Draft Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) (Amendment) Regulations 2014
The Committee consisted of the following Members:
† Bain, Mr William (Glasgow North East) (Lab)
† Blackman-Woods, Roberta (City of Durham) (Lab)
† Boles, Nick (Parliamentary Under-Secretary of State for Communities and Local Government)
† Colvile, Oliver (Plymouth, Sutton and Devonport) (Con)
† Cox, Mr Geoffrey (Torridge and West Devon) (Con)
† Cunningham, Sir Tony (Workington) (Lab)
† Freer, Mike (Finchley and Golders Green) (Con)
† Holloway, Mr Adam (Gravesham) (Con)
† Jones, Susan Elan (Clwyd South) (Lab)
† Leech, Mr John (Manchester, Withington) (LD)
† Lloyd, Stephen (Eastbourne) (LD)
† Luff, Sir Peter (Mid Worcestershire) (Con)
† O'Donnell, Fiona (East Lothian) (Lab)
Pearce, Teresa (Erith and Thamesmead) (Lab)
† Perry, Claire (Devizes) (Con)
† Ruane, Chris (Vale of Clwyd) (Lab)
Simpson, David (Upper Bann) (DUP)
† Stevenson, John (Carlisle) (Con)
David Slater, Committee Clerk
† attended the Committee
Seventh Delegated Legislation Committee
Wednesday 5 February 2014
[Jim Sheridan in the Chair]
Draft Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) (Amendment) Regulations 2014
2.30 pm
The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles): I beg to move,
That the Committee has considered the draft Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) (Amendment) Regulations 2014.
It is a great pleasure to serve under your chairmanship, Mr Sheridan, in consideration of this detailed but important matter.
The draft regulations laid before the House on 18 December 2013 amend the Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) Regulations 2012. If approved by the Committee and in another place, the regulations will come into effect later this month.
The purpose of the draft regulations is to clarify how to calculate the level of fees payable by an applicant for proposals for oil and gas extraction. The coalition Government believe that gas, alongside low-carbon technologies, will continue to play an important role in our energy mix in the coming decades, as the country moves towards a low-carbon economy.
It is important for all of us to recognise that this country has extracted onshore oil and gas for many decades. Production continues to take place in a number of areas throughout the country under robust legislation to ensure that extraction is carried out in a responsible, safe and sustainable way, and with few instances of major local objections. Shale gas specifically has the potential to provide the UK with greater energy security, growth and jobs. As the industry develops, the Government want to ensure that an effective, predictable and locally led planning system is in place.
I want to be clear that the draft regulations are only intended to clarify one narrow, but important point of law, but let me first put in context the scale of the changes that we are proposing today. The changes will affect a little more than 30 of the 450,000 applications for planning consent made in England this year. Statutory planning functions are not only financed through the fees set, but subsidised by Government grant and locally raised revenue. Our approach to setting fees in England is that they are set nationally and grouped into broad categories such as housing, business and commercial, and onshore oil and gas, approximating to the amount of work involved.
The fee is based on the average cost of determination across all local authorities in England. The principle underlying the planning fee regime is that would-be
applicants should meet the majority of the costs incurred by planning authorities in determining planning applications. Even so, some local authorities may rely more on public sector funds than others to fund the planning services provided.Existing departmental guidance dating back to 1992 makes it clear that the Government’s long-standing intention in relation to oil and gas applications fees is that they should be calculated on the basis of the area of the surface works only. That is also a practice employed by authorities for many years. However, according to the explanatory note, the regulations refer to
“the land to which the application relates”,
or, in other words, to the whole development, including underground works.
Until relatively recently, the tension between the regulations and the guidance has not been a practical concern. In recent months, however, with new technology allowing for horizontal drilling, including the prospect of hydraulic fracturing of shale, we have become aware of questions on the issue from the sector and local authorities. We know of a couple of authorities that are charging a larger fee than we intended.
The simple purpose of the draft regulations is to clarify the law beyond doubt. Regulation 2 provides that a fee is not payable for any part of an oil or gas development that takes place underground, if there is no oil or gas development on the surface directly above such operations.
We recognise the confusion and uncertainty about how to interpret the term
“land to which the application relates”
for oil and gas applications. That is especially so when showing the extent of such proposals on a location map. It is important that the extent of underground development is indicated on such maps. It is also essential that the planning permission indicates where the underground development is allowed to take place. Our national planning practice guidance will provide additional advice on what local authorities and local communities can expect to see.
Sir Tony Cunningham (Workington) (Lab): I wonder whether this change will affect manorial rights.
Nick Boles: The hon. Gentleman asks a good question, and I hope that he will bear with me if I make a little more progress in my speech, to give myself the opportunity for a little in-flight refuelling on what is a very good question to which I cannot possibly provide him answer right now.
