HL Deb 26 July 1999 vol 604 cc1343-9

1A Line 34, after subsection (4) insert—

("(4A) The regulations made under this section and section 2 of this Act shall make provision for appeals to lie to a tribunal independent of the Secretary of State from decisions, authorisations, prohibitions, variations and enforcement actions of the Secretary of State or any agency acting on his behalf,").

6.15 p.m.

Lord Jenkin of Roding

My Lords, I beg to move Amendment No. 1A as an amendment to Commons Amendment No. 1. I tabled this amendment because of an undertaking given by the noble Lord, Lord Whitty, at Third Reading. I shall come to that in a moment. In discussing draft regulations with the generality of industry affected by the Bill, the DETR has seen fit to include in such regulations an effective appeals procedure. The DTI, which has been consulting with the offshore oil and gas industry on the different set of regulations which will implement the Bill so far as that industry is concerned, has so far shown no inclination to include an appeals procedure in its regulations.

Perhaps I may remind the House of the huge importance to this country of the oil and gas industry. I cannot do so with better words than those used by the Minister for Energy and Industry, Mr John Battle, when he addressed the All Party Group on Oil and Gas last month. He stated: The exploitation of the UKCS"— that is United Kingdom Continental Shelf— is one of the great British commercial and technological success stories. In a hostile physical environment, UK technology and teamwork have created a highly-productive oil and gas province which has kept the UK self-sufficient for some 20 years. It provides around 30,000 jobs offshore and many more onshore in support of these, not just in Scotland but in East Anglia. North East England", and, the honourable Member added, in his own constituency.

Last year saw combined oil and gas production (132 million tonnes of oil and 95 billion cubic metres of gas) running to record levels. Over 200 offshore fields are currently in production". By any standards, this is a hugely important industry.

My second point is that the industry has at no point quarrelled with the objective of the Bill—and, I would add, with the objective of the Commons amendments; that is the new clause which the Minister has just moved—as being appropriate to safeguard the environment. It has been perfectly prepared to accept the new regulations, many of which replace existing statutory provisions (I shall not rehearse old arguments) because it recognises that that is necessary both to ensure high standards of environmental protection and to comply with the European directive.

The industry is, therefore, nonplussed and somewhat disturbed to find that in the draft regulations upon which it has been consulted, so far there is no provision for an appeal against any ministerial determination, and so on, as I have set out in my amendment.

I find this all the more surprising because at Third Reading my noble friend Lord Renton moved an amendment in which he sought to write into the Bill the existing statutory provision contained in primary legislation which set out in some detail the appeals procedure. The noble Lord, Lord Whitty, in reply stated: Whatever we do, I can give a categoric assurance that operators will have rights of appeal under the system that we now propose or any future system were we minded to make any further alteration".—[Official Report, 20/5/99; col. 434.] As regards the draft regulations with which his department is concerned, that is being fulfilled; but, where is the corresponding regulation from the DTI in relation to the offshore oil and gas industry? There must be some explanation. The industry has so far complained that in the regulation with which it is concerned there is no provision for appeal. I have to ask the Minister, why not? Is it intended that there should be a new draft or an addition to the existing draft to fulfil his own very clear and specific pledge given only last May?

I do not want to dwell on the fact unnecessarily, but from the industry's point of view I am sure that the entire House recognises how important it is for there to be a proper appeals mechanism against the regulation. I refer to both this new clause and, as my amendment states, Clause 2 of the Bill—the general operating provisions. We have established that they apply to the offshore oil and gas industry, as they apply to the rest of industry. That was made clear by the Government at the earlier stages of the Bill. That is the reason why I have included Clause 2 in my amendment to this Commons amendment.

I hope that this time I shall be vouchsafed a proper explanation of what is going on and told when we can expect the offshore oil and gas industry to be accorded the same rights of appeal as the Minister's own department is now prepared to give to anybody else.

Moved, That Amendment No. 1A, as an amendment to Commons Amendment No. 1, be agreed to.—(Lord Jenkin of Roding.)

Lord Renton

My Lords, having spent two of the most interesting years of my life as Parliamentary Secretary to the Ministry of Fuel and Power—although that was many years ago and there have been many changes since then—I agree with my noble friend Lord Jenkins of Roding that the oil and gas industries are vital to this country. We should legislate with accuracy and clarity and avoid confusion.

I gladly support the amendment, in spite of the fact that my noble friend is taking advantage of a power to make regulations. That is an overriding power in the Bill. We have complained about it and at this stage we cannot avoid it.

Noble Lords should bear in mind the implications for the drafting of legislation. The Bill replaces 28 clauses of the Environmental Protection Act 1990 and has various vital cross references to the Control of Pollution Act 1974. With regard to the amendment, the provisions of the Merchant Shipping Act 1995 also have to be borne in mind. God help those who have to construe the legislation and apply it for practical reasons—not just for business reasons, but to ensure this country's supply of gas and electricity without running up against legislative problems. It is not good enough. This is not the way to legislate.

The Government should try to mitigate the situation they have created. The amendment would help by adding a new subsection dealing with the way in which the regulations are to be made.

