed in Government stewardship and regulation of the UK continental shelf, and this required a new independent body with a strong CEO and greater independence from Government to focus fully on maximising economic recovery. As an arm’s length body, the OGA will be in a much better position to play a strong role in catalysing, encouraging and facilitating actions and agreements within and between operators, and between operators and Government, to ensure the success of the tripartite MER UK strategy. It is simply not true to say that this was not part of Sir Ian Wood’s recommendations; I think it was very much a part of those recommendations. The alternative, as the hon. Gentleman will be aware, is that the OGA continues to operate as an Executive agency, and that of course would not have the same extent of separation from Government as Sir Ian Wood envisaged.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2

Alan Whitehead Portrait Dr Whitehead
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I beg to move amendment 7, in clause 2, page 2, line 9, at end insert—

‘(2c) The Secretary of State shall, within one year from the date of this section coming into force, 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.”

This amendment would require the Secretary of State to undertake an assessment of whether the OGA’S powers are fit for purpose within a year of this section coming into force.

None Portrait The Chair
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With this it will be convenient to discuss Government amendments 2 and 3.

Alan Whitehead Portrait Dr Whitehead
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Amendment 7 seeks to reflect the newness of the concept of what the OGA is undertaking regarding the North sea. This regulator has previously existed as an Executive agency, as the Minister quite correctly says, and was essentially given authority under the Infrastructure Act; nevertheless, it will be operating in very new circumstances for a regulator.

Unlike some previous bodies, the OGA is not being set up at the same time as the emergence of a specific legislative structure or the development of a new industry. It is coming into an industry that is three quarters of the way through the operational history of North sea exploration, extraction and associated activities. It comes in with a number of new challenges, which include the maturity of the North sea basin and the need for different forms of working for future extraction, such as the sharing of infrastructure facilities and agreements on how the North sea can best be developed in its more mature phase. My central point is that the OGA arises at that new stage in the life of the North sea and the challenge is to get the arrangements right for the future.

A structure has been put in place that is substantially in line with many of the recommendations of the Wood review and seeks to get the best out of an admittedly difficult series of processes. My concern is whether, in setting up the powers and arrangements for the OGA, we have found the best way forward. We will perhaps know that only as the OGA gets under way. Although I do not believe that, with regulators in general, one should pull the plant up by its roots to see if the roots are growing, I think it is important when establishing a new agency to carry out an initial appraisal of its fitness for purpose and ability to achieve what we all want, as well as to inform how best to undertake its activities.

The purpose of the amendment is not to secure regular reviews of the agency’s activities. I suspect the Minister may have one or two things to say about the status of regular reviews. Labour Members believe the Government amendments on regular reviews are about right. There is a different case to be made for the initial scoping of the purpose of the OGA and how it has been transferred from idea to purpose to action. An initial appraisal of whether we have got that right ought to be undertaken in the next year.

It is vital that we get this right, because of the importance of the North sea having a successful future. An initial review would greatly enhance the faith that people will place in the OGA’s ability to regulate activities in the North sea properly. Does the Minister think that that is a good idea in principle? If she does, would she be willing to accept amendment 7 or a similar amendment to inform the activity of the OGA over the next few years?

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Alan Whitehead Portrait Dr Whitehead
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I thank the Minister for her response to my explanation of why the amendment is useful for the longer term operational strategy of the OGA. However, I gently suggest that she may have slightly misunderstood my earlier comments. I am certainly not saying that the OGA should be reviewed on an annual basis. I share the Minister’s concerns that were that to be the case, it could well stifle the OGA’s activities.

That is an operational point: how can the OGA best operate over a period of time and how can we make sure that it has the wherewithal to do so? It would have a negative effect to put its operations continually under the microscope, and could stifle its ability to do what we hope it will do best, as far as the future of the North sea is concerned.

We have to look back through the legislation to see exactly where the construction of the OGA comes from. The whole question of strategy arises from the amendment of the Petroleum Act 1998 by the Infrastructure Act to provide the principal objective. Interestingly, that measure refers to “collaboration among”—not regulation between—“the following persons”, and lists some consequences of the principal objective, including the

“development, construction, deployment and use of equipment used in the petroleum industry”.

In other words, under that objective, there is a fairly close relationship between the petroleum industry and the OGA.