Sir Tony Cunningham: I would be happy if the Minister wrote to me.
Nick Boles: I would be happy to do that, thank you so much. That was I think what is known as a googly in the profession that Mr Pietersen has been so sadly deprived of the opportunity to take further part in.
I am fully aware that six of the seven local authorities that responded to our consultation, as well as several other mainly individual responses, were not in favour of the changes. That is understandable. I can assure the Committee that we carefully considered the nature and impact of those responses before we decided to press ahead with our proposals. However, we have listened to the concerns raised and have taken further steps to help planning authorities.
Regulation 3 provides for application fees to rise by 10% for all oil and gas applications. The UK onshore oil and gas industry, which represents the majority of onshore operators, offered to increase the level of fees by that amount, in recognition of the increased public scrutiny of oil and gas applications.
Planning fees are not the only way to support planning authorities to process an application for oil and gas. The Government strongly encourage pre-application discussions between planning authorities and developers. Not only can those discussions deliver better outcomes but, as a discretionary service, the planning authorities can also charge for them.
The Committee may be aware that the UK onshore oil and gas association has made a commitment to extensive pre-application discussions for all proposals involving shale. That can only help local authorities by identifying, understanding and seeking to resolve issues associated with any application, and can happen to other oil and gas proposals as much as to housing and retail proposals. That approach can significantly cut down the resource needed to process a planning application, if most or all of the issues are dealt with before the application is formally submitted. Furthermore, mineral planning authorities may enter into a planning performance agreement with a developer, which will deliver a project-managed approach to the scheme in a way that suits all interested parties.
In the year ending March 2013, 252 such agreements were recorded, of which 187 were decided in accordance with the agreed timetable. At the moment, I am not aware of any agreements that are in place for oil and gas proposals, but there is certainly scope for such an agreement if the planning authority and the applicant consider it beneficial. Of course, as part of any agreement, the planning authority may negotiate additional resources.
Before I finish my opening remarks, I will try to answer the hon. Gentleman’s question but I will also be happy to write to him and to copy in other members of the Committee. I think it is prudent to say that I am advised that these changes do not affect manorial rights. Mineral rights for oil and gas are owned by the Crown under the Petroleum Act 1998 and preceding legislation, but I will write and confirm the position.
Planning authorities clearly need to have sufficient resources to carry out their job effectively and efficiently. We increased the fees for oil and gas applications to help with the cost of processing those applications, and these regulations are purely designed to clarify a single point in law, which will provide clarity for investors, local authorities and local communities alike. I therefore commend the regulations to the Committee.
2.39 pm
Roberta Blackman-Woods (City of Durham) (Lab): I thank the Minister for outlining lucidly, as he always does, the purpose of this statutory instrument. To us, its
purpose was always clear: it is the second stage of a process outlined by the Government last year to make life easier for those who wish to undertake fracking.The first change that the Government sneaked in over the Christmas recess reduced notification requirements. Many people affected by fracking could be totally unaware of it, because the consultation area is so tightly drawn around the vertical drilling site. The changes, put through by a negative instrument, are very unwelcome, given the number of people who are likely to be affected by them. As Parliament did not get an opportunity to scrutinise that secondary legislation, Parliament failed to notice the huge scale of opposition to what that statutory instrument contained, because we did not have before us at that time the outcome of the Government’s consultation on the changes. We now know that only seven of the responses were in favour of the Government’s proposed changes, while 155 of them were against. The two parties of the coalition do not look very much like the parties of localism now.
Current UK property rights, as the Minister outlined, do not apply to the value of gas or oil underneath a person’s land, but they do apply to the land itself, so permission must be granted before a fracking company can drill. Without such permission, as demonstrated by a recent legal challenge by Greenpeace, the company is liable for trespass. Will the Minister confirm whether he is seeking to reform the law on trespass, so that UK onshore operators will not have to notify people, under the trespass law, of drilling through their land? That significant change would be of great concern to many people.
The second major change was setting the fees for those who wish to undertake fracking, no doubt with the intention that the extra money would help local authorities speed up the planning process for fracking applications. A number of concerns are now emerging about the Government’s approach. I would like to turn to some specific issues that emerge from the impact assessment. Some of the information in that assessment is very interesting.
How was the figure of increasing fees by 10% arrived at? Was it plucked from the air, or is there an actual evidence base? No real reason was given in the revised requirements paper on why fees should not be based on a calculation referring to the site area of the above-ground works. Presumably, the Minister and his officials would agree that this would often make fracking unviable. If so, we need that to be transparent and out in the open. The impact assessment also notes that the Government have not systematically evaluated the financial impact on the public sector of the new arrangement, so we do not know whether a 10% increase will cover the additional costs for local authorities.