Lord Dixon-Smith

My Lords, there are two aspects to the debate. The first is the amendment to Commons Amendment No. 1, moved by my noble friend Lord Jenkins of Roding. The second is the more general fact that we have known all along that the Bill depends entirely on regulation. Although some regulation is in draft, it will not be possible for ordinary people, let alone lawyers, to interpret the Bill in relation to their circumstances until the regulations are published and passed by both Houses of Parliament. However, that is a secondary issue hanging on the amendment, which I support.

It is unfortunate that a gap appears to be opening between two government departments on the treatment of appeals. The noble Lord, Lord Whitty, has been very helpful and I understand that his department is providing an adequate mechanism. However, the Department of Trade and Industry, which deals with the offshore oil industry, is adopting a different approach. I acknowledge that I may have been unjust to that department. It may not be aware of the problem, or the difficulty could be something even worse, such as the person responsible for the promulgation of draft regulations being ill, although that is a somewhat feeble excuse, because none of us should be indispensable. If one person cannot carry out a task, somebody else should be available and competent to deal with the matter, particularly in government.

The question of appeals is important. The Minister has accepted the principle and I look forward to his comments, although I understand his possible embarrassment at having to answer for another department.

I also look forward to some reassurance from the Minister on the fact that the Bill is wholly dependent on the passing of regulations. The Bill is a meaningless jumble of words without the regulations that are needed to back it up and give it the force of law, or at least the force of something that can be interpreted by those who have to comply with it. We have protested all along that we are passing a shell. Industry and commerce cannot implement a shell. They can only implement something that has been written down and is capable of precise interpretation. I hope that the Minister does not mind my repeating the fact that we need more than just the draft regulations. When we come back in the autumn we shall need regulations that we can approve, for the sake of industry and commerce throughout the country. Without those regulations they are being invited to fly blind on a dark night in a thick fog.

Baroness Hamwee

My Lords, I wish to ask one question arising from the Government's amendment. The point was covered in another place, but I am not entirely clear about the answer. The amendment refers to sections of the Merchant Shipping Act 1995, which it describes as, powers to prevent and reduce pollution, and the risk of pollution…following an accident". A question was asked in the other place about whether the powers are intended to be exercised only in the immediate aftermath of accidents. The Minister, in the Standing Committee, said: I should point out that the health and safety regulations normally provide for the period leading up to an accident. The aim of those regulations is the prevention of accidents. If, despite all best plans and preparations, an accident occurred, the powers in new clause 2 would come into operation".—[Official Report, Commons Standing Committee A; 22/6/99; col. 108.] It is not clear to me whether the powers that are the subject of the new clause can be exercised in a precautionary fashion. The way in which the Minister answered in another place seemed to suggest that they would come into play only after an accident had occurred. I hope that the Minister will give an assurance that the new powers will allow precautions to be taken to prevent pollution if there is an accident.

6.30 p.m.

Lord Whitty

My Lords, it causes me no embarrassment to speak for the Department of Trade and Industry as well as the Department of the Environment, Transport and the Regions. It is only a minor additional burden. I hope that the whole House is clear about the importance of the oil and gas industry to the economy and well-being of this country. It is central to our future and there is nothing in the Government's intentions that would deliberately or inadvertently lead to any unnecessary restriction beyond what is needed for safety and environmental reasons. Indeed, the oil and gas industry, as the noble Lord, Lord Jenkin, indicated, has been supportive of the objectives of this Bill and the regulations which are now in draft relating to the offshore installations.

Amendment No. 1 would apply beyond the offshore area, if taken literally, and that would clearly not be appropriate, as the noble Lord acknowledged, because in general we have a perfectly adequate appeals process already in place under the 1990 Act which we intend to carry forward unaltered into the new regimes set up under this Bill. We debated this process during the course of the Bill and the Bill was not amended in another place.

In brief, those provisions provide that an operator may appeal to the Secretary of State against a decision of the regulator. If he wishes, the operator may go on to apply for judicial review of the Secretary of State's decision. That is fairly straightforward. It is fair, efficient and there is no need to change it. If we were to adopt the amendment proposed across the board, it would undoubtedly add an unnecessary and confusing bureaucratic third stage. We could end up with a decision by the regulator being subject to an appeal to the Secretary of State. His decision might then be appealed to the tribunal. Even after all that there would be the possibility of judicial review. That is not a sensible regime. The existing one is appropriate and will be carried forward.

In relation to the offshore regime the position is slightly different. There the powers will normally be exercised directly by the Secretary of State. In the case of the recommendations of the Donaldson Report, it is clearly impossible for the emergency operational decisions of the Secretary of State's representative to be scrutinised by a tribunal. The Donaldson Report recommended that a Secretary of State representative (a SOSREP) would have an operational support group comprising a small number of specialists, but it emphasised that the Minister or others must not interfere or give the impression of being in charge. The report said: SOSREP may be called upon to make extremely difficult and potentially controversial decisions and he will he unable to make these dispassionately, as he must, if he is looking over his shoulder and guarding his back". Should any of his decisions be called into question, then the regulations, which will be based on the existing merchant shipping legislation, will provide for a formal compensation mechanism.

