I am grateful to my hon. Friend for pointing that out. As I have said, the proof of the pudding will be in the eating, so we will wait to hear what the Minister says in response. Given that the Bill
has further stages to go through before Royal Assent—I am glad to see the hon. Member for Brecon and Radnorshire (Roger Williams) nodding—I think that it is the Opposition’s duty to press the Government as much as possible, because it is important that Parliament does the right thing. Even if the Government do not make concessions at this stage, there will be an opportunity in the other place to put more flesh on the Bill and to make it much more fit for purpose. We will wait to see what further progress we can make.
I will speak briefly to new clause 6, which stands in my name, because I realise that many Members wish to speak. I want to introduce my comments by considering the issue of contaminated land. It is clear to me from the work I have done recently that there is a problem with how we deal with contaminated land. The current regime and the funding for it, particularly that which involves local authorities, is not fit for purpose, and it needs to be. We are dealing with a huge amount of legacy problems. I do not want the Government to set up a whole new regime without giving due consideration to the preventative measures that would need to be put in place in relation to fracking and shale gas extraction.
Madam Deputy Speaker, I am sure you would rule me out of order if I were to speak this evening on whether we should have fracking or shale gas extraction. The point I want to make is that if it is to go ahead, with the enormous tax concessions it currently has, there needs to be a proper regime in place that relates to water, water quality and concerns about contamination. It is for that reason that I have tabled new clause 6. I acknowledge that, were the Government to act on the concerns I am raising, there would be need to be consequential amendments to paragraph 9 of schedule 20 to the Environmental Permitting (England and Wales) Regulations 2010, so I do not want the Minister simply to claim on a technical point that the new clause is unworkable because it is not thorough in that regard.
My understanding is that the principles that the polluter should pay and that prevention is much better than an end-of-pipe solution mean that we should be dealing at this stage with the procedures that need to be put in place to prevent contamination of water as a result of fracking. I point out that the new clause is supported by many non-governmental organisations working on the front line to deal with that, including the Royal Society for the Protection of Birds, the Angling Trust, the World Wide Fund for Nature and the Salmon & Trout Association.
New clause 6 would amend the Environmental Permitting (England and Wales) Regulations 2010 to introduce a liability guarantee to ensure that fracking companies have the funds available to pay the clean-up costs should an accident occur during the fracking process. I think that is eminently sensible. A similar amendment was tabled in Committee and briefly debated, as my hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty) just pointed out, but it got nowhere. I believe that it was important to table it again for further consideration, mainly because the Minister’s response in Committee did not offer adequate assurances that the public purse would not be hit should an accident occur.
As I understand it, the Minister’s main argument was that the existing regulations on the statute book already ensure that operators are technically and financially
competent to carry out fracking activities. However, a financial competence check is carried out only in specific circumstances, and competence is not the same as securing a form of financial provision or guarantee for long-term environmental liabilities. In other words, it does not guarantee that a company has put in place funding or insurance for dealing with an accident; it only provides a snapshot in time of its financial situation. I am reminded of the complex discussions there have been about the ownership of football clubs and where due diligence should lie.
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It is vital that anyone looking to carry out fracking should have the finances in place to pay for any remedial work that is needed. Tests for technical competence, which the Minister also mentioned in Committee to reassure Members, are also limited. Even the most technically competent operator might not be able to avoid an environmental impact as a result of its operation.
I understand that the hon. Member for Brecon and Radnorshire made the point in Committee—I was not party to those discussions but read the reports assiduously—that the amendment was intended simply to ensure that there is a plan in place for the low-probability but high-risk scenario of a pollution incident occurring. Although a stringent and well-enforced regulatory regime will mitigate risk, it cannot eliminate it altogether. It is for that reason that we need to look seriously at making that amendment before the Bill receives Royal Assent.
The importance of protecting ground and surface water must not be underemphasised. In the midlands—I represent a midlands constituency—40% of public water comes from ground water. The figure is even greater—more than 70%—in the southern regions of England. Not only do we depend on that resource for drinking water, but farmers and industries across the country depend on healthy aquifers, which are estimated to be worth £8 billion to the economy. We must look at this in the round, because we are talking about the food industry and food security. Are we really going to risk contaminating all that simply by failing to put proper safeguards in place when introducing legislation?
The Government must therefore put in place adequate provisions to ensure that companies are able to pay for the clean-up of a contamination incident. There is much peer-reviewed evidence to suggest that that is something we should be prepared for. For example, a study in the USA last year examined stray gas concentrations in 141 drinking water wells near Marcellus shale gas extraction sites in Pennsylvania. It detected methane in 82% of drinking water samples. Average concentrations were found to be six times higher for homes within 1 km of natural gas wells.
Some would argue that our regulatory regime is much more stringent than that in the US and that we can therefore prevent such accidents from occurring. Although it is true that the existing regulatory regime, if properly implemented and enforced, should mitigate most risk, that does not detract from the need for the new clause. Even if liability can be proven, there remains the risk that companies could go bankrupt, leaving taxpayers and water companies with the clean-up costs.
The precedent for that has already been set. I note that several Members present this evening represent former coal mining constituencies. Those of us who
have dealt with the legacy of mining pollution will know that the cost of clean-up often falls on the taxpayer. In 1994 it was estimated that abandoned coal mines had polluted more than 400 km of rivers. Treatment schemes and remedial works undertaken by the Coal Authority have helped to protect the environment and people, but at a cost of tens of millions of pounds a year to the taxpayer, not the polluter. It is vital that we follow the principle that the polluter pays.
There is also concerning evidence that regulation is not being adequately enforced. I understand that at Preese Hall, the only site in the UK to be hydraulically fractured to date, the Environment Agency did not issue the environmental permits that were required. At the same time, the agency has committed to a dramatic reduction in the time it takes to issue permits. Streamlining regulation and issuing permits in this way is all well and good in some circumstances, but as we are dealing with a new technology in the UK with unknown risks, we should not be looking to streamline regulation until we can be certain that proper procedures are being followed.
The new clause would ensure that the fracking companies that will benefit from the most generous tax regime in the world for this industry have the funds available to pay for the cost of clean-up should an accident occur. Since we are repeatedly reassured that the risk of an accident occurring is minimal, why should we be concerned that the new clause would impose unreasonable costs on the industry? If there is a minimal risk, there is not a huge likelihood that it will be needed, but it would ensure that in the event of an accident the industry did not impose unreasonable financial and environmental costs on the public.
I wish briefly to refer to aspects of the Flood Re scheme and the amendments that relate to it. The adaptation sub-committee, which advises the Committee on Climate Change, has, through its chairman, Lord Krebs, made various points about the importance of getting the scheme absolutely right at this stage rather than later on. In a letter that he wrote to the Secretary of State for the Environment, Food and Rural Affairs about the awareness of flood risk and the importance of taking account of rising flood risk levels, he said that there are at least five issues that the Government need to address but have not yet done so. Given that, as we heard earlier in the Secretary of State’s statement on flooding, we know that we are now going to get events of this kind far more regularly, it is incumbent on Parliament to make sure that the insurance scheme that is being introduced is absolutely fit for purpose.