That is a particular way of proceeding, and it is what is in the legislation, but it may not, as it turns out, be the best way for the future operation of the OGA. The authority could be carrying out its ongoing activities wonderfully, but be stifled by the way in which its powers and objectives have been set up. The review seeks not to run regular speed checks as the OGA goes down the road in the early stages of operation but to look at whether the vehicle in which it has been designed to travel is the best one. It would at the very least be prudent to take the opportunity to consider the situation one year into the OGA’s operation, to ensure that we have got it right, and it could be useful for the authority’s future, whereas longer-term review methods, undertaken too regularly, could cause operational problems.

I am happy to withdraw the amendment. I hope, however, that the Minister will consider carefully how the OGA has been set up. Can we be certain that the authority will be as fit for purpose in the future as we think it is today, and might there be mechanisms for reviewing that as the OGA undertakes its operations?

Andrea Leadsom Portrait Andrea Leadsom
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I think that the hon. Gentleman and I agree in principle—clause 17 was introduced because of the need for regular review—but we disagree about how soon the review needs to take place. It would be unsettling for the industry that supported the establishment of the OGA if within a year everything could change, so I feel that one year is too short a time. I am grateful to the hon. Gentleman for withdrawing the amendment.

Alan Whitehead Portrait Dr Whitehead
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I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 ordered to stand part of the Bill.

Schedule 1

Transfer of functions to the OGA

Question proposed, That the schedule be the First schedule to the Bill.
Alan Whitehead Portrait Dr Whitehead
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On the OGA’s functions regarding the disposal of gas by flaring, what does the Minister think is the best arrangement for the regulation of flaring and for ensuring that it is undertaken in the safest and most environmentally acceptable way, and in a way that is most conducive to the overall purpose of a platform? The schedule states:

“The OGA’s consent is required for natural gas to be disposed of (whether at source or elsewhere)…by flaring, or by releasing it unignited into the atmosphere”,

and so on.

The schedule also states:

“This section applies to all natural gas of the United Kingdom, whether obtained there or in territorial waters, or in areas designated under the Continental Shelf Act 1964”,

which suggests that the proposed new section applies to the flaring of all natural gas in the United Kingdom, whether onshore or offshore. I might not have read the provision entirely correctly, but if it does apply to all natural gas flaring in the United Kingdom in general, then the role of the Environment Agency in looking at how such flaring works might need to be added to the schedule, given the agency’s proper interest and indeed expertise, in particular in respect of the environmental considerations of flaring that under the schedule as drafted appear to be deputed entirely to the OGA.

I do not seek to overturn the schedule, because it is an important part of the process of getting the OGA under way, but that particular part of the proposed new section appears to be a lacuna on how the function is undertaken. Has the Minister considered, formally or informally, the role of the Environment Agency in the process? Might a function onshore also apply to a function offshore? I seek clarification from the Minister, so we may be as clear as possible that where flaring is undertaken it is done so with the best possible safety and environmental safeguards. Safeguards should also have a relationship to the purpose of the exploration or extraction in the first place.

Andrea Leadsom Portrait Andrea Leadsom
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I am grateful to the hon. Gentleman for raising the issue. As he is aware, although the Wood review looked only at offshore oil and gas, it acknowledged that there were synergies between offshore and onshore. We agree that there are such synergies. In particular, the licensing regimes, technologies and necessary regulatory expertise are all similar. We therefore decided that the OGA will take on a larger range of regulatory functions than originally envisaged by the Wood review.

The clause and the schedule provide for the transfer of DECC’s functions in relation to oil and gas to the OGA, covering offshore oil and gas licensing and regulation, but not health and safety or environment; onshore oil and gas licensing and regulation for England, but not health and safety or environment; carbon capture and storage; and gas storage and unloading. We will transfer the powers that at present lie with the Secretary of State and are exercised by the OGA as an Executive agency. As we have just discussed, an Executive agency has no separate legal identity and so exercises powers that are conferred on the Secretary of State. For the OGA to carry out its functions, the powers will therefore need to be transferred to it as a Government company through legislation.

The Secretary of State’s regulatory functions in relation to the environment will not be transferred, but will stay with DECC. The regulation of health and safety is undertaken by the Health and Safety Executive, and that will remain so. Powers will need to be transferred to the OGA so that it can fulfil its remit. Those include powers to award petroleum licences, issue consents for related activity and regulate third party access to upstream petroleum infrastructure.