As for the wider powers in the Bill relating to offshore activities, it is recognised that care needs to be taken to ensure that there are appropriate and impartial avenues of appeal or review both on matters of law and on matters of fact. Indeed, the oil industry's response to the consultation draft showed its concern in this area. The DTI is still considering the appropriate mechanism to put into the regulations. Though a final conclusion has not yet been reached, an ongoing tribunal is unlikely to be the solution. Nevertheless, the regulations will have to consider a process and that additional provision will be included in the next round of DTI regulations, which it is the intention to issue in the next month or so.

As noble Lords will recall, the regulations will now be subject to the affirmative procedure in this House and another place. We undertook, in response to anxieties expressed here and in your Lordships' Delegated Powers and Deregulation Committee, that any subsequent amendments to the sort of provisions set out in the 1990 Act would also be subject to affirmative procedure. That will include changes to the appeals procedure currently set out in the 1990 Act or any subsequent change in specific offshore regulations. We are therefore retaining a parliamentary control which will not saddle the industry with anything inflexible and nevertheless give it grounds for appeal.

I understand the general objection of the noble Lord, Lord Dixon-Smith, to putting this provision into regulations rather than on the face of the Bill. We have been round that circle a good number of times and I doubt that we will agree tonight. Nevertheless, it is clear that the general appeals procedure applies in the regulations which are already in the Bill and there will be a parallel procedure in the DTI's regulations regarding offshore installations.

In response to the question of the noble Baroness, Lady Hamwee, the scope of the powers included here cannot be used prior to an accident. The powers of the Health and Safety Executive and regulation of the licence are protection against the onset of an accident and therefore are not covered by these new powers. Indeed, the Donaldson Report did not recommend prior protection being covered by these powers. Statutory and other provisions spell out the responsibilities of the operator in respect of the situation prior to an accident and the situation post-salvage, after an accident. Those situations are not altered by our adaptation of the Donaldson provisions into the regulations.

I hope that I have said sufficient to convince the noble Lord, Lord Jenkin of Roding, that in practice the procedure will lead to the DTI adopting the precedent set by the DETR.

6.30 p.m.

Lord Renton

My Lords, the Bill cannot come into operation until the regulations mentioned in the new clause, and those in Clause 2 of the Bill, have been approved by both Houses of Parliament. How soon is that likely to be? Until then the Bill will be a dead letter.

Lord Whitty

My Lords, as I said, the regulations on the general part of the Bill are extant and a number of your Lordships will have seen them. The draft regulations in relation to the offshore position will be published in the next month and we expect the full process to be completed within three months. The Bill will be on the statute book, it is hoped, prior to that and we will therefore have fulfilled our commitment in relation to the EU dimension to transpose the legislation by 30th October, provided your Lordships agree my position tonight.

Lord Jenkin of Roding

My Lords, this Bill started off on its stony passage to reaching Royal Assent with perhaps the most damaging report the Delegated Powers and Deregulation Committee has ever produced. And here we are, at the final stage in this House considering the Commons amendments and we still find ourselves complaining bitterly that we are having to examine this Bill without some essential pieces of information.

The noble Baroness on the Front Bench shakes her head. But nobody has seen a draft of the measures of appeal that her noble friend said a moment ago were under consideration by the department.

Baroness Farrington of Ribbleton

My Lords, for the record, I was not shaking my head; I was losing my spectacles.

Lord Jenkin of Roding

My Lords, I hope the noble Baroness has replaced her spectacles satisfactorily, but she certainly misled me.

I accept that the noble Lord, Lord Whitty, in all good faith is assuring us that there will be an appropriate right of appeal for the companies of the industry affected by this legislation. I accept entirely the points he made about the specific application to this clause—of course we cannot have appeals taking place if emergency action has to be taken in the case of a serious accident.

But I am sure the noble Lord realises the procedural constraints that were upon me in deciding how best to raise this matter at this final last gasp of the Bill. The only thing I could do was seek to amend a Commons amendment. No other amendment would be appropriate, so I have done that here. It is obviously in order because I have been allowed to table and speak to my amendment.

We still do not know what the right of appeal will be. The Minister made it clear that it will not be the same as the right that applies to the generality of industry. The particular circumstances and statutory framework of the offshore oil and gas industry may make that inevitable, but I protest that we are asked to approve amendments without that crucial information. The Minister may not have taken part personally in the negotiations with the oil and gas industry but I am sure that his colleagues in the DTI have told him that there have been lengthy negotiations and that the question of appeal has been raised again and again, yet still we do not know what is to happen.

This is the last chapter in what has been one of the most chequered pieces of legislation introduced by any government for many years. Obviously it is not appropriate to divide the House at this stage. I am sorely tempted but I fear that other distractions may make doing so rather pointless. In the circumstances, I have no option but to beg leave to withdraw the amendment; but I tell the Government Front Bench that I do so in a spirit of considerable protest.

Amendment No. 1A, as an amendment to Commons Amendment No. 1, by leave, withdrawn.

On Question, Motion agreed to.