Why is the whole process being shaped by making the procedural requirements for oil and gas extraction less onerous? I want to see the evidence and a clear rationale, especially for fracking—a relatively new process with possible side effects that we may not yet be aware of. Surely, we want a planning system with the correct degree of rigour for the task, not one based on the assumption that any regulation is harmful.
Rather curiously, the Government seem to be taking a particularly laid-back approach to fracking. They say in the impact assessment:
“Given the unique nature of oil and gas extraction, and to take account of new extraction technology, it is considered desirable to introduce a more proportionate and flexible approach, with less onerous notification requirements”.
That totally defies logic. Surely, as fracking is a new method and we do not know its full implications, we should be more rigorous, not less. Most people would think that additional care needs to be taken in the circumstances, not less, which is exactly what the Government appear to be doing.
Indeed, the great anxiety and concern that the Government’s approach to fracking is engendering in the community is, rather oddly, recognised in the impact assessment but not really addressed. The impact assessment says:
“A 10% fee increase will represent an increase in costs for applicants. This offer was made by the”
“represents a transfer to the local authority and recognises increased costs of processing applications which may be subject to increased public scrutiny.”
What that actually means is that there will be a great deal of protest against and opposition to such applications for fracking, and that proposed developers will need to reimburse local authorities for the additional costs of managing that opposition.
I want the Minister to explain the urgent promotion of fracking. Is it a symptom of a Government who have let energy management get out of control, with no real policies to provide energy security? Are we now seeing panic and a hope that fracking can get us out of this energy black hole?
The Opposition have long agreed that gas has a role to play in a future balanced energy mix, along with renewables, nuclear and carbon capture and storage, and we have accepted that shale gas might have a role to play. However, many people in the industry argue that the Government are simply over-egging the pudding on what fracking will deliver.
As I have argued, important regulatory questions must be answered before large-scale extraction can begin. Ministers are in danger of ignoring or sweeping aside legitimate environmental concerns, rather than addressing them with appropriate safeguards. Instead of the balanced and cautious approach needed, we have a hyping up of the benefits of fracking, but to benefit whom?
We believe, as does the Local Government Association, that communities should decide through their democratically elected councils whether or not to host fracking in their areas. Benefits to communities should mitigate the adverse impacts of the development and deliver significant benefit to those communities. Given the significant tax breaks proposed by Government to drive forward fracking development, the industry should increase its community benefits offer, which should be more in line with offers elsewhere in the world and set somewhere between 5% and 10% of gross revenues.
I realise that I have asked the Minister a number of questions. I know that he might not be able to deal with them all today, but I should like to hear from him on the ones that he can answer.
2.48 pm
Nick Boles: It is true that the regulations address a rather narrow point of law, and some people—perhaps those of us who are not qualified lawyers—might think them rather dry and technical. Having confronted that, the hon. Member for City of Durham has clearly decided that it would be much more fun and amusing for us all to debate the rights and wrongs of fracking and its place in the Government’s energy policy.
I am severely tempted to take up the hon. Lady’s invitation, because I could then point out that the Government whom she supported completely failed to renew any of our nuclear power and very largely failed to develop renewable power, and that the Labour party has no alternative to suggest to fracking as a source of shale gas, which we propose to develop prudently and responsibly, as part of our energy mix. Nevertheless, I will resist the temptation to go down that road because hon. Members on both sides of the Committee have much better things to do with their time than to listen to me indulge in that debate, which does not relate to the matter before us.
The regulations clarify a point of law and establish what has always been the practice in the extremely well established onshore oil and gas industry. Many hon. Members—not the hon. Lady, I am sure—mistakenly imply that shale gas is somehow the first time that we have ever had onshore oil and gas extraction in this country. That, of course, is not so: we have lots of onshore oil and gas facilities, and the fees for planning permission have always followed the route that, as we are now clarifying in the regulations, should apply to fracking.
The hon. Lady seeks to imply that somehow, because the process of securing planning consent will involve a limited fee set according to national criteria, we have abandoned localism. However, the idea of planning fees being set according to a national scale is long standing and universal throughout the planning system, and it was entirely accepted and supported by the Government whom she supported. I have not yet heard the hon. Lady or her colleagues propose the entire localisation of planning fees. I suspect that, if they were to make such a proposal in opposition, it would not survive any transition into government—heaven forfend, of course, that that should happen in our lifetimes.
I need to bring the Committee back to the question at hand: whether it is reasonable to accept a modest increase in planning fees to fund local authorities’ planning permission work appropriately and to define clearly in regulations the extent of the territory to which the planning permission applies, on the basis of which the planning fee should be calculated. I believe that these are eminently reasonable regulations, so I hope very much to win the Committee’s support.