With regard to the hon. Gentleman’s particular point, venting is agreed to under licence, but that is determined by safety reasons. Those functions will be under licence to the OGA—so it will take on some of those licensing functions.

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None Portrait The Chair
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With this it will be convenient to consider clauses 4 to 7 stand part.

Alan Whitehead Portrait Dr Whitehead
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I feel puzzled about some of the arrangements that are set out in these clauses, particularly the transfer of staff to the OGA from DECC, which is referred to in clause 4. It states:

“The Secretary of State may make… transfer schemes under which persons who hold employment in the civil service of the State become employees of the OGA”

—in other words, they are not civil servants. Under the clause, the Secretary of State may make a scheme that

“may (in particular) include provision that is the same as, or similar to, the provision made by the Transfer of Undertakings (Protection of Employment) Regulations 2006”.

That is puzzling, given that, in the way the arrangements have been set out in the clause, transfer of staff to the OGA is surely covered by TUPE regulations, and the terms and conditions should, certainly for a period, be similar to those that staff enjoyed under their previous arrangements.

To put in legislation that the Minister may make an arrangement similar to the provisions under TUPE suggests that the Minister has an opportunity at least to stray from TUPE provisions with regard to transfer of staff. I would welcome an indication from the Minister that my reading of the clause is perhaps a little over-suspicious and that the intention is to hold to TUPE as closely to possible on transfer of staff. That is obviously very important to an entire group of staff who have previously been employed by DECC and are now essentially, moving into uncharted waters in terms of their terms and conditions and future security of employment. Indeed, that is precisely why TUPE was put in place in the first instance. I would therefore welcome a statement by the Minister that she does not intend to try to drive a broad interpretation through the clause, to water down or, indeed, avoid the provisions of TUPE for staff undertakings.

There is also a small puzzle about the status that a staff transfer under clause 6 gives the pensions of those who are transferred. That is a little singular because, although the clause sets up the OGA as separate for the purpose of staff employment, the pension arrangements mean that the employees of the OGA are to be treated, for the purpose of paragraph 1 of the Public Service (Civil Servants and Others) Pensions Regulations 2014, as persons to whom the scheme applies. So staff who have transferred out of employment by DECC and into employment by the OGA—a Government company, as we have established, and nothing to do with the civil service—will nevertheless have access to civil service pension arrangements.

Personally, I welcome that idea—certainly the security that the staff who are transferred from employment by DECC will have in their future pension arrangements. It seems to me to be a very positive step for those staff; but of course the OGA will employ staff in the future who have never worked for DECC and will be entirely subject to whatever terms and conditions apply when they take up employment with the OGA. Nevertheless, under the clause, those people who come into the service of the OGA will also have access to civil service pension arrangements, whatever their pension arrangements prior to their coming to the OGA. Under those circumstances, I imagine that a number of staff would transfer in to civil service pension arrangements as they come to work for the OGA, having never previously worked for DECC.

That is not about individuals who had pension arrangements with DECC and retain them, but about people who gain new pension arrangements as they come to work for the OGA. It puzzles me a little, as I said, about the final status of those staff in relation to the civil service as a whole. They are not civil servants, but they are civil servants for the purposes of pensions. They may have never been civil servants, but they sort of become civil servants in retirement. Is that a constructional problem that the Minister considers may lurk behind this arrangement, good though I think it is for current staff? Does she think it needs any further examination to resolve it, so that there can be a clear line of employment, pension rights and pension arrangements subsequently?

Andrea Leadsom Portrait Andrea Leadsom
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I welcome the hon. Gentleman’s questions and I can assure him that it is our intention to leave staff pretty much unchanged. The legal advice on the application of TUPE was uncertain as to whether this qualifies as a relevant transfer, so, to ensure that TUPE-like protection is afforded to staff, a transfer scheme is required. As a result of the transfer of functions, civil servants currently employed by the OGA as an Executive agency of DECC, who perform relevant functions, will be required, unless they object, to transfer along with those functions to the new Government company. The purpose of the transfer scheme is to provide the same or similar protection to that afforded by the TUPE regulations. I hope that that reassures the hon. Gentleman.

I can also tell the hon. Gentleman that, in line with the handling of all machinery of Government-like changes and TUPE transfers, staff are not able to opt out of the transfer. However, for any individuals who might wish to return to a civil service Department, a provision is normally made for a period of 12 months after the transfer date to allow them to apply for another civil service position.

On the hon. Gentleman’s second, important point about pensions, clause 6 allows civil servants who transfer to the OGA continued access to either the principal civil service pension scheme or the new Alpha pension scheme, which was introduced in April 2015, and, in some cases, both schemes, depending on the date they joined the civil service and their anticipated date of retirement. It also ensures that non-civil servants who are recruited by the OGA in future will have access to the Alpha scheme.

The hon. Gentleman asked why we are allowing new joiners to have access to the civil service pension scheme. I am glad that he welcomes it, but he nevertheless asked whether that complicates things. I can tell him that the Department has used such an approach before. For example, the Energy Act 2013 added the Office for Nuclear Regulation to schedule 1 of the Superannuation Act 1972. The benefit of allowing new joiners to have access is that it will avoid having a two-tier workforce whereby new joiners work alongside existing employees, but with different pension benefits, and of course it encourages the recruitment of staff to the OGA.

Alan Whitehead Portrait Dr Whitehead
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I thank the Minister for that clarification. Although I appreciate that these matters are complex as far as TUPE is concerned, I welcome what I think I heard was the intention to stick as closely as possible to TUPE—

Andrea Leadsom Portrait Andrea Leadsom
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You did, yes.

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Alan Whitehead Portrait Dr Whitehead
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—in circumstances where there might be some grey areas as far as TUPE is concerned. I trust that the close operation of TUPE will be a considerable comfort to the people who transfer out of DECC, and a comfort in terms of continuity of service as far as future employees and pensions are concerned.

Question put and agreed to.

Clause 3 accordingly ordered to stand part of the Bill.

Clauses 4 to 7 ordered to stand part of the Bill.

None Portrait The Chair
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Before we come to clause 8, let me say that it is unseasonably warm in here, and if any Member wishes to remove their jacket, please feel free to do so.

Clause 8

Transportation and storage of greenhouse gases

Question proposed, That the clause stand part of the Bill.

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Matters to which the OGA must have regard
Alan Whitehead Portrait Dr Whitehead
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I beg to move amendment 8, in clause 9, page 6, line 17, at end insert—

Environmental considerations and climate change

The need for the OGA to address environmental considerations and to facilitate the pursuance of section 1 of the Climate Change Act 2008 in relation to relevant activities.”

This amendment would require the OGA to have regard to environmental considerations and climate change when exercising its functions.

None Portrait The Chair
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With this it will be convenient to discuss amendment 9, in clause 9, page 6, line 17, at end insert—

Hierarchy of matters relating to decommissioning

The need to re-use North Sea infrastructure for carbon capture and storage projects and marginal field extraction, where economically viable, to be considered prior to the decommissioning of such sites.”

This amendment would require the OGA to have regard to the hierarchy of matters relating to decommissioning when exercising its functions.

Alan Whitehead Portrait Dr Whitehead
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We now turn, in the sequence of clauses, to the matters to which the OGA must have regard. The Bill lists those as minimising future public expenditure; security of supply; and the storage of carbon dioxide—I believe that that provision was inserted in another place, and I am pleased that it remains in the Bill. The OGA must also have regard to collaboration, innovation and the system of regulation. There are therefore a number of key directions to the OGA about how it goes about its stewardship of the North sea and its regulation of the industry.

The amendments seek to add a couple of additional items to the list of matters to which the OGA should have regard. This is not about departing wildly from the list in front of us, but about how the OGA operates in its wider sense—that is, not only its stewardship of the industry and the North sea, but its proper concern with what is happening and will happen as far as North sea exploration and development is concerned, in the context of the wider concerns to which the UK should have regard. The two definitions that we wish to add to the list develop and round off that particular mission requirement for the OGA.

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Philip Boswell Portrait Philip Boswell
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Amendment 9 is essential both for the future of carbon capture and storage and to enable the more marginal fields to be harvested by smaller operators, which the Scottish National party sees as increasingly vital for the future of the industry. The hon. Member for Southampton, Test and the hon. Member for Norwich South spoke of previous short-termism in the industry and the need for a longer term vision, as pointed out in the Wood report. We completely agree with that and see that there is a requirement for a more holistic view with respect to management of oil and gas collection and transport infrastructure. We therefore support the amendment.

Alan Whitehead Portrait Dr Whitehead
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I thank the hon. Member for Coatbridge, Chryston and Bellshill for clarifying the SNP’s position on amendment 9. His support underlines why this is necessary for the longer term stewardship of the North sea. We are looking a little higher than the immediate issues that face the North sea, important though those are, and trying to ensure that, whatever may come its way and whatever its mix of jobs, production and facilities, it has a fully viable future. As we mentioned on Second Reading, although there are a lot of known knowns, unknown knowns, unknown unknowns and so on about the future of the North sea, what we do know is precisely the point that the hon. Gentleman made a moment ago—namely, it will be a future of smaller fields and, through collaboration and careful planning, of maximising best use of infrastructure for those fields to maintain their security and perhaps to start to develop different uses for the North sea, which in the very long term will provide substantial security and jobs and a vital national function for the UK.

The amendments are not about trying to cut off particular routes for the OGA—or, indeed, over-prescribe what the OGA should have regard to. I was disappointed that the Minister sought to suggest that the amendments should not be supported because they would require the OGA to do things beyond its remit and for which it would not have resources. The OGA would not be required by anything in the amendments to move beyond its overall resources or function, but they frame what the OGA needs to look at generally in regard to its business of stewardship. That of course means that the OGA has to look at its overall business within the context of its overall resources, and there will be things that the OGA will not be able to do, or be able to do only in conjunction with other bodies. Indeed, as the Minister pointed out, clause 10 gives the Government the power to undertake direction where necessary, if the Government consider there are particular circumstances wherein the OGA should do more or enter into areas of activity that it has not entered previously. That power is already there, and there are powers in the Bill for the Government to fund those additional activities as necessary.

The amendments are not about the daily management of the OGA and how it can go about its business. As the Minister rightly set out, there are already provisions in the Bill for allowing that management to be undertaken in conjunction with Government direction and OGA function. However, the fact that that is separate from the clause that precedes it points strongly to the idea that having a framework within which the OGA works is the best way to start the process of how the OGA functions on a daily basis for the future. Essentially, that is all these amendments seek to do—point the OGA in particular directions and inform its thought process and general decisions with regard to particular activities. They do not require the OGA to do anything particular in its daily activity, nor do they require it to acquire a whole series of new skills and arrangements as it goes about its task. They simply suggest that a framework should be put in place, after which the Government, particularly under clause 10, can look at whether the OGA in its daily operations is doing what they thought it should do in the first place.

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Directions: national security and public interest
Alan Whitehead Portrait Dr Whitehead
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I beg to move amendment 10, in clause 10, page 6, line 31, at end insert—

“(aa) Are necessary in order to inform the OGA’s role in developing and promoting carbon storage;

(ab) Are necessary to meet the terms of the Climate Change Act 2008 or European or international obligations on climate change”

This amendment would allow the Secretary of State to give direction to the OGA if the Secretary of State considers that these are necessary to inform the OGA’s role in developing and promoting carbon storage and/or to meet the terms of the Climate Change Act 2008 or any international obligation on climate change.

We now move to the area that the Minister alluded to in the debate on clause 9 on “Matters to which the OGA must have regard”: directions in relation to national security and public interest, which the Government may give to the OGA in the exercise of any of its functions. The clause lists various circumstances in which directions may be given. They are drawn fairly widely in that the directions

“are necessary in the interests of national security, or...are otherwise in the public interest.”

However, although the clause gives the Secretary of State fairly wide powers to provide directions to the OGA, it does not include the issues to which we adverted in the discussion on the previous clause, which is the question of what happens to the OGA’s role in developing and promoting carbon capture and storage, and how the OGA meets the terms of the Climate Change Act 2008.

Clause 10 could be strengthened by clarifying the circumstances in which direction might be given, bearing in mind that the issues are wider and more long term than those on which the Bill currently provides guidance to the OGA. It is now rather more important to include in the Bill guidance and clarity on where directions are necessary, given what occurred on the previous clause, where, despite our best endeavours, the matters to which the OGA must have regard stayed as they were, with what I suggest is a less than perfect regard for what we might call wider horizon issues as far as the OGA’s function is concerned.

The amendment explicitly underlines the directions

“to inform the OGA’s role in developing and promoting carbon storage”,

and states that they are necessary

“to meet the terms of the Climate Change Act”.

That provides the right boundaries and the framework in which those Government directions might be undertaken. That is why we have tabled the amendment.