My Lords, before I speak to the government amendments to this part of the Bill, I thank noble Lords and others for their valuable contributions to the Bill.
Climate change is a threat to the environment, to our security and to our economic prosperity, and we are determined to tackle it. The Government will decarbonise the economy and will do so cost-effectively. A global deal is the only way both to deliver the scale of action required and to drive down the costs of climate action, so Paris this December is the opportunity to open up new avenues for low-carbon industries. The Government’s energy priorities are clear: keeping bills as low as possible for families and businesses; and powering the economy while decarbonising in the most cost-effective way.
Today, we are discussing amendments to the part of the Bill dealing with the Oil and Gas Authority. The United Kingdom oil and gas industry is of national importance and makes a substantial contribution to
the United Kingdom’s economy, energy security and employment. This is compatible with our climate change targets. The 2011 carbon plan noted that Britain will still need significant oil and gas supplies while we decarbonise our economy and transition to a low-carbon economy. Any oil and gas that we do not produce ourselves has to be imported, resulting in additional transport costs and emissions. Maximising recovery, in terms of increasing both the levels and efficiency of production of the United Kingdom’s oil and gas, will help maintain security of supply as well as boost growth and jobs.
I was pleased to host a meeting in the House a couple of weeks ago with the noble Baroness, Lady Worthington, and the noble Lords, Lord Oxburgh and Lord Howell, to talk about the Oil and Gas Authority and its role in relation to carbon storage. We were joined by Professor Stuart Hazeldine of the University of Edinburgh and Andy Samuel, chief executive of the Oil and Gas Authority. This was an informative and useful discussion. Professor Hazeldine’s immense knowledge of carbon capture and storage was clear, and it was also clear that Andy Samuel, his team at the Oil and Gas Authority and the industry have CCS very much in mind as they plan for the future. Indeed, Andy Samuel committed that CCS will feature across the Oil and Gas Authority’s sector strategies.
There is a developing consensus on how the OGA will contribute to carbon capture and storage. I hope that we can continue this engagement and that through a collective effort we can drive this technology towards commercial implementation. We shall come on to talk about carbon capture and storage later today.
The Bill is consistent with the Government’s aims on climate change. We are committed to meeting our target to reduce greenhouse gas emissions by at least 80% by 2050, and it will be a priority for this Government to achieve an ambitious global deal on climate change. Once again, I thank noble Lords and others who have contributed to the Bill so far, and I look forward to a good debate today.
I now speak specifically to the first group of government amendments, which make provision for the transfer of staff and property to the Oil and Gas Authority and amend the schedule to the Bill in respect of the MER UK strategy and decommissioning. Amendment 1 amends Clause 2, which relates to the transfer of functions to the OGA, so that it is clear that regulations may make provision so that anything done by or in relation to a Minister in connection with any functions transferred is to be treated as done by the OGA. Because Amendment 3 confers on the Secretary of State the power to make the transfer scheme for the transfer of property rights and liabilities, the amendment makes the power in Clause 2 consistent with the transfer scheme power. It also makes provision so that it is clear that regulations made by the Secretary of State which are consequential on the transfer of functions may include provision for the continuation of legal proceedings. This mirrors the provision contained in the transfer scheme for property rights and liabilities.
Amendment 2 ensures that the definitions used in Clause 2 also apply to the new clause inserted by Amendment 3. Amendment 3 introduces a power for the Secretary of State to create transfer schemes enabling
the transfer of property rights and liabilities from the Department of Energy and Climate Change to the OGA. This will enable property, including intellectual property, to be transferred to the OGA. It will also enable rights and liabilities under contracts to be transferred to the OGA. This is a standard provision where a new body is being established to which functions of the Secretary of State will be transferred. The transfer scheme will not cover the transfer of statutory functions from the Secretary of State to the OGA or functions under petroleum licences, for example. These functions will be transferred by way of regulations under Clause 2.
Amendment 4 introduces a general power for the Secretary of State to create transfer schemes to enable the transfer of staff from the Department of Energy and Climate Change to the OGA. As a result of the transfer of functions, civil servants currently employed by the OGA as an executive agency of DECC performing the relevant functions will be required, unless they object, to transfer along with those functions to the government company. We are committed to protecting staff conditions, and the transfer schemes will therefore ensure the same or similar protection to that afforded by the TUPE regulations. OGA management will work closely with the relevant unions and keep staff informed as the transfer schemes are developed. These transfer schemes will ensure that the OGA has the necessary skilled and experienced staff to perform its functions as an independent regulator. In addition to transferring existing staff, the OGA is conducting an extensive external recruitment campaign to ensure that the organisation has the right level of skills and expertise to perform its role as a more robust and proactive regulator.
Amendment 5 is to enable a scheme made by the Secretary of State for the transfer of property rights and liabilities or staff to the OGA to be modified, subject to the agreement of the person or persons affected. It also ensures that certain incidental, supplementary, consequential, transitory and transitional provision can be made in those schemes. This is a standard provision to be included in a power to make transfer schemes of this nature. It ensures that transfer schemes may be modified—for instance, where particular members of staff leave all new contracts are entered into in the transitional period. It also clarifies that the schemes may be detailed and make provision specific to individual cases, such as staff members with specialist allowances or the details of particular IT or property contracts.
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Amendment 6 will allow 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 when they joined the Civil Service and their anticipated date of retirement. This is part of our commitment to ensuring that staff retain their current terms and conditions on transfer to the OGA. The amendment will also ensure that non-civil servants recruited by the OGA have access to the alpha scheme in future, which will avoid having a two-tier workforce, whereby new
joiners work alongside existing employees but with different pension benefits, with a view to encouraging recruitment of staff to the OGA.
Amendments 8 and 9 amend the schedule to the Bill, reinstating the obligation on the Secretary of State to act in accordance with the strategy to maximise economic recovery of UK petroleum when exercising her functions under Part 4 of the Petroleum Act 1998, which sets out provisions on the abandonment of petroleum infrastructure, in so far as they relate to the reduction of costs, and slightly tweak the scope of those obligations. Section 9B(b) of the Petroleum Act 1998 currently imposes a duty on the Secretary of State to act in accordance with the strategy when exercising functions under Part 4 to the extent that they concern reduction of the costs of decommissioning. However, paragraph 3 of the schedule to the Bill as introduced amends Section 9B so that the duty is transferred to the OGA on Royal Assent.
It is of vital importance that all parties to the decommissioning process, including the Secretary of State and the OGA, act in accordance with the strategy when carrying out their respective roles. As such, to ensure that the Secretary of State remains under an obligation to act in accordance with the strategy, Amendment 9 introduces a new section which reimposes the duties with minor modifications. These amendments also slightly modify the duty that will be transferred to the OGA under Section 9B(b) to ensure that the OGA’s duty to act in accordance with the strategy when exercising its new functions under Part 4 is not limited to the reduction of costs but will include all the aspects of its new functions under the revised Part 4. I beg